20-F

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-10409

InterContinental Hotels Group PLC

(Exact name of registrant as specified in its charter)

England and Wales

(Jurisdiction of incorporation or organization)

Broadwater Park,

Denham, Buckinghamshire UB9 5HR

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
American Depositary Shares	New York Stock Exchange
Ordinary Shares of 13 29/47 pence each	New York Stock Exchange*

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Ordinary Shares of 13 ²⁹/47 pence each 290,548,089

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:    Yes  þ    No  ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934:    Yes  ¨    No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ	Accelerated filer  ¨	Non-accelerated filer  ¨	Smaller reporting company  ¨
		(Do not check if a smaller reporting company)

Indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 ¨      Item 18þ

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes            ¨                     No            þ

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

US GAAP  ¨ International Reporting Standards as issued by the International Standards Accounting Board  þ Other  ¨

TABLE OF CONTENTS

		Page
Introduction			1
Cautionary Note Regarding Forward-Looking Statements			2
	PART I
Item 1.	Identity of Directors, Senior Management and Advisors		4
Item 2.	Offer Statistics and Expected Timetable		4
Item 3.	Key Information		4
	Selected Consolidated Financial Information		4
	Risk Factors		7
Item 4.	Information on the Company		10
	Summary		10
	Segmental Information		13
	Business Overview		14
	Trademarks		37
	Organizational Structure		37
	Property, Plant and Equipment		38
	Environment		38
Item 4A.	Unresolved Staff Comments		40
Item 5.	Operating and Financial Review and Prospects		40
	Critical Accounting Policies		40
	Operating Results		43
	Liquidity and Capital Resources		53
Item 6.	Directors, Senior Management and Employees		56
	Directors and Senior Management		56
	Compensation		60
	Board Practices		61
	Employees		64
	Share-based Compensation		64
	Share Ownership		65
Item 7.	Major Shareholders and Related Party Transactions		66
	Major Shareholders		66
	Related Party Transactions		66
Item 8.	Financial Information		66
	Consolidated Statements and Other Financial Information		66
	Significant Changes		67
Item 9.	The Offer and Listing		67
	Plan of Distribution		68
	Selling Shareholders		68
	Dilution		68
	Expenses of the Issue		68

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		Page
Item 10.	Additional Information		68
	Articles of Association		68
	Material Contracts		70
	Exchange Controls		72
	Taxation		72
	Documents on Display		76
Item 11.	Quantitative and Qualitative Disclosures About Market Risk		76
Item 12.	Description of Securities Other Than Equity Securities		79
	PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		81
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		81
Item 15.	Controls and Procedures		81
Item 16.	[Reserved]		81
Item 16A.	Audit Committee Financial Expert		81
Item 16B.	Code of Ethics		81
Item 16C.	Principal Accountant Fees and Services		82
Item 16D.	Exemptions from the Listing Standards for Audit Committees		82
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		82
Item 16F.	Change in Registrant’s Certifying Accountant		83
Item 16G.	Summary of Significant Corporate Governance Differences from NYSE Listing Standards		83
Item 16H.	Mine Safety Disclosure		84
	PART III
Item 17.	Financial Statements		84
Item 18.	Financial Statements		85
Item 19.	Exhibits		85

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INTRODUCTION

As used in this document, except as the context otherwise requires, the terms:

• “ADR” refers to an American Depositary Receipt, being a receipt evidencing title to an ADS;

• “ADS” refers to an American Depositary Share, being a registered negotiable security, listed on the New York Stock Exchange, representing one InterContinental Hotels Group PLC ordinary share of 13 ²⁹/47 pence each;

• “AMEA” refers to Asia, the Middle East and Africa;

• “Board” refers to the Board of directors of InterContinental Hotels Group PLC or, where appropriate, the Boards of directors of InterContinental Hotels Limited or Six Continents Limited;

• “Britvic” refers to Britannia Soft Drinks Limited for the period up to November 18, 2005, and thereafter, Britannia SD Holdings Limited (renamed Britvic plc on November 21, 2005) which became the holding company of the Britvic Group on November 18, 2005;

• “Britvic Group” refers to Britvic and its subsidiaries;

• “Company” refers to InterContinental Hotels Group PLC, InterContinental Hotels Limited or Six Continents Limited or their respective Board of directors as the context requires;

• “EMEA” refers to Europe, the Middle East and Africa;

• “Group” refers to InterContinental Hotels Group PLC and its subsidiaries or, where appropriate, InterContinental Hotels Limited or Six Continents Limited and their subsidiaries as the context requires;

• “Hotels” refers to the hotels business of the Group;

• “IHG” refers to InterContinental Hotels Group PLC or, where appropriate, its Board of directors;

• “IHL” refers to InterContinental Hotels Limited, previously InterContinental Hotels Group PLC, former parent company of the Group and re-registered as a private limited company on June 27, 2005;

• “ordinary share” or “share” refers, before April 14, 2003, to the ordinary shares of 28 pence each in Six Continents Limited; following that date and until December 10, 2004 to the ordinary shares of £1 each in IHL; following that date and until June 27, 2005 to the ordinary shares of 112 pence each in IHL; following that date and until June 12, 2006 to the ordinary shares of 10 pence each in IHG; following that date until June 4, 2007 to the ordinary shares of 11 ³/7 pence each in IHG; and following June 4, 2007 to the ordinary shares of 13 ²⁹/47 pence each in IHG;

• “Six Continents” refers to Six Continents Limited; previously Six Continents PLC and re-registered as a private limited company on June 6, 2005;

• “Soft Drinks” refers to the soft drinks business of InterContinental Hotels Group PLC, which the Company had through its controlling interest in Britvic and which the Company disposed of by way of an initial public offering effective December 14, 2005; and

• “VAT” refers to UK value added tax levied by HM Revenue and Customs on certain goods and services.

The following are some of the service marks owned by the InterContinental Hotels Group companies: IHG^®, INTERCONTINENTAL^®, INTERCONTINENTAL ALLIANCE^®, HUALUXE^™, CROWNE PLAZA^®, HOTEL INDIGO^®, EVEN^™, HOLIDAY INN^®, HOLIDAY INN EXPRESS^®, HOLIDAY INN RESORTS^®, HOLIDAY INN CLUB VACATIONS^®, STAYBRIDGE SUITES^®, CANDLEWOOD SUITES^®, PRIORITY CLUB^®, HOLIDEX^®, and GREEN ENGAGE^®.

References in this document to the “Companies Act” mean the Companies Act 2006 of Great Britain; references to the “EU” mean the European Union; references in this document to “UK” refer to the United Kingdom of Great Britain and Northern Ireland; references to “US” refer to the United States of America.

The Company publishes its Consolidated Financial Statements expressed in US dollars.

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In this document, references to “US dollars”, “US$”, “$” or “¢” are to United States currency, references to “euro” or “€” are to the euro, the currency of the European Economic and Monetary Union, references to “pounds sterling”, “sterling”, “£”, “pence” or “p” are to UK currency. Solely for convenience, this Annual Report on Form 20-F contains translations of certain pound sterling amounts into US dollars at specified rates. These translations should not be construed as representations that the pound sterling amounts actually represent such US dollar amounts or could be converted into US dollars at the rates indicated. The noon buying rate in The City of New York for cable transfers in pounds sterling as certified for customs purposes by the Federal Reserve Bank of New York on March 21, 2012 was £1.00 = $1.5848. For further information on exchange rates please refer to page F-23.

The Company’s fiscal year ends on December 31. The December 31 fiscal year end is in line with the calendar accounting year ends of the majority of comparable US and European hotel companies. IHG will continue to report on a December 31 fiscal year-end basis, as the Group believes this facilitates more meaningful comparisons with other key participants in the industry. References in this document to a particular year are to the fiscal year unless otherwise indicated. For example, references to the year ended December 31, 2011 are shown as 2011 and references to the year ended December 31, 2010 are shown as 2010, unless otherwise specified, and references to other fiscal years are shown in a similar manner.

The Company’s Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in accordance with IFRS as adopted by the European Union (“EU”). IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. However, the differences have no impact on the Group’s Consolidated Financial Statements for the years presented.

As explained in Note 2 of Notes to the Consolidated Financial Statements an internal reorganization during 2011 resulted in a change to the Group’s reportable segments. Comparatives have been restated to show the segmental information on a consistent basis.

In keeping with UK practice IHG believes that the reporting of profit and earnings measures before exceptional items provides additional meaningful information on underlying returns and trends to shareholders. The Group’s key performance indicators used in budgets, monthly reporting, forecasts, long-term planning and incentive plans for internal financial reporting focus primarily on profit and earnings measures before exceptional items. Throughout this document earnings per ordinary share is also calculated excluding the effect of all exceptional operating items, exceptional interest, exceptional tax and gain on disposal of assets and is referred to as adjusted earnings per ordinary share.

The Company furnishes JPMorgan Chase Bank, N.A., as Depositary, with annual reports containing Consolidated Financial Statements and an independent auditor’s opinion thereon. These Consolidated Financial Statements are prepared on the basis of IFRS. The Company also furnishes to the Depositary all notices of shareholders’ meetings and other reports and communications that are made generally available to shareholders of the Company. The Depositary makes such notices, reports and communications available for inspection by registered holders of ADRs and mails to all registered holders of ADRs voting instruction cards with specific reference to the section of the Company’s website on which such notices, reports and communications can be viewed. During 2011, the Company reported interim financial information at June 30, 2011 in accordance with the Listing Rules of the UK Listing Authority. In addition, it provided quarterly financial information at March 31, 2011 and at September 30, 2011 and intends to continue to provide quarterly financial information during fiscal 2012. The Consolidated Financial Statements may be found on the Company’s website at www.ihgplc.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 20-F contains certain forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 with respect to the financial condition, results of operations and business of InterContinental Hotels Group and certain plans and objectives of the Board of Directors of InterContinental Hotels Group PLC with respect thereto. These forward-looking statements can be identified by the fact that they

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do not relate only 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. These statements are based on assumptions and assessments made by InterContinental Hotels Group’s management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

Such statements in the Form 20-F include, but are not limited to, statements under the following headings; (i) “Item 4. Information on the Company”; (ii) Item 5. Operating and financial review and prospects”; (iii) “Item 8. Financial information”; and (iv) “Item 11. Quantitative and qualitative disclosures about market risk”. Specific risks faced by the Company are described under “Item 3. Key information — Risk factors” commencing on page 7.

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, including, but not limited to: the risks of political and economic developments; the risk of events that adversely impact domestic or international travel; the risks of the hotel industry supply and demand cycle; the risks related to identifying, securing and retaining franchise and management agreements; risks in relation to changing technology and systems; the risks associated with the Group’s reliance on the reputation of its brands and the protection of its intellectual property rights; the need to find people with the right skills and capability to manage growth and change; the risks of the Group’s reliance upon its proprietary reservations system and exposure to the risk of failures in the system and increased competition in reservations infrastructure; the risks related to information security; the risks associated with the Group’s financial stability and its ability to borrow and satisfy debt covenants; the risks of non-compliance with existing and changing regulations across numerous countries, territories and jurisdictions; the risk of litigation; the risks related to corporate responsibility; the funding risks in relation to the defined benefits under the Group’s pension plans and the risks associated with difficulties the Group may face in insuring its business.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Summary

The selected consolidated financial data set forth below for the years ended December 31, 2011, 2010, 2009, 2008 and 2007 has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in accordance with IFRS as adopted by the European Union (“EU”), and is derived from the Consolidated Financial Statements of the Group which have been audited by its independent registered public accounting firm, Ernst & Young LLP.

IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. However, the differences have no impact on the Group’s Consolidated Financial Statements for the years presented. The selected consolidated financial data set forth below should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements and Notes thereto included elsewhere in this Annual Report.

For the years ended December 31, 2011 and 2010, the selected consolidated financial data differs from the consolidated financial statements issued to UK listing authorities as explained in Note 1 of Notes to the Consolidated Financial Statements.

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Consolidated Income Statement Data

	Year ended December 31,
	2011			2010			2009			2008			2007
	($ million, except earnings per ordinary share)
Revenue:
Continuing operations		1,768			1,628			1,538			1,897			1,817
Discontinued operations		—			—			—			—			33
		1,768			1,628			1,538			1,897			1,850
Total operating profit before exceptional operating items:
Continuing operations		559			444			363			549			488
Discontinued operations		—			—			—			—			3
		559			444			363			549			491
Exceptional operating items:
Continuing operations		57			(7	)		(373	)		(132	)		60
Discontinued operations		—			—			—			—			—
		57			(7	)		(373	)		(132	)		60
Total operating profit/(loss):
Continuing operations		616			437			(10	)		417			548
Discontinued operations		—			—			—			—			3
		616			437			(10	)		417			551
Financial income		2			2			3			12			18
Financial expenses		(64	)		(64	)		(57	)		(113	)		(108	)
Profit/(loss) before tax		554			375			(64	)		316			461
Tax:
On profit before exceptional items		(120	)		(98	)		(15	)		(101	)		(90	)
On exceptional operating items		(4	)		1			112			17			—
Exceptional tax credit		43			—			175			25			60
		(81	)		(97	)		272			(59	)		(30	)
Profit after tax		473			278			208			257			431
Gain on disposal of discontinued operations, net of tax		—			2			6			5			32
Profit for the year		473			280			214			262			463
Attributable to:
Equity holders of the parent		473			280			213			262			463
Non-controlling interest		—			—			1			—			—
Profit for the year		473			280			214			262			463
Earnings per ordinary share:
Continuing operations:
Basic		163.7	¢		96.5¢			72.6¢			89.5¢			134.1¢
Diluted		159.8	¢		93.9¢			70.2¢			86.8¢			130.4¢
Total operations:
Basic		163.7	¢		97.2¢			74.7¢			91.3¢			144.7¢
Diluted		159.8	¢		94.6¢			72.2¢			88.5¢			140.7¢

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Consolidated Statement of Financial Position Data

	At December 31,
	2011		2010		2009		2008			2007
	($ million, except number of shares)
Goodwill and intangible assets		400		358		356		445			556
Property, plant and equipment		1,362		1,690		1,836		1,684			1,934
Investments and other financial assets		243		178		175		195			253
Retirement benefit assets		21		5		12		40			49
Non-current tax receivable		41		—		—		—			—
Deferred tax assets		106		88		95		—			—
Current assets		578		466		419		544			710
Non-current assets classified as held for sale		217		—		—		210			115
Total assets		2,968		2,785		2,893		3,118			3,617
Current liabilities		860		943		1,040		1,141			1,226
Long-term debt		670		776		1,016		1,334			1,748
Net assets		555		278		156		1			98
Equity share capital		162		155		142		118			163
IHG shareholders’ equity		547		271		149		(6	)		92
Number of shares in issue at period end (millions)		290		289		287		286			295

Dividends

InterContinental Hotels Group PLC paid an interim dividend of 16.0 cents per ADS (equivalent to 9.8 pence per share at the closing exchange rate of August 5, 2011) on October 7, 2011. The IHG Board has proposed a final dividend of 39.0 cents per ADS (equivalent to 24.7 pence per share at the closing exchange rate on February 10, 2012), payable on June 1, 2012, if approved by shareholders at the Annual General Meeting to be held on May 25, 2012, bringing the total IHG dividend for the year ended December 31, 2011 to 55.0 cents per ADS (equivalent to 34.5 pence per share).

The table below sets forth the amounts of interim, final and total dividends on each ordinary share in respect of each fiscal year indicated. Comparative dividends per share have been restated using the aggregate of the weighted average number of shares of InterContinental Hotels Group PLC. For the purposes of showing the dollar amount per ADS in respect of the interim and final dividends for 2007, such amount was translated into US dollars per ADS at the Noon Buying Rate on the UK payment date. In respect of the interim and final dividends for each of 2008, 2009, 2010 and 2011 such amounts are translated from US dollars into GBP at the prevailing exchange rate immediately prior to their announcement.

Ordinary dividend

	Pence per ordinary share						Cents per ADS
	Interim		Final		Total		Interim		Final		Total
Year ended December 31,
2007		5.70		14.90		20.60		11.5		29.2		40.7
2008		6.40		20.20		26.60		12.2		29.2		41.4
2009		7.30		18.70		26.00		12.2		29.2		41.4
2010		8.00		22.00		30.00		12.8		35.2		48.0
2011		9.80		24.70		34.50		16.0		39.0		55.0

Special dividend

	Pence per ordinary  share		Cents per ADS
June 2007		200.00		400.00

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RISK FACTORS

This section describes the principal risks that could materially affect the Group’s business. The factors below should be considered in connection with any financial and forward-looking information in this Form 20-F and the cautionary note regarding forward-looking statements contained on pages 2 and 3.

Global economic conditions and particularly the economic outlook for the Eurozone remain uncertain. Accordingly, capital availability remains a challenge for current and potential hotel owners particularly in developed markets. This has put added pressure on existing and potential hotel owners, impacting on the current hotel estate and the delivery and growth of potential new hotels in the Group’s pipeline. The geopolitical and civil unrest in the Middle East and Northern Africa remains and as the Group continues to grow its global footprint and expand in emerging markets, the Group may be increasingly exposed to safety and security incidents and major crises.

The risks below are not the only ones that the Group faces. Some risks are not yet known to the Group and some that the Group does not currently believe to be material could later turn out to be material. All of these risks could materially affect the Group’s business operations, cash flow, financial condition, turnover, profits, liquidity and/or capital reserves.

The Group is exposed to the risks of political and economic developments

The Group is exposed to political, economic and financial market developments such as recession, inflation, availability of credit and currency fluctuations that could lower revenues and reduce income. A recession reduces leisure and business travel to and from affected countries and adversely affects room rates and/or occupancy levels and other income-generating activities. This may result in deterioration of results of operations and potentially reduce the value of properties in affected economies. The owners or potential owners of hotels franchised or managed by the Group face similar risks which could adversely impact the Group’s ability to retain and secure franchise or management agreements. More specifically, the Group is highly exposed to the US market and, accordingly, is particularly susceptible to adverse changes in the US economy.

The Group is exposed to the risk of events that adversely impact domestic or international travel

The room rates and occupancy levels of the Group could be adversely impacted by events that reduce domestic or international travel, such as actual or threatened acts of terrorism or war, political or civil unrest, epidemics, travel-related accidents, travel-related industrial action, increased transportation and fuel costs and natural disasters, resulting in reduced worldwide travel or other local factors impacting individual hotels. A decrease in the demand for hotel rooms as a result of such events may have an adverse impact on the Group’s operations and financial results. In addition, inadequate preparedness, contingency planning or recovery capability in relation to a major incident or crisis may prevent operational continuity and consequently impact the value of the brand or the reputation of the Group.

The Group is exposed to the risks of the hotel industry supply and demand cycle

The future operating results of the Group could be adversely affected by industry overcapacity (by number of rooms) and weak demand due, in part, to the cyclical nature of the hotel industry, or other differences between planning assumptions and actual operating conditions. Reductions in room rates and occupancy levels would adversely impact the results of Group operations.

The Group is exposed to a variety of risks related to identifying, securing and retaining franchise and management agreements

The Group’s growth strategy depends on its success in identifying, securing and retaining franchise and management agreements. This is an inherent risk for the hotel industry and franchise business model. Competition with other hotel companies may generally reduce the number of suitable franchise, management and investment opportunities offered to the Group and increase the bargaining position of property owners seeking to become a franchisee or engage a manager. The terms of new franchise or management agreements may not be as favorable as current arrangements and the Group may not be able to renew existing arrangements on similarly favorable terms or at all.

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There can also be no assurance that the Group will be able to identify, retain or add franchisees to the Group system or to secure management contracts. For example, the availability of suitable sites, market saturation, planning and other local regulations or the availability and affordability of finance may all restrict the supply of suitable hotel development opportunities under franchise or management agreements. In connection with entering into franchise or management agreements, the Group may be required to make investments in, or guarantee the obligations of, third parties or guarantee minimum income to third parties. There are also risks that significant franchisees or groups of franchisees may have interests that conflict, or are not aligned, with those of the Group including, for example, the unwillingness of franchisees to support brand improvement initiatives. This could result in franchisees exiting the system which would adversely impact overall system size.

In addition, changes in legislation or regulatory changes may be implemented that have the effect of favoring franchisees relative to brand owners.

The Group is exposed to inherent risks in relation to changing technology and systems

The Group is reliant upon certain technologies and systems (including IT systems) for the running of its business, particularly those which are highly integrated with business operational processes. Disruption to those technologies or systems could adversely affect the efficiency of the business, notwithstanding business continuity or disaster recovery processes. The Group may have to make substantial additional investments in new technologies or systems to remain competitive. Failing to keep pace with developments in technologies or systems may put the Group at a competitive disadvantage. The technologies or systems that the Group chooses may not be commercially successful or the technology or system strategy employed may not be sufficiently aligned with the needs of the business or responsive to changes in business strategy. As a result, the Group could lose customers, fail to attract new customers or incur substantial costs or face other losses.

The Group is reliant on the reputation of its brands and the protection of its intellectual property rights

Any event that materially damages the reputation of one or more of the Group’s brands and/or fails to sustain the appeal of the Group’s brands to its customers may have an adverse impact on the value of that brand and subsequent revenues from that brand or business.

In particular, where the Group is unable to enforce adherence to its safety or operating and quality standards, or the significant regulations applicable to hotel operations, pursuant to its franchise and management contracts, there may be further adverse impact upon brand reputation or customer perception and therefore the value of the Group’s brands.

In addition, the value of the Group’s brands is influenced by a number of other factors, some of which may be outside the Group’s control, including commoditisation (whereby price and/or quality becomes relatively more important than brand identifications due, in part, to the increased prevalence of third-party intermediaries), consumer preference and perception, or other factors affecting consumers’ willingness to purchase goods and services.

Given the importance of brand recognition to the Group’s business, the Group has invested considerable resources in protecting its intellectual property, including registration of trademarks and domain names. However, the controls and laws are variable and subject to change. Any widespread infringement, misappropriation or weakening of the control environment could materially harm the value of the Group’s brands and its ability to develop the business.

The Group requires the right people, skills and capability to manage growth and change

In order to remain competitive, the Group must employ the right people. This includes hiring and retaining highly skilled employees with particular expertise or leadership capability. The implementation of the Group’s strategic business plans could be undermined by failure to build resilient corporate culture, recruit or retain key personnel, unexpected loss of key senior employees, failures in the Group’s succession planning and incentive plans, or a failure to invest in the development of key skills.

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Some of the markets in which the Group operates are experiencing economic growth and the Group must compete against other companies inside and outside the hospitality industry for suitably qualified or experienced employees. Some emerging markets may not have the required local expertise to operate a hotel and may not be able to attract the right talent. Failure to attract and retain employees may threaten the success of the Group’s operations in these markets. Additionally, unless skills are supported by a sufficient infrastructure to enable knowledge and skills to be passed on, the Group risks losing accumulated knowledge if key employees leave the Group.

The Group is reliant upon its proprietary reservations system and is exposed to the risk of failures in the system and increased competition in reservations infrastructure

The value of the Group’s brands is partly derived from the ability to drive reservations through its proprietary HolidexPlus reservations system, a central repository of the Group’s hotel room inventories linked electronically to multiple sales channels including the Group’s own websites, call centers and hotels, third-party intermediaries and travel agents.

Lack of resilience and operational availability could lead to prolonged service disruption and may result in significant business interruption and subsequent impact on revenues. Lack of investment in these systems may also result in reduced ability to compete. Additionally, failure to maintain an appropriate technology strategy and select the right technology partners could erode the Group’s long-term competitiveness.

The Group is exposed to the risks related to information security

The Group is increasingly dependent upon the availability, integrity and confidentiality of information including, but not limited to, guest and employee credit card, financial and personal data, business performance and financial reporting.

The reputation and performance of the Group may be adversely affected if it fails to maintain appropriate confidentiality of information and ensure relevant controls are in place to enable the release of information only through the appropriate channels in a timely and accurate manner.

The Group is exposed to a variety of risks associated with its financial stability, ability to borrow and satisfy debt covenants

While the strategy of the Group is to extend the hotel network through activities that do not involve significant amounts of its own capital, the Group does require capital to fund some development opportunities and to maintain and improve owned hotels. The Group is reliant upon having financial strength and access to borrowing facilities to meet these expected capital requirements. The majority of the Group’s borrowing facilities are only available if the financial covenants in the facilities are complied with. Non-compliance with covenants could result in the lenders demanding repayment of the funds advanced. If the Group’s financial performance does not meet market expectations, it may not be able to refinance existing facilities on terms considered favourable.

The Group is required to comply with existing and changing regulations across numerous countries, territories and jurisdictions

Governmental regulations affect countless aspects of our business ranging from corporate governance, health and safety, environmental, bribery and corruption, employment law and diversity, disability access, relationships, data privacy and information protection, financial, accounting and tax. Regulatory changes may require significant changes in the way the business operates and may inhibit the strategy including the markets we operate in, brand protection, and use or transmittal of customer data. If the Group fails to comply with existing or changing regulations, the Group may be subject to fines, prosecution, loss of licence to operate or reputation damage.

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The Group is exposed to the risk of litigation

The Group could be at risk of litigation from many parties, including guests, customers, joint venture partners, suppliers, employees, regulatory authorities, franchisees and/or the owners of hotels it manages. Claims filed in the US may include requests for punitive damages as well as compensatory damages. Exposure to litigation or fines imposed by regulatory authorities may also affect the reputation of the Group and its brands.

The Group is exposed to risks related to corporate responsibility

The reputation of the Group and the value of its brands are influenced by a wide variety of factors, including the perception of stakeholder groups such as the communities in which the Group operates. The social and environmental impacts of business are under increasing scrutiny, and the Group is exposed to the risk of damage to its reputation if it fails to demonstrate sufficiently responsible practices, ethical behavior, or fails to comply with relevant regulatory requirements.

The Group is exposed to funding risks in relation to the defined benefits under its pension plans

The Group is required by law to maintain a minimum funding level in relation to its ongoing obligation to provide current and future pensions for members of its UK pension plans who are entitled to defined benefits. The contributions payable by the Group must be set with a view to making prudent provision for the benefits accruing under the plans of the Group.

In particular, the trustees of the Group’s UK defined benefit plan may demand increases to the contribution rates relating to the funding of this plan, which would oblige relevant employers of the Group to contribute extra amounts. The trustees must consult the plan’s actuary and principal employer before exercising this power. In practice, contribution rates are agreed between the Group and the trustees on actuarial advice, and are set for three-year terms. The funding implications of the last actuarial review are disclosed in Notes to the Consolidated Financial Statements on pages F-30 to F-35.

The Group may face difficulties insuring its business

Historically, the Group has maintained insurance at levels determined to be appropriate in light of the cost of cover and the risk profiles of the business in which it operates. However, forces beyond the Group’s control, including market forces, may limit the scope of coverage the Group can obtain and the Group’s ability to obtain coverage at reasonable rates. Other forces beyond the Group’s control, such as terrorist attacks or natural disasters may be uninsurable or simply too expensive to insure. Inadequate or insufficient insurance could expose the Group to large claims or could result in the loss of capital invested in properties, as well as the anticipated future revenue from properties, and could leave the Group responsible for guarantees, debt or other financial obligations related to such properties.

ITEM 4. INFORMATION ON THE COMPANY

SUMMARY

Group overview

The Group is an international hotel business which owns a portfolio of established and diverse hotel brands, including InterContinental Hotels & Resorts (“InterContinental”), Crowne Plaza Hotels & Resorts (“Crowne Plaza”), Holiday Inn Hotels & Resorts (including Holiday Inn Club Vacations) (“Holiday Inn”), Holiday Inn Express, Staybridge Suites, Candlewood Suites and Hotel Indigo. At December 31, 2011, the Group had 4,480 franchised, managed, owned and leased hotels and 658,348 guest rooms in nearly 100 countries and territories around the world. The Group also manages the hotel loyalty program, Priority Club Rewards.

In the first quarter 2012, the Group launched two new brands. EVEN hotels is aimed at the US midscale market and HUALUXE is tailored towards Chinese guests.

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The Group’s revenue and earnings are derived from hotel operations, which include franchise and other fees paid under franchise agreements, management and other fees paid under management contracts, where the Group operates third-parties’ hotels, and operation of the Group’s owned and leased hotels.

At March 21, 2012, InterContinental Hotels Group PLC had a market capitalization of approximately £4.2 billion, and was included in the FTSE 100, a list of the 100 largest companies by market capitalization on the London Stock Exchange.

InterContinental Hotels Group PLC is the holding company for the Group. Six Continents Limited (formerly Six Continents PLC), which was formed in 1967, is the principal subsidiary company. The Company’s corporate headquarters are in the United Kingdom, and the registered address is:

InterContinental Hotels Group PLC

Broadwater Park

Denham

Buckinghamshire UB9 5HR

Tel: +44 (0) 1895 512000

Internet address: www.ihgplc.com

InterContinental Hotels Group PLC was incorporated in Great Britain on May 21, 2004 and registered in, and operates under, the laws of England and Wales. Operations undertaken in countries other than England and Wales are subject to the laws of those countries in which they reside.

Group history and developments

The Group, formerly known as Bass and, more recently, Six Continents, was historically a conglomerate operating as, among other things, a brewer, soft drinks manufacturer, hotelier, leisure operator, and restaurant, pub and bar owner. In the last several years, the Group has undergone a major transformation in its operations and organization, as a result of the Separation (as discussed below) and a number of significant disposals during this period, which has narrowed the scope of its business.

On April 15, 2003, following shareholder and regulatory approval, Six Continents PLC (as it then was) separated into two new listed groups, InterContinental Hotels Group PLC (as it then was) comprising the Hotels and Soft Drinks businesses and Mitchells & Butlers plc comprising the Retail and Standard Commercial Property Developments businesses (the “Separation”).

The Group disposed of its interests in the Soft Drinks business by way of an initial public offering (“IPO”) of Britvic, a manufacturer and distributor of soft drinks in the United Kingdom, in December 2005.

Following Separation, the Group has undertaken an asset disposal program realizing, by the end of 2010, proceeds of $5.6 billion from the sale of 185 hotels. Of these 185 hotels, 166 remained in the Group’s global system through either franchise or management agreements. The asset disposal program has significantly reduced the capital requirements of the Group whilst largely retaining the hotels in the Group’s system.

In 2011 the Group disposed of four hotels for total proceeds of $143 million (see below for more information).

Recent acquisitions and dispositions

During 2011, the Group disposed of the Holiday Inn Burswood in Australia for $71 million, the Hotel Indigo San Diego for $55 million and two other hotels in North America for $17 million. During 2010, the Group disposed of the Holiday Inn Lexington for $5 million and the InterContinental Buckhead, Atlanta for $105 million. During 2009, the Group disposed of the InterContinental Sao Paulo for $22 million.

The Group also divested a number of investments for total proceeds of $15 million, $17 million and $15 million in 2011, 2010 and 2009, respectively. In 2010, a loan repayment of $11 million was also received.

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Capital expenditure in 2011 totaled $194 million compared with $95 million in 2010 and $148 million in 2009. The increase in expenditure in 2011 reflects the current strategy of recycling capital to drive growth in the Group’s brands. Expenditure in 2009 included the $65 million purchase of the Hotel Indigo San Diego.

At December 31, 2011 capital committed, being contracts placed for expenditure on property, plant and equipment and intangible assets not provided for in the Consolidated Financial Statements, totaled $14 million. The Group has also committed to invest up to $60 million in two joint venture arrangements of which $36 million had been spent at December 31, 2011.

On October 24, 2007 the Group announced a worldwide relaunch of its Holiday Inn brand family which is now substantially complete. In support of this relaunch, the Group made a non-recurring revenue investment of $63 million which was charged to the Consolidated income statement as an exceptional item in periods up to December 31, 2010.

Return of funds

Since March 2004, the Group has returned over £3.5 billion of funds to shareholders by way of special dividends, share repurchase programs and capital returns (see table below).

A £150 million share repurchase program was announced on February 20, 2007. During 2011 no shares were repurchased. By March 21, 2012, a total of 14.4 million shares had been repurchased under the £150 million repurchase program at an average price per share of 831 pence per share (approximately £120 million). Purchases are made under the existing authority from shareholders which will be renewed at the Company’s Annual General Meeting. Any shares repurchased under these programs will be canceled.

Information relating to the purchases of equity securities can be found in Item 16E.

Return of funds program	Timing	Total return		Returned to  date(i)
£501 million special dividend	Paid in December 2004	£	501m	£	501m
First £250 million share buyback	Completed in 2004	£	250m	£	250m
£996 million capital return	Paid in July 2005	£	996m	£	996m
Second £250 million share buyback	Completed in 2006	£	250m	£	250m
£497 million special dividend	Paid in June 2006	£	497m	£	497m
Third £250 million share buyback	Completed in 2007	£	250m	£	250m
£709 million special dividend	Paid in June 2007	£	709m	£	709m
£150 million share buyback	Deferred	£	150m	£	120m
Total		£	3,603m	£	3,573

(i) At March 21, 2012.

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SEGMENTAL INFORMATION

Geographic segmentation

Following an internal reorganization during the year, there has been a change in the Group’s geographic segments as explained in Note 2 of the Notes to the Consolidated Financial Statements. Comparatives have been restated to show segmental information on a consistent basis.

The following table shows the Group’s revenue and operating profit before exceptional operating items and the percentage by geographical area, for the years ended December 31, 2011, 2010 and 2009.

	Year ended December 31,
	2011			2010			2009
	($ million)
Revenue(1)
Americas		830			807			772
Europe		405			326			309
AMEA		216			213			190
Greater China		205			178			143
Central(2)		112			104			124
Total		1,768			1,628			1,538
Operating profit before exceptional operating items(1)(3)
Americas		451			369			288
Europe		104			78			77
AMEA		84			82			72
Greater China		67			54			30
Central		(147	)		(139	)		(104	)
Total		559			444			363
	Year ended December 31,
	2011			2010			2009
	(%)
Revenue
Americas		47.0			49.6			50.2
Europe		22.9			20.0			20.1
AMEA		12.2			13.1			12.3
Greater China		11.6			10.9			9.3
Central		6.3			6.4			8.1
Total		100.0			100.0			100.0
Operating profit before exceptional operating items
Americas		80.7			83.1			79.3
Europe		18.6			17.6			21.2
AMEA		15.0			18.5			19.8
Greater China		12.0			12.1			8.3
Central		(26.3	)		(31.3	)		(28.6	)
Total		100.0			100.0			100.0

(1) The results of operations have been translated into US dollars at the average rates of exchange for the year. In the case of sterling, the translation rate is $1 = £0.62 (2010 $1 = £0.65, 2009 $1 = £0.64). In the case of the euro, the translation rate is $1 = €0.72 (2010 $1 = €0.76, 2009 $1 = €0.72).

(2) Central revenue primarily relates to Holidex (the Group’s proprietary reservation system) fee income. Central operating profit includes central revenue less costs related to global functions.

(3) Operating profit before exceptional operating items does not include exceptional operating items for all periods presented. Exceptional operating items (charge unless otherwise noted) by region were the Americas credit of $35 million (2010 $8 million, 2009 $301 million); Europe $39 million (2010 $5 million, 2009 $22 million); AMEA credit of $26 million (2010 credit of $6 million, 2009 $7 million); Greater China $nil (2010 $nil, 2009 $nil); and Central credit of $35 million (2010 $nil, 2009 $43 million).

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BUSINESS OVERVIEW

The Group is an international hotel business which owns a portfolio of established and diverse hotel brands, including InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn Hotels & Resorts (including Holiday Inn Club Vacations), Holiday Inn Express, Staybridge Suites Candlewood Suites and Hotel Indigo. At December 31, 2011, the Group had 4,480 franchised, managed, owned and leased hotels and 658,348 guest rooms in nearly 100 countries and territories around the world. The Group also manages the hotel loyalty program, Priority Club Rewards.

In the first quarter 2012, the Group launched two new brands. EVEN hotels is aimed at the US midscale market and HUALUXE is tailored towards Chinese guests.

Industry overview

The hotel industry demonstrated its resilience in the challenging 12 months ended December 31, 2011 by continuing the recovery started during 2010. Globally, industry revenue per available room (“RevPAR”), a key industry metric, was up 5.9%, driven primarily by pricing, or average daily rate. In addition, global room demand surpassed its previous peak and is now at a new high, most notably in the United States, the largest lodging market in the world.

The Group performed well over the year with global RevPAR growth of 6.2% (comparable hotels), maintaining the Group’s 2010 performance. Our number of open hotel rooms grew to 658,348, with 241 new hotels opening worldwide, taking into account the removal of terminated contracts.

The Group closely monitors markets across the globe, and follows key industry and business metrics, such as RevPAR, average daily rate, demand and gross domestic product (“GDP”), to ensure its strategy continues to be sustainable in the changing business environment and suitable for the Group’s capabilities, and as such the business remains resilient.

The global hotel market is estimated to be close to 20 million rooms and leading research (Smith Travel Research) calculates there are seven million branded hotel rooms globally, with the remainder a combination of independent hotels, guesthouses and other types of lodging. For four years, the Group has held the largest share of branded rooms, currently at approximately 9% of supply, distributed across nearly 100 countries and territories.

The growth of the branded hotel sector has exceeded that of the unbranded sector over the past 10 years, and although currently less than half of all hotel rooms are branded, the benefits of a brand, such as the greater security and performance of a global reservation system, loyalty schemes and international networks, are clear to many owners. The Group is therefore well-positioned to win the business of owners seeking to grow with a hotel brand. Additionally, IHG and other large hotel companies have the competitive advantage of a global portfolio of brands that suit the different real estate or market opportunities an owner may have.

The Group continues to grow rooms supply and revenues, aided by wider trends:

Global economic trends — we expect 2011’s modest economic growth to continue into 2012. Countries in or highly connected to the Eurozone face an uncertain short-term outlook and are likely to see stagnant or negative GDP growth, depending on the outcome of the sovereign debt crisis. However, the Group is not significantly exposed to this region. Less than 10% of the Group’s operating profit before central overheads is euro denominated and the only significant asset in the region is the InterContinental Paris Le Grand which is partly hedged from a balance sheet perspective. The Group is not dependent on euro liquidity and none of the banks in the Group’s main bank loan facility are based in the Eurozone. Many other developed and major emerging markets are expected to experience modest growth. GDP is a leading indicator for key industry metrics and our expertise combined with consensus opinion for long-term GDP trends allow us to prepare better the business for fluctuations in demand; and

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Change in demographics — as developed market populations age, increased leisure time suggests positive implications for travel and hotel demand. Conversely, younger generations are looking to balance work and lifestyles better, indicating an increasing need for quality hotel options. In advanced developing markets, an emerging middle class presents consumer and branded organisations with an opportunity to develop further global networks.

Our strategy

With a portfolio of preferred brands in the best developed and emerging markets, our talented people are focused on delivering “Great Hotels Guests Love” and executing a clear set of priorities to achieve our vision of becoming one of the great companies of the world.

Strategy is about making distinct and clear choices about where and how to compete in order to achieve a set of business goals.

In addition, an organization needs to be able to execute these choices with focus, and measure its success using a clear set of comprehensively aligned metrics.

The Group’s strategy determines a set of choices to balance the quality of its hotels and the speed at which it grows. The Group’s measures this through key performance indicators (“KPIs”) such as growing its RevPAR, its system size and its margins. In addition, the Group ensures it continues to improve employee engagement and increase the proportion of hotel room demand that it generates for its owners.

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DELIVERING THE ELEMENTS OF OUR STRATEGY

Competing with an appropriate business model

The Group’s business model has a clear focus on franchising and managing hotels, rather than owning them, enabling it to grow at an accelerated pace with limited capital investment. This enables the Group to focus on building strong, preferred brands, leaving asset management and real estate to its local partners with the necessary expertise. With this ‘asset-light’ approach, the Group also benefits from the reduced volatility of fee-based income streams, as compared with the ownership of assets.

A key characteristic of the franchised and managed business model is that it is highly cash generative, with a high return on capital employed. At December 31, 2011 87% of operating profit* was derived from franchised and managed operations. In some situations, IHG supports its brands by using its capital to build or support the funding of flagship assets in high demand locations. IHG plans to recycle capital by selling these assets when the time is right and to reinvest elsewhere in the business and across its portfolio. Recent examples of this include the sale of the Group’s InterContinental Buckhead property in Atlanta and the Hotel Indigo San Diego, both of which are now managed by the Group under long-term management agreements.

Choosing not to own hotel assets means the focus of the Group’s business is on:

• developing preferred brands that offer a unique set of guest experiences;

• building global demand delivery systems, such as the Group’s branded hotel websites and call centers; and

• building relationships with existing and prospective owners who can utilize these systems to create enhanced returns.

Across the industry, hotel ownership is increasingly becoming separated from hotel operations, with hotel owners using third parties, such as the Group, to manage their hotels and run their demand delivery systems. The Group is well positioned to benefit from this trend with its focus on franchising and managing hotels within its many brands.

The key features of IHG’s business model are represented in the following table and charts:

* Before regional and central overheads and exceptional items.

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Competing in the best developed and emerging markets

Globally, supply of hotel rooms has grown at approximately 3% per annum over the past five years to approximately 20 million rooms in 2011. Competition for this new rooms supply include other branded hotel companies, both large and small, international and domestic, and independently owned hotels.

Taking into account rooms supply in open hotels and those under development, we have a leadership position (ie, when taking open rooms and pipeline rooms together we are in the top 3 in that country) in 13 of the top 20 markets, globally. These markets alone account for over 80% of global lodging spend. They include large developed markets such as the US, UK and Germany, as well as emerging markets like China and India.

Key economic metrics, such as GDP and travel flows, generally indicate current and future levels of hotel demand and we continue to forecast these trends so we can focus on the largest markets. Concentrating growth in the largest markets means the Group and owners can operate more efficiently and benefit from enhanced revenues and reduced costs.

The US is the largest market for branded hotels, with 3.4 million rooms accounting for 64% of all US rooms available. The segment in the US with the greatest share is midscale, with 1.3 million branded hotel rooms, and the Group’s Holiday Inn brand family, which includes Holiday Inn Express and, Holiday Inn Club Vacations, along with Holiday Inn itself, is the largest in this segment.

In China, the Group sees the greatest opportunity for growth within any single country and our strategy has been to enter the market early, to develop our relationships with key local partners and grow our presence rapidly. In a country with 0.5 million branded hotel rooms, IHG is the largest international hotel company with over 55,000 rooms across our brands and another 50,000 in the planning phase or under construction. This rapid pace of openings for the Group, which was the first international hotel chain to launch in the country, has been planned against a back-drop of increasing demand drivers for hotels, such as a large emerging middle class and growing domestic and international travel flows.

The Group is also focused on developing in large markets such as the UK and Germany, where we rank second and third, respectively. We anticipate that these markets will remain significant sources of hotel demand and seek to develop lasting relationships with owners and build our brands’ awareness and presence.

In certain markets, the Group is able to benefit from and maximize regional similarities and travel patterns by clustering operations and generating efficiencies. The Group’s predominantly managed operations across the Middle East and Asia, which have become significant contributors to its global performance, are examples of clustering operations across multiple brands, owners and markets.

Outside the largest markets, the Group focuses on achieving presence for its brands in key gateway cities with the potential for high demand from business and leisure guests and where its brands can generate revenue premiums.

The number of hotels in planning and under construction, known in the industry as the pipeline, reflect the future supply of hotels.

During 2011, the Group opened 44,265 rooms in 26 countries and territories, and signed a further 55,424 rooms into its development pipeline across 32 countries. As part of its ongoing commitment to maintaining the quality of its brands, the Group removed 33,078 rooms during the year. As at December 31, 2011, the Group had the largest pipeline in the industry, with 180,484 rooms in 1,144 hotels across 59 countries. This represents a market share of 13% of all hotels under development, including those that are independent or unaffiliated.

* Before regional and central overheads and exceptional items.

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The Group’s pipeline ensures continued growth in new and emerging markets that best suit its strengths and anticipates the future needs of customers. The Group has committed development teams across both developed and emerging markets ensuring a sizable pipeline in developing markets: during 2011 the Group opened 8,084 rooms in Greater China, representing nearly 20% of all new rooms opened by the Group across the globe.

Winning with our best in class delivery

The major benefit the Group brings to guests who stay with us, and owners who invest with us, is the extent of our hotel network and the demand we deliver through our system. Our system is the combined efforts of our scale and networks, websites, call centers, loyalty schemes and sales and marketing expertise to help guests book and stay with us, and then maintain the relationship with them after they leave. Together, these tools form one of the largest such ‘systems’ in the industry and are the engine of our business, delivering on average 69% of total rooms revenue.

With continued focus on the success of this global system, we have developed best-in-class marketing and technology to support our hotels and drive incremental revenues. This extensive marketing and technology support ranges from the ‘Stay You’ campaign for the Holiday Inn relaunch and the ‘Best Price Guarantee’ campaign to promote booking through the Group’s proprietary distribution channels, such as IHG.com and HolidayInn.com, to sophisticated technology allowing for improved targeted marketing, communications, and innovative booking technologies. During 2011, these innovations were best showcased by our leading mobile booking platforms realizing $148 million in revenues by December 31, 2011 — up from $2.5 million in 2009. These mobile platforms, which are tailored to each of our brands, are supported on the major mobile device operating platforms and demonstrate the Group’s efforts in anticipating how guests will interact with hotels and book rooms in the future.

Winning with our talented people and business relationships with others

The Group believes talented and passionate people at all levels of the business are a key competitive advantage to delivering Great Hotels Guests Love and enhanced shareholder returns. Part of this process is empowering our people to deliver our branded guest experience. To do this we need a culture which champions our brands and effectively articulates what our brands mean and who they are for. We have begun this with a focus on being ‘BrandHearted’. For the Group, ‘BrandHearted’ is about fostering a collaborative culture to improve our brands’ performance by ensuring the brands are at the heart of all decision making and actions, and helping our people to bring our brands to life.

The Group recognizes that a large proportion of its staff will not come under direct IHG employment and we have initiatives in place to help our owners deliver our brands and fulfil guests’ needs. We have extensive induction, communication, development and recognition programs aligned under our employment brand, ‘Room to be yourself’. These programs provide a supportive environment that helps our people to be successful and realize our Vision of becoming one of the great companies of the world by delivering the right experiences to our guests through shared values and living our brands.

Our talented people create our culture, and the Group is aligned around great values which are consistently brought to life through a suite of five the Group behaviors, the ‘Winning Ways’:

• do the right thing;

• show we care;

• aim higher;

• celebrate difference; and

• work better together.

The Group maintains effective relationships across all aspects of its operations. The Group’s operations are not dependent upon any single customer, supplier or hotel owner due to the breadth of its brands, market segments and geographical coverage. For example, the Group’s largest third-party hotel owner controls just 2% of the Group’s total room count, as at December 31, 2011.

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The Group continued to enhance relationships with suppliers and streamline its procurement processes during 2011. With a focus on sourcing high-quality goods and services at the most competitive prices and employing best-practice throughout the Group, IHG strives to ensure enhanced value for the Group, our hotel owners and shareholders.

The Group is proud of its strong and important relationship with the IHG Owners Association, the organization that represents owners of hotels under the Group’s brands across the world. IHG meets with the IHG Owners Association, in large and small groups, on a regular basis and works with them to support and facilitate the continued development of the Group’s brands and systems. During 2011, the combined work of the two organizations supported several enhancements to the Group’s system.

Examples include:

• Holiday Inn relaunch — the near completion of the $1 billion global relaunch of the Holiday Inn brand family delivered through joint owner and IHG investment;

• Crowne Plaza repositioning program — the global repositioning of the Crowne Plaza brand launched in 2011, to bring every hotel up to a leading standard offering modern business and meetings facilities;

• roomkey.com — an online search engine, founded by six of the world’s leading hotel companies — IHG, Choice Hotels International, Hilton, Hyatt, Marriott and Wyndham Hotel Group. The site provides consumers with the ability to compare and contrast room options across multiple hotel brands, ultimately booking on a hotel’s branded website; and

• IHG Owners Association rebranding — the rebranding of the International Association of Holiday Inns (“IAHI”), the Owners Association as the IHG Owners Association to reflect more accurately its representation of the portfolio of the Group’s brands and demonstrate the Association’s commitment to the BrandHearted journey.

Measuring our success

We have a holistic set of carefully selected KPIs to monitor our success in achieving our strategy. These are organized around the elements of our strategy: ‘Where we compete’, focusing on the appropriate business model, best developed and emerging markets and consumer segments; and ‘How we win’, focusing on our corporate priorities of preferred brands, talented people, and best in class delivery.

In particular, we use the following measures to monitor our performance:

• market share by rooms supply;

• pricing and revenue premiums;

• system contribution — the proportion of business delivered to our hotels by the Group’s dedicated booking channels (our “system”);

• employee engagement; and

• responsible business practices.

These KPIs are used to measure the Group’s and our peoples’ progress on our journey to delivering Great Hotels Guests Love and becoming one of the great companies of the world.

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Our performance against these KPIs over the 2009/2011 period is summarized in the following tables:

Where we compete

Strategic priorities	KPIs	Current status and 2011 development	2012 priorities
Best developed and emerging markets To accelerate profitable growth of our core business in the largest markets where presence and scale really count and also in key global gateway cities. Seeking opportunities to benefit from our scale in new business areas.	Net rooms supply	•  System size grown to 658,348 rooms; •  Over 90% of signings in scale markets, key global gateway cities and resort destinations; •  14 signings of Hotel Indigo and Staybridge Suites outside of North America; and •  241 hotels opened globally.	•  Accelerate growth strategies in quality locations in agreed scale markets; and •  continue to leverage scale.

How we win — Delivering Great Hotels Guests Love

Strategic priorities	KPIs	Current status and 2011 development	2012 priorities
Preferred brands To operate a portfolio of preferred brands attractive to both owners and guests that have clear market positions and differentiation in the eyes of the guest.	Global RevPAR growth/(decline) Comparable hotels, constant US$	•  Near completion of Holiday Inn relaunch; •  launched global repositioning program for our Crowne Plaza brand; •  developed two new brands to further capture opportunities in North America and China; and •  grew our industry-leading loyalty program to 63 million members.	•  Build upon the success of the Holiday Inn relaunch with repositioning of Crowne Plaza; •  continue development of our brand portfolio with further signings of our newer brands in expanding markets; and •  increase the Group’s business from Priority Club Rewards’ (“PCR”) members.

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Strategic priorities	KPIs	Current status and 2011 development	2012 priorities
Talented people Creating hotels that are well run, with brands brought to life by people who are proud of the work they do.	Employee engagement scores	• Training delivered to all senior managers on brand leadership; • training delivered to 60% of franchised hotels to deliver our branded guest experience; • jointly hosted our global recognition event — “Celebrate Service” week — with the IHG Owners Association, with over 3,000 hotels and offices participating; and • supported 49 employees from 22 countries to manage the athlete’s accommodation and placed 10 people in the London Organising Committee of the Olympic Games and Paralympic Games’ head office roles, as part of our London 2012 Olympic and Paralympic sponsorship.	• Strengthen brand capabilities, including cascading brand training to all our leaders; • strengthen IHG’s employment brand, particularly through the use of new media to make the Group an employer of choice; • develop our talent pipeline to meet our commercial goals; and • continue to develop compelling people offer to our franchisees.
Best in class delivery To generate higher returns for owners and IHG through increased revenue share, improved operating efficiency and growing margins.	Total gross revenue Actual US$ billion System contribution to revenue (reservations channels and PCR members direct to hotels) As percentage of rooms revenue	• Strengthened revenue streams from mobile booking channels; • established strategic industry partnership to develop roomkey.com; • strengthened coverage of our global sales force; and • grew our industry-leading loyalty program, contributing over $6.9 billion to global system rooms revenue.	• Optimize revenue from third-party, partner and the Group’s websites; • strengthen global sales force effectiveness; and • ensure the Group’s industry-leading system of delivering demand and revenue to hotels retains competitive advantage.

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Strategic priorities	KPIs	Current status and 2011 development	2012 priorities
Responsible business To take a proactive stance and seek creative solutions through innovation and collaboration on environment and community issues, and to drive increased value for IHG, owners, guests and the communities where we operate.	Hotels signed-up to “Green Engage”* Hotels, cumulative Pupils enrolled with “IHG Academy”* Students enrolled	•  Exceeded our “Green Engage” program target to enroll 1,700 hotels; •  “IHG Academy” program expanded to every IHG operating region and participation up by 17%; and •  led a Cornell University study on developing an industry standard for carbon measurement.	•  Enroll 50% of the Group’s hotels in “Green Engage” by the end of 2012; •  achieve energy savings of 6% to 10% in our owned and managed estate by end of 2012 (on a per available room night basis); •  continue to drive carbon strategy work to develop an industry standard for measuring carbon emission and reduction; •  create new opportunities for communities by growing the “IHG Academy” to more countries and increasing the student-base; and •  continue to leverage social media to drive stakeholder engagement.

* See page 39 for further details.

22

Segmental Results by Activity

The following table shows the Group’s continuing revenue and operating profit before exceptional operating items by activity and the percentage contribution of each activity, for the years ended December 31, 2011, 2010 and 2009.

	Year ended December 31,
	2011			2010			2009
	($ million)
Revenue(1)
Americas
Franchised		502			465			437
Managed		124			119			110
Owned and leased		204			223			225
		830			807			772
Europe
Franchised		86			76			79
Managed		118			70			58
Owned and leased		201			180			172
		405			326			309
AMEA
Franchised		19			15			14
Managed		151			155			134
Owned and leased		46			43			42
		216			213			190
Greater China
Franchised		2			2			1
Managed		77			60			32
Owned and leased		126			116			110
		205			178			143
Central(2)		112			104			124
Total		1,768			1,628			1,538
Operating profit before exceptional operating items(1)(3)
Americas
Franchised		431			392			364
Managed		52			21			(40	)
Owned and leased		17			13			11
Regional overheads		(49	)		(57	)		(47	)
		451			369			288
Europe
Franchised		65			55			57
Managed		26			17			18
Owned and leased		49			38			31
Regional overheads		(36	)		(32	)		(29	)
		104			78			77
AMEA
Franchised		12			8			6
Managed		87			88			82
Owned and leased		5			4			5
Regional overheads		(20	)		(18	)		(21	)
		84			82			72

Footnotes on page 25.

23

	Year ended December 31,
	2011			2010			2009
	($ million)
Greater China
Franchised		3			3			2
Managed		43			30			9
Owned and leased		37			33			27
Regional overheads		(16	)		(12	)		(8	)
		67			54			30
Central(2)		(147	)		(139	)		(104	)
Total		559			444			363

	Year ended December 31,
	2011		2010		2009
	(%)
Revenue
Americas
Franchised		28.4		28.6		28.4
Managed		7.0		7.3		7.2
Owned and leased		11.6		13.7		14.6
		47.0		49.6		50.2
Europe
Franchised		4.9		4.7		5.1
Managed		6.7		4.3		3.8
Owned and leased		11.3		11.0		11.2
		22.9		20.0		20.1
AMEA
Franchised		1.1		0.9		0.9
Managed		8.5		9.5		8.7
Owned and leased		2.6		2.7		2.7
		12.2		13.1		12.3
Greater China
Franchised		0.1		0.1		0.1
Managed		4.4		3.7		2.1
Owned and leased		7.1		7.1		7.1
		11.6		10.9		9.3
Central		6.3		6.4		8.1
Total		100.0		100.0		100.0

Footnotes on page 25.

24

	Year ended December 31,
	2011			2010			2009
	(%)
Operating profit before exceptional operating items
Americas
Franchised		77.1			88.3			100.2
Managed		9.3			4.7			(11.0	)
Owned and leased		3.0			2.9			3.0
Regional overheads		(8.7	)		(12.8	)		(12.9	)
		80.7			83.1			79.3
Europe
Franchised		11.6			12.4			15.7
Managed		4.6			3.8			5.0
Owned and leased		8.8			8.6			8.5
Regional overheads		(6.4	)		(7.2	)		(8.0	)
		18.6			17.6			21.2
AMEA
Franchised		2.1			1.8			1.6
Managed		15.6			19.8			22.6
Owned and leased		0.9			0.9			1.4
Regional overheads		(3.6	)		(4.0	)		(5.8	)
		15.0			18.5			19.8
Greater China
Franchised		0.5			0.7			0.6
Managed		7.7			6.7			2.5
Owned and leased		6.6			7.4			7.4
Regional overheads		(2.8	)		(2.7	)		(2.2	)
		12.0			12.1			8.3
Central		(26.3	)		(31.3	)		(28.6	)
Total		100.0			100.0			100.0

(1) The results of operations have been translated into US dollars at the average rates of exchange for the year. In the case of sterling, the translation rate $1 = £0.62 (2010 $1 = £0.65, 2009 $1 = £0.64). In the case of the euro, the translation rate is $1 = €0.72 (2010 $1 = €0.76, 2009 $1 = €0.72).

(2) Central revenue primarily relates to Holidex (the Group’s proprietary reservation system) fee income. Central operating profit includes central revenue less costs related to global functions.

(3) Operating profit before exceptional operating items does not include exceptional operating items for all periods presented. Exceptional operating items (charge unless otherwise noted) by region were the Americas credit of $35 million (2010 $8 million, 2009 $301 million); Europe $39 million (2010 $5 million, 2009 $22 million); AMEA credit of $26 million (2010 credit of $6 million, 2009 $7 million); Greater China $nil (2010 $nil, 2009 $nil); and Central credit of $35 million (2010 $nil, 2009 $43 million).

Global System

In addition to management or franchise fees, hotels within the Group’s system pay cash assessments and contributions which are collected by the Group for specific use within the System Fund (the “Fund”). The Fund also receives proceeds from the sale of Priority Club Rewards points. The Fund is managed for the benefit of hotels in the system with the objective of driving revenues for the hotels. The Fund is used to pay for marketing, the Priority Club Rewards loyalty program and the global reservations system.

Priority Club Rewards:    The Group’s worldwide loyalty scheme, Priority Club Rewards, is the largest of its kind in the hotel industry. Members enjoy a variety of privileges and rewards as they stay at the Group’s hotels around the world. The global system room revenue generated from Priority Club Rewards members during 2011 was $6.9 billion. Priority Club Rewards membership reached 63 million customers as at December 31, 2011, compared to 56 million as at December 31, 2010.

25

Central Reservations System Technology:    The Group operates the HolidexPlus reservations system. The HolidexPlus system receives reservations requests entered on terminals located at most of the Group’s reservations centers, as well as from global distribution systems operated by a number of major corporations and travel agents. Where local hotel systems allow, the HolidexPlus system immediately confirms reservations or indicates alternative accommodation available within the Group’s network. Confirmations are transmitted electronically to the hotel for which the reservation is made.

Reservations Call Centers:    The Group operates 11 reservations call centers around the world which enable it to sell in local languages in many countries and offer a high quality service to customers.

Internet:    The Group introduced electronic hotel reservations in 1995. The Internet is an important communications, branding and distribution channel for hotel sales. During 2011, 25% (24% in 2010) of global system room revenue was booked via the Internet through various branded websites, such as www.intercontinental.com and www.holidayinn.com, as well as certified third parties.

During 2011 the Group’s leading mobile booking platforms realized $148 million in revenue, up from $2.5 million in 2009.

The Group has established standards for working with third-party intermediaries — online travel distributors — who sell or re-sell the Group’s branded hotel rooms via their Internet sites. Under the standards, certified distributors are required to respect the Group’s trademarks, ensure reservations are guaranteed through an automated and common confirmation process, and clearly present fees to customers.

During 2011, global system room revenue booked through the Group’s global systems (which includes Priority Club Rewards members, central reservations and call centers, global distribution systems and the Internet) was 69% (68% in 2010).

Sales and Marketing

The Group targets its sales and marketing expenditure in each region on driving revenue and brand awareness or, in the case of sales investments, targeting segments such as corporate accounts, travel agencies and meeting organizers. The majority of the Group’s sales and marketing expenditure is funded by contractual fees paid by most hotels in the system.

Global Brands

Brands Overview

The Group offers hotel brands that appeal to guests with different needs and tastes. This requires a portfolio of large global brands, growing alongside innovative new brands to meet the unique experiences our guests desire.

The hotel industry is usually split into segments based upon price point and consumer expectations. The Group is focused on the three segments that together generate over 90% of branded hotel revenues: midscale (broadly 3 star hotels), upscale (mostly 4 star), and luxury (5 star).

The Group operates the following brands:

	At December 31, 2011
	Room numbers		Hotels
InterContinental Hotels & Resorts		57,598		169
Crowne Plaza Hotels & Resorts		105,104		387
Holiday Inn Hotels & Resorts(1)		228,256		1,240
Holiday Inn Express		196,666		2,114
Staybridge Suites		19,567		179
Candlewood Suites		27,500		285
Hotel Indigo		4,564		39
Other		19,093		67
Total		658,348		4,480

(1) Includes Holiday Inn Club Vacations (2,928 rooms, 7 hotels)

26

To reflect emerging consumer trends the Group has developed two new brands. On February 28, 2012, the Group launched EVEN hotels aimed at the sizable US midscale market. It is the first mainstream lifestyle hotel brand focused on wellness and is designed to provide a solution for healthy minded travelers.

On March 19, 2012, the Group launched HUALUXE Hotels and Resorts specifically for the Chinese traveler. HUALUXE takes the best aspects of renowned Chinese hospitality and applies the Group’s international scale, powerful systems and unparalleled insights into the Chinese market to deliver a traditional high-end consistent experience.

The first EVEN and HUALUXE hotels are expected to open in late 2013 or early 2014.

InterContinental Hotels & Resorts

	Americas		Europe		AMEA		Greater China
Average room rate $(1)		168.20		247.94		206.46		169.58
Room numbers(2)		17,598		9,664		20,425		9,911

(1) For the year ended December 31, 2011; quoted at constant US dollar exchange rate. Average room rate is for comparable InterContinental hotels.

(2) At December 31, 2011.

InterContinental Hotels & Resorts (“InterContinental”) is the Group’s 5-star brand located in key cities and resort destinations in over 60 countries worldwide. With over 60 years of experience, our talented people, supported by outstanding facilities, help us differentiate in a competitive segment by understanding that well-traveled and affluent people want to be connected to what is special about a hotel and its destination. The brand’s ethos is to empower our talented people to share their knowledge so guests further enjoy great experiences that enrich their lives, broaden their outlook, and make the most of their time with us.

InterContinental hotels are principally managed by the Group. At December 31, 2011, there were 169 InterContinental hotels which represented 9% of the Group’s total hotel rooms. During 2011, six InterContinental hotels were added to the portfolio, while eight hotels were removed.

Crowne Plaza Hotels & Resorts

	Americas		Europe		AMEA		Greater China
Average room rate $(1)		105.61		133.11		141.77		95.58
Room numbers(2)		50,002		19,725		16,921		18,456

(1) For the year ended December 31, 2011; quoted at constant US dollar exchange rate. Average room rate is for comparable Crowne Plaza hotels.

(2) At December 31, 2011.

Crowne Plaza Hotels & Resorts (“Crowne Plaza”), in the upscale, 4 star segment, specializes in offering modern business and meeting facilities with a unique service style to provide productive and energising experiences to guests who live life to the fullest and believe travel is essential for their journey to success. The Group is committed to the sustainable evolution of each of its brands, and as such, is working hard to strengthen Crowne Plaza’s position in the market over the coming years. A multi-year brand development program was announced in 2011 to reflect the commitment of IHG and owners to improve the guest experience.

The majority of Crowne Plaza hotels are operated under franchise agreements in the US and Europe, and managed in other markets by the Group. At December 31, 2011, there were 387 Crowne Plaza hotels which represented 16% of the Group’s total hotel rooms. During 2011, 30 Crowne Plaza hotels were added to the portfolio, while 31 hotels were removed.

27

The Holiday Inn Family of Brands

The Holiday Inn brand family comprises Holiday Inn, Holiday Inn Express and Holiday Inn Club Vacations. It is the world’s largest midscale hotel brand family by number of rooms. Working together with our owners and through their continued investment, the Holiday Inn brand family has all but completed a $1 billion refresh, updating its image by upgrading facilities, service and amenities, and ensuring the brand family continues to remain competitive within its midscale markets. Holiday Inn aims to provide a welcoming experience to business and leisure travelers worldwide. These are ‘full service’ hotels, providing amenities such as a restaurant and room service. Recently, J.D. Power and Associates ranked Holiday Inn “Highest in Guest Satisfaction Among Midscale Full Service Hotel Chain” in their 2011 North American Hotel Guest Satisfaction Index Study^SM. The family adds to the Group’s record of firsts, being both the first international hotel chain to open in China in 1984, and to launch a direct booking website in 1995. Holiday Inn Express is one of the world’s fastest growing hotel brands in its segment. Holiday Inn Express aims to provide an efficient and cost-effective experience to business and leisure travelers. These are ‘limited service’ hotels offering a complimentary breakfast, but do not offer the full compliment of amenities (such as a restaurant or full service bar).

Holiday Inn Hotels & Resorts

	Americas		Europe		AMEA		Greater China
Average room rate $(1)		98.89		112.62		123.18		77.40
Room numbers(2)(3)		145,821		46,465		18,032		17,938

(1) For the year ended December 31, 2011; quoted at constant US dollar exchange rate. Average room rate is for comparable Holiday Inn hotels.

(2) At December 31, 2011.

(3) The Americas total includes Holiday Inn Club Vacations (2,928 rooms).

Holiday Inn Hotels & Resorts (including Holiday Inn Club Vacations, which is the brand family’s vacation ownership brand) (“Holiday Inn”) are predominantly operated under franchise agreements. At December 31, 2011, there were 1,240 Holiday Inn hotels which represented 35% of the Group’s total hotel rooms, of which 64% were located in the Americas. During 2011, 58 Holiday Inn hotels were added to the portfolio, while 65 hotels were removed.

Holiday Inn Express

	Americas		Europe		AMEA		Greater China
Average room rate $(1)		98.65		91.48		71.10		46.77
Room numbers(2)		162,935		23,181		1,857		8,693

(1) For the year ended December 31, 2011; quoted at constant US dollar exchange rate. Average room rate is for comparable Holiday Inn Express hotels.

(2) At December 31, 2011.

Holiday Inn Express hotels are almost entirely operated under franchise agreements. At December 31, 2011, there were 2,114 Holiday Inn Express hotels worldwide which represented 30% of the Group’s total hotel rooms, of which 83% were located in the Americas. During 2011, 96 new Holiday Inn Express hotels were added to the portfolio, while 57 hotels were removed.

Staybridge Suites

	Americas		Europe		AMEA
Average room rate $(1)		96.44		113.87		144.69
Room numbers(2)		18,820		443		304

(1) For the year ended December 31, 2011; quoted at constant US dollar exchange rate. Average room rate is for comparable Staybridge Suites hotels.

(2) At December 31, 2011.

28

Staybridge Suites is the Group’s upscale extended stay brand for guests on longer trips, offering studios and suites complete with full kitchens and separate sleeping and work areas in a sociable, family-like atmosphere. It was the fastest upper-tier extended stay brand to reach the 50-hotel and 100-hotel milestones and in 2008, opened its first hotel in Europe in Liverpool, UK. Since then, Staybridge Suites has expanded its footprint with locations including Cairo and Abu Dhabi in the Middle East and most recently in St. Petersburg in Russia. Staybridge Suites is playing its role in IHG’s partnership with the London 2012 Olympic and Paralympic Games by opening the Staybridge Suites London Stratford property. Located on the doorstep of the Olympic Village and at the heart of Europe’s largest shopping center, this property will be one of the onsite hotels for athletes during the games.

The Staybridge Suites brand is principally operated under management contracts and franchise agreements. At December 31, 2011 there were 179 Staybridge Suites hotels, which represented 3% of the Group’s total hotel rooms, of which 96% (174 hotels) were located in the Americas. During 2011, seven hotels were added to the portfolio, and 16 hotels were removed.

Candlewood Suites

	Americas
Average room rate $(1)		66.45
Room numbers(2)		27,500

(1) For the year ended December 31, 2011; quoted at constant US dollar exchange rate. Average room rate is for comparable Candlewood Suites hotels.

(2) At December 31, 2011.

Candlewood Suites, acquired by the Group in 2003, is our North American-focused midscale extended stay brand that gives its guests all the essentials they need for a home-like stay at great value. Candlewood Suites has the most properties under development in North American midscale extended stay lodging and continues to keep its look and feel fresh. During 2011, the brand began a program to develop a new and refreshed look and design to ensure its guest experience remains competitive and attractive.

The Candlewood Suites brand is operated under management contracts and franchise agreements. At December 31, 2011, there were 285 Candlewood Suites hotels, which represented 4% of the Group’s total rooms, all of which were located in the Americas. During 2011, 15 hotels were added to the portfolio, and 18 hotels were removed.

Hotel Indigo

	Americas		Europe		Greater China
Average room rate $(1)		118.32		203.48		—
Room numbers(2)		3,973		407		184

(1) For the year ended December 31, 2011; quoted at constant US dollar exchange rate. Average room rate is for comparable Hotel Indigo hotels.

(2) At December 31, 2011.

Hotel Indigo is the Group’s boutique and youngest brand, launched in 2004, and focuses on a guest that appreciates art and design and that wants to experience something different. Hotel Indigo provides guests with the refreshing design and service experience synonymous with a boutique hotel. Each hotel is unique and reflects its local neighborhood with design elements such as murals, a vibrant color palette and locally sourced and seasonal menu items. During 2011, Hotel Indigo was awarded “Highest Guest Satisfaction Among Upscale Hotel Chains” in the J.D. Power and Associates’ 2011 North American Hotel Guest Satisfaction Index Study.

The Hotel Indigo brand is principally operated under franchise agreements. At December 31, 2011, there were 39 Hotel Indigo hotels, 33 located in the Americas. During 2011, four hotels were added to the portfolio, and three hotels were removed.

29

Geographical Analysis

Although it has worldwide hotel operations, the Group is most dependent on the Americas for operating profit, reflecting the structure of the branded global hotel market. The Americas region generated 64% of the Group’s operating profit before central overheads and exceptional operating items during 2011.

The geographical analysis, split by number of rooms and operating profit, is set out in the table below.

	Americas		Europe		AMEA		Greater China
	(% of total)
Room numbers(1)		67		15		9		9
Regional operating profit (before central overheads and exceptional operating items)(2)		64		15		12		9

(1) At December 31, 2011.

(2) For the year ended December 31, 2011.

Americas

In the Americas, the largest proportion of rooms is operated under the franchise business model (90% of rooms in the Americas operate under this model) primarily in the midscale segment (Holiday Inn and Holiday Inn Express). Similarly, in the upscale segment, Crowne Plaza is predominantly franchised, whereas the majority of the InterContinental branded hotels are operated under franchise and management agreements. With 3,473 hotels (442,198 rooms), the Americas represented 67% of the Group’s room count and 64% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2011. The key profit producing region is the United States, although the Group is also represented in each of Latin America, Canada, Mexico and the Caribbean.

Europe

In Europe, the largest proportion of rooms is operated under the franchise business model primarily in the midscale segment (Holiday Inn and Holiday Inn Express). Similarly, in the upscale segment, Crowne Plaza is predominantly franchised whereas the majority of the InterContinental branded hotels are operated under management agreements. Comprising 612 hotels (99,885 rooms) at the end of 2011, Europe represented 15% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2011. Profits are primarily generated from hotels in the United Kingdom and Continental European gateway cities.

AMEA

In AMEA, the largest proportion of rooms are operated under the managed business model. The majority of hotels are in the midscale and upscale segments. Comprising 228 hotels (61,083 rooms) at December 31, 2011, AMEA represents 12% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2011.

Greater China

In Greater China, the largest proportion of rooms are operated under the managed business model. The majority of hotels are in the midscale and upscale segments. Comprising 167 hotels (55,182 rooms) at December 31, 2011, Greater China represents 9% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2011. The Chinese tourism market continues to grow, with the country forecast to become one of the world’s biggest tourist destinations within 10 years. At December 31, 2011 there were 149 hotels in development.

30

The following table shows information concerning the geographical locations and ownership of the Group’s hotels as at December 31, 2011.

	Franchised				Managed				Owned and leased				Total
	Hotels		Rooms		Hotels		Rooms		Hotels		Rooms		Hotels		Rooms
Americas
InterContinental		27		7,580		22		8,529		3		1,489		52		17,598
Crowne Plaza		176		45,719		12		4,283		—		—		188		50,002
Holiday Inn(1)		787		136,720		27		8,406		2		695		816		145,821
Holiday Inn Express		1,872		162,520		2		415		—		—		1,874		162,935
Staybridge Suites		145		15,180		28		3,528		1		112		174		18,820
Candlewood Suites		226		20,224		59		7,276		—		—		285		27,500
Hotel Indigo		30		3,458		3		515		—		—		33		3,973
Other		3		7,279		48		8,270		—		—		51		15,549
Total		3,266		398,680		201		41,222		6		2,296		3.473		442,198
Europe
InterContinental		8		1,913		20		6,834		2		917		30		9,664
Crowne Plaza		73		16,603		13		3,122		—		—		86		19,725
Holiday Inn		224		34,510		66		11,955		—		—		290		46,465
Holiday Inn Express		197		23,063		1		118		—		—		198		23,181
Staybridge Suites		2		315		1		128		—		—		3		443
Hotel Indigo		5		407		—		—		—		—		5		407
Total		509		76,811		101		22,157		2		917		612		99,885
AMEA
InterContinental		9		2,980		54		17,069		1		376		64		20,425
Crowne Plaza		7		1,287		54		15,634		—		—		61		16,921
Holiday Inn		20		4,060		56		13,772		1		200		77		18,032
Holiday Inn Express		8		1,857		—		—		—		—		8		1,857
Hotel Indigo		—		—		2		304		—		—		2		304
Other		10		2,433		6		1,111		—		—		16		3,544
Total		54		12,617		172		47,890		2		576		228		61,083
Greater China
InterContinental		1		573		21		8,843		1		495		23		9,911
Crowne Plaza		—		—		52		18,456		—		—		52		18,456
Holiday Inn		1		252		56		17,686		—		—		57		17,938
Holiday Inn Express		1		138		33		8,555		—		—		34		8,693
Hotel Indigo		—		—		1		184		—		—		1		184
Total		3		963		163		53,724		1		495		167		55,182
Total
InterContinental		45		13,046		117		41,275		7		3,277		169		57,598
Crowne Plaza		256		63,609		131		41,495		—		—		387		105,104
Holiday Inn(1)		1,032		175,542		205		51,819		3		895		1,240		228,256
Holiday Inn Express		2,078		187,578		36		9,088		—		—		2,114		196,666
Staybridge Suites		147		15,495		31		3,960		1		112		179		19,567
Candlewood Suites		226		20,224		59		7,276		—		—		285		27,500
Hotel Indigo		35		3,865		4		699		—		—		39		4,564
Other		13		9,712		54		9,381		—		—		67		19,093
Total		3,832		489,071		637		164,993		11		4,284		4,480		658,348

(1) Includes Holiday Inn Club Vacations (7 hotels, 2,928 rooms) within franchised.

31

Room Count and Pipeline

During 2011, the Group’s global system (the number of hotels and rooms which are franchised, managed, owned or leased by the Group) increased by 43 hotels (11,187 rooms). Openings of 241 hotels (44,265 rooms) were driven by continued expansion in the US, in particular within the Holiday Inn brand family and Greater China. These openings offset the removal of 198 hotels (33,078 rooms). Removals in the US included 43 hotels (6,994 rooms) which were removed from the system as part of the renegotiation of the management contract with Hospitality Properties Trust, a major US owner group. Other openings included the Venetian and Palazzo resorts, under an InterContinental Alliance relationship (6,986 rooms, included in franchised) as well as 25 hotels (4,796 rooms) managed on US army bases.

At the end of 2011, the pipeline totaled 1,144 hotels (180,484 rooms). The Group’s pipeline represents hotels and rooms where a contract has been signed and the appropriate fees paid. The continued global demand for the Group’s brands is demonstrated by over 50% of pipeline rooms being outside of the Americas region, including 28% in Greater China.

Signings of 356 hotels (55,424 rooms) represented an increase in the number of hotels signed from 2010 levels (319 hotels). Momentum for the Hotel Indigo brand continued into 2011 with 19 signings, including entry into the Russian market, as well as the first Hotel Indigo resort in Phuket, Thailand.

During 2011, the opening of 44,265 rooms contributed to a net pipeline decline of 24,375 rooms. Active management out of the pipeline of deals that have become dormant or no longer viable resulted in a further reduction of 35,534 rooms.

There are no assurances that all of the hotels in the pipeline will open. The construction, conversion and development of hotels is dependent upon a number of factors, including meeting brand standards, obtaining the necessary permits relating to construction and operation, the cost of constructing, converting and equipping such hotels and the ability to obtain suitable financing at acceptable interest rates. The supply of capital for hotel development in the United States and major economies may not continue at previous levels and consequently the pipeline could decrease.

Americas

The Americas hotel and room count in the year increased by 15 hotels (2,823 rooms) to 3,473 hotels (442,198 rooms). Openings of 168 hotels (27,107 rooms) included the Venetian and Palazzo resorts, under an InterContinental Alliance relationship (6,986 rooms, included in franchised) and 25 hotels managed as part of the US government’s Privatization of Army Lodgings initiative. The Holiday Inn and Holiday Inn Express brands generated openings of 113 hotels (12,269 rooms) and the Group’s extended-stay brands, Staybridge Suites and Candlewood Suites, achieved openings of 22 hotels (2,036 rooms). Removals of 153 hotels (24,284 rooms) were mainly from Crowne Plaza and Holiday Inn hotels, and included 43 hotels (6,994 rooms) which were removed as part of the renegotiation of the management contract with Hospitality Properties Trust.

The Americas pipeline totaled 775 hotels (84,450 rooms) as at December 31, 2011. Overall signings of 30,109 rooms were in line with 2010 levels. Notable signings included Hotel Indigo properties in Guadalajara and Boca del Rio in Mexico, as well as Lower East Side, Manhattan in the US. The overall pipeline reduced by 115 hotels (18,059 rooms) compared to 2010.

Europe

During 2011, Europe hotel and room count increased by 13 hotels (a net increase of 2,236 rooms) to 612 hotels (99,885 rooms). Activity included openings of 37 hotels (6,167 rooms), an increase from 27 hotels and 4,419 rooms in 2010, and removals of 24 hotels (3,931 rooms). The net decrease of eight Holiday Inn hotels comprised nine openings and 17 removals, five of which relate to the Holiday Inn brand relaunch. There were three Hotel Indigo openings in the UK in 2011, bringing the total Hotel Indigo count for Europe to five. Two InterContinental hotels, in Moscow and Porto, opened in 2011, representing a re-entry for the brand into the Russian and Portuguese markets.

32

There were 38 hotel signings (5,779 rooms) in 2011, down from 51 hotel signings (7,479 rooms) in 2010, strengthening the Group’s presence in established markets such as the UK, Germany and the Netherlands and extending into newer markets such as Turkey and Russia. Demand was particularly strong in the midscale segment which represented 65% of room signings. There were five further signings for the Group’s lifestyle brand, Hotel Indigo, including further expansion in the UK and entry into the Russian market. There were also seven Crowne Plaza signings including three in the developing Turkish market.

AMEA

AMEA hotel and room count decreased by seven hotels (527 rooms) to 228 hotels (61,083 rooms). Openings of 10 hotels (2,907 rooms) were offset by the removal of 17 hotels (3,434 rooms). Hotel openings were mainly in the Crowne Plaza and Holiday Inn brands, including notably the entry of the Crowne Plaza brand into the Vietnam market (in West Hanoi and Danang) and a second Holiday Inn resort in Phuket, Thailand.

Signings increased from 27 hotels (6,410 rooms) in 2010 to 36 hotels (7,424 rooms) in 2011, mainly within the Holiday Inn brand family (23 hotels or 5,037 rooms), including five Holiday Inn Express hotels as part of a deal with Duet India Hotels Group. In addition, there were three new signings for Hotel Indigo, in Jakarta and Riyadh, as well as the world’s first Hotel Indigo resort in Phuket, Thailand.

Pipeline signings were offset by active management out of the pipeline of deals which were dormant or no longer viable, including a number of exits in the Middle East reflecting increased uncertainty in the region.

Greater China

Greater China hotel and room count increased by 22 hotels (6,655 rooms) to 167 hotels (55,182 rooms). Growth was driven by openings of 26 hotels (8,084 rooms), higher than in 2010 (24 hotels or 7,253 rooms). The majority of openings were in the upscale brands in 2011, including the InterContinental One Thousand Island Lake Resort which is the Group’s first resort in East China, whilst there were 12 openings for the Holiday Inn brand family, including five Holiday Inn Express hotels.

The pipeline in Greater China increased by two hotels to 149 hotels. There were 38 hotels signed during 2011 (12,112 rooms) compared to 40 hotels (11,486 rooms) in 2010. Demand was strong for both upscale and midscale brands. Signings were split between 21 hotels in the upscale brands (InterContinental, Crowne Plaza and Hotel Indigo) and 17 hotels within the midscale Holiday Inn brand family (including five for the Holiday Inn Express).

Key signings include Holiday Inn in Macau with Sands China Ltd, which will be the world’s largest Holiday Inn, with 1,224 rooms, and Hotel Indigo Haitang Bay, which will be the first Hotel Indigo to open in a resort location in Greater China.

	Hotels							Rooms
Global hotel and room count at December 31,	2011		2010		Change over 2010			2011		2010		Change over 2010
Analyzed by brand:
InterContinental		169		171		(2	)		57,598		58,429		(831	)
Crowne Plaza		387		388		(1	)		105,104		106,155		(1,051	)
Holiday Inn(1)		1,240		1,247		(7	)		228,256		230,117		(1,861	)
Holiday Inn Express		2,114		2,075		39			196,666		191,228		5,438
Staybridge Suites		179		188		(9	)		19,567		20,762		(1,195	)
Candlewood Suites		285		288		(3	)		27,500		28,253		(753	)
Hotel Indigo		39		38		1			4,564		4,548		16
Other		67		42		25			19,093		7,669		11,424
Total		4,480		4,437		43			658,348		647,161		11,187
Analyzed by ownership type:
Franchised		3,832		3,783		49			489,071		479,320		9,751
Managed		637		639		(2	)		164,993		162,711		2,282
Owned and leased		11		15		(4	)		4,284		5,130		(846	)
Total		4,480		4,437		43			658,348		647,161		11,187

(1) Includes Holiday Inn Club Vacations (7 hotels, 2,928 rooms in 2011; 2010 6 hotels, 2,892 rooms).

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	Hotels							Rooms
Global pipeline at December 31,	2011		2010		Change over 2010			2011		2010		Change over 2010
Analyzed by brand:
InterContinental		51		60		(9	)		17,623		19,374		(1,751	)
Crowne Plaza		108		123		(15	)		34,643		38,994		(4,351	)
Holiday Inn(1)		267		313		(46	)		50,750		57,505		(6,755	)
Holiday Inn Express		470		494		(24	)		52,201		53,219		(1,018	)
Staybridge Suites		95		101		(6	)		10,026		10,760		(734	)
Candlewood Suites		94		120		(26	)		8,062		10,506		(2,444	)
Hotel Indigo		59		62		(3	)		7,179		7,627		(448	)
Other		—		2		(2	)		—		6,874		(6,874	)
Total		1,144		1,275		(131	)		180,484		204,859		(24,375	)
Analyzed by ownership type:
Franchised		853		970		(117	)		96,513		113,940		(17,427	)
Managed		291		305		(14	)		83,971		90,919		(6,948	)
Total		1,144		1,275		(131	)		180,484		204,859		(24,375	)

(1) Includes Holiday Inn Club Vacations (1 hotel, 658 rooms; 2010 nil).

Seasonality

Although the performance of individual hotels and geographic markets might be highly seasonal due to a variety of factors such as the tourist trade and local economic conditions, the geographical spread of the Group’s hotels in nearly 100 countries and territories and the relative stability of the income stream from franchising and management activities, diminishes, to some extent, the effect of seasonality on the results of the Group.

Competition

The Group’s hotels compete with a wide range of facilities offering various types of lodging options and related services to the public. The competition includes several large and moderate sized hotel chains offering upper, mid and lower priced accommodation and also includes independent hotels in each of these market segments, particularly outside of North America where the lodging industry is much more fragmented. Major hotel chains which compete with the Group include Marriott International, Inc., Starwood Hotels & Resorts Worldwide, Inc., Choice Hotels International, Inc., Best Western International, Inc., Hilton Hotels Corporation, Wyndham Worldwide Corporation, Four Seasons Hotels Inc. and Accor S.A. The Group also competes with non-hotel options, such as timeshare offerings and cruises.

RevPAR

The following tables present RevPAR statistics for the year ended December 31, 2011 and a comparison to 2010. RevPAR is a meaningful indicator of performance because it measures period-over-period change in rooms revenue for comparable hotels. RevPAR is calculated by dividing rooms revenue for comparable hotels by room nights available to guests for the period.

Franchised, managed, owned and leased statistics are for comparable hotels, and include only those hotels in the Group’s system at December 31, 2011 and franchised, managed, owned or leased by the Group since January 1, 2010.

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The comparison with 2010 is at constant US dollar exchange rates.

	Franchised						Managed						Owned and leased
	2011			Change vs 2010			2011			Change vs 2010			2011			Change vs 2010
Americas
InterContinental
Occupancy		61.5	%		3.4	%pts		72.2	%		2.9	%pts		81.3	%		1.9	%pts
Average daily rate		128.87			0.0	%		181.49			4.3	%		243.50			9.1	%
RevPAR		79.27			5.9	%		131.06			8.6	%		197.98			11.7	%
Crowne Plaza
Occupancy		60.2	%		2.1	%pts		73.8	%		3.2	%pts		—			—
Average daily rate		100.58			2.2	%		132.52			4.0	%		—			—
RevPAR		60.57			6.0	%		97.83			8.8	%		—			—
Holiday Inn
Occupancy		60.5	%		2.2	%pts		72.3	%		2.4	%pts		74.5	%		2.8	%pts
Average daily rate		97.70			2.3	%		113.77			6.2	%		107.57			(7.4	)%
RevPAR		59.12			6.3	%		82.26			9.9	%		80.12			(3.8	)%
Holiday Inn Express
Occupancy		64.4	%		3.1	%pts		78.0	%		1.6	%pts		—			—
Average daily rate		98.54			2.7	%		129.81			12.8	%		—			—
RevPAR		63.44			7.9	%		101.20			15.2	%		—			—
Staybridge Suites
Occupancy		72.8	%		3.7	%pts		77.4	%		2.6	%pts		79.2	%		0.5	%pts
Average daily rate		93.99			2.4	%		102.43			4.4	%		81.56			9.0	%
RevPAR		68.42			8.0	%		79.26			8.0	%		64.60			9.6	%
Candlewood Suites
Occupancy		70.1	%		4.6	%pts		74.8	%		2.9	%pts		—			—
Average daily rate		70.89			2.8	%		59.40			4.0	%		—			—
RevPAR		49.67			10.0	%		44.44			8.1	%		—			—
Hotel Indigo
Occupancy		66.1	%		5.2	%pts		66.0	%		0.2	%pts		—			—
Average daily rate		116.28			4.9	%		130.60			7.5	%		—			—
RevPAR		76.89			13.8	%		86.16			7.8	%		—			—
Other
Occupancy		—			—			80.7	%		(0.4	)%pts		—			—
Average daily rate		—			—			98.50			(1.8	)%		—			—
RevPAR		—			—			79.51			(2.2	)%		—			—

35

	Franchised						Managed						Owned and leased
	2011			Change vs 2010			2011			Change vs 2010			2011			Change vs 2010
Europe
InterContinental
Occupancy		60.9	%		2.1	%pts		64.9	%		1.9	%pts		81.1	%		0.5	%pts
Average daily rate		244.73			4.0	%		209.50			5.1	%		443.44			10.3	%
RevPAR		148.93			7.7	%		135.91			8.3	%		359.67			10.9	%
Crowne Plaza
Occupancy		68.9	%		2.1	%pts		75.5	%		(0.3	)%pts		—			—
Average daily rate		131.14			1.9	%		143.74			2.7	%		—			—
RevPAR		90.40			5.1	%		108.57			2.3	%		—			—
Holiday Inn
Occupancy		66.5	%		1.5	%pts		73.3	%		0.4	%pts		—			—
Average daily rate		113.26			2.0	%		111.20			3.7	%		—			—
RevPAR		75.27			4.4	%		81.54			4.2	%		—			—
Holiday Inn Express
Occupancy		69.8	%		0.5	%pts		46.3	%		0.5	%pts		—			—
Average daily rate		91.55			1.1	%		74.37			0.5	%		—			—
RevPAR		63.90			1.8	%		34.41			1.6	%		—			—
Staybridge Suites
Occupancy		69.5	%		(4.9	)%pts		78.3	%		5.9	%pts		—			—
Average daily rate		111.88			3.5	%		115.69			(0.6	)%		—			—
RevPAR		77.73			(3.3	)%		90.62			7.5	%		—			—
Hotel Indigo
Occupancy		94.0	%		0.6	%pts		—			—			—			—
Average daily rate		203.48			3.2	%		—			—			—			—
RevPAR		191.20			3.8	%		—			—			—			—

	Franchised						Managed						Owned and leased
	2011			Change vs 2010			2011			Change vs 2010			2011			Change vs 2010
AMEA
InterContinental
Occupancy		70.8	%		(3.9	)%pts		64.5	%		(2.2	)%pts		71.4	%		4.9	%pts
Average daily rate		209.95			5.3	%		207.30			0.6	%		152.22			2.7	%
RevPAR		148.64			(0.2	)%		133.62			(2.7	)%		108.75			10.3	%
Crowne Plaza
Occupancy		61.0	%		5.5	%pts		71.4	%		(1.0	)%pts		—			—
Average daily rate		118.04			(5.3	)%		143.00			2.5	%		—			—
RevPAR		72.04			4.2	%		102.10			1.1	%		—			—
Holiday Inn
Occupancy		72.0	%		4.7	%pts		71.8	%		3.1	%pts		87.2	%		(2.9	)%pts
Average daily rate		130.38			2.7	%		120.45			3.3	%		155.38			8.9	%
RevPAR		93.84			9.9	%		86.42			8.0	%		135.49			5.4	%
Holiday Inn Express
Occupancy		56.5	%		(1.8	)%pts		—			—			—			—
Average daily rate		71.10			(8.7	)%		—			—			—			—
RevPAR		40.14			(11.4	)%		—			—			—			—
Staybridge Suites
Occupancy		—			—			79.5	%		1.4	%pts		—			—
Average daily rate		—			—			144.69			(4.2	)%		—			—
RevPAR		—			—			114.96			(2.4	)%		—			—
Other
Occupancy		68.4	%		(2.1	)%pts		61.4	%		(8.7	)%pts		—			—
Average daily rate		123.25			0.4	%		94.14			(0.3	)%		—			—
RevPAR		84.31			(2.6	)%		57.76			(12.7	)%		—			—

36

	Franchised						Managed						Owned and leased
	2011			Change vs 2010			2011			Change vs 2010			2011			Change vs 2010
Greater China
InterContinental
Occupancy		83.4	%		2.3	%pts		59.4	%		4.5	%pts		75.1	%		3.9	%pts
Average daily rate		228.38			20.5	%		135.21			7.9	%		384.22			7.4	%
RevPAR		190.39			24.0	%		80.31			16.8	%		288.38			13.4	%
Crowne Plaza
Occupancy		—			—			60.1	%		2.7	%pts		—			—
Average daily rate		—			—			95.58			4.8	%		—			—
RevPAR		—			—			57.40			9.7	%		—			—
Holiday Inn
Occupancy		77.8	%		(2.2	)%pts		64.3	%		2.4	%pts		—			—
Average daily rate		52.25			12.5	%		77.96			4.0	%		—			—
RevPAR		40.63			9.4	%		50.11			8.0	%		—			—
Holiday Inn Express
Occupancy		76.0	%		(0.3	)%pts		67.6	%		2.9	%pts		—			—
Average daily rate		36.22			3.3	%		47.03			3.2	%		—			—
RevPAR		27.53			2.9	%		31.79			7.8	%		—			—

Regulation

Both in the United Kingdom and internationally, the Group’s hotel operations are subject to regulation, including health and safety, zoning and similar land use laws as well as regulations that influence or determine wages, prices, interest rates, construction procedures and costs.

TRADEMARKS

Group companies own a substantial number of service brands upon which it is dependent and the Group believes that its significant trademarks are protected in all material respects in the markets in which its brands currently operate.

ORGANIZATIONAL STRUCTURE

Principal operating subsidiary undertakings

InterContinental Hotels Group PLC was the beneficial owner of all of the equity share capital, either itself or through subsidiary undertakings, of the following companies during the year. The companies listed below include those which principally affect the amount of profit and assets of the Group.

Six Continents Limited^(a)

Hotel Inter-Continental London Limited^(a)

IHG Hotels Limited^(a)

Six Continents Hotels, Inc.^(b)

Inter-Continental Hotels Corporation^(b)

111 East 48^th Street Holdings, LLC^(b)

InterContinental Hotels Group Resources, Inc.^(b)

InterContinental Hong Kong Limited^(c)

Société Nouvelle du Grand Hotel SA^(d)

(a) Incorporated in Great Britain and registered in England and Wales.

(b) Incorporated in the United States.

(c) Incorporated in Hong Kong.

(d) Incorporated in France.

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PROPERTY, PLANT AND EQUIPMENT

Group companies own and lease properties throughout the world, principally hotels but also offices. The table below analyzes the net book value of the Group’s property, plant and equipment at December 31, 2011.

Net book value at December 31, 2011	Americas		Europe		AMEA		Greater China		Total
	($ million)
Land and buildings.		273		510		10		270		1,063
Fixtures, fittings and equipment		80		135		30		54		299
		353		645		40		324		1,362

In addition, there was one hotel, the InterContinental New York Barclay, with a net book value of $217 million, that was classified as held for sale at December 31, 2011.

Including assets classified as held for sale, approximately 40% of hotel properties by value were directly owned, with 55% held under leases having a term of 50 years or longer.

Including assets classified as held for sale, approximately 90% of the net book value relates to the top five owned and leased hotels (in terms of value) of a total of 11 hotels, including $190 million relating to assets held under finance leases.

Contracts placed for expenditure on property, plant and equipment not included in the Consolidated Financial Statements at December 31, 2011 amounted to $10 million.

Charges over one hotel totaling $85 million exist as security provided to the Group’s pension plans.

ENVIRONMENT

With over 4,400 hotels worldwide and almost 1,150 in the pipeline, the Group has a tremendous opportunity to help make tourism responsible, from the energy it uses, to the economic opportunities it creates and the support it can provide to communities in times of disaster.

As such, the Group is committed to:

• Implementing sound environmental practices in the design, development and operation of its hotels;

• Encouraging the development and integration of sustainable technologies;

• Endeavoring to reduce its use of energy, water and re-use and recycle the resources consumed by its business wherever practical;

• Driving economic opportunity through the community strategy;

• Engaging its guests, colleagues, hotel owners, suppliers and contractors in its efforts to protect the environment and support local communities;

• Providing the training and resources required to meet its objectives;

• Monitoring, recording and benchmarking its environmental and community performance on a regular basis;

• Making business decisions taking into account these commitments; and

• Communicating its policies, practices and programs to all its stakeholders.

Corporate Responsibility (“CR”) is part of the Group’s culture and part of the way it does business. Doing the right thing creates shared value, reinforces trust in the Group’s brands and helps its hotels manage costs, drive revenue and be prepared for the future. It helps the Group address social, economic and environmental challenges — keeping it in tune with its stakeholders and strengthening its corporate reputation. That is why the Group puts CR at the heart of its Vision to become one of the world’s great companies. More and more of its guests and corporate clients want to make sustainable choices. Behaving responsibly shows the Group is listening to its stakeholders, strengthening its brands and helping create hotels of the future.

38

The Group is focused on developing better ways to design, build and run its hotels. To achieve its aims, the Group innovates and collaborates.

• Innovation — the Group develops innovative concepts and technologies, and works closely with its partners to find creative solutions to the challenges it faces.

• Collaboration — the Group’s stakeholders play a key role in helping it define and address its priorities. Stakeholders include guests and corporate clients, hotel owners and franchise holders, local communities, employees, shareholders, suppliers, academic institutions, non-government organizations, governments and industry-specific institutions.

The Group’s innovation and collaboration activities are focused on the areas that make most sense to its business, and where it believes it can make the most difference, the environment and the community:

• Environment — driving environmental sustainability through Green Engage and the Group’s three-year target to reduce energy consumption in its managed and owned estate by between 6% and 10% by the end of 2012.

• Community — creating local economic opportunity, particularly through the IHG Academy, and by providing disaster relief through the IHG Shelter in a Storm Program.

The Group believes that as a global organization with operations in many markets, its biggest contribution towards cutting greenhouse gas emissions will come from delivering real emission cuts — through innovating new and better ways to design, build and run its hotels — not through offsetting.

The Group’s key programs include;

• Green Engage — Green Engage is the Group’s innovative online sustainability management system. The tool helps hotels track and reduce their energy, water and waste, giving them the means to conserve resources and save money — the system can help make hotels up to 25 per cent more energy efficient. Currently, over 1,700 hotels are signed up to the system. In 2011, the Group made further inroads in Green Engage by launching version 2.0, making it easier to use, adding more advanced features and developing training and support materials for its growing user base. The Group has also made it easier for guests to book a Green Engage hotel by introducing an online booking capability for guests who want to stay at ‘green’ hotels on Group branded and external booking sites.

• IHG Academy — a program in which the Group’s hotels work with community and educational institutions to give people real-world hospitality experience. The IHG Academy program will help create real job opportunities in the communities around the Group’s hotels and provide motivated, engaged people the opportunity to work in its hotels, delivering a better service for guests, now and in the future. The IHG Academy program was first developed in China and the Group now has 36 IHG Academy programs across its regions with over 5,500 participants in 2011.

• IHG Shelter in a Storm Program — the Group’s hotels have a long history of helping communities in times of disaster. The IHG Shelter in a Storm Program, in partnership with CARE, builds on this tradition, using the Group’s scale to pool its resources and efforts. When disaster strikes, the Group will provide guidance to help IHG hotels react swiftly and effectively so they can provide help such as emergency shelter, food and clean water to communities around our affected hotels. The IHG Shelter Fund, set up in 2011, is supported through employee fundraising activities and ensures that the Group can give responders the resources they need, fast.

In 2012, the Group will continue to drive environmental sustainability, create local economic opportunity and to engage stakeholders to champion the CR agenda and protect the Group’s trusted reputation.

39

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

INTRODUCTION

Business and Overview

The Group is an international hotel business which owns a portfolio of established and diverse hotel brands, including InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn Hotels & Resorts (including Holiday Inn Club Vacations), Holiday Inn Express, Staybridge Suites, Candlewood Suites and Hotel Indigo. At December 31, 2011, the Group had 4,480 franchised, managed, owned and leased hotels and 658,348 guest rooms in nearly 100 countries and territories around the world. The Group also manages the hotel loyalty program, Priority Club Rewards.

In the first quarter 2012, the Group launched two new brands. EVEN hotels is aimed at the US midscale market and HUALUXE is tailored towards Chinese guests.

The Group’s revenue and earnings are derived from hotel operations, which include franchise and other fees paid under franchise agreements, management and other fees paid under management contracts, where the Group operates third-parties’ hotels, and operation of the Group’s owned hotels.

Operational Performance

Revenue increased by 8.6% to $1,768 million and operating profit before exceptional items increased by 25.9% to $559 million during the 12 months ended December 31, 2011.

The 2011 results reflect continued RevPAR growth, with a global RevPAR increase of 6.2%, including a 2.5% increase in average daily rate. The results also benefit from overall system size growth of 1.7% year-on-year to 658,348 rooms. RevPAR growth remained strong throughout the year across the Group although there was some deterioration in Europe in the fourth quarter reflecting macroeconomic conditions in the region.

During 2011 an internal reorganization resulted in a change to the Group’s reportable segments. Previously there were three geographical regions: The Americas; Europe, Middle East and Africa; and Asia Pacific (comprising Greater China and Asia Australasia). From 2011 onwards there are four reportable segments: The Americas; Europe; Asia, Middle East and Africa; and Greater China.

Operating profit improved in each of the regions. RevPAR growth of 7.5% and 4.7% in the Americas and Europe respectively helped to drive operating profit increases of $82 million and $26 million in these regions. Operating profit in AMEA rose by $2 million despite an estimated adverse impact of the events of the Arab Spring and the natural disasters in Japan and New Zealand of $11 million. Continued strong economic growth in Greater China led to operating profit growth of $13 million as RevPAR grew by 10.7% and system size increased by 13.7%.

The performance of the Group is evaluated primarily on a regional basis. The regional operations are split by business model: franchise agreement, management contract, and owned and leased operations. All three income types are affected by occupancy and room rates achieved by hotels, the ability to manage costs and the change in the number of available rooms through acquisition, development and disposition. Results are also impacted by economic conditions and capacity. The Group’s segmental results are shown before exceptional operating items, interest expense, interest income and income taxes.

CRITICAL ACCOUNTING POLICIES

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and costs and expense during the reporting

40

period. On an ongoing basis, management evaluates its estimates and judgments, including those relating to revenue recognition, bad debts, investments, property, plant and equipment, goodwill and intangible assets, income taxes, guest program liability, self insurance claims payable, restructuring costs, retirement benefits and contingencies and litigation.

Management bases its estimates and judgments on historical experience and on other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions and conditions.

The Group’s critical accounting policies are set out below.

Revenue recognition

Revenue is the gross inflow of economic benefits received and receivable by the Group on its own account where those inflows result in increases in equity.

Revenue is derived from the following sources: franchise fees; management fees; owned and leased properties and other revenues which are ancillary to the Group’s operations, including technology fee income.

Generally, revenue represents sales (excluding VAT and similar taxes) of goods and services, net of discounts, provided in the normal course of business and recognized when services have been rendered. The following is a description of the composition of revenues of the Group.

Franchise fees — received in connection with the license of the Group’s brand names, usually under long-term contracts with the hotel owner. The Group charges franchise royalty fees as a percentage of room revenue. Revenue is recognized when earned and realized or realizable under the terms of the agreement.

Management fees — earned from hotels managed by the Group, usually under long-term contracts with the hotel owner. Management fees include a base fee, which is generally a percentage of hotel revenue, and an incentive fee, which is generally based on the hotel’s profitability or cash flows. Revenue is recognized when earned and realized or realizable under the terms of the contract.

Owned and leased — primarily derived from hotel operations, including the rental of rooms and food and beverage sales from owned and leased hotels operated under the Group’s brand names. Revenue is recognized when rooms are occupied and food and beverages are sold.

In addition to management or franchise fees, hotels within the Group’s system pay cash assessments and contributions which are collected for specific use within the System Fund. The Fund also receives proceeds from the sale of Priority Club Rewards points. The Group exerts significant influence over the operation of the Fund, however, the Fund is managed for the benefit of hotels in the system with the objective of driving revenues for the hotels. The Fund is used to pay for marketing, the Priority Club Rewards loyalty program and the global reservations system. The Fund is planned to operate at breakeven with any short-term timing surplus or deficit carried in the Consolidated statement of financial position within working capital. As all Fund income is designated for specific purposes and does not result in a profit or loss for the Group, the revenue recognition criteria as outlined in the accounting policy above are not met and therefore the income and expenses of the Fund are not included in the Consolidated income statement. Financial information relating to the Fund is included in Note 31 of Notes to the Consolidated Financial Statements.

Goodwill, intangible assets, and property, plant and equipment

Goodwill arising on acquisitions prior to October 1, 1998 was eliminated against equity. From October 1, 1998 to December 31, 2003, acquired goodwill was capitalized and amortized over a period not exceeding 20 years. Since January 1, 2004, goodwill continued to be capitalized but amortization ceased as at that date, replaced by an impairment review on an annual basis or more frequently if there are indicators of impairment. The annual review is performed in the fourth quarter. Goodwill is allocated to cash-generating units for impairment testing purposes.

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Intangible assets and property, plant and equipment are capitalized and amortized over their expected useful lives, and reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable. Assets that do not generate independent cash flows are combined into cash-generating units.

The impairment testing of individual assets or cash-generating units requires an assessment of the recoverable amount of the asset or cash-generating unit. If the carrying value of the asset or cash-generating unit exceeds its estimated recoverable amount, the asset or cash-generating unit is written down to its recoverable amount. Recoverable amount is the greater of fair value less cost to sell and value in use. Value in use is assessed based on estimated future cash flows discounted to their present value using a pre-tax discount rate that is based on the Group’s weighted average cost of capital adjusted to reflect the risks specific to the business model and territory of the cash-generating unit or asset being tested. The outcome of such an assessment is subjective, and the result sensitive to the assumed future cashflows to be generated by the cash-generating units or assets and discount rates applied in calculating the value in use. Any impairment arising is charged to the income statement. With the exception of goodwill, impairment charges are reversed when there is a subsequent recovery in the recoverable amount of the asset arising from an increase in its service potential.

Following the full impairment of Americas managed goodwill in 2009, the remaining balance of goodwill of $92 million at December 31, 2011, relates to Asia Australasia franchised and managed operations. Given the substantial valuation headroom relating to this goodwill, management believe that the carrying value of the cash-generating unit would only exceed its recoverable amount in the event of highly unlikely changes in the key assumptions.

During 2011, the Group recognized total impairment charges of $5 million and total impairment reversals of $25 million as follows:

Impairment charges:

• Property, plant and equipment — $2 million in respect of one hotel in Europe; and

• Other financial assets — $3 million in respect of an equity investment in AMEA.

The hotel impairment charge was measured by reference to fair value less costs to sell and following the impairment charge, the hotel had a net book value of $6 million at December 31, 2011.

The equity investment was impaired following a significant and prolonged decline in its fair value below cost. Following the impairment charge, the investment had a net book value of $3 million.

Impairment reversals:

• Property, plant and equipment — $23 million in respect of two hotels in North America; and

• Associate — $2 million in respect of an associate investment in North America.

In respect of the hotels, $11 million arose in March 2011 on the classification of a North American hotel as ‘held for sale’. The amount of the reversal was based on the expected net sales proceeds which were subsequently realized on the disposal of the hotel (see Note 11 of Notes to the Consolidated Financial Statements). A further $12 million arose in respect of another North American hotel following a re-assessment of its recoverable amount, based on value in use. Estimated future cash flows were discounted at a pre-tax rate of 12.6%.

The associate impairment reversal was measured by reference to fair value less costs to sell.

Income taxes

The Group provides for deferred tax in accordance with IAS 12 “Income Taxes” in respect of temporary differences between the tax base and carrying value of assets and liabilities including accelerated capital allowances, unrelieved tax losses, unremitted profits from overseas where the Group does not control remittance, gains rolled over into replacement assets, gains on previously revalued properties and other short-term temporary differences. Deferred tax assets are recognized to the extent that it is regarded as probable that the deductible

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temporary differences can be realized. The Group estimates deferred tax assets and liabilities based on current tax laws and rates, and in certain cases, business plans, including management’s expectations regarding the manner and timing of recovery of the related assets. Changes in these estimates may affect the amount of deferred tax liabilities or the valuation of deferred tax assets.

Provisions for tax contingencies require judgments on the expected outcome of tax exposures and ongoing tax audit discussions which may be subject to significant uncertainty, and therefore the actual results may vary from expectations resulting in adjustments to contingencies, the valuation of deferred tax assets and cash tax settlements. During 2011, exceptional provision releases of $13 million were made in relation to tax matters which have been settled or in respect of which the relevant statutory limitation period has expired.

Loyalty program

The hotel loyalty program, Priority Club Rewards enables members to earn points, funded through hotel assessments, during each qualifying stay and redeem the points at a later date for free accommodation or other benefits. The future redemption liability is included in trade and other payables and is estimated using eventual redemption rates determined by actuarial methods and points values. Actuarial gains and losses on the future redemption liability are borne by the System Fund and any resulting changes in the liability would correspondingly adjust the amount of short-term timing differences held in the Group statement of financial position. The future redemption liability amounted to $578 million at December 31, 2011.

Pensions and other post-employment benefit plans

Accounting for pensions and other post-employment benefit plans requires the Group to make assumptions including, but not limited to, future asset returns, discount rates, rates of inflation, life expectancies and health care costs. The use of different assumptions could have a material effect on the accounting values of the relevant assets and liabilities which could result in a material change to the cost of such liabilities as recognized in the income statement over time. These assumptions are subject to periodic review. A sensitivity analysis to changes in various assumptions is included in Note 3 of Notes to the Consolidated Financial Statements.

OPERATING RESULTS

Accounting Principles

The following discussion and analysis is based on the Consolidated Financial Statements of the Group, which are prepared in accordance with IFRS.

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For the year ended December 31, 2011 the results include exceptional items totaling a net credit of $96 million (2010 $4 million charge, 2009 $80 million charge). For comparability of the periods presented, some performance indicators in this Operating and financial review and prospects discussion have been calculated after eliminating these exceptional items. Such indicators are prefixed with “adjusted”. An analysis of exceptional items is included in Note 5 of Notes to the Consolidated Financial Statements.

	Year ended December 31,
	2011			2010			2009
	($ million)
Total revenue		1,768			1,628			1,538
Operating profit before exceptional operating items		559			444			363
Exceptional operating items		57			(7	)		(373	)
Operating profit/(loss)		616			437			(10	)
Net financial expenses		(62	)		(62	)		(54	)
Profit/(loss) before tax		554			375			(64	)
Tax.		(81	)		(97	)		272
Profit after tax		473			278			208
Gain on disposal of assets, net of tax		—			2			6
Profit for the year		473			280			214
Earnings per ordinary share:
Basic		163.7	¢		97.2	¢		74.7	¢
Adjusted		130.4	¢		98.6	¢		102.8	¢

Year ended December 2011 compared with year ended December 2010

Revenue increased by 8.6% to $1,768 million and operating profit before exceptional items increased by 25.9% to $559 million during the 12 months ended December 31, 2011.

The average US dollar exchange rate to sterling weakened during 2011 (2011 $1=£0.62; 2010 $1=£0.65). Translated at constant currency, applying 2010 exchange rates, revenue increased by 6.8% and operating profit increased by 24.8%.

Exceptional operating items

Exceptional operating items totaled a net gain of $57 million. Exceptional gains included $37 million from the disposal of hotels, including $29 million profit on the sale of the Holiday Inn Burswood, a UK VAT refund of $9 million, $20 million net impairment reversals and a $28 million pension curtailment gain in relation to the closure of the UK defined benefit pension scheme to future accrual. Exceptional charges included $37 million in respect of the settlement of a prior period commercial dispute in Europe.

Exceptional operating items are treated as exceptional by reason of their size or nature and are excluded from the calculation of adjusted earnings per ordinary share in order to provide a more meaningful comparison of performance.

Net financial expenses

Net financial expenses remained flat at $62 million as costs relating to the new syndicated bank facility offset the impact of lower levels of net debt.

Financing costs included $1 million (2010 $2 million) of interest costs associated with Priority Club Rewards where interest is charged on the accumulated balance of cash received in advance of the redemption points awarded. Financing costs in 2011 also included $18 million (2010 $18 million) in respect of the InterContinental Boston finance lease.

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Taxation

The effective rate of tax on the combined profit from continuing and discontinued operations, excluding the impact of exceptional items, was 24% (2010 26%). By excluding the impact of prior year items, which are included wholly within continuing operations, the equivalent tax rate would be 36% (2010 35%). This rate is higher than the average UK statutory rate of 26.5% due mainly to certain overseas profits (particularly in the US) being subject to statutory rates higher than the UK statutory rate, unrelieved foreign taxes and disallowable expenses.

Taxation within exceptional items totaled a credit of $39 million (2010 credit of $1 million) in respect of continuing operations. This represented the release of exceptional provisions relating to tax matters which were settled during the year, or in respect of which the statutory limitation period had expired, together with tax relief on exceptional costs and tax arising on disposals.

Net tax paid in 2011 totaled $90 million (2010 $68 million) including $1 million paid (2010 $4 million) in respect of disposals. Tax paid represents an effective rate of 16% (2010 18%) on total profits and is lower than the effective income statement tax rate of 24% primarily due to the impact of deferred taxes (including the realization of assets such as tax losses), the receipt of refunds in respect of prior years and provisions for tax for which no payment of tax has currently been made.

Detailed information concerning the Group’s tax position can be found in Notes 7 and 25 of Notes to the Consolidated Financial Statements.

The Group pursues a tax strategy that is consistent with its business strategy and its overall business conduct principles. This strategy seeks to ensure full compliance with all tax filing, payment and reporting obligations on the basis of communicative and transparent relationships with tax authorities. Policies and procedures related to tax risk management are subject to regular review and update and are approved by the Board.

Tax liabilities or refunds may differ from those anticipated, in particular as a result of changes in tax law, changes in the interpretation of tax law, or clarification of uncertainties in the application of tax law. Procedures to minimize risk include the preparation of thorough tax risk assessments for all transactions carrying tax risk and, where appropriate, material tax uncertainties are discussed and resolved with tax authorities in advance.

The Group’s contribution to the jurisdictions in which it operates includes a significant contribution in the form of taxes borne and collected, including taxes on its revenues and profits and in respect of the employment its business generates.

Earnings per ordinary share

Basic earnings per ordinary share in 2011 was 163.7¢, compared with 97.2¢ in 2010. Adjusted earnings per ordinary share was 130.4¢, against 98.6¢ in 2010.

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Highlights for the year ended December 31, 2011

The following is a discussion of the year ended December 31, 2011 compared with the year ended December 31, 2010.

Group results

	Year ended December 31, 2011			Year ended December 31, 2010			Change
	($ million)						%
Revenue
Americas		830			807			2.9
Europe		405			326			2.4
AMEA.		216			213			1.4
Greater China		205			178			15.2
Central		112			104			7.7
Total		1,768			1,628			8.6
Operating profit before exceptional operating items(1)
Americas		451			369			22.2
Europe		104			78			33.3
AMEA.		84			82			2.4
Greater China		67			54			24.1
Central		(147	)		(139	)		(5.8	)
Total		559			444			25.9

(1) Operating profit before exceptional operating items does not include exceptional operating items for all periods presented. Exceptional operating items (charge unless otherwise noted) by region were Americas credit of $35 million (2010 $8 million); Europe $39 million (2010 $5 million); AMEA credit of $26 million (2010 credit of $6 million); Greater China $nil (2010 $nil); and Central credit of $35 million (2010 $nil).

Revenue increased by 8.6% to $1,768 million and operating profit before exceptional items increased by 25.9% to $559 million during the 12 months ended December 31, 2011.

The 2011 results reflect continued RevPAR growth, with an overall RevPAR increase of 6.2%, including a 2.5% increase in average daily rate. The results also benefit from overall system size growth of 1.7% year-on-year to 658,348 rooms. RevPAR growth remained strong throughout the year across the Group although there was some deterioration in Europe in the fourth quarter reflecting macroeconomic conditions in the region.

Operating profit improved in each of the regions. RevPAR growth of 7.5% and 4.7% in the Americas and Europe respectively helped to drive operating profit increases of $82 million and $26 million in these regions. Operating profit in AMEA rose by $2 million despite an estimated adverse impact of the events of the Arab Spring and the natural disasters in Japan and New Zealand of $11 million. Continued strong economic growth in Greater China led to operating profit growth of $13 million as RevPAR grew by 10.7% and system size increased by 13.7%.

At constant currency, central overheads increased from $139 million in 2010 to $143 million in 2011 ($147 million at actual currency), driven by increased investment to support growth in the business, offsetting non-recurring bonus costs.

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As a result of growth in the business, together with strong cost control, operating profit margin was 40.6%, up 4.9 percentage points on 2010, after adjusting for owned and leased hotels, the Americas and Europe managed leases and significant liquidated damages received in 2011. This growth approximates to one percentage point after adjusting for a number of one-off benefits.

Americas

	Year ended December 31, 2011			Year ended December 31, 2010			Change
	($ million)						%
Revenue
Franchised		502			465			8.0
Managed		124			119			4.2
Owned and leased		204			223			(8.5	)
Total		830			807			2.9
Operating profit before exceptional operating items
Franchised		431			392			9.9
Managed		52			21			147.6
Owned and leased		17			13			30.8
		500			426			17.4
Regional overheads		(49	)		(57	)		14.0
Total		451			369			22.2

Revenue and operating profit before exceptional items increased by $23 million (2.9%) to $830 million and by $82 million (22.2%) to $451 million respectively.

Franchised revenue increased by $37 million (8.0%) to $502 million. Royalties growth of 8.5% was driven by RevPAR gains across the estate of 7.2%, including 7.9% for Holiday Inn Express, and was further boosted by continued improvement in the royalty rate achieved. Operating profit increased by $39 million (9.9%) to $431 million also benefiting from lower bad debt experience.

Managed revenue increased by $5 million (4.2%) to $124 million and operating profit increased by $31 million (147.6%) to $52 million. Revenue and operating profit included $59 million (2010 $71 million) and $1 million (2010 $1 million) respectively from properties that are structured, for legal reasons, as operating leases but with the same characteristics as management contracts. Excluding properties operated under this arrangement, as well as the benefit of a $10 million liquidated damages receipt in 2011 and a $10 million year-on-year benefit from the conclusion of a specific guarantee negotiation relating to one hotel, revenue grew by $7 million. Growth was driven by a RevPAR increase of 8.8% across the estate. Although year end system size was 6.0% lower than at the end of 2010, due to the phasing of removals towards the end of the year, rooms available during the year actually grew by 4.5%. Operating profit grew by $11 million on the same basis, also benefiting from increased joint venture distributions.

Owned and leased revenue declined by $19 million (8.5%) and operating profit grew by $4 million (30.8%) to $17 million. In the first half of the year, Staybridge Suites Denver Cherry Creek was sold and converted to a franchise contract, whilst Holiday Inn Atlanta Gwinnett Place and Hotel Indigo San Diego were sold and converted to management contracts. Excluding the year-on-year impact of these and prior year disposals, owned and leased revenue grew by $8 million (4.2%) and operating profit by $7 million (77.8%) reflecting RevPAR growth of 10.3%, including 11.2% at the InterContinental New York Barclay. Operating profit for 2011 includes a $4 million year-on-year benefit from lower depreciation recorded for the InterContinental New York Barclay since the hotel was categorised as “held for sale” in the first quarter of 2011, subsequent to which no depreciation was charged. Operating profit growth was, however, adversely impacted by $3 million of one off re-organization costs relating to one hotel in 2011.

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Regional overheads decreased by $8 million (14.0%) to $49 million, mainly reflecting a year-on-year reduction of $6 million in costs for claims in a self-insured healthcare benefit plan.

Europe

	Year ended December 31, 2011			Year ended December 31, 2010			Change
	($ million)						%
Revenue
Franchised		86			76			13.2
Managed		118			70			68.6
Owned and leased		201			180			11.7
Total		405			326			24.2
Operating profit before exceptional operating items
Franchised		65			55			18.2
Managed		26			17			52.9
Owned and leased		49			38			28.9
		140			110			27.3
Regional overheads		(36	)		(32	)		(12.5	)
Total		104			78			33.3

Revenue and operating profit before exceptional items increased by $79 million (24.2%) to $405 million and by $26 million (33.3%) to $104 million respectively.

Franchised revenue increased by $10 million (13.2%) to $86 million and operating profit by $10 million (18.2%) to $65 million. At constant currency, revenue increased by 7.9% and operating profit increased by 12.7%. Growth was mainly driven by royalties growth of 11.4% (5.9% at constant currency) reflecting RevPAR growth of 4.0%, together with an increase in system size. Revenues associated with new signings, relicensing and terminations increased by $2 million.

Managed revenue increased by $48 million to $118 million (68.6%) and operating profit increased by $9 million to $26 million (52.9%). At constant currency, revenue increased by 61.4% whilst operating profit increased by 47.1%. During the year, two properties were converted from management contracts to an operating lease structure with the same characteristics as management contracts. Revenues recorded under the operating lease structure were $46 million in 2011 (2010 $nil), with operating profits of $nil (2010 $nil). Excluding the impact of properties under the operating lease structure and on a constant currency basis, operating profit increased by $8 million (47.1%) reflecting RevPAR growth of 5.5%, together with the year-on-year benefit of a $3 million charge in 2010 with regard to guarantee obligations for one hotel. On the same basis, revenue fell slightly as a result of a minor change in the allocation of income to the managed estate.

In the owned and leased estate, revenue increased by $21 million (11.7%) to $201 million and operating profit increased by $11 million (28.9%), or at a constant currency by 6.7% and 21.1% respectively. During the year, the Group exited from the lease for Holiday Inn Express Essen, with a minor impact on revenue and operating profit. RevPAR growth of 10.9% benefitted from average daily rate growth of 10.3% across the year. The InterContinental London Park Lane and the InterContinental Paris Le Grand delivered strong year-on-year RevPAR growth of 7.3% and 14.5% respectively.

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AMEA

	Year ended December 31, 2011			Year ended December 31, 2010			Change
	($ million)						%
Revenue
Franchised		19			15			26.7
Managed		151			155			(2.6	)
Owned and leased		46			43			7.0
Total		216			213			1.4
Operating profit before exceptional operating items
Franchised		12			8			50.0
Managed		87			88			(1.1	)
Owned and leased		5			4			25.0
		104			100			4.0
Regional overheads		(20	)		(18	)		(11.1	)
Total		84			82			2.4

Revenue and operating profit before exceptional items increased by $3 million (1.4%) to $216 million and by $2 million (2.4%) to $84 million respectively. The region’s results were adversely impacted by the political instability throughout 2011 in the Middle East, together with the natural disasters in Japan and New Zealand.

Franchised revenue increased by $4 million (26.7%) to $19 million and operating profit by $4 million (50.0%) to $12 million. At constant currency, revenue increased by 20.0% and operating profit increased by 37.5%, which includes four properties which were converted from management contracts to franchise arrangements during the year. RevPAR in the franchised estate grew by 1.7%. Excluding Egypt, Bahrain and Japan, RevPAR grew by 4.4%.

Managed revenue decreased by $4 million (2.6%) to $151 million and operating profit decreased by $1 million (1.1%) to $87 million. At constant currency, revenue decreased by 7.7% and operating profit by 5.7%. The events of the Arab Spring together with the natural disasters in Japan and New Zealand had an estimated adverse impact of $11 million on the results, whilst there was a further $4 million adverse impact due to changes to certain management contract terms. Results did, however, benefit from a liquidated damages receipt of $6 million during the year. RevPAR grew by 0.6% compared to 2010 and by 5.7% excluding Egypt, Bahrain and Japan.

In the owned and leased estate, revenue increased by $3 million (7.0%) to $46 million and operating profit increased by $1 million (25.0%), or at a constant currency by 9.3% and 25.0% respectively.

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Greater China

	Year ended December 31, 2011			Year ended December 31, 2010			Change
	($ million)						%
Revenue
Franchised		2			2			—
Managed		77			60			28.3
Owned and leased		126			116			8.6
Total		205			178			15.2
Operating profit before exceptional operating items
Franchised		3			3			—
Managed		43			30			43.3
Owned and leased		37			33			12.1
		83			66			25.8
Regional overheads		(16	)		(12	)		(33.3	)
Total		67			54			24.1

Revenue and operating profit before exceptional items increased by $27 million (15.2%) to $205 million and by $13 million (24.1%) to $67 million respectively.

Managed revenue increased by $17 million (28.3%) to $77 million and operating profit increased by $13 million (43.3%) to $43 million. At constant currency, revenue increased by 26.7% and operating profit increased by 43.3%. Continued strong economic growth in the region helped to drive RevPAR growth of 10.3%. Excluding Shanghai, where RevPAR growth was tempered by strong comparatives due to the World EXPO held in May to October 2010, comparable RevPAR grew by 17.4%. There was also continued significant system size growth for the managed estate in the region (14.2% rooms growth in 2011 and 12.6% in 2010).

On both a constant and actual currency basis, owned and leased revenue increased by $10 million (8.6%) to $126 million and operating profit increased by $4 million (12.1%) to $37 million. The InterContinental Hong Kong drove RevPAR growth of 13.4%.

Regional costs increased by $4 million to $16 million (33.3%), reflecting increased investment in operations and infrastructure in the region to support the growth of the Group’s brands.

Central

	Year ended December 31, 2011			Year ended December 31, 2010			Change
	($ million)						%
Revenue		112			104			7.7
Gross central costs		(259	)		(243	)		(6.6	)
Net central costs		(147	)		(139	)		(5.8	)

During 2011, net central costs increased by $8 million from $139 million to $147 million (5.8%). At constant currency, net central costs increased by $4 million (2.9%). The movement was primarily driven by increased investment to support growth in the business. Central revenue mainly comprised technology fee income.

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System Fund

	Year ended December 31, 2011		Year ended December 31, 2010		Change
	($ million)				%
Assessment fees and contributions received from hotels		1,025		944		8.6
Proceeds from sale of Priority Club Rewards points		128		106		20.8
		1,153		1,050		9.8

In the year to December 31, 2011, System Fund income increased by 9.8% to $1.2 billion primarily as a result of growth in hotel room revenues and marketing programs. The increase in proceeds from the sale of Priority Club Rewards points mainly reflects the strong performance of co-brand credit card schemes.

In addition to management or franchise fees, hotels within the Group’s system pay cash assessments and contributions which are collected by the Group for specific use within the Fund. The Fund also receives proceeds from the sale of Priority Club Rewards points. The Fund is managed for the benefit of hotels in the system with the objective of driving revenues for the hotels.

The Fund is used to pay for marketing, the Priority Club Rewards loyalty program and the global reservation system. The operation of the Fund does not result in a profit or loss for the Group and consequently the revenues and expenses of the Fund are not included in the Group Income Statement.

Highlights for the year ended December 31, 2010

The following is a discussion of the year ended December 31, 2010 compared with the year ended December 31, 2009, restated where appropriate to reflect the change in the Group’s geographical segments following an internal reorganization during 2011.

Group results

Revenue increased by 5.9% to $1,628 million and operating profit before exceptional items increased by 22.3% to $444 million during the year ended December 31, 2010.

The 2010 results reflect a return to RevPAR growth in a recovering global market, with an overall RevPAR increase of 6.2% led by occupancy. 2010 fourth quarter comparable RevPAR increased 8.0% compared to the same quarter in 2009, including a 2.4% increase in average daily rate. During 2010, average daily rate for the InterContinental and Holiday Inn brands increased by 1.3% and 0.5% respectively.

The $1 billion roll-out of the Holiday Inn brand family relaunch is substantially complete. By December 31, 2010, 2,956 hotels were converted globally under the relaunch program, representing 89% of all Holiday Inn hotels. The required improvement in quality standards contributed to the removal of a total of 35,262 rooms from the Group’s global system during 2010. In spite of this necessary reduction, the Group’s closing global room count was 647,161 rooms, in line with 2009 levels.

The ongoing focus on efficiency across the Group largely sustained underlying cost reductions achieved in 2009. Regional and central overheads increased by $49 million, from $209 million in 2009 to $258 million in 2010, driven by incremental performance based incentive costs of $47 million and charges of $4 million relating to a self-insured healthcare benefit plan.

Primarily as a result of these actions taken across the Group to improve efficiencies, operating profit margin was 35.7%, up 1.1 percentage points on 2009, after adjusting for owned and leased hotels, Americas managed leases, significant liquidated damages received in 2009, an onerous contract provision established in 2009 and non-payment of performance based incentive costs in 2009.

In 2010 the InterContinental Buckhead, Atlanta and the Holiday Inn Lexington were sold for $105 million and $5 million respectively, with proceeds used to reduce net debt. These disposals resulted in a reduction in owned and leased revenue and operating profit of $19 million and $4 million, respectively, compared to 2009.

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Americas

Revenue and operating profit before exceptional items increased by $35 million to $807 million (4.5%) and $81 million to $369 million (28.1%) respectively.

Franchised revenue increased by $28 million to $465 million (6.4%) and operating profit by $28 million to $392 million (7.7%) compared to 2009. Royalties growth was driven by RevPAR gains across all brands and by a 4.5% RevPAR increase in total. While franchised hotel and room count at December 31, 2010 was lower than at December 31, 2009, the weighting of removals towards the end of 2010 meant that daily rooms available actually increased in 2010 from 2009 levels, further boosting royalty growth. Non royalty revenues and profits remained flat on 2009, as real estate financing for new activity remained constrained.

Managed revenue increased by $9 million to $119 million (8.2%) in line with the RevPAR growth of 7.5%. Operating profit increased by $61 million to $21 million from a $40 million loss in 2009. The loss in 2009 included a charge for priority guarantee shortfalls relating to a portfolio of hotels. A provision for onerous contracts was established on December 31, 2009 and further payments made during 2010 were charged against this provision. Excluding the effect of the provision, managed operating profit increased by $3 million, driven by RevPAR growth of 23.3% in Latin America.

Results from managed operations included revenues of $71 million (2009 $71 million) and operating profit of $1 million (2009 $nil) from properties that are structured, for legal reasons, as operating leases but with the same characteristics as management contracts.

Owned and leased revenue declined by $2 million to $223 million (0.9%) and operating profit increased by $2 million to $13 million (18.2%). Improving trading conditions led to a RevPAR increase of 6.4%, including an 8.1% increase at the InterContinental New York Barclay. The disposal of the InterContinental Buckhead, Atlanta in July 2010 and its subsequent conversion to a management contract resulted in reductions of $15 million in revenue and $4 million in operating profit when compared to 2009. The Holiday Inn Lexington was also sold in March 2010, which led to a $4 million reduction in revenue and no reduction in operating profit compared to 2009. Excluding the impact of these two disposals, owned and leased revenue increased by $17 million (9.0%) and operating profit by $6 million (150.0%) compared to 2009.

Regional overheads increased by $10 million (21.3%) from $47 million in 2009 to $57 million in 2010. The increase was attributable primarily to performance based incentives and $4 million from increased claims in a self-insured healthcare benefit plan.

Europe

Revenue increased by $17 million (5.5%) to $326 million and operating profit before exceptional items increased by $1 million (1.3%) to $78 million compared to 2009.

Franchise revenue and operating profit decreased by $3 million (3.8%) to $76 million and by $2 million (3.5%) to $55 million respectively compared to 2009. Revenue and operating profit in 2009 benefited from $3 million of liquidated damages.

Managed revenue increased by $12 million (20.7%) to $70 million, whilst operating profit decreased by $1 million (5.6%) to $17 million. Revenue growth was driven by positive RevPAR performance in key European cities and markets, including growth of 14.8% in the Group’s managed properties in Germany. At the year end, a provision of $3 million was made for future estimated cash outflows relating to guarantee obligations for one hotel.

In the owned and leased estate, revenue increased by $8 million (4.7%) to $180 million, whilst operating profits improved by $7 million (22.6%) to $38 million. A RevPAR increase of 13.7% benefited from average daily rate growth of 6.0% across the year. The InterContinental London Park Lane and InterContinental Paris Le Grand delivered strong year-on-year RevPAR growth of 15.0% and 11.5% respectively. Margins improved in both hotels as the focus remained on cost control.

Regional overheads increased by $3 million to $32 million (10.3%) compared to 2009, mainly attributable to performance based incentive costs.

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AMEA

AMEA revenue and operating profit before exceptional items increased by $23 million (12.1%) to $213 million and by $10 million (13.9%) to $82 million respectively compared to 2009.

Franchise revenue increased by $1 million (7.1%) to $15 million, whilst operating profit increased by $2 million (33.3%) to $8 million.

Managed revenue increased by $21 million (15.7%) to $155 million, whilst operating profit increased by $6 million (7.3%) to $88 million. Results were driven by RevPAR growth of 4.0%, together with system size growth of 0.7%.

In the owned and leased estate, revenue increased by $1 million (2.4%) to $43 million and operating profit decreased by $1 million (20.0%) to $4 million.

Regional costs decreased by $3 million (14.3%) to $18 million as a result of the measures taken as part of the 2009 restructuring, offset by an increase in performance based incentive costs.

Greater China

Greater China revenue and operating profit before exceptional items increased by $35 million (24.5%) to $178 million and by $24 million (80.0%) to $54 million respectively. Continued economic growth in the region was given a further boost by the World Expo held in Shanghai from May to October 2010. Resulting RevPAR growth in key Chinese cities was exceptional, with increases of 55.9% in Shanghai and 29.9% in Beijing respectively.

Managed revenue increased by $28 million (87.5%) to $60 million, whilst operating profit increased by $21 million (233.3%) to $30 million. In addition to strong comparable RevPAR performance, growth was driven by an increase in system size of 12.6% in 2010. Results also benefited in 2010 from a $3 million year-on-year improvement in bad debt experience.

In the owned and leased estate, revenue and operating profit both increased by $6 million to $116 million (5.5%) and $33 million (22.2%) respectively compared to 2009. These results were driven by the InterContinental Hong Kong, where RevPAR increased 15.3% during 2010.

Regional costs increased by $4 million (50.0%) to $12 million as a result of additional investment to support the Group’s brands in the region, together with an increase in performance based incentive costs.

Central

During 2010, net central costs increased by $35 million from $104 million to $139 million (33.7%). The increase was primarily driven by an increase in performance based incentive costs where no payments were made on some plans in 2009. At constant currency, net central costs increased by $36 million (34.6%) compared to 2009.

System Fund

In the year ended December 31, 2010, System Fund income increased by 4.2% to $1.1 billion primarily as a result of growth in hotel room revenues and marketing programs. Sale of Priority Club Rewards points declined by 20.3% due to the impact of a special promotional program in 2009.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity

The Group is primarily financed by a $1.07 billion syndicated bank facility which matures in November 2016 (the “Syndicated Facility”) and £250 million of public bonds which are repayable on December 9, 2016. Short-term borrowing requirements are met from drawings under bilateral bank facilities. Additional funding is provided by the 99-year finance lease (of which 94 years remain) on the InterContinental Boston.

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The Syndicated Facility was successfully refinanced during the year, replacing a $1.6 billion facility that was due to mature in May 2013.

The £250 million public bonds were issued on December 9, 2009 at a coupon of 6% and were initially priced at 99.465% of face value and are unsecured. Interest is payable annually on December 9, in each year commencing December 9, 2010 to the maturity date. Currency swaps were transacted at the same time the bonds were issued in order to swap the proceeds and interest flows into US dollars. The reasons for issuing the bonds were to diversify the Group’s funding sources and extend the duration of a portion of its borrowings.

At December 31, 2011, total borrowings were $691 million, including the finance lease creditor of $209 million. The currency denomination of the borrowings was $302 million of US dollar denominated borrowings, $384 million of sterling denominated borrowings and $5 million of New Zealand dollar denominated borrowings. The impact of currency swaps traded in December 2009 is to convert the sterling denominated borrowings above into US dollar denominated borrowings; at December 31, 2011, the fair value of the element of the currency swaps disclosed as a component of net debt was a liability of $29 million.

At December 31, 2011, total committed bank facilities amounted to $1,075 million of which $970 million were unutilized. Uncommitted facilities totaled $79 million. In the Group’s opinion, the available facilities are sufficient for the Group’s present requirements.

The Group held cash and short-term deposits at December 31, 2011 amounting to $182 million. Credit risk is minimized by operating a policy that generally restricts the investment of surplus cash to counterparties with an A credit rating or better or those providing adequate security. Limits are also set on the amounts invested with individual counterparties. Notwithstanding that counterparties must have an A credit rating or better, during periods of significant financial market turmoil, counterparty exposure limits are significantly reduced and counterparty credit exposure reviews are broadened to include the relative placing of credit default swap pricings. Most of the Group’s surplus funds are held in the United Kingdom or United States and there are no material funds where repatriation is restricted as a result of foreign exchange regulations.

The Syndicated Facility contains two financial covenants: interest cover and net debt divided by earnings before interest, tax, depreciation and amortization (“EBITDA”). Net debt for this purpose is calculated as total borrowings less cash and cash equivalents. The Group is in compliance with all of the financial covenants in its loan documents, none of which is expected to present a material restriction on funding in the near future.

Further details of exchange and interest rate risk and financial instruments are disclosed in “Item 11. Quantitative and qualitative disclosures about market risk”.

Cash From Operating Activities

Net cash from operating activities totaled $479 million for the year ended December 31, 2011 (2010 $462 million). The increase over 2010 is significantly less than the corresponding increase in profit for the year primarily due to the payment of 2010 bonuses in 2011 (no bonuses were payable in 2010 in respect of 2009) and higher tax payments.

Cash flow from operating activities is the principal source of cash used to fund the ongoing operating expenses, interest payments, maintenance capital expenditure and dividend payments of the Group. The Group believes that the requirements of its existing business and future investment can be met from cash generated internally, disposition of assets and external finance expected to be available to it.

Cash From Investing Activities

Net cash outflows due to investing activities totaled $38 million (2010 $36 million inflow) comprising proceeds (net of tax paid) from the disposal of hotels and investments of $156 million (2010 $131 million) and capital expenditure of $194 million (2010 $95 million). Proceeds in 2011 mainly relate to the disposals of the Hotel Indigo San Diego, Staybridge Suites Cherry Creek, Holiday Inn Atlanta-Gwinnett Place and a hotel asset and partnership interest in Australia. The most significant disposal in 2010 was the InterContinental Buckhead, Atlanta for $105 million. In line with the strategy of recycling capital to drive growth in the Group’s brands,

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capital expenditure in 2011 included a $12 million equity stake in Summit Hotel Properties Inc. in the US with whom the Group has a hotel sourcing agreement, $11 million in a venture which will take the Holiday Inn Express brand into India and $25 million in a joint venture to develop a Hotel Indigo on the Lower East Side, Manhattan.

Cash Used in Financing Activities

Net cash used for financing activities totaled $334 million (2010 $447 million), including the repayment of gross borrowings of $119 million (2010 $292 million). Dividend payments to shareholders totaled $148 million (2010 $121 million) and $75 million (2010 $53 million) was spent on share purchases in order to fulfil share incentive awards.

Overall net debt decreased during the year by $205 million to $538 million at December 31, 2011.

The Group had committed contractual capital expenditure of $14 million at December 31, 2011 (2010 $14 million).

Off-Balance Sheet Arrangements

At December 31, 2011, the Group had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Group’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Contractual Obligations

The Group had the following contractual obligations outstanding as of December 31, 2011:

	Total amounts committed		Less than 1 year		1-3 years		3-5 years		After 5 years
	($ million)
Long-term debt(i)(ii)		520		5		—		515		—
Interest payable(ii)		136		28		54		54		—
Finance lease obligations(iii)		3,412		16		32		32		3,332
Operating lease obligations		418		46		73		44		255
Agreed pension scheme contributions(iv)		133		37		1		—		95
Capital contracts placed		14		14		—		—		—
		4,633		146		160		645		3,682

  (i) Repayment period classified according to the related facility maturity date.

 (ii) Including the impact of derivatives.

(iii) Represents the minimum lease payments related to the 99-year lease (of which 94 years remain) on the InterContinental Boston. Payments under the lease step up at regular intervals over the lease term.

(iv) Primarily relates to the recovery plan agreed with trustees of the InterContinental Hotels UK Pension Plan (see below).

In addition, the Group has committed to invest up to $60 million in two joint venture arrangements of which $36 million had been spent at December 31, 2011.

In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts. Forecast payments of $9 million have been provided for in the financial statements and the maximum unprovided exposure under such guarantees is $42 million at December 31, 2011.

As of December 31, 2011, the Group had outstanding letters of credit of $51 million mainly relating to self insurance programs.

The Group may guarantee loans made to facilitate third-party ownership of hotels in which the Group has an equity interest and also a management contract. As of December 31, 2011, there were no such guarantees in place.

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The Group has given warranties in respect of the disposal of certain of its former subsidiaries and hotels. It is the view of the Directors that, other than to the extent that liabilities have been provided for in the Consolidated Financial Statements, such warranties are not expected to result in material financial loss to the Group.

Pension Plan Commitments

The Group operates the following material defined benefits plans: the InterContinental Hotels UK Pension Plan and, in the United States, the InterContinental Hotels Pension Plan and the InterContinental Hotels non-qualified plans.

On an IAS 19 “Employee Benefits” basis, the InterContinental Hotels UK Pension Plan had a surplus of $17 million at December 31, 2011, net of the tax that would be deducted at source in respect of a refund of surplus taking into account amounts payable under funding commitments. The defined benefits section of this plan is closed to new members and will close to future accrual for current members with effect from July 1, 2013. In addition, there are unfunded UK pension arrangements for certain members affected by the lifetime or annual allowance; at December 31, 2011, these arrangements had an IAS 19 deficit of $54 million. In 2012, the Group expects to make regular contributions to the UK pension plan of £5 million.

The most recent actuarial valuation of the InterContinental Hotels UK Pension Plan was carried out as at March 31, 2009 and showed a deficit of £129 million on a funding basis. Under the recovery plan agreed with the trustees, the Group aims to eliminate this deficit by March 2017 through additional Company contributions of up to £100 million and projected investment returns. The agreed additional contributions comprise three annual payments of £10 million (£10 million was paid in August 2010, £10 million in July 2011 and further payment of £10 million is due on or before July 31, 2012), together with further payments related to the disposal of hotels (7.5% of net sales proceeds) and growth in the Group’s EBITDA above specified targets. If required in 2017, a top-up payment will be made to bring the total additional contributions up to £100 million. As at December 31, 2011, total additional contributions of £36 million have been paid, including £21 million during 2011. In 2012, the Group expects to make additional contributions of £11 million under these arrangements with further amounts payable if there are any hotel disposals. The InterContinental Hotels UK Pension Plan is formally valued every three years and future valuations could lead to changes in the amounts payable beyond March 2012.

The US-based plans are closed to new members and pensionable service no longer accrues for current employee members. On an IAS 19 basis, at December 31, 2011 the plans had a combined deficit of $103 million. In 2012, the Group expects to make contributions to these plans of $10 million.

The Group is exposed to the funding risks in relation to the defined benefit sections of the InterContinental Hotels UK Pension Plan and the US-based InterContinental Hotels Pension Plan, as explained in “Item 3. Key information — Risk factors”.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

Overall strategic direction of the Group is provided by the Board of directors, comprising executive and non- executive directors, and by members of the executive committee.

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The directors and officers of InterContinental Hotels Group PLC at March 21, 2012 were:

Directors

Name	Title	Initially appointed to the Board		Date of next reappointment by shareholders
Graham Allan(1)	Director		2010		2012
David Kappler(1)	Director and Senior Independent Director		2004		2012
Kirk Kinsell	Director		2010		2012
Jennifer Laing(1)	Director		2005		2012
Jonathan Linen(1)	Director		2005		2012
Luke Mayhew(1)	Director		2011		2012
Dale Morrison(1)	Director		2011		2012
Tracy Robbins	Director		2011		2012
Thomas Singer	Director and Chief Financial Officer		2011		2012
Richard Solomons	Director and Chief Executive		2003		2012
David Webster	Director and Chairman		2003		2012
Ying Yeh(1)	Director		2007		2012

(1) Non-executive independent director.

Officers

Name	Title	Initially appointed to position
Keith Barr	Chief Executive, Greater China		2011
Angela Brav	Chief Executive, Europe		2011
Eric Pearson	Executive Vice President and Chief Information Officer		2012
Larry Light	Chief Brands Officer		2012
Jan Smits	Chief Executive, Asia, Middle East and Africa		2011
George Turner	Executive Vice President, General Counsel and Company Secretary		2009

Former Directors and Officers

James Abrahamson served as a Director and President, The Americas until June 2011. Andrew Cosslett served as a Director and Chief Executive of the Company until June 2011. Ralph Kugler served as a Non-Executive Director until June 2011. Tom Seddon, a senior employee of the Company, served as Executive Vice President and Chief Marketing Officer until July 2011. Tom Conophy, a senior employee of the Company, served as Executive Vice President and Chief Information Officer until February 2012.

Directors and Officers

David Webster, Non-Executive Chairman

Appointed Deputy Chairman and Senior Independent Director of InterContinental Hotels Group PLC on the Separation of Six Continents PLC in April 2003. Appointed Non-Executive Chairman on January 1, 2004. Also Non-Executive Chairman of Makinson Cowell Limited, a capital markets advisory firm, a Non-Executive Director of Amadeus IT Holding SA, a transaction processing and technology solutions company for the travel and tourism industry, a member of the Appeals Committee of the Panel on Takeovers and Mergers and a Director of Temple Bar Investment Trust PLC. Formerly Chairman of Safeway plc and a Non-Executive Director of Reed Elsevier PLC. Chairman of the Nomination Committee. Age 67.

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Richard Solomons, Chief Executive

Appointed Chief Executive in July 2011. Previously Chief Financial Officer and Head of Commercial Development. Joined the Group in 1992 and held a variety of senior financial and operational roles, including Chief Operating Officer of The Americas Hotels division. Became Finance Director of the Hotels business in October 2002 in anticipation of the Separation of Six Continents PLC in April 2003. A chartered accountant and a member of the Executive Committee of the World Travel & Tourism Council. Age 50.

Thomas Singer, Chief Financial Officer

Appointed Chief Financial Officer in September 2011. Prior to joining the Group, he was Group Finance Director and a main board member of Bupa, a global healthcare provider. Previously Group Finance Director and Chief Operating Officer at William Hill PLC and Finance Director at Moss Bros Group PLC. Responsible for corporate and regional finance, Group financial control, strategy, investor relations, tax, treasury, commercial development and procurement. Age 48.

Kirk Kinsell, President, The Americas

Appointed a Director in August 2010. Has over 29 years’ experience in the hospitality industry, including senior franchise positions with Holiday Inn Corporation and ITT Sheraton. He joined the Group in 2002 as Senior Vice President, Chief Development Officer for The Americas region. Became an Executive Committee member in September 2007 and was previously President, EMEA until June 2011. Responsible for the business development and performance of all the hotel brands and properties in The Americas region. Age 57.

Tracy Robbins, Executive Vice President, Human Resources and Head of Operations Support

Appointed a Director in August 2011. Has over 26 years’ experience in line and HR roles in service industries. Joined the Group in December 2005 from Compass Group PLC, a world leading food service company, where she was Group Human Resources Leadership & Development Director. Previously Group HR Director for Forte Hotels Group. Has global responsibility for talent management, leadership development, employee reward strategy and implementation, organizational capability and operational support. Age 48.

Graham Allan, Non-Executive Director

Appointed a Director in January 2010. Became Chief Executive Officer of Yum! Restaurants International (“YRI”), a subsidiary of Yum! Brands, Inc., in 2010 after serving as President of YRI since 2003. Previously Executive Vice President and Chief Operating Officer of YRI and Managing Director of YRI in Europe. Has over 20 years’ experience in brand management, marketing, franchising and retail development. Age 56.

David Kappler, Senior Independent Non-Executive Director

Appointed a Director and Senior Independent Director in June 2004. A Non-Executive Director of Shire plc. A qualified accountant and formerly Chief Financial Officer of Cadbury Schweppes plc and Non-Executive Chairman of Premier Foods plc. Also served as a Non-Executive Director of Camelot Group plc and HMV Group plc. A member of the Trilantic Europe Advisory Council. Chairman of the Audit Committee. Age 65.

Jennifer Laing, Non-Executive Director

Appointed a Director in August 2005. Was Associate Dean, External Relations at London Business School, until 2007. A Fellow of the Marketing Society and of the Institute of Practitioners in Advertising, has over 30 years’ experience in advertising including 16 years with Saatchi & Saatchi. Also a Non-Executive Director of Hudson Highland Group Inc., a US human resources company. Chairman of the Corporate Responsibility Committee. Age 65.

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Jonathan Linen, Non-Executive Director

Appointed a Director in December 2005. Was formerly Vice Chairman of the American Express Company, having held a range of senior positions throughout his career of over 35 years with American Express. A Non- Executive Director of Yum! Brands, Inc. and of Modern Bank N.A., a US private banking company. Also serves on a number of US Councils and advisory boards. Age 68.

Luke Mayhew, Non-Executive Director

Appointed a Director in July 2011. A Non-Executive Director of Brambles Limited, a global provider of supply chain and information management solutions. Previously served for 12 years on the Board of John Lewis Partnership, including as Managing Director of the Department Store Division. Was a Non-Executive Director of WH Smith PLC and Chairman of Pets at Home Group Limited. Chairman of the Remuneration Committee. Age 58.

Dale Morrison, Non-Executive Director

Appointed a Director in June 2011. A founding partner of TriPointe Capital Partners, a private equity firm. Was previously President and Chief Executive Officer of McCain Foods Limited and President and Chief Executive Officer of Campbell Soup Company. A Non-Executive Director of International Flavors & Fragrances Inc., a producer of flavors and fragrances. Age 63.

Ying Yeh, Non-Executive Director

Appointed a Director in December 2007. Was formerly Vice President and Chairman, Greater China Region, Nalco Company, and Chairman and President, North Asia Region, President, Business Development, Asia Pacific Region and Vice President, Eastman Kodak Company. Also a Non-Executive Director of AB Volvo and ABB Ltd.. Was, for 15 years, a diplomat with the US Foreign Service in Hong Kong and Beijing until 1997. Age 63.

Other members of the Executive Committee

Keith Barr, Chief Executive, Greater China

Has over 19 years’ experience in the hospitality industry. Joined the Group in 2000. Following senior appointments including Vice President of Sales and Revenue Management, Vice President of Operations and Chief Operating Officer, Australia, New Zealand and South Pacific, he was appointed Managing Director, Greater China in June 2009 and became Chief Executive, Greater China in April 2011. Responsible for the business development and performance of all the hotel brands and properties in the Greater China region. Age 41.

Angela Brav, Chief Executive, Europe

Has over 23 years’ experience in the hospitality industry, including hotel operations, franchise relations and technology solutions. Joined the Group in 1988 and held various senior roles in the Group’s US and European businesses prior to becoming Chief Operating Officer, North America. Was appointed Chief Executive, Europe in August 2011, responsible for the business development and performance of all the hotel brands and properties in Europe. Age 49.

Larry Light, Chief Brands Officer

Appointed in March 2012. Has over 30 years’ experience in marketing. Was Global Chief Marketing Officer at McDonald’s Corporation until 2005, and has more recently worked as a consultant specializing in the strategic management of global brands. Responsible for worldwide brand management, design, innovation and market research. Age 70.

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Eric Pearson, Executive Vice President and Chief Information Officer

Joined the Group in 1997. Has had interim responsibility for [worldwide brand management, guest experience and design and integrated marketing planning], in addition to his responsibilities as Chief Marketing Officer of the Americas. Previously worked for The Walt Disney Company, IBM and NASA in different management and technical roles. Responsible for global technology, including IT systems and information management throughout the Group. Age 46.

Jan Smits, Chief Executive, Asia, Middle East and Africa

Has 30 years’ experience in the hospitality industry. Joined the Group in 2002 and held various senior positions in the Asia and Australasia region. Became Managing Director, Asia Australasia in June 2009. Following the amalgamation of our Middle East and Africa region with our Asia Australasia region, became Chief Executive, Asia, Middle East and Africa in August 2011. Responsible for the business development and performance of all the hotel brands and properties in Asia, Middle East and Africa. Age 51.

George Turner, Executive Vice President, General Counsel and Company Secretary

Solicitor, qualified to private practice in 1995. After 12 years with Imperial Chemical Industries PLC, where he was Deputy Company Secretary, he joined the Group in September 2008. Appointed Executive Vice President, General Counsel and Company Secretary in January 2009. Responsible for corporate governance, risk management, insurance, data privacy, internal audit, legal and corporate responsibility & public affairs. Age 41.

There are no family relationships between any of the persons named above.

There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person named above was selected as a director or member of senior management.

COMPENSATION

In fiscal 2011, the aggregate compensation (including pension contributions, bonus and awards under the long term incentive plans) of the directors and officers of the Company was $29.1 million. The aggregate amount set aside or accrued by the Company in fiscal 2011 to provide pension retirement or similar benefits for those individuals was $0.8 million. An amount of $8.1 million was charged in fiscal 2011 in respect of bonuses payable to them under performance related cash bonus schemes and long term incentive plans.

Note 3 of Notes to the Consolidated Financial Statements sets out the individual compensation of the directors. The following are details of the Company’s principal share schemes, in which the directors of the Company participated during the period.

Annual Bonus Plan

The Group’s Annual Bonus Plan (“ABP”), enables eligible employees, including Executive Directors, to receive all or part of their bonus in the form of deferred shares. The deferred shares are released on the third anniversary of the award date. Under the terms of the current plans, a fixed percentage of the bonus is awarded in the form of shares with no voluntary deferral and no matching shares.

The awards in all of the plans are conditional on the participants remaining in the employment of a participating company or leaving for a qualifying reason as set out in the plan rules. Participation in the ABP is at the discretion of the Remuneration Committee. The number of shares is calculated by dividing a specific percentage of the participant’s annual performance-related bonus by the middle market quoted prices on the three consecutive dealing days immediately preceding the date of grant. A number of executives participated in the plan during the year, and conditional rights over 528,213 shares (2010 nil) were awarded to participants.

Long Term Incentive Plan

The Long Term Incentive Plan (“LTIP”) allows Executive Directors and eligible employees to receive share awards, subject to the achievement of performance conditions, set by the Remuneration Committee, which are

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normally measured over a three-year period. Awards are normally made annually and, except in exceptional circumstances, will not exceed three times salary for Executive Directors and four times salary in the case of other eligible employees. During 2011, conditional rights over 3,257,364 (2010 2,602,773) shares were awarded to employees under the plan. The plan provides for the grant of ‘nil cost options’ to participants as an alternative to conditional share awards.

Executive Share Option Plan

For options granted, the option price is not less than the market value of an ordinary share, or the nominal value if higher. The market value is the quoted price on the business day preceding the date of grant, or the average of the middle market quoted prices on the three consecutive dealing days immediately preceding the date of grant. A performance condition has to be met before options can be exercised. The performance condition is set by the Remuneration Committee. The plan was not operated during 2011 and no options were granted in the year under the plan. The latest date that any options may be exercised is April 4, 2015.

Options and Ordinary Shares held by Directors

Details of the directors’ interests in the Company’s shares are set out on page 65 and pages F-48 to F-50.

BOARD PRACTICES

Contracts of Service

The Remuneration Committee’s policy is for Executive Directors to have rolling contracts with a notice period of 12 months. Richard Solomons, Thomas Singer, Kirk Kinsell and Tracy Robbins have service agreements with a notice period of 12 months. All new appointments will have 12-month notice periods, unless, on an exceptional basis to complete an external recruitment successfully, a longer initial notice period reducing to 12 months is used, in accordance with the UK Corporate Governance Code.

Non-Executive Directors have letters of appointment. David Webster’s appointment as Non-executive Chairman, effective from January 1, 2004, is subject to six months’ notice.

David Kappler signed a letter of appointment effective from his date of original appointment to the Board on June 21, 2004. This was also renewed, effective from June 27, 2005. Jennifer Laing and Jonathan Linen signed letters of appointment effective from their appointment dates, respectively August 25, 2005 and December 1, 2005. Ying Yeh signed a letter of appointment effective from her appointment date of December 1, 2007. Graham Allan signed a letter of appointment effective from his appointment date of January 1, 2010. Dale Morrison signed a letter of appointment effective from his appointment date of June 1, 2011. Luke Mayhew signed a letter of appointment effective from his appointment date of July 1, 2011.

Directors’ Contracts

Directors	Contract effective date	Unexpired term/ notice period
Richard Solomons	July 1, 2011	12 months
Kirk Kinsell	August 1, 2010	12 months
Tracy Robbins	August 9, 2011	12 months
Thomas Singer	September 26, 2011	12 months

See Note 3 of Notes to the Consolidated Financial Statements for details of directors’ service contracts.

Payments on Termination

No provisions for compensation for termination following change of control, nor for liquidated damages of any kind, are included in the current Directors’ contracts. In the event of any early termination of an Executive Director’s contract the policy is to seek to minimize any liability.

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Upon retirement, and under certain other specified circumstances on termination of their employment, a director will become eligible to receive benefit from their participation in a Company pension plan. See Note 3 of Notes to the Consolidated Financial Statements for details of directors’ pension entitlements at December 31, 2011.

Committees

Each Committee of the Board has written terms of reference which are approved by the Board and subject to review every year. These are available on the Company’s website www.ihgplc.com/investors under corporate governance/committees or from the Company Secretary’s office upon request. During the year, the terms of reference of all of the Committees of the Board were reviewed against the latest best practice guidance and the UK Corporate Governance Code (“Code”). As a result, some minor amendments in respect of the Code were made to update the Remuneration Committee’s terms of reference.

Executive Committee

The Executive Committee is chaired by the Chief Executive. It consists of the executive directors and the most senior executives from the Group and usually meets monthly. Its role is to consider and manage a range of important strategic and business issues facing the Group. It is responsible for monitoring the performance of the business. It is authorized to approve capital and revenue investment within levels agreed by the Board. It reviews and recommends to the Board the most significant investment proposals.

Audit Committee

The Audit Committee is chaired by David Kappler who has significant recent and relevant financial experience and is the Committee’s financial expert. During 2011, the other Committee members were Graham Allan, Ralph Kugler (until his retirement on June 30, 2011) and Jennifer Laing and Dale Morrison from June 1, 2011. All Audit Committee members are independent.

The Audit Committee’s principal responsibilities are to:

• review the Group’s public statements on internal control, risk management and corporate governance compliance prior to their consideration by the Board;

• review the Group’s processes for detecting and addressing fraud, misconduct and control weaknesses and to consider the response to any such occurrence, including overseeing the process enabling the anonymous submission of concerns;

• review reports from management, internal audit and external audit concerning the effectiveness of internal control, financial reporting and risk management processes;

• review with management and the external auditor any financial statements required under UK or US legislation before submission to the Board;

• establish, review and maintain the role and effectiveness of the internal audit function, including overseeing the appointment of the Head of Global Internal Audit;

• assume responsibility for the appointment, compensation, resignation, dismissal and the overseeing of the external auditor, including review of the external audit, its cost and effectiveness;

• pre-approve non-audit work to be carried out by the external auditor and the fees to be paid for that work, along with the monitoring of the external auditor’s independence; and

• oversee the Group’s Code of Ethics and Business Conduct and associated procedures for monitoring adherence.

The Audit Committee discharges its responsibilities through a series of Committee meetings during the year at which detailed reports are presented for review. The Audit Committee commissions reports, either from

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external advisers, the Head of Global Internal Audit, or Group management, after consideration of the major risks to the Group or in response to developing issues. The Chief Financial Officer attends its meetings as do the external auditor and the Head of Global Internal Audit, both of whom have the opportunity to meet privately with the Audit Committee, in the absence of Group management, at the conclusion of each meeting.

All proposals for the provision of non-audit services by the external auditor are pre-approved by the Audit Committee or its delegated member, the overriding consideration being to ensure that the provision of non-audit services does not impact the external auditor’s independence and objectivity.

Remuneration Committee

The Remuneration Committee, chaired by Luke Mayhew, also comprises the following independent Non-Executive, directors: David Kappler, Jonathan Linen and Ying Yeh. Luke Mayhew succeeded Ralph Kugler as Chairman of the Committee on July 1, 2011. The Remuneration Committee agrees, on behalf of the Board, all aspects of the remuneration of the Executive Directors and the Executive Committee members, and agrees the strategy, direction and policy for the remuneration of other senior executives who have a significant influence over the Company’s ability to meet its strategic objectives.

Nomination Committee

The Nomination Committee comprises the Chairman of the Board and all the Non-Executive Directors. It is chaired by the Chairman of the Board except when matters relating to this position are discussed, in which case it is chaired by an independent Non-Executive Director. The Committee leads the process for Board appointments and nominates candidates for approval by the Board. The balance of skills, experience, independence and knowledge of Board members is evaluated in order to define the requirements for a particular appointment. The Committee generally engages external consultants to advise on candidates for Board appointments and appointments are made on merit, against objective criteria, including ability to commit time, and with due regard for the benefits of diversity, including gender. The Committee also has responsibility for succession planning and assists in identifying and developing the role of the Senior Independent Director.

During 2011 the Committee discussed succession planning for both the Executive Committee and the Board of Directors, considered and recommended new Executive Director appointments, which have now been implemented, and considered the appointment of two additional Non-Executive Directors.

Corporate Responsibility Committee

The Corporate Responsibility Committee is chaired by Jennifer Laing. During 2011 the other Committee members were Graham Allan, Ralph Kugler (until his retirement on June 30, 2011), Luke Mayhew, Richard Solomons and Ying Yeh. Meetings are regularly attended by other members of the Board and Executive Committee. The Corporate Responsibility Committee ensures that the Company has in place the right policies, management and measurement systems to enable it to deliver against its CR strategy.

Disclosure Committee

The Disclosure Committee, chaired by the Group’s Financial Controller, and comprising the Company Secretary and other senior executives, reports to the Chief Executive, the Chief Financial Officer and to the Audit Committee. Its duties include ensuring that information required to be disclosed in reports pursuant to UK and US accounting, statutory or listing requirements, fairly represents the Group’s position in all material respects.

General Purposes Committee

The General Purposes Committee comprises any one Executive Committee member together with a senior officer from an agreed and restricted list of senior executives. It is always chaired by an Executive Committee member. It attends to business of a routine nature and to the administration of matters, the principles of which have been agreed previously by the Board or an appropriate Committee.

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A description of the significant ways in which the Company’s actual corporate governance practices differ from the New York Stock Exchange corporate governance requirements followed by US companies can be found on page 83.

EMPLOYEES

The Group directly employed an average of 7,956 people worldwide in the year ended December 31, 2011. Of these, 93% were employed on a full-time basis and 7% were employed on a part-time basis. When the whole Group estate is taken into account (including staff working in the franchised and managed hotels) approximately 345,000 people are employed across the Group’s brands.

The table below analyzes the geographic distribution of the average number of employees for the last three fiscal periods by division and by geographic region.

	Americas		Europe		AMEA		Greater China		Central		Total
2011		2,895		1,574		1,195		1,000		1,292		7,956
2010		3,309		1,206		1,142		964		1,237		7,858
2009		3,229		1,192		992		938		1,205		7,556

The costs of the above employees are borne by the Group. In addition, the Group employs 4,462 (2010 4,489, 2009 4,561) people who work in managed hotels or directly on behalf of the System Fund and whose costs of $307 million (2010 $282 million, 2009 $267 million) are borne by those hotels or by the Fund.

Under EU law, many employees of Group companies are now covered by the Working Time Regulations which came into force in the United Kingdom on October 1, 1998. These regulations implemented the European Working Time Directive and parts of the Young Workers Directive, and lay down rights and protections for employees in areas such as maximum working hours, minimum rest time, minimum days off and paid leave.

In the United Kingdom there is in place a national minimum wage under the National Minimum Wage Act. At December 31, 2011, the minimum wage for individuals between 18 and under the age of 21 was £4.98 per hour and £6.08 per hour for individuals age 21 and above. This particularly impacts businesses in the hospitality and retailing sectors. Compliance with the National Minimum Wage Act is being monitored by the Low Pay Commission, an independent statutory body established by the UK Government.

Less than 5% of the Group’s UK employees are covered by collective bargaining agreements with trade unions.

Continual attention is paid to the external market in order to ensure that terms of employment are appropriate. The Group believes the Group companies will be able to conduct their relationships with trade unions and employees in a satisfactory manner.

SHARE-BASED COMPENSATION

During 2011, conditional rights over 3,257,364 shares were awarded to employees under the Long Term Incentive Plan and 528,213 shares were awarded to employees under the Annual Bonus Plan. No awards were granted under the Executive Share Option Plan. Details regarding the option pricing model and assumptions used to determine the fair value of the awards is included in Note 26 of Notes to the Consolidated Financial Statements.

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SHARE OWNERSHIP

The interests of the directors and officers of the Group at March 21, 2012 were:

	Ordinary shares of 13 29/47 pence			% of shares outstanding(4)
Directors
Graham Allan		12,000	(1)		N/A
David Kappler		1,400			N/A
Kirk Kinsell		477,913	(2)		N/A
Jennifer Laing		3,373			N/A
Jonathan Linen		7,343	(3)		N/A
Luke Mayhew		2,000			N/A
Dale Morrison		4,536	(3)		N/A
Tracy Robbins		246,212			N/A
Thomas Singer		195,283			N/A
Richard Solomons		934,462			N/A
David Webster		35,828			N/A
Ying Yeh		Nil			N/A
Officers
Keith Barr		124,697			N/A
Angela Brav		183,392			N/A
Larry Light		Nil			N/A
Eric Pearson		177,364			N/A
Jan Smits		213,234			N/A
George Turner		115,609			N/A

(1) 10,000 of which are held as American Depositary Shares (ADSs).

(2) 637 of which are held as ADSs.

(3) All of which are held as ADSs.

(4) Where no figure is given the shareholding represents less than 0.1% of shares outstanding.

The above shareholdings are all beneficial interests. The percentage of ordinary share capital owned by each of the directors is negligible.

The directors’ interests as at December 31, 2011 in options to subscribe for shares in InterContinental Hotels Group PLC are set out on page F-50.

The directors do not have different voting rights from other shareholders of the Company.

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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

As far as is known to management, IHG is not directly or indirectly owned or controlled by another corporation or by any government. As at the dates shown, the Company had been notified, in accordance with the Disclosure and Transparency Rules of the UK Financial Services Authority, of the following significant holdings of voting rights in its ordinary shares:

	March 21, 2012					March 25, 2011					March 19, 2010
Identity of person or group	Number of shares/ADSs		Percent of class			Number of shares/ADSs		Percent of class			Number of shares/ADSs		Percent of class
Ellerman Corporation Limited		N/A		N/A			N/A		N/A			29,921,742		10.28	%
Southeastern Asset Management, Inc.		38,519,075		13.23	%		N/A		N/A			14,860,671		5.10	%
FIL Limited (Fidelity International)		13,850,157		4.76	%		N/A		N/A			14,687,743		5.04	%
Cedar Rock Capital Limited		14,923,417		5.13	%		14,923,417		5.13	%		14,923,417		5.13	%
JP Morgan Asset Management Holdings Inc.		N/A		N/A			14,592,363		5.01	%		N/A		N/A
Blackrock, Inc.		14,505,612		4.98	%		14,505,612		4.98	%		14,434,598		4.96	%
Capital Research and Management Company.		14,495,664		4.98	%		14,495,664		4.98	%		N/A		N/A
Legal & General Group Plc		11,336,113		3.89	%		N/A		N/A			11,336,113		3.98	%
Lloyds Banking Groupplc		13,619,563		4.68	%		N/A		N/A			13,619,563		4.68	%

The Company’s major shareholders do not have different voting rights from other shareholders of the Company. The Company does not know of any arrangements the operation of which may result in a change in its control.

As of March 21, 2012, 37,166,221 ADSs equivalent to 37,166,221 ordinary shares, or approximately 12.77% of the total ordinary shares in issue, were outstanding and were held by 1,001 holders. Since certain ordinary shares are registered in the names of nominees, the number of shareholders of record may not be representative of the number of beneficial owners.

As of March 21, 2012, there were a total of 51,795 record holders of ordinary shares, of whom 343 had registered addresses in the United States and held a total of 1,457,995 ordinary shares (0.50% of the total issued).

RELATED PARTY TRANSACTIONS

Other than those disclosed in Note 30 of Notes to the Consolidated Financial Statements, the Company has not entered into any related party transactions or loans for the period beginning January 1, 2011 up to March 21, 2012.

ITEM 8. FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Financial Statements

See “Item 18. Financial Statements”.

Legal Proceedings

Group companies have extensive operations in the United Kingdom, as well as internationally, and are involved in a number of legal and arbitration proceedings incidental to those operations. It is the Company’s view that such proceedings, either individually or in the aggregate, have not in the recent past and are not likely to have a significant effect on the Group’s financial position or profitability.

Notwithstanding the above, Holiday Hospitality Franchising, Inc., a Group company, had a petition denied on March 19, 2012 by the United States Supreme Court in connection with a lawsuit filed by Hotel Associates, Inc., a former franchisee. Amounts representing a litigation provision for $22 million, which was reflected in the Consolidated Financial Statements for the year ended December 31, 2010, plus interest have been paid in connection with the judgment.

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Dividends

See “Item 3. Key information — Dividends”.

SIGNIFICANT CHANGES

Except as otherwise stated in this Form 20-F, there have been no significant changes subsequent to December 31, 2011.

ITEM 9. THE OFFER AND LISTING

The principal trading market for the Company’s ordinary shares is the London Stock Exchange on which InterContinental Hotels Group PLC shares are traded. The ordinary shares are also listed on the New York Stock Exchange trading in the form of ADSs evidenced by ADRs. Each ADS represents one ordinary share. InterContinental Hotels Group PLC has a sponsored ADR facility with JP Morgan Chase Bank, N.A. as Depositary.

The following tables show, for the fiscal periods indicated, the reported high and low middle market quotations (which represent an average of closing bid and ask prices) for the ordinary shares on the London Stock Exchange, as derived from the Daily Official List of the UK Listing Authority, and the highest and lowest sales prices of the ADSs as reported on the New York Stock Exchange composite tape.

	£ per ordinary share				$ per ADS
Year ended December 31,	High		Low		High		Low
2007		14.20		8.73		32.59		17.37
2008		8.84		4.48		17.40		6.52
2009		9.04		4.46		14.67		6.04
2010		12.66		8.87		20.04		13.84
2011		14.35		9.55		23.28		15.27

	£ per ordinary share				$ per ADS
Year ended December 31,	High		Low		High		Low
2010
First quarter		10.46		8.87		15.71		13.84
Second quarter		12.24		10.23		18.34		14.86
Third quarter		11.99		9.82		18.49		15.24
Fourth quarter		12.66		10.81		20.04		17.20
2011
First quarter		14.35		12.28		23.28		19.60
Second quarter		13.14		11.65		22.10		18.76
Third quarter		13.31		9.55		21.47		15.67
Fourth quarter		11.91		9.73		19.21		15.27
2012 First quarter (through March 21, 2012)		14.97		11.57		23.67		17.99

	£ per ordinary share				$ per ADS
Month ended	High		Low		High		Low
September 2011		10.95		9.87		17.13		15.67
October 2011		11.91		9.73		19.21		15.27
November 2011		11.22		10.00		18.21		15.52
December 2011		11.57		10.67		17.99		16.58
January 2012		13.57		11.57		21.09		17.99
February 2012		14.40		13.34		22.94		21.09
March 2012 (through to March 21, 2012)		14.97		13.83		23.67		21.72

Fluctuations in the exchange rates between sterling and the US dollar will affect the dollar equivalent of the sterling price of the ordinary shares on the London Stock Exchange and, as a result, are likely to affect the market price of ADSs.

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PLAN OF DISTRIBUTION

Not applicable.

SELLING SHAREHOLDERS

Not applicable.

DILUTION

Not applicable.

EXPENSES OF THE ISSUE

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

ARTICLES OF ASSOCIATION

The Company’s articles of association were adopted at the Annual General Meeting held on May 28, 2010. The following summarizes material rights of holders of the Company’s ordinary shares under the material provisions of the Company’s articles of association and English law. This summary is qualified in its entirety by reference to the Companies Act and the Company’s articles of association. The Company’s articles of association are filed as an exhibit to this Form 20-F.

The Company’s shares may be held in certificated or uncertificated form. No holder of the Company’s shares will be required to make additional contributions of capital in respect of the Company’s shares in the future.

In the following description, a “shareholder” is the person registered in the Company’s register of members as the holder of the relevant share.

Principal Objects

The Company is incorporated under the name InterContinental Hotels Group PLC and is registered in England and Wales with registered number 5134420. The Company’s articles of association do not restrict its objects.

Directors

Under the Company’s articles of association, a director may not vote in respect of any proposal in which he, or any person connected with him, has any material interest other than by virtue of his interests in securities of, or otherwise in or through, the Company. This is subject to certain exceptions, including in relation to proposals (a) indemnifying him in respect of obligations incurred on behalf of the Company, (b) indemnifying a third party in respect of obligations of the Company for which the director has assumed responsibility under an indemnity or guarantee, (c) relating to an offer of securities in which he will be interested as an underwriter, (d) concerning another body corporate in which the director is beneficially interested in less than one percent of the issued shares of any class of shares of such a body corporate, (e) relating to an employee benefit in which the director will share equally with other employees and (f) relating to liability insurance that the Company is empowered to purchase for the benefit of directors of the Company in respect of actions undertaken as directors (or officers) of the Company.

The directors are empowered to exercise all the powers of the Company to borrow money, subject to the limitation that the aggregate amount of all moneys borrowed by the Company and its subsidiaries shall not exceed an amount equal to three times the Company’s share capital and consolidated reserves, unless sanctioned by an ordinary resolution of the Company.

Directors are not required to hold any shares of the Company by way of qualification.

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Rights Attaching to Shares

Under English law, dividends are payable on the Company’s ordinary shares only out of profits available for distribution, as determined in accordance with accounting principles generally accepted in the United Kingdom and by the Companies Act. Holders of the Company’s ordinary shares are entitled to receive such dividends as may be declared by the shareholders in general meeting, rateably according to the amounts paid up on such shares, provided that the dividend cannot exceed the amount recommended by the directors.

The Company’s Board of directors may pay shareholders such interim dividends as appear to them to be justified by the Company’s financial position. If authorized by an ordinary resolution of the shareholders, the Board of directors may also direct payment of a dividend in whole or in part by the distribution of specific assets (and in particular of paid up shares or debentures of any other company).

Any dividend unclaimed after six years from the date the dividend was declared, or became due for payment, will be forfeited and will revert to the Company.

Voting Rights

Voting at any general meeting of shareholders is by a show of hands unless a poll, which is a written vote, is duly demanded. On a show of hands, every shareholder who is present in person or by proxy at a general meeting has one vote regardless of the number of shares held. On a poll, every shareholder who is present in person or by proxy has one vote for every share held by that shareholder. A poll may be demanded by any of the following:

• the chairman of the meeting;

• at least five shareholders present in person or by proxy and entitled to vote at the meeting;

• any shareholder or shareholders present in person or by proxy representing in the aggregate not less than one-tenth of the total voting rights of all shareholders entitled to vote at the meeting; or

• any shareholder or shareholders present in person or by proxy holding shares conferring a right to vote at the meeting on which there have been paid-up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

A proxy form will be treated as giving the proxy the authority to demand a poll, or to join others in demanding one.

The necessary quorum for a general meeting is three persons carrying a right to vote upon the business to be transacted, whether present in person or by proxy.

Matters are transacted at general meetings of the Company by the proposing and passing of resolutions, of which there are two kinds:

• an ordinary resolution, which includes resolutions for the election of directors, the approval of financial statements, the cumulative annual payment of dividends, the appointment of auditors, the increase of authorized share capital or the grant of authority to allot shares; and

• a special resolution, which includes resolutions amending the Company’s articles of association, disapplying statutory pre-emption rights, modifying the rights of any class of the Company’s shares at a meeting of the holders of such class or relating to certain matters concerning the Company’s winding up or changing the Company’s name.

An ordinary resolution requires the affirmative vote of a majority of the votes of those persons voting at a meeting at which there is a quorum.

Special resolutions require the affirmative vote of not less than three-fourths of the persons voting at a meeting at which there is a quorum.

Annual General Meetings must be convened upon advance written notice of 21 days. Other meetings must be convened upon advance written notice of 14 days. The days of delivery or receipt of the notice are not included. The notice must specify the nature of the business to be transacted. The Board of directors may if they choose make arrangements for shareholders who are unable to attend the place of the meeting to participate at other places.

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The articles of association specify that each Director shall retire every three years at the Annual General Meeting and unless otherwise decided by the Directors, shall be eligible for re-election. However, the UK Corporate Governance Code recommends that all Directors of FTSE 350 companies submit themselves for election or re-election (as appropriate) by shareholders every year. Therefore, all Directors will retire and offer themselves for election or re-election at the 2012 Annual General Meeting.

Variation of Rights

If, at any time, the Company’s share capital is divided into different classes of shares, the rights attached to any class may be varied, subject to the provisions of the Companies Act, with the consent in writing of holders of three-fourths in nominal value of the issued shares of that class or upon the adoption of a special resolution passed at a separate meeting of the holders of the shares of that class. At every such separate meeting, all of the provisions of the articles of association relating to proceedings at a general meeting apply, except that the quorum is to be the number of persons (which must be two or more) who hold or represent by proxy not less than one-third in nominal value of the issued shares of the class.

Rights in a Winding-up

Except as the Company’s shareholders have agreed or may otherwise agree, upon the Company’s winding up, the balance of assets available for distribution:

• after the payment of all creditors including certain preferential creditors, whether statutorily preferred creditors or normal creditors; and

• subject to any special rights attaching to any class of shares;

is to be distributed among the holders of ordinary shares according to the amounts paid-up on the shares held by them. This distribution is generally to be made in cash. A liquidator may, however, upon the adoption of a special resolution of the shareholders, divide among the shareholders the whole or any part of the Company’s assets in kind.

Limitations on Voting and Shareholding

There are no limitations imposed by English law or the Company’s articles of association on the right of non-residents or foreign persons to hold or vote the Company’s ordinary shares or ADSs, other than the limitations that would generally apply to all of the Company’s shareholders.

MATERIAL CONTRACTS

The following contracts have been entered into otherwise than in the course of ordinary business by members of the Group either (i) in the two years immediately preceding the date of this document in the case of contracts which are or may be material or (ii) which contain provisions under which any Group member has any obligation or entitlement which is material to the Group as at the date of this document. To the extent that these agreements include representations, warranties and indemnities, such provisions are considered standard in an agreement of that nature, save to the extent identified below.

£750,000,000 Euro Medium Term Note Program

In 2011, the Group updated its Euro Medium Term Note program (the “Program”).

1. On July 7, 2011, a first supplemental trust deed (the “Trust Deed”) was executed by InterContinental Hotels Group PLC as issuer (the “Issuer”), Six Continents Limited and InterContinental Hotels Limited as guarantors (the “Guarantors”) and HSBC Corporate Trustee Company (UK) Limited as trustee (the “Trustee”), pursuant to which the trust deed dated November 29, 2009 between the same parties relating to the Program was modified and restated. Under the Trust Deed, the Issuer may issue notes (“Notes”) unconditionally and irrevocably guaranteed by the Guarantors, up to a maximum nominal amount from time to time outstanding of £750,000,000 (or its equivalent in other currencies).

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Notes are to be issued in series (each a “Series”) in bearer form. Each Series may comprise one or more tranches (each a “Tranche”) issued on different issue dates. Notes may be issued either (1) pursuant to the updated Base Prospectus dated July 7, 2011 (the “Base Prospectus”) as amended and/or supplemented by a document setting out the final terms (the “Final Terms”) of the Notes or (2) pursuant to a separate prospectus specific to such Tranche (the “Drawdown Prospectus”). The terms and conditions applicable to any particular Tranche of Notes will be the Terms and Conditions of the Notes as supplemented, amended and/or replaced to the extent described in the relevant Final Terms or, as the case may be, the relevant Drawdown Prospectus.

Under the Trust Deed, each of the Issuer and the Guarantors has given certain customary covenants in favor of the Trustee.

Final Terms were issued (pursuant to the previous base prospectus dated November 27, 2009) on December 9, 2009 in respect of the issue of a Tranche of £250,000,000 6 per cent Notes due December 9, 2016. These Final Terms stipulate that the holders of the Notes have the right to repayment if the Notes (a) become non-investment grade within the period commencing on the date of announcement of a change of control and ending 90 days after the change of control (the “Change of Control Period”) and are not subsequently, within the Change of Control Period, reinstated to investment grade; (b) are downgraded from a non-investment grade and are not reinstated to its earlier credit rating or better within the Change of Control Period; or (c) are not credit rated and do not become investment-grade credit rated by the end of the Change of Control Period. Further details of the Program and the Notes are set out in the Base Prospectus, a copy of which is available (as is a copy of Final Terms dated December 7, 2009) on the Company’s website at www.ihgplc.com. These Notes are referred to as “£250 million 6% bonds” in the Consolidated Financial Statements.

2. On November 27, 2009, the Issuer and the Guarantors entered into an agency agreement (the “Agency Agreement”) with HSBC Bank PLC as principal paying agent and the Trustee, pursuant to which the Issuer and the Guarantors appointed paying agents and calculation agents in connection with the Program and the Notes.

Under the Agency Agreement, each of the Issuer and the Guarantors has given a customary indemnity in favor of the paying agents and the calculation agents. There was no change to the Agency Agreement in 2011.

3. On July 7, 2011, the Issuer and the Guarantors entered into a dealer agreement (the “Dealer Agreement”) with HSBC Bank PLC as arranger (the “Arranger”) and Barclays Bank PLC, HSBC Bank PLC, Lloyds TSB Bank PLC, Merrill Lynch International, Société Générale and The Royal Bank of Scotland PLC as dealers (the “Dealers”), pursuant to which the Dealers were appointed in connection with the Program and the Notes.

Under the Dealer Agreement, each of the Issuer and the Guarantors has given customary warranties and indemnities in favor of the Dealers.

Syndicated Facility

On November 7, 2011, the Company signed the Syndicated Facility, which comprises a five-year $1,070 million bank facility agreement with The Royal Bank of Scotland plc, NB International Finance B.V., Citigroup Global Markets Limited, HSBC Bank plc, Lloyds TSB Bank plc and The Bank of Tokyo-Mitsubishi UFJ, Ltd., all acting as mandated lead arrangers and Banc of America Securities Limited as facility agent.

The interest margin payable on borrowings under the Syndicated Facility is linked to IHG’s consolidated net debt to consolidated EBITDA ratio. The margin can vary between LIBOR + 0.90% and LIBOR + 1.70% depending on the level of the ratio. $100 million has been drawn under the facility, at December 31, 2011.

Disposal to Westbridge

On March 10, 2006 a Sale and Purchase Agreement (“SPA”) was entered into between BHR Luxembourg S.à.r.l. and other wholly owned subsidiaries of IHG as sellers (BHR Luxembourg S.à.r.l. being the principal seller) and Cooperatie Westbridge Europe I U.A. as purchaser and Westbridge Hospitality Fund L.P. as the purchaser’s guarantor. Under the SPA the sellers agreed to sell 23 hotels situated across Europe in France, Germany, Belgium, the Netherlands, Austria, Italy and Spain.

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The agreed sale price was €352 million. IHG’s share of the proceeds was €345.2 million (before transaction costs), in cash and the assumption of debt, and the balance of €6.8 million relates to third-party minority interests.

The hotels continue to be operated by the purchaser under the same brands under 15-year franchise agreements.

Under the SPA the sellers gave certain customary warranties and indemnities to the purchaser.

Disposal to Morgan Stanley Real Estate Funds

On July 13, 2006 a sale and purchase agreement (“SPA”) was entered into between BHR Holdings BV and other wholly owned subsidiaries of IHG as sellers (BHR Holdings BV being the principal seller) and a subsidiary of Morgan Stanley Real Estate Funds MSREF VI Danube BV. Under the SPA the sellers agreed to sell seven InterContinental branded hotels situated across Europe in France, Germany, the Netherlands, Austria, Hungary, Italy and Spain.

The agreed sale price for the seven hotels was €634 million. The Group retained 30-year management contracts on the hotels, with two ten-year renewals at the Group’s discretion, giving a total potential contract length of 50 years.

Under the SPA the sellers gave certain customary warranties and indemnities to the purchaser.

EXCHANGE CONTROLS

There are no restrictions on dividend payments to US citizens.

Although there are currently no UK foreign exchange control restrictions on the export or import of the capital or the payment of dividends on the ordinary shares or the ADSs, from time to time English law imposes restrictions on the payment of dividends to persons resident (or treated as so resident) in or governments of (or persons exercising public functions in) certain countries (each of the foregoing, a “Prohibited Person”).

There are no restrictions under the articles of association or under English law that limit the right of non-resident or foreign owners to hold or vote the ordinary shares. However, under current English law, ordinary shares or ADSs may not be owned by a Prohibited Person. In addition, the Company’s articles of association contain certain limitations on the voting and other rights of any holder of ordinary shares, whose holding may, in the opinion of the directors, result in the loss or failure to secure the reinstatement of any license or franchise from any US governmental agency held by Six Continents Hotels Inc or any subsidiary thereof.

TAXATION

This section provides a summary of the material US federal income tax and UK tax consequences to US holders, as defined below, of owning and disposing of ordinary shares or ADSs of the Company. This section addresses only the tax position of a US holder who holds ordinary shares or ADSs as capital assets. This section does not, however, discuss the tax consequences of members of special classes of holders subject to special rules, such as

• certain financial institutions;

• insurance companies;

• dealers and traders in securities or foreign currencies;

• persons holding ordinary shares or ADSs as part of a hedge, straddle, conversion transaction, integrated transaction or similar transaction;

• persons whose functional currency for US federal income tax purposes is not the US dollar;

• partnerships or other entities classified as partnerships for US federal income tax purposes;

• persons liable for the alternative minimum tax;

• tax-exempt organizations;

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• persons who acquired our ADSs or ordinary shares pursuant to the exercise of any employee stock option or otherwise in connection with employment; or

• holders that, directly or indirectly, hold 10% or more of the Company’s voting stock.

This section does not generally deal with the position of a US holder who is resident or, in the case of an individual, ordinarily resident in the UK for UK tax purposes or who is subject to UK taxation on capital gains or income by virtue of carrying on a trade, profession or vocation in the UK through a branch, agency or permanent establishment to which such ADSs or ordinary shares are attributable (“trading in the UK”).

A US holder is a beneficial owner of ordinary shares or ADSs who is for US federal income tax purposes (i) an individual citizen or resident of the US, (ii) a US domestic corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; (iii) an estate whose income is subject to US federal income tax regardless of its source, or (iv) a trust if a US court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, published rulings and court decisions, and on UK tax laws and the published practice of HM Revenue and Customs, all as of the date hereof. These laws, and that practice, are subject to change, possibly on a retroactive basis.

This section is further based in part upon the representations of the Depositary and assumes that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms. For US federal income tax purposes, an owner of ADRs evidencing ADSs will generally be treated as the owner of the underlying shares represented by those ADSs. Generally, exchanges of ordinary shares for ADRs, and ADRs for ordinary shares, will not be subject to US federal income tax or UK taxation on capital gains, although UK stamp duty reserve tax (“SDRT”) may arise as describes below.

The US Treasury has expressed concerns that parties to whom American Depositary Shares are pre-released may be taking actions that are inconsistent with the claiming of foreign tax credits for US holders of American Depositary Shares. Such actions would also be inconsistent with the claiming of the reduced rate of tax, described below, for qualified dividend income. Accordingly, the analysis of the availability of the reduced rate of tax for qualified dividend income described below could be affected by actions taken by parties to whom the ADRs are pre-released.

The following discussion assumes that the Company is not, and will not become, a passive foreign investment company (a “PFIC”), as described below.

Investors should consult their own tax advisors regarding the US federal, state and local, the UK and other tax consequences of owning and disposing of shares and ADSs in their particular circumstances.

Taxation of Dividends

United Kingdom Taxation

Under current UK tax law, the Company will not be required to withhold tax at source from dividend payments it makes.

A US holder who is not resident for UK tax purposes in the UK and who is not trading in the UK will generally not be liable for UK taxation on dividends received in respect of the ADSs or ordinary shares.

United States Federal Income Taxation

A US holder is subject to US federal income taxation on the gross amount of any dividend paid by the Company out of its current or accumulated earnings and profits (as determined for US federal income tax purposes). Distributions in excess of the Company’s current and accumulated earnings and profits, as determined for US federal income tax purposes, will be treated as a return of capital to the extent of the US holder’s basis in the shares or ADSs and thereafter as capital gain. Because the Company has not historically maintained, and does

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not currently maintain, books in accordance with US tax principles, the Company does not expect to be in a position to determine whether any distribution will be in excess of the Company’s current and accumulated earnings and profits as computed for US federal income tax purposes. As a result, the Company expects that amounts distributed will be reported to the Internal Revenue Service as dividends.

Subject to applicable limitations and the discussion above regarding concerns expressed by the US Treasury, dividends paid to a non-corporate US holder in taxable years beginning before January 1, 2013 that constitute qualified dividend income will be taxable to the holder at a maximum tax rate of 15%. The Company expects that dividends paid by the Company with respect to the shares or ADSs will constitute qualified dividend income. US holders should consult their own tax advisors to determine whether they are subject to any special rules that limit their ability to be taxed at this favorable rate.

Dividends must be included in income when the US holder, in the case of shares, or the Depositary, in the case of ADSs, actually or constructively receives the dividend, and will not be eligible for the dividends-received deduction generally allowed to US corporations in respect of dividends received from other US corporations. For foreign tax credit limitation purposes, dividends will generally be income from sources outside the United States.

The amount of any dividend paid in pounds will be the US dollar value of the sterling payments made, determined at the spot sterling/US dollar rate on the date the dividend distribution is includible in income, regardless of whether the payment is in fact converted into US dollars. If the dividend is converted into US dollars on the date of receipt, a US holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is includible in income to the date the payment is converted into US dollars will be treated as ordinary income or loss and, for foreign tax credit limitation purposes, from sources within the United States.

Taxation of Capital Gains

United Kingdom Taxation

A US holder who is not resident or, in the case of an individual, ordinarily resident for UK tax purposes in the UK and who is not trading in the UK will not generally be liable for UK taxation on capital gains realized or accrued on the sale or other disposal of ADSs or ordinary shares.

A US holder of ADSs or ordinary shares who is an individual and who, broadly, has temporarily ceased to be resident or ordinarily resident in the UK or has become temporarily treated as non-resident for UK tax purposes for a period of less than five years of assessment and who disposes of ordinary shares or ADSs during that period may, for the year of assessment when that individual becomes resident again in the UK, be liable to UK tax on capital gains (subject to any available exemption or relief), notwithstanding the fact that such US holder was not resident or ordinarily resident in the UK at the time of the sale or other disposal.

United States Federal Income Taxation

A US holder that sells or otherwise disposes of ordinary shares or ADSs will recognize a capital gain or loss for US federal income tax purposes equal to the difference between the US dollar value of the amount realized and its tax basis, determined in US dollars, in the ordinary shares or ADSs. Such capital gain or loss will be long-term capital gain or loss where the holder has a holding period greater than one year. The gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. The deductibility of losses is subject to limitations.

PFIC Rules

The Company believes that it was not a PFIC for US federal income tax purposes for its 2011 taxable year. However, this conclusion is an annual factual determination and thus may be subject to change. If the Company were to be treated as a PFIC, gain realized on the sale or other disposition of ordinary shares or ADSs would in general not be treated as capital gain. Instead, gain would be treated as if the US holder had realized such gain ratably over the holding period for the ordinary shares or ADSs and, to the extent allocated to the taxable year of

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the sale or other exchange and to any year before the Company became a PFIC, would be taxed as ordinary income. The amount allocated to each other taxable year would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. In addition, similar rules would apply to any “excess distribution” received on the ordinary shares or ADSs (generally, the excess of any distribution received on the ordinary shares or ADSs during the taxable year over 125% of the average amount of distributions received during a specified prior period), and the preferential rate for “qualified dividend income” received by certain non-corporate US holders would not apply. Certain elections may be available (including a market-to-market election) to US holders that would result in alternative treatments of the ordinary shares or ADSs. Pursuant to legislation enacted in 2010, if the Company were to be treated as a PFIC in any taxable year, a US holder may be required to file an annual report with the Internal Revenue Service containing such information as the Treasury Department may require.

Additional Tax Considerations

United States Backup Withholding and Information Reporting

Payments of dividends and other proceeds with respect to ADSs and ordinary shares may be reported to the IRS and to the US holder. Backup withholding may apply to these payments if the US holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to report all interest and dividends required to be shown on its US federal income tax returns. Certain US holders (including, among others, corporations) are not subject to backup withholding. The amount of any backup withholding from a payment to a US holder will be allowed as a credit against the holder’s US federal income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS. US holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.

United Kingdom Inheritance Tax

An individual who is neither domiciled nor deemed domiciled in the UK (under certain UK rules relating to previous domicile or long residence) is only chargeable to UK inheritance tax to the extent the individual owns assets situated in the UK. As a matter of UK law, it is not clear whether the situs of an ADS for UK inheritance tax purposes is determined by the place where the depositary is established and records the entitlements of the depositholders, or by the situs of the underlying share which the ADS represents, but the UK tax authorities are likely to take the view that the ADSs, as well as the ordinary shares, are UK situs assets.

However, an individual who is domiciled in the United States (for the purposes of the Estate and Gift Tax Convention) and is not a UK national as defined in the Convention will not be subject to UK inheritance tax (to the extent UK inheritance tax applies) in respect of the ordinary shares or ADSs on the individual’s death or on a transfer of the ordinary shares or ADSs during their lifetime, provided that any applicable US federal gift or estate tax is paid, unless the ordinary shares or ADSs are part of the business property of a UK permanent establishment or pertain to a UK fixed base of an individual used for the performance of independent personal services. Where the ordinary shares or ADSs have been placed in trust by a settlor, they may be subject to UK inheritance tax unless, when the trust was created, the settlor was domiciled in the United States and was not a UK national. If no relief is given under the Convention, inheritance tax may be charged on the amount by which the value of the transferor’s estate is reduced as a result of any transfer made by way of gift or other undervalue transfer by an individual, broadly within seven years of death, or on the death of an individual, and in certain other circumstances. Where the ordinary shares or ADSs are subject to both UK inheritance tax and to US federal gift or estate tax, the Estate and Gift Tax Convention generally provides for either a credit against US federal tax liabilities for UK inheritance tax paid or for a credit against UK inheritance tax liabilities for US federal tax paid, as the case may be.

United Kingdom Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)

Neither stamp duty nor SDRT will generally be payable in the UK on the purchase or transfer of an ADS, provided that the ADS and any separate instrument or written agreement of transfer are executed and remain at all times outside the UK. Stamp duty or SDRT is, however, generally payable at the rate of 1.5% on the amount or value of the consideration (or, in some cases, the value of the ordinary shares) where ordinary shares are

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issued or transferred to a person (or a nominee or of a person) whose business is or includes issuing depositary receipts or the provision of clearance services. In accordance with the terms of the deposit agreement, any tax or duty payable on deposits of ordinary shares by the depositary or by the custodian of the depositary will typically be charged to the party to whom ADSs are delivered against such deposits.

Following a decision of the European Court of Justice in 2009, HM Revenue & Customs has announced that it will not seek to apply the 1.5% SDRT charge when new shares are issued to an EU clearance service or EU depositary receipt system. In HM Revenue & Customs’ view, the 1.5% SDRT charge will continue to apply to transfers of shares into a clearance service or depositary receipt system, and also in respect of issues of shares into non-EU clearance services and non-EU depositary receipt systems, including in connection with ADSs. This view is currently being challenged in further litigation, but it is expected that HM Revenue & Customs will continue to impose such charges until further case law or legislation resolves the issues. Accordingly, specific professional advice should be sought before paying the 1.5% SDRT or stamp duty charge in any circumstances.

A transfer of the underlying ordinary shares will generally be subject to stamp duty or SDRT, normally at the rate of 0.5% of the amount of value of the consideration (rounded up to the next multiple of £5 in the case of stamp duty). A transfer of ordinary shares from a nominee to its beneficial owner, including the transfer of underlying ordinary shares from the depositary to an ADS holder, under which no beneficial interest passes, will not be subject to stamp duty or SDRT.

DOCUMENTS ON DISPLAY

It is possible to read and copy documents referred to in this Annual Report on Form 20-F that have been filed with the SEC at the SEC’s public reference room located at 100 F Street, NE Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges. The Company’s SEC filings since May 22, 2002 are also publicly available through the SEC’s website located at www.sec.gov.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Exchange and Interest Rate Risk, and Financial Instruments

The Group’s treasury policy is to manage financial risks that arise in relation to underlying business needs. The activities of the treasury function are carried out in accordance with Board approved policies and are subject to regular internal audit. The treasury function does not operate as a profit center.

Treasury Risk Management

The treasury function seeks to reduce the financial risk of the Group and manages liquidity to meet all foreseeable cash needs. Treasury activities may include money market investments, spot and forward foreign exchange instruments, currency options, currency swaps, interest rate swaps and options and forward rate agreements. One of the primary objectives of the Group’s treasury risk management policy is to mitigate the adverse impact of movements in interest rates and foreign exchange rates.

Credit Risk

Credit risk on treasury transactions is minimized by operating a policy on the investment of surplus cash that generally restricts counterparties to those with an A credit rating or better or those providing adequate security.

Notwithstanding that counterparties must have an A credit rating or better, during periods of significant financial market turmoil, counterparty exposure limits are significantly reduced and counterparty credit exposure reviews are broadened to include the relative placing of credit default swap pricings.

The Group trades only with recognized, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures.

In respect of credit risk arising from financial assets, the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

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Most of the Group’s surplus funds are held in the United Kingdom or United States and there are no material funds where repatriation is restricted as a result of foreign exchange regulations.

Currency Risk

The US dollar is the predominant currency of the Group’s revenue and cash flows. Movements in foreign exchange rates can affect the Group’s reported profits, net assets and interest cover. To hedge translation exposure, wherever possible, the Group matches the currency of its debt (either directly or via derivatives) to the currency of its net assets, while maximizing the amount of US dollars borrowed to reflect the predominant trading currency. At December 31, 2011, the Group held currency swaps with a principal of $415 million (2010 $415 million) and short dated foreign exchange swaps with principals of €75 million (2010 €75 million and HK$70 million ).

The Group is exposed to foreign currency risk on income streams denominated in foreign currencies. From time to time, the Group hedges a portion of forecast foreign currency income by taking out forward exchange contracts. The designated risk is the spot foreign exchange risk. There were no such contracts in place at either December 31, 2011 or December 31, 2010.

A general strengthening of the US dollar (specifically a five cent fall in the sterling: US dollar rate) would increase the Group’s profit before tax by an estimated $3.3 million (2010 $3.5 million, 2009 $1.6 million) and decrease net assets by an estimated $10.4 million (2010 $5.6 million, 2009 $4.1 million). Similarly, a five cent fall in the euro: US dollar rate would reduce the Group’s profit before tax by an estimated $1.9 million (2010 $1.4 million, 2009 $0.7 million) and decrease net assets by an estimated $10.3 million (2010 $8.2 million, 2009 $4.5 million).

Interest Rate Risk and Sensitivity

Interest rate exposure is managed within parameters that stipulate that fixed rate borrowings should normally account for no less than 25% and no more than 75% of net borrowings for each major currency. This is usually achieved through the use of interest rate swaps. Due to relatively low interest rates and the level of the Group’s debt, 100% of borrowings were fixed rate debt or had been swapped into fixed rate borrowings at December 31, 2011.

At December 31, 2011, the Group held interest rate swaps (swapping floating for fixed) with notional principals of $100 million (2010 $100 million and €75 million). These swaps are held to fix the interest payable on borrowings under the Syndicated Facility; at December 31, 2011, $100 million of US dollar borrowings were fixed at 1.99% until May 2012.

Based on the year-end net debt position and given the underlying maturity profile of investments, borrowings and hedging instruments at December 31, 2011, a one percentage point rise in US dollar interest rates would increase the annual net interest charge by approximately $nil (2010 $nil, 2009 $0.8 million). A similar rise in euro and sterling interest rates would increase the annual net interest charge by approximately $nil (2010 $nil, 2009 $1.1 million) and $nil (2010 $nil, 2009 $nil), respectively.

The tables below provide information about the Group’s derivative and other financial instruments that are sensitive to changes in interest rates, including interest rate swaps, currency swaps and debt obligations. For long-term debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For interest rate swaps and currency swaps, the table presents notional amounts and weighted average interest rates by expected maturity dates. Weighted average variable rates are based on rates set on the last day of the period. The actual currencies of the instruments are indicated in parentheses.

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At December 31, 2011

	Expected to mature before December 31,
	2012			2013		2014		2015		Thereafter			Total			Fair  value(i)
	($ million, except percentages)
Long-term debt:
Fixed rate public bonds (sterling)		—			—		—		—		384			384			411
Fixed rate payable											6.0	%		6.0	%
Fixed rate lease debt (US dollar)		—			—		—		—		209			209			268
Fixed rate payable											9.7	%		9.7	%
Variable rate bank debt (various currencies)		5			—		—		—		93			98			98
Average interest rate payable		5.3	%								1.3	%		1.4	%
	(local currency million, except percentages)
Interest rate swaps:
Principal (US dollar)		100			—		—		—		—			100			—
Fixed rate payable		2.0	%											2.0	%
Variable rate receivable		0.5	%											0.5	%
	(local currency million, except percentages)
Currency swaps:
Principal receivable (sterling)		—			—		—		—		250			250			(39	)
Fixed rate receivable											6.0	%		6.0	%
Principal payable (US dollar)		—			—		—		—		415			415
Fixed rate payable											6.2	%		6.2	%

(i) Represents the net present value of the expected cash flows discounted at current market rates of interest, except for the public bonds which are shown at market value.

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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Fees and Charges Payable to a Depositary

Category (as defined by SEC)	Depositary actions	Associated fee
(a) Depositing or substituting the underlying shares	Each person to whom ADRs are issued against deposits of Shares, including deposits and issuances in respect of: •share distributions, stock split, rights, merger •Exchange of securities or any other transactions or event or other distribution affecting the ADSs or the Deposited Securities	$5 for each 100 ADSs (or portion thereof)
(b) Receiving or distributing dividends	•Distribution of stock dividends •Distribution of cash	$5 for each 100 ADSs (or portion thereof) $0.02 or less per ADS (or portion thereof)
(c) Selling or exercising rights	Distribution or sale of securities, the fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities	$5.00 for each 100 ADSs (or portion thereof)
(d) Withdrawing an underlying security	Acceptance of ADRs surrendered for withdrawal of deposited securities	$5.00 for each 100 ADSs (or portion thereof)
(e) Transferring, splitting or grouping receipts	Transfers, combining or grouping of depositary receipts	$1.50 per ADS
(f) General depositary services, particularly those charged on an annual basis	•Other services performed by the depositary in administering the ADRs	$0.02 per ADS (or portion thereof)* not more than once each calendar year and payable at the sole discretion of the depositary by billing Holders or by deducting such charge from one or more cash dividends or other cash distributions
(g) Expenses of the depositary	Expenses incurred on behalf of Holders in connection with: •Compliance with foreign exchange control regulations or any law or regulation relating to foreign investment •The depositary’s or its custodian’s compliance with applicable law, rule or regulation •Stock transfer or other taxes and other governmental charges •Cable, telex, facsimile transmission/delivery •transfer or registration fees in connection with the deposit and withdrawal of Deposited Securities •Expenses of the depositary in connection with the conversion of foreign currency into US dollars (which are paid out of such foreign currency) •Any other charge payable by depositary or its agents	Expenses payable at the sole discretion of the depositary by billing Holders or by deducting charges from one or more cash dividends or other cash distributions $20 per transaction

* These fees are not currently being charged by the depositary.

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Fees and Charges Payable by a Depositary

Direct Payments

JPMorgan Chase Bank, N.A. is the depositary for IHG’s ADS program. The depositary’s principal executive office is at: 1 Chase Manhattan Plaza, Floor 58, New York, NY 10005-1401, United States of America. The depositary, has agreed to reimburse certain reasonable Company expenses related to the Company’s ADR Program and incurred by the Company in connection with the ADR Program. During the year ended December 31, 2011 the Company received $444,685.01 from the depositary in respect of legal, accounting and other fees incurred in connection with preparation of Form 20-F and ongoing SEC compliance and listing requirements, investor relations programs and advertising and public relations expenditure.

Indirect Payments

As part of its service to the Company, JPMorgan has agreed to waive fees for the standard costs associated with the administration of the ADR Program, associated operating expenses and investor relations advice. In the year ended December 31, 2011, JPMorgan agreed to waive fees and expenses amounting to $20,000.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As at the end of the period covered by this report, the Group carried out an evaluation under the supervision and with the participation of the Group’s management, including the Chief Executive and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures (as defined in Rules 13a-15(e)). These are defined as those controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the specified periods. Based on that evaluation, the Chief Executive and Chief Financial Officer concluded that the Group’s disclosure controls and procedures were effective.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934.

Management has issued a report on the effectiveness of the Group’s Internal Control over Financial reporting as at December 31, 2011. This report appears on page F-1 of the Group’s Consolidated Financial Statements contained in this Annual Report.

Ernst & Young LLP, an independent registered public accounting firm, has issued an attestation report on the Company’s internal control over financial reporting. This report appears on page F-2 of the Group’s Consolidated Financial Statements contained in this Annual Report.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Group’s internal controls over financial reporting that occurred during the period covered by this Form 20-F that have materially affected, or are reasonably likely to materially affect, the Group’s internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Senior Independent Director David Kappler, who has significant recent and relevant financial experience is the “Audit Committee Financial Expert” as defined under the regulations of the US Securities and Exchange Commission. David Kappler is independent as that term is defined under the listing standards of the NYSE.

ITEM 16B. CODE OF ETHICS

The Board has adopted a global Code of Ethics and Business Conduct that applies to all directors, officers and employees of the Group, including the Chief Executive and Chief Financial Officer. This Code of Ethics has been signed by the Chief Executive and the Chief Financial Officer of the Company and by the Group Financial Controller and regional financial heads. The Company has published its Code of Ethics and Business Conduct on its website www.ihgplc.com. No amendment has been made to the provisions of the Code of Ethics (as published on the Company’s website) and no waivers have been granted by the Board in respect of the Code of Ethics.

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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees for professional services provided by Ernst & Young LLP, the Group’s independent auditors in each of the last two fiscal periods in each of the following categories are:

	Year ended December 31,
	2011		2010
	($ million)
Audit fees		3.7		3.8
Audit related fees		1.8		2.0
Tax fees		0.7		2.1
Total		6.2		7.9

Further detail is provided in Note 4 “Auditor’s remuneration paid to Ernst & Young LLP” of “Item 18 — Financial Statements”.

Audit fees in respect of the pension scheme were not material.

The Audit Committee has a process to ensure that any non-audit services do not compromise the independence and objectivity of the external auditor and that relevant United Kingdom and United States professional and regulatory requirements are met. A number of criteria are applied when deciding whether pre-approval for such services should be given. These include the nature of the service, the level of fees and the practicality of appointing an alternative provider, having regard to the skills and experience required to supply the service effectively. Cumulative fees for audit and non-audit services are presented to the Audit Committee on a quarterly basis for review. The Audit Committee is responsible for monitoring adherence to the pre-approval policy.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Period of fiscal year	(a) Total number of shares (or units) purchased		(b) Average price paid per share (or unit)		(c) Total number of shares (or units) purchased as part of publicly announced plans or programs		(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
Month 1 (no purchases in this month)		0		0.00		0		28,777,533
Month 2		2,589,780	£	13.75		0		28,777,533
Month 3 (no purchases in this month)		0		0.00		0		28,777,533
Month 4 (no purchases in this month)		0		0.00		0		28,777,533
Month 5 (no purchases in this month)		0		0.00		0		28,777,533
Month 6 (no purchases in this month)		0		0.00		0		28,982,476	*
Month 7 (no purchases in this month)		0		0.00		0		28,982,476
Month 8 (no purchases in this month)		0		0.00		0		28,982,476
Month 9 (no purchases in this month)		0		0.00		0		28,982,476
Month 10 (no purchases in this month)		0		0.00		0		28,982,476
Month 11 (no purchases in this month)		0		0.00		0		28,982,476
Month 12		1,000,000	£	11.06		0		28,982,476

* Reflects the resolution passed at the Company’s Annual General Meeting held on May 27, 2011.

The first share repurchase program was announced on March 11, 2004 with the intention to repurchase £250 million worth of shares. A second £250 million share repurchase program followed, announced September 9, 2004. A third £250 million share repurchase program was announced on September 8, 2005. These programs were completed on December 20, 2004, April 11, 2006, and June 28, 2007 respectively.

82

On February 20, 2007, the Company announced a fourth, £150 million share repurchase program. No shares were repurchased in 2011. By March 21, 2012, 14,446,554 shares had been repurchased at an average price of 831 pence per share (approximately £120 million).

During fiscal 2011, 3,589,780 ordinary shares were purchased by the Company’s Employee Share Ownership Trust at prices ranging from 10.9553 pence to 13.94857 pence per share, for the purpose of satisfying future share awards to employees.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. SUMMARY OF SIGNIFICANT CORPORATE GOVERNANCE DIFFERENCES FROM NYSE LISTING STANDARDS

The Group is committed to compliance with the principles of corporate governance and aims to follow the corporate governance practices specified in the UK Corporate Governance Code, the “Code” issued by the Financial Services Authority in the United Kingdom.

IHG has also adopted the corporate governance requirements of the US Sarbanes-Oxley Act and related rules and of the NYSE, to the extent that they are applicable to it as a foreign private issuer. As a foreign private issuer IHG is required to disclose any significant ways in which its corporate governance practices differ from those followed by US companies. These are as follows:

Basis of regulation

The Code contains a series of principles and provisions. It is not, however, mandatory for companies to follow these principles. Instead, companies must disclose how they have applied them and disclose, if applicable, any areas of non-compliance along with an explanation for the non-compliance. In contrast, US companies listed on the NYSE are required to adopt and disclose corporate governance guidelines adopted by the NYSE. IHG’s statement of compliance with the UK Code’s requirements for 2011 is contained in the Company’s Annual Report and Financial Statements for the year ended December 31, 2011.

Independent Directors

The Code’s principles recommend that at least half the Board, excluding the Chairman, should consist of independent Non-Executive Directors. As at March 21, 2012 the Board consisted of the Chairman, independent at the time of his appointment, four Executive Directors and seven independent Non-Executive Directors. NYSE listing rules applicable to US companies state that companies must have a majority of independent directors. The NYSE set out five bright line tests for director independence. The Board’s judgment is that all of its Non-Executive Directors are independent. However it did not explicitly take into consideration the NYSE’s tests in reaching this determination.

Chairman and Chief Executive

The Code recommends that the Chairman and Chief Executive should not be the same individual to ensure that there is a clear division of responsibility for the running of the Company’s business. There is no corresponding requirement for US companies. The roles of Chairman and Chief Executive were, as at March 21, 2012 and throughout 2011 fulfilled by separate individuals.

Committees

The Company has a number of Board Committees which are similar in purpose and constitution to those required for domestic companies under NYSE rules. The Remuneration, Audit and Nomination Committees consist only of Non-Executive Directors. The NYSE requires US companies to have a nominating/corporate governance committee composed entirely of independent directors. The committee is responsible for identifying individuals qualified to become Board members and to recommend to the Board a set of corporate governance

83

principles. As the Company is subject to the Code, the Company’s Nomination Committee is only responsible for nominating, for approval of the Board, candidates for appointment to the Board, though it also assists in developing the role of the Senior Independent Director. The Company’s Nomination Committee consists of the Company Chairman and all the independent Non-Executive Directors. The Chairman of the Company is not a member of either of the Remuneration or the Audit Committees. The Audit Committee is chaired by an independent Non-Executive Director who, in the Board’s view, has the experience and qualifications to satisfy the criteria under US rules for an “audit committee financial expert”.

Non-Executive Director Meetings

Non-management directors of US companies must meet on a regular basis without management present, and independent directors must meet separately at least once per year. The Company’s Non-Executive Directors have met without Executive Directors being present, and intend to continue this practice, before every Board meeting if possible.

Shareholder approval of Equity Compensation Plans

The NYSE rules require that shareholders must be given the opportunity to vote on all equity compensation plans and material revisions to those plans. The Company complies with UK requirements which are similar to the NYSE rules. The Board does not, however, explicitly take into consideration the NYSE’s detailed definition of “material revisions”.

Code of Ethics

The NYSE requires companies to adopt a code of business conduct and ethics, applicable to directors, officers and employees. Any waivers granted to directors or officers under such a code must be promptly disclosed. The Company’s Code of Ethics and Business Conduct, applicable to all directors, officers and employees, is available on the Company’s website. No waivers have been granted under this Code.

Compliance Certification

Each Chief Executive of a US company must certify to the NYSE each year that he or she is not aware of any violation by the Company of any NYSE corporate governance listing standard. As the Company is a foreign private issuer, the Company’s Chief Executive is not required to make this certification. However he is required to notify the NYSE promptly in writing after any of the Company’s Executive Officers become aware of any non-compliance with those NYSE corporate governance rules applicable to the Company.

ITEM 16H.   MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

The Group reports its results in US dollars, and this is the currency in which dividends are declared.

Dividends are paid in GBP and the US dollar amount of the declared dividend is translated into GBP at the prevailing exchange rate immediately prior to their announcement.

84

ITEM 18. FINANCIAL STATEMENTS

The following Consolidated Financial Statements and related schedule, together with the report thereon of Ernst & Young LLP, are filed as part of this Annual Report:

	Page
Management’s Report on Internal Control over Financial Reporting		F-1
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting		F-2
Report and Consent of Independent Registered Public Accounting Firm		F-3
Financial Statements
Consolidated income statement for the years ended December 31, 2011, 2010 and 2009		F-5
Consolidated statement of comprehensive income for the years ended December 31, 2011, 2010 and 2009		F-6
Consolidated statement of changes in equity for the years ended December 31, 2011, 2010 and 2009		F-7
Consolidated statement of financial position for the years ended December 31, 2011 and 2010		F-11
Consolidated statement of cash flows for the years ended December 31, 2011, 2010 and 2009		F-12
Notes to the Consolidated Financial Statements		F-13
Schedule for the years ended December 31, 2011, 2010 and 2009
Schedule II — Valuation and Qualifying Accounts		S-1

ITEM 19. EXHIBITS

The following exhibits are filed as part of this Annual Report:

Exhibit 1	Articles of Association of IHG (incorporated by reference to Exhibit 1 of the InterContinental Hotels Group PLC Annual Report on Form 20-F (File No. 1-10409) dated April 11, 2011)
Exhibit 4(a)(i)	Five-year $1,070 million bank facility agreement dated November 7, 2011, among The Royal Bank of Scotland plc, NB International Finance B.V., Citigroup Global Markets Limited, HSBC Bank plc, Lloyds TSB Bank plc and The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Exhibit 4(a)(ii)	First supplemental trust deed dated July 7, 2011 modifying and restating the Euro Medium Term Note program governed by a trust deed dated November 29, 2009
Exhibit 4(a)(iii)	Trust Deed dated November 27, 2009 relating to a £750 million Euro Medium Term Note Program, among InterContinental Hotels Group PLC, Six Continents Limited, InterContinental Hotels Limited and HSBC Corporate Trustee Company (UK) Limited (incorporated by reference to Exhibit 4(a)(i) of the InterContinental Hotels Group PLC Annual Report on Form 20-F (file No. 1-10409) dated April 1, 2010)
Exhibit 4(c)(i)	Tracy Robbins’ service contract dated August 9, 2011
Exhibit 4(c)(ii)	Tom Singer’s service contract dated July 26, 2011
Exhibit 4(c)(iii)	Kirk Kinsell’s service contract commencing on August 1, 2010, as amended by a letter dated July 5, 2010 (incorporated by reference to Exhibit 4(c)(ii) of the InterContinental Hotels Group PLC Annual Report on Form 20-F (File No. 1-10409) dated April 11, 2011)
Exhibit 4(c)(iv)	Richard Solomons’ service contract dated March 16, 2011, commencing on July 1, 2011 (incorporated by reference to Exhibit 4(c)(iii) of the InterContinental Hotels Group PLC Annual Report on Form 20-F (File No. 1-10407) dated April 11, 2011)
Exhibit 4(c)(v)	Rules of the InterContinental Hotels Group Long Term Incentive Plan as amended on February 9, 2012
Exhibit 4(c)(vi)	Rules of the InterContinental Hotels Group Annual Bonus Plan as amended on February 9, 2012

85

Exhibit 8	List of Subsidiaries
Exhibit 12(a)	Certification of Richard Solomons filed pursuant to 17 CFR 240.13a-14(a)
Exhibit 12(b)	Certification of Thomas Singer filed pursuant to 17 CFR 240.13a-14(a)
Exhibit 13(a)	Certification of Richard Solomons and Thomas Singer furnished pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C.1350
Exhibit 15(a)	Consent of Ernst & Young LLP (included on page F-4)

86

MANAGEMENT’S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of InterContinental Hotels Group PLC (“Company” and together with its subsidiaries the “Group”) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Group’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Consolidated Financial Statements for external purposes in accordance with generally accepted accounting principles.

The Group’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the Group’s transactions and dispositions of the Group’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the Consolidated Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Group are being made only in accordance with authorizations of the Group’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Group’s assets that could have a material effect on the Consolidated Financial Statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In connection with the preparation of the Group’s annual Consolidated Financial Statements, management has undertaken an assessment of the effectiveness of the Group’s internal control over financial reporting as of December 31, 2011 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO”).

Based on this assessment, management has concluded that as of December 31, 2011, the Group’s internal control over financial reporting is effective based on those criteria.

Ernst & Young LLP, the independent registered public accounting firm that audited the Group’s Consolidated Financial Statements, has issued an attestation report on the Group’s internal control over financial reporting, a copy of which appears on the next page of this Annual Report.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors and Shareholders of InterContinental Hotels Group PLC:

We have audited InterContinental Hotels Group PLC’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). InterContinental Hotels Group PLC’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Form 20-F. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A group’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A group’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the group; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the group are being made only in accordance with authorizations of management and directors of the group; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the group’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, InterContinental Hotels Group PLC maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the accompanying Consolidated statements of financial position of InterContinental Hotels Group PLC as of December 31, 2011 and 2010, and the related Consolidated income statements, Consolidated statements of comprehensive income, Consolidated statements of changes in equity and Consolidated statements of cash flows for each of the three years in the period ended December 31, 2011, and the financial statement schedule listed in the Index at Item 18. Financial Statements, and our report dated March 29, 2012 expressed an unqualified opinion thereon.

ERNST & YOUNG LLP

London, England

March 29, 2012

F-2

INTERCONTINENTAL HOTELS GROUP PLC

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of InterContinental Hotels Group PLC

We have audited the accompanying Consolidated statements of financial position of InterContinental Hotels Group PLC as of December 31, 2011 and 2010, and the related Consolidated income statements, Consolidated statements of comprehensive income, Consolidated statements of changes in equity and Consolidated statements of cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the financial statements schedule listed in the Index at Item 18. These financial statements and schedule are the responsibility of the Group’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of InterContinental Hotels Group PLC at December 31, 2011 and 2010, and the consolidated results of its operations and its consolidated cash flows for each of the three years in the period ended December 31, 2011, in conformity with International Financial Reporting Standards as adopted by the European Union and International Financial Reporting Standards as issued by the International Accounting Standards Board. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), InterContinental Hotels Group PLC’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 29, 2012 expressed an unqualified opinion thereon.

ERNST & YOUNG LLP

London, England

March 29, 2012

F-3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements (Form F-3 No. 333-108084 and Form S-8 Nos. 333-01572, 333-08336, 333-99785, 333-104691 and 333-126139) of InterContinental Hotels Group PLC of the reference to our name in “Item 3. Key information” and our reports dated March 29, 2012, with respect to the Consolidated Financial Statements and Schedule of InterContinental Hotels Group PLC, and the effectiveness of internal control over financial reporting of InterContinental Hotels Group PLC, included in this Annual Report (Form 20-F) for the year ended December 31, 2011.

ERNST & YOUNG LLP

London, England

March 29, 2012

F-4

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED INCOME STATEMENT

	Year ended December 31, 2011									Year ended December 31, 2010									Year ended December 31, 2009
	Before exceptional items			Exceptional items (Note 5)			Total			Before exceptional items			Exceptional items (Note 5)			Total			Before exceptional items			Exceptional items (Note 5)			Total
	($ million)
Revenue (Note 2)		1,768			—			1,768			1,628			—			1,628			1,538			—			1,538
Cost of sales		(771	)		—			(771	)		(753	)		—			(753	)		(769	)		(91	)		(860	)
Administrative expenses		(350	)		(9	)		(359	)		(331	)		(35	)		(366	)		(303	)		(83	)		(386	)
Other operating income and expenses		11			46			57			8			35			43			6			(2	)		4
		658			37			695			552			—			552			472			(176	)		296
Depreciation and amortization (Note 2)		(99	)		—			(99	)		(108	)		—			(108	)		(109	)		—			(109	)
Impairment (Note 2)		—			20			20			—			(7	)		(7	)		—			(197	)		(197	)
Operating profit/(loss) (Note 2)		559			57			616			444			(7	)		437			363			(373	)		(10	)
Financial income (Note 6)		2			—			2			2			—			2			3			—			3
Financial expenses (Note 6)		(64	)		—			(64	)		(64	)		—			(64	)		(57	)		—			(57	)
Profit/(loss) before tax		497			57			554			382			(7	)		375			309			(373	)		(64	)
Tax (Note 7)		(120	)		39			(81	)		(98	)		1			(97	)		(15	)		287			272
Profit for the year from continuing operations		377			96			473			284			(6	)		278			294			(86	)		208
Profit for the year from discontinued operations (Note 11)		—			—			—			—			2			2			—			6			6
Profit for the year		377			96			473			284			(4	)		280			294			(80	)		214
Attributable to:
Equity holders of the parent		377			96			473			284			(4	)		280			293			(80	)		213
Non-controlling interest		—			—			—			—			—			—			1			—			1
		377			96			473			284			(4	)		280			294			(80	)		214
Earnings per ordinary share (Note 9)
Continuing operations:
Basic								163.7	¢								96.5¢									72.6¢
Diluted								159.8	¢								93.9¢									70.2¢
Total operations:
Basic								163.7	¢								97.2¢									74.7¢
Diluted								159.8	¢								94.6¢									72.2¢

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-5

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Year ended December 31, 2011			Year ended December 31, 2010			Year ended December 31, 2009
				($ million)
Profit for the year		473			280			214
Other comprehensive income
Available-for-sale financial assets:
Gains on valuation		15			17			11
Losses reclassified to income on impairment/disposal		3			1			4
Cash flow hedges:
Losses arising during the year		—			(4	)		(7	)
Reclassified to financial expenses		4			6			11
Defined benefit pension plans:
Actuarial losses, net of related tax credit of $13 million (2010 $7 million, 2009 $1 million)		(19	)		(38	)		(57	)
Change in asset restriction on plans in surplus and liability in respect of funding commitments, net of related tax credit of $7 million (2010 $10 million, 2009 $nil)		(4	)		(38	)		21
Exchange differences on retranslation of foreign operations, including related tax charge of $3 million (2010 $1 million credit, 2009 $4 million credit)		(21	)		(4	)		43
Tax related to pension contributions		2			7			—
Other comprehensive (loss)/income for the year		(20	)		(53	)		26
Total comprehensive income for the year		453			227			240
Attributable to:
Equity holders of the parent		452			227			240
Non-controlling interest		1			—			—
		453			227			240

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-6

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital				Retained earnings and other reserves
	Number of shares(i)		Nominal value(i)		Share premium(ii)			Capital redemption reserve(ii)		Shares held by employee share trusts(iii)			Other reserves(iv)			Unrealized gains and losses reserve(v)		Currency translation reserve(vi)			Retained earnings			IHG shareholders’ equity			Non- controlling interest		Total equity
	($ million, number of shares — millions)
At January 1, 2011		289		61		94			10		(35	)		(2,894	)		49		211			2,775			271			7		278
Profit for the year		—		—		—			—		—			—			—		—			473			473			—		473
Other comprehensive income:
Gains on valuation of available-for-sale financial assets		—		—		—			—		—			—			15		—			—			15			—		15
Losses reclassified to income on impairment of available-for-sale financial assets		—		—		—			—		—			—			3		—			—			3			—		3
Amounts reclassified to financial expenses on cash flow hedges		—		—		—			—		—			—			4		—			—			4			—		4
Actuarial losses on defined benefit pension plans		—		—		—			—		—			—			—		—			(19	)		(19	)		—		(19	)
Change in asset restriction on pension plans in surplus and liability in respect of funding commitments		—		—		—			—		—			—			—		—			(4	)		(4	)		—		(4	)
Exchange differences on retranslation of foreign operations		—		—		—			—		—			—			—		(22	)		—			(22	)		1		(21	)
Tax related to pension contributions		—		—		—			—		—			—			—		—			2			2			—		2
Total other comprehensive loss		—		—		—			—		—			—			22		(22	)		(21	)		(21	)		1		(20	)
Total comprehensive income for the year		—		—		—			—		—			—			22		(22	)		452			452			1		453
Issue of ordinary shares		1		—		8			—		—			—			—		—			—			8			—		8
Purchase of own shares by employee share trusts		—		—		—			—		(75	)		—			—		—			—			(75	)		—		(75	)
Release of own shares by employee share trusts		—		—		—			—		83			—			—		—			(80	)		3			—		3
Equity-settled share-based cost		—		—		—			—		—			—			—		—			29			29			—		29
Tax related to share schemes		—		—		—			—		—			—			—		—			7			7			—		7
Equity dividends paid		—		—		—			—		—			—			—		—			(148	)		(148	)		—		(148	)
Exchange adjustments		—		—		(1	)		—		—			1			—		—			—			—			—		—
At December 31, 2011		290		61		101			10		(27	)		(2,893	)		71		189			3,035			547			8		555

All items above are shown net of tax.

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-7

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY — (Continued)

	Share capital					Retained earnings and other reserves
	Number of shares(i)		Nominal value(i)			Share premium(ii)			Capital redemption reserve(ii)			Shares held by employee share trusts(iii)			Other reserves(iv)			Unrealized gains and losses reserve(v)			Currency translation reserve(vi)			Retained earnings			IHG shareholders’ equity			Non- controlling interest		Total equity
	($ million, number of shares — millions)
At January 1, 2010		287		63			79			11			(4	)		(2,900	)		29			215			2,656			149			7		156
Profit for the year		—		—			—			—			—			—			—			—			280			280			—		280
Other comprehensive income:
Gains on valuation of available-for-sale financial assets		—		—			—			—			—			—			17			—			—			17			—		17
Losses reclassified to income on impairment of available-for-sale financial assets		—		—			—			—			—			—			1			—			—			1			—		1
Losses on cash flow hedges		—		—			—			—			—			—			(4	)		—			—			(4	)		—		(4	)
Amounts reclassified to financial expenses on cash flow hedges		—		—			—			—			—			—			6			—			—			6			—		6
Actuarial losses on defined benefit pension plans		—		—			—			—			—			—			—			—			(38	)		(38	)		—		(38	)
Change in asset restriction on pension plans in surplus and liability in respect of funding commitments		—		—			—			—			—			—			—			—			(38	)		(38	)		—		(38	)
Exchange differences on retranslation of foreign operations		—		—			—			—			—			—			—			(4	)		—			(4	)		—		(4	)
Tax related to pension contributions		—		—			—			—			—			—			—			—			7			7			—		7
Total other comprehensive loss		—		—			—			—			—			—			20			(4	)		(69	)		(53	)		—		(53	)
Total comprehensive income for the year		—		—			—			—			—			—			20			(4	)		211			227			—		227
Issue of ordinary shares		2		1			18			—			—			—			—			—			—			19			—		19
Purchase of own shares by employee share trusts		—		—			—			—			(53	)		—			—			—			—			(53	)		—		(53	)
Release of own shares by employee share trusts		—		—			—			—			21			—			—			—			(26	)		(5	)		—		(5	)
Equity-settled share-based cost		—		—			—			—			—			—			—			—			33			33			—		33
Tax related to share schemes		—		—			—			—			—			—			—			—			22			22			—		22
Equity dividends paid		—		—			—			—			—			—			—			—			(121	)		(121	)		—		(121	)
Exchange adjustments		—		(3	)		(3	)		(1	)		1			6			—			—			—			—			—		—
At December 31, 2010		289		61			94			10			(35	)		(2,894	)		49			211			2,775			271			7		278

All items above are shown net of tax.

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-8

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY — (Continued)

	Share capital				Retained earnings and other reserves
	Number of shares(i)		Nominal value(i)		Share premium(ii)		Capital redemption reserve(ii)		Shares held by employee share trusts(iii)			Other reserves(iv)			Unrealized gains and losses reserve(v)			Currency translation reserve(vi)		Retained earnings			IHG shareholders’ equity			Non- controlling interest			Total equity
	($ million, number of shares — millions)
At January 1, 2009		286		57		61		10		(49	)		(2,890	)		9			172		2,624			(6	)		7			1
Profit for the year		—		—		—		—		—			—			—			—		213			213			1			214
Other comprehensive income:
Gains on valuation of available-for-sale financial assets		—		—		—		—		—			—			11			—		—			11			—			11
Losses reclassified to income on impairment of available-for-sale financial assets		—		—		—		—		—			—			4			—		—			4			—			4
Losses on cash flow hedges		—		—		—		—		—			—			(7	)		—		—			(7	)		—			(7	)
Amounts reclassified to financial expenses on cash flow hedges		—		—		—		—		—			—			11			—		—			11			—			11
Actuarial losses on defined benefit pension plans		—		—		—		—		—			—			—			—		(57	)		(57	)		—			(57	)
Change in asset restriction on pension plans in surplus		—		—		—		—		—			—			—			—		21			21			—			21
Exchange differences on retranslation of foreign operations		—		—		—		—		—			—			1			43		—			44			(1	)		43
Total other comprehensive income		—		—		—		—		—			—			20			43		(36	)		27			(1	)		26
Total comprehensive income for the year		—		—		—		—		—			—			20			43		177			240			—			240
Issue of ordinary shares		1		—		11		—		—			—			—			—		—			11			—			11
Purchase of own shares by employee share trusts		—		—		—		—		(6	)		—			—			—		—			(6	)		—			(6	)
Release of own shares by employee share trusts		—		—		—		—		55			—			—			—		(61	)		(6	)		—			(6	)
Equity-settled share-based cost		—		—		—		—		—			—			—			—		24			24			—			24
Tax related to share schemes		—		—		—		—		—			—			—			—		10			10			—			10
Equity dividends paid		—		—		—		—		—			—			—			—		(118	)		(118	)		—			(118	)
Exchange adjustments		—		6		7		1		(4	)		(10	)		—			—		—			—			—			—
At December 31, 2009		287		63		79		11		(4	)		(2,900	)		29			215		2,656			149			7			156

All items above are shown net of tax.

At December 31, 2008, the authorized share capital was £160,050,000, comprising 1,175,000,000 ordinary shares of 13 ²⁹/47 pence each and one redeemable preference share of £50,000.

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-9

(i) The Company was incorporated and registered in England and Wales with registered number 5134420 on May 21, 2004 as a limited company under the Companies Act 1985 with the name Hackremco (No. 2154) Limited. On March 24, 2005 Hackremco (No. 2154) Limited changed its name to New InterContinental Hotels Group Limited. On April 27, 2005 New InterContinental Hotels Group Limited re-registered as a public limited company and changed its name to New InterContinental Hotels Group PLC. On June 27, 2005 New InterContinental Hotels Group PLC changed its name to InterContinental Hotels Group PLC.

On June 1, 2006, shareholders approved a share capital consolidation on the basis of seven new ordinary shares for every eight existing ordinary shares. This provided for all the authorized ordinary shares of 10 pence each (whether issued or unissued) to be consolidated into new ordinary shares of 11 ³/7 pence each. The share capital consolidation became effective on June 12, 2006.

On June 1, 2007, shareholders approved a share capital consolidation on the basis of 47 new ordinary shares for every 56 existing ordinary shares. This provided for all the authorized ordinary shares of 11 ³/7 pence each (whether issued or unissued) to be consolidated into new ordinary shares of 13 ²⁹/47 pence each. The share capital consolidation became effective on June 4, 2007.

At September 30, 2009, the authorized share capital was £160,050,000, comprising 1,175,000,000 ordinary shares of 13 ²⁹/47 pence each and one redeemable preference share of £50,000. As a result of the resolution passed at the Annual General Meeting on May 29, 2009 amending the articles of association in line with the Companies Act 2006, from October 1, 2009 the Company no longer has an authorized share capital.

During 2004 and 2005, the Company undertook to return funds of up to £750 million to shareholders by way of three consecutive £250 million share repurchase programs, the third of which was completed in the first half of 2007. In June 2007, a further £150 million share repurchase program commenced.

During 2008, 9,219,325 (2007 7,724,844) ordinary shares were repurchased and canceled under the authorities granted by shareholders at the Extraordinary General Meeting held on June 1, 2007 and at the Annual General Meeting held on May 30, 2008. The Company deferred its £150 million share repurchase program in November 2008 in order to preserve cash and maintain the strength of the Group’s financial position. No shares were repurchased in 2011, 2010 or 2009.

The authority given to the Company at the Annual General Meeting on May 27, 2011 to purchase its own shares was still valid at December 31, 2011. A resolution to renew the authority will be put to shareholders at the Annual General Meeting on May 25, 2012.

(ii) The share premium reserve and capital redemption reserve are not distributable. The share premium reserve has a balance of $101 million (2010 $94 million, 2009 $79 million) representing the amount of proceeds received for shares in excess of their nominal value. The capital redemption reserve maintains the nominal value of the equity share capital of the Company when shares are repurchased or canceled.

(iii) The shares held by employee share trusts comprises $26.5 million (2010 $34.6 million, 2009 $3.8 million) in respect of 1.5 million (2010 1.9 million, 2009 0.3 million) InterContinental Hotels Group PLC ordinary shares held by employee share trusts, with a market value at December 31, 2011 of $26 million (2010 $37 million, 2009 $4 million).

(iv) Other reserves comprises the merger and revaluation reserves previously recognized under UK GAAP, together with the reserve arising as a consequence of the Group’s capital reorganization in June 2005. Following the change in presentational currency to the US dollar in 2008, this reserve also includes exchange differences arising on the retranslation to period-end exchange rates of equity share capital, the capital redemption reserve and shares held by employee share trusts.

(v) The unrealized gains and losses reserve records movements to fair value of available-for-sale financial assets and the effective portion of the cumulative net change in the fair value of the cash flow hedging instruments related to hedged transactions that have not yet occurred.

The fair value of cash flow hedging instruments outstanding at December 31, 2011 was $nil (2010 $4 million liability, 2009 $7 million liability).

(vi) The currency translation reserve records the movement in exchange differences arising from the translation of the financial statements of foreign operations and exchange differences on foreign currency borrowings and derivative instruments that provide a hedge against net investments in foreign operations. On adoption of IFRS, cumulative exchange differences were deemed to be $nil as permitted by IFRS 1.

The fair value of derivative instruments designated as hedges of net investments in foreign operations outstanding at December 31, 2011 was a $36 million net liability (2010 $40 million liability, 2009 $13 million liability).

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-10

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	At December 31, 2011			At December 31, 2010
	($ million)
ASSETS
Property, plant and equipment (Note 10)		1,362			1,690
Goodwill (Note 12)		92			92
Intangible assets (Note 13)		308			266
Investment in associates and joint ventures (Note 14)		87			43
Retirement benefit assets (Note 3)		21			5
Other financial assets (Note 15)		156			135
Non-current tax receivable		41			—
Deferred tax assets (Note 25)		106			88
Total non-current assets		2,173			2,319
Inventories (Note 16)		4			4
Trade and other receivables (Note 17)		369			371
Current tax receivable		20			13
Derivative financial instruments (Note 23)		3			—
Cash and cash equivalents (Note 18)		182			78
Total current assets		578			466
Non-current assets classified as held for sale (Note 11)		217			—
Total assets (Note 2)		2,968			2,785
LIABILITIES
Loans and other borrowings (Note 22)		(21	)		(18	)
Derivative financial instruments (Note 23)		—			(6	)
Trade and other payables (Note 19)		(707	)		(722	)
Provisions (Note 20)		(12	)		(30	)
Current tax payable		(120	)		(167	)
Total current liabilities		(860	)		(943	)
Loans and other borrowings (Note 22)		(670	)		(776	)
Derivative financial instruments (Note 23)		(39	)		(38	)
Retirement benefit obligations (Note 3)		(188	)		(200	)
Trade and other payables (Note 19)		(497	)		(464	)
Provisions (Note 20)		(2	)		(2	)
Deferred tax liabilities (Note 25)		(97	)		(84	)
Total non-current liabilities		(1,493	)		(1,564	)
Liabilities classified as held for sale (Note 11)		(60	)		—
Total liabilities (Note 2)		(2,413	)		(2,507	)
Net assets		555			278
EQUITY
Equity share capital		162			155
Capital redemption reserve		10			10
Shares held by employee share trusts.		(27	)		(35	)
Other reserves		(2,893	)		(2,894	)
Unrealized gains and losses reserve		71			49
Currency translation reserve		189			211
Retained earnings		3,035			2,775
IHG shareholders’ equity		547			271
Non-controlling interest		8			7
Total equity		555			278

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-11

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

	Year ended December 31, 2011			Year ended December 31, 2010			Year ended December 31, 2009
	($ million)
Profit for the year		473			280			214
Adjustments for:
Net financial expenses		62			62			54
Income tax charge/(credit)		81			97			(272	)
Depreciation and amortization		99			108			109
Impairment		(20	)		7			197
Other exceptional operating items		(37	)		—			176
Gain on disposal of discontinued operations		—			(2	)		(6	)
Equity-settled share-based cost, net of payments		25			26			14
Other items		—			1			1
Operating cash flow before movements in working capital		683			579			487
(Increase)/decrease in trade and other receivables		(11	)		(35	)		58
Net change in loyalty program liability and System Fund surplus		66			10			42
(Decrease)/increase in other trade and other payables		(20	)		131			(41	)
Utilization of provisions		(19	)		(54	)		—
Retirement benefit contributions, net of cost		(44	)		(27	)		(2	)
Cash flows relating to exceptional operating items		(32	)		(21	)		(60	)
Cash flow from operations		623			583			484
Interest paid		(56	)		(59	)		(53	)
Interest received		1			2			2
Tax paid on operating activities		(89	)		(64	)		(1	)
Net cash from operating activities		479			462			432
Cash flow from investing activities
Purchases of property, plant and equipment		(55	)		(62	)		(100	)
Purchases of intangible assets		(48	)		(29	)		(33	)
Investment in other financial assets		(50	)		(4	)		(11	)
Investment in associates and joint ventures		(41	)		—			(4	)
Disposal of assets, net of costs		142			107			20
Proceeds from associates and other financial assets		15			28			15
Tax paid on disposals		(1	)		(4	)		(1	)
Net cash from investing activities		(38	)		36			(114	)
Cash flow from financing activities
Proceeds from the issue of share capital		8			19			11
Purchase of own shares by employee share trusts		(75	)		(53	)		(8	)
Proceeds on release of own shares by employee share trusts		—			—			2
Dividends paid to shareholders		(148	)		(121	)		(118	)
Issue of £250m 6% bonds		—			—			411
Decrease in other borrowings		(119	)		(292	)		(660	)
Net cash from financing activities		(334	)		(447	)		(362	)
Net movement in cash and cash equivalents in the year		107			51			(44	)
Cash and cash equivalents at beginning of the year		78			40			82
Exchange rate effects		(3	)		(13	)		2
Cash and cash equivalents at end of the year		182			78			40

The Notes to the Consolidated Financial Statements are an integral part of these Financial Statements.

F-12

Note 1 — Accounting policies

General information

The consolidated financial statements of InterContinental Hotels Group PLC (the “Group” or “IHG”) for the year ended December 31, 2011 were authorized for issue to the UK listing authorities in accordance with a resolution of the Directors on February 13, 2012. InterContinental Hotels Group PLC (the “Company”) is incorporated in Great Britain and registered in England and Wales.

On February 23, 2011, the Group received an unfavorable court judgment in respect of a prior year litigation claim. As required by IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” and IAS 10 “Events after the Reporting Period”, the Consolidated Financial Statements for the year ended December 31, 2010, authorized by the Directors on April 11, 2011, for issue on Form 20-F included a litigation provision of $22 million ($13 million net of tax) to reflect this adjusting post balance sheet event. In respect of the consolidated financial statements issued to the UK listing authorities, the equivalent provision has been recorded in the financial statements for the year ended December 31, 2011 as the 2010 financial statements were authorized on February 14, 2011, which was prior to the court judgment.

The impact of the above is summarized as follows:

	2011 Financial Statements
	Form 20-F		UK filing
Profit before tax ($ million)		554		532
Profit for the year ($ million)		473		460
Net assets ($ million) .		555		555
Basic earnings per ordinary share (cents)		163.7		159.2
Diluted earnings per ordinary share (cents) .		159.8		155.4

	2010 Financial Statements
	Form 20-F		UK filing
Profit before tax ($ million)		375		397
Profit for the year ($ million)		280		293
Net assets ($ million)		278		291
Basic earnings per ordinary share (cents)		97.2		101.7
Diluted earnings per ordinary share (cents)		94.6		99.0

As the litigation provision was recorded as an exceptional item, there was no impact on results before exceptional items and adjusted earnings per share.

Summary of significant accounting policies

Basis of preparation

The Consolidated Financial Statements of IHG have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and in accordance with IFRS as adopted by the European Union (“EU”), and as applied in accordance with the provisions of the Companies Act 2006. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB, however, the differences have no impact on the Group’s Consolidated Financial Statements for the years presented.

Changes in accounting policies

With effect from January 1, 2011, the Group has implemented the following new accounting standards, amendments and interpretations. None of these have had a material impact on the Group’s financial performance or position during the year and there has been no requirement to restate prior year comparatives.

IAS 1 (Amendment) “Presentation of Financial Statements” clarifies that the analysis of each component of other comprehensive income may be presented either in the statement of changes in equity or in the notes to the financial statements. The Group provides this analysis in the statement of changes in equity.

F-13

IAS 24 (Amendment) “Related Party Transactions” clarifies the identification of related party relationships, particularly in relation to significant influence and joint control.

IAS 27 (Amendment) “Consolidated and Separate Financial Statements” removes the requirement to restate comparatives in a period when control or significant influence is lost and the remaining investment is accounted for under IAS 39.

IFRS 3 (Amendment) “Business Combinations” limits the scope of the measurement options available for non-controlling interest (“NCI”).

IFRS 7 (Amendment) “Financial Instruments – Disclosures” amends credit risk disclosures for financial assets and reduces the volume of disclosures around collateral held.

IFRIC 13 (Amendment) “Customer Loyalty Programmes” clarifies that when measuring the fair value of award credits, discounts and incentives offered to customers outside of the loyalty program must be taken into account.

IFRIC 14 (Amendment) “Prepayments of a Minimum Funding Requirement” permits a pension asset to be recognized when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover such requirements.

Segmental information

As explained in Note 2, an internal reorganization during the year has resulted in a change to the Group’s reportable segments. Comparatives have been restated to show the segmental information on a consistent basis.

Presentational currency

The Consolidated Financial Statements are presented in millions of US dollars following a management decision to change the reporting currency from sterling during 2008. The change was made to reflect the profile of the Group’s revenue and operating profit which are primarily generated in US dollars or US dollar-linked currencies.

The currency translation reserve was set to nil at January 1, 2004 on transition to IFRS and this reserve is presented on the basis that the Group has reported in US dollars since this date. Equity share capital, the capital redemption reserve and shares held by employee share trusts are translated into US dollars at the rates of exchange on the last day of the period; the resultant exchange differences are recorded in other reserves.

The functional currency of the parent company remains sterling since this is a non-trading holding company located in the United Kingdom that has sterling denominated share capital and whose primary activity is the payment and receipt of interest on sterling denominated external borrowings and inter-company balances.

Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of the parent company and entities controlled by the Company. All intra-group balances and transactions have been eliminated.

The results of those businesses acquired or disposed of are consolidated for the period during which they were under the Group’s control.

Foreign currencies

Transactions in foreign currencies are translated to the functional currency at the exchange rates ruling on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the relevant rates of exchange ruling on the last day of the period. Foreign exchange differences arising on translation are recognized in the income statement except on foreign currency borrowings that provide a hedge against a net investment in a foreign operation. These are taken directly to the currency translation reserve until the disposal of the net investment, at which time they are recycled against the gain or loss on disposal.

F-14

The assets and liabilities of foreign operations, including goodwill, are translated into US dollars at the relevant rates of exchange ruling on the last day of the period. The revenues and expenses of foreign operations are translated into US dollars at average rates of exchange for the period. The exchange differences arising on the retranslation are taken directly to the currency translation reserve. On disposal of a foreign operation, the cumulative amount recognized in the currency translation reserve relating to that particular foreign operation is recycled against the gain or loss on disposal.

Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation and any impairment.

Repairs and maintenance costs are expensed as incurred.

Land is not depreciated. All other property, plant and equipment are depreciated to a residual value over their estimated useful lives, namely:

Buildings	lesser of 50 years and unexpired term of lease; and
Fixtures, fittings and equipment	three to 25 years.

All depreciation is charged on a straight-line basis. Residual value is re-assessed annually.

Property, plant and equipment are tested for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Assets that do not generate independent cash flows are combined into cash-generating units. If carrying values exceed their estimated recoverable amount, the assets or cash-generating units are written down to the recoverable amount. Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is assessed based on estimated future cash flows discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses, and any subsequent reversals, are recognized in the income statement.

On adoption of IFRS, the Group retained previous revaluations of property, plant and equipment which are included in deemed cost as permitted by IFRS 1 “First-time Adoption of International Financial Reporting Standards”.

Goodwill

Goodwill arises on consolidation and is recorded at cost, being the excess of the cost of acquisition over the fair value at the date of acquisition of the Group’s share of identifiable assets, liabilities and contingent liabilities. With effect from January 1, 2010, transaction costs are expensed and therefore not included in the cost of acquisition. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is tested for impairment at least annually by comparing carrying values of cash-generating units with their recoverable amounts. Impairment losses cannot be subsequently reversed.

Intangible assets

Software

Acquired software licenses and software developed in-house are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. Costs are amortized over estimated useful lives of three to five years on a straight-line basis.

Internally generated development costs are expensed unless forecast revenues exceed attributable forecast development costs, at which time they are capitalized and amortized over the life of the asset.

Management contracts

When assets are sold and a purchaser enters into a franchise or management contract with the Group, the Group capitalizes as part of the gain or loss on disposal an estimate of the fair value of the contract entered into. The value of management contracts is amortized over the life of the contract which ranges from six to 50 years on a straight-line basis.

F-15

Other intangible assets

Amounts paid to hotel owners to secure management contracts and franchise agreements are capitalized and normally amortized over the shorter of the contracted period and 10 years on a straight-line basis.

Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

Borrowing costs

Borrowing costs attributable to the acquisition or construction of property, plant and equipment or in respect of software projects that necessarily take a substantial period of time to prepare for its intended use, or sale, are capitalized as part of the asset cost. All other borrowing costs are expensed as incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. All borrowing costs relating to projects commencing before January 1, 2009 were expensed.

Associates and joint ventures

An associate is an entity over which the Group has the ability to exercise significant influence, but not control, through participation in the financial and operating policy decisions of the entity.

A joint venture is a contractual arrangement whereby two or more venturers exercise joint control over the entity and unanimous agreement is required to make strategic financial and operating policy.

Associates and jointly controlled entities are accounted for using the equity method unless the associate or jointly controlled entity is classified as held for sale. Under the equity method, the Group’s investment is recorded at cost adjusted by the Group’s share of post-acquisition profits and losses. When the Group’s share of losses exceeds its interest in an associate or joint venture, the Group’s carrying amount is reduced to $nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an associate or jointly controlled entity.

Financial assets

The Group classifies its financial assets into one of the two following categories: loans and receivables or available-for-sale financial assets. Management determines the classification of financial assets on initial recognition and they are subsequently held at amortized cost (loans and receivables) or fair value (available-for-sale financial assets). Interest on loans and receivables is calculated using the effective interest rate method and is recognized in the income statement as interest income. Changes in fair values of available-for-sale financial assets are recorded directly in equity within the unrealized gains and losses reserve. On disposal, the accumulated fair value adjustments recognized in equity are recycled to the income statement. Dividends from available-for-sale financial assets are recognized in the income statement as other operating income and expenses.

Financial assets are assessed for impairment at each period-end date. In the case of an equity investment classified as available-for-sale, a significant or prolonged decline in fair value below cost is evidence that the asset is impaired. If an available-for-sale financial asset is impaired, the difference between original cost and fair value is transferred from equity to the income statement to the extent of any cumulative loss recorded in equity, with any excess charged directly to the income statement. Subsequent impairment reversals relating to previously impaired equity instruments are recorded in equity.

Inventories

Inventories are stated at the lower of cost and net realizable value.

Trade receivables

Trade receivables are recorded at their original amount less provision for impairment. It is the Group’s policy to provide for 100% of the previous month’s aged receivables balances which are more than 180 days past due. Adjustments to the policy may be made due to specific or exceptional circumstances when collection is no longer considered probable. The carrying amount of the receivable is reduced through the use of a provision account and movements in the provision are recognized in the income statement within cost of sales. When a previously provided trade receivable is uncollectable, it is written off against the provision.

F-16

Cash and cash equivalents

Cash comprises cash in hand and demand deposits.

Cash equivalents are short-term highly liquid investments with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of short-term overdrafts which are repayable on demand and form an integral part of the Group’s cash management.

Assets held for sale

Non-current assets and associated liabilities are classified as held for sale when their carrying amount will be recovered principally through a sale transaction rather than continuing use and a sale is highly probable.

Assets designated as held for sale are held at the lower of carrying amount at designation and fair value less costs to sell.

Depreciation is not charged against property, plant and equipment classified as held for sale.

Financial liabilities

Financial liabilities are measured at amortized cost using the effective interest rate method. A financial liability is derecognized when the obligation under the liability expires, is discharged or canceled.

Trade payables

Trade payables are non-interest-bearing and are stated at their nominal value.

Bank and other borrowings

Bank and other borrowings are initially recognized at the fair value of the consideration received less directly attributable transaction costs. They are subsequently measured at amortized cost. Finance charges, including the transaction costs and any discount or premium on issue, are charged to the income statement using the effective interest rate method.

Borrowings are classified as non-current when the repayment date is more than 12 months from the period-end date or where they are drawn on a facility with more than 12 months to expiry.

Derivative financial instruments and hedging

Derivatives are initially recognized and subsequently remeasured at fair value. The method of recognizing the remeasurement depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income and the unrealized gains and losses reserve to the extent that the hedges are effective. When the hedged item is recognized, the cumulative gains and losses on the related hedging instrument are reclassified to the income statement.

Changes in the fair value of derivatives designated as net investment hedges are recorded in other comprehensive income and the currency translation reserve to the extent that the hedges are effective. The cumulative gains and losses remain in equity until a foreign operation is sold, at which point they are reclassified to the income statement.

Changes in the fair value of derivatives which have either not been designated as hedging instruments or relate to the ineffective portion of hedges are recognized immediately in the income statement.

Documentation outlining the measurement and effectiveness of any hedging arrangements is maintained throughout the life of the hedge relationship.

F-17

Interest arising from currency derivatives and interest rate swaps is recorded in financial income or expenses on a net basis over the term of the agreement, unless the accounting treatment for the hedging relationship requires the interest to be taken to reserves.

Self insurance

Liabilities in respect of self insured risks include projected settlements for known and incurred but not reported claims. Projected settlements are estimated based on historical trends and actuarial data.

Provisions

Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that a payment will be made and a reliable estimate of the amount payable can be made. If the effect of the time value of money is material, the provision is discounted.

An onerous contract provision is recognized when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits expected to be received under it.

In respect of litigation, provision is made when management consider it probable that payment may occur even though the defence of the related claim may still be ongoing through the court process

Taxes

Current tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the tax authorities including interest. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax assets and liabilities are recognized in respect of temporary differences between the tax base and carrying value of assets and liabilities, including accelerated capital allowances, unrelieved tax losses, unremitted profits from overseas where the Group does not control remittance, gains rolled over into replacement assets, gains on previously revalued properties and other short-term temporary differences.

Deferred tax assets are recognized to the extent that it is regarded as probable that the deductible temporary differences can be realized. The recoverability of all deferred tax assets is re-assessed at the end of each reporting period.

Deferred tax is calculated at the tax rates that are expected to apply in the periods in which the asset or liability will be settled, based on rates enacted or substantively enacted at the end of the reporting period.

Retirement benefits

Defined contribution plans

Payments to defined contribution schemes are charged to the income statement as they fall due.

Defined benefit plans

Plan assets are measured at fair value and plan liabilities are measured on an actuarial basis, using the projected unit credit method and discounting at an interest rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the plan liabilities. The difference between the value of plan assets and liabilities at the period-end date is the amount of surplus or deficit recorded in the statement of financial position as an asset or liability. An asset is recognized when the employer has an unconditional right to use the surplus at some point during the life of the plan or on its wind up. If a refund would be subject to a tax other than income tax, as is the case in the United Kingdom, the asset is recorded at the amount net of tax. A liability is also recorded for any such tax that would be payable in respect of funding commitments based on the accounting assumption that the related payments increase the asset.

F-18

The service cost of providing pension benefits to employees for the year is charged to the income statement. The cost of making improvements to pensions is recognized in the income statement on a straight-line basis over the period during which any increase in benefits vests. To the extent that improvements in benefits vest immediately, the cost is recognized immediately as an expense.

Curtailment gains arising from the cessation of future benefit accrual are recognized in the period in which the defined benefit plan is amended.

Actuarial gains and losses may result from: differences between the expected return and the actual return on plan assets; differences between the actuarial assumptions underlying the plan liabilities and actual experience during the year; or changes in the actuarial assumptions used in the valuation of the plan liabilities. Actuarial gains and losses, and taxation thereon, are recognized in the Consolidated statement of comprehensive income.

Actuarial valuations are normally carried out every three years and are updated for material transactions and other material changes in circumstances (including changes in market prices and interest rates) up to the end of the reporting period.

Revenue recognition

Revenue arises from the sale of goods and provision of services where these activities give rise to economic benefits received and receivable by the Group on its own account and result in increases in equity.

Revenue is derived from the following sources: franchise fees; management fees; owned and leased properties and other revenues which are ancillary to the Group’s operations, including technology fee income.

Generally, revenue represents sales (excluding VAT and similar taxes) of goods and services, net of discounts, provided in the normal course of business and recognized when services have been rendered. The following is a description of the composition of revenues of the Group.

Franchise fees — received in connection with the license of the Group’s brand names, usually under long-term contracts with the hotel owner. The Group charges franchise royalty fees as a percentage of rooms revenue. Revenue is recognized when earned and realized or realizable under the terms of the contract.

Management fees — earned from hotels managed by the Group, usually under long-term contracts with the hotel owner. Management fees include a base fee, which is generally a percentage of hotel revenue, and an incentive fee, which is generally based on the hotel’s profitability or cash flows. Revenue is recognized when earned and realized or realizable under the terms of the contract.

Owned and leased — primarily derived from hotel operations, including the rental of rooms and food and beverage sales from owned and leased hotels operated under the Group’s brand names. Revenue is recognized when rooms are occupied and food and beverages are sold.

Share-based payments

The cost of equity-settled transactions with employees is measured by reference to fair value at the date at which the right to the shares is granted. Fair value is determined by an external valuer using option pricing models.

The cost of equity-settled transactions is recognized, together with a corresponding increase in equity, over the period in which any performance or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (vesting date).

The income statement charge for a period represents the movement in cumulative expense recognized at the beginning and end of that period. No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

The Group has taken advantage of the transitional provisions of IFRS 2 “Share-based Payment” in respect of equity-settled awards and has applied IFRS 2 only to equity-settled awards granted after November 7, 2002 that had not vested before January 1, 2005.

F-19

Leases

Operating lease rentals are charged to the income statement on a straight-line basis over the term of the lease.

Assets held under finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease, with a corresponding liability being recognized for the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Lease payments are apportioned between the reduction of the lease liability and finance charges in the income statement so as to achieve a constant rate of interest on the remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.

Disposal of non-current assets

The Group recognizes sales proceeds and any related gain or loss on disposal on completion of the sales process. In determining whether the gain or loss should be recorded, the Group considers whether it:

• has a continuing managerial involvement to the degree associated with asset ownership;

• has transferred the significant risks and rewards associated with asset ownership; and

• can reliably measure and will actually receive the proceeds.

Discontinued operations

Discontinued operations are those relating to hotels or operations sold or those classified as held for sale when the results relate to a separate line of business, geographical area of operations, or where there is a co-ordinated plan to dispose of a separate line of business or geographical area of operations.

Exceptional items

The Group discloses certain financial information both including and excluding exceptional items. The presentation of information excluding exceptional items allows a better understanding of the underlying trading performance of the Group and provides consistency with the Group’s internal management reporting. Exceptional items are identified by virtue of either their size or nature so as to facilitate comparison with prior periods and to assess underlying trends in financial performance. Exceptional items can include, but are not restricted to, gains and losses on the disposal of assets, impairment charges and reversals, restructuring costs and the release of tax provisions.

Use of accounting estimates and judgments

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates under different assumptions and conditions.

The estimates and assumptions that have the most significant effect on the amounts recognized in the financial statements are:

• Trade receivables — a provision for impairment of trade receivables is made on the basis of historical experience and other factors considered relevant by management.

• Impairment — the Group determines whether goodwill is impaired on an annual basis or more frequently if there are indicators of impairment. Other non-current assets, including property, plant and equipment, are tested for impairment if there are indicators of impairment. Impairment testing requires an estimate of future cash flows and the choice of a suitable discount rate and, in the case of hotels, an assessment of recoverable amount based on comparable market transactions.

F-20

• System Fund — in addition to management or franchise fees, hotels within the IHG system pay cash assessments and contributions which are collected by IHG for specific use within the System Fund (the “Fund”). The Fund also receives proceeds from the sale of Priority Club Rewards points. IHG exerts significant influence over the operation of the Fund, however the Fund is managed for the benefit of hotels in the system with the objective of driving revenues for the hotels. The Fund is used to pay for marketing, the Priority Club Rewards loyalty program and the global reservation system. The Fund is planned to operate at breakeven with any short-term timing surplus or deficit carried in the Consolidated statement of financial position within working capital.

As all Fund income is designated for specific purposes and does not result in a profit or loss for the Group, the revenue recognition criteria as outlined in the accounting policy above are not met and therefore the income and expenses of the Fund are not included in the Consolidated income statement.

The assets and liabilities relating to the Fund are included in the appropriate headings in the Consolidated statement of financial position as the related legal, but not beneficial, rights and obligations rest with the Group. These assets and liabilities include the Priority Club Rewards liability, short-term timing surpluses and deficits and any receivables and payables related to the Fund.

The cash flows relating to the Fund are reported within “cash flow from operations” in the Consolidated statement of cash flows due to the close interrelationship between the Fund and the trading operations of the Group.

Further information on the Fund is included in Note 31.

• Loyalty program — the hotel loyalty program, Priority Club Rewards, enables members to earn points, funded through hotel assessments, during each qualifying stay at an IHG branded hotel and redeem points at a later date for free accommodation or other benefits. The future redemption liability is included in trade and other payables and is estimated using eventual redemption rates determined by actuarial methods and points values. Actuarial gains and losses on the future redemption liability are borne by the System Fund and any resulting changes in the liability would correspondingly adjust the amount of short-term timing differences held in the Consolidated statement of financial position.

• Retirement and other post-employment benefits — the cost of defined benefit pension plans and other post-employment benefits is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases.

• Tax — provisions for tax accruals require judgments on the interpretation of tax legislation, developments in tax case law and the potential outcomes of tax audits and appeals. In addition, deferred tax assets are recognized for unused tax attributes to the extent that it is probable that taxable profit will be available against which they can be utilized. Judgment is required as to the amount that can be recognized based on the likely amount and timing of future taxable profits, taking into account expected tax planning. Deferred tax balances are dependent on management’s expectations regarding the manner and timing of recovery of the related assets.

• Other — the Group also makes estimates and judgments in the valuation of franchise and management agreements acquired on asset disposals, the valuation of financial assets classified as available-for-sale, the outcome of legal proceedings and claims and in the valuation of share-based payment costs.

F-21

New standards issued but not effective

The following accounting standards, amendments and interpretations with an effective date after the date of these financial statements have not been adopted early by the Group and will be adopted in accordance with the effective date. The Directors do not anticipate that the adoption of these standards, amendments and interpretations will have a material impact on the Group’s reported income or net assets in the period of adoption.

IFRS 7 (amendment) “Financial Instruments: Disclosures”, which is effective from July 1, 2011, requires additional disclosures about financial assets that have been transferred but not derecognized and about continuing involvement in derecognized assets.

IAS 12 (Amendment) “Income Taxes”, which is effective from January 1, 2012, introduces a rebuttable presumption that deferred tax on investment property measured at fair value should be determined on the basis that its carrying amount will be recovered through sale. The amendment also introduces the requirement that deferred tax on non-depreciable assets measured using the revaluation model in IAS 16 will always be measured on a sale basis of the asset.

IAS 1 (Amendment) “Presentation of Financial Statements”, which is effective from July 1, 2012, changes the grouping of items presented in other comprehensive income (“OCI”) so that items which may be reclassified to profit or loss in the future are presented separately from items that will never be reclassified.

IAS 19 (Revised) “Employee Benefits”, which is effective from January 1, 2013, introduces numerous changes including the removal of the corridor mechanism and the concept of expected returns on plan assets. The Group currently recognizes all actuarial gains and losses in OCI, therefore the removal of the corridor mechanism will have no impact on financial performance or position. The Group is currently assessing the impact of the other amendments although these are expected to result in a higher income statement charge. Comparatives will be restated on a consistent basis on adoption.

IAS 28 (Amendment) “Investments in Associates and Joint Ventures”, which is effective from January 1, 2013, has been renamed as a consequence of the new IFRS 10 and IFRS 12 (see below) and describes the application of the equity method to investments in joint ventures in addition to associates.

IFRS 10 “Consolidated Financial Statements”, which is effective from January 1, 2013, introduces a single control model for all entities, including special purpose entities, which will require significant judgment to determine which entities are controlled and therefore consolidated in the Consolidated Financial Statements. The Group is currently assessing the impact that this standard will have on the financial statements, if any.

IFRS 11 “Joint Arrangements”, which is effective from January 1, 2013, eliminates the option to account for jointly controlled entities (“JCE”) using proportionate consolidation. The Group currently accounts for its JCEs using the equity method which is the requirement of IFRS 11.

IFRS 12 “Disclosure of Involvement with Other Entities”, which is effective from January 1, 2013, incorporates all of the disclosures required in respect of an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. The requirements are extensive and likely to result in new disclosures in the Consolidated Financial Statements.

IFRS 13 “Fair Value Measurement”, which is effective from January 1, 2013, establishes a single source of guidance under IFRS for all fair value measurements.

IFRS 9 “Financial Instruments: Classification and Measurement” which is effective from January 1, 2015, introduces new requirements for classifying and measuring financial assets and for measuring financial liabilities at fair value through profit or loss.

Note: the effective dates are in respect of accounting periods beginning on or after the date shown and so will be effective for the Group from January 1, 2013, other than amendments to IFRS 7 and IAS 12 which will be effective for the Group from January 1, 2012 and IFRS 9 which will be effective for the Group from January 1, 2015.

F-22

Note 2 — Exchange rates and Segmental information

Exchange rates

The results of operations have been translated into US dollars at the average rates of exchange for the year. In the case of sterling, the translation rate is $1 = £0.62 (2010 $1 = £0.65, 2009 $1 = £0.64). In the case of the euro, the translation rate is $1 = €0.72 (2010 $1 = €0.76, 2009 $1 = €0.72).

Assets and liabilities have been translated into US dollars at the rates of exchange on the last day of the year. In the case of sterling, the translation rate is $1 = £0.65 (2010 $1 = £0.64, 2009 $1 = £0.62). In the case of the euro, the translation rate is $1 = €0.77 (2010 $1 = €0.75, 2009 $1 = €0.69).

Segmental information

The management of the Group’s operations, excluding Central functions, is organized within four geographical regions:

Americas;

Europe;

Asia, Middle East and Africa (“AMEA”); and

Greater China.

These, together with Central functions, comprise the Group’s five reportable segments. No operating segments have been aggregated to form these reportable segments.

During the year, an internal reorganization resulted in a change to the Group’s reportable segments. Previously there were three geographical regions: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific (comprising the two operating segments that existed at that time, Greater China and Asia Australasia). The Middle East and Africa region has been combined with the former Asia Australasia operating segment to form a single new operating segment, AMEA. The reorganization was undertaken to better align similar businesses and to allow greater focus on Europe as a stand-alone region. Comparatives have been restated to show segmental information on a consistent basis.

Central functions include costs of global functions, including technology, sales and marketing, finance, human resources and corporate services; revenue arises principally from technology fee income. Central liabilities include the loyalty program liability and the cumulative short-term System Fund surplus.

Each of the geographical regions derives its revenues from either franchising, managing or owning hotels and additional segmental disclosures are provided accordingly.

Management monitors the operating results of the geographical regions and Central functions separately for the purpose of making decisions about resource allocation and performance assessment. Segmental performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the Consolidated Financial Statements, excluding exceptional items. Group financing and income taxes are managed on a group basis and are not allocated to reportable segments.

F-23

Segmental information

Year ended December 31, 2011

Revenue

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Franchised		502		86		19		2		—		609
Managed		124		118		151		77		—		470
Owned and leased		204		201		46		126		—		577
Central		—		—		—		—		112		112
Total revenue*		830		405		216		205		112		1,768

Segmental result

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Franchised		431			65			12			3			—			511
Managed		52			26			87			43			—			208
Owned and leased		17			49			5			37			—			108
Regional and central		(49	)		(36	)		(20	)		(16	)		(147	)		(268	)
Reportable segments’ operating profit		451			104			84			67			(147	)		559
Exceptional operating items (Note 5)		35			(39	)		26			—			35			57
Operating profit*		486			65			110			67			(112	)		616

	Group*
	($ million)
Reportable segments’ operating profit		559
Exceptional operating items		57
Operating profit		616
Net finance costs		(62	)
Profit before tax		554
Tax		(81	)
Profit for the year		473

* Relates to continuing operations.

F-24

Year ended December 31, 2011

Assets and liabilities

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Segment assets		908			816			276			388			228			2,616
Unallocated assets:
Non-current tax receivable																	41
Deferred tax assets																	106
Current tax receivable																	20
Derivative financial instruments																	3
Cash and cash equivalents																	182
Total assets																	2,968
Segment liabilities		(487	)		(247	)		(53	)		(54	)		(625	)		(1,466	)
Unallocated liabilities
Current tax payable																	(120	)
Deferred tax liabilities																	(97	)
Loans and other borrowings																	(691	)
Derivative financial instruments																	(39	)
Total liabilities																	(2,413	)

Other segmental information

	Americas			Europe		AMEA			Greater China		Central		Group
	($ million)
Capital expenditure (see below)		84			15		14			8		72		193
Non-cash items:
Depreciation and amortization*		23			24		16			16		20		99
Impairment losses		—			2		3			—		—		5
Reversal of previously recorded impairment		(25	)		—		—			—		—		(25	)
Share-based payments cost		—			—		—			—		25		25
Share of profit of associates and joint ventures		—			—		(1	)		—		—		(1	)

* Included in the $99 million of depreciation and amortization is $30 million relating to administrative expenses and $69 million relating to cost of sales.

Reconciliation of capital expenditure

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Capital expenditure per management reporting		84		15		14		8		72		193
Management contract acquired on disposal		2		—		—		—		—		2
Timing differences		2		—		—		2		—		4
Capital expenditure per the financial statements		88		15		14		10		72		199
Comprising additions to:
Property, plant and equipment		6		12		2		10		26		56
Intangible assets		30		3		—		—		46		79
Investments in associates and joint ventures		31		—		11		—		—		42
Other financial assets		21		—		1		—		—		22
		88		15		14		10		72		199

F-25

Segmental information

Year ended December 31, 2010

Revenue

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Franchised		465		76		15		2		—		558
Managed		119		70		155		60		—		404
Owned and leased		223		180		43		116		—		562
Central		—		—		—		—		104		104
Total revenue*		807		326		213		178		104		1,628

Segmental result

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Franchised		392			55			8			3			—			458
Managed		21			17			88			30			—			156
Owned and leased		13			38			4			33			—			88
Regional and central		(57	)		(32	)		(18	)		(12	)		(139	)		(258	)
Reportable segments’ operating profit		369			78			82			54			(139	)		444
Exceptional operating items (Note 5)		(8	)		(5	)		6			—			—			(7	)
Operating profit*		361			73			88			54			(139	)		437

	Continuing			Discontinued		Group
	($ million)
Reportable segments’ operating profit		444			—		444
Exceptional operating items		(7	)		—		(7	)
Operating profit		437			—		437
Net finance costs		(62	)		—		(62	)
Profit before tax		375			—		375
Tax		(97	)		—		(97	)
Profit after tax		278			—		278
Gain on disposal of discontinued operations, net of tax		—			2		2
Profit for the year		278			2		280

* Relates to continuing operations.

F-26

Year ended December 31, 2010

Assets and liabilities

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Segment assets		891			826			310			385			194			2,606
Unallocated assets:
Deferred tax assets																	88
Current tax receivable																	13
Cash and cash equivalents																	78
Total assets																	2,785
Segment liabilities		(474	)		(280	)		(58	)		(38	)		(568	)		(1,418	)
Unallocated liabilities:
Current tax payable																	(167	)
Deferred tax liabilities																	(84	)
Loans and other borrowings																	(794	)
Derivative financial investments																	(44	)
Total liabilities																	(2,507	)

Other segmental information

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Capital expenditure (see below)		37		8		6		6		40		97
Non-cash items:
Depreciation and amortization*		33		24		15		16		20		108
Impairment losses		7		—		—		—		—		7
Share-based payments cost		—		—		—		—		32		32

* Included in the $108 million of depreciation and amortization is $31 million relating to administrative expenses and $77 million relating to cost of sales.

Reconciliation of capital expenditure

	Americas		Europe			AMEA		Greater China			Central		Group
	($ million)
Capital expenditure per management reporting		37		8			6		6			40		97
Management contract acquired on disposal		5		—			—		—			—		5
Timing differences		—		(1	)		—		(4	)		—		(5	)
Capital expenditure per the financial statements		42		7			6		2			40		97
Comprising additions to:
Property, plant and equipment		27		6			1		2			23		59
Intangible assets		11		1			5		—			17		34
Other financial assets		4		—			—		—			—		4
		42		7			6		2			40		97

F-27

Segmental information

Year ended December 31, 2009

Revenue

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Franchised		437		79		14		1		—		531
Managed		110		58		134		32		—		334
Owned and leased		225		172		42		110		—		549
Central		—		—		—		—		124		124
Total revenue*		772		309		190		143		124		1,538

Segmental result

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Franchised		364			57			6			2			—			429
Managed		(40	)		18			82			9			—			69
Owned and leased		11			31			5			27			—			74
Regional and central		(47	)		(29	)		(21	)		(8	)		(104	)		(209	)
Reportable segments’ operating profit		288			77			72			30			(104	)		363
Exceptional operating items (Note 5)		(301	)		(22	)		(7	)		—			(43	)		(373	)
Operating loss*		(13	)		55			65			30			(147	)		(10	)

	Continuing			Discontinued		Group
	($ million)
Reportable segments’ operating profit		363					363
Exceptional operating items		(373	)		—		(373	)
Operating loss		(10	)		—		(10	)
Net finance costs		(54	)		—		(54	)
Loss before tax		(64	)		—		(64	)
Tax		272			—		272
Profit after tax		208			—		208
Gain on disposal of discontinued operations, net of tax		—			6		6
Profit for the year		208			6		214

* Relates to continuing operations.

F-28

Year ended December 31, 2009

Other segmental information

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Capital expenditure		80		2		10		7		37		136
Non-cash items:
Onerous management contracts		91		—		—		—		—		91
Depreciation and amortization*		33		28		14		15		19		109
Impairment losses		189		8		—		—		—		197
Share-based payments costs		—		—		—		—		22		22
Share of loss of associates and joint ventures		—		—		—		1		—		1

* Included in the $109 million of depreciation and amortization is $29 million relating to administrative expenses and $80 million relating to cost of sales.

Geographical information

	Year ended December 31,
	2011		2010		2009
	($ million)
Revenue:
United Kingdom		139		130		125
United States		740		706		678
People’s Republic of China (including Hong Kong)		210		182		150
Rest of World		679		610		585
		1,768		1,628		1,538

For the purposes of the above table, hotel revenue is determined according to the location of the hotel and other revenue is attributed to the country of origin. In addition to the United Kingdom, revenue relating to an individual country is separately disclosed when it represents 10% or more of total revenue.

	At December 31, 2011		At December 31, 2010
	($ million)
Non-current assets:
United Kingdom		361		366
United States		559		726
France		328		344
People’s Republic of China (including Hong Kong)		331		335
Rest of World		270		320
		1,849		2,091

For the purposes of the above table, non-current assets comprise property, plant and equipment, goodwill, intangible assets and investments in associates and joint ventures. Non-current assets relating to an individual country are separately disclosed when they represent 10% or more of total non-current assets, as defined above.

F-29

Note 3 — Staff costs and Directors’ emoluments

With regards to this note, pages F-30 to F-35 and F-45 to F-50 are audited. The second half of page F-35 to F-44 are unaudited.

Staff

	Year ended December 31,
	2011		2010		2009
	($ million)
Costs:
Wages and salaries		550		535		441
Social security costs		43		34		45
Pension and other post-retirement benefits:
Defined benefit plans*		8		9		12
Defined contribution plans		22		19		26
		623		597		524

* Before exceptional items.

Average number of employees, including part-time employees:

	Year ended December 31,
	2011		2010		2009
Americas		2,895		3,309		3,229
Europe		1,574		1,206		1,192
Asia, Middle East and Africa		1,195		1,142		992
Greater China		1,000		964		938
Central		1,292		1,237		1,205
		7,956		7,858		7,556

The costs of the above employees are borne by IHG. In addition, the Group employs 4,462 (2010 4,489, 2009 4,561) people who work in managed hotels or directly on behalf of the System Fund and whose costs of $307 million (2010 $282 million, 2009 $267 million) are borne by those hotels or by the Fund.

Retirement benefits

Retirement and death in service benefits are provided for eligible Group employees in the United Kingdom principally by the InterContinental Hotels UK Pension Plan. The plan, which is funded and HM Revenue & Customs registered, covers approximately 545 (2010 500, 2009 460) employees, of which 125 (2010 140, 2009 150) are in the defined benefit section which provides pensions based on final salaries and 420 (2010 360, 2009 310) are in the defined contribution section. The defined benefit section of the plan closed to new entrants in 2002 and will close to future accrual for current members with effect from July 1, 2013. New members are provided with defined contribution arrangements as will be members of the defined benefit section in July 2013. The assets of the plan are held in self-administered trust funds separate from the Group’s assets. In addition, there are unfunded UK pension arrangements for certain members affected by the lifetime or annual allowance. The Group also maintains the following US-based defined benefit plans; the funded InterContinental Hotels Pension Plan, unfunded InterContinental Hotels non-qualified pension plans and post-employment benefits schemes. These plans are closed to new members. The Group also operates a number of smaller pension schemes outside the United Kingdom, the most significant of which is a defined contribution scheme in the United States; there is no material difference between the pension costs of, and contributions to, these schemes.

F-30

In respect of the defined benefit plans, the amounts recognized in the Consolidated income statement, in administrative expenses, are:

	Pension plans																		Post- employment benefits						Total
	UK									US and other
	2011			2010			2009			2011			2010			2009			2011		2010		2009		2011			2010			2009
	($ million)
Current service costs		6			6			7			1			1			1			—		—		—		7			7			8
Interest cost on benefit obligation		28			25			22			10			11			10			1		1		1		39			37			33
Expected return on plan assets		(29	)		(25	)		(21	)		(9	)		(10	)		(8	)		—		—		—		(38	)		(35	)		(29	)
Operating profit before exceptional items		5			6			8			2			2			3			1		1		1		8			9			12
Exceptional items		(28	)		—			11			—			—			—			—		—		—		(28	)		—			11
		(23	)		6			19			2			2			3			1		1		1		(20	)		9			23

In 2011, the exceptional item relates to a curtailment gain arising in respect of the UK pension plan and from the decision to close the defined benefit section to future accrual with effect from July 1, 2013. The plan rules were formally amended to reflect this change in September 2011.

In 2009, the exceptional item related to the settlement loss arising on the payment of the enhanced pension transfers to those deferred members of the UK pension plan who had accepted an offer to receive the enhancement either as a cash lump sum or as an additional transfer value.

The amounts recognized in the Consolidated statement of comprehensive income are:

	Pension plans																		Post- employment benefits									Total
	UK									US and other
	2011			2010			2009			2011			2010			2009			2011			2010			2009			2011			2010			2009
	($ million)
Actual return on plan assets		53			46			7			4			13			22			—			—			—			57			59			29
Less: expected return on plan assets		(29	)		(25	)		(21	)		(9	)		(10	)		(8	)		—			—			—			(38	)		(35	)		(29	)
Actuarial gains/(losses) on plan assets		24			21			(14	)		(5	)		3			14			—			—			—			19			24			—
Actuarial losses on plan liabilities		(22	)		(49	)		(44	)		(26	)		(13	)		(13	)		(3	)		(7	)		(1	)		(51	)		(69	)		(58	)
Total actuarial gains/(losses)		2			(28	)		(58	)		(31	)		(10	)		1			(3	)		(7	)		(1	)		(32	)		(45	)		(58	)
Change in asset restriction and liability in respect of funding commitments*		(11	)		(48	)		21			—			—			—			—			—			—			(11	)		(48	)		21
		(9	)		(76	)		(37	)		(31	)		(10	)		1			(3	)		(7	)		(1	)		(43	)		(93	)		(37	)

* Relates to tax that would be deducted at source in respect of a refund of the surplus taking into account amounts payable under funding commitments.

F-31

The assets and liabilities of the schemes and the amounts recognized in the Consolidated statement of financial position are:

	Pension plans												Post- employment benefits						Total
	UK						US and other
	2011			2010			2011			2010			2011			2010			2011			2010
	($ million)
Retirement benefit assets
Fair value of plan assets		551			—			16			16			—			—			567			16
Present value of benefit obligations		(471	)		—			(12	)		(11	)		—			—			(483	)		(11	)
Surplus in schemes		80			—			4			5			—			—			84			5
Asset restriction and liability in respect of funding commitments*		(63	)		—			—			—			—			—			(63	)		—
Total retirement benefit assets		17			—			4			5			—			—			21			5
Retirement benefit obligations
Fair value of plan assets		—			475			117			114			—			—			117			589
Present value of benefit obligations		(54	)		(512	)		(221	)		(198	)		(30	)		(27	)		(305	)		(737	)
Deficit in schemes		(54	)		(37	)		(104	)		(84	)		(30	)		(27	)		(188	)		(148	)
Asset restriction and liability in respect of funding commitments*		—			(52	)		—			—			—			—			—			(52	)
Total retirement benefit obligations		(54	)		(89	)		(104	)		(84	)		(30	)		(27	)		(188	)		(200	)
Total fair value of plan assets		551			475			133			130			—			—			684			605
Total present value of benefit obligations		(525	)		(512	)		(233	)		(209	)		(30	)		(27	)		(788	)		(748	)

* Relates to tax that would be deducted at source in respect of a refund of the surplus taking into account amounts payable under funding commitments.

The “US and other” surplus of $4 million (2010 $5 million) relates to a defined benefit pension scheme in Hong Kong. Included within the “US and other” deficit is $1 million (2010 $2 million) relating to a defined benefit pension plan in the Netherlands.

Assumptions

The principal financial assumptions used by the actuaries to determine the benefit obligation are:

	Pension plans												Post-employment benefits
	UK						US
	2011		2010		2009		2011		2010		2009		2011		2010		2009
	(%)
Wages and salaries increases		4.6		5.0		5.1		—		—		—		4.0		4.0		4.0
Pensions increases		3.1		3.5		3.6		—		—		—		—		—		—
Discount rate		4.7		5.3		5.7		4.1		5.2		5.7		4.1		5.2		5.7
Inflation rate		3.1		3.5		3.6		—		—		—		—		—		—
Healthcare cost trend rate assumed for next year														—		—		9.0
-Pre 65 (ultimate rate reached in 2021)														9.5		10.0		—
-Post 65 (ultimate rate reached in 2023)														12.8		14.0		—
Ultimate rate that the cost trend rate trends to														5.0		5.0		5.0

Mortality is the most significant demographic assumption. The current assumptions for the UK plan are based on the S1NA tables with long cohort projections and a one percent per annum underpin to future mortality improvements with age rated down by 1.75 years for pensioners and 1.5 years for non-pensioners. In the United States, the current assumptions are based on the RP-2000 IRS PPA@ 2012 Non-Annuitant/Annuitant healthy tables, for males and females.

F-32

Accordingly, assumed life expectancy at retirement age as follows:

	Pension plans
	UK				US
	2011		2010		2011		2010
	(Years)
Current pensioners at 65 — male(i)		24		24		19		19
Current pensioners at 65 — female(i)		27		27		21		21
Future pensioners at 65 — male(ii)		26		26		21		21
Future pensioners at 65 — female(ii)		29		29		22		22

(i) Relates to assumptions based on longevity (in years) following retirement at the end of the reporting period.

(ii) Relates to assumptions based on longevity (in years) relating to an employee retiring in 2032.

The assumptions allow for expected increases in longevity.

Sensitivities

The value of plan assets is sensitive to market conditions, particularly equity values. Changes in assumptions used for determining retirement benefit costs and obligations may have a material impact on the income statement and the Consolidated statement of financial position. The main assumptions are the discount rate, the rate of inflation and the assumed mortality rate. The following table provides an estimate of the potential impact of each of these variables on the principal pension plans.

	UK						US
	Higher/ (lower) pension cost			Increase/ (decrease) in liabilities			Higher/ (lower) pension cost			Increase/ (decrease) in liabilities
	($ million)
Discount rate — 0.25% decrease		0.3			27.0			0.3			7.0
Discount rate — 0.25% increase		(0.3	)		(26.9	)		(0.3	)		(6.7	)
Inflation rate — 0.25% increase		1.4			25.5			—			—
Inflation rate — 0.25% decrease		(1.4	)		(24.7	)		—			—
Mortality rate — one year increase		0.6			11.4			0.4			9.7

A one percentage point increase/(decrease) in assumed healthcare costs trend rate would increase/(decrease) the accumulated post-employment benefit obligations as of December 31, 2011 by approximately $2.8 million (2010 $2.5 million, 2009 $1.6 million).

	Pension plans												Post- employment benefits
	UK						US and other												Total
Movement in benefit obligation	2011			2010			2011			2010			2011			2010			2011			2010
	($ million)
Benefit obligation at January 1,		512			461			209			197			27			20			748			678
Current service cost		6			6			1			1			—			—			7			7
Members’ contributions		1			1			—			—			—			—			1			1
Interest expense		28			25			10			11			1			1			39			37
Benefits paid		(13	)		(12	)		(13	)		(13	)		(1	)		(1	)		(27	)		(26	)
Enhanced pension transfer		(28	)		—			—			—			—			—			(28	)		—
Actuarial loss arising in the year		22			49			26			13			3			7			51			69
Exchange adjustments		(3	)		(18	)		—			—			—			—			(3	)		(18	)
Benefit obligation at December 31,		525			512			233			209			30			27			788			748
Comprising:
Funded plans		471			457			181			161			—			—			652			618
Unfunded plans		54			55			52			48			30			27			136			130
		525			512			233			209			30			27			788			748

F-33

	Pension plans												Post- employment benefits
	UK						US and other												Total
Movement in plan assets	2011			2010			2011			2010			2011			2010			2011			2010
	($ million)
Fair value of plan assets at January 1,		475			426			130			126			—			—			605			552
Company contributions		40			31			11			4			1			1			52			36
Members’ contributions		1			1			—			—			—			—			1			1
Benefits paid		(13	)		(12	)		(13	)		(13	)		(1	)		(1	)		(27	)		(26	)
Expected return on plan assets		29			25			9			10			—			—			38			35
Actuarial gain/(loss) arising in the year		24			21			(5	)		3			—			—			19			24
Exchange adjustments		(5	)		(17	)		1			—			—			—			(4	)		(17	)
Fair value of plan assets at December 31,		551			475			133			130			—			—			684			605

The plan assets are comprised as follows:

	2011				2010
	Value				Value
	($ million)		(%)		($ million)		(%)
UK pension plans
Liability matching investment funds		290		53		237		50
Bonds		74		13		43		9
Equities		93		17		96		20
Hedge funds		56		10		61		13
Cash and other		38		7		38		8
Total market value of assets		551		100		475		100
US pension plans
Equities		58		53		65		60
Fixed income		52		47		44		40
Total market value of assets		110		100		109		100

The expected overall rates of return on assets, being 4.8% (2010 5.9%, 2009 6.2%) for the UK plan and 7.3% (2010 7.5%, 2009 8.0%) for the US plans, have been determined following advice from the plans’ independent actuaries and are based on the expected return on each asset class together with consideration of the plans’ asset strategy. In respect of the UK plan, the long-term rate of return assumptions are 3.3% (2010 4.5%, 2009 4.8%) for liability matching funds and bonds and 7.4% (2010 8.9%, 2009 9.2%) for equities and other return seeking assets.

Funding commitments

The most recent actuarial valuation of the InterContinental Hotels UK Pension Plan was carried out as at March 31, 2009 and showed a deficit of £129 million on a funding basis. Under the recovery plan agreed with the trustees, the Group aims to eliminate this deficit by March 2017 through additional Company contributions of up to £100 million and projected investment returns. The agreed additional contributions comprise three annual payments of £10 million (£10 million was paid in August 2010, £10 million in July 2011 and a further payment of £10 million is due on or before July 31, 2012), together with further payments related to the disposal of hotels (7.5% of net sales proceeds) and growth in the Group’s earnings before interest, tax, depreciation and amortization (“EBITDA”) above specified targets. As at December 31, 2011 total additional contributions of £36 million have been paid, including £21 million during 2011. If required in 2017, a top-up payment will be made to bring the total additional contributions up to £100 million. The plan is formally valued every three years and future valuations could lead to changes in the amounts payable beyond March 2012.

F-34

Company contributions are expected to be $37 million in 2012, including known UK additional contributions of £11 million with further amounts payable if there are any hotel disposals.

History of experience gains and losses

UK pension plans	2011			2010			2009			2008			2007
	($ million)
Fair value of plan assets		551			475			426			437			611
Present value of benefit obligations		(525	)		(512	)		(461	)		(411	)		(597	)
Surplus/(deficit) in the plans		26			(37	)		(35	)		26			14
Experience adjustments arising on plan liabilities		(22	)		(49	)		(44	)		55			31
Experience adjustments arising on plan assets		24			21			(14	)		(57	)		(6	)
US and other pension plans	2011			2010			2009			2008			2007
	($ million)
Fair value of plan assets		133			130			126			112			144
Present value of benefit obligations		(233	)		(209	)		(197	)		(185	)		(184	)
Deficit in the plans		(100	)		(79	)		(71	)		(73	)		(40	)
Experience adjustments arising on plan liabilities		(26	)		(13	)		(13	)		3			—
Experience adjustments arising on plan assets		(5	)		(3	)		14			(38	)		—
US post-employment benefits	2011			2010			2009			2008			2007
	($ million)
Present value of benefit obligations		(30	)		(27	)		(20	)		(19	)		(20	)
Experience adjustments arising on plan liabilities		(3	)		(7	)		(1	)		1			—

The cumulative amount of net actuarial losses recognized since January 1, 2004 in the Consolidated statement of comprehensive income is $285 million (2010 $253 million, 2009 $208 million). The Group is unable to determine how much of the pension scheme deficit recognized on transition to IFRS of $298 million and taken directly to total equity is attributable to actuarial gains and losses since inception of the schemes. Therefore, the Group is unable to determine the amount of actuarial gains and losses that would have been recognized in the Consolidated statement of comprehensive income before January 1, 2004.

Unaudited information on Directors’ emoluments

Policy on remuneration of Executive Directors and senior executives

Remuneration policy and structure

IHG’s remuneration approach is designed to support and reflect the delivery of business strategy by:

• attracting and retaining high quality executives in an environment where compensation is based on global market practice;

• aligning rewards for executives with the achievement of business performance targets, strategic objectives and returns to shareholders;

• supporting equitable treatment between members of the same executive team; and

• facilitating global assignments and relocation.

The Remuneration

IHG’s remuneration structure for senior executives places a strong emphasis on performance-related reward. The Remuneration Committee believes that it is important to reward management, including the Executive Directors, for targets achieved, provided those targets are stretching.

F-35

Business strategy is the driver of our reward structure. The business strategy is explained on page 15.

Individual reward elements for all Executive Directors and Executive Committee members are designed to provide the appropriate balance between fixed remuneration and variable “risk” reward, linked to both the performance of the Group and the achievements of the individual. Approximately two-thirds of variable reward is delivered in the form of shares, to enhance alignment with shareholders’ interests.

The following table shows a summary of the individual elements of remuneration provided to the Executive Directors, including the split of fixed and variable remuneration, assuming target performance is achieved on variable elements:

Reward element	Purpose	Performance measures	Payment	Reward type	% of total remuneration if target achieved
Base salary (cash)	• Recognizes the market value of the role and the individual’s skill, performance and experience.	N/A	Cash	Fixed	30%
Annual Bonus Plan (“ABP”)	• Drives and rewards annual performance of individuals and teams against both financial and non-financial metrics;	Individual performance and earnings before interest and tax (“EBIT”), measured over one year	1/2 cash	Short-term variable	35%
	• aligns individual employee objectives with those of the Group; and		1/2 shares deferred for three years
	• aligns short-term annual performance with long- term returns to shareholders.
Long Term Incentive Plan (“LTIP”)	• Drives and rewards delivery of sustained long-term performance on measures that are aligned with the interests of shareholders.	Net rooms growth, revenue per available room (“RevPAR”) growth and total shareholder return (“TSR”) relative to a comparator group, measured over three years	Shares	Long-term variable	35%

The ABP and LTIP are explained further on pages F-38 to F-40 and all Executive Directors have the same fixed to variable pay split. The normal policy for all Executive Directors and Executive Committee members is that their performance-related incentives will equate to approximately 70% of total remuneration if target performance is achieved (this excludes pensions and benefits).

The Remuneration Committee also reviews the balance of fixed and variable remuneration provided to the wider management population, to ensure these are appropriate relative to the Executive Directors and to market practice. The next section shows the components of total remuneration for each Executive Director.

F-36

Introduction of claw back in incentive plans

For awards made from 2012, the ABP and LTIP will allow Remuneration Committee discretion to claw back unvested share awards in the following exceptional circumstances:

• serious misconduct that causes significant damage or potential damage to IHG’s prospects, finances or brand reputation; and/or

• actions that lead to material misstatement of accounts.

This change is further to ensure that there is proper alignment between rewards and shareholder returns and is in line with developing market practice in relation to share-based incentive plans.

Changes to the Board

Richard Solomons succeeded Andrew Cosslett as Chief Executive on July 1, 2011 and his annual base salary increased to £700,000 from this date. As Mr Solomons was previously an Executive Director in his prior role as Chief Financial Officer and Head of Commercial Development at IHG, his incentive arrangements remain unchanged.

Andrew Cosslett retired from his position as Chief Executive, and his contract of employment and directorship terminated, on June 30, 2011. There was no payment in respect of loss of office. In accordance with the current plan rules, the Remuneration Committee released all ABP deferred shares upon retirement as there were no further performance conditions that would affect the number of shares that could potentially vest; as a result 155,657 shares vested on July 1, 2011. Mr Cosslett continues to be eligible for a pro-rated vesting of his outstanding LTIP awards, which will be determined at the end of the relevant plan cycles, subject to performance conditions being achieved. In addition, Mr Cosslett received a pro-rated cash award under the 2011 ABP based on actual performance results at year end.

When Mr Cosslett ceased pensionable service on June 30, 2011, his accrued retirement pension entitlement was £177,800 per annum before cash commutation. In line with the terms of the plan, he commuted part of this for a lump sum and immediately drew the remainder as pension.

Thomas Singer was appointed Chief Financial Officer on September 26, 2011. Mr Singer’s annual base salary is £540,000 and his incentives are in line with IHG’s remuneration policy for Executive Directors. Mr Singer did not participate in the 2011 ABP. In order to secure his recruitment, IHG agreed to compensate Mr Singer for incentives from his previous employer that he had to forgo, and the Remuneration Committee approved the following one-off arrangements which apply to Mr Singer only:

• a cash payment of £480,000 to be paid in March 2012; and

• a restricted award of 46,635 shares which vests on September 27, 2012, one year from the date of grant. These shares will be forfeited if Mr Singer leaves the Company before the vesting date.

There are no performance conditions attached to these one-off arrangements and the awards are not pensionable. However it is expected that all shares that vest will be held by Mr Singer until he meets the expected shareholding set out on page F-42.

In addition, to ensure immediate alignment to the long-term performance of IHG, pro-rated awards were made for the 2010/2012 LTIP cycle and the 2011/2013 LTIP cycle of 137% and 154% of salary respectively. Vesting of these awards is subject to the results of the performance conditions for the relevant plan cycle as outlined on page F-41.

As part of his recruitment terms, it was agreed that Mr Singer would not have a salary review until April 2013.

Kirk Kinsell (formerly President, Europe, Middle East and Africa) succeeded James Abrahamson as President, The Americas following Mr Abrahamson’s resignation from IHG on June 13, 2011. In accordance with his termination arrangements, all of Mr Abrahamson’s outstanding deferred share awards under the ABP and unvested LTIP awards lapsed and he relinquished all rights to an annual bonus in respect of the 2011 ABP. No remuneration changes were made for Mr Kinsell as a result of his new appointment.

F-37

Tracy Robbins was promoted to the Board on August 9, 2011. Her annual base salary following promotion was increased to £400,000. However, as an Executive Committee member since joining IHG, Ms Robbins’ incentive arrangements remain unchanged.

Base salary and benefits

The salary for each Executive Director is reviewed annually. Base salary is the only element of remuneration which is pensionable.

In reviewing potential salary changes, the Remuneration Committee considers business and individual performance, average salary increases for the wider IHG workforce and, where appropriate, the terms offered by comparator and competitor companies.

When external benchmarking is used, the comparator groups are chosen having regard to participants’:

• size — market capitalization, turnover, profits and the number of people employed;

• diversity and complexity of business;

• geographical spread of business; and

• relevance to the hotel industry.

In addition, benefits are provided to Executive Directors in accordance with local market practice.

The current Executive Directors’ annual base salaries are shown in the table below*:

Director	2012		2012		2011		2011
	(£)		($)		(£)		($)
Richard Solomons		721,000				700,000
Kirk Kinsell				755,400				737,000
Thomas Singer		540,000				540,000
Tracy Robbins		412,000				400,000

* Mr Kinsell is paid in US dollars and his annual base salary for 2011 and 2012 is shown in US dollars above. The equivalent sterling values calculated using an exchange rate of $1 = £0.62 are 2011: £459,817 and 2012: £471,297. The 2011 annual base salary shown for Mr Solomons reflects his salary increase when appointed as Chief Executive. The 2011 annual base salaries shown for Mr Singer and Ms Robbins apply from the dates of their appointment to the Board.

Annual Bonus Plan

Structure and outcomes in 2011

Awards under the ABP require the achievement of challenging performance goals before any bonus is payable. These goals are set annually following the Board review of the annual budget. The maximum annual award an Executive Director or Executive Committee member can receive in any one year is 200% of salary. Achievement of target performance results in an award of 115% of salary. Half of any award earned is paid in cash, and the other half is compulsorily deferred in the form of shares for three years. No matching shares are awarded by the Company.

Awards under the ABP are linked to individual performance and EBIT. Individual performance was measured by the achievement of specific individual key performance objectives (“KPO”s) linked directly to the Group’s strategic objectives, and an assessment against leadership competencies and behaviors. The KPOs are reviewed and agreed by the Remuneration Committee.

Each year, specific quantitative targets and strategic objectives are set for each Executive Director and Executive Committee member, as relevant to their role. Performance is reviewed at the end of each year to determine an overall performance rating (“OPR”). The OPR determines 30% of the annual award outcome. The OPR is reviewed and agreed by the Remuneration Committee.

EBIT performance determines 70% of the annual award outcome. In 2011 threshold payout was 90% of target performance, with maximum payout at 110% or more of target. Payout for individual performance would be reduced by half if EBIT performance was below threshold. In addition, no annual award would be made on any measure if EBIT performance was lower than 85% of target.

F-38

For 2011, EBIT achieved was 104.1% of target for the year. Based on this performance, the following table shows the level of 2011 awards, of which 50% was paid in cash and 50% in deferred shares that will vest after three years:

			Award as % of salary
Measure	Key performance indicator		Target		Max
Financial		EBIT (70%)		80.5		161
Individual.		OPR (30%)		34.5		69
Total for 2011				115.0		200	*

* Combined EBIT and OPR payout subject to a maximum of 200% of base salary.

Actual 2011 result for current Executive Directors (as % of salary)

Director	EBIT % payout		OPR % payout		Total % payout
Richard Solomons		113.5		51.8		165.3
Kirk Kinsell		113.5		43.1		156.6
Thomas Singer*		N/A		N/A		N/A
Tracy Robbins		113.5		60.4		173.9

* Mr Singer did not participate in the 2011 ABP.

Structure in 2012

The annual bonus structure remains largely unchanged in 2012 with awards under the ABP continuing to require the achievement of challenging EBIT goals before target bonus is payable.

Long Term Incentive Plan

The LTIP allows Executive Directors and eligible management employees to receive share awards, subject to the achievement of performance conditions set by the Remuneration Committee, measured over a three-year period. Awards are made annually and, other than in exceptional circumstances, will not exceed three times annual salary for Executive Directors.

Details on the performance conditions and outcome/current position for all outstanding awards as at December 31, 2011 are shown in the table on page F-41.

For the 2011/2013 cycle, maximum awards were made at 205% of base salary. The performance conditions for the cycle are:

• IHG’s TSR relative to the Dow Jones Global Hotels index (“DJGH”) (50% of the award);

• cumulative annual growth of net rooms (25% of the award); and

• cumulative annual like-for-like RevPAR growth (25% of the award).

Growth in both rooms and RevPAR will be measured on a relative basis against a comparator group of the major globally branded competitors: Accor, Choice, Hilton, Hyatt, Marriott, Starwood and Wyndham.

Threshold vesting will occur if IHG’s TSR growth is equal to the DJGH index. Maximum vesting will occur if IHG’s TSR growth exceeds the index by 8% or more, which is equivalent over time to upper quartile or better performance. In setting the TSR performance target, the Remuneration Committee has taken into account a range of factors, including IHG’s strategic plans, historical performance of the industry and FTSE 100 market practice.

For both rooms growth and RevPAR measures, threshold vesting will occur if IHG performance at least equals the average of the comparator group. Maximum vesting for either measure will only occur if IHG is ranked first in the comparator group. Vesting for points between threshold and maximum will be calculated on a straight-line basis.

F-39

After testing the performance conditions set on grant, the Remuneration Committee will review the vesting outcomes of the rooms and RevPAR measures against an assessment of earnings and quality of Company financial performance over the period. The Remuneration Committee may reduce the number of shares which vest if they determine such an adjustment is appropriate. IHG’s performance and vesting outcomes will be fully disclosed and explained in the relevant Remuneration report.

The LTIP structure remains consistent for the 2012/2014 cycle, with the award level of 205% of salary maintained. Performance conditions will remain TSR relative to the DJGH index, cumulative growth of net rooms and cumulative growth in like-for-like RevPAR.

The awards for 2009/2011 and 2010/2012 have performance conditions based on relative TSR and earnings per share (“EPS”).

There is no re-testing of performance conditions under the LTIP, and awards lapse if they are not met.

F-40

The specific vesting performance conditions and, where relevant, position as at December 31, 2011 for the vested, outstanding and next conditional LTIP awards are set out in the following table:

Performance measure	Threshold performance	Maximum performance	Threshold vesting(i)			Maximum vesting(i)			Weighting			Maximum award			Outcome / current position
2009/2011 cycle
TSR	Growth equal to the DJGH index	Growth exceeds the index by 8% or more		20	%		100	%		66.7	%		102.5	%	Growth exceeded index by 7.9%
EPS	Growth of 0% per annum	Growth of 10% per annum or more		0	%		100	%		33.3	%		102.5	%	Growth of 2.5% per annum
Total vesting outcome															73.9% of maximum award
2010/2012 cycle(ii)
TSR	Growth equal to the DJGH index	Growth exceeds the index by 8% or more		20	%		100	%		50	%		102.5	%	Growth after two years exceeds index by 3.9%
EPS	Growth of 5% per annum	Growth of 15% per annum or more		20	%		100	%		50	%		102.5	%	Growth after two years of 20.4% per annum
2011/2013 cycle(iii)
TSR	Growth equal to the DJGH index	Growth exceeds the index by 8% or more		20	%		100	%		50	%		102.5	%	Growth after one year exceeds the index by 4.5%
Net rooms growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	Will partially vest if current level of performance continues
RevPAR growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	Will partially vest if current level of performance continues
2012/2014 cycle
TSR	Growth equal to the DJGH index	Growth exceeds the index by 8% or more		20	%		100	%		50	%		102.5	%	—
Net rooms growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	—
RevPAR growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	—

(i) Vesting between threshold and maximum occurs on a straight-line basis.

(ii) Two years of cycle completed.

(iii) One year of cycle completed.

F-41

Shareholding policy

Share ownership

The Remuneration Committee believes that share ownership by Executive Directors and senior executives strengthens the link between the individual’s personal interests and those of the shareholders. Executive Directors are expected to hold the value of twice their base salary in shares, or three times in the case of the Chief Executive. Executives are expected to hold all shares earned (net of any share sales required to meet personal tax liabilities) until their shareholding requirement is achieved.

The following table shows the guideline and actual shareholdings of the Executive Directors:

Director	Guideline shareholding as % of salary		Actual shareholding at Dec 31, 2011 as % of salary(i)
Richard Solomons		300		417
Kirk Kinsell		200		276
Thomas Singer(ii)		200		—
Tracy Robbins(iii)		200		125

(i) Based on share price of 1,157 pence per share as at December 31, 2011.

(ii) Shareholding requirement took effect upon appointment to the Board on September 26, 2011.

(iii) Shareholding requirement took effect upon appointment to the Board on August 9, 2011.

Executive share options

From 2006, executive share options have not formed part of the Company’s remuneration structure. Details of prior share option grants are given on page F-50.

Share capital

No awards or grants over shares were made during 2011 that would be dilutive of the Company’s ordinary share capital. Current policy is to settle the majority of awards or grants under the Company’s share plans with shares purchased in the market. A number of options granted up to 2005 are yet to be exercised and will be settled with the issue of new shares.

Policy regarding pensions

Following an extensive UK pensions review and subsequent consultations with affected employees, it was announced on September 29, 2011 that the UK registered defined benefit InterContinental Hotels UK Pension Plan (the “IC Plan”) would close to future accrual for existing members with effect from July 1, 2013. The IC Plan is already closed to new entrants. A cap on pensionable salary increases of RPI plus 2.5% per annum became effective on October 1, 2011.

Richard Solomons and other senior UK-based executives participate on the same basis in the executive section of the IC Plan and, if appropriate, the InterContinental Executive Top-Up Scheme (“ICETUS”). This is an unfunded arrangement, but with appropriate security provided via a fixed charge on a hotel asset. ICETUS also closes to future accrual with effect from July 1, 2013. As an alternative to these pension arrangements, a cash allowance may be taken. Andrew Cosslett, who ceased to be a Director on June 30, 2011, also participated in the IC Plan and ICETUS.

Tracy Robbins participates in the executive defined contribution section of the IC Plan on the same basis as other senior UK-based employees. Thomas Singer receives a salary supplement in lieu of pension benefits.

Kirk Kinsell and other senior US-based executives participate in US retirement benefit plans. James Abrahamson, who ceased to be a Director on June 13, 2011, also participated in the US retirement benefit plan. Executives outside the UK and US participate in the InterContinental Hotels Group International Savings and Retirement Plan or other local plans.

Further details on the Directors’ pension arrangements are shown on page F-46.

F-42

Non-Executive Directors’ pay policy and structure

Non-Executive Directors are paid a fee which is agreed by the Board and the Chairman, taking into account fees paid in other companies of a similar complexity. These fees also reflect the time commitment and responsibilities of the roles. Accordingly, higher fees are payable to the Senior Independent Director who chairs the Audit Committee and to the Chairmen of the Remuneration and Corporate Responsibility Committees, reflecting the additional responsibilities of these roles. The Chairman’s fees are agreed by the Remuneration Committee.

Non-Executive Directors’ fee levels are reviewed annually. In the final quarter of 2011 an increase of approximately 2% for the Non-Executive Directors was agreed from January 1, 2012. This increase is broadly in line with anticipated salary increases for executive and senior management employees across the wider organization. The Chairman waived any right to an increase in respect of his fees for 2012.

The following table sets out the change in annual fee rates from 2011 to 2012 for the Non-Executive Directors:

Director	Role	Fees at Jan 1, 2012		Fees at Jan 1, 2011
		(£)		(£)
David Webster	Chairman		406,000		406,000
David Kappler	Senior Independent Director and Chairman of Audit Committee		105,060		103,000
Luke Mayhew*	Chairman of Remuneration Committee		88,230		—
Jennifer Laing	Chairman of Corporate Responsibility Committee		77,520		76,000
Others	Non-Executive Director		66,300		65,000

* Luke Mayhew became Chairman of the Remuneration Committee on July 1, 2011.

Service contracts

Policy

The Remuneration Committee’s policy is for Executive Directors to have rolling contracts with a notice period of 12 months. Richard Solomons, Thomas Singer, Kirk Kinsell and Tracy Robbins have service agreements with a notice period of 12 months. All new appointments will have 12-month notice periods unless, on an exceptional basis to complete an external recruitment successfully, a longer initial notice period reducing to 12 months is used, in accordance with the UK Corporate Governance Code.

No provisions for compensation for termination following change of control, nor for liquidated damages of any kind, are included in the current Directors’ contracts. In the event of any early termination of an Executive Director’s contract, the policy is to seek to minimize any liability.

Current Executive Directors hold no non-executive directorships of other companies. However, the Company recognizes that its Executive Directors may be invited to become non-executive directors of other companies and that such duties can broaden experience and knowledge, and benefit the Company. Executive Directors are, therefore, permitted to accept one non-executive appointment (in addition to any positions where the Director is appointed as the Group’s representative), subject to Board approval, as long as this is not, in the reasonable opinion of the Board, likely to lead to a conflict of interest. Executive Directors are generally authorized to retain the fees received.

Non-Executive Directors have letters of appointment. David Webster’s appointment as Non-Executive Chairman, effective from January 1, 2004, is subject to six months’ notice.

All Directors’ appointments and subsequent reappointments are subject to election and re-election by shareholders.

Biographies of each of the Directors and their main responsibilities can be found on pages 56 to 58.

F-43

Directors’ contracts

	Position	Date of original appointment(i)	Notice period
Current Directors
David Webster	Non-Executive Chairman	April 15, 2003	6 months
Richard Solomons(ii)	Chief Executive	February 10, 2003	12 months
Kirk Kinsell(iii)	President, The Americas	August 1, 2010	12 months
Tracy Robbins	Executive Vice President, Human Resources and Head of Operations Support	August 9, 2011	12 months
Thomas Singer	Chief Financial Officer	September 26, 2011	12 months
David Kappler	Non-Executive Director and Senior Independent Director	June 21, 2004
Graham Allan	Non-Executive Director	January 1, 2010
Jennifer Laing	Non-Executive Director	August 25, 2005
Jonathan Linen	Non-Executive Director	December 1, 2005
Luke Mayhew	Non-Executive Director	July 1, 2011
Dale Morrison	Non-Executive Director	June 1, 2011
Ying Yeh	Non-Executive Director	December 1, 2007
Former Directors
Andrew Cosslett(iv)	Chief Executive	February 3, 2005
James Abrahamson(v)	President, The Americas	August 1, 2010
Ralph Kugler(vi)	Non-Executive Director	April 15, 2003

(i) The capital reorganization of the Group, effective on June 27, 2005, entailed the insertion of a new parent company of the Group. All Directors serving at that time signed new letters of appointment effective from that date. The dates shown above represent the original dates of appointment of each of the Directors to the Group’s parent company.

(ii) Richard Solomons served as Chief Financial Officer and Head of Commercial Development until June 30, 2011 and became Chief Executive on July 1, 2011.

(iii) Kirk Kinsell became President, The Americas on June 13, 2011, having previously served as President, Europe, Middle East and Africa.

(iv) Andrew Cosslett retired on June 30, 2011.

(v) James Abrahamson resigned on June 13, 2011.

(vi) Ralph Kugler retired on June 30, 2011.

F-44

Audited information on Directors’ emoluments

Directors’ remuneration in 2011

The following table sets out the remuneration paid or payable to the Directors in respect of the year to December 31, 2011.

	Basic salaries and fees				Performance payments(i)				Benefits(ii)				Total emoluments excluding pensions
	2011		2010		2011		2010		2011		2010		2011		2010
	(£ thousand)
Executive Directors
Andrew Cosslett(iii)		419		820		740		723		15		28		1,174		1,571
Richard Solomons(iv)		616		520		512		458		20		18		1,148		996
James Abrahamson(v)		212		196		16		178		27		6		255		380
Kirk Kinsell(vi)		449		193		360		169		334		74		1,143		436
Tracy Robbins(vii)		159		—		145		—		39		—		343		—
Thomas Singer(viii)		142		—		—		—		45		—		187		—
Non-Executive Directors
David Webster		406		398		—		—		—		—		406		398
Graham Allan		65		63		—		—		—		—		65		63
David Kappler		103		100		—		—		—		—		103		100
Ralph Kugler(ix)		43		84		—		—		—		—		43		84
Jennifer Laing		76		74		—		—		—		—		76		74
Jonathan Linen		65		63		—		—		—		—		65		63
Luke Mayhew(x)		43		—		—		—		—		—		43		—
Dale Morrison(xi)		38		—		—		—		—		—		38		—
Ying Yeh		65		63		—		—		—		—		65		63
Former Directors(xii)		—		—				—		1		1		1		1
Total		2,901		2,574		1,773		1,528		481		127		5,155		4,229

(i) Performance payments comprise cash payments in respect of participation in the ABP but exclude bonus payments in deferred shares, details of which are set out in the ABP table on page F-48.

(ii) Benefits incorporate all tax assessable benefits arising from the individual’s employment. This includes, but is not limited to, benefits such as the provision of a fully expensed company car, private healthcare, financial counseling and other benefits as applicable to the individual’s work location.

(iii) Andrew Cosslett retired as Chief Executive on June 30, 2011. His base salary, ABP payment (which was paid all in cash) and benefits have been pro-rated to his date of retirement.

(iv) Richard Solomons succeeded Andrew Cosslett as Chief Executive on July 1, 2011.

(v) James Abrahamson resigned as a Director on June 13, 2011. His base salary and benefits (these include payment for unused holiday on termination) have been pro-rated to his date of leaving. His pro-rated base salary received was $339,803 which equates to the figure in the above table, using an exchange rate of $1 = £0.62. He did not receive an ABP payment. The performance payment related to his cash payment in lieu of dividends, paid prior to his resignation, relating to his ABP deferred shares as outlined on page F-48 and his special share award on page F-48.

(vi) Kirk Kinsell received base salary of $720,160 which equates to the figure in the above table, using an exchange rate of $1 = £0.62. Benefits include the cost of expatriate benefits related to his international assignment outside the United States of America prior to taking up his appointment as President, The Americas, on June 13, 2011.

(vii) Tracy Robbins was appointed as a Director on August 9, 2011. Her base salary, performance payment and benefits have been pro-rated from her date of appointment.

(viii) Thomas Singer was appointed as a Director on September 26, 2011. His base salary and benefits have been pro-rated from his date of appointment. His benefits include receipt of a salary supplement in lieu of pension contributions of £41,979. He did not participate in the ABP during the year ended December 31, 2011.

(ix) Ralph Kugler retired as a Director on June 30, 2011. His emoluments have been pro-rated to his date of retirement.

(x) Luke Mayhew was appointed as a Director on July 1, 2011. His emoluments have been pro-rated from his date of appointment.

(xi) Dale Morrison was appointed as a Director on June 1, 2011. His emoluments have been pro-rated from his date of appointment.

(xii) Sir Ian Prosser retired as a Director on December 31, 2003. However, he had an ongoing healthcare benefit of £1,205 during the year.

F-45

Directors’ pension benefits

The following information relates to the pension arrangements provided for Messrs Cosslett and Solomons under the executive defined benefit section of the IC Plan and the unfunded ICETUS. Mr Cosslett ceased to be a Director on July 1, 2011.

The executive section of the IC Plan is a funded, registered, final salary, occupational pension scheme. The main features applicable to the Executive Directors are:

• a normal pension age of 60;

• pension accrual of 1/30th of final pensionable salary for each year of pensionable service;

• life assurance cover of four times pensionable salary;

• pensions payable in the event of ill health; and

• spouses’, partners’ and dependants’ pensions on death.

When benefits would otherwise exceed a member’s lifetime or annual allowance under the post-April 2011 pensions regime, these benefits are limited in the IC Plan, but the balance is provided instead by ICETUS.

The defined benefit section of the IC Plan will close to future accruals by existing members with effect from July 1, 2013. ICETUS will also close to future accruals with effect from July 1, 2013.

James Abrahamson, who ceased to be a Director on June 13, 2011, has retirement benefits provided via the Six Continents Hotels, Inc. Deferred Compensation Plan (“DCP”). Kirk Kinsell has retirement benefits provided via the 401(k) Retirement Plan for employees of Six Continents Hotels, Inc. (“401(k)”) and the DCP. The 401(k) is a tax qualified plan providing benefits on a defined contribution basis, with the member and the relevant company both contributing. The DCP is a non-tax qualified plan, providing benefits on a defined contribution basis, with the member and the relevant company both contributing.

Tracy Robbins participates in the executive defined contribution section of the IC Plan. This section of the IC Plan is a funded, registered, defined contribution, occupational pension scheme. The main features applicable are:

• a normal pension age of 60;

• employee contributions of 7.5% of salary and company matching contributions of 30% of salary (subject to the Annual Allowance, with any excess over the Annual Allowance as a salary supplement in lieu of pension benefits);

• life assurance cover of four times pensionable salary; and

• lump sum contributions payable in the event of ill health.

F-46

The following table sets out the pension benefits of the Executive Directors in the UK defined benefit plans:

	Andrew Cosslett(i)		Richard Solomons(ii)
	(£)		(£)
Directors’ contributions in the year(iii)		20,400		26,000
Transfer value of accrued benefits at January 1, 2011		3,438,100		4,708,400
Transfer value of accrued benefits at December 31, 2011		5,643,300		6,999,800
Increase in transfer value over the year, less Directors’ contributions		2,184,800		2,265,400
Absolute increase in accrued pension(iv) (per annum)		18,500		65,100
Increase in accrued pension(v) (per annum)		10,300		52,900
Accrued pension at December 31, 2010(vi) (per annum)		180,000		304,300
Age at December 31, 2011 (years)		56		50

(i) When Andrew Cosslett ceased pensionable service with the Group on June 30, 2011, under the terms of the IC Plan his pension entitlement was £177,800 per annum before any cash commutation. In line with the Enhanced Early Retirement Facility (“EERF”) which is available to all members of the plan, this pension was not reduced on retirement. This facility enables members to retire without reduction in pension if they are within five years of normal retirement age. Although the EERF is non-contractual, its continuation formed part of the agreement with trustees on closure of the defined benefit section of the IC Plan, and the provisions of the facility state that while in place, it cannot reasonably be refused to retiring employees.

(ii) The increase in the transfer value of accrued benefits for Richard Solomons arises partly from the increase in salary resulting from his appointment as Chief Executive and partly from a change in the transfer value basis resulting from lower gilt yields.

(iii) Contributions paid in 2011 by the Directors under the terms of the plans. Contributions were 5% of full pensionable salary.

(iv) The absolute increase in accrued pension during 2011.

(v) The increase in accrued pension during 2011, excluding any increase for inflation.

(vi) Accrued pension is that which would be paid annually on retirement at 60, based on service to December 31, 2011.

Employer contributions to the IC Plan made for Tracy Robbins since she became an Executive Director in August 2011 amounted to £10,032. In addition, Ms Robbins received a salary supplement in lieu of pension contributions of £33,175.

Thomas Singer received a salary supplement in lieu of pension contributions of £41,979.

Contributions made by and in respect of James Abrahamson and Kirk Kinsell to the defined contributions plans are⁽ⁱ⁾:

	James Abrahamson(ii)		Kirk Kinsell
	(£)		(£)
Directors’ contributions to DCP in 2011		4,200		204,200
Directors’ contributions to 401(k) in 2011		6,100		13,700
Company contribution to DCP in 2011		4,200		99,600
Company contribution to 401(k) in 2011		6,100		6,100
Age at December 31, 2011 (years)		56		56

(i) Sterling values have been calculated using an exchange rate of $1 = £0.62.

(ii) James Abrahamson ceased to be a Director upon his resignation from IHG on June 13, 2011. The Company contribution to the DCP shown for Mr Abrahamson excludes Company contributions of £36,200 that were forfeited by Mr Abrahamson because he ceased to be a member of the DCP before these contributions vested five years after joining the DCP. Similarly, an amount of £14,000 of Company contributions to the DCP included in the 2010 Form 20-F has been forfeited.

F-47

Annual Bonus Plan deferred share awards

Directors’ pre-tax share interests during the year were as set out below. No matching shares are provided on awards.

Director	Financial year on which performance is based for award(i)		ABP awards held at Jan 1, 2011		ABP awards during the year		Award date		Market price per share at award (pence)		ABP shares vested during the year		Vesting date		Market price per share at vesting (pence)		Value at vesting (£)		ABP awards held at Dec 31, 2011		Planned vesting date		Value based on share price of 1,157 pence at Dec 31, 2011 (£)
Andrew Cosslett(ii)		2007		71,287				2.25.08		819.6		71,287		2.25.11		1,350.8		962,945
		2008		104,652				2.23.09		472.6		104,652		7.1.11		1,300.1		1,360,581
		2009		—
		2010				51,005		2.21.11		1,417.0		51,005		7.1.11		1,300.1		663,116
Total				175,939		51,005														—				—
Richard Solomons		2007		45,634				2.25.08		819.6		45,634		2.25.11		1,350.8		616,424
		2008		66,549				2.23.09		472.6										66,549		2.23.12		769,972
		2009		—
		2010				32,295		2.21.11		1,417.0										32,295		2.21.14		373,653
Total				112,183		32,295														98,844				1,143,625
James Abrahamson(iii)		2009		—
		2010				27,758		2.21.11		1,417.0
Total				—		27,758														—				—
Kirk Kinsell		2007		19,731				2.25.08		819.6		19,731		2.25.11		1,350.8		266,526
		2008		41,427				2.23.09		472.6										41,427		2.23.12		479,310
		2009		—
		2010				27,375		2.21.11		1,417.0										27,375		2.21.14		316,729
Total				61,158		27,375														68,802				796,039
Tracy Robbins		2007		24,306				2.25.08		819.6		24,306		2.25.11		1,350.8		328,325
		2008		33,132				2.23.09		472.6										33,132		2.23.12		383,337
		2009		—
		2010				20,377		2.21.11		1,417.0										20,377		2.21.14		235,762
Total				57,438		20,377														53,509				619,099
Thomas Singer		2010				—
Total				—		—														—				—

(i) For financial year 2007, the award was based on Group EBIT and net annual rooms additions measures and total shares held include matching shares. For financial year 2008, the award was based on Group EBIT, net annual rooms additions and individual performance measures. No matching shares were awarded. For financial year 2009, no bonus was paid. For financial year 2010, the award was based on Group EBIT and individual performance measures. No matching shares were awarded.

(ii) Andrew Cosslett retired as Chief Executive on June 30, 2011. Shares awarded to him in respect of financial years 2008 and 2010 were released early on July 1, 2011.

(iii) James Abrahamson resigned as a Director on June 13, 2011. Shares awarded to him in respect of financial year 2010 have lapsed.

All Executive Directors participated in the ABP during the year ended December 31, 2011 except for Thomas Singer, who did not participate having joined IHG in September 2011.

Special share awards

Details of special share awards that were granted and vested during the year ended December 31, 2011 are set out below:

Director	Awards held at Jan 1, 2011		Awards during the year		Award date		Market price per share at award (pence)		Shares vested during the year		Vesting date		Market price per share at vesting (pence )		Value at vesting (£)		Awards held at Dec 31, 2011		Planned vesting date		Value based on share price of 1,157 pence at Dec 31, 2011 (£)
James Abrahamson(i)		45,000				2.23.09		454.2		45,000		2.16.11		1,373.4		618,030
		45,000				2.23.09		454.2
Total		90,000																—				—
Thomas Singer(ii)				46,635		9.27.11		1,055.0										46,635		9.26.12		539,567
Total		—		46,635														46,635				539,567

F-48

(i) James Abrahamson received a special share award which was to vest over three years as part of his recruitment terms on 2009. Vesting each year was subject to continued service. His award of 45,000 shares due to vest on February 15, 2012 lapsed upon his resignation as a Director on June 13, 2011.

(ii) Thomas Singer received a special share award which vests one year from his appointment as a Director as part of his recruitment terms. Vesting is subject to continued service.

Long Term Incentive Plan awards

The awards made in respect of cycles ending on December 31, 2010, 2011, 2012 and 2013 and the maximum pre-tax number of ordinary shares due if performance targets are achieved in full are set out in the table below. In respect of the cycle ending December 31, 2010, 73.8% of the award vested on February 16, 2011. In respect of the cycle ending on December 31, 2011, the Company out-performed the DJGH index in TSR by 7.9 percentage points and achieved 2.5% per annum adjusted EPS growth. Accordingly, 73.9% of the award vested on February 15, 2012.

Director	End of year to which performance is based for award (Dec 31)(i)		Maximum LTIP awards held at Jan 1, 2011		Maximum LTIP shares awarded during the year		Award date		Market price per share at award (pence)		LTIP shares vested during the year(ii)		Market price per share at vesting (pence)		Value at vesting (£)		Vesting date		Maximum LTIP awards held at Dec 31, 2011		Maximum value based on share price of 1,157 pence at Dec 31, 2011 (£)
Andrew Cosslett(iii)		2010		253,559				5.19.08		854.0		187,126		1,373.4		2,569,988		2.16.11
		2011		272,201				4.3.09		604.0								2.15.12		226,834		2,624,469
		2012		160,807				4.8.10		1,053.0								2.13.13		80,403		930,263
		2013				137,438		4.8.11		1,269.0								2.12.14		22,906		265,022
Total				686,567		137,438														330,143		3,819,754
Richard Solomons		2010		161,241				5.19.08		854.0		118,995		1,373.4		1,634,277		2.16.11
		2011		173,096				4.3.09		604.0								2.15.12		173,096		2,002,721
		2012		101,818				4.8.10		1,053.0								2.13.13		101,818		1,178,034
		2013				87,234		4.8.11		1,269.0								2.12.14		87,234		1,009,297
Total				436,155		87,234														362,148		4,190,052
James Abrahamson(iv)		2010		164,973				2.23.09		457.0		121,750		1,373.4		1,672,115		2.16.11
		2011		138,730				4.3.09		604.0								2.15.12
		2012		79,008				4.8.10		1,053.0								2.13.13
		2013				72,872		4.8.11		1,269.0								2.12.14
Total				382,711		72,872														—		—
Kirk Kinsell		2010		84,397				5.19.08		854.0		62,284		1,373.4		855,408		2.16.11
		2011		132,256				4.3.09		604.0								2.15.12		132,256		1,530,202
		2012		75,411				4.8.10		1,053.0								2.13.13		75,411		872,505
		2013				72,872		4.8.11		1,269.0								2.12.14		72,872		843,129
Total				292,064		72,872														280,539		3,245,836
Tracy Robbins		2010		86,311				5.19.08		854.0		63,697		1,373.4		874,815		2.16.11
		2011		92,657				4.3.09		604.0								2.15.12		92,657		1,072,041
		2012		55,873				4.8.10		1,053.0								2.13.13		55,873		646,451
		2013				55,248		4.8.11		1,269.0								2.12.14		55,248		639,219
Total				234,841		55,248														203,778		2,357,711
Thomas Singer(v)		2012				69,952		9.27.11		1,055.0								2.13.13		69,952		809,345
		2013				78,696		9.27.11		1,055.0								2.12.14		78,696		910,513
Total						148,648														148,648		1,719,858

(i) All details of performance conditions in relation to the awards made in respect of cycles ending on December 31, 2011, 2012 and 2013 are provided on page F-41.

(ii) This award was based on performance to December 31, 2010 where the performance measure related to both the Company’s TSR relative to the index and the cumulative annual growth rate (“CAGR”) in adjusted EPS over the performance period. The Company out-performed the DJGH index in TSR by 8 percentage points and achieved 9.6% per annum adjusted EPS growth. Accordingly 73.8% of the award vested on February 16, 2011.

(iii) Andrew Cosslett retired as Chief Executive on June 30, 2011. Shares awarded to him in respect of the cycles ending on December 31, 2011, 2012 and 2013 were pro-rated to reflect his contractual service during the applicable performance period.

F-49

(iv) James Abrahamson resigned as a Director on June 13, 2011. Shares awarded to him in respect of cycles ending on December 31, 2011, 2012 and 2013 have lapsed.

(v) Thomas Singer’s LTIP awards are pro-rated as explained on page F-37.

Share options

Between 2003 and 2005, grants of options were made under the IHG Executive Share Option Plan. No executive share options have been granted since 2005.

Director	Ordinary shares under option									Weighted average option price at Dec 31, 2011 (pence)		Option price (pence)
	Options held at Jan 1, 2011			Lapsed during the year	Exercised during the year	Share price on date of exercise	Options held at Dec 31, 2011
Kirk Kinsell		77,110	(i)					77,110	(i)				494.17
		32,040	(ii)					32,040	(ii)				619.83
Total		109,150						109,150			531.06
Richard Solomons		230,320	(i)					230,320	(i)				494.17
		100,550	(ii)					100,550	(ii)				619.83
Total		330,870						330,870			532.36

(i) Executive share options granted in 2004 became exercisable in April 2007 up to April 2014.

(ii) Executive share options granted in 2005 became exercisable in April 2008 up to April 2015.

Option prices during the year ranged from 308.48 pence to 619.83 pence per IHG share. The closing market value share price on December 31, 2011 was 1,157.0 pence and the range during the year was 955.0 pence to 1,435.0 pence per share.

No Director exercised options during the year; therefore there is no disclosable gain by Directors in aggregate for the year ended December 31, 2011 (2010 $nil).

Note 4 — Auditor’s remuneration paid to Ernst & Young LLP

	Year ended December 31,
	2011		2010		2009
	($ million)
Group audit fees		1.9		1.9		1.8
Audit fees in respect of subsidiaries		1.5		1.6		2.1
Tax fees		0.7		2.1		1.7
Interim review fees		0.3		0.3		0.3
Other services pursuant to legislation		0.4		0.3		0.3
Other		1.4		1.7		1.5
		6.2		7.9		7.7

Audit fees in respect of the pension scheme were not material.

The Audit Committee has a process to ensure that any non-audit services do not compromise the independence and objectivity of the external auditor and that relevant United Kingdom and United States professional and regulatory requirements are met. A number of criteria are applied when deciding whether pre-approval for such services should be given. These include the nature of the service, the level of fees and the practicality of appointing an alternative provider, having regard to the skills and experience required to supply the service effectively. Cumulative fees for audit and non-audit services are presented to the Audit Committee on a quarterly basis for review. The Audit Committee is responsible for monitoring adherence to the pre-approval policy.

F-50

Note 5 — Exceptional items

	Year ended December 31,
	2011			2010			2009
	($ million)
Continuing operations
Exceptional operating items
Cost of sales:
Onerous management contracts(i)		—			—			(91	)
Administrative expenses:
Litigation provision(ii)		—			(22	)		—
Resolution of commercial dispute(iii)		(37	)		—			—
Pension curtailment gain(iv)		28			—			—
Enhanced pension transfer(v)		—			—			(21	)
Holiday Inn brand relaunch(vi)		—			(9	)		(19	)
Reorganization and related costs(vii)		—			(4	)		(43	)
		(9	)		(35	)		(83	)
Other operating income and expenses:
Gain/(loss) on disposal of hotels* (Note 11)		37			27			(2	)
VAT refund(viii)		9			—			—
Gain on sale of other financial assets(ix)		—			8			—
		46			35			(2	)
Impairment:
Impairment charges:
Property, plant and equipment (Note 10)		(2	)		(6	)		(28	)
Assets held for sale (Note 11)		—			—			(45	)
Goodwill (Note 12)		—			—			(78	)
Intangible assets (Note 13)		—			—			(32	)
Other financial assets (Note 15)		(3	)		(1	)		(14	)
Reversals of previously recorded impairment:
Property, plant and equipment (Note 10)		23			—			—
Associates (Note 14)		2			—			—
		20			(7	)		(197	)
		57			(7	)		(373	)
Tax
Tax on exceptional operating items		(4	)		1			112
Exceptional tax credit(x)		43			—			175
		39			1			287
		96			(6	)		287
Discontinued operations(xi)
Gain on disposal of assets (Note 11)
Gain on disposal of hotels**		—			—			2
Tax credit		—			2			4
		—			2			6
		96			(4	)		(80	)

* Relates to hotels classified as continuing operations.

** Relates to hotels classified as discontinued operations.

F-51

The above items are treated as exceptional by reason of their size or nature.

(i) An onerous contract provision of $65 million was recognized at December 31, 2009 for the future net unavoidable costs under the performance guarantee related to certain management contracts with one US hotel owner. In addition to the provision, a deposit of $26 million was written off as it was no longer considered recoverable under the terms of the same management contracts.

(ii) Related to a lawsuit filed against the Group in the Americas region.

(iii) Relates to the settlement of a prior period commercial dispute in the Europe region.

(iv) Arises from the closure of the UK defined benefit pension scheme to future accrual with effect from July 1, 2013.

(v) Related to the payment of enhanced pension transfers to those deferred members of the InterContinental Hotels UK Pension Plan who had accepted an offer to receive the enhancement either as a cash lump sum or as an additional transfer value to an alternative pension plan provider. The exceptional item in 2009 comprised the lump sum payments ($9 million), the IAS 19 settlement loss arising on the pension transfers ($11 million) and the costs of the arrangement ($1 million). The payments and transfers were made in January 2009.

(vi) Related to costs incurred in support of the worldwide relaunch of the Holiday Inn brand family that was announced on October 24, 2007 and substantially completed in 2010.

(vii) Primarily related to the closure of certain corporate offices together with severance costs arising from a review of the Group’s cost base.

(viii) Arises in the United Kingdom and relates to periods prior to 1996.

(ix) Related to the gain on sale of an investment in the AMEA region.

(x) Represents the release of provisions of $13 million (2010 $7 million, 2009 $175 million) 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, in 2011, a $30 million revision to the estimated tax impacts relating to an internal reorganization carried out in 2010, including the recognition of additional deferred tax assets. In 2010 the tax charge of $7 million relating to this reorganization comprised the recognition of deferred tax assets of $24 million for capital losses and other deductible amounts, offset by tax charges of $31 million.

(xi) In 2010, related to tax refunded in respect of a prior year sale. In 2009, related to tax arising on disposals together with the release of provisions no longer required in respect of hotels disposed of in prior years.

Note 6 — Finance costs

	Year ended December 31,
	2011		2010		2009
	($ million)
Financial income
Interest income on deposits.		1		2		2
Unwinding of discount on other financial assets.		1		—		—
Fair value gains		—		—		1
		2		2		3
Financial expenses
Interest expense on borrowings		42		40		28
Interest rate swaps fair value transferred from equity.		4		6		11
Finance charge payable under finance leases		18		18		18
		64		64		57

Interest income and expense relate to financial assets and liabilities held at amortized cost, calculated using the effective interest rate method.

Included within interest expense is $1 million (2010 $2 million, 2009 $2 million) payable to the Priority Club Rewards loyalty program relating to interest on the accumulated balance of cash received in advance of the redemption of points awarded.

F-52

Note 7 — Tax

	Year ended December 31,
	2011			2010			2009
	($ million)
Income tax
UK corporation tax at 26.5% (2010 28.0%, 2009 28.0%):
Current period		30			21			26
Adjustments in respect of prior periods		(25	)		(29	)		(33	)
		5			(8	)		(7	)
Foreign tax(i):
Current period		98			122			79
Benefit of tax reliefs on which no deferred tax previously recognized		(16	)		(13	)		(6	)
Adjustments in respect of prior periods(ii)		(65	)		(23	)		(246	)
		17			86			(173	)
Total current tax		22			78			(180	)
Deferred tax:
Origination and reversal of temporary differences		82			47			(73	)
Changes in tax rates		(2	)		(2	)		1
Adjustments to estimated recoverable deferred tax assets		(12	)		(36	)		1
Adjustments in respect of prior periods		(9	)		8			(25	)
Total deferred tax		59			17			(96	)
Total income tax charge/(credit) for the year		81			95			(276	)
Further analyzed as tax relating to:
Profit before exceptional items		120			98			15
Exceptional items (Note 5):
Exceptional operating items		4			(1	)		(112	)
Exceptional tax credit(iii)		(43	)		—			(175	)
Gain on disposal of discontinued operations		—			(2	)		(4	)
		81			95			(276	)
The total tax charge/(credit) can be further analyzed as relating to:
Continuing operations		81			97			(272	)
Discontinued operations — gain on disposal of assets		—			(2	)		(4	)
		81			95			(276	)

(i) Represents corporate income taxes on profit taxable in foreign jurisdictions, a significant proportion of which relates to the Group’s US subsidiaries.

(ii) Includes $39 million (2010 $7 million, 2009 $165 million) of exceptional releases included at (iii) below together with other releases relating to tax matters which have been settled or in respect of which the relevant statutory limitation period has expired.

(iii) Represents the release of provisions of $13 million (2010 $7 million, 2009 $175 million) 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, in 2011, a $30 million revision to the estimated tax impacts relating to an internal reorganization carried out in 2010, including the recognition of additional deferred tax assets. In 2010 the tax charge of $7 million relating to this reorganization comprised the recognition of deferred tax assets of $24 million for capital losses and other deductible amounts, offset by tax charges of $31 million.

F-53

Reconciliation of tax charge/(credit), including gain on disposal of assets

	Total(i)									Before exceptional items(ii)
				Year ended December 31,
	2011			2010			2009			2011			2010			2009
				(%)
UK corporation tax at standard rate		26.5			28.0			28.0			26.5			28.0			28.0
Non-deductible expenditure and non-taxable income		1.8			4.1			(36.5	)		2.6			4.2			7.4
Net effect of different rates of tax in overseas businesses		9.0			9.4			(43.0	)		9.8			9.3			8.7
Effect of changes in tax rates		(0.5	)		(0.5	)		(0.3	)		(0.4	)		(0.7	)		0.1
Benefit of tax reliefs on which no deferred tax previously recognized		(2.9	)		(3.7	)		7.2			(3.2	)		(3.6	)		(1.5	)
Effect of adjustments to estimated recoverable deferred tax assets		(2.2	)		(9.7	)		5.9			(0.3	)		(2.3	)		(1.2	)
Adjustment to tax charge in respect of prior periods		(18.1	)		(11.8	)		185.5			(12.1	)		(9.1	)		(37.6	)
Other		1.0			—			(3.8	)		1.3			—			0.8
Exceptional items and gain on disposal of assets		—			9.4			298.3			—			—			—
		14.6			25.2			441.3			24.2			25.8			4.7

(i) Calculated in relation to total profits including exceptional items.

(ii) Calculated in relation to profits excluding exceptional items.

Tax paid

Total net tax paid during the year of $90 million (2010 $68 million, 2009 $2 million) comprises $89 million paid (2010 $64 million, 2009 $1 million) in respect of operating activities and $1 million paid (2010 $4 million, 2009 $1 million) in respect of investing activities.

Tax paid represents an effective rate of 16% (2010 18%, 2009 (3)%) on total profits and is lower than the effective income statement tax rate of 24% primarily due to the impact of deferred taxes (including the realization of assets such as tax losses), the receipt of refunds in respect of prior years and provisions for tax for which no payment of tax has currently been made.

Tax risks, policies and governance

Information concerning the Group’s tax governance can be found in the Taxation section of the Operating Results section, page 45.

Note 8 — Dividends paid and proposed

	Year ended December 31,						Year ended December 31,
	2011		2010		2009		2011		2010		2009
	(cents per share)						($ million)
Paid during the year:
Final (declared for previous year)		35.2		29.2		29.2		102		84		83
Interim		16.0		12.8		12.2		46		37		35
		51.2		42.0		41.4		148		121		118
Proposed (not recognized as a liability at December 31):
Final		39.0		35.2		29.2		113		101		84

The final dividend of 24.7 pence (39.0 cents converted at the closing exchange rate on February 10, 2012) is proposed for approval at the Annual General Meeting (“AGM”) on May 25, 2012 and is payable on the shares in issue at March 23, 2012.

F-54

Note 9 — Earnings per ordinary share

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

Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional exercise of the weighted average number of dilutive ordinary share options outstanding during the year.

Adjusted earnings per ordinary share is disclosed in order to show performance undistorted by exceptional items, to give a more meaningful comparison of the Group’s performance.

	Year ended December 31,
	2011				2010				2009
	Continuing operations		Total		Continuing operations		Total		Continuing operations		Total
Basic earnings per ordinary share
Profit available for equity holders ($ million)		473		473		278		280		207		213
Basic weighted average number of ordinary shares (millions)		289		289		288		288		285		285
Basic earnings per ordinary share (cents)		163.7		163.7		96.5		97.2		72.6		74.7
Diluted earnings per ordinary share
Profit available for equity holders ($ million)		473		473		278		280		207		213
Diluted weighted average number of ordinary shares (millions)		296		296		296		296		295		295
Diluted earnings per ordinary share (cents)		159.8		159.8		93.9		94.6		70.2		72.2

	2011		2010		2009
	(millions)
Diluted weighted average of ordinary shares is calculated as:
Basic weighted average number of ordinary shares		289		288		285
Dilutive potential ordinary shares — employee share options		7		8		10
		296		296		295

	Year ended December 31,
	2011						2010						2009
	Continuing operations			Total			Continuing operations			Total			Continuing operations			Total
Adjusted earnings per ordinary share
Profit available for equity holders ($ million)		473			473			278			280			207			213
Adjusting items (Note 5):
Exceptional operating items ($ million)		(57	)		(57	)		7			7			373			373
Tax on exceptional operating items ($ million)		4			4			(1	)		(1	)		(112	)		(112	)
Exceptional tax credit ($ million)		(43	)		(43	)		—			—			(175	)		(175	)
Gain on disposal of discontinued operations ($ million)		—			—			—			(2	)		—			(6	)
Adjusted earnings ($ million)		377			377			284			284			293			293
Basic weighted average number of ordinary shares (millions)		289			289			288			288			285			285
Adjusted earnings per ordinary share (cents)		130.4			130.4			98.6			98.6			102.8			102.8
Adjusted earnings ($ million)		377			377			284			284			293			293
Diluted weighted average number of ordinary shares (millions)		296			296			296			296			295			295
Adjusted diluted earnings per ordinary share (cents)		127.4			127.4			95.9			95.9			99.3			99.3

F-55

Note 10 — Property, plant and equipment

	Land and buildings			Fixtures, fittings and equipment			Total
				($ million)
Year ended December 31, 2010
Cost
At January 1, 2010		1,622			1,046			2,668
Additions		24			35			59
Net transfers to non-current assets classified as held for sale		(57	)		(55	)		(112	)
Disposals		(11	)		(20	)		(31	)
Exchange and other adjustments		(30	)		(9	)		(39	)
At December 31, 2010		1,548			997			2,545
Depreciation and impairment
At January 1, 2010		(212	)		(620	)		(832	)
Provided		(11	)		(64	)		(75	)
Net transfers to non-current assets classified as held for sale		1			29			30
Impairment charge (see below)		—			(6	)		(6	)
Disposals		8			18			26
Exchange and other adjustments		1			1			2
At December 31, 2010		(213	)		(642	)		(855	)
Year ended December 31, 2011
Cost
At January 1, 2011		1,548			997			2,545
Additions		2			54			56
Net transfers to non-current assets classified as held for sale		(258	)		(98	)		(356	)
Disposals		(44	)		(25	)		(69	)
Exchange and other adjustments		(11	)		(11	)		(22	)
At December 31, 2011		1,237			917			2,154
Depreciation and impairment
At January 1, 2011		(213	)		(642	)		(855	)
Provided		(10	)		(56	)		(66	)
Net transfers to non-current assets classified as held for sale		19			71			90
Impairment charge (see below)		(2	)		—			(2	)
Impairment reversals (see below)		23			—			23
Disposals		9			8			17
Exchange and other adjustments		—			1			1
At December 31, 2011		(174	)		(618	)		(792	)
Net book value at December 31, 2011		1,063			299			1,362
Net book value at December 31, 2010		1,335			355			1,690
Net book value at January 1, 2010		1,410			426			1,836

The impairment charge in 2011 arose in respect of one hotel in Europe following a re-assessment of its recoverable amount, based on fair value less costs to sell.

The impairment charge in 2010 arose in respect of one hotel in the Americas following a re-assessment of its recoverable amount, based on value in use. Estimated future cash flows were discounted at a pre-tax rate of 11.8%.

F-56

Of the impairment reversal, $11 million arose in March 2011 on the classification of a North American hotel as “held for sale”. The amount of the reversal was based on the expected net sales proceeds which were subsequently realized on the disposal of the hotel. A further $12 million arose in respect of another North American hotel following a re-assessment of its recoverable amount, based on value in use. Estimated future cash flows were discounted at a pre-tax rate of 12.6%.

All impairment charges and reversals are included within impairment on the face of the Consolidated income statement.

The carrying value of property, plant and equipment held under finance leases at December 31, 2011 was $190 million (2010 $183 million).

No borrowing costs were capitalized during the year (2010 $nil).

Charges over one hotel totaling $85 million exist as security provided to the Group’s pension plans.

Note 11 — Assets sold, held for sale and discontinued operations

During the year ended December 31, 2011, the Group sold four hotels, three in the Americas region and one in the AMEA region. The gain on disposal mainly relates to the sale of the Holiday Inn Burswood in Australia. The other significant disposal was the Hotel Indigo San Diego which resulted in an impairment reversal (see Note 10) in March 2011 on classification as “held for sale”.

During the year ended December 31, 2010, two hotels in the Americas were sold including the InterContinental Buckhead, Atlanta on July 1, 2010 for a profit of $27 million.

During the year ended December 31, 2009, one hotel was sold and four others were reclassified as property, plant and equipment at June 30, 2009 when they no longer met the “held for sale” criteria of IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” as sales were no longer considered highly probable within the next 12 months. On reclassification, valuation adjustments of $45 million were recognized, comprising $14 million of depreciation not charged whilst held for sale and $31 million of further write-downs to recoverable amounts, as required by IFRS 5. Recoverable amounts were assessed by reference to value in use with the expected future cash flows for the North American hotels comprising substantially all of the write-downs discounted at a pre-tax rate of 12.5%. The valuation adjustments are included within impairment on the face of the Consolidated income statement.

F-57

.	Year ended December 31,
	2011			2010			2009
				($ million)
Consideration
Current year disposals:
Cash consideration, net of costs paid		142			109			20
Management contract value		2			5			—
		144			114			20
Net assets disposed of		(107	)		(87	)		(22	)
Prior year disposals:
Provision release		—			—			2
Tax		—			2			4
Gain on disposal of assets		37			29			4
Analyzed as:
Gain/(loss) on disposal of hotel assets from continuing operations (Note 5)		37			27			(2	)
Gain on disposal of assets from discontinued operations (Note 5)		—			2			6
		37			29			4
Net cash inflow
Current year disposals:
Cash consideration, net of costs paid		142			109			20
Tax		(1	)		(6	)		—
Prior year disposals:
Costs paid		—			(2	)		—
Tax		—			2			—
		141			103			20

Assets held for sale

One hotel, the InterContinental New York Barclay, met the “held for sale” criteria of IFRS 5 at December 31, 2011.

.	Year ended December 31,
	2011		2010	2009
			($ million)
Assets and liabilities held for sale
Non-current assets classified as held for sale:
Property, plant and equipment		217	—	—
Liabilities classified as held for sale:
Deferred tax (Note 25)		60	—	—

Discontinued operations

The results of discontinued operations comprise gains arising from prior year hotel disposals of $nil (2010 $2 million 2009 $6 million) and do not impact on segmental results.

	Year ended December 31,
	2011		2010		2009
			(cents)
Earnings per ordinary share from discontinued operations
Basic		—		0.7		2.1
Diluted		—		0.7		2.0

Cash flows attributable to discontinued operations were $nil (2010 $2 million, 2009 $nil).

F-58

Note 12 — Goodwill

	Year ended December 31,
	2011			2010
	($ million)
Cost
At January 1,		233			223
Exchange and other adjustments		—			10
At December 31,		233			233
Impairment
At January 1, and December 31,		(141	)		(141	)
Net book value at December 31,		92			92
Net book value at January 1,		92			82

Goodwill arising on business combinations that occurred before January 1, 2005 was not restated on adoption of IFRS as permitted by IFRS 1.

Impairment charges are included within impairment on the face of the Consolidated income statement and all cumulative impairment losses relate to the Americas managed cash-generating unit (“CGUs”) (see below).

Goodwill has been allocated to CGUs for impairment testing as follows:

	Cost				Net book value
	At December 31,
	2011		2010		2011		2010
	($ million)
Asia Australasia franchised and managed operations		92		92		92		92
Americas managed operations		141		141		—		—
		233		233		92		92

The Group tests goodwill for impairment annually, or more frequently if there are any indications that an impairment may have arisen. The recoverable amounts of the CGUs are determined from value in use calculations. These calculations use pre-tax cash flow forecasts derived from the most recent financial budgets and strategic plans approved by management covering a five-year period or, in absence of up-to-date strategic plans, the financial budget for the next year with an extrapolation of the cash flows for the following four years, using growth rates based on management’s past experience and industry growth forecasts. After the five-year planning period, the terminal value of the future cash flows is calculated based on perpetual growth rates that do not exceed the average long-term growth rates for the relevant markets. Pre-tax discount rates are used to discount the cash flows based on the Group’s weighted average cost of capital adjusted to reflect the risks specific to the business model and territory of the CGU being tested.

Asia Australasia goodwill

At December 31, 2011, the recoverable amount of the CGU has been assessed based on the approved budget for 2012 and strategic plans covering a five-year period, a perpetual growth rate of 3.5% (2010 3.5%) and a discount rate of 13.9% (2010 14.4%).

Impairment was not required at either December 31, 2011 or December 31, 2010 and management believe that the carrying value of the CGU would only exceed their recoverable amounts in the event of highly unlikely changes in the key assumptions.

Americas goodwill

Americas managed operations incurred significant operating losses during 2009 as a result of the global economic downturn and, in particular, IHG’s funding obligations under certain management contracts with one

F-59

US hotel owner. As a consequence, goodwill was tested on a quarterly basis during 2009 using updated five-year projections prepared by management, a perpetual growth rate of 2.7% and a discount rate of 12.5%. Due to the expectation of continuing losses, the recoverable value of the CGU declined resulting in the impairment of the remaining goodwill balance during 2009. Total impairment charges of $78 million were recognized in 2009 ($57 million at June 30, 2009 and $21 million at September 30, 2009). As the goodwill is impaired in full, there is no sensitivity around any assumptions that could lead to a further impairment charge.

Note 13 — Intangible assets

	Software			Management contracts			Other intangibles			Total
	($ million)
Year ended December 31, 2010
Cost
At January 1, 2010		185			231			98			514
Additions		18			5			11			34
Disposals		(2	)		—			(1	)		(3	)
Exchange and other adjustments		2			(5	)		1			(2	)
At December 31, 2010		203			231			109			543
Amortization and impairment
At January 1, 2010		(100	)		(96	)		(44	)		(240	)
Provided		(15	)		(10	)		(8	)		(33	)
Disposals		2			—			1			3
Exchange and other adjustments		(7	)		—			—			(7	)
At December 31, 2010		(120	)		(106	)		(51	)		(277	)
Year ended December 31, 2011
Cost
At January 1, 2011		203			231			109			543
Additions		46			2			31			79
Disposals		—			—			(2	)		(2	)
Exchange and other adjustments		3			(2	)		—			1
At December 31, 2011		252			231			138			621
Amortization and impairment
At January 1, 2011		(120	)		(106	)		(51	)		(277	)
Provided		(13	)		(10	)		(10	)		(33	)
Disposals		—			—			2			2
Exchange and other adjustments		(5	)		—			—			(5	)
At December 31, 2011		(138	)		(116	)		(59	)		(313	)
Net book value at December 31, 2011		114			115			79			308
Net book value at December 31, 2010		83			125			58			266
Net book value at January 1, 2010		85			135			54			274

Borrowing costs of $0.4 million (2010 $nil) were capitalized during the year in respect of software projects.

The weighted average remaining amortization period for management contracts is 20 years (2010 21 years).

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Note 14 — Investment in associates and joint ventures

	Associates			Joint ventures			Total
	($ million)
Year ended December 31, 2010
Cost
At January 1, 2010		50			—			50
Dividends		(1	)		—			(1	)
Exchange and other adjustments		(1	)		—			(1	)
At December 31, 2010		48			—			48
Impairment
At January 1, and December 31, 2010		(5	)		—			(5	)
Year ended December 31, 2011
Cost
At January 1, 2011		48			—			48
Additions		11			31			42
Share of profit/(loss)		2			(1	)		1
Dividends		(1	)		—			(1	)
At December 31, 2011		60			30			90
Impairment
At January 1, 2011		(5	)		—			(5	)
Impairment reversal (see below)		2			—			2
At December 31, 2011		(3	)		—			(3	)
Net book value at December 31, 2011		57			30			87
Net book value at December 31, 2010		43			—			43
Net book value at January 1, 2010		45			—			45

The impairment reversal arose in the Americas region.

The following table summarizes the financial information of the Group’s associates and joint ventures:

	Associates						Joint ventures					Total
	2011			2010			2011			2010		2011			2010
	($ million)
Share of statement of financial position
Current assets		9			5			3			—		12			5
Non-current assets		70			62			27			—		97			62
Current liabilities		(7	)		(9	)		—			—		(7	)		(9	)
Non-current liabilities		(15	)		(15	)		—			—		(15	)		(15	)
Net assets		57			43			30			—		87			43
Share of revenue and profit
Revenue		28			26			—			—		28			26
Profit/(loss)		2			—			(1	)		—		1			—
Related party transactions
Revenue from related parties		5			4			—			—		5			4
Amounts owed by related parties		1			1			—			—		1			1
Loans from related parties		(2	)		—			—			—		(2	)		—

F-61

The above comprises investments in six associates (2010 five) and two jointly controlled entities (2010 nil) at December 31, 2011. The most significant investments are a 30% associate holding in President Hotel and Tower Co Ltd, the owner of the InterContinental Hotel Bangkok and the Holiday Inn Bangkok, and a 49% holding in BCRE IHG 180 Orchard Holdings LLC, a joint venture established to develop and build a multi-use property in Manhattan, New York, including a Hotel Indigo.

Note 15 — Other financial assets

	At December 31, 2011		At December 31, 2010
	($ million)
Non-current
Equity securities available-for-sale		112		87
Other		44		48
		156		135

Available-for-sale financial assets, which are included in the Consolidated statement of financial position at fair value, consist of equity investments in listed and unlisted shares. Of the total amount of equity investments at December 31, 2011, $15 million (2010 $3 million) were listed securities and $97 million (2010 $84 million) unlisted; $61 million (2010 $41 million) were denominated in US dollars, $23 million (2010 $17 million) in Hong Kong dollars and $28 million (2010 $29 million) in other currencies. Unlisted equity shares are mainly investments in entities that own hotels which the Group manages. The fair value of unlisted equity shares has been estimated using valuation guidelines issued by the British Venture Capital Association and is based on assumptions regarding expected future earnings. Listed equity share valuation is based on observable market prices. Dividend income from available-for-sale equity securities of $11 million (2010 $8 million, 2009 $7 million) is reported as other operating income and expenses in the Consolidated income statement.

Other financial assets consist of trade deposits and restricted cash. These amounts have been designated as “loans and receivables” and are held at amortized cost. A deposit of $37 million was made during the year to a hotel owner in connection with the renegotiation of a management contract. The deposit is non-interest-bearing and repayable at the end of the management contract, and is therefore held at its discounted value of $10 million; the discount will unwind to the income statement (financial income) over the period to repayment. Restricted cash of $27 million (2010 $42 million) relates to cash held in bank accounts which is pledged as collateral to insurance companies for risks retained by the Group.

The movement in the provision for impairment of other financial assets during the year is as follows:

	Year ended December 31, 2011			Year ended December 31, 2010
	($ million)
At January 1,		(26	)		(25	)
Provided — exceptional items		(3	)		(1	)
Reclassification		3			—
Amounts written off		1			—
At December 31		(25	)		(26	)

The amounts provided as exceptional items relate to available-for-sale equity investments and have arisen as a result of significant and prolonged declines in their fair value below cost.

The provision is used to record impairment losses unless the Group is satisfied that no recovery of the amount is possible; at that point the amount considered irrecoverable is either written off directly to the income statement, or, if previously provided, against the financial asset with no impact on the income statement.

F-62

Note 16 — Inventories

	At December 31, 2011		At December  31, 2010
	($ million)
Finished goods		2		2
Consumable stores		2		2
		4		4

Note 17 — Trade and other receivables

	At December 31, 2011		At December  31, 2010
	($ million)
Trade receivables		299		292
Other receivables		28		32
Prepayments		42		47
		369		371

Trade and other receivables are designated as “loans and receivables” and are held at amortized cost.

Trade receivables are non-interest-bearing and are generally on payment terms of up to 30 days. The fair value of trade and other receivables approximates their carrying value.

The maximum exposure to credit risk for trade and other receivables, excluding prepayments, at the end of the reporting period by geographic region is:

	At December 31, 2011		At December  31, 2010
	($ million)
Americas		170		163
Europe		69		70
Asia, Middle East and Africa		61		59
Greater China		27		32
		327		324

The aging of trade and other receivables, excluding prepayments, at the end of the reporting period is:

	At December 31, 2011							At December 31, 2010
	Gross		Provision			Net		Gross		Provision			Net
	($ million)
Not past due		201		(1	)		200		197		(3	)		194
Past due 1 to 30 days		73		(2	)		71		75		(4	)		71
Past due 31 to 180 days		59		(3	)		56		66		(9	)		57
Past due more than 180 days		40		(40	)		—		44		(42	)		2
		373		(46	)		327		382		(58	)		324

The movement in the provision for impairment of trade and other receivables during the year is as follows:

	Year ended December 31, 2011			Year ended December 31, 2010
	($ million)
At January 1,		(58	)		(85	)
Provided		(15	)		(27	)
Amounts written back		7			7
Amounts written off		20			47
At December 31,		(46	)		(58	)

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Note 18 — Cash and cash equivalents

	At December 31, 2011		At December  31, 2010
	($ million)
Cash at bank and in hand		51		38
Short-term deposits		131		40
		182		78

Short-term deposits are highly liquid investments with an original maturity of three months or less, in various currencies.

Note 19 — Trade and other payables

	At December 31, 2011		At December  31, 2010
	($ million)
Current
Trade payables		126		113
Other tax and social security payable		35		35
Other payables		262		226
Accruals		284		348
		707		722
Non-current
Other payables		497		464

Trade payables are non-interest-bearing and are normally settled within an average of 45 days.

Other payables includes $578 million (2010 $531 million) relating to the future redemption liability of the Group’s loyalty program, of which $105 million (2010 $92 million) is classified as current and $473 million (2010 $439 million) as non-current.

Note 20 — Provisions

	Onerous management contracts			Litigation			Total
	($ million)
At January 1, 2010		65			—			65
Provided		3			22			25
Utilized		(58	)					(58	)
At December 31, 2010		10			22			32
Provided		1			—			1
Utilized		(8	)		(11	)		(19	)
At December 31, 2011		3			11			14

	At December 31, 2011		At December  31, 2010
	($ million)
Analyzed as:
Current		12		30
Non-current		2		2
		14		32

F-64

The onerous management contracts provision relates to the unavoidable net cash outflows that are expected to be incurred under performance guarantees associated with certain management contracts. The non-current portion of the provision is expected to be utilized over the period to 2020.

The litigation provision was charged in the income statement as an exceptional item (see Note 5) and relates to an action brought against the Group in the Americas region. The balance of the provision was paid on March 22, 2012.

Note 21 — Financial risk management

Overview

The Group’s treasury policy is to manage financial risks that arise in relation to underlying business needs. The activities of the treasury function are carried out in accordance with Board approved policies and are subject to regular audit. The treasury function does not operate as a profit center.

The treasury function seeks to reduce the financial risk of the Group and manages liquidity to meet all foreseeable cash needs. Treasury activities may include money market investments, spot and forward foreign exchange instruments, currency options, currency swaps, interest rate swaps and options and forward rate agreements. One of the primary objectives of the Group’s treasury risk management policy is to mitigate the adverse impact of movements in interest rates and foreign exchange rates.

Market risk exposure

The US dollar is the predominant currency of the Group’s revenue and cash flows. Movements in foreign exchange rates can affect the Group’s reported profit, net assets and interest cover. To hedge translation exposure, wherever possible, the Group matches the currency of its debt (either directly or via derivatives) to the currency of its net assets, whilst maximizing the amount of US dollars borrowed to reflect the predominant trading currency.

From time to time, foreign exchange transaction exposure is managed by the forward purchase or sale of foreign currencies or the use of currency options. Most significant exposures of the Group are in currencies that are freely convertible.

A general strengthening of the US dollar (specifically a five cent fall in the sterling : US dollar rate) would increase the Group’s profit before tax by an estimated $3.3 million (2010 $3.5 million, 2009 $1.6 million) and decrease net assets by an estimated $10.4 million (2010 $5.6 million, 2009 $4.1 million). Similarly, a five cent fall in the euro : US dollar rate would reduce the Group’s profit before tax by an estimated $1.9 million (2010 $1.4 million, 2009 $0.7 million) and decrease net assets by an estimated $10.3 million (2010 $8.2 million, 2009 $4.5 million).

Interest rate exposure is managed within parameters that stipulate that fixed rate borrowings should normally account for no less than 25% and no more than 75% of net borrowings for each major currency. This is usually achieved through the use of interest rate swaps. Due to relatively low interest rates and the level of the Group’s debt, 100% of borrowings were fixed rate debt or had been swapped into fixed rate borrowings at December 31, 2011.

Based on the year-end net debt position and given the underlying maturity profile of investments, borrowings and hedging instruments at December 31, 2011, a one percentage point rise in US dollar interest rates would increase the annual net interest charge by approximately $nil (2010 $nil, 2009 $0.8 million). A similar rise in euro and sterling interest rates would increase the annual net interest charge by approximately $nil (2010 $nil, 2009 $1.1 million) and $nil (2010 $nil, 2009 $nil), respectively.

Liquidity risk exposure

The treasury function ensures that the Group has access to sufficient funds to allow the implementation of the strategy set by the Board. At the year end, the Group had access to $1,049 million of undrawn committed facilities. Medium and long-term borrowing requirements are met through the $1.07 billion Syndicated Facility which expires in November 2016 and through the £250 million 6% bonds that are repayable on December 9, 2016. Short-term borrowing requirements are met from drawings under bilateral bank facilities.

F-65

The Syndicated Facility contains two financial covenants: interest cover and net debt divided by earnings before interest, tax, depreciation and amortization (“EBITDA”). Net debt is calculated as total borrowings less cash and cash equivalents. The Group is in compliance with all of the financial covenants in its loan documents, none of which is expected to present a material restriction on funding in the near future.

At the year end, the Group had cash of $182 million which is held in short-term deposits and cash funds which allow daily withdrawals of cash. Most of the Group’s funds are held in the United Kingdom or United States and there are no material funds where repatriation is restricted as a result of foreign exchange regulations.

Credit risk exposure

Credit risk on treasury transactions is minimized by operating a policy on the investment of surplus cash that generally restricts counterparties to those with an A credit rating or better or those providing adequate security.

Notwithstanding that counterparties must have an A credit rating or better, during periods of significant financial market turmoil, counterparty exposure limits are significantly reduced and counterparty credit exposure reviews are broadened to include the relative placing of credit default swap pricings.

The Group trades only with recognized, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures.

In respect of credit risk arising from financial assets, the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern. The capital structure consists of net debt, issued share capital and reserves totaling $1,085 million at December 31, 2011 (2010 $1,014 million). The structure is managed to maintain an investment grade credit rating, to provide ongoing returns to shareholders and to service debt obligations, whilst maintaining maximum operational flexibility. A key characteristic of IHG’s managed and franchised business model is that it is highly cash generative, with a high return on capital employed. Surplus cash is either reinvested in the business, used to repay debt or returned to shareholders. The Group maintains a conservative level of debt which is monitored on the basis of a cashflow leverage ratio, being net debt divided by EBITDA.

Hedging

Interest rate risk

The Group hedges its interest rate risk by taking out interest rate swaps to fix the interest flows on between 25% and 75% of its net borrowings in major currencies, although 100% of interest flows were fixed at December 31, 2011. At December 31, 2011, the Group held interest rate swaps (swapping floating for fixed) with notional principals of $100 million (2010 $100 million and €75 million). The Group designates its interest rate swaps as cash flow hedges (see Note 23 for further details).

Foreign currency risk

The Group is exposed to foreign currency risk on income streams denominated in foreign currencies. From time to time, the Group hedges a portion of forecast foreign currency income by taking out forward exchange contracts. The designated risk is the spot foreign exchange risk. There were no such contracts in place at either December 31, 2011 or December 31, 2010.

Hedge of net investment in foreign operations

The Group designates its foreign currency bank borrowings and currency derivatives as net investment hedges of foreign operations. The designated risk is the spot foreign exchange risk for loans and short dated derivatives and the forward risk for the seven-year currency swaps. The interest on these financial instruments is taken through financial income or expense except for the seven-year currency swaps where interest is taken to the currency translation reserve.

F-66

At December 31, 2011, the Group held currency swaps with a principal of $415 million (2010 $415 million) and short dated foreign exchange swaps with principals of €75 million (2010 €75 million and HK$70 million) (see Note 23 for further details). The maximum amount of foreign exchange derivatives held during the year as net investment hedges and measured at calendar quarter ends were currency swaps with a principal of $415 million (2010 $415 million) and short dated foreign exchange swaps with principals of HK$nil (2010 HK$280 million) and €100 million (2010 €75 million).

Hedge effectiveness is measured at calendar quarter ends. No ineffectiveness arose in respect of either the Group’s cash flow or net investment hedges during the current or prior year.

Liquidity risk

The following are the undiscounted contractual cash flows of financial liabilities, including interest payments:

	Less than 1 year			Between 1 and 2 years			Between 2 and 5 years			More than 5 years			Total
	($ million)
At December 31, 2011
Non-derivative financial liabilities:
Secured bank loans		5			—			—			—			5
£250m 6% bonds		23			23			456			—			502
Finance lease obligations		16			16			48			3,332			3,412
Unsecured bank loans		100			—			—			—			100
Trade and other payables		707			123			135			324			1,289
Provisions		12			1			1			—			14
Derivative financial liabilities:
Interest rate swaps		1			—			—			—			1
Forward foreign exchange contracts		(3	)		—			—			—			(3	)
Currency swaps — outflows		26			26			492			—			544
Currency swaps — inflows		(23	)		(23	)		(456	)		—			(502	)
	Less than 1 year			Between 1 and 2 years			Between 2 and 5 years			More than 5 years			Total
	($ million)
At December 31, 2010
Non-derivative financial liabilities:
Secured bank loans		1			5			—			—			6
£250m 6% bonds		23			23			70			411			527
Finance lease obligations		16			16			48			3,348			3,428
Unsecured bank loans		201			—			—			—			201
Trade and other payables		722			118			137			336			1,313
Provisions		30			—			2			—			32
Derivative financial liabilities:
Interest rate swaps		4			1			—			—			5
Forward foreign exchange contracts		2			—			—			—			2
Currency swaps — outflows		26			26			77			441			570
Currency swaps — inflows		(23	)		(23	)		(70	)		(411	)		(527	)

Cash flows relating to unsecured bank loans are classified according to the maturity date of the loan drawdown rather than the facility maturity date.

Interest rate swaps are expected to affect profit or loss in the same periods that the cash flows are expected to occur.

F-67

Credit risk

The carrying amount of financial assets represents the maximum exposure to credit risk.

	At December 31, 2011		At December 31, 2010
	($ million)
Equity securities available-for-sale		112		87
Derivative financial instruments		3		—
Loans and receivables:
Cash and cash equivalents		182		78
Other financial assets		44		48
Trade and other receivables, excluding prepayments		327		324
		668		537

Fair values

The table below compares carrying amounts and fair values of the Group’s financial assets and liabilities.

	At December 31, 2011						At December 31, 2010
	Carrying value			Fair value			Carrying value			Fair value
	($ million)
Financial assets
Equity securities available-for-sale* (Note 15)		112			112			87			87
Derivatives* (Note 23)		3			3			—			—
Loans and receivables:
Cash and cash equivalents (Note 18)		182			182			78			78
Other financial assets (Note 15)		44			44			48			48
Trade and other receivables, excluding prepayments (Note 17)		327			327			324			324
Financial liabilities
£250 million 6% bonds (Note 22)		(384	)		(411	)		(385	)		(404	)
Finance lease obligations (Note 22)		(209	)		(268	)		(206	)		(217	)
Other borrowings (Note 22)		(98	)		(98	)		(203	)		(203	)
Trade and other payables (Note 19)		(1,204	)		(1,204	)		(1,186	)		(1,186	)
Derivatives* (Note 23)		(39	)		(39	)		(44	)		(44	)
Provisions (Note 20)		(14	)		(14	)		(32	)		(32	)

* Financial assets and liabilities which are measured at fair value.

The fair value of cash and cash equivalents approximates book value due to the short maturity of the investments and deposits. Equity securities available-for-sale and derivatives are held in the Consolidated statement of financial position at fair value as set out in Note 15 and Note 23. The fair value of other financial assets approximates book value based on prevailing market rates. The fair value of borrowings, excluding finance lease obligations and the fixed rate $250 million 6% bonds, approximates book value as interest rates reset to market rates on a frequent basis. The fair value of the £250 million 6% bonds is based on the quoted market price. The fair value of the finance lease obligations is calculated by discounting future cash flows at prevailing interest rates. The fair value of trade and other receivables, trade and other payables and provisions approximates to their carrying value, including the future redemption liability of the Group’s loyalty program.

Fair value hierarchy

The Group uses the following valuation hierarchy to determine the carrying value of financial instruments that are measured at fair value:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

F-68

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

	At December 31, 2011										At December 31, 2010
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets
Equity securities available-for-sale		15		—			97		112			3		—			84		87
Derivatives		—		3			—		3			—		—			—		—
Liabilities
Derivatives		—		(39	)		—		(39	)		—		(44	)		—		(44	)

There were no transfers between Level 1 and Level 2 fair value measurements during the year and no transfers into and out of Level 3.

The following table reconciles movements in instruments classified as Level 3 during the year:

	At December 31, 2011			At December 31, 2010
	($ million)			($ million)
At January 1,		84			69
Additions		1			4
Repaid		(3	)		(5	)
Valuation gains recognized in other comprehensive income		16			16
Impairment*		(1	)		—
At December 31,		97			84

* The impairment charge recognized in the income statement (see Note 5) also includes $2 million (2010 $1 million) of losses reclassified from equity.

The Level 3 equity securities relate to investments in unlisted shares which are valued by applying an average price-earnings (P/E) ratio for a competitor group to the earnings generated by the investment. A 10% increase in the average P/E ratio would result in a $5 million increase (2010 $4 million) in the fair value of the investments and a 10% decrease in the average P/E ratio would result in a $5 million decrease (2010 $4 million) in the fair value of the investments.

Note 22 — Loans and other borrowings

	At December 31, 2011						At December 31, 2010
	Current		Non-current		Total		Current		Non-current		Total
	($ million)
Secured bank loans		5		—		5		1		4		5
Finance lease obligations		16		193		209		16		190		206
£250 million 6% bonds		—		384		384		—		385		385
Unsecured bank loans		—		93		93		1		197		198
Total borrowings		21		670		691		18		776		794
Denominated in the following currencies:
Sterling		—		384		384		—		385		385
US dollars		16		286		302		16		287		303
Euro		—		—		—		—		100		100
Other		5		—		5		2		4		6
		21		670		691		18		776		794

F-69

Secured bank loans

This New Zealand dollar mortgage (interest payable at 5.3%) is secured on the hotel property to which it relates.

Non-current amounts include $nil (2010 $4 million) repayable by instalments.

Finance lease obligations

Finance lease obligations, which relate to the 99-year lease (of which 94 years remain) on the InterContinental Boston, are payable as follows:

	At December 31, 2011					At December 31, 2010
	Minimum lease payments			Present value of payments		Minimum lease payments			Present value of payments
	($ million)
Less than one year		16			16		16			16
Between one and five years		64			48		64			48
More than five years		3,332			145		3,348			142
		3,412			209		3,428			206
Less: amount representing finance charges		(3,203	)		—		(3,222	)		—
		209			209		206			206

The Group has the option to extend the term of the lease for two additional 20-year terms. Payments under the lease step up at regular intervals over the lease term.

£250 million 6% bonds

The 6% fixed interest sterling bonds were issued on December 9, 2009 and are repayable in full on December 9, 2016. Interest is payable annually on December 9, in each year commencing December 9, 2010 to the maturity date. The bonds were initially priced at 99.465% of face value and are unsecured. Currency swaps were transacted at the same time the bonds were issued in order to swap its proceeds and interest flows into US dollars (see Note 23 for further details).

Unsecured bank loans

Unsecured bank loans are borrowings under the Group’s Syndicated Facility and its short-term bilateral loan facilities. These facilities contain financial covenants and, as at the end of the reporting period, the Group was not in breach of these covenants, nor had any breaches or defaults occurred during the year. Borrowings under the facilities are classified as non-current when the facilities have more than 12 months to expiry. The Syndicated Facility comprises a $1.07 billion five-year revolving credit facility that matures in November 2016. This replaced a $1.6 billion five-year revolving facility (maturing in May 2013) in November 2011 following a successful refinancing of the facility.

Facilities provided by banks

	At December 31, 2011						At December 31, 2010
	Utilized		Unutilized		Total		Utilized		Unutilized		Total
	($ million)
Committed		105		970		1,075		205		1,400		1,605
Uncommitted		—		79		79		1		52		53
		105		1,049		1,154		206		1,452		1,658

F-70

	At December 31,
	2011		2010
	($ million)
Unutilized facilities expire:
Within one year		79		52
After two but before five years		970		1,400
		1,049		1,452

Utilized facilities are calculated based on actual drawings and may not agree to the carrying value of loans held at amortized cost.

Note 23 — Derivative financial instruments

	At December 31,
	2011			2010
	($ million)
Currency swaps		39			38
Interest rate swaps		—			4
Forward foreign exchange contracts		(3	)		2
		36			44
Analyzed as:
Current assets		(3	)		—
Current liabilities		—			6
Non-current liabilities		39			38
		36			44

Derivatives are recorded at their fair values, estimated using discounted future cash flows taking into consideration interest and exchange rates prevailing on the last day of the reporting period.

Currency swaps

At December 31, 2011, the Group held currency swaps with a principal of $415 million (2010 $415 million). These swaps were transacted at the same time as the £250 million 6% bonds were issued in December 2009 in order to swap the bonds’ proceeds and interest flows into US dollars. Under the terms of the swaps, $415 million was borrowed and £250 million deposited for seven years at a fixed exchange rate of £1 = $1.66. The fair value of the currency swap comprises two components: $29 million (2010 $27 million) relating to the repayment of the underlying principal and $10 million (2010 $11 million) relating to interest payments. The element relating to the underlying principal is disclosed as a component of net debt (see Note 24). The currency swaps are designated as net investment hedges.

Interest rate swaps

At December 31, 2011, the Group held interest rate swaps with notional principals of $100 million (2010 $100 million and €75 million). These swaps are held to fix the interest payable on borrowings under the Syndicated Facility; at December 31, 2011, $100 million of US dollar borrowings were fixed at 1.99% until May 2012. The interest rate swaps have been designated as cash flow hedges.

Forward foreign exchange contracts

At December 31, 2011, the Group held short dated foreign exchange swaps with principals of €75 million (2010 €75 million and HK$70 million). The swaps are used to manage US dollar surplus cash and reduce euro borrowings whilst maintaining operational flexibility. The foreign exchange swaps have been designated as net investment hedges.

F-71

Note 24 — Net debt

	At December 31, 2011			At December 31, 2010
	($ million)
Cash and cash equivalents		182			78
Loans and other borrowings — current		(21	)		(18	)
Loans and other borrowings — non-current		(670	)		(776	)
Derivatives hedging debt values (Note 23)		(29	)		(27	)
Net debt		(538	)		(743	)

	Year ended December 31, 2011			Year ended December 31, 2010
	($ million)
Movement in net debt
Net increase in cash and cash equivalents		107			51
Add back cash flows in respect of other components of net debt:
Decrease in borrowings		119			292
Decrease in net debt arising from cash flows		226			343
Non-cash movements:
Finance lease obligations		(3	)		(2	)
Exchange and other adjustments		(18	)		8
Decrease in net debt		205			349
Net debt at beginning of the year		(743	)		(1,092	)
Net debt at end of the year		(538	)		(743	)

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

Note 25 — Deferred tax

	Property, plant and equipment			Deferred gains on loan notes			Losses			Employee benefits			Intangible assets			Other short-term temporary differences			Total
	($ million)
At January 1, 2010		189			151			(146	)		(35	)		31			(167	)		23
Income statement		24			(3	)		(12	)		11			6			(9	)		17
Statement of comprehensive income		—			—			—			(22	)		—			(2	)		(24	)
Statement of changes in equity		—			—			—			—			—			(12	)		(12	)
Exchange and other adjustments		(8	)		(4	)		8			(1	)		(2	)		(1	)		(8	)
At December 31, 2010		205			144			(150	)		(47	)		35			(191	)		(4	)
Income statement		19			(7	)		17			—			1			29			59
Statement of comprehensive income		—			—			—			(12	)		—			1			(11	)
Statement of changes in equity		—			—			—			—			—			9			9
Exchange and other adjustments		(3	)		—			—			—			2			(1	)		(2	)
At December 31, 2011		221			137			(133	)		(59	)		38			(153	)		51

F-72

	At December 31, 2011			At December 31, 2010
	($ million)
Analyzed as:
Deferred tax assets		(106	)		(88	)
Deferred tax liabilities		97			84
Liabilities held for sale		60			—
		51			(4	)

Deferred gains on loan notes includes $55 million (2010 $55 million) which is expected to fall due for payment in 2016.

The deferred tax asset recognized in respect of losses of $133 million (2010 $150 million) includes $104 million (2010 $113 million) in respect of capital losses available to be utilized against the realization of capital gains which are recognized as a deferred tax liability and $29 million (2010 $37 million) in respect of revenue tax losses. Deferred tax assets of $44 million (2010 $88 million) are recognized in relation to legal entities which suffered a tax loss in the current or preceding period. These assets are recognized based upon future taxable profit forecasts for the entities concerned.

Tax losses with a net tax value of $358 million (2010 $411 million), including capital losses with a value of $134 million (2010 $148 million), have not been recognized. These losses may be carried forward indefinitely with the exception of $11 million which expires after five years and $1 million which expires after six years (2010 $16 million which expires after six years). Deferred tax assets with a net tax value of $29 million (2010 $15 million) in respect of employee benefits, up to $34 million (2010 $nil) in respect of foreign tax credits and $52 million (2010 $5 million) in respect of other items have not been recognized. These losses and other deferred tax assets have not been recognized as the Group does not currently anticipate being able to offset these against future profits or gains in order to realize any economic benefit in the foreseeable future. However, future benefits may arise as a result of resolving tax uncertainties, or as a consequence of case law and legislative developments which make the value of assets more certain.

At December 31, 2011 the Group has not provided deferred tax in relation to temporary differences associated with post-acquisition undistributed earnings of subsidiaries as the Group is in a position to control the timing of reversal of these temporary differences and it is probable that they will not reverse in the foreseeable future. Following the introduction of a UK dividend exemption regime, the tax which would arise upon reversal of the temporary differences is not expected to exceed $20 million (2010 $20 million).

Other short-term temporary differences relate primarily to provisions and accruals and share-based payments.

Note 26 — Share-based payments

Annual Bonus Plan

The IHG Annual Bonus Plan (“ABP”) enables eligible employees, including Executive Directors, to receive all or part of their bonus in the form of deferred shares. The deferred shares are released on the third anniversary of the award date. Under the terms of the current plans, a fixed percentage of the bonus is awarded in the form of shares with no voluntary deferral and no matching shares. The awards in all of the plans are conditional on the participants remaining in the employment of a participating company or leaving for a qualifying reason as per the plan rules. Participation in the ABP is at the discretion of the Remuneration Committee. The number of shares is calculated by dividing a specific percentage of the participant’s annual performance-related bonus by the middle market quoted prices on the three consecutive dealing days immediately preceding the date of grant. A number of executives participated in the plan during the year and conditional rights over 528,213 shares (2010 nil, 2009 1,058,734) were awarded to participants. In 2009 this number included 228,000 shares awarded as part of recruitment terms or for one-off individual performance-related awards.

F-73

Long Term Incentive Plan

The Long Term Incentive Plan (“LTIP”) allows Executive Directors and eligible employees to receive share awards, subject to the achievement of performance conditions, set by the Remuneration Committee, which are normally measured over a three-year period. Awards are normally made annually and, except in exceptional circumstances, will not exceed three times salary for Executive Directors and four times salary in the case of other eligible employees. During the year, conditional rights over 3,257,364 (2010 2,602,773, 2009 5,754,548) shares were awarded to employees under the plan. The plan provides for the grant of “nil cost options” to participants as an alternative to conditional share awards.

Executive Share Option Plan

For options granted, the option price is not less than the market value of an ordinary share, or the nominal value if higher. The market value is the quoted price on the business day preceding the date of grant, or the average of the middle market quoted prices on the three consecutive dealing days immediately preceding the date of grant. A performance condition has to be met before options can be exercised. The performance condition is set by the Remuneration Committee. The plan was not operated during 2011 and no options were granted in the year under the plan. The latest date that any options may be exercised is April 4, 2015.

Sharesave Plan

The Sharesave Plan is a savings plan whereby employees contract to save a fixed amount each month with a savings institution for three or five years. At the end of the savings term, employees are given the option to purchase shares at a price set before savings began. The Sharesave Plan is available to all UK employees (including Executive Directors) employed by participating Group companies provided that they have been employed for at least one year. The plan provides for the grant of options to subscribe for ordinary shares at the higher of nominal value and not less than 80% of the middle market quotations of the ordinary shares on the three dealing days immediately preceding the invitation date. The plan was not operated during 2011 and no options were granted in the year under the plan.

US Employee Stock Purchase Plan

The US Employee Stock Purchase Plan will allow eligible employees resident in the United States an opportunity to acquire Company American Depositary Shares (“ADS”s) on advantageous terms. The option to purchase ADSs may be offered only to employees of designated subsidiary companies. The option price may not be less than the lesser of either 85% of the fair market value of an ADS on the date of grant or 85% of the fair market value of an ADS on the date of exercise. Options granted under the plan must generally be exercised within 27 months from the date of grant. The plan was not operated during 2011 and at December 31, 2011 no options had been granted under the plan.

Former Six Continents Share Schemes

Under the terms of the Separation of Six Continents PLC in 2003, holders of options under the Six Continents Executive Share Option Schemes were given the opportunity to exchange their Six Continents PLC options for equivalent value new options over IHG shares. As a result of this exchange, 23,195,482 shares were put under option at prices ranging from 308.5 pence to 593.3 pence. The exchanged options were immediately exercisable and are not subject to performance conditions. During 2011, 397,943 (2010 1,016,572) such options were exercised and 45,655 (2010 82,076) lapsed, leaving a total of 458,814 (2010 902,412) such options outstanding at prices ranging from 308.5 pence to 434.2 pence. The latest date that any options may be exercised is October 3, 2012.

F-74

The Group recognized a cost of $25 million (2010 $32 million, 2009 $22 million) in operating profit and $nil (2010 $1 million, 2009 $2 million) within exceptional administrative expenses related to equity-settled share-based payment transactions during the year, net of amounts borne by the System Fund.

The aggregate consideration in respect of ordinary shares issued under option schemes during the year was $8 million (2010 $19 million, 2009 $11 million).

The following table sets forth awards and options granted during 2011. No awards were granted under the Executive Share Option Plan, Sharesave Plan or US Employee Stock Purchase Plan during the year.

	ABP		LTIP
Number of shares awarded in 2011		528,213		3,257,364

The Group uses separate option pricing models and assumptions depending on the plan. The following tables set forth information about options granted in 2011, 2010 and 2009:

2011	ABP			LTIP
Valuation model	Binomial			Monte Carlo Simulation and Binomial
Weighted average share price (pence)		1,415.0			1,281.0
Expected dividend yield		2.14	%		2.78	%
Risk-free interest rate					1.88	%
Volatility*					39	%
Term (years)		3. 0			3.0

2010	LTIP
Valuation model	Monte Carlo Simulation and Binomial
Weighted average share price (pence)		1,033.0
Expected dividend yield		3.10	%
Risk-free interest rate		1.83	%
Volatility*		41	%
Term (years)		3.0

2009	ABP			LTIP
Valuation model	Binomial			Monte Carlo Simulation and Binomial
Weighted average share price (pence)		454.0			612.0
Expected dividend yield		4.89	%		5.26	%
Risk-free interest rate					2.11	%
Volatility*					43	%
Term (years)		3.0			3.0

* The expected volatility was determined by calculating the historical volatility of the Company’s share price corresponding to the expected life of the share award.

F-75

Movements in the awards and options outstanding under the schemes are as follows:

	ABP			LTIP
	Number of shares			Number of shares
	(thousands)
Outstanding at January 1, 2009		1,289			11,153
Granted		1,059			5,755
Vested		(434	)		(3,124	)
Lapsed or canceled		(60	)		(1,518	)
Outstanding at December 31, 2009		1,854			12,266
Granted		—			2,603
Vested		(580	)		(1,500	)
Lapsed or canceled		—			(2,027	)
Outstanding at December 31, 2010		1,274			11,342
Granted		528			3,257
Vested		(702	)		(3,454	)
Lapsed or canceled		(150	)		(2,115	)
Outstanding at December 31, 2011		950			9,030
Fair value of awards granted during the year (cents)
At December 31, 2011		2,141.1			819.7
At December 31, 2010		N/A	*		1,181.9
At December 31, 2009		735.6			414.1
Weighted average remaining contract life (years)
At December 31, 2011		0.9			1.0
At December 31, 2010		0.7			1.0
At December 31, 2009		1.3			1.3

* No awards were granted during the year.

The above awards do not vest until the performance and service conditions have been met.

	Sharesave Plan							Executive Share Option Plan
	Number of shares			Range of option prices		Weighted average option price		Number of Shares			Range of option prices		Weighted average option price
	(thousands)			(pence)		(pence)		(thousands)			(pence)		(pence)
Outstanding at January 1, 2009		49			420.5		420.5		7,635			308.5-619.8		486.3
Exercised		(48	)		420.5		420.5		(1,518	)		308.5-619.8		496.2
Lapsed or canceled		(1	)		420.5		420.5		(247	)		438.0-619.8		509.9
Outstanding at December 31, 2009		—			—		—		5,870			308.5-619.8		482.8
Exercised		—			—		—		(2,497	)		349.1-619.8		478.6
Lapsed or canceled		—			—		—		(82	)		349.1		349.1
Outstanding at December 31, 2010		—			—		—		3,291			308.5-619.8		489.3
Exercised		—			—		—		(1,075	)		308.5-619.8		476.5
Lapsed or canceled		—			—		—		(46	)		422.8		422.8
Outstanding at December 31, 2011		—			—		—		2,170			308.5-619.8		497.0
Options exercisable		—			—		—
At December 31, 2011									2,170			308.5-619.8		497.0
At December 31, 2010		—			—		—		3,291			308.5-619.8		489.3
At December 31, 2009		—			—		—		5,870			308.5-619.8		482.8

F-76

Included within the options outstanding under the Executive Share Option Plan are options over 458,814 (2010 902,412, 2009 2,001,060) shares that have not been recognized in accordance with IFRS 2 as the options were granted on or before November 7, 2002. These options, relating to former Six Continents share schemes, have not been subsequently modified and therefore do not need to be accounted for in accordance with IFRS 2.

The weighted average share price at the date of exercise for share options vested during the year was 1,265.9 pence. The closing share price on December 31, 2011 was 1,157.0 pence and the range during the year was 955.0 pence to 1,435.0 pence per share.

Summarized information about options outstanding at December 31, 2011 under the share option schemes is as follows:

	Options outstanding and exercisable
	Number outstanding		Weighted average remaining contract life		Weighted average option price
	(thousands)		(years)		(pence)
Range of exercise prices (pence)
Executive Share Option Plan
308.5		4		0.8		308.5
434.2 to 494.2		1,745		1.6		467.8
619.8		421		3.3		619.8
		2,170		1.9		497.0

Note 27 — Operating leases

During the year ended December 31, 2011, $64 million (2010 $53 million, 2009 $51 million) was recognized as an expense in the Consolidated income statement in respect of operating leases, net of amounts borne directly by the System Fund. The expense includes contingent rents of $18 million (2010 $8 million, 2009 $7 million).

Future minimum lease payments under non-cancelable operating leases are as follows:

	At December 31, 2011		At December 31, 2010
	($ million)
Due within one year		46		50
One to two years		41		40
Two to three years		32		36
Three to four years		23		31
Four to five years		21		25
More than five years		255		323
		418		505

In addition, in certain circumstances the Group is committed to making additional lease payments that are contingent on the performance of the hotels that are being leased.

The average remaining term of these leases, which generally contain renewal options, is approximately 19 years (2010 21 years). No material restrictions or guarantees exist in the Group’s lease obligations.

Total future minimum rentals expected to be received under non-cancelable sub-leases are $14 million (2010 $17 million).

F-77

Note 28 — Capital and other commitments

	At December 31, 2011		At December 31, 2010
	($ million)
Contracts placed for expenditure on property, plant and equipment and intangible assets not provided for in the Consolidated Financial Statements		14		14

The Group has also committed to invest up to $60 million in two investments accounted for under the equity method of which $36 million had been spent at December 31, 2011.

Note 29 — Contingencies

	At December 31, 2011		At December 31, 2010
	($ million)
Contingent liabilities not provided for in the Consolidated Financial Statements		8		1

In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts. The maximum unprovided exposure under such guarantees is $42 million at December 31, 2011 (2010 $90 million).

As of December 31, 2011, the Group had outstanding letters of credit of $51 million (2010 $54 million) mainly relating to self insurance programs.

The Group may guarantee loans made to facilitate third-party ownership of hotels in which the Group has an equity interest and also a management contract. As of December 31, 2011, there were no such guarantees in place (2010 $nil).

From time to time, the Group is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. The Group has also given warranties in respect of the disposal of certain of its former subsidiaries. It is the view of the Directors that, other than to the extent that liabilities have been provided for in these financial statements, such legal proceedings and warranties are not expected to result in material financial loss to the Group.

Note 30 — Related party disclosures

	Year ended December 31,
	2011		2010		2009
	($ million)
Total compensation of key management personnel
Short-term employment benefits		18.8		13.6		9.8
Post-employment benefits		0.8		0.6		0.6
Termination benefits		1.4		—		0.8
Equity compensation benefits		8.1		9.4		9.5
		29.1		23.6		20.7

There were no other transactions with key management personnel during the years ended December 31, 2011, 2010 or 2009.

Related party disclosures for associates and joint ventures are included in Note 14.

Key management personnel comprises the Board and Executive Committee.

F-78

Note 31 — System Fund

The Group operates a System Fund (the “Fund”) to collect and administer assessments and contributions from hotel owners for specific use in marketing, the Priority Club Rewards loyalty program and the global reservation system. The Fund and loyalty program are accounted for in accordance with the accounting policies set out on page F-21.

The following information is relevant to the operation of the Fund:

	Year ended December 31,
	2011		2010			2009
	($ million)
Income:*
Assessment fees and contributions received from hotels		1,025		944			875
Proceeds from sale of Priority Club Rewards points		128		106			133
Key elements of expenditure:*
Marketing		203		170			165
Priority Club		232		250			210
Payroll costs		182		167			152
Net surplus/(deficit) for the year*		19		(51	)		43
Interest payable to the Fund		1		2			2

* Not included in the Consolidated income statement in accordance with the Group’s accounting policies.

The payroll costs above relate to 3,885 (2010 3,927, 2009 4,019) employees whose costs are borne by the Fund.

The following liabilities relating to the Fund are included in the Consolidated statement of financial position:

	Year ended December 31,
	2011		2010		2009
	($ million)
Cumulative short-term net surplus		39		20		71
Loyalty program liability		578		531		470
		617		551		541

The net change in the loyalty program liability and Fund surplus contributed an inflow of $66 million (2010 $10 million, 2009 $42 million) to the Group’s cash flow from operations.

F-79

INTERCONTINENTAL HOTELS GROUP PLC

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

	Balance at beginning of period		Additions charged to costs and expenses		Exchange differences		Deductions			Balance at end of period
	($ million)
Year ended December 31, 2011
Provisions for bad and doubtful debts		58		15		—		(27	)		46
Year ended December 31, 2010
Provisions for bad and doubtful debts		85		27		—		(54	)		58
Year ended December 31, 2009
Provisions for bad and doubtful debts		110		34		—		(59	)		85

S-1

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

INTERCONTINENTAL HOTELS GROUP PLC (Registrant)
By:	/s/    Tom Singer
	Name:	Thomas Singer
	Title:	Chief Financial Officer

Date: March 29, 2012

EX-4.A.I

Exhibit 4(a)(i)

CONFORMED COPY

DATED 7 NOVEMBER 2011

INTERCONTINENTAL HOTELS GROUP PLC

AND CERTAIN OF ITS SUBSIDIARIES

AS BORROWERS AND/OR GUARANTORS

THE ROYAL BANK OF SCOTLAND PLC

BARCLAYS BANK PLC

CITIBANK, N.A., LONDON BRANCH

DBS BANK LTD, LONDON BRANCH

HSBC BANK PLC

ICBC (LONDON) PLC

LLOYDS TSB BANK PLC

NB INTERNATIONAL FINANCE B.V.

SUNTRUST BANK

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

US BANK NATIONAL ASSOCIATION

WELLS FARGO BANK N.A.

AS ORIGINAL LENDERS

BANC OF AMERICA SECURITIES LIMITED

AS FACILITY AGENT

AND

THE ROYAL BANK OF SCOTLAND PLC

BANC OF AMERICA SECURITIES LIMITED

CITIGROUP GLOBAL MARKETS LIMITED

HSBC BANK PLC

LLOYDS TSB BANK PLC

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

AS MANDATED LEAD ARRANGERS

$1,070,000,000

FACILITY AGREEMENT

CONTENTS

Clause	Page
1.   Definitions and Interpretation		1
2.   The Facility		18
3.   Purpose		20
4.   Conditions of Utilisation		21
5.   Utilisation		22
6.   Optional Currencies		23
7.   Repayment		24
8.   Prepayment and Cancellation		26
9.   Interest		30
10. Interest Periods		31
11. Changes to the Calculation of Interest		31
12. Fees		33
13. Tax Gross-Up and Indemnities		34
14. Increased Costs		42
15. Other Indemnities		44
16. Mitigation by the Lenders		45
17. Costs and Expenses		45
18. Guarantee and Indemnity		46
19. Representations		49
20. Information Undertakings		51
21. Financial Covenants		56
22. General Undertakings		59
23. Events of Default		65
24. Changes to the Lenders		68
25. Changes to the Obligors		72
26. Role of the Facility Agent and the Arranger		74
27. Conduct of Business by the Finance Parties		81
28. Sharing among the Finance Parties		81
29. Payment Mechanics		83
30. Set-Off		87
31. Notices		87
32. Calculations and Certificates		89
33. Partial Invalidity		90
34. Remedies and Waivers		90

35. Amendments and Waivers	90
36. Confidentiality	93
37. Counterparts	97
38. Governing Law	98
39. Enforcement	98

THIS AGREEMENT is dated 7 November 2011

BETWEEN:

(1) INTERCONTINENTAL HOTELS GROUP PLC incorporated in England and Wales with registration number 05134420 (the “Company”);

(2) SIX CONTINENTS LIMITED incorporated in England and Wales with registration number 913450 and INTERCONTINENTAL HOTELS LIMITED incorporated in England and Wales with registration number 4551528 (together with the Company, the “Original Borrowers”);

(3) SIX CONTINENTS LIMITED incorporated in England and Wales with registration number 913450 and INTERCONTINENTAL HOTELS LIMITED incorporated in England and Wales with registration number 4551528 (together with the Company, the “Original Guarantors”);

(4) THE ROYAL BANK OF SCOTLAND PLC, BANC OF AMERICA SECURITIES LIMITED, CITIGROUP GLOBAL MARKETS LIMITED, HSBC BANK PLC, LLOYDS TSB BANK PLC and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. as mandated lead arrangers (whether acting individually or together, the “Arranger”);

(5) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the “Original Lenders”); and

(6) BANC OF AMERICA SECURITIES LIMITED as agent of the other Finance Parties (the “Facility Agent”).

IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement:

“Acceptable Bank” means a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A-1 or higher by Standard & Poor’s Rating Services Limited or Fitch Ratings Ltd or P-1 or higher by Moody’s or a comparable rating from an internationally recognised credit rating agency.

“Accession Letter” means a document substantially in the form set out in Schedule 6 (Form of Accession Letter).

“Additional Borrower” means a company which becomes an Additional Borrower in accordance with Clause 25 (Changes to the Obligors).

“Additional Cost Rate” has the meaning given to it in Schedule 4 (Mandatory Cost formulae).

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“Additional Guarantor” means a company which becomes an Additional Guarantor in accordance with Clause 25 (Changes to the Obligors).

“Additional Obligor” means an Additional Borrower or an Additional Guarantor.

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company but excluding, in relation to The Royal Bank of Scotland plc: (i) the UK government or any member or instrumentality thereof, including Her Majesty’s Treasury and UK Financial Investments Limited (or any directors, officers, employees or entities thereof); or (ii) any persons or entities controlled by or under common control with the UK government or any member or instrumentality thereof (including Her Majesty’s Treasury and UK Financial Investments Limited) and which are not part of The Royal Bank of Scotland Group plc and its subsidiaries or subsidiary undertakings.

“Agent’s Spot Rate of Exchange” means the spot rate of exchange at which the Facility Agent is able to purchase the relevant currency with the Base Currency in the London foreign exchange market at or about 11:00 a.m. on a particular day.

“Applicable Accounting Principles” means those accounting principles, standards and practices on which the preparation of the Original Financial Statements was based and those accounting policies which were used in the preparation of those financial statements.

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

“Availability Period” means the period from and including the date of this Agreement to and including the date falling one month prior to the Termination Date.

“Available Commitment” means a Lender’s Commitment minus:

(a) the Base Currency Amount of its participation in any outstanding Loans; and

(b) in relation to any proposed Utilisation, the Base Currency Amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date,

other than that Lender’s participation in any Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date.

“Available Facility” means the aggregate for the time being of each Lender’s Available Commitment.

“Bank Levy” means the United Kingdom bank levy as set out in the Finance Act 2011 (UK), the French taxe bancaire de risque systémique as set out in the Finance Bill 2011 (France) and the German Bank Levy as set out in the German Restructuring Fund Act, as all such legislation stands at the date of this Agreement.

“Base Currency” or “$” means US Dollars.

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“Base Currency Amount” means, in relation to a Loan, the amount specified in the Utilisation Request delivered by a Borrower for that Loan (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent’s Spot Rate of Exchange on the date which is three Business Days before the Utilisation Date or, if later, on the date the Facility Agent receives the Utilisation Request) adjusted to reflect any repayment, prepayment, consolidation or division of the Loan.

“Basel III” means the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision on 16 December 2010, each as amended, supplemented or restated.

“Borrower” means an Original Borrower or an Additional Borrower, unless it has ceased to be a Borrower in accordance with Clause 25 (Changes to the Obligors).

“Borrowings” has the meaning given to it in Clause 21 (Financial covenants).

“Break Costs” means the amount (if any) by which:

(a) the interest (excluding the Margin and Mandatory Costs) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London and:

(a) (in relation to any date for payment, purchase or sale of a currency other than euro) the principal financial centre of the country of that currency; or

(b) (in relation to any date for payment, purchase or sale of euro) any TARGET Day.

“Cash” has the meaning given to it in Clause 21 (Financial covenants).

“Cash Equivalents” has the meaning given to it in Clause 21 (Financial covenants).

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“Commitment” means:

(a) in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading “Commitment” in Schedule 1 (The Original Lenders) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and

(b) in relation to any other Lender, the amount in the Base Currency of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase),

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Compliance Certificate” means a certificate substantially in the form set out in Schedule 8 (Form of Compliance Certificate).

“Confidential Information” means all information relating to the Company, any Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

(a) any member of the Group or any of its advisers; or

(b) another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(i) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 36 (Confidentiality); or

(ii) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

(iii) is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

“Confidentiality Undertaking” means a confidentiality undertaking in the form set out in Schedule 11 (Form of Confidentiality Undertaking) or in any other form agreed between the Company and the Facility Agent.

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“Consolidated Gross Assets” means the consolidated current assets plus consolidated non-current assets of the Group.

“CTA 2009” means the Corporation Tax Act 2009.

“CTA 2010” means the Corporation Tax Act 2010.

“Default” means an Event of Default or any event or circumstance specified in Clause 23 (Events of Default) which would (with the expiry of a grace period and/or the giving of notice) be an Event of Default.

“Defaulting Lender” means any Lender:

(a) which has failed to make its participation in a Loan available or has notified the Facility Agent that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 5.4 (Lenders’ participation);

(b) which has otherwise rescinded or repudiated a Finance Document; or

(c) with respect to which an Insolvency Event has occurred and is continuing,

unless, in the case of paragraph (a) above:

(i) its failure to pay is caused by:

(A) administrative or technical error; or

(B) a Disruption Event; and

payment is made within five Business Days of its due date; or

(ii) the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.

“Disruption Event” means either or both of:

(a) a material disruption to those payment or communication systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i) from performing its payment obligations under the Finance Documents; or

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(ii) from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

“EBITDA” has the meaning given to it in Clause 21 (Financial covenants).

“EURIBOR” means, in relation to any Loan in euro:

(a) the applicable Screen Rate; or

(b) (if no Screen Rate is available for the Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request quoted by the Reference Banks to leading banks in the European interbank market,

as of the Specified Time on the Quotation Day for the offering of deposits in euro for a period comparable to the Interest Period of the relevant Loan and, if any such rate is below zero, EURIBOR will be deemed to be zero.

“euro” or “€” means the single currency of the Participating Member States.

“Event of Default” means any event or circumstance specified as such in Clause 23 (Events of Default).

“Existing Facility” means the $2,100,000,000 term and revolving facilities agreement dated 2 May 2008 (as amended from time to time) between, among others, the Company, certain lenders and certain arrangers named in it and HSBC Bank plc as agent.

“Facility” means the revolving credit facility made available under this Agreement, as described in Clause 2.1 (The Facility).

“Facility Office” means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

“Fee Letter” means any letter or letters dated on or about the date of this Agreement between the Arranger and the Company (or the Facility Agent and the Company) setting out any of the fees referred to in Clause 12 (Fees).

“Finance Document” means this Agreement, any Fee Letter, any Accession Letter, any Resignation Letter and any other document designated as such by the Facility Agent and the Company.

“Finance Party” means the Facility Agent, the Arranger or a Lender.

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“Financial Indebtedness” means any indebtedness (without double counting) for or in respect of:

(a) moneys borrowed;

(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock, commercial paper or any similar instrument (entered into or issued primarily as a method of raising finance) provided that, for all purposes under this Agreement (other than for the purposes of Clause 23.5 (Cross default)), any bonds from time to time issued and outstanding under the GBP 750m Bond Programme shall at the relevant time be valued as Financial Indebtedness having regard to the net effect of the marked-to-market value of any related interest and currency hedging arrangements in effect at that time;

(d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a finance or capital lease;

(e) receivables sold or discounted (other than any receivables to the extent they are sold or discounted on a non-recourse basis);

(f) any amount raised under any other transaction (including any forward sale or purchase agreement) required by IFRS to be shown as a borrowing in the audited consolidated balance sheet of the Group;

(g) for the purpose of Clause 23.5 (Cross default) only, any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

(h) shares which are expressed to be redeemable prior to the Termination Date;

(i) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, letter of credit or any other instrument issued by a bank or financial institution; and

(j) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above,

but excluding indebtedness owing by a member of the Group to another member of the Group.

“GBP” or “£” means the lawful currency for the time being of the United Kingdom of Great Britain and Northern Ireland.

“GBP 750m Bond Programme” means the Company’s £750,000,000 Euro Medium Term Note programme as outlined in the prospectus dated 7 July 2011.

“Group” means the Company and its Subsidiaries for the time being.

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“Guarantor” means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 25 (Changes to the Obligors).

“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

“Impaired Agent” means the Facility Agent at any time when:

(a) it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

(b) the Facility Agent otherwise rescinds or repudiates a Finance Document;

(c) (if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of “Defaulting Lender”; or

(d) an Insolvency Event has occurred and is continuing with respect to the Facility Agent,

unless, in the case of paragraph (a) above:

(i) its failure to pay is caused by:

(A) administrative or technical error; or

(B) a Disruption Event; and

payment is made within five Business Days of its due date; or

(ii) the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

“Income Tax Act” means the Income Tax Act 2007.

“Increase Confirmation” means a confirmation substantially in the form set out in Schedule 13 (Form of Increase Confirmation).

“Increase Lender” has the meaning given to that term in Clause 2.2 (Increase).

“Insolvency Event” in relation to a Finance Party means that the Finance Party:

(a) is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(b) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;

(c) makes a general assignment, arrangement or composition with or for the benefit of its creditors;

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(d) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;

(e) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not prescribed in paragraph (d) above and:

(i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or

(ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;

(f) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(g) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets;

(h) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; or

(i) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above.

“Interest Period” means, in relation to a Loan, each period determined in accordance with Clause 10 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 9.3 (Default interest).

“Lender” means:

(a) any Original Lender; and

(b) any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 2.2 (Increase) or Clause 24 (Changes to the Lenders),

which  in each case has not ceased to be a Party in accordance with the terms of this Agreement.

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“LIBOR” means, in relation to any Loan:

(a) the applicable Screen Rate; or

(b) (if no Screen Rate is available for the currency or Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

as of the Specified Time on the Quotation Day for the offering of deposits in the currency of that Loan and for a period comparable to the Interest Period for that Loan and, if any such rate is below zero, LIBOR will be deemed to be zero.

“LMA” means the Loan Market Association.

“Loan” means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan, as the context requires.

“Majority Lenders” means a Lender or Lenders whose Commitments aggregate more than 66²/₃ per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66²/₃ per cent. of the Total Commitments immediately prior to the reduction).

“Managed Assets” means any assets (including, for the avoidance of doubt, any equity interest in any such asset) of a member of the Group which are sold and become, or remain, the subject of a management or franchise agreement in favour of the Group.

“Mandatory Cost” means the percentage rate per annum calculated by the Facility Agent in accordance with Schedule 4 (Mandatory Cost formulae).

“Margin” means at any time the rate per annum determined by reference to the ratio of Net Borrowings, as at the last day of the last preceding Margin Period, to EBITDA for that Margin Period (the “Margin Ratio”) in accordance with the following table:

Net Borrowings/EBITDA	Margin (per cent. p.a.)
Higher than 3.00:1	1.70
Equal to or lower than 3.00:1 but higher than 2.50:1	1.35
Equal to or lower than 2.50:1 but higher than 2.00:1	1.10
Equal to or lower than 2.00:1 but higher than 1.50:1	1.00
Equal to or lower than 1.50:1	0.90

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However:

(a) until the delivery of the first Margin Certificate required pursuant to Clause 20.3 (Margin Certificate) the applicable Margin shall be 0.90 per cent. per annum;

(b) any increase or decrease in the applicable Margin, as the case may be, will take effect for all purposes under this Agreement from the date falling two Business Days after receipt by the Facility Agent of a Margin Certificate as required pursuant to Clause 20.3 (Margin Certificate);

(c) if the Company does not deliver the relevant Margin Certificate to the Facility Agent in accordance with the terms of Clause 20.3 (Margin Certificate), the Margin shall, as from the date immediately following the last date on which such Margin Certificate should have been delivered until the date such Margin Certificate is delivered, be 1.70 per cent. per annum;

(d) if at any time an Event of Default is continuing, the Margin shall, until the date such Event of Default ceases to be continuing, be 1.70 per cent. per annum;

(e) if at any time a decrease in the Margin is to take effect a Default is continuing, such decrease shall not take effect at that time but such decrease shall take effect with effect from the date such Default ceases to be continuing; and

(f) in this definition, “EBITDA” shall have the same meaning as EBITDA as defined in Clause 21.3 (Definitions) save that the reference to “Relevant Period” in that definition shall, for the purposes of calculating the Margin, be substituted with “Margin Period” and EBITDA shall be adjusted to take into account the pro forma impact of any acquisitions or disposals (other than of Managed Assets) made during the Margin Period by a member of the Group.

“Margin Certificate” means a certificate substantially in the form set out in Schedule 12 (Form of Margin Certificate).

“Margin Period” means the period of 12 months ending on each Quarter Date.

“Margin Ratio” has the meaning given to it in the definition of “Margin”.

“Material Adverse Effect” means a material adverse effect on:

(a) the ability of the Obligors (taken as a whole) to perform and comply with their payment obligations under any Finance Document; or

(b) the ability of the Company to perform and comply with its obligations under Clause 21 (Financial covenants).

“Material Subsidiary” means, at any time, any Subsidiary of the Company:

(a) whose gross assets represent 5 per cent. or more of Consolidated Gross Assets or whose EBITDA represents 5 per cent. or more of consolidated EBITDA of the Group, in each case, as calculated by reference to the latest financial

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statements of such Subsidiary (which shall be audited if such statements are prepared by that Subsidiary) and the latest audited consolidated financial statements of the Group adjusted in such manner as the auditors of the Company may determine (which determination shall be conclusive in the absence of manifest error) (i) to reflect the gross assets and EBITDA of any person which has become or ceased to be a member of the Group since the end of the financial year to which the latest audited consolidated financial statements of the Group relate where such adjustment is requested by the Company and (ii) so that for the purposes of this definition, the gross assets of the relevant Subsidiary shall be calculated on the same basis as Consolidated Gross Assets are calculated and/or, as the case may be, EBITDA of the relevant Subsidiary shall be calculated on the same basis as consolidated EBITDA for the Group (but, in each case, relating only to the relevant Subsidiary) and making such adjustments and eliminations as are required to show the same as the contribution of the relevant Subsidiary to Consolidated Gross Assets and/or, as the case may be, consolidated EBITDA of the Group; or

(b) to which is transferred all or substantially all of the business, undertaking or assets of a Subsidiary which immediately prior to such transfer is a Material Subsidiary, whereupon the transferor Subsidiary shall cease to be a Material Subsidiary and the transferee Subsidiary shall become a Material Subsidiary under this sub-paragraph (b) upon the completion of such transfer.

Any determination made by the auditors of the Company as to whether a Subsidiary of the Company is or is not a Material Subsidiary at any time shall be conclusive in the absence of manifest error.

“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

(a) subject to paragraph (c), if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

(b) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

(c) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

The above rules will only apply to the last Month of any period.

“Moody’s” means Moody’s Investors Services Inc.

“Net Borrowings” has the meaning given to it in Clause 21 (Financial covenants).

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“Net Interest Payable” has the meaning given to it in Clause 21 (Financial covenants).

“New Lender” has the meaning given to it in Clause 24.1 (Assignments and transfers by the Lenders).

“NZD” means the lawful currency for the time being of New Zealand.

“Obligor” means the Company, a Borrower or a Guarantor.

“Optional Currency” means a currency (other than the Base Currency) which complies with the conditions set out in Clause 4.3 (Conditions relating to Optional Currencies).

“Original Financial Statements” means the audited consolidated financial statements of the Group for the financial year ended 31 December 2010.

“Original Obligor” means an Original Borrower or an Original Guarantor.

“Participating Member State” means any member state of the European Communities that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.

“Party” means a party to this Agreement.

“Project Finance Indebtedness” means Financial Indebtedness (in respect of which Security has been given) incurred by a member of the Group (a “Project Group Member”) for the purposes of financing the acquisition, construction, development and/or operation of an asset (a “Project Asset”) where the provider of the Financial Indebtedness has no recourse against any member of the Group, except for recourse to:

(a) the Project Asset of the Project Group Member or receivables arising from the Project Asset;

(b) a Project Group Member for the purpose of enforcing Security given by it so long as:

(i) the recourse is limited to recoveries in respect of the Project Asset; and

(ii) if the Project Asset does not comprise all or substantially all of the business of that Project Group Member, the provider of the Financial Indebtedness does not have the right to take any steps towards its winding up or dissolution or the appointment of a liquidator, administrator, receiver or similar officer or person, other than in respect of the Project Asset or receivables arising therefrom; or

(c) a member of the Group to the extent only of its shareholding in a Project Group Member.

“Project Group Member” has the meaning given to it in the definition of Project Finance Indebtedness provided that the principal assets and business of such member of the Group is constituted by Project Assets and it has no other Financial Indebtedness except Project Finance Indebtedness.

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“Qualifying Lender” has the meaning given to it in Clause 13 (Tax gross-up and indemnities).

“Quarter Date” means each 31 March, 30 June, 30 September and 31 December in each financial year of the Company.

“Quotation Day” means, in relation to any period for which an interest rate is to be determined:

(a) (if the currency is Sterling) the first day of that period;

(b) (if the currency is euro) two TARGET Days before the first day of that period; or

(c) (for any other currency) two Business Days before the first day of that period,

unless market practice differs in the Relevant Interbank Market for a currency, in which case the Quotation Day for that currency will be determined by the Facility Agent in accordance with market practice in the Relevant Interbank Market (and if quotations for that currency and period would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

“Reference Banks” means, in relation to LIBOR, Mandatory Costs and EURIBOR the principal London offices of The Royal Bank of Scotland plc, Bank of America, N.A. and HSBC Bank plc or such other banks as may be appointed by the Facility Agent in agreement with the Company (such agreement not to be unreasonably withheld).

“Relevant Interbank Market” means, in relation to euro, the European interbank market and, in relation to any other currency, the London interbank market.

“Relevant Period” has the meaning given to it in Clause 21 (Financial covenants).

“Repeating Representations” means each of the representations set out in Clauses 19.1 (Status) to 19.4 (Power and authority), paragraph (a) of Clause 19.6 (No default) and Clause 19.8 (Pari passu ranking).

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

“Resignation Letter” means a letter substantially in the form set out in Schedule 7 (Form of Resignation Letter).

“Rollover Loan” means one or more Loans:

(a) made or to be made on the same day that one or more maturing Loans is or are due to be repaid;

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(b) the aggregate amount of which is equal to or less than the maturing Loan(s) (unless it is more than the maturing Loan(s) solely because it arose as a result of the operation of Clause 6.2 (Unavailability of a currency));

(c) in the same currency as the maturing Loan(s) (unless it arose as a result of the operation of Clause 6.2 (Unavailability of a currency)); and

(d) made or to be made to the same Borrower for the purpose of refinancing the maturing Loan(s).

“Screen Rate” means:

(a) in relation to LIBOR, the British Bankers Association Interest Settlement Rate for the relevant currency and period; and

(b) in relation to EURIBOR, the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period,

displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Facility Agent may specify another page or service displaying the appropriate rate after consultation with the Company and the Lenders.

“Security” means a mortgage, pledge, lien, hypothecation, security interest or other charge or encumbrance entered into for the purpose of securing any obligation of any person.

“Separate Loan” has the meaning given to that term in Clause 7.1 (Repayment of Loans).

“Specified Time” means a time determined in accordance with Schedule 10 (Timetables).

“Sterling” or “£” means the lawful currency for the time being of the United Kingdom.

“Subsidiary” means a subsidiary within the meaning of section 1159 of the Companies Act 2006 and, for the purpose of Clause 21 (Financial covenants) and in relation to financial statements of the Group, a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006, but in this Agreement “Subsidiary” shall for all purposes exclude each Project Group Member.

“Super-Majority Lenders” means a Lender or Lenders whose Commitments aggregate more than 85 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 85 per cent. of the Total Commitments immediately prior to the reduction).

“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007.

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“TARGET Day” means any day on which TARGET2 is open for the settlement of payments in euro.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure by an Obligor to pay or any delay in paying by an Obligor any of the same).

“Termination Date” means the date which is 60 Months after the date of this Agreement.

“Total Commitments” means the aggregate of the Lenders’ Commitments being $1,070,000,000 at the date of this Agreement.

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Company.

“Transfer Date” means, in relation to a transfer, the later of:

(a) the proposed Transfer Date specified in the Transfer Certificate; and

(b) the date on which the Facility Agent executes the Transfer Certificate.

“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

“US Dollars” or “$” means the lawful currency for the time being of the United States of America.

“Utilisation” means a utilisation of the Facility.

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Loan is to be made.

“Utilisation Request” means a notice substantially in the form set out in Part A of Schedule 3 (Requests).

“Utilisation Level” means the Base Currency Amount of all Loans expressed as a percentage of the Total Commitments.

“VAT” means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.

1.2 Construction

(a) Unless a contrary indication appears, any reference in this Agreement to:

(i) the “Facility Agent”, the “Arranger”, any “Finance Party”, any “Guarantor”, any “Lender”, any “Obligor” or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

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(ii) “assets” includes present and future properties, revenues and rights of every description;

(iii) a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended, restated (however fundamentally and whether or not more onerously) or replaced and includes any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under that Finance Document or other agreement or instrument;

(iv) “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(v) a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

(vi) a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, which is generally complied with by those to whom it is addressed) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

(vii) a “subsidiary” has the meaning given to it in section 1159 of the Companies Act 2006 and “subsidiary undertaking” has the same meaning given to it in section 1162 of the Companies Act 2006;

(viii) a provision of law is a reference to that provision as amended or re-enacted; and

(ix) a time of day is a reference to London time.

(b) Section, Clause and Schedule headings are for ease of reference only.

(c) Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(d) A Default or an Event of Default is “continuing” if it has not been remedied or waived.

1.3 Third Party Rights

A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

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2. THE FACILITY

2.1 The Facility

Subject to the terms of this Agreement, the Lenders make available to the Borrowers a multicurrency revolving loan facility in an aggregate amount equal to the Total Commitments.

2.2 Increase

(a) The Company may by giving prior notice to the Facility Agent after the effective date of a cancellation of:

(i) the Available Commitments of a Defaulting Lender in accordance with Clause 8.68.7 (Right of cancellation in relation to a Defaulting Lender);

(ii) all or part of the Commitments of a Lender in accordance with Clause 8.5 (Right of repayment and cancellation in relation to, or replacement of, a single Lender); or

(iii) the Commitments of a Lender in accordance with Clause 8.1 (Illegality),

request that the Total Commitments be increased (and the Total Commitments under that Facility shall be so increased) in an aggregate amount in the Base Currency of up to the amount of the Available Commitments or Commitments so cancelled as follows:

(iv) the increased Commitments may be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an “Increase Lender”) selected by the Company (each of which shall not be a member of the Group) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender;

(v) each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender;

(vi) each Increase Lender shall become a Party as a “Lender” and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender;

(vii) the Commitments of the other Lenders shall continue in full force and effect; and

(viii) any increase in the Total Commitments shall take effect on the date specified by the Company in the notice referred to above or any later date on which the conditions set out in paragraph (b) below are satisfied.

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(b) An increase in the Total Commitments will only be effective on:

(i) the execution by the Facility Agent of an Increase Confirmation from the relevant Increase Lender and the Facility Agent shall execute an Increase Confirmation within five Business Days of receipt by it of an Increase Confirmation duly executed by the Increase Lender;

(ii) in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase, the performance by the Facility Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Facility Agent shall promptly notify to the Company and the Increase Lender.

(c) Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.

(d) The Company may (but shall be under no obligation to) pay to the Increase Lender a fee in the amount and at the times agreed between the Company and the Increase Lender in a letter between the Company and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph.

(e) Clause 24.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to:

(i) an “Existing Lender” were references to all the Lenders immediately prior to the relevant increase;

(ii) the “New Lender” were references to that “Increase Lender”; and

(iii) a “re-transfer” and “re-assignment” were references to respectively a “transfer” and “assignment”.

2.3 Finance Parties’ rights and obligations

(a) The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

(b) The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

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(c) A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

2.4 Obligors’ agent

(a) Each Obligor (other than the Company) by its execution of this Agreement or an Accession Letter irrevocably appoints the Company to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:

(i) the Company on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, if relevant, any Utilisation Request), to execute on its behalf any Accession Letter, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor (including, without limitation, by increasing the obligations of such Obligor howsoever fundamentally, whether by increasing the liabilities guaranteed or otherwise), without further reference to or the consent of that Obligor; and

(ii) each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Company,

and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Request) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

(b) Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors’ agent or given to the Obligors’ agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors’ agent and any other Obligor, those of the Obligors’ agent shall prevail.

3. PURPOSE

3.1 Purpose

Each Borrower shall apply all amounts borrowed by it under the Facility towards general corporate purposes of the Group.

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3.2 Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4. CONDITIONS OF UTILISATION

4.1 Initial conditions precedent

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) in relation to the first Utilisation if on or before the Utilisation Date for that Utilisation, the Facility Agent has received all of the documents and other evidence listed in Part A (Conditions Precedent to Initial Utilisation) of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent. The Facility Agent shall notify the Company and the Lenders promptly upon being so satisfied.

4.2 Further conditions precedent

The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:

(a) in the case of a Rollover Loan, no notice has been served by the Facility Agent on the Company under Clause 23.13 (Acceleration) and, in the case of any other Loan, no Default is continuing or would result from the proposed Loan; and

(b) the Repeating Representations to be made by each Obligor are true in all material respects.

4.3 Conditions relating to Optional Currencies

(a) A currency will constitute an Optional Currency in relation to a Loan if it is euro or Sterling or:

(i) it is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market on the Quotation Day and the Utilisation Date for that Loan; and

(ii) it has been approved by the Facility Agent (acting on the instructions of all the Lenders) on or prior to receipt by the Facility Agent of the relevant Utilisation Request for that Loan.

(b) If by the Specified Time the Facility Agent has received a written request from the Company for a currency to be approved under paragraph (a)(ii) above, the Facility Agent will notify the Lenders of that request by the Specified Time. Based on any responses received by the Facility Agent by the Specified Time, the Facility Agent will confirm to the Company by the Specified Time:

(i) whether or not the Lenders have granted their approval; and

(ii) if approval has been granted, the minimum amount (and, if required, integral multiples) for any subsequent Utilisation in that currency.

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4.4 Maximum number of Loans

(a) A Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation more than 15 Loans would be outstanding.

(b) Any Loan made by a single Lender under Clause 6.2 (Unavailability of a currency) shall not be taken into account in this Clause 4.4.

(c) Any Separate Loan shall not be taken into account in this Clause 4.4.

5. UTILISATION

5.1 Delivery of a Utilisation Request

A Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.

5.2 Completion of a Utilisation Request

(a) Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(i) the proposed Utilisation Date is a Business Day within the Availability Period;

(ii) the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount);

(iii) the proposed Interest Period complies with Clause 10 (Interest Periods); and

(iv) it specifies the account and bank (which must be in the principal financial centre of the country of the currency of the Utilisation or, in the case of euro, the principal financial centre of a Participating Member State in which banks are open for general business on that day or London or, such other financial centre as the relevant Borrower, with the consent of the Facility Agent, may select) to which the proceeds of the Utilisation are to be credited.

(b) Only one Loan may be requested in each Utilisation Request.

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5.3 Currency and amount

(a) The currency specified in a Utilisation Request must be the Base Currency or an Optional Currency.

(b) The amount of the proposed Loan must be:

(i) if the currency selected is the Base Currency, a minimum of $20,000,000 and in multiples of $1,000,000, or if less, the Available Facility;

(ii) if the currency selected is Sterling, a minimum of £10,000,000 and in multiples of £1,000,000, or, if less the Available Facility; or

(iii) if the currency selected is euro, a minimum of €15,000,000, and in multiples of €1,000,000, or if less, the Available Facility; or

(iv) if the currency selected is an Optional Currency other than Sterling or euro, the minimum amount (and, if required, integral multiple) as agreed between the Facility Agent, the Lenders and the Company provided that if no such agreement is reached between the Facility Agent, the Lenders and the Company the minimum amount shall be the equivalent at that time of $20,000,000 and multiples of $2,000,000, such amount to be rounded as reasonably determined by the Facility Agent and notified to the Company; and

(v) in any event such that its Base Currency Amount is less than or equal to the Available Facility.

5.4 Lenders’ participation

(a) If the conditions set out in this Agreement have been met, and subject to Clause 7 (Repayment), each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.

(b) The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.

(c) The Facility Agent shall determine the Base Currency Amount of each Loan which is to be made in an Optional Currency and shall notify each Lender of the amount, currency and the Base Currency Amount of each Loan and the amount of its participation in that Loan, in each case by the Specified Time.

5.5 Cancellation of Commitment

The Total Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.

6. OPTIONAL CURRENCIES

6.1 Selection of currency

A Borrower (or the Company on behalf of a Borrower) shall select the currency of a Loan in a Utilisation Request.

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6.2 Unavailability of a currency

If before the Specified Time on any Quotation Day:

(a) a Lender notifies the Facility Agent that the Optional Currency requested is not readily available to it in the amount required; or

(b) a Lender notifies the Facility Agent that compliance with its obligation to participate in a Loan in the proposed Optional Currency would contravene a law or regulation applicable to it,

the Facility Agent will give notice to the relevant Borrower to that effect by the Specified Time on that day. In this event, any Lender that gives notice pursuant to this Clause 6.2 will be required to participate in the Loan in the Base Currency (in an amount equal to that Lender’s proportion of the Base Currency Amount or, in respect of a Rollover Loan, an amount equal to that Lender’s proportion of the Base Currency Amount of the Rollover Loan that is due to be made) and its participation will be treated as a separate Loan denominated in the Base Currency during that Interest Period.

6.3 Participation in a Loan

Each Lender’s participation in a Loan will be determined in accordance with paragraph (b) of Clause 5.4 (Lenders’ participation).

7. REPAYMENT

7.1 Repayment of Loans

(a) Subject to paragraph (c) below, each Borrower which has drawn a Loan shall repay that Loan on the last day of its Interest Period.

(b) Without prejudice to each Borrower’s obligation under paragraph (a) above, if one or more Loans are to be made available to a Borrower:

(i) on the same day that a maturing Loan is due to be repaid by that Borrower;

(ii) in the same currency as the maturing Loan (unless it arose as a result of the operation of Clause 6.2 (Unavailability of a currency)); and

(iii) in whole or in part for the purpose of refinancing the maturing Loan,

the aggregate amount of the new Loans shall be treated as if applied in or towards repayment of the maturing Loan so that:

(A) if the amount of the maturing Loan exceeds the aggregate amount of the new Loans:

(1) the relevant Borrower will only be required to pay an amount in cash in the relevant currency equal to that excess; and

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(2) each Lender’s participation (if any) in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender’s participation (if any) in the maturing Loan and that Lender will not be required to make its participation in the new Loans available in cash; and

(B) if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans:

(1) the relevant Borrower will not be required to make any payment in cash; and

(2) each Lender will be required to make its participation in the new Loans available in cash only to the extent that its participation (if any) in the new Loans exceeds that Lender’s participation (if any) in the maturing Loan and the remainder of that Lender’s participation in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender’s participation in the maturing Loan.

(c) At any time when a Lender becomes a Defaulting Lender, the maturity date of each of the participations of that Lender in the Loans then outstanding will be automatically extended to the Termination Date and will be treated as separate Loans (the “Separate Loans”) denominated in the currency in which the relevant participations are outstanding.

(d) A Borrower to whom a Separate Loan is outstanding may prepay that Loan by giving five Business Days’ prior notice to the Facility Agent. The Facility Agent will forward a copy of a prepayment notice received in accordance with this paragraph (d) to the Defaulting Lender concerned as soon as practicable on receipt.

(e) Interest in respect of a Separate Loan will accrue for successive Interest Periods selected by the Borrower by the time and date specified by the Facility Agent (acting reasonably) and will be payable by that Borrower to the Defaulting Lender on the last day of each Interest Period of that Separate Loan.

(f) The terms of this Agreement relating to Loans generally shall continue to apply to Separate Loans other than to the extent inconsistent with paragraphs (c) to (e) above, in which case those paragraphs shall prevail in respect of any Separate Loan.

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8. PREPAYMENT AND CANCELLATION

8.1 Illegality

If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan:

(a) that Lender shall promptly notify the Facility Agent upon becoming aware of that event;

(b) upon the Facility Agent notifying the Company, the Commitment of that Lender will be immediately cancelled; and

(c) each Borrower shall repay that Lender’s participation in the Loans made to that Borrower on the last day of the Interest Period for each Loan occurring after the Facility Agent has notified the Company or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law).

8.2 Change of control

(a) If at any time any person or group of persons acting in concert gains control of the Company:

(i) the Company shall promptly notify the Facility Agent upon becoming aware of that event;

(ii) a Lender shall not be obliged to fund a Utilisation (except for a Rollover Loan); and

(iii) if a Lender so requires and notifies the Facility Agent within 30 days of the Company notifying the Facility Agent of the event, the Facility Agent shall, by not less than 30 days’ notice to the Company, cancel the Commitment of that Lender and declare the participation of that Lender in all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Commitment of that Lender will be cancelled and all such outstanding amounts will become immediately due and payable.

(b) For the purpose of paragraph (a) above “control” has the meaning given to it in section 1124 of the CTA 2010.

(c) For the purpose of paragraph (a) above “acting in concert” has the meaning given to it in the City Code on Takeovers and Mergers.

8.3 Voluntary cancellation

The Company may, if it gives the Facility Agent not less than three Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice in writing, cancel the whole or any part (being a minimum amount of $40,000,000 and in multiples of $10,000,000) of the Available Facility. Any cancellation under this Clause 8.3 shall reduce the Commitments of the Lenders rateably.

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8.4 Voluntary prepayment of Loans

A Borrower to which a Loan has been made, may, if it gives the Facility Agent not less than three Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice in writing, prepay the whole or any part of a Loan (but, if in part, being an amount that reduces the Base Currency Amount of the Loan by a minimum amount of $40,000,000 and in multiples of $10,000,000).

8.5 Right of repayment and cancellation in relation to, or replacement of, a single Lender

(a) If:

(i) any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 13.2 (Tax gross-up);

(ii) any Lender claims indemnification from the Company under Clause 13.3 (Tax indemnity) or Clause 14.1 (Increased costs); or

(iii) any Lender notifies the Facility Agent of its Additional Cost Rate under paragraph 3 of Schedule 4 (Mandatory Cost formulae),

the Company may, whilst (in the case of paragraphs (i) and (ii) above) the circumstance giving rise to the requirement or indemnification continues, or (in the case of paragraph (iii) above) that Additional Cost Rate is greater than zero, give the Facility Agent notice of:

(w) cancellation of the Commitment of that Lender; and/or

(x) its intention to procure the repayment of that Lender’s participation in the Loans; and/or

(y) its intention to procure the repayment of that Lender’s participation in the Loans to the specified Borrower in relation to which an event referred to in paragraphs (i), (ii) or (iii) above has occurred; and/or

(z) its intention to replace that Lender in accordance with paragraph (d) below.

(b) On receipt of a notice referred to in paragraph (a) above (other than one providing only for repayment of the Lender’s participation in the Loans to a specified Borrower), the Commitment of that Lender shall immediately be reduced to zero.

(c) On the last day of each Interest Period which ends after the Company has given notice under paragraph (a) above (or, if earlier, the date specified by the Company in that notice), each Borrower (or, as the case may be, the specified Borrower) to which a Loan is outstanding shall repay that Lender’s participation in that Loan.

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(d) The Company may, in the circumstances set out in paragraph (a) above, on five Business Days’ prior notice to the Facility Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 24 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Company which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 24 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of such Lender’s participation in the outstanding Loans and all accrued interest (to the extent that the Facility Agent has not given a notification under Clause 24.9 (Pro rata interest settlement)), Break Costs and other amounts payable in relation thereto under the Finance Documents.

(e) The replacement of a Lender pursuant to paragraph (d) above shall be subject to the following conditions:

(i) no Finance Party shall have any obligation to find a replacement Lender;

(ii) any replacement pursuant to this Clause 8.5 (but subject to the other provisions of this Agreement) of a Lender which is the Facility Agent shall not affect its role as the Facility Agent; and

(iii) any Lender replaced pursuant to this Clause 8.5 shall not be required to refund, or to pay or surrender to any other Lender, any of the fees or other amounts received by that Lender under any Finance Document.

8.6 Replacement of a Non-Consenting Lender

(a) In this Clause 8.6, “Non-Consenting Lender” means any Lender which does not agree to a consent, waiver or amendment if:

(i) the Company or the Facility Agent has requested a consent under or waiver or amendment of any provision of any Finance Document;

(ii) that consent, waiver or amendment requires the agreement of all the Lenders; and

(iii) the Super-Majority Lenders have agreed to that consent, waiver or amendment.

(b) If any Lender becomes a Non-Consenting Lender, the Company may, if it gives the Facility Agent and that Lender not less than 5 Business Days’ prior notice, arrange for the transfer of the whole (but not part only) of that Lender’s Commitment and participations in the Utilisations at par to a new or existing Lender willing to accept that transfer and acceptable to the Company and the remaining Lenders.

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(c) The replacement of a Lender pursuant to this Clause 8.6 shall be subject to the following conditions:

(i) no Finance Party shall have any obligation to find a replacement Lender;

(ii) any replacement of a Non-Consenting Lender must take place no later than 180 days after the earlier of (A) the date the Non-Consenting Lender notified the Facility Agent of its refusal to agree to the relevant consent, waiver or amendment and (B) the deadline (being not less than 15 Business Days after the Lender received the request for the relevant consent, waiver or amendment) by which the Non-Consenting Lender failed to reply to that request;

(iii) any Lender replaced pursuant to this Clause 8.6 shall not be required to refund, or to pay or surrender to any other Lender, any of the fees or other amounts received by that Lender under any Finance Document; and

(iv) any replacement pursuant to this Clause 8.6 (but subject to the other provisions of this Agreement) of a Lender which is the Facility Agent shall not affect its role as the Facility Agent.

8.7 Right of cancellation in relation to a Defaulting Lender

(a) If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent five Business Days’ notice of cancellation of that Lender’s Available Commitment.

(b) On the notice referred to in paragraph (a) above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero.

(c) The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders.

8.8 Restrictions

(a) Any notice of cancellation, prepayment or replacement given by any Party under this Clause 8 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

(c) Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid may be reborrowed in accordance with the terms of this Agreement.

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(d) The Borrowers shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

(e) Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

(f) If the Facility Agent receives a notice under this Clause 8 it shall promptly forward a copy of that notice to either the Company or the affected Lender, as appropriate.

(g) If all or part of a Loan is repaid or prepaid and is not available for redrawing (other than by operation of Clause 4.2 (Further conditions precedent)), an amount of the Commitments (equal to the Base Currency Amount of the amount of the Loan which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this paragraph (g) shall reduce the Commitments of the Lenders rateably.

9. INTEREST

9.1 Calculation of interest

The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

(a) Margin;

(b) LIBOR or, in relation to any Loan in euro, EURIBOR; and

(c) Mandatory Cost, if any.

9.2 Payment of interest

The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six monthly intervals after the first day of the Interest Period).

9.3 Default interest

(a) If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is the sum of 1 per cent. and the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this Clause 9.3 shall be immediately payable by the Obligor on demand by the Facility Agent.

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(b) If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

(i) the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

(ii) the rate of interest applying to the overdue amount during that first Interest Period shall be the sum of 1 per cent. and the rate which would have applied if the overdue amount had not become due.

(c) Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

9.4 Notification of rates of interest

The Facility Agent shall promptly notify the Lenders and the relevant Borrower of the determination of a rate of interest under this Agreement.

10. INTEREST PERIODS

10.1 Selection of Interest Periods

(a) A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan.

(b) Subject to this Clause 10, a Borrower (or the Company) may select an Interest Period of 1, 2, 3 or 6 Months or any other period agreed between the Company and the Facility Agent (acting on the instructions of all the Lenders).

(c) An Interest Period for a Loan shall not extend beyond the Termination Date.

(d) A Loan has one Interest Period only.

(e) Each Interest Period shall start on the Utilisation Date.

10.2 Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

11. CHANGES TO THE CALCULATION OF INTEREST

11.1 Absence of quotations

Subject to Clause 11.2 (Market disruption), if LIBOR or, if applicable, EURIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR or EURIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

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11.2 Market disruption

(a) If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender’s share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of:

(i) the applicable Margin;

(ii) the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and

(iii) the Mandatory Cost, if any, applicable to that Lender’s participation in the Loan.

(b) In this Agreement “Market Disruption Event” means:

(i) at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR or, if applicable, EURIBOR, for the relevant currency and Interest Period; or

(ii) before close of business in London on the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 35 per cent. of that Loan) that the cost to it of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR or, if applicable, EURIBOR.

11.3 Alternative basis of interest or funding

(a) If a Market Disruption Event occurs and the Facility Agent or the Company so requires, the Facility Agent and the Company shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

(b) Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Company, be binding on all Parties.

11.4 Break Costs

(a) Each Borrower shall, within five Business Days of a demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

(b) Each Lender shall, together with its demand provide a certificate confirming the amount and basis of calculation of its Break Costs for any Interest Period in which they accrue.

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12. FEES

12.1 Commitment fee

(a) The Company shall pay to the Facility Agent (for the account of each Lender) a fee in the Base Currency computed on a day to day basis at a percentage rate per annum equal to 35 per cent. of the relevant Margin which would apply to a Loan drawn on that day on that Lender’s Available Commitment for the Availability Period.

(b) The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender’s Available Commitment at the time the cancellation is effective.

(c) No commitment fee is payable to the Facility Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.

12.2 Participation fee

The Company shall pay, or shall procure that the same is paid, to the Facility Agent (for the account of each Original Lender) a fee in the amount and at the times agreed in a Fee Letter.

12.3 Utilisation Fee

The Borrower shall pay a utilisation fee which:

(a) shall be calculated daily from the date of this Agreement and at the rate per annum (on the basis of a 360 day year) determined in accordance with the following table upon the daily Utilisation Level:

Utilisation Level (%)	Rate (%)
Equal to or lower than 33.34%		0
Higher than 33.34% but equal to or lower than 66.67%		0.20
Higher than 66.67%		0.40

(b) shall be paid in arrear to the Facility Agent for the account of the Lenders on:

(i) the date falling three months after the date of this Agreement;

(ii) each date falling at three monthly intervals thereafter; and

(iii) the Termination Date; and

(c) shall be paid in arrear to the Facility Agent for the account of a particular Lender on the date on which that Lender’s participations in the Facility are repaid.

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12.4 Agency fee

The Company shall pay, or procure that the same is paid, to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.

13. TAX GROSS-UP AND INDEMNITIES

13.1 Definitions

(a) In this Agreement:

“Protected Party” means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

“Qualifying Lender” means:

(a) a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:

(i) a Lender:

(A) which is a bank (as defined for the purpose of section 879 of the Income Tax Act) making an advance under a Finance Document; or

(B) in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the Income Tax Act) at the time that that advance was made,

and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or

(ii) a Lender which is:

(A) a company resident in the United Kingdom for United Kingdom tax purposes;

(B) a partnership each member of which is:

(I) a company so resident in the United Kingdom; or

(II) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (for the purposes of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009; or

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(C) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA 2009) of that company; or

(D) a Treaty Lender; or

(b) a building society (as defined for the purposes of section 880 of the Income Tax Act) making an advance under a Finance Document.

“Tax Confirmation” means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:

(a) a company resident in the United Kingdom for United Kingdom tax purposes; or

(b) a partnership each member of which is:

(i) a company so resident in the United Kingdom; or

(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009; or

(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.

“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document.

“Tax Payment” means the amount by which a payment made by an Obligor to a Finance Party is increased under Clause 13.2 (Tax gross-up) or a payment under Clause 13.3 (Tax indemnity).

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“Treaty Lender” means a Lender which:

(a) is treated as a resident of a Treaty State for the purposes of the Treaty;

(b) does not carry on a business in the United Kingdom through a permanent establishment with which that Lender’s participation in the Loans is effectively connected; and

(c) fulfils any conditions which must be fulfilled under the double taxation agreement for residents of that Treaty State to obtain exemption from United Kingdom taxation on interest (subject to the completion of any necessary procedural formalities).

“Treaty State” means a jurisdiction having a double taxation agreement (a “Treaty”) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.

“UK Non-Bank Lender” means:

(a) where a Lender becomes a Party on the day on which this Agreement is entered into, a Lender listed in Part B of Schedule 1; and.

(b) where a Lender becomes a Party after the day on which this Agreement is entered into, a Lender which gives a Tax Confirmation in the Transfer Certificate which it executes on becoming a Party.

Unless a contrary indication appears, in this Clause 13 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

13.2 Tax gross-up

(a) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

(b) The Company shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall promptly notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall promptly notify the Company and that Obligor.

(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

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(d) An Obligor is not required to make an increased payment to a Lender under paragraph (c) above by reason of a Tax Deduction on account of tax imposed by the United Kingdom, if on the date on which the payment falls due:

(i) the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or

(ii)

(A) the relevant Lender is a Qualifying Lender solely by virtue of sub-paragraph (a)(ii) of the definition of Qualifying Lender;

(B) an officer of HM Revenue & Customs has given (and not revoked) a direction (a “Direction”) under section 931 of the Income Tax Act which relates to that payment and that Lender has received from that Obligor or the Company a certified copy of that Direction; and

(C) the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or

(iii) the relevant Lender is a Qualifying Lender solely under sub-paragraph (a)(ii)(A) to (C) of the definition of Qualifying Lender and:

(A) the relevant lender has not given a Tax Confirmation to the Company; and

(B) the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Company, on the basis that the Tax Confirmation would have enabled the Company to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the Income Tax Act; or

(iv) the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that (assuming the completion of all necessary procedural formalities by the Obligor) the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (g) below; or

(v) the Tax Deduction is required as a result of a direction under regulation 9(b) of SI 1970/488 and the application of regulation 9(b) to that Lender does not result from a change after it became a Lender in (or the interpretation, administration or application of) any law or Treaty, or any published practice or concession of any relevant taxing authority.

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(e) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(f) Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment a statement under section 975 of the Income Tax Act or evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

(g)

(i) Subject to paragraph (ii) below, a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in promptly completing any procedural formalities (including completing and submitting appropriate documents to the applicable tax authorities) necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.

(ii) Nothing in paragraph (i) above shall require a Treaty Lender to:

(A) register under the HMRC DT Treaty Passport scheme;

(B) apply the HMRC DT Treaty Passport scheme to any Utilisation if it has so registered; or

(C) file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph (k) below or paragraph (a) of Clause 13.7 (HMRC DT Treaty Passport scheme confirmation) and the Obligor making that payment has not complied with its obligations under paragraph (l) below or paragraph (b) of Clause 13.7 (HMRC DT Treaty Passport scheme confirmation).

(h) A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is entered into gives a Tax Confirmation to the Company by entering into this Agreement.

(i) A UK Non-Bank Lender shall promptly notify the Company and the Facility Agent if there is any change in the position from that set out in the Tax Confirmation.

(j) Each Lender severally warrants to the Company that it is a Qualifying Lender on the date it becomes a Party to this Agreement. If at any time after this Agreement is entered into any Lender becomes aware that it is not and will not or will cease to be a Qualifying Lender, it shall promptly notify the Facility Agent and the Company.

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(k) A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include a confirmation to that effect by including its scheme reference number and its jurisdiction of tax residence opposite its name in Part A of Schedule 1 (The Original Lenders).

(l) Where a Lender includes the confirmation described in paragraph (k) above in Part A of Schedule 1 (The Original Lenders):

(i) each Original Borrower shall, to the extent that that Lender is a Lender under a Facility made available to that Original Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide that Lender with a copy of that filing; and

(ii) each Additional Borrower shall, to the extent that that Lender is a Lender under a Facility made available to that Additional Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of becoming an Additional Borrower and shall promptly provide the Lender with a copy of that filing.

(m) If a Lender has not included a confirmation to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph (k) above or paragraph (a) of Clause 13.7 (HMRC DT Treaty Passport scheme confirmation), no Obligor shall file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender’s Commitment(s) or its participation in any Utilisation.

13.3 Tax indemnity

(a) The Borrowers shall (within five Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

(b) Paragraph (a) above shall not apply:

(i) with respect to any Tax assessed on a Finance Party:

(A) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(B) under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,

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if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party;

(ii) to the extent a loss, liability or cost:

(A) is compensated for by an increased payment under Clause 13.2 (Tax gross-up); or

(B) would have been compensated for by an increased payment under Clause 13.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 13.2 (Tax gross-up) applied; or

(C) is attributable to any Bank Levy;

(iii) to the extent that such loss, liability or cost has not been notified to the Company by the relevant Finance Party within 2 months of such Finance Party becoming aware of the existence of the same.

(c) A Protected Party making, or intending to make, a claim under paragraph (a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall promptly notify the Company.

(d) A Protected Party shall, on receiving a payment from an Obligor under this Clause 13.3, notify the Facility Agent.

13.4 Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

(a) a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part or to that Tax Payment; and

(b) that Finance Party has obtained, utilised and retained that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in no better and no worse position in respect of its worldwide tax liabilities than it would have been in had the Tax Payment not been required to be made by the Obligor.

13.5 Stamp taxes

The Borrowers shall pay and, within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

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13.6 Lender Status Confirmation

Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the Transfer Certificate or Increase Confirmation which it executes on becoming a Party, and for the benefit of the Facility Agent and without liability to any Obligor, which of the following categories it falls in:

(a) not a Qualifying Lender;

(b) a Qualifying Lender (other than a Treaty Lender); or

(c) a Treaty Lender.

If a New Lender fails to indicate its status in accordance with this Clause 13.6 then such New Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Facility Agent which category applies (and the Facility Agent, upon receipt of such notification, shall inform the Company). For the avoidance of doubt, a Transfer Certificate or Increase Confirmation shall not be invalidated by any failure of a Lender to comply with this Clause 13.6.

13.7 HMRC DT Treaty Passport scheme confirmation

(a) A New Lender or an Increase Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include a confirmation to that effect in the Transfer Certificate or Increase Confirmation which it executes by including its scheme reference number and its jurisdiction of tax residence in that Transfer Certificate or Increase Confirmation.

(b) Where a New Lender or an Increase Lender includes the confirmation described in paragraph (a) above in the relevant Transfer Certificate or Increase Confirmation:

(i) each Borrower which is a Party as a Borrower as at the relevant Transfer Date or the date on which the increase in Total Commitments described in the relevant Increase Confirmation takes effect shall, to the extent that that New Lender or Increase Lender becomes a Lender under a Facility which is made available to that Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of that Transfer Date or that date on which the increase in Total Commitments takes effect and shall promptly provide the Lender with a copy of that filing; and

(ii) each Additional Borrower which becomes an Additional Borrower after the relevant Transfer Date or the date on which the increase in Total Commitments described in the relevant Increase Confirmation takes effect shall, to the extent that that New Lender or Increase Lender is a Lender under a Facility which is made available to that Additional Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of becoming an Additional Borrower and shall promptly provide the Lender with a copy of that filing.

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13.8 Value added tax

(a) All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or part) constitute the consideration for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to paragraph (c) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).

(b) If VAT is or becomes chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and any Party other than the Recipient (the “Relevant Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant tax authority which it reasonably determines relates to the VAT chargeable on that supply.

(c) Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses save to the extent that neither the Finance Party nor any other member of any group of which it is a member for VAT purposes is entitled to repayment or credit in respect of such VAT.

(d) Any reference in this Clause 13.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994).

14. INCREASED COSTS

14.1 Increased costs

(a) Subject to Clause 14.3 (Exceptions) the Company shall, within five Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of: (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; (ii) compliance with any law or regulation made after the date of this Agreement; or (iii) the implementation of, or compliance with, Basel III or any law or regulation that implements or applies Basel III.

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(b) In this Agreement “Increased Costs” means:

(i) a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;

(ii) an additional or increased cost; or

(iii) a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

14.2 Increased cost claims

(a) A Finance Party intending to make a claim pursuant to Clause 14.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Company.

(b) Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount and reasonable details of the basis therefor.

14.3 Exceptions

(a) Clause 14.1 (Increased costs) does not apply to the extent any Increased Cost is:

(i) attributable to a Tax Deduction required by law to be made by an Obligor;

(ii) compensated for by Clause 13.3 (Tax indemnity) (or would have been compensated for under Clause 13.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 13.3 (Tax indemnity) applied);

(iii) compensated for by the payment of the Mandatory Cost;

(iv) attributable to the negligence or wilful breach by the relevant Finance Party or its Affiliates of any law or regulation;

(v) attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates); or

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(vi) without prejudice to the exception set out in paragraph (ii) above, attributable to the implementation or application of or compliance with any Bank Levy or any law or regulation which implements any Bank Levy (whether such implementation, application or compliance is by a government or a regulator or by a Finance Party or any of its Affiliates).

In this Clause 14.3, a reference to a “Tax Deduction” has the same meaning given to the term in Clause 13.1 (Definitions).

15. OTHER INDEMNITIES

15.1 Currency indemnity

(a) If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

(i) making or filing a claim or proof against that Obligor;

(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Obligor shall as an independent obligation, within five Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

(b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

15.2 Other indemnities

The Company shall (or shall procure that an Obligor will), within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

(a) the occurrence of any Event of Default;

(b) a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 28 (Sharing among the Finance Parties);

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(c) funding, or making arrangements to fund, its participation in a Loan requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or

(d) a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Company.

15.3 Indemnity to the Facility Agent

The Company shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

(a) investigating any event which it reasonably believes is an Event of Default; or

(b) acting or relying on any notice, request or instruction made by an Obligor which it reasonably believes to be genuine, correct and appropriately authorised.

16. MITIGATION BY THE LENDERS

16.1 Mitigation

(a) Each Finance Party shall, in consultation with the Company, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 8.1 (Illegality), Clause 13 (Tax gross-up and indemnities), Clause 14 (Increased Costs) or paragraph 3 of Schedule 4 (Mandatory Cost formulae) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

(b) Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

16.2 Limitation of liability

(a) The Company shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 16.1 (Mitigation).

(b) A Finance Party is not obliged to take any steps under Clause 16.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

17. COSTS AND EXPENSES

17.1 Transaction expenses

The Company shall promptly on demand pay the Facility Agent and the Arranger the amount of all reasonable costs and expenses (including legal fees) reasonably incurred by any of them (subject to a maximum in respect of legal fees as agreed with the Company) in connection with the negotiation, preparation, printing and execution of:

(a) this Agreement and any other documents referred to in this Agreement; and

(b) any other Finance Documents executed after the date of this Agreement.

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17.2 Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 29.10 (Change of currency), the Company shall, within five Business Days of demand, reimburse the Facility Agent for the amount of all reasonable costs and expenses (including legal fees) reasonably incurred by the Facility Agent in evaluating, negotiating or complying with that request.

17.3 Enforcement costs

The Company shall, within five Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

18. GUARANTEE AND INDEMNITY

18.1 Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

(a) guarantees to each Finance Party punctual performance by each Borrower of all that Borrower’s payment obligations under the Finance Documents;

(b) undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and

(c) agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.

18.2 Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

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18.3 Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 18 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

18.4 Waiver of defences

The obligations of each Guarantor under this Clause 18 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 18 (without limitation and whether or not known to it or any Finance Party) including:

(a) any time, waiver or consent granted to, or composition with, any Obligor or other person;

(b) the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(d) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(e) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

(f) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

(g) any insolvency or similar proceedings.

18.5 Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 18. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

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18.6 Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

(a) refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

(b) hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Clause 18.

18.7 Deferral of Guarantors’ rights

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 18:

(a) to be indemnified by an Obligor;

(b) to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;

(c) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;

(d) to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 18.1 (Guarantee and Indemnity);

(e) to exercise any right of set-off against any Obligor; and/or

(f) to claim or prove as a creditor of any Obligor in competition with any Finance Party.

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 29 (Payment mechanics).

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18.8 Release of Guarantors’ right of contribution

If any Guarantor (a “Retiring Guarantor”) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:

(a) that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

(b) each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.

18.9 Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

19. REPRESENTATIONS

Each Obligor makes the representations and warranties set out in this Clause 19 to each Finance Party, on the date of this Agreement.

19.1 Status

(a) It is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

(b) It and each of its Material Subsidiaries has the power to own its assets and carry on its business as it is being conducted.

19.2 Binding obligations

The obligations expressed to be assumed by it in each Finance Document are subject to any general principles of law limiting its obligations which are specifically referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation) or Clause 25 (Changes to the Obligors) legal, valid, binding and enforceable obligations.

19.3 Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not conflict with:

(a) any law or regulation applicable to it;

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(b) its constitutional documents; or

(c) any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries’ assets breach of which would have a Material Adverse Effect.

19.4 Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.

19.5 Validity and admissibility in evidence

All Authorisations required:

(a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and

(b) to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation,

have been obtained or effected and are in full force and effect (or, in each case, will be when required).

19.6 No default

(a) No Event of Default is continuing or could reasonably be expected to result from the making of any Utilisation.

(b) No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which has or could reasonably be expected to have a Material Adverse Effect.

19.7 Financial statements

(a) The Original Financial Statements were prepared in accordance with IFRS consistently applied.

(b) The Original Financial Statements fairly represent the consolidated financial condition and operations of the Group during the relevant financial period.

(c) There has been no material adverse change in the business or financial condition of the Group since 31 December 2010.

19.8 Pari passu ranking

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

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19.9 No proceedings pending or threatened

No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which are reasonably likely to be adversely determined and, if adversely determined, could be reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.

19.10  No misleading information

(a) Any written factual information provided by or on behalf of any member of the Group for the purposes of the entry into of this Agreement by a Finance Party, was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

(b) Nothing has occurred since the date of delivery of, or been omitted from, the factual information referred to in paragraph (a) above and no information has been given or withheld that results in the information referred to in paragraph (a) being untrue or misleading in any material respect.

(c) The representations and warranties in this Clause 19.10 are made by the Company only.

19.11  Repetition

The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on:

(a) the date of each Utilisation Request and the first day of each Interest Period; and

(b) in the case of an Additional Obligor, the day on which the company becomes (or it is proposed that the company becomes) an Additional Obligor.

20. INFORMATION UNDERTAKINGS

The undertakings in this Clause 20 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

20.1 Financial statements

The Company shall supply to the Facility Agent in sufficient copies for all the Lenders:

(a) as soon as the same become available, but in any event within 120 days after the end of each of its financial years:

(i) its audited consolidated financial statements for that financial year; and

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(ii) the financial statements of each Obligor for that financial year (which shall be audited if that Obligor produces audited financial statements); and

(b) as soon as the same become available, but in any event within 90 days after the end of the first half of each of its financial years, its consolidated financial statements for that financial half year.

20.2 Compliance Certificate

(a) The Company shall supply to the Facility Agent, with each set of financial statements delivered pursuant to paragraph

(a)(i) or (b) of Clause 20.1 (Financial statements), a Compliance Certificate setting out:

(i) (in reasonable detail) computations as to compliance with Clause 21 (Financial covenants); and

(ii) an updated list of Material Subsidiaries,

in each case, as at the date at which those financial statements were drawn up.

(b) Each Compliance Certificate shall be signed by a director or an authorised signatory on behalf of the Company.

20.3 Margin Certificate

(a) The Company shall supply to the Facility Agent a Margin Certificate within 80 days of each Quarter Date setting out a computation of the Margin Ratio.

(b) Each Margin Certificate shall be signed by a director on behalf of the Company.

20.4 Requirements as to financial statements

(a) Each set of financial statements delivered by the Company pursuant to paragraph (a) of Clause 20.1 (Financial statements) shall be certified by an authorised signatory on behalf of the relevant company as fairly representing its (or, as the case may be, its consolidated) financial condition and operations as at the end of and for the period in relation to which those financial statements were drawn up.

(b) The Company shall procure that each set of financial statements of the Group delivered pursuant to Clause 20.1 (Financial statements) is prepared using IFRS and it shall deliver to the Facility Agent:

(i) sufficient information, in form and substance as may be reasonably required by the Facility Agent, to enable the Lenders to determine whether Clause 21 (Financial covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements; and

(ii) a description of any change necessary for those financial statements to reflect the Applicable Accounting Principles upon which the Original Financial Statements were prepared.

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(c) Any reference in this Agreement to the financial statements of the Group delivered pursuant to Clause 20.1 (Financial statements) shall be construed as a reference to those financial statements as adjusted to reflect the Applicable Accounting Principles and, if applicable, any amendments pursuant to paragraph (d) below.

(d) The Company may at any time notify the Facility Agent that there has been a change in accounting practices applied or accounting principles in force in relation to a set of financial statements from the Applicable Accounting Principles upon which the Original Financial Statements were prepared, in which case the Company and the Facility Agent shall negotiate in good faith for not less than 30 days with a view to agreeing:

(i) any amendments to Clause 20.1 (Financial statements) and any of the definitions of terms used therein as are necessary to provide the Lenders and the Company comparable protection to that contemplated at the date of this Agreement; and

(ii) any other amendments to this Agreement which are necessary to ensure that the adoption by the Group of different accounting practices or principles does not result in any material alteration to the commercial effect of the obligations of any Obligor under this Agreement.

If amendments satisfactory to the Majority Lenders (acting reasonably) are so agreed in writing by the Company and the Facility Agent, those amendments shall take effect in accordance with the terms of that agreement.

20.5 Information: miscellaneous

The Company shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):

(a) all documents dispatched by the Company to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;

(b) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which might, if adversely determined, have a Material Adverse Effect; and

(c) promptly, such further information regarding the financial condition, business and operations of any member of the Group as any Finance Party (through the Facility Agent) may reasonably request except to the extent that disclosure of the information would breach any law regulation, stock exchange requirement or duty of confidentiality.

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20.6 Notification of default

(a) Each Obligor shall notify the Facility Agent of any Default and the steps, if any, being taken to remedy it promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).

(b) Promptly upon a request by the Facility Agent, the Company shall supply to the Facility Agent a certificate signed by a director or authorised signatory on its behalf certifying that no Default is continuing (or if continuing, specifying the steps, if any, being taken to remedy it).

20.7 Use of websites

(a) The Company may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the “Website Lenders”) who accept this method of communication by posting this information onto an electronic website designated by the Company and the Facility Agent (the “Designated Website”) if:

(i) the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;

(ii) the Company and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; and

(iii) the information is in a format previously agreed between the Company and the Facility Agent.

If any Lender (a “Paper Form Lender”) does not agree to the delivery of information electronically then the Facility Agent shall notify the Company accordingly and the Company shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Company shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.

(b) The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Company and the Facility Agent.

(c) The Company shall promptly upon becoming aware of its occurrence notify the Facility Agent if:

(i) the Designated Website cannot be accessed due to technical failure;

(ii) the password specifications for the Designated Website change;

(iii) any new information which is required to be provided under this Agreement is posted onto the Designated Website;

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(iv) any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

(v) the Company becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.

If the Company notifies the Facility Agent under paragraph (c)(i) or paragraph (c)(v) above, all information to be provided by the Company under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.

(d) Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Company shall comply with any such request within ten Business Days.

20.8 “Know your customer” checks

(a) If:

(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii) any change in the status of an Obligor after the date of this Agreement; or

(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Facility Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Facility Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

(b) Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

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(c) The Company shall, by not less than five Business Days’ prior written notice to the Facility Agent, notify the Facility Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 25 (Changes to the Obligors).

(d) Following the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional Obligor obliges the Facility Agent or any Lender to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Facility Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Obligor.

21. FINANCIAL COVENANTS

21.1 Financial Condition

The Company shall ensure that:

(a) the ratio of EBITDA to Net Interest Payable for each Relevant Period will not be less than 3.50:1; and

(b) the ratio of Net Borrowings as at the last day of each Relevant Period to EBITDA for that Relevant Period will not be more than 3.50:1, where EBITDA for the purpose of this covenant shall be adjusted to take into account the pro forma impact of any acquisitions or disposals (other than disposals of Managed Assets) made during the Relevant Period by a member of the Group.

21.2 Financial covenant calculations

For the purposes of this Agreement, Borrowings (including Financial Indebtedness for the purpose of calculating Borrowings), EBITDA, Net Borrowings and Net Interest Payable shall be:

(a) calculated and interpreted on a consolidated basis in accordance with the Applicable Accounting Principles of the Company and shall be expressed in the currency in which the relevant financial statements of the Group delivered under Clause 20.1 (Financial statements) are presented; and

(b) extracted (except as needed to reflect the terms of this Clause 21) from the financial statements of the Group delivered under Clause 20.1 (Financial statements) and Clause 20.2 (Compliance Certificate).

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21.3 Definitions

In this Agreement:

“Borrowings” means, as at any particular time, the aggregate outstanding principal, capital or nominal amount (and any fixed or minimum premium payable on redemption) of the Financial Indebtedness of members of the Group, other than:

(a) any indebtedness referred to in paragraph (g) of the definition of Financial Indebtedness;

(b) any Project Finance Indebtedness; and

(c) any indebtedness referred to in paragraphs (i) and (j) of the definition of Financial Indebtedness except to the extent any such obligation or liability specified in such paragraphs has been provided for in the financial statements of the Group delivered under Clause 20.1 (Financial statements) or is disclosed as a contingency in the notes thereto and is quantified,

and deducting, to the extent included, amounts attributable to interests of third parties in members of the Group.

For this purpose, any amount outstanding or repayable in a currency other than US Dollars shall on that day be taken into account in its US Dollar equivalent at the rate of exchange that would have been used had an audited consolidated balance sheet of the Group been prepared as at that day in accordance with IFRS as applicable to the Original Financial Statements.

“Cash” means any credit balances on any deposit, savings, current or other account, and any cash in hand, which is:

(a) freely withdrawable on demand;

(b) not subject to any Security (other than permitted pursuant to Clause 22.3 (Negative pledge));

(c) denominated and payable in freely transferable and freely convertible currency; and

(d) capable of being remitted to an Obligor in the United Kingdom.

“Cash Equivalents” means short-term, highly liquid investments that are readily convertible to known amounts of cash and which have contractual maturities of three months or less.

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“EBITDA” means, in relation to any Relevant Period, the total consolidated operating profit of the Group for that Relevant Period:

(a) before taking into account:

(i) Net Interest Payable;

(ii) Tax; and

(iii) all exceptional items; and

(b) after adding back all amounts provided for depreciation and amortisation; and

(c) deducting, to the extent included, amounts attributable to interests of third parties in members of the Group.

“Net Borrowings” means, as at any particular time, Borrowings less Cash and Cash Equivalents.

“Net Interest Payable” means, in relation to any Relevant Period, the aggregate amount of interest and any other finance charges accrued by the Group in that Relevant Period in respect of Borrowings including:

(a) the interest element of leasing and hire purchase payments;

(b) commitment fees, commissions and guarantee fees; and

(c) amounts in the nature of interest payable in respect of any shares other than equity share capital,

adjusted (but without double counting) by:

(i) deducting interest income of the Group in respect of that Relevant Period;

(ii) adding back the net amount payable (or deducting the net amount receivable) by members of the Group in that Relevant Period as a result of close-out or termination of any interest or (so far as they relate to interest) currency hedging activities;

(iii) adding back the amount payable as a premium on any bond buy-back by members of the Group in that Relevant Period;

(iv) deducting, to the extent included, the amount payable by members of the Group in that Relevant Period for arrangement or related fees in respect of Borrowings including, for the avoidance of doubt, any un-amortised fees to be written-off in respect of the Existing Facility (to include, for the avoidance of doubt, underwriting, syndication and fees of a similar nature); and

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(v) deducting, to the extent included, the amount of interest and other finance charges attributable to interests of third parties in members of the Group and adjusting, as appropriate, the additions or deductions specified in paragraphs (i) to (iv) (inclusive) above as a consequence of interests of third parties in members of the Group,

but shall exclude in relation to the Relevant Period (A) net mark-to-market gains or losses on revaluation of financial instruments, and (B) for the avoidance of doubt, any amount of interest paid to the Group’s loyalty programme on the accumulated balance of cash received in advance of the redemption of loyalty points awarded.

“Relevant Period” means:

(a) each financial year of the Company; and

(b) each period beginning on the first day of the second half of a financial year of the Company and ending on the last day of the first half of its next financial year.

22. GENERAL UNDERTAKINGS

The undertakings in this Clause 22 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

22.1 Authorisations

Each Obligor shall promptly:

(a) obtain, comply with and do all that is necessary to maintain in full force and effect; and

(b) supply certified copies to the Facility Agent of,

any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.

22.2 Compliance with laws

Each Obligor shall comply with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its obligations under the Finance Documents.

22.3 Negative pledge

(a) No Obligor shall (and the Company shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.

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(b) Paragraph (a) above does not apply to:

(i) any Security listed in Schedule 9 (Security) except to the extent the principal amount secured by that Security exceeds the amount stated in that Schedule;

(ii) any cash management, netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

(iii) any payment or close out netting or set-off arrangement pursuant to any hedging transaction entered into by a member of the Group for the purpose of:

(A) hedging any risk to which any member of the Group is exposed in its ordinary course of trading; or

(B) its interest rate or currency management operations which are carried out in the ordinary course of business and for non-speculative purposes only,

excluding, in each case, any Security under a credit support arrangement in relation to a hedging transaction;

(iv) any lien arising by operation of law and in the ordinary course of business;

(v) any Security resulting from the rules and regulations of any clearing system or stock exchange over shares and/or other securities held in that clearing system or stock exchange;

(vi) any Security over or affecting any asset acquired by a member of the Group after the date of this Agreement to the extent that:

(A) the Security was not created in contemplation of the acquisition of that asset by a member of the Group; and

(B) the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by a member of the Group;

(vii) any Security over or affecting any asset of any company which becomes a member of the Group after the date of this Agreement, where the Security is created prior to the date on which that company becomes a member of the Group, to the extent that:

(A) the Security was not created in contemplation of the acquisition of that company; and

(B) the principal amount secured has not increased in contemplation of or since the acquisition of that company;

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(viii) any Security created pursuant to any Finance Document;

(ix) any title transfer or retention of title arrangement entered into by any member of the Group in the ordinary course of business;

(x) pledges of goods, the related documents of title and/or other related documents arising or created in the ordinary course of business as security for indebtedness to a bank or financial institution directly relating to the goods or documents over which that pledge exists;

(xi) any Security over cash or other investments for bank guarantees given in the ordinary course of trading securing liabilities of up to, in aggregate, $100,000,000 (or its equivalent in any other currency or currencies) or to meet any margin requirement in respect of derivative transactions;

(xii) any Security resulting from the rules and regulations of any clearing system or stock exchange over shares and/or other securities held in that clearing system or stock exchange;

(xiii) any Security securing Project Finance Indebtedness;

(xiv) any Security provided in relation to the InterContinental executive top-up scheme securing liabilities of up to, in aggregate, $100,000,000 (or its equivalent in any other currency or currencies);

(xv) any Security replacing any Security permitted under paragraph (i) above or this paragraph (xv) and securing the same indebtedness or obligations whose principal amount does not exceed the maximum principal amount secured, or which could be secured, by the replaced Security when it is replaced;

(xvi) any Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security given by any member of the Group other than any permitted under paragraphs (i) to (xv) above) does not exceed an amount equal to $150,000,000 (or its equivalent in any other currency or currencies); or

(xvii) any other Security created or outstanding with the prior consent of the Majority Lenders.

22.4 Disposals

(a) No Obligor shall (and the Company shall ensure that no other member of the Group will) enter into a single transaction or a series of transactions (whether related or not and whether voluntary or involuntary) to sell, lease, transfer or otherwise dispose of any asset of the Group (each a “Disposal”).

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(b) Paragraph (a) above does not apply to any Disposal:

(i) made in the ordinary course of day-to-day business of the disposing entity;

(ii) of assets in exchange for or to be replaced within 12 months (or committed within 12 months to be replaced and actually replaced within 24 months) by other assets comparable or superior as to type, value and quality;

(iii) of assets which are obsolete or redundant;

(iv) which constitutes the payment of cash for any purpose not prohibited by any Finance Document;

(v) by any member of the Group to another member of the Group;

(vi) which constitutes any short term investment of funds not immediately required in the Group’s business and the realisation of those investments;

(vii) which constitutes the making of a lawful distribution;

(viii) of assets which become Managed Assets following such Disposal;

(ix) of assets (i) acquired by a member of the Group or (ii) owned by an entity which is acquired by a member of the Group, in each case as permitted by the terms of this Agreement, which become the subject of a Disposal on arm’s length terms to a person who is not a member of the Group within the period of twelve Months following the date of the relevant acquisition;

(x) where the proceeds of that Disposal (net of fees, transaction costs and Taxes) (or such smaller amount having regard to other Disposals which are permitted to be made pursuant to the other sub-paragraphs of this paragraph (b)) are (within the period of 12 months following receipt of those proceeds) applied (or committed within the period of 12 months following receipt of those proceeds to be applied (and actually applied within the period of 18 months following receipt of those proceeds)) in or towards capital expenditure of the Group;

(xi) where any member of the Group has applied funds in or towards capital expenditure of the Group within the period of 12 months prior to the receipt of the proceeds of that Disposal and where the amount so applied is at least equal to the proceeds of that Disposal (net of fees, transaction costs and Taxes) or, to the extent it is less than those proceeds, the balance is attributed to, or applied pursuant to, another sub-paragraph of this paragraph (b);

(xii) where an amount equal to the proceeds of that Disposal (net of fees, transaction costs and Taxes) (or such smaller amount having regard to other Disposals which are permitted to be made pursuant to the other sub-paragraphs of this paragraph (b)) is used in or towards a permanent reduction of Financial Indebtedness of the Group;

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(xiii) to which the Majority Lenders have consented; or

(xiv) where the higher of the market value or consideration receivable (when aggregated with the higher of the market value or consideration receivable for any other Disposal, to the extent not permitted under any of paragraphs (i) to (xiii) above, effected during any financial year), does not exceed an amount equal to $225,000,000 (or its equivalent in any other currency or currencies) in any financial year.

22.5 Subsidiary Indebtedness

(a) The Company shall ensure that the portion of Financial Indebtedness which is borrowed or incurred by Subsidiaries that are not Guarantors under this Agreement shall not at any time exceed the aggregate of:

(i) $400,000,000 (or its equivalent in any other currency or currencies); and (but without double counting)

(ii) $400,000,000 (or its equivalent in any other currency or currencies) (provided such amount relates exclusively to Financial Indebtedness specified in paragraphs (i) and (j) of the definition of Financial Indebtedness),

and provided that Financial Indebtedness for the purpose of this Clause 22.5 shall exclude:

(A) amounts borrowed under this Agreement;

(B) qualifying amounts specified in paragraph (b) below which are secured as permitted pursuant to paragraphs (b)(vi) or (vii) of Clause 22.3 (Negative pledge) or otherwise is outstanding for the period of up to 6 months following the relevant acquisition;

(C) amounts which would be included as Financial Indebtedness due to a change in IFRS after the date of this Agreement but would not be treated as Financial Indebtedness using Applicable Accounting Principles; and

(D) amounts which are incurred in connection with the arrangements described in paragraphs (b)(ii) or (b)(iii) of Clause 22.3 (Negative pledge).

(b) Where a member of the Group acquires an asset or a company after the date of this Agreement in respect of which Financial Indebtedness is outstanding (other than Project Finance Indebtedness), where:

(i) that Financial Indebtedness was not created in contemplation of the acquisition of that asset or company; and

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(ii) that Financial Indebtedness has not increased in contemplation of or since that acquisition,

then that Financial Indebtedness shall be permitted and be in addition to the threshold numbers specified in paragraph (a) above.

22.6 Change of business

The Company shall procure that no substantial change is made to the general nature of the business of the Group taken as a whole from that anticipated to be carried on at the date of this Agreement but this shall not prevent any member of the Group engaging in any ancillary or related business.

22.7 Insurance

The Company shall or shall procure that other members of the Group shall, maintain insurances on and in relation to the business and assets of the Group with reputable underwriters or insurance companies against those risks, and to the extent, usually insured against by a prudent group of companies located in the same or similar locations and carrying on a similar business to that of the Group.

22.8 Acquisitions

No Obligor shall (and the Company shall ensure that no other member of the Group will) complete (without the approval of the Majority Lenders which shall not be unreasonably withheld or delayed) any acquisition (whether through a single transaction or series of related transactions with the same party or with parties connected with one another) where the consideration for the acquisition exceeds 25 per cent. of the Group’s market capitalisation at the time of the London Stock Exchange market close on the Business Day falling immediately prior to the date of formal announcement of such acquisition by the Company.

22.9 Disposal of Receivables

(a) No Obligor shall (and the Company shall ensure that no other member of the Group will) sell, transfer or otherwise dispose of any of its trade receivables.

(b) Paragraph (a) above does not apply to any sale, transfer or other disposal of any of its receivables where the aggregate face value of all such receivables that are outstanding at any time does not exceed $70,000,000 (or its equivalent in any other currency or currencies).

22.10  Merger

No Obligor shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than any such transaction between Obligors or Obligors and other persons provided that, in each case, the surviving entity is (or, as the case may be, becomes) a Guarantor and/or a Borrower (as the case may be).

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23. EVENTS OF DEFAULT

Each of the events or circumstances set out in Clause 23 (other than Clause 23.13 (Acceleration)) is an Event of Default.

23.1 Non-payment

An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

(a) its failure to pay is caused by:

(i) administrative or technical error; or

(ii) a Disruption Event; and

(b) payment is made within five Business Days of its due date.

23.2 Financial covenants

Any requirement of Clause 21 (Financial covenants) is not satisfied.

23.3 Other obligations

(a) An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 23.1 (Non-payment) and Clause 23.2 (Financial covenants)).

(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 20 days of the earlier of Facility Agent giving notice to the Company or the Company becoming aware of the failure to comply.

23.4 Misrepresentation

(a) Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

(b) No Event of Default under paragraph (a) above will occur if the circumstances giving rise to a misrepresentation or misstatement is/are capable of remedy and is/are remedied within 20 days of the Facility Agent giving notice to the Company requiring such remedy or (if earlier) the Company becoming aware of the failure to comply.

23.5 Cross default

(a) Any Financial Indebtedness of any member of the Group is not paid when due nor within any applicable grace period.

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(b) Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

(c) Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).

(d) No Event of Default will occur under this Clause 23.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (c) above is less than $50,000,000 (or its equivalent in any other currency or currencies) and Financial Indebtedness for the purposes of this Clause 23.5 shall exclude, in each case, Project Finance Indebtedness.

23.6 Insolvency

(a) An Obligor or a Material Subsidiary is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

(b) A moratorium is declared or takes effect in respect of all or a material part (or a particular type of) the indebtedness of an Obligor or a Material Subsidiary.

23.7 Insolvency proceedings

(a) Any corporate action or legal proceeding is taken (subject to paragraph (d) below) for the winding-up or dissolution of an Obligor or Material Subsidiary, or the appointment of a liquidator, administrator, administrative receiver, compulsory manager or other similar officer is appointed in respect of, an Obligor or Material Subsidiary other than for a solvent winding-up, dissolution or liquidation of an Obligor (other than the Company or the Guarantors) or a Material Subsidiary.

(b) Any corporate action or legal proceeding is taken (subject to paragraph (d) below), or an agreement is entered into or proposed by an Obligor or Material Subsidiary, for the suspension of payments by, a moratorium of any indebtedness of, or a general composition, compromise or assignment for the benefit of the creditors of, an Obligor or Material Subsidiary.

(c) A receiver, administrative receiver, compulsory manager or other similar officer is appointed in respect of an Obligor or Material Subsidiary or any of its assets, or any Security is enforced over an Obligor’s or Material Subsidiary’s assets, having an aggregate value of and in respect of indebtedness aggregating not less than $50,000,000 (or its equivalent in any other currency or currencies).

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(d) A person presents a petition for the winding up, liquidation, dissolution, administration or suspension of payments of an Obligor or Material Subsidiary except:

(i) where such petition is being contested in good faith and by appropriate means and is in any event dismissed within 30 days of its presentation; or

(ii) where such presentation is frivolous or vexatious or an abuse of process and is in any event dismissed within 30 days of its presentation.

23.8 Creditors’ process

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of an Obligor or Material Subsidiary having an aggregate value of and in respect of indebtedness aggregating at least $50,000,000 (or its equivalent in any other currency or currencies) and is not discharged within 30 days.

23.9 Ownership of the Obligors

An Obligor (other than the Company) is not or ceases to be a Subsidiary of the Company.

23.10 Unlawfulness

It is or becomes unlawful for an Obligor to perform any of its material obligations under the Finance Documents.

23.11 Repudiation

An Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document.

23.12 Cessation of business

An Obligor ceases to carry on its business except pursuant to a reconstruction, amalgamation, merger or consolidation on solvent terms or, for the avoidance of doubt, by way of a disposal.

23.13 Acceleration

On and at any time after the occurrence of an Event of Default which is continuing the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Company:

(a) cancel the Total Commitments whereupon they shall immediately be cancelled;

(b) declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

(c) declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Facility Agent on the instructions of the Majority Lenders.

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24. CHANGES TO THE LENDERS

24.1 Assignments and transfers by the Lenders

Subject to this Clause 24, a Lender (the “Existing Lender”) may:

(a) assign any of its rights; or

(b) transfer by novation any of its rights and obligations,

to another bank or financial institution or, following the occurrence of an Event of Default which is continuing, to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).

24.2 Conditions of assignment or transfer

(a) The consent of the Company is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is to another Lender or an Affiliate of a Lender or following the occurrence of an Event of Default which is continuing.

(b) The consent of the Company to an assignment or transfer must not be unreasonably withheld or delayed. The Company will be deemed to have given its consent seven Business Days after the Existing Lender has requested it unless consent is expressly refused by the Company within that time.

(c) The consent of the Company to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to the Mandatory Costs.

(d) A partial transfer by a Lender shall be in a minimum amount of $10,000,000.

(e) An assignment will only be effective on:

(i) receipt by the Facility Agent of written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and

(ii) performance by the Facility Agent of all “know your customer” or other checks relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.

(f) A transfer will only be effective if the procedure set out in Clause 24.6 (Procedure for transfer) is complied with.

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(g) If:

(i) a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

(ii) as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 13 (Tax gross-up and indemnities) or Clause 14 (Increased Costs),

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.

24.3 Transfer by sub-participation

Where a Lender proposes to enter into a sub-participation (whether funded or unfunded) where as a result of the sub-participation such Lender would no longer retain absolute discretion with regard to the exercise of votes under the Finance Documents, then unless the sub-participation is to be entered into with an Affiliate of the Lender or an existing Lender, the Company’s consent shall be required to the extent so required when applying Clause 24.2 (Conditions of assignment or transfer) mutatis mutandis in respect of such sub-participation.

24.4 Assignment or transfer fee

The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of $2,000.

24.5 Limitation of responsibility of Existing Lenders

(a) Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

(i) the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

(ii) the financial condition of any Obligor;

(iii) the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

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(b) Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

(i) has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

(ii) will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

(c) Nothing in any Finance Document obliges an Existing Lender to:

(i) accept a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause 24; or

(ii) support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

24.6 Procedure for transfer

(a) Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (b) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

(b) The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

(c) Subject to Clause 24.9 (Pro rata interest settlement), the Transfer Date:

(i) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the “Discharged Rights and Obligations”);

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(ii) each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

(iii) the Facility Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Arranger and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

(iv) the New Lender shall become a Party as a Lender.

24.7 Copy of Transfer Certificate or Increase Confirmation to Company

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or Increase Confirmation, send to the Company a copy of that Transfer Certificate or Increase Confirmation.

24.8 Security over Lenders’ rights

In addition to the other rights provided to Lenders under this Clause 24, each Lender may without consulting with or obtaining consent from any Obligor in relation to a charging, assignment or creation of Security in favour of a central bank or federal reserve, or with the agreement of the Company (acting reasonably) in relation to a charging, assignment or creation of Security in favour of any other entity, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

(a) any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and

(b) in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Security shall:

(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or

(ii) require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

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24.9 Pro rata interest settlement

If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 24.6 (Procedure for transfer) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

(a) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“Accrued Amounts”) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

(b) the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(i) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(ii) the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 24.9, have been payable to it on that date, but after deduction of the Accrued Amounts.

25. CHANGES TO THE OBLIGORS

25.1 Assignments and transfer by Obligors

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

25.2 Additional Borrowers

(a) Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 20.8 (“Know your customer” checks), the Company may request that any of its Subsidiaries becomes an Additional Borrower. That Subsidiary shall become an Additional Borrower if:

(i) all Lenders (acting reasonably) approve the addition of that Subsidiary and which they shall do so if that Subsidiary is a wholly owned subsidiary incorporated in the United Kingdom or in the same jurisdiction as an existing Borrower;

(ii) the Company delivers to the Facility Agent a duly completed and executed Accession Letter;

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(iii) the Company confirms that no Default is continuing or would occur as a result of that Subsidiary becoming an Additional Borrower; and

(iv) the Facility Agent has received all of the documents and other evidence listed in Part B of Schedule 2 (Conditions precedent) in relation to that Additional Borrower, each in form and substance reasonably satisfactory to the Facility Agent.

(b) The Facility Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance reasonably satisfactory to it) all the documents and other evidence listed in Part B of Schedule 2 (Conditions precedent).

25.3 Resignation of a Borrower

(a) The Company may request that a Borrower (other than the Company) ceases to be a Borrower by delivering to the Facility Agent a Resignation Letter.

(b) The Facility Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if:

(i) no Default is continuing or would result from the acceptance of the Resignation Letter (and the Company has confirmed this is the case); and

(ii) that Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents,

whereupon that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents.

25.4 Additional Guarantors

(a) Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 20.8 (“Know your customer” checks), the Company may request that any of its Subsidiaries become an Additional Guarantor. That Subsidiary shall become an Additional Guarantor if:

(i) the Company delivers to the Facility Agent a duly completed and executed Accession Letter; and

(ii) the Facility Agent has received all of the documents and other evidence listed in Part B of Schedule 2 (Conditions precedent) in relation to that Additional Guarantor, each in form and substance reasonably satisfactory to the Facility Agent.

(b) The Facility Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance reasonably satisfactory to it) all the documents and other evidence listed in Part B of Schedule 2 (Conditions precedent).

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25.5 Repetition of Representations

Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.

25.6 Resignation of a Guarantor

(a) The Company may request that a Guarantor (other than the Company) ceases to be a Guarantor by delivering to the Facility Agent a Resignation Letter.

(b) The Facility Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if:

(i) no Default is continuing or would result from the acceptance of the Resignation Letter (and the Company has confirmed this is the case); and

(ii) the Majority Lenders have consented to the Company’s request (which they shall do if in relation to any Subsidiary of the Company, Clause 22.5 (Subsidiary Indebtedness) is being complied with at such time).

26. ROLE OF THE FACILITY AGENT AND THE ARRANGER

26.1 Appointment of the Facility Agent

(a) Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

(b) Each other Finance Party authorises the Facility Agent to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

26.2 Duties of the Facility Agent

(a) Subject to paragraph (b) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

(b) Without prejudice to Clause 24.7 (Copy of Transfer Certificate or Increase Confirmation to Company), paragraph (a) above shall not apply to any Transfer Certificate or any Increase Confirmation.

(c) Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

(d) If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.

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(e) If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent or the Arranger) under this Agreement it shall promptly notify the other Finance Parties.

(f) The Facility Agent shall provide to the Company (i) every six months, starting with the date falling six Months from the date of this Agreement and (ii) in any event within three Business Days of a request by the Company, a list (which may be in electronic form) setting out the names of the Lenders as at the date of response or as at the date of that request (as the Company may elect), their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Facility Agent to that Lender under the Finance Documents.

(g) The Facility Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

26.3 Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.

26.4 No fiduciary duties

(a) Nothing in this Agreement constitutes the Facility Agent or the Arranger as a trustee or fiduciary of any other person.

(b) Neither the Facility Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

26.5 Business with the Group

The Facility Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

26.6 Rights and discretions of the Facility Agent

(a) The Facility Agent may rely on:

(i) any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

(ii) any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

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(b) The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

(i) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 23.1 (Non-payment));

(ii) any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

(iii) any notice or request made by the Company (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.

(c) The Facility Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

(d) The Facility Agent may act in relation to the Finance Documents through its personnel and agents.

(e) The Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

(f) Without prejudice to the generality of paragraph (e) above, the Facility Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Company and shall disclose the same upon the written request of the Company or the Majority Lenders.

(g) Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

26.7 Majority Lenders’ instructions

(a) Unless a contrary indication appears in a Finance Document, the Facility Agent shall (i) exercise any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Facility Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.

(b) Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.

(c) The Facility Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

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(d) In the absence of instructions from the Majority Lenders (or, if appropriate, the Lenders), the Facility Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

(e) The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.

26.8 Responsibility for documentation

Neither the Facility Agent nor the Arranger:

(a) is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Facility Agent, the Arranger, an Obligor or any other person given in or in connection with any Finance Document; or

(b) is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

26.9 Exclusion of liability

(a) Without limiting paragraph (b) below and without prejudice to the provisions of paragraph (e) of Clause 29.11 (Disruption to Payment Systems, etc.), the Facility Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

(b) No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this Clause.

(c) The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.

(d) Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out any “know your customer” or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Facility Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Arranger.

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26.10 Lenders’ indemnity to the Facility Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or wilful misconduct) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).

26.11 Resignation of the Facility Agent

(a) The Facility Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the other Finance Parties and the Company.

(b) Alternatively the Facility Agent may resign by giving notice to the other Finance Parties and the Company, in which case the Majority Lenders may appoint a successor Facility Agent with the consent of the Company (such consent not to be unreasonably withheld or delayed) unless the successor Facility Agent is an Arranger or an Affiliate thereof, in which case the consent of the Company shall not be required.

(c) If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 30 days after notice of resignation was given, the Facility Agent (after consultation with the Company) may appoint a successor Facility Agent (acting through an office in the United Kingdom).

(d) The retiring Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.

(e) The Facility Agent’s resignation notice shall only take effect upon the appointment of a successor.

(f) Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 26. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

(g) After consultation with the Company the Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above. In this event, the Facility Agent shall resign in accordance with paragraph (b) above.

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26.12 Replacement of the Facility Agent

(a) Subject to paragraph (b) below, the Majority Lenders may, by giving 30 days’ notice to the Facility Agent (or, at any time the Facility Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Facility Agent by appointing a successor Facility Agent (acting through an office in the United Kingdom).

(b) The Facility Agent may only be replaced with the consent of the Company (such consent not to be unreasonably withheld or delayed) unless the successor Facility Agent is an Arranger or an Affiliate thereof, in which case the consent of the Company shall not be required.

(c) The retiring Facility Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.

(d) The appointment of the successor Facility Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Facility Agent. As from this date, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 26 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date).

(e) Any successor Facility Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

26.13 Confidentiality

(a) In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

(b) If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or department and the Facility Agent shall not be deemed to have notice of it.

26.14 Relationship with the Lenders

(a) Subject to Clause 24.9 (Pro rata interest settlement), the Facility Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

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(b) Each Lender shall supply the Facility Agent with any information required by the Facility Agent in order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost formulae).

(c) Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 31.6 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 31.2 (Addresses) and paragraph (a)(iii) of Clause 31.6 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

26.15 Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Facility Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

(a) the financial condition, status and nature of each member of the Group;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

(c) whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

(d) the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

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26.16 Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent shall (in agreement with the Company, such agreement not to be unreasonably withheld) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.

26.17 Deduction from amounts payable by the Facility Agent

If any Party owes an amount to the Facility Agent under the Finance Documents the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

27. CONDUCT OF BUSINESS BY THE FINANCE PARTIES

No provision of this Agreement will:

(a) interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

(b) oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

(c) oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

28. SHARING AMONG THE FINANCE PARTIES

28.1 Payments to Finance Parties

If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from an Obligor other than in accordance with Clause 29 (Payment mechanics) and applies that amount to a payment due under the Finance Documents then:

(a) the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery to the Facility Agent;

(b) the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 29 (Payment mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and

(c) the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 29.6 (Partial payments).

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28.2 Redistribution of payments

The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause 29.6 (Partial payments).

28.3 Recovering Finance Party’s rights

(a) On a distribution by the Facility Agent under Clause 28.2 (Redistribution of payments), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared in the redistribution.

(b) If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph (a) above, the relevant Obligor shall be liable to the Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable.

28.4 Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

(a) each Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 28.2 (Redistribution of payments) shall, upon request of the Facility Agent, pay to the Facility Agent for account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay); and

(b) that Recovering Finance Party’s rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Finance Party for the amount so reimbursed.

28.5 Exceptions

(a) This Clause 28 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.

(b) A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(i) it notified that other Finance Party of the legal or arbitration proceedings; and

(ii) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

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29. PAYMENT MECHANICS

29.1 Payments to the Facility Agent

(a) On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

(b) Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre in a Participating Member State or London) with such bank as the Facility Agent specifies.

29.2 Distributions by the Facility Agent

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 29.3 (Distributions to an Obligor) and Clause 29.4 (Clawback), be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days’ notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London).

29.3 Distributions to an Obligor

The Facility Agent may (with the consent of the Obligor or in accordance with Clause 30 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

29.4 Clawback

(a) Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

(b) If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

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29.5 Impaired Agent

(a) If, at any time, the Facility Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with Clause 29.1 (Payments to the Facility Agent) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents.

(b) All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements.

(c) A Party which has made a payment in accordance with this Clause 29.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

(d) Promptly upon the appointment of a successor Facility Agent in accordance with Clause 26.12 (Replacement of the Facility Agent), each Party which has made a payment to a trust account in accordance with this Clause 29.5 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Facility Agent for distribution in accordance with Clause 29.2 (Distributions by the Facility Agent).

29.6 Partial payments

(a) If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:

(i) firstly, in or towards payment pro rata of any unpaid fees, costs and expenses of the Facility Agent or the Arranger under the Finance Documents;

(ii) secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

(iii) thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(iv) fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

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(b) The Facility Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv) above.

(c) Paragraphs (a) and (b) above will override any appropriation made by an Obligor.

29.7 No set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim unless:

(a) the relevant payments are to be made to a Defaulting Lender; and

(b) all Lenders (other than the Defaulting Lender) have agreed to that Obligor making such payments with set-off or counterclaim.

29.8 Business Days

(a) Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

(b) During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

29.9 Currency of account

(a) Subject to paragraphs (b) to (e) below, the Base Currency is the currency of account and payment for any sum due from an Obligor under any Finance Document.

(b) A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the currency in which that Loan or Unpaid Sum is denominated on its due date.

(c) Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

(d) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

(e) Any amount expressed to be payable in a currency other than the Base Currency shall be paid in that other currency.

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29.10 Change of currency

(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (acting reasonably and after consultation with the Company); and

(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably and after consultation with the Company).

(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Company) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

29.11 Disruption to Payment Systems etc.

If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Company that a Disruption Event has occurred:

(a) the Facility Agent may, and shall if requested to do so by the Company, consult with the Company with a view to agreeing with the Company such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;

(b) the Facility Agent shall not be obliged to consult with the Company in relation to any changes mentioned in paragraph (a) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

(c) the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

(d) any such changes agreed upon by the Facility Agent and the Company shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 35 (Amendments and Waivers);

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(e) the Facility Agent shall not be liable for any damages, costs or losses whatsoever arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 29.11 save to the extent the relevant damage, cost or loss (as the case may be) is caused by the fraud of the Facility Agent; and

(f) the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

30. SET-OFF

Without prejudice to the normal rights of the Finance Parties at law, after the occurrence of an Event of Default which is continuing, a Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. That Finance Party shall promptly notify that Obligor of any such set-off or conversion.

31. NOTICES

31.1 Communications in writing

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

31.2 Addresses

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

(a) in the case of the Company, that identified with its name below;

(b) in the case of each Lender or any other Obligor, that notified in writing to the Facility Agent on or prior to the date on which it becomes a Party; and

(c) in the case of the Facility Agent, that identified with its name below,

or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days’ notice.

31.3 Delivery

(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

(i) if by way of fax, when received in legible form; or

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(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

and, if a particular department or officer is specified as part of its address details provided under Clause 31.2 (Addresses), if addressed to that department or officer.

(b) Any communication or document to be made or delivered to the Facility Agent will be effective only when actually received by the Facility Agent and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent’s signature below (or any substitute department or officer as the Facility Agent shall specify for this purpose).

(c) All notices from or to an Obligor shall be sent through the Facility Agent.

(d) Any communication or document made or delivered to the Company in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.

31.4 Notification of address and fax number

Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 31.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.

31.5 Communication when Facility Agent is Impaired Agent

If the Facility Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Facility Agent, communicate with each other directly and (while the Facility Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Facility Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Facility Agent has been appointed.

31.6 Electronic communication

(a) Any communication to be made between the Facility Agent and a Lender or an Obligor and the Facility Agent under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Facility Agent and the relevant Lender or, as appropriate, the relevant Obligor and the Facility Agent:

(i) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(ii) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(iii) notify each other of any change to their address or any other such information supplied by them.

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(b) Any electronic communication made between the Facility Agent and a Lender or an Obligor and the Facility Agent will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Facility Agent or an Obligor to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.

(c) The ability of an Obligor to use electronic communications is without prejudice to its obligation to submit any Utilisation Request, Accession Letter, Resignation Letter or Compliance Certificate in the form required under this Agreement or any other document or notice which requires the signature of any director or authorised signatory of an Obligor.

31.7 English language

(a) Any notice given under or in connection with any Finance Document must be in English.

(b) All other documents provided under or in connection with any Finance Document must be:

(i) in English; or

(ii) if not in English, and if so required by the Facility Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

32. CALCULATIONS AND CERTIFICATES

32.1 Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

32.2 Certificates and Determinations

Any certification or determination by a Finance Party of a rate or amount under any Finance Document shall set out the basis of calculation in reasonable detail and is prima facie evidence of the matters to which it relates.

32.3 Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 365 days in the case of sterling or 360 days in the case of euros and US Dollars or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

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33. PARTIAL INVALIDITY

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

34. REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

35. AMENDMENTS AND WAIVERS

35.1 Required consents

(a) Subject to Clause 35.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.

(b) The Facility Agent may effect, on behalf of any Finance Party, and the Company may effect, on behalf of any Obligor, any amendment or waiver permitted by this Clause.

35.2 Exceptions

(a) An amendment or waiver that has the effect of changing or which relates to:

(i) the definition of “EURIBOR”, “LIBOR” or “Majority Lenders” in Clause 1.1 (Definitions);

(ii) an extension to the date of payment of any amount under the Finance Documents;

(iii) a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

(iv) an increase in or an extension of any Commitment;

(v) a change to the Borrowers or Guarantors other than in accordance with Clause 25 (Changes to the Obligors);

(vi) any provision which expressly requires the consent of all the Lenders;

(vii) Clause 2.3 (Finance Parties’ rights and obligations), Clause 24 (Changes to the Lenders), Clause 28 (Sharing among the Finance Parties), or this Clause 35; or

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(viii) the nature or scope of the guarantee and indemnity granted under Clause 18 (Guarantee and Indemnity),

shall not be made without the prior consent of all the Lenders.

(b) An amendment or waiver which relates to the rights or obligations of the Facility Agent or the Arranger may not be effected without the consent of the Facility Agent or the Arranger.

(c) If a Lender fails to respond or vote in relation to a request for a consent, waiver, amendment or other vote under the Finance Documents (a “Request”) within twenty-five Business Days (unless any Borrower and the Facility Agent agree a longer time period in relation to any request) of that Request being made, (i) with respect to any Request that does not require the consent of all Lenders pursuant to paragraph (a) of this Clause 35.2, in ascertaining whether the Majority Lenders or any other given percentage of the Total Commitments has been obtained, that Lender’s Commitments shall not be included (for the avoidance of doubt, for the purposes of calculating both (A) the Total Commitments and (B) the aggregate Commitments of Lenders voting in favour of such Request) and (ii) with respect to any Request requiring the consent of all Lenders pursuant to paragraph (a) of this Clause 35.2, that Lender shall be deemed to have declined to consent to such Request (and the requested consent, waiver, amendment or other vote shall not become effective); provided, however, that if the Super-Majority Lenders have agreed to the Request, the Company may exercise its rights under Clause 8.6 (Replacement of a Non-Consenting Lender) with respect to such Lender as if it were a Non-Consenting Lender.

35.3 Disenfranchisement of Defaulting Lenders

(a) For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained in respect of any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender’s Commitments will be reduced (for the avoidance of doubt, for the purposes of calculating both (i) the Total Commitments and (ii) the aggregate Commitments of Lenders voting in favour of such consent, waiver, amendment or other vote under the Finance Documents) by the amount of its Available Commitments.

(b) For the purposes of this Clause 35.3, the Facility Agent may assume that the following Lenders are Defaulting Lenders:

(i) any Lender which has notified the Facility Agent that it has become a Defaulting Lender;

(ii) any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of “Defaulting Lender” has occurred,

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unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Facility Agent) or the Facility Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.

35.4 Replacement of a Defaulting Lender

(a) The Company may, at any time a Lender has become and continues to be a Defaulting Lender, by giving five Business Days’ prior written notice to the Facility Agent and such Lender:

(i) replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 24 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement;

(ii) require such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 24 (Changes to the Lenders) all (and not part only) of the undrawn Commitment of the Lender; or

(iii) require such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 24 (Changes to the Lenders) all (and not part only) of its rights and obligations,

to a Lender or other bank, financial institution, trust, fund or other entity (a “Replacement Lender”) selected by the Company and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lender’s participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender’s participation in the outstanding Utilisations and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.

(b) Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions:

(i) the relevant Lender continues to be a Defaulting Lender at the time when the Company exercises its rights under this Clause 35.4 (Replacement of a Defaulting Lender);

(ii) the Company shall have no right to replace the Facility Agent;

(iii) neither the Facility Agent nor the Defaulting Lender shall have any obligation to the Company to find a Replacement Lender;

(iv) the transfer must take place as soon as reasonably practicable following receipt by the Facility Agent of the notice referred to in paragraph (a) above; and

(v) in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents.

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36. CONFIDENTIALITY

36.1 Confidential Information

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 36.2 (Disclosure of Confidential Information) and Clause 36.3 (Disclosure to numbering service providers), to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information and to use all reasonable endeavours to ensure that any person to whom that Finance Party passes any Confidential Information (unless disclosed in accordance with paragraph (b)(v) of Clause 36.2 (Disclosure of Confidential Information)) acknowledges and complies with the provisions of this Clause 36 as if that person were bound by it.

36.2 Disclosure of Confidential Information

Any Finance Party may disclose, on a need-to-know basis:

(a) to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors and partners such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

(b) to any person:

(i) to (or through) whom it transfers (or may potentially transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person’s Affiliates, Representatives and professional advisers for the purpose of that actual or potential assignment or transfer;

(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Representatives and professional advisers for the purpose of that actual or potential sub-participation or transaction;

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(iii) appointed by any Finance Party or by a person to whom paragraph (b)(i) or (ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (c) of Clause 26.14 (Relationship with the Lenders));

(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph (b)(i) or (b)(ii) above for the purpose of that transaction;

(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

(vi) to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 24.8 (Security over Lenders’ rights);

(vii) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes in connection with the Finance Documents;

(viii) who is a Party; or

(ix) with the consent of the Company;

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

(A) in relation to paragraphs (b)(i), (b)(ii) and (b)(iii) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

(B) in relation to paragraph (b)(iv) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

(C) in relation to paragraphs (b)(v), (b)(vi) and (b)(vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the reasonable opinion of that Finance Party, it is not practicable so to do in the circumstances;

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(c) to any person appointed by that Finance Party or by a person to whom paragraph (b)(i) or (b)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Company and the relevant Finance Party;

(d) to any rating agency (including its professional advisers) the following information:

(i) names of Obligors;

(ii) country of domicile of Obligors;

(iii) place of incorporation of Obligors;

(iv) date of this Agreement;

(v) the names of the Facility Agent and the Arranger;

(vi) date of each amendment and restatement of this Agreement;

(vii) amount of Total Commitments;

(viii) currencies of the Facility;

(ix) type of Facility;

(x) ranking of Facility;

(xi) Termination Date for Facility;

(xii) the amount of such Finance Party’s Commitment;

(xiii) changes to any of the information previously supplied pursuant to paragraphs (i) to (xii) above; and

(xiv) such other information agreed between such Finance Party and the Company,

as may be required to be disclosed to enable such rating agency to perform its normal corporate loan rating activities in relation to the Finance Documents.

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36.3 Disclosure to numbering service providers

(a) Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:

(i) names of Obligors;

(ii) country of domicile of Obligors;

(iii) place of incorporation of Obligors;

(iv) date of this Agreement;

(v) the names of the Facility Agent and the Arranger;

(vi) date of each amendment and restatement of this Agreement;

(vii) amount of Total Commitments;

(viii) currencies of the Facility;

(ix) type of Facility ;

(x) ranking of Facility;

(xi) Termination Date for Facility;

(xii) changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and

(xiii) such other information agreed between such Finance Party and the Company,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

(b) The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

(c) The Facility Agent shall notify the Company and the other Finance Parties of:

(i) the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or one or more Obligors; and

(ii) the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.

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36.4 Entire agreement

This Clause 36 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

36.5 Inside information

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

36.6 Notification of disclosure

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Company:

(a) of the circumstances of any disclosure of Confidential Information made pursuant to (i) paragraph (b)(v) of Clause 36.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function or (ii) paragraph (b)(vi) of Clause 36.2 (Disclosure of Confidential Information); and

(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 36 (Confidentiality).

36.7 Continuing obligations

The obligations in this Clause 36 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of:

(a) the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

(b) the date on which such Finance Party otherwise ceases to be a Finance Party.

37. COUNTERPARTS

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

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38. GOVERNING LAW

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

39. ENFORCEMENT

39.1 Jurisdiction

(a) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”).

(b) The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

(c) This Clause 39.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

39.2 Service of process

Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

(a) irrevocably appoints the Company as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(b) agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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The Company

INTERCONTINENTAL HOTELS GROUP PLC

By:	/s/ THOMAS SINGER
Name:	Thomas Singer
Title:	Chief Financial Officer
Address:	Broadwater Park
	Denham
	Middlesex UB9 5HR
Fax No:	0870 197 4426
Attention:	The Company Secretary
cc:	Treasurer
	InterContinental Hotels Group PLC
	No 1 First Avenue
	Centrum 100
	Burton on Trent
	Staffordshire DE14 2WB
Fax No:	01283 514767
The Original Borrowers
INTERCONTINENTAL HOTELS GROUP PLC
By:	/s/ THOMAS SINGER
Name:	Thomas Singer
Title:	Chief Financial Officer
Address:	Broadwater Park
	Denham
	Middlesex UB9 5HR
Fax No:	0870 197 4426
Attention:	The Company Secretary
cc:	Treasurer
	InterContinental Hotels Group PLC
	No 1 First Avenue
	Centrum 100
	Burton on Trent
	Staffordshire DE14 2WB
Fax No:	01283 514767

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INTERCONTINENTAL HOTELS LIMITED

By:	/s/ NICOLETTE HENFREY
Name:	Nicolette Henfrey
Title:	Director
Address:	Broadwater Park
	Denham
	Middlesex UB9 5HR
Fax No:	0870 197 4426
Attention:	The Company Secretary
cc:	Treasurer
	InterContinental Hotels Group PLC
	No 1 First Avenue
	Centrum 100
	Burton on Trent
	Staffordshire DE14 2WB
Fax No:	01283 514767

SIX CONTINENTS LIMITED

By:	/s/ NICOLETTE HENFREY
Name:	Nicolette Henfrey
Title:	Director
Address:	Broadwater Park
	Denham
	Middlesex UB9 5HR
Fax No:	0870 197 4426
Attention:	The Company Secretary
cc:	Treasurer
	InterContinental Hotels Group PLC
	No 1 First Avenue
	Centrum 100
	Burton on Trent
	Staffordshire DE14 2WB
Fax No:	01283 514767

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The Original Guarantors

INTERCONTINENTAL HOTELS GROUP PLC

By:	/s/ THOMAS SINGER
Name:	Thomas Singer
Title:	Chief Financial Officer

INTERCONTINENTAL HOTELS LIMITED

By:	/s/ NICOLETTE HENFREY
Name:	Nicolette Henfrey
Title:	Director

SIX CONTINENTS LIMITED

By:	/s/ NICOLETTE HENFREY
Name:	Nicolette Henfrey
Title:	Director

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The Arrangers

THE ROYAL BANK OF SCOTLAND PLC

By:	/s/ ROBERT NEWELL
Name:	Robert Newell
Title:	Senior Director
Address:	280 Bishopsgate
	London, EC2M 4RB
Fax No:	0044 20 7672 6403
Attention:	Lending Operations
Telephone No:	+4420 3361 2582
E-mail address:	LendingOpsSmartShore@rbs.com

BANC OF AMERICA SECURITIES LIMITED

By:	/s/ MAURO MAIOLI
Name:	Mauro Maioli
Title:	Director
Address:	c/o Bank of America
	26 Elmfield Road
	Bromley, Kent BR1 1WA
Fax No:	+44 208 695 3544
Attention:	Shirley Brown / Adi Khambata
Telephone No:	+44 208 695 3347 / +44 208 695 3389
E-mail address:	emealoanservicebromley@bankofamerica.com

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CITIGROUP GLOBAL MARKETS LIMITED

By:	/s/ SHUJAT MIRZA
Name:	Shujat Mirza
Title:	Director, UK Banking & Broking
Address:	c/o Citibank International Plc Poland Branch
	Loans Operations Department
	8 CHALUBINSKIEGO Str., 8th Floor
	Warsaw 00-613, Poland
Fax No:	0044 20 7942 7512
Attention:	Olga Grzeskowiak (Section Manager) and Anna Rudnicka (Manager)
E-mail address:	cibuk.loans@citi.com
HSBC BANK PLC
By:	/s/ DAVID STENT
Name:	David Stent
Title:	Director
Address:	24th Floor
	8 Canada Square
	London E14 5HQ
Fax No:	020 799 24680
Attention:	Process Manager, Loans Administration

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LLOYDS TSB BANK PLC

By:	/s/ IAN DIMMOCK
Name:	Ian Dimmock
Title:	Director
For operational aspects of the transaction:
Address:	Wholesale Loan Operations – “Major corp/fi”
	Lloyds TSB Corporate Markets
	Level 1, Citymark, 150 Fountainbridge
	Edinburgh EH3 9PE
Fax No:	020 7158 3204
Attention:	Service Managers
Telephone No:	0845 366 0025
E-mail address:	WLS2@lloydsbanking.com
For credit aspects of the transaction:
Address:	10 Gresham Street London
	EC2V 7AE
Attention:	Nigel Martyn
Telephone No:	020 7158 2971
E-mail address:	Nigel.Martyn@lloydsbanking.com

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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

By:	/s/ SIMON LELLO
Name:	Simon Lello
Title:	SVP
Address:	Ropemaker Place
	25, Ropemaker St.
	London EC2Y 9AN
Fax No:	+44 (0)20 7577 1559
Attention:	Loan Participation / Ganesh Ganeshwaran
The Original Lenders
THE ROYAL BANK OF SCOTLAND PLC
By:	/s/ ROBERT NEWELL
Name:	Robert Newell
Title:	Senior Director
Address:	280 Bishopsgate
	London, EC2M 4RB
Fax No:	0044 20 7672 6403
Attention:	Lending Operations
Telephone No:	+4420 3361 2582
E-mail address:	LendingOpsSmartShore@rbs.com

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BARCLAYS BANK PLC

By:	/s/ BEN HICKES
Name:	Ben Hickes
Title:	Authorised Signatory
Address:	1 Churchill Place, London, E14 5HP
Fax No:	02071167641
Attention:	Mr T Helliwell
E-mail address:	tim.helliwell@barclays.com
Telephone No:	0207 116 4536

CITIBANK, N.A., LONDON BRANCH

By:	/s/ SHUJAT MIRZA
Name:	Shujat Mirza
Title:	Director, UK Banking & Broking
Address:	c/o Citibank International Plc Poland Branch
	Loans Operations Department
	8 CHALUBINSKIEGO Str., 8th Floor
	Warsaw 00-613, Poland
Fax No:	0044 20 7942 7512
Attention:	Olga Grzeskowiak (Section Manager) and Anna Rudnicka (Manager)
E-mail address:	cibuk.loans@citi.com

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DBS BANK LTD, LONDON BRANCH

By:	/s/ STEWART BOYD
Name:	Stewart Boyd
Title:	General Manager
Address:	4th Floor, Paternoster House
	65 St. Paul’s Churchyard
	London EC4M 8AB
For credit matters:
Fax No:	+44 (0) 20 7489 5850
Attention:	Iain Stuart/Janet Hyde
Telephone No:	+44 (0)20 7489 6583/160
E-mail address:	iainstuart@dbs.com / janethyde@dbs.com
For operational matters:
Fax No:	+44 (0)20 7489 5852
Attention:	Ian Herrod/Ruth Yan
Telephone No:	+44 (0)20 7489 6548/567
E-mail address:	ianherrod@dbs.com / ruthyan@dbs.com
HSBC BANK PLC
By:	/s/ DAVID STENT
Name:	David Stent
Title:	Director
Address:	24th Floor, 8 Canada Square
	London E14 5HQ
Fax No:	020 799 24680
Attention:	Process Manager, Loans Administration

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ICBC (LONDON) PLC

By:	/s/ BO JIANG                                     /s/ JINGFEN ZHAO
Name:	Bo Jiang                                              Jingfen Zhao
Title:	Deputy General Manager                   Deputy Managing Director
Address:	36 King Street
	London EC2V 8BB
For credit matters:
Fax No:	+44 (0)20 7397 8899
Attention:	Darren Elliott / Suzy Ferreira
Telephone No:	+44 (0)20 7397 8860 / 8823
E-mail address:	darren.elliott@icbclondon.com / suzy.ferreira@icbclondon.com
For operational matters:
Fax No:	+44 (0)20 7397 8899
Attention:	Ben Sin / Rong Tang
Telephone No:	+44 (0)20 7397 8889 / 8838
E-mail address:	Wingtai.sin@icbclondon.com / rong.tang@icbclondon.com
LLOYDS TSB BANK PLC
By:	/s/ IAN DIMMOCK
Name:	Ian Dimmock
Title:	Director, Loan Markets
For operational aspects of the transaction:
Address:	Wholesale Loan Operations – “Major corp/fi”
	Lloyds TSB Corporate Markets
	Level 1, Citymark, 150 Fountainbridge
	Edinburgh EH3 9PE

- 108 -

Fax No:	020 7158 3204
Attention:	Service Managers
Telephone No:	0845 366 0025
E-mail address:	WLS2@lloydsbanking.com
For credit aspects of the transaction:
Address:	10, Gresham Street
	London, EC2V 7AE
Attention:	Nigel Martyn
Telephone No:	020 7158 2971
E-mail address:	Nigel.Martyn@lloydsbanking.com
NB INTERNATIONAL FINANCE B.V.
By:	/s/ J.R.GOODSELL                            /s/ A.E.OKOBIA
Name:	J.R.Goodsell                                       A.E. Okobia
Title:	Director                                                Director
For operational aspects of the transaction:
Address:	c/o Bank of America
	26, Elmfield Road
	Bromley, Kent BR1 1WA
Fax No:	+44 208 695 3544
Attention:	Shirley Brown / Adi Khambata
Telephone No:	+44 208 695 3347 / +44 208 695 3389
E-mail address:	emealoanservicebromley@bankofamerica.com

- 109 -

For credit aspects of the transaction:
Address:	NB International Finance B.V.
	Herengracht 469
	1017 BS Amsterdam
	The Netherlands
Fax:	+44 207 996 8547
Attention:	Mark Harrison, Carlos Medina
Telephone No:	+44 207 996 0348 (Mark Harrison)
E-mail address:	c.medina@baml.com,
	copy to mac_precloseutility@bankofamerica.com
	(Mark Harrison)
SUNTRUST BANK
By:	/s/ BAERBEL FREUDENTHALER
Name:	Baerbel Freudenthaler
Title:	Director
Address:	211 Perimeter Ctr. Parkway
	Atlanta GA. 30346
Fax No:	404-588-4402
Attention:	James Wu

- 110 -

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
By:	/s/ SIMON LELLO
Name:	Simon Lello
Title:	SVP
Address:	Ropemaker Place
	25, Ropemaker St.,
	London EC2Y 9AN
Fax No:	+44 (0)20 7577 1559
Attention:	Loan Participation / Ganesh Ganeshwaran

US BANK NATIONAL ASSOCIATION
By:	/s/ STEVE L. SAWYER
Name:	Steve L. Sawyer
Title:	Vice President
Address:	214 N. Tryon Street
	Charlotte, NC 28202
Fax No:	+1 704-335-2435
Attention:	Steve Sawyer

- 111 -

WELLS FARGO BANK N.A.
By:	/s/ NATHAN HAMSIK
Name:	Nathan Hamsik
Title:	Vice President
Address:	One Plantation Place
	30 Fenchurch Street
	London EC3M 3BD
Fax No:	+44 (0)20 7149 8392
Attention:	Nathan Hamsik

The Facility Agent
BANC OF AMERICA SECURITIES LIMITED
By:	/s/ MARK HARRISON
Name:	Mark Harrison
Title:	Vice President
Address:	5 Canada Square
	London E14 5AQ
Fax No:	+44(0)20 8313 2149
Attention:	Loans Agency

- 112 -

EX-4.A.II

Exhibit 4(a)(ii)

7 July 2011

INTERCONTINENTAL HOTELS GROUP PLC

(the Issuer)

and

SIX CONTINENTS LIMITED

and

INTERCONTINENTAL HOTELS LIMITED

(together, the Guarantors)

HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED

£750,000,000

EURO MEDIUM TERM NOTE PROGRAMME

FIRST SUPPLEMENTAL TRUST DEED

modifying and restating the provisions of the Trust

Deed dated 27 November 2009

THIS FIRST SUPPLEMENTAL TRUST DEED is made on 7 July 2011

BETWEEN:

(1) INTERCONTINENTAL HOTELS GROUP PLC (the “Issuer”);

(2) SIX CONTINENTS LIMITED (“Six Continents”);

(3) INTERCONTINENTAL HOTELS LIMITED (“Intercontinental”, and together with Six Continents, the “Guarantors”); and

(4) HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED (the “Trustee”, which expression includes, where the context admits, all persons for the time being the trustee or trustees of this Trust Deed).

WHEREAS:

(A) This First Supplemental Trust Deed is supplemental to the Trust Deed dated 27 November 2009 (hereinafter called the “Principal Trust Deed”) made between the Issuer and the Trustee and relating to the Euro Medium Term Note Programme established by the Issuer (the “Programme”).

(B) On the date hereof the Issuer published an updated Base Prospectus relating to the Programme, which replaces the Base Prospectus dated 27 November 2009;

(C) The Trustee, the Guarantors and the Issuer have agreed to modify and restate the provisions of the Principal Trust Deed in the manner set out below. The amendments contemplated by this First Supplemental Trust Deed do not affect any Notes issued under the Programme prior to the date hereto.

NOW THIS FIRST SUPPLEMENTAL TRUST DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:

1. Subject as hereinafter provided and unless there is something in the subject matter or context inconsistent therewith all words and expressions defined in the Principal Trust Deed shall have the same meanings in this First Supplemental Trust Deed.

2. Save:

(a) in relation to all Series of Notes issued during the period up to and including the day last preceding the date of this First Supplemental Trust Deed and any Notes issued on or after the date of this First Supplemental Trust Deed so as to be consolidated and form a single Series with the Notes of any Series issued during the period up to and including such last preceding day; and

(b) for the purpose (where necessary) of construing the provisions of this First Supplemental Trust Deed, with effect on and from the date of this First Supplemental Trust Deed:

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(i) the Principal Trust Deed is modified in such manner as would result in the Principal Trust Deed as so modified being in the form set out in the Schedule hereto; and

(ii) the provisions of the Principal Trust Deed insofar as the same still have effect shall cease to have effect and in lieu thereof the provisions of the Principal Trust Deed as so modified (and being in the form set out in the Schedule hereto) shall have effect.

3. The First Supplemental Trust Deed shall henceforth be read and construed as one document with the Principal Trust Deed.

4. No person other than a party to this First Supplemental Trust Deed shall have any right by virtue of the Contracts (Rights of Third Parties) Act 1999 to enforce any term (express or implied) of this First Supplemental Trust Deed, but this is without prejudice to any right or remedy of any third party which may exist or be available apart from that Act.

5. This First Supplemental Trust Deed and any non-contractual obligations arising out of or in connection with it, shall be governed by, and construed in accordance with, English law.

6. A Memorandum of the First Supplemental Trust Deed shall be endorsed by the Trustee on the Principal Trust Deed and by the Issuer and the Guarantors on its duplicate thereof.

7. This First Supplemental Trust Deed may be executed in any number of counterparts, each of which, taken together, shall constitute one and the same First Supplemental Trust Deed and any party may enter into this First Supplemental Trust Deed by executing a counterpart.

IN WITNESS whereof this First Supplemental Trust Deed has been executed by the Issuer, the Trustee and the Guarantors as a deed and delivered on the day and year first above written.

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THE SCHEDULE

7 July 2011

INTERCONTINENTAL HOTELS GROUP PLC

(the Issuer)

and

SIX CONTINENTS LIMITED

and

INTERCONTINENTAL HOTELS LIMITED

(together, the Guarantors)

and

HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED

(the Trustee)

TRUST DEED

(as modified and restated by the First Supplemental

Trust Deed dated 7 July 2011)

relating to a

£750,000,000

EURO MEDIUM TERM NOTE PROGRAMME

CONTENTS

CLAUSE		PAGE
1.	DEFINITIONS AND INTERPRETATION		1
2.	AMOUNT AND ISSUE OF THE NOTES		9
3.	COVENANT TO REPAY		10
4.	GUARANTEE		13
5.	THE NOTES		15
6.	CANCELLATION OF NOTES AND RECORDS		16
7.	COVENANT TO COMPLY WITH THE TRUST DEED		18
8.	COVENANTS BY THE ISSUER AND THE GUARANTORS		18
9.	AMENDMENTS AND SUBSTITUTION		23
10.	BREACH		27
11.	ENFORCEMENT		27
12.	APPLICATION OF MONEYS		28
13.	TERMS OF APPOINTMENT		30
14.	COSTS AND EXPENSES		38
15.	APPOINTMENT AND RETIREMENT		41
16.	NOTICES		43
17.	LAW AND JURISDICTION		44
18.	SEVERABILITY		44
19.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999		45
20.	COUNTERPARTS		45

TRUST DEED is made on 27 November 2009 as amended and restated on 7 July 2011

BETWEEN

(5) INTERCONTINENTAL HOTELS GROUP PLC (the Issuer);

(6) SIX CONTINENTS LIMITED (Six Continents);

(7) INTERCONTINENTAL HOTELS LIMITED (InterContinental, and together with Six Continents, the Guarantors); and

(8) HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED (the Trustee, which expression includes, where the context admits, all persons for the time being the trustee or trustees of this Trust Deed).

WHEREAS

(D) The Issuer has established a Euro Medium Term Note Programme pursuant to which the Issuer may issue from time to time Notes as set out herein (the Programme). Notes up to a maximum nominal amount from time to time outstanding of £750,000,000 (subject to increase as provided in the Dealer Agreement (as defined below)) (the Authorised Amount) may be issued pursuant to the said Programme.

(E) The Guarantors have agreed to guarantee Notes issued under the Programme and to enter into certain covenants set out in this Trust Deed.

(F) The Trustee has agreed to act as trustee of this Trust Deed on the following terms and conditions.

NOW THIS TRUST DEED WITNESSES AND IT IS HEREBY DECLARED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Trust Deed the following expressions have the following meanings:

Additional Rating Agency means Moody’s and Fitch;

Agency Agreement means, in relation to the Notes of any Series, the agency agreement dated 27 November 2009 (as amended, modified and restated from time to time) between the Issuer, the Guarantors, the Trustee and HSBC Bank plc as Principal Paying Agent appointing the initial Paying Agent and the Calculation Agent in relation to such Series and any other agreement for the time being in force appointing Successor paying agents or a Successor calculation agent in relation to such Series, together with any agreement for the time being in force amending or modifying with the prior written approval of the Trustee any of the aforesaid agreements in relation to such Series;

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Agents means, in relation to the Notes of any Series, the Principal Paying Agent, the other Paying Agents, the Calculation Agent or any of them;

Appointee means any attorney, manager, agent, delegate, nominee, custodian, receiver or other person appointed by the Trustee under this Trust Deed;

Auditors means the auditors for the time being of the Issuer or, as the case may be, a Guarantor and, in the event of any of them being unable or unwilling to carry out any action requested of them pursuant to this Trust Deed, means such other firm of chartered accountants in England as may be nominated in writing by the Trustee for the purpose;

Authorised Signatory means any person who (a) is a Director of the Issuer or, as the case may be, the relevant Guarantor or (b) has been notified to the Trustee by any such Director as being an Authorised Signatory pursuant to sub-clause 8(p) (Authorised Signatories);

Calculation Agent means, in relation to the Notes of any Series, the institution at its Specified Office initially appointed as calculation agent in relation to such Notes pursuant to the Agency Agreement and/or, if applicable, Successor calculation agent in relation to such Notes at its Specified office;

CGN Permanent Global Note means a Permanent Global Note representing Notes for which the relevant Final Terms specify that the New Global Note form is not applicable;

CGN Temporary Global Note means a Temporary Global Note representing Notes for which the relevant Final Terms specify that the New Global Note form is not applicable;

Change of Control has the meaning given to such term in Condition 2(a);

Clearstream, Luxembourg means Clearstream Banking, société anonyme;

Common Safekeeper means an ICSD in its capacity as common safekeeper or a person nominated by the ICSDs to perform the role of common safekeeper;

Conditions means the terms and conditions to be endorsed on, or incorporated by reference in, the Notes of any Series, in the form set out in Schedule 1 or in such other form, having regard to the terms of the Notes of the relevant Series, as may be agreed between the issuer, the Principal Paying Agent, the Trustee and the relevant Dealer(s) as modified and supplemented by the Final Terms(s) applicable to such Series, as any of the same may from time to time be modified in accordance with this Trust Deed and any reference in this Trust Deed to a particular numbered Condition shall be construed in relation to the Notes of such Series accordingly;

Contractual Currency means, in relation to any payment obligation of any Note, the currency in which that payment obligation is expressed and, in relation to Clause 14.1 (Remuneration), pounds sterling or such other currency as may be agreed between the issuer and the Trustee from time to time;

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Couponholder means the holder of a Coupon;

Coupons means any bearer interest coupons in or substantially in the form set out in Part E of Schedule 2 appertaining to the Notes of any Series and for the time being outstanding or, as the context may require, a specific number thereof and includes any replacement Coupons issued pursuant to Condition 15 and, where the context so permits, the Talons appertaining to the Notes of such Series;

Dealer Agreement means the agreement between the Issuer and the Dealers named therein concerning the purchase of Notes to be issued pursuant to the Programme as amended from time to time or any restatement thereof for the time being in force;

Dealers means any person appointed as a Dealer by the Dealer Agreement and any other person which the Issuer may appoint as a Dealer and notice of whose appointment has been given to the Principal Paying Agent and the Trustee by the Issuer in accordance with the provisions of the Dealer Agreement but excluding any entity whose appointment has been terminated in accordance with the terms of the Dealer Agreement and notice of whose termination has been given to the Principal Paying Agent and the Trustee by the Issuer in accordance with the provisions of the Dealer Agreement and references to the relevant Dealer(s) mean, in relation to any Note, the Dealer(s) with whom the Issuer has agreed the issue and purchase of such Note;

Director means any Director of the Issuer or, as the case may be, a Guarantor, from time to time;

Drawdown Prospectus means a prospectus specific to a Tranche of Notes which may be constituted either (a) by a single document or (b) by a registration document, a securities note and, if applicable, a summary;

Euroclear means Euroclear Bank SA/NV;

Event of Default means any one of the circumstances described in Condition 13;

Extraordinary Resolution has the meaning set out in Schedule 6;

Final Terms has the meaning ascribed to it in the Dealer Agreement;

Fitch means Fitch Ratings Ltd or any successor;

Fixed Rate Note means a Note on which interest is calculated at a fixed rate payable in arrear on a fixed date or dates in each year and on redemption or on such other dates as may be agreed between the Issuer, the Guarantors and the relevant Dealer(s) (as indicated in the relevant Final Terms);

Floating Rate Note means a Note on which interest is calculated at a floating rate payable at intervals of one, two, three, six or twelve months or at such other intervals as may be agreed between the Issuer, the Guarantors and the relevant Dealer(s) (as indicated in the relevant Final Terms);

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FSMA means the Financial Services and Markets Act 2000;

Global Note means a CGN Temporary Global Note, a CGN Permanent Global Note, an NGN Temporary Global Note or an NGN Permanent Global Note;

ICSDs means Clearstream, Luxembourg and Euroclear;

Index Linked Interest Notes has the meaning given to such term in the relevant Final Terms;

Issue Date means, in relation to any Note, the date of issue of such Note pursuant to the Dealer Agreement or any other relevant agreement between the Issuer and the relevant Dealer(s);

Interest Commencement Date means, in relation to any interest-bearing Note, the date specified in the relevant Final Terms from which such Note bears interest or, if no such date is specified therein, the Issue Date;

Liabilities or Liability means any loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding or other liability whatsoever (including, without limitation, in respect of taxes, duties, levies, imposts and other charges) and including any value added tax or similar tax charged or chargeable in respect thereof and legal fees and expenses on a full indemnity basis;

London Stock Exchange means the London Stock Exchange plc;

Material Subsidiary has the meaning set out in Condition 2(a);

Moody’s means Moody’s Investors Service, Inc. or any successor;

NGN Permanent Global Note means a Permanent Global Note representing Notes for which the relevant Final Terms specify that the New Global Note form is applicable;

NGN Temporary Global Note means a Temporary Global Note representing Notes for which the relevant Final Terms specify that the New Global Note form is applicable;

Noteholder and (in relation to a Note) holder means the bearer of a Note;

Notes means the bearer notes of each Series constituted in relation to or by this Trust Deed which shall be in or substantially in the form set out in Schedule 2 and, for the time being outstanding or, as the case may be, a specific number thereof and includes any replacement Notes of such Series issued pursuant to Condition 15 and (except for the purposes of Clause 5.1 (Global Notes) and 5.3 (Signature)) each Global Note in respect of such Series for so long as it has not been exchanged in accordance with the terms thereof;

outstanding means, in relation to the Notes of any Series, all the Notes of such Series other than:

(a) those which have been redeemed in accordance with this Trust Deed;

Page 4

(b) those in respect of which the date for redemption in accordance with the provisions of the Conditions has occurred and for which the redemption moneys (including all interest accrued thereon to the date for such redemption) have been duly paid to the Trustee or the Principal Paying Agent in the manner provided for in the Agency Agreement (and, where appropriate, notice to that effect has been given to the Noteholders in accordance with Condition 19) and remain available for payment in accordance with the Conditions;

(c) those which have been purchased and surrendered for cancellation as provided in Condition 10(j) and notice of the cancellation of which has been given to the Trustee;

(d) those which have become void under Condition 14;

(e) those mutilated or defaced Notes which have been surrendered or cancelled and in respect of which replacement Notes have been issued pursuant to Condition 15; or

(f) (for the purpose only of ascertaining the aggregate nominal amount of Notes outstanding and without prejudice to the status for any other purpose of the relevant Notes) those Notes which are alleged to have been lost, stolen or destroyed and in respect of which replacements have been issued pursuant to Condition 15;

provided that for each of the following purposes, namely:

(i) the right to attend and vote at any meeting of the holders of Notes of any Series;

(ii) the determination of how many and which Notes of any Series are for the time being outstanding for the purposes of Clauses 11.1 (Legal Proceedings) and 9.1 (Waiver), Conditions 13 and 17 and Schedule 6;

(iii) any discretion, power or authority, whether contained in this Trust Deed or provided by law, which the Trustee is required to exercise in or by reference to the interests of the holders of the Notes of any Series or any of them; and

(iv) the determination by the Trustee whether any event, circumstance, matter or timing is, in its opinion, materially prejudicial to the interests of the holders of the Notes of any Series;

those Notes (if any) of the relevant Series which are for the time being held by any person (including but not limited to the Issuer, any Guarantor or any Subsidiary) for the benefit of the Issuer, any Guarantor or any Subsidiary shall (unless and until ceasing to be so held) be deemed not to remain outstanding;

Paying Agents means, in relation to the Notes of any Series, the several institutions (including, where the context permits, the Principal Paying Agent) at their respective

Page 5

Specified Offices appointed pursuant to the relative Agency Agreement and/or, if applicable, any additional and/or Successor paying agents in relation to such Series at their respective Specified Offices;

Permanent Global Note means, in relation to any Series, a Global Note to be issued pursuant to Clause 5.1 in the form or substantially in the form set out in Part B of Schedule 2;

Potential Event of Default means an event or circumstance which could, with the giving of notice, lapse of time, the issuing of a certificate and/or fulfilment of any other requirement provided for in Condition 13, become an Event of Default;

Principal Paying Agent means, in relation to the Notes of any Series, the institution at its Specified Office initially appointed as issuing and principal paying agent in relation to such Series pursuant to the relative Agency Agreement or, if applicable, any Successor principal paying agent in relation to such Series at its Specified Office;

Put Option has the meaning given to such term in Condition 10(e);

Rating Agency means S&P or any of its respective successors or any Substitute Rating Agency and, for the purposes of Condition 10(f), includes any Additional Rating Agency;

Receiptholder means the holder of a Receipt;

Receipts means any bearer principal receipts appertaining to the Notes of any Series or, as the context may require, a specific number thereof and includes any replacement Receipts issued pursuant to Condition 15;

Relevant Date has the meaning ascribed to it in Condition 2(a);

Reserved Matter has the meaning set out in paragraph 1 of Schedule 6;

repay includes redeem and vice versa and repaid, repayable, repayment, redeemed, redeemable and redemption shall be construed accordingly;

Series means a Tranche of Notes together with any further Tranche or Tranches of Notes expressed to be consolidated and form a single series with the Notes of the original Tranche and the terms of which are identical (save for the issue Date and/or the Interest Commencement Date but including as to whether or not the Notes are listed);

Specified Office means, in relation to any Agent in respect of any Series, either the office identified with its name in Condition 2(a) of such Series or any other office notified to any relevant parties pursuant to the Agency Agreement;

Subsidiary has the meaning set out in Condition 2(a);

Substitute Rating Agency means any rating agency of international standing substituted for the Rating Agency by the Issuer from time to time with the prior

Page 6

written approval of the Trustee, such approval not to be unreasonably withheld or delayed;

Successor means, in relation to the Paying Agents, such other or further person as may from time to time be appointed pursuant to the Agency Agreement as a Paying Agent;

Successor in Business means in respect of a company (the Original Company):

(i) a company or other entity to whom the Original Company validly and effectually, in accordance with all enactments, orders and regulations in force for the time being and from time to time, transfers the whole or substantially the whole of its business, undertaking and assets for the purpose of assuming and conducting the business of the Original Company in its place; or

(ii) any other entity which acquires in any other manner the whole or substantially the whole of the undertaking, property and assets of the Original Company and carries on as a successor to the Original Company the whole or substantially the whole of the business carried on by the Original Company prior thereto;

S&P means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies Inc. or any successor;

Talonholder means the holder of a Talon;

Talons means any bearer talons appertaining to the Notes of any Series or, as the context may require, a specific number thereof and includes any replacement Talons issued pursuant to Condition 15;

Temporary Global Note means, in relation to any Series, a Global Note to be issued pursuant to Clause 5.1 in the form or substantially in the form set out in Part A of Schedule 2;

this Trust Deed means this Trust Deed and the Schedules (as from time to time modified in accordance with the provisions contained herein) and (unless the context requires otherwise) includes any deed or other document executed in accordance with the provisions hereof (as from time to time modified as aforesaid) and expressed to be supplemental hereto;

Tranche means all Notes of the same Series with the same Issue Date and Interest Commencement Date;

Trustee Acts means both the Trustee Act 1925 and the Trustee Act 2000 of England and Wales;

Written Resolution means, in relation to any Series, a resolution in writing signed by or on behalf of the holders of 75 per cent. of the aggregate principal amount of the Notes of such Series for the time being outstanding, whether contained in one document or several documents in like form, each signed by or on behalf of one or more such Noteholders;

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Zero Coupon Note means a Note on which no interest is payable.

1.2 Principles of interpretation

In this Trust Deed:

(a) Statutory modification: a provision of any statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such modification or re-enactment;

(b) Additional amounts: principal and/or interest in respect of the Notes of any Series shall be deemed also to include references to any additional amounts, any redemption amounts and any premium which may be payable under the Conditions;

(c) Relevant Currency: relevant currency shall be construed as a reference to the currency in which payments in respect of the Notes and/or Receipts and/or Coupons of the relevant Series are to be made as indicated in the relevant Final Terms;

(d) Tax: costs, charges or expenses shall include any value added tax or similar tax charged or chargeable in respect thereof;

(e) Enforcement of rights: an action, remedy or method of judicial proceedings for the enforcement of rights of creditors shall include, in respect of any jurisdiction other than England, references to such action, remedy or method of judicial proceedings for the enforcement of rights of creditors available or appropriate in such jurisdictions as shall most nearly approximate thereto;

(f) Clauses and Schedules: a Schedule or a Clause, sub-clause, paragraph or sub-paragraph is, unless otherwise stated, to a schedule hereto or a clause, sub-clause, paragraph or sub-paragraph hereof respectively;

(g) Clearing systems: Euroclear and/or Clearstream, Luxembourg shall, wherever the context so admits (but not in the case of any Notes in NGN form), be deemed to include references to any additional or alternative clearing system approved by the Issuer and the Trustee;

(h) Trust corporation: a trust corporation denotes a corporation entitled by rules made under the Public Trustee Act 1906 to act as a custodian trustee or entitled pursuant to any other legislation applicable to a trustee in any jurisdiction other than England to act as trustee and carry on trust business under the laws of the country of its incorporation;

(i) Gender: words denoting the masculine gender shall include the feminine gender also, words denoting individuals shall include companies, corporations and partnerships, words importing the singular number shall include the plural and, in each case, vice versa;

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(j) Records: any reference to the records of an ICSD shall be to the records that each of the ICSDs holds for its customers which reflect the amount of such customers’ interests in the Notes (but excluding any interest in any Notes of one ICSD shown in the records of another ICSD);

(k) Drawdown Prospectus: each reference to Final Terms shall, in the case of a Series of Notes which is the subject of a Drawdown Prospectus be read and construed as a reference to the final terms of the Notes set out in such Drawdown Prospectus;

(l) Guarantees: all references in this Trust Deed to guarantees or to an obligation being guaranteed shall be deemed to include respectively references to indemnities or to an indemnity being given in respect thereof; and

(m) Proceedings: all references in these presents to taking proceedings against the Issuer and/or the Guarantors shall be deemed to include references to proving in the winding up of the Issuer and/or any Guarantor (as the case may be).

1.3 The Conditions

In this Trust Deed, unless the context requires or the same are otherwise defined, words and expressions defined in the Conditions and not otherwise defined herein shall have the same meaning in this Trust Deed.

1.4 Headings

The headings and sub-headings are for ease of reference only and shall not affect the construction of this Trust Deed.

1.5 The Schedules

The schedules are part of this Trust Deed and shall have effect accordingly.

1.6 Written Notices/Approvals

Any reference to a written notice or approval being given by the Trustee shall, for the avoidance of doubt, be deemed to include such notice being given by email.

2. AMOUNT AND ISSUE OF THE NOTES

2.1 Amount of the Notes

The Notes will be issued in Series in an aggregate nominal amount from time to time outstanding not exceeding the Authorised Amount and, for the purpose of determining such aggregate nominal amount, Clause 14 of the Dealer Agreement shall apply.

2.2 Prior to each Issue Date

By not later than 3.00 p.m. (London time) on the fourth business day in London (which for this purpose shall be a day on which commercial banks are open for business in London) preceding each proposed Issue Date, the Issuer shall:

Page 9

(a) deliver or cause to be delivered to the Trustee a draft of the relevant Final Terms and, if applicable, notify the Trustee of any proposed changes to the draft Final Terms delivered to the Trustee; and

(b) notify the Trustee in writing without delay of the Issue Date and the nominal amount of the Notes of the relevant Tranche.

For the avoidance of doubt, the Trustee shall not be required in any case to approve such Final Terms.

2.3 Constitution of Notes

Upon the issue of the Temporary Global Note, initially representing the Notes of any Tranche, such Notes shall become constituted by this Trust Deed without further formality.

2.4 Further legal opinions

After each anniversary of this Trust Deed and prior to the first issue of any Notes, on each occasion when a legal opinion is delivered to a Dealer pursuant to Clause 5.10 of the Dealer Agreement and on such other occasions as the Trustee so requests, the Issuer will procure, at no cost to the Trustee, that further legal opinions in such form and with such content as the Trustee may require from the legal advisers specified in the Dealer Agreement or in the relevant jurisdiction approved by the Trustee are delivered to the Trustee, provided that the Trustee shall not be required to approve the applicable legal opinions. In each such case, receipt by the Trustee of the relevant opinion shall be a condition precedent to the issue of Notes pursuant to this Trust Deed.

3. COVENANT TO REPAY

3.1 Covenant to repay

The Issuer covenants with the Trustee that it shall, as and when the Notes of any Series or any of them become due to be redeemed or any principal on the Notes of any Series or any of them becomes due to be repaid in accordance with the Conditions, unconditionally pay or procure to be paid to or to the order of the Trustee in immediately available freely transferable funds in the relevant currency the principal amount of the Notes of such Series or any of them becoming due for payment on that date and shall (subject to the provisions of the Conditions and except in the case of Zero Coupon Notes), until all such payments (both before and after judgment or other order of a court of competent jurisdiction) are duly made, unconditionally pay or procure to be paid to or to the order of the Trustee as aforesaid on the dates provided for in the Conditions interest (which shall accrue from day to day) on the principal amount (or such other amount as may be specified in the Final Terms) of the Notes or any of them of such Series outstanding from time to time as set out in the Conditions (subject to Clause 3.3 (Interest on Floating Rate Notes following Event of Default)) provided that:

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(a) every payment of principal, interest or other sum due in respect of such Notes or any of them made to the Principal Paying Agent in the manner provided in the Agency Agreement shall satisfy pro tanto, to the extent of such payment, the relevant covenant by the Issuer contained in this Clause except to the extent that there is default in the subsequent payment thereof to the relevant Noteholders, Receiptholders or Couponholders (as the case may be) in accordance with the Conditions;

(b) if any payment of principal or interest in respect of such Notes or any of them is made after the due date, payment shall be deemed not to have been made until either the full amount is paid to the relevant Noteholders, Receiptholders or Couponholders (as the case may be) or, if earlier, the seventh day after notice has been given to the relevant Noteholders in accordance with the Conditions that the full amount has been received by the Principal Paying Agent or the Trustee except, in the case of payment to the Principal Paying Agent, to the extent that there is failure in the subsequent payment to the Noteholders, Receiptholders, or Couponholders (as the case may be) under the Conditions; and

(c) in any case where payment of the whole or any part of the principal amount due in respect of any Note is improperly withheld or refused upon due presentation of the relevant Note or Receipt (as the case may be) interest shall accrue on the whole or such part of such principal amount (except in the case of Zero Coupon Notes, to which the provision of Condition 8 shall apply) from the date of such withholding or refusal until the date either on which such principal amount due is paid to the relevant Noteholders or Receiptholders (as the case may be) or, if earlier, the seventh day after which notice is given to the relevant Noteholders in accordance with the Conditions that the full amount payable in respect of the said principal amount is available for collection by the relevant Noteholders or Receiptholders (as the case may be) provided that on further due presentation of the relevant Note or Receipt (as the case may be) such payment is in fact made.

The Trustee will hold the benefit of this covenant and the other covenants in this Trust Deed on trust for the Noteholders in accordance with their respective interests.

3.2 Following an Event of Default

At any time after any Event of Default or Potential Event of Default shall have occurred or the Notes of all or any Series shall otherwise have become due and repayable or the Trustee shall have received any money which it proposes to pay under Clause 12 to the relevant Noteholders, Receiptholders and/or Couponholders, the Trustee may:

(a) by notice in writing to the Issuer, the Guarantors, the Principal Paying Agent and the other Agents require the Principal Paying Agent and the other Agents or any of them:

(i) to act thereafter, until otherwise instructed by the Trustee, as Agents of the Trustee under the provisions of this Trust Deed on the terms

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provided in the Agency Agreement (with consequential amendments as necessary and save that the Trustee’s liability under any provisions thereof for the indemnification, remuneration and payment of out-of-pocket expenses of the Agents shall be limited to amounts for the time being held by the Trustee on the trusts of this Trust Deed in relation to the Notes on the terms of this Trust Deed and available to the Trustee for such purpose) and thereafter to hold all Notes, Receipts and Coupons and all sums, documents and records held by them in respect of Notes, Receipts and Coupons on behalf of the Trustee; and/or

(ii) to deliver up all Notes, Receipts and Coupons and all sums, documents and records held by them in respect of Notes, Receipts and Coupons to the Trustee or as the Trustee shall direct in such notice provided that such notice shall be deemed not to apply to any document or record which the relevant Agent is obliged not to release by any law or regulation; and

(b) by notice in writing to the Issuer and the Guarantors require each of them to make all subsequent payments in respect of Notes, Receipts and Coupons to or to the order of the Trustee and, with effect from the issue of any such notice until such notice is withdrawn, proviso 3.1(a) to Clause 3.1 (Covenant to repay) and (so far as it concerns payments by the Issuer and the Guarantors) Clause 12.4 (Payments to Noteholders, Receiptholders and Couponholders) shall cease to have effect.

3.3 Interest on Floating Rate Notes and Index Linked Interest Notes following Event of Default

If Floating Rate Notes or Index Linked Interest Notes become immediately due and repayable under Condition 13 the rate and/or amount of interest payable in respect of them will be calculated at the same intervals as if such Notes had not become due and repayable, the first of which will commence on the expiry of the Interest Period (as defined in the Conditions) during which the Notes of the relevant Series become so due and repayable in accordance with Condition 13 (with consequential amendments as necessary) except that the rates of interest need not be published.

3.4 Currency of payments

All payments in respect of, under and in connection with this Trust Deed and the Notes to the relevant Noteholders, Receiptholders and Couponholders shall be made in the relevant currency as required by the Conditions.

3.5 Separate Series

The Notes of each Series shall form a separate Series of Notes and accordingly, unless for any purpose the Trustee in its absolute discretion shall otherwise determine, all the provisions of this Trust Deed shall apply mutatis mutandis separately and independently to the Notes of each Series and in such Clauses and Schedule the expressions “Notes”, “Noteholders”, “Receipts”, “Receiptholders”, “Coupons”, “Couponholders”, “Talons” and “Talonholders” shall be construed accordingly.

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4. GUARANTEE

4.1 The Guarantors hereby irrevocably and unconditionally and on a joint and several basis, and notwithstanding the release of any other guarantor or any other person under the terms of any composition or arrangement with any creditors of the Issuer, guarantee to the Trustee:

(a) the due and punctual payment in accordance with the provisions of this Trust Deed of the principal of and premium (if any) and interest on the Notes and of any other amounts payable by the Issuer under this Trust Deed; and

(b) the due and punctual performance and observance by the Issuer of each of the other provisions of this Trust Deed on the Issuer’s part to be performed or observed.

4.2 If the Issuer fails for any reason whatsoever punctually to pay any such principal, premium, interest or other amount, the Guarantors shall cause each and every such payment to be made as if the Guarantors instead of the Issuer were expressed to be the primary obligor under this Trust Deed and not merely as surety (but without affecting the nature of the Issuer’s obligations) to the intent that the holder of the relevant Note, Receipt or Coupon or the Trustee (as the case may be) shall receive the same amounts in respect of principal, premium, interest or such other amount as would have been receivable had such payments been made by the Issuer.

4.3 If any payment received by the Trustee or any Noteholder or Couponholder under the provisions of this Trust Deed shall (whether on the subsequent bankruptcy, insolvency or corporate reorganisation of the Issuer or, without limitation, on any other event) be avoided or set aside for any reason, such payment shall not be considered as discharging or diminishing the liability of the Guarantors and this guarantee shall continue to apply as if such payment had at all times remained owing by the Issuer and the Guarantors shall indemnify the Trustee and the Noteholders and/or Receiptholders and/or Couponholders (as the case may be) in respect thereof PROVIDED THAT the obligations of the Issuer and/or the Guarantors under this sub-clause shall, as regards each payment made to the Trustee or any Noteholder or Couponholder which is avoided or set aside, be contingent upon such payment being reimbursed to the Issuer or other persons entitled through the Issuer.

4.4 Each of the Guarantors hereby agrees that its obligations under this Clause shall be unconditional and that it shall be fully liable irrespective of the validity, regularity, legality or enforceability against the Issuer of, or of any defence or counter-claim whatsoever available to the Issuer in relation to, its obligations under this Trust Deed, whether or not any action has been taken to enforce the same or any judgment obtained against the Issuer, whether or not any of the other provisions of this Trust Deed have been modified, whether or not any time, indulgence, wavier, authorisation or consent has been granted to the Issuer by or on behalf of the Noteholders, Receiptholders or the Couponholders or the Trustee, whether or not any determination has been made by the Trustee pursuant to Clause 9 whether or not there have been any dealings or transactions between the Issuer, any of the Noteholders or Couponholders or the Trustee, whether or not the Issuer has been dissolved, liquidated, merged, consolidated, bankrupted or has changed its status, functions,

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control or ownership, whether or not the Issuer has been prevented from making payment by foreign exchange provisions applicable at its place of registration or incorporation and whether or not any other circumstances have occurred which might otherwise constitute a legal or equitable discharge of or defence to any guarantor. Accordingly, the validity of this guarantee shall not be affected by reason of any invalidity, irregularity, illegality or unenforceability of all or any of the obligations of the Issuer under this Trust Deed and this guarantee shall not be discharged nor shall the liability of a Guarantor under this Trust Deed be affected by any act, thing or omission or means whatever whereby its liability would not have been discharged if it had been the principal debtor.

4.5 Without prejudice to the provisions of Clause 11 the Trustee may determine from time to time whether or not it will enforce this guarantee which it may do without making any demand of or taking any proceedings against the Issuer and may from time to time make any arrangement or compromise with the Guarantors in relation to this guarantee which the Trustee may consider expedient in the interests of the Noteholders.

4.6 The Guarantors waive diligence, presentment, demand of payment, filing of claims with a court in the event of dissolution, liquidation, merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to this Trust Deed or the indebtedness evidenced thereby and all demands whatsoever and covenants that this guarantee shall be a continuing guarantee, shall extend to the ultimate balance of all sums payable and obligations owed by the Issuer under this Trust Deed, shall not be discharged except by complete performance of the obligations in this Trust Deed and is additional to, and not instead of, any security or other guarantee or indemnity at any time existing in favour of any person, whether from the Guarantors or otherwise.

4.7 If any moneys shall become payable by the Guarantors under this guarantee the Guarantors shall not, so long as the same remain unpaid, without the prior written consent of the Trustee:

(a) in respect of any amounts paid by it under these guarantees, exercise any rights of subrogation or contribution or, without limitation, any other right or remedy which may accrue to it in respect of or as a result of any such payment; or

(b) in respect of any other moneys for the time being due to the Guarantors by the Issuer, claim payment thereof or exercise any other right or remedy.

(including in either case claiming the benefit of any security or right of set-off or, on the liquidation of the Issuer, proving in competition with the Trustee). If, notwithstanding the foregoing, upon the bankruptcy, insolvency or liquidation of the Issuer, any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, shall be received by the Guarantors before payment in full of all amounts payable under this Trust Deed shall have been made to the Noteholders, the Couponholders and the Trustee, such payment or distribution shall be received by the Guarantors on trust to pay the same over immediately to the

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Trustee for application in or towards the payment of all sums due and unpaid under this Trust Deed in accordance with Clause 7.

4.8 Until all amounts which may be or become payable by the Issuer under this Trust Deed have been irrevocably paid in full, the Trustee may:

(a) refrain from applying or enforcing any other moneys, security or rights held or received by the Trustee in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise), and the Guarantors shall not be entitled to the benefit of the same; and

(b) hold in a suspense account any moneys received from the Guarantors or an account of the Guarantors’ liability under this guarantee, without liability to pay interest on those moneys.

5. THE NOTES

5.1 Global Notes

(a) The Notes of each Tranche will initially be together represented by a Temporary Global Note. Each Temporary Global Note shall (save as may be specified in the relevant Final Terms) be exchangeable, in accordance with its terms, for interests in a Permanent Global Note or Notes in definitive form together with, where applicable, Receipts and (except in the case of Zero Coupon Notes) Coupons, and where applicable Talons attached.

(b) Each Permanent Global Note shall be exchangeable, in accordance with its terms, for Notes in definitive form.

All Global Notes shall be prepared, completed and delivered to a common depositary (in the case of a CGN) or common safekeeper (in the case of a NGN) for Euroclear and Clearstream, Luxembourg in accordance with the provisions of the Dealer Agreement or to another appropriate depositary in accordance with any other agreement between the Issuer and the relevant Dealer(s) and, in each case, the Agency Agreement.

5.2 Notes in definitive form

Notes in definitive form will be security printed in accordance with applicable legal and stock exchange requirements substantially in the form set out in Part C of Schedule 2. Any Coupons, Receipts and Talons will also be security printed in accordance with the same requirements and will be attached to the Notes in definitive form at the time of issue. Notes in definitive form will be endorsed with the Conditions and shall have endorsed thereon or attached thereto a copy of the applicable Final Terms (or the relevant provisions thereof).

5.3 Signature

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The Global Notes and the Notes in definitive form will be signed manually or in facsimile by a duly authorised person designated by the Issuer and will be authenticated manually by or on behalf of the Principal Paying Agent and if applicable, will be effectuated manually by or on behalf of the Common Safekeeper. The Issuer may use the facsimile signature of a person who at the date such signature was originally produced was such a duly authorised person even if at the time of issue of any Global Note or Note in definitive form he is no longer so authorised. Global Notes and Notes in definitive form so executed, duly authenticated and, if applicable, duly effectuated will be binding and valid obligations of the Issuer and title thereto shall pass by delivery.

5.4 Entitlement to treat holder as owner

The Issuer, the Guarantors, the Trustee and any Paying Agent may deem and treat the holder of any Note and the holder of any Receipt or Coupon as the absolute owner of such Note, Receipt or Coupon, as the case may be, free of any equity, set-off or counterclaim on the part of the Issuer or any Guarantor against the original or any intermediate holder of such Note, Receipt or Coupon (whether or not such Note, Receipt or Coupon shall be overdue and notwithstanding any notation of ownership or other writing thereon or any notice of previous loss or theft of such Note, Receipt or Coupon) for all purposes and, except as ordered by a court of competent jurisdiction or as required by applicable law, the Issuer, the Guarantors, the Trustee and any Paying Agent shall not be affected by any notice to the contrary. All payments made to any such holder shall be valid and, to the extent of the sums so paid, effective to satisfy and discharge the liability for the moneys payable upon the Notes.

5.5 Further Notes

The Issuer shall be at liberty from time to time (but subject always to the provisions of this Trust Deed) without the consent of the Noteholders, Receiptholders or Couponholders to create and issue further Notes having terms and conditions the same as the Notes of any Series (or the same in all respects save for the amount and date of the first payment of interest thereon) and so that the same shall be consolidated and form a single series with the outstanding Notes of a particular Series.

6. CANCELLATION OF NOTES AND RECORDS

6.1 The Issuer shall procure that all Notes issued by it which are (a) redeemed or (b) purchased by or on behalf of the Issuer, a Guarantor or any Subsidiary and surrendered for cancellation or (c) which, being mutilated or defaced, have been surrendered and replaced pursuant to Condition 15 (Replacement of Notes, Receipts, Coupons and Talons) (together in each case, in the case of Definitive Notes, with all unmatured Receipts and Coupons attached thereto or delivered therewith), and all Receipts and Coupons paid in accordance with the relevant Conditions or which, being mutilated or defaced, have been surrendered and replaced pursuant to Condition 15 (Replacement of Notes, Receipts, Coupons and Talons), shall forthwith be cancelled by or on behalf of the Issuer and a certificate stating:

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(i) the aggregate nominal amount of Notes which have been redeemed and the aggregate amounts in respect of Receipts and Coupons which have been paid;

(ii) the serial numbers of such Notes in definitive form and Receipts;

(iii) the total numbers (where applicable, of each denomination) by maturity date of such Receipts and Coupons;

(iv) the aggregate amount of interest paid (and the due dates of such payments) on Global Notes;

(v) the aggregate nominal amount of Notes (if any) which have been purchased by or on behalf of the Issuer, any Guarantor or any Subsidiary and cancelled and the serial numbers of such Notes in definitive form and, in the case of Notes in definitive form, the total number (where applicable, of each denomination) by maturity date of the Receipts, Coupons and Talons attached thereto or surrendered therewith;

(vi) the aggregate nominal amounts of Notes and Receipts and the aggregate amounts in respect of Coupons which have been so surrendered and replaced and the serial numbers of such Notes in definitive form and the total number (where applicable, of each denomination) by maturity date of such Coupons and Talons;

(vii) the total number (where applicable, of each denomination) by maturity date of the unmatured Coupons missing from Notes in definitive form bearing interest at a fixed rate which have been redeemed or surrendered and replaced and the serial numbers of the Notes in definitive form to which such missing unmatured Coupons appertained; and

(viii) the total number (where applicable, of each denomination) by maturity date of Talons which have been exchanged for further Coupons,

shall be given to the Trustee by or on behalf of the Issuer as soon as possible and in any event within one month after the end of each calendar quarter during which any such redemption, purchase, payment, exchange or replacement (as the case may be) takes place. The Trustee may accept such certificate as conclusive evidence of redemption, purchase, payment, exchange or replacement pro tanto of the Notes or payment of interest thereon or exchange of the relative Talons respectively and of cancellation of the relative Notes and Coupons.

6.2 The Issuer shall procure (a) that the Principal Paying Agent shall keep a full and complete record of all Notes, Receipts, Coupons and Talons issued by it (other than serial numbers of Receipts and Coupons) and of their redemption, any cancellation or any payment (as the case may be) and of all replacement notes, receipts, coupons or talons issued in substitution for lost, stolen, mutilated, defaced or destroyed Notes, Receipts, Coupons or Talons, (b) that the Principal Paying Agent

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shall in respect of the Coupons of each maturity retain (in the case of Coupons other than Talons) until the expiry of ten years from the Relevant Date in respect of such Coupons and (in the case of Talons indefinitely) either all paid or exchanged Coupons of that maturity or a list of the serial numbers of Coupons of that maturity still remaining unpaid or unexchanged and (c) that such records and Coupons (if any) shall be made available to the Trustee at all reasonable times.

7. COVENANT TO COMPLY WITH THE TRUST DEED

7.1 Covenant to comply with the Trust Deed

Each of the Issuer and each Guarantor severally covenants with the Trustee to comply with those provisions of this Trust Deed and the Conditions which are expressed to be binding on it and to perform and observe the same. The Notes, the Receipts and the Coupons are subject to the provisions contained in this Trust Deed, all of which shall be binding upon the Issuer, the Guarantors, the Noteholders, the Receiptholders, the Couponholders and all persons claiming through or under them respectively. The Trustee shall hold the benefit of this covenant upon trust for itself and the Noteholders, the Receiptholders and the Couponholders according to its and their respective interests.

7.2 Trustee may enforce Conditions

The Trustee shall itself be entitled to enforce the obligations of the Issuer and each Guarantor under the Notes and the Conditions as if the same were set out and contained in this Trust Deed which shall be read and construed as one document with the Notes.

8. COVENANTS BY THE ISSUER AND THE GUARANTORS

So long as any of the Notes remains outstanding, the Issuer and the Guarantors will each:

(a) Books of account: at all times keep and procure that all its Subsidiaries keep such books of account as may be necessary to comply with all applicable laws and so as to enable the financial statements of the Issuer or, as the case may be, the relevant Guarantor to be prepared and, if the Trustee, in its sole opinion, determines that it is necessary to request access to such books of account, allow the Trustee and any person appointed by it, to whom the Issuer, the relevant Guarantor or the relevant Subsidiary (as the case may be) shall have no reasonable objection, free access to the same at all reasonable times during normal business hours and to discuss the same with responsible officers of the Issuer;

(b) Event of Default: give notice in writing to the Trustee forthwith of the coming into existence of any security interest which would require any security to be given to the Notes pursuant to Condition 5 (Negative Pledge) or of the occurrence of any Event of Default, Potential Event of Default, Change of Control or Change of Control Put Event and without waiting for the Trustee to take any further action;

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(c) Certificate of Compliance: provide to the Trustee within seven days of any request by the Trustee and at the time of the despatch to the Trustee of its annual balance sheet and profit and loss account, and in any event not later than 180 days after the end of its financial year, a certificate, signed by two Authorised Signatories of the Issuer or, as the case may be, the relevant Guarantor certifying that up to a specified date not earlier than seven days prior to the date of such certificate (the “Certified Date”) the Issuer or, as the case may be, the relevant Guarantor has complied with its obligations under this Trust Deed and the Notes (or, if such is not the case, giving details of the circumstances of such non-compliance) and that as at such date there did not exist nor had there existed at any time prior thereto since the Certified Date in respect of the previous such certificate (or, in the case of the first such certificate, since the date of this Trust Deed) any Event of Default, Potential Event of Default, Change of Control Put Event, Change of Control or other matter which could affect the ability of the Issuer or, as the case may be, the relevant Guarantor to perform its obligations under this Trust Deed or (if such is not the case) specifying the same;

(d) Financial statements: send to the Trustee and to the Principal Paying Agent (if the same are produced) as soon as practicable after their date of publication and in the case of annual financial statements in any event not more than 180 days after the end of each financial year, two copies of the Issuer’s or, as the case may be, the relevant Guarantor’s consolidated annual balance sheet and profit and loss account and of every balance sheet, profit and loss account, report or other notice, statement or circular issued (or which under any legal or contractual obligation should be issued) to the members or holders of debentures or creditors (or any class of them) of the Issuer or, as the case may be, the relevant Guarantor in their capacity as such at the time of the actual (or legally or contractually required) issue or publication thereof and procure that the same are made available for inspection by Noteholders, Receiptholders and Couponholders at the Specified Offices of the Paying Agents as soon as practicable thereafter;

(e) Information: so far as permitted by applicable law, at all times give to the Trustee such information, opinions, certificates and other evidence as it shall require in accordance with its fiduciary duties and obligations to the Noteholders and in such form as it shall require (including, without limitation, the certificates called for by the Trustee pursuant to Clause 8(c) (Certificate of Compliance) for the exercise of its duties, trusts, powers, authorities and discretions vested in it under this Trust Deed or by operation of law;

(f) Notes held by Issuer and the Guarantors: send to the Trustee forthwith upon being so requested in writing by the Trustee a certificate of the Issuer or, as the case may be, the relevant Guarantor (signed on its behalf by two Authorised Signatories) setting out the total number of Notes of each Series which at the date of such certificate are held by or for the benefit of the Issuer, the relevant Guarantor or any Subsidiary;

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(g) Execution of further Documents: so far as permitted by applicable law, at all times execute all such further documents and do all such further acts and things as may be necessary at any time or times in the opinion of the Trustee to give effect to the provisions of this Trust Deed;

(h) Notices to Noteholders: send or procure to be sent to the Trustee not less than three business days in London prior to the date of publication, for the Trustee’s approval, one copy of each notice to be given to the Noteholders in accordance with Condition 19 (Notices) and not publish such notice without such approval (such approval not to be unreasonably withheld or delayed) and, upon publication, send to the Trustee two copies of such notice (such approval, unless so expressed, not to constitute approval of such notice for the purpose of Section 21 of the Financial Services and Markets Act 2000);

(i) Notification of non-payment: use its reasonable endeavours to procure that the Principal Paying Agent notifies the Trustee forthwith in the event that it does not, on or before the due date for payment in respect of the Notes, Receipts or Coupons of any Series or any of them receive unconditionally the full amount in the relevant currency of the moneys payable on such due date on all such Notes, Receipts or Coupons;

(j) Notification of late payment: in the event of the unconditional payment to the Principal Paying Agent or the Trustee of any sum due in respect of any of the Notes, the Receipts or the Coupons or any of them being made after the due date for payment thereof, forthwith give notice to the Noteholders that such payment has been made in accordance with Condition 19 (Notices);

(k) Notification of redemption or payment: not less than the number of days specified in the relevant Condition prior to the redemption or payment date in respect of any Note, Receipt or Coupon give to the Trustee notice in writing of the amount of such redemption or payment pursuant to the Conditions and duly proceed to redeem or pay such Notes, Receipts or Coupons accordingly;

(l) Tax or optional redemption: if the Issuer gives notice to the Trustee that it intends to redeem the Notes pursuant to Conditions 10(b) and 10(c) and prior to the Issuer giving such notice to the Noteholders, provide such information to the Trustee as the Trustee requires in order to satisfy itself of the matters referred to in such Condition;

(m) Obligations of Agents: observe and comply with its obligations and use all reasonable endeavours to procure that the Agents observe and comply with all their obligations under the Agency Agreement and notify the Trustee immediately it becomes aware of any material breach or failure by an Agent in relation to the Notes, Receipts or Coupons and at all times maintain Paying Agents and a Calculation Agent in accordance with the Conditions;

(n) Change of taxing jurisdiction: if before the Relevant Date for any Note, Receipt or Coupon the Issuer or any Guarantor shall become subject generally to the taxing jurisdiction of any territory or any political sub-division thereof or any authority therein or thereof having power to tax other than or in

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addition to the United Kingdom, immediately upon becoming aware thereof notify the Trustee of such event and (unless the Trustee otherwise agrees) enter forthwith into a trust deed supplemental hereto, giving to the Trustee an undertaking or covenant in form and manner satisfactory to the Trustee in terms corresponding to the terms of Condition 12 with the substitution for (or, as the case may be, the addition to) the references therein to the United Kingdom of references to that other or additional territory to whose taxing jurisdiction, or that of a political subdivision thereof or an authority therein or thereof, the Issuer or, as the case may be, the relevant Guarantor shall have become subject as aforesaid, such trust deed also to modify Condition 12 so that such Condition shall make reference to that other or additional territory;

(o) Listing: at all times use reasonable endeavours to maintain the admission to listing, trading and/or quotation of the Notes of each Series by the relevant competent authority, stock exchange and/or quotation system on which they are admitted to listing, trading and/or quotation on issue as indicated in the relevant Final Terms or, if it is unable to do so having used all reasonable endeavours or, if the Trustee considers that the maintenance of such admission to listing, trading and/or quotation is agreed by the Trustee to be unduly burdensome or impractical and the Trustee is of the opinion that to do so would not be materially prejudicial to the interests of the Noteholders, use reasonable endeavours to obtain and maintain admission to listing, trading and/or quotation of the Notes on such other competent authority, stock exchange and/or quotation system as the Issuer and the Guarantors may (with the approval of the Trustee decide and give notice of the identity of such other competent authority, stock exchange or quotation system to the Noteholders;

(p) Authorised Signatories: upon the execution hereof and thereafter forthwith upon any change of the same, deliver to the Trustee (with a copy to the Principal Paying Agent) a list of the Authorised Signatories of the Issuer and each Guarantor, together with certified specimen signatures of the same;

(q) Payments: pay moneys payable by it to the Trustee hereunder without set off, counterclaim, deduction or withholding, unless otherwise compelled by law and in the event of any deduction or withholding compelled by law pay such additional amount as will result in the payment to the Trustee of the amount which would otherwise have been payable by it to the Trustee hereunder; and

(r) Notification of amendment to Dealer Agreement: notify the Trustee of any amendment to the Dealer Agreement.

(s) Auditor’s certificates: cause to be prepared and certified by the Auditors in respect of each financial accounting period accounts in such form as will comply with all relevant legal and accounting requirements and all requirements for the time being of the relevant stock exchange;

(t) Further documents: at all times execute and do all such further documents, acts and things as may be necessary at any time or times in the reasonable opinion of the Trustee to give effect to this Trust Deed;

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(u) Appointment and removal of Agents: give notice to the Noteholders in accordance with Condition 19 (Notices) of any appointment, resignation or removal of any Paying Agent or Calculation Agent (other than the appointment of the initial Agents and Calculation Agent) after having obtained the prior written approval of the Trustee thereto or any change of any Paying Agent’s specified office and (except as provided by the Agency Agreement or the Conditions) at least 30 days prior to such event taking effect; PROVIDED ALWAYS THAT so long as any of the Notes remains outstanding in the case of the termination of the appointment of the Calculation Agent or so long as any of the Notes, Receipts or Coupons remains liable to prescription in the case of the termination of the appointment of the Principal Paying Agent no such termination shall take effect until a new Calculation Agent or Principal Paying Agent (as the case may be) has been appointed on terms previously approved in writing by the Trustee;

(v) Subsidiaries: procure its Subsidiaries to comply with all applicable provisions of Condition 10 (Redemption and Purchases);

(w) Documents available for inspection: use reasonable endeavours to procure that each Paying Agent makes available for inspection by Noteholders, Receiptholders and Couponholders at its specified office copies of this Trust Deed, the Agency Agreement and the then latest audited balance sheet and profit and loss account (consolidated if applicable) of the Issuer and the Guarantors;

(x) U.S. Paying Agent: if, in accordance with the provisions of the Conditions, interest in respect of the Notes becomes payable at the specified office of any Paying Agent in the United States of America promptly give notice thereof to the relative Noteholders in accordance with Condition 19 (Notices);

(y) Dealer Agreement: promptly provide the Trustee with copies of all supplements and/or amendments and/or restatements of the Dealer Agreement;

(z) List of Material Subsidiaries: give to the Trustee (i) on the date hereof and (ii) at the same time as sending to it the certificates referred to in paragraph (c) above, a certificate signed by two Authorised Signatories of the Issuer addressed to the Trustee (with a form and content satisfactory to the Trustee) listing those Subsidiaries of the Issuer which as at the date hereof, as at the Certified Date (as defined in paragraph (c) above) of the relevant certificate given under paragraph (c) above or, as the case may be, as at the first day on which the then latest audited consolidated accounts of the Issuer became available were Material Subsidiaries for the purposes of Condition 13 (Events of Default);

(aa) Change in Material Subsidiaries: give to the Trustee, as soon as reasonably practicable after the acquisition or disposal of any company which thereby becomes or ceases to be a Material Subsidiary or after any transfer is made to any Subsidiary of the Issuer which thereby becomes a Material Subsidiary, a certificate by two Authorised Signatories of the Issuer addressed to the Trustee (with a form and content satisfactory to the Trustee) to such effect;

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(bb) Coupons: upon due surrender in accordance with the Conditions, pay the face value of all Coupons (including Coupons issued in exchange for Talons) appertaining to all Notes purchased by the Issuer, the Guarantors or any other Subsidiary of the Issuer;

(cc) Legal Opinions: prior to making any modification or amendment or supplement to this Trust Deed, procure the delivery of (a) legal opinion(s) as to English and any other relevant law, addressed to the Trustee, dated the date of such modification or amendment or supplement, as the case may be, and in a form acceptable to the Trustee from legal advisers acceptable to the Trustee;

(dd) Euroclear and Clearstream: use all reasonable endeavours to procure that Euroclear and/or Clearstream, Luxembourg (as the case may be) issue(s) any record, certificate or other document requested by the Trustee as soon as practicable after such request; and

(ee) Notice of rating downgrade: promptly notify the Trustee upon becoming aware that any of the ratings assigned to the Notes has been downgraded or withdrawn.

9. AMENDMENTS AND SUBSTITUTION

9.1 Waiver

Without prejudice to Clause 9.4, the Trustee may, without any consent or sanction of the Noteholders, Receiptholders or Couponholders and without prejudice to its rights in respect of any subsequent breach, Event of Default or Potential Event of Default, from time to time and at any time, but only if and in so far as in its opinion the interests of the Noteholders shall not be materially prejudiced thereby, authorise or waive, on such terms and conditions (if any) as shall seem expedient to it, any breach or proposed breach by the Issuer or any Guarantor of any of the covenants or provisions contained in this Trust Deed or the Notes, Receipts or Coupons (other than a proposed breach or breach relating to the subject of a Reserved Matter) or determine that any Event of Default or Potential Event of Default shall not be treated as such for the purposes of this Trust Deed; any such authorisation, waiver or determination shall be binding on the Noteholders, the Receiptholders and the Couponholders and, if, but only if, the Trustee shall so require, the Issuer shall cause such authorisation, waiver or determination to be notified to the Noteholders as soon as practicable thereafter in accordance with the Conditions; provided that the Trustee shall not exercise any powers conferred upon it by this Clause in contravention of any express direction by an Extraordinary Resolution or of a request in writing made by the holders of not less than 20 per cent. in aggregate principal amount of the Notes then outstanding (but so that no such direction or request shall affect any authorisation, waiver or determination previously given or made) or so as to authorise or waive any such breach or proposed breach relating to any of the matters the subject of the Reserved Matters as specified and defined in Schedule 6.

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9.2 Modifications

Without prejudice to Clause 9.4, the Trustee may from time to time and at any time without any consent or sanction of the Noteholders, Receiptholders or Couponholders concur with the Issuer and the Guarantors in making (a) any modification to this Trust Deed (other than in respect of Reserved Matters as specified and defined in Schedule 6 or any provision of this Trust Deed referred to in that specification) or the Notes which in the opinion of the Trustee it may be proper to make provided the Trustee is of the opinion that such modification will not be materially prejudicial to the interests of the Noteholders or (b) any modification to this Trust Deed or the Notes if in the opinion of the Trustee such modification is of a formal, minor or technical nature or made to correct a manifest error or an error which is, in the opinion of the Trustee, proven. Any such modification shall be binding on the Noteholders, the Receiptholders and the Couponholders and, unless the Trustee otherwise agrees, the Issuer shall cause such modification to be notified to the Noteholders as soon as practicable thereafter in accordance with Condition 19 (Notices).

9.3 Substitution

(a) Procedure: Without prejudice to Clause 9.4, the Trustee may (1) without the consent of the Noteholders, the Receiptholders or the Couponholders, agree to the substitution, in place of the Issuer (or of any previous substitute under this Clause) of a Guarantor or its successor in business or any Subsidiary of the Issuer (hereinafter called the Substituted Obligor) as the principal debtor under this Trust Deed in relation to the Notes, Receipts, and Coupons of any Series and under the Notes, Receipts and Coupons of that Series and (2) without the consent of the Noteholders, the Receiptholders or the Couponholders, agree to the substitution of any Subsidiary of any Guarantor (also a Substituted Obligor) in place of a Guarantor (or any previous substitute under this Clause) as the guarantor under this Trust Deed in relation to the Notes, Receipts and Coupons of any Series and under the Notes, Receipts and Coupons of that Series, in each case provided that:

(i) a trust deed is executed or some other written form of undertaking is given by the Substituted Obligor to the Trustee, in form and manner satisfactory to the Trustee, agreeing to be bound by the terms of this Trust Deed, the Notes, the Receipts and the Coupons (with any consequential amendments which the Trustee may deem appropriate) as fully as if the Substituted Obligor had been named in this Trust Deed and on the Notes, the Receipts and the Coupons as the principal debtor in place of the Issuer or, as the case may be, as the guarantor in place of the relevant Guarantor (or of any previous substitute under this Clause);

(ii) the Issuer, the Guarantors and the Substituted Obligor execute such other deeds, documents and instruments (if any) as the Trustee may require in order that the substitution is fully effective and comply with

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such other requirements as the Trustee may direct in the interests of the Noteholders, the Receiptholders and the Couponholders;

(iii) an unconditional and irrevocable guarantee in form and substance satisfactory to the Trustee shall have been given (x) in the case of the substitution of the Issuer as provided in (1) above, by the Issuer and each of the Guarantors or, if one of the Guarantors or its successor in business has become the Substituted Obligor, by the Issuer and the remaining Guarantor or (y) in the case of the substitution of a Guarantor as provided in (2) above, by each of the Guarantors, of the obligations of the Substituted Obligor under this Trust Deed and the Notes;

(iv) the Trustee is satisfied that (i) the Substituted Obligor has obtained all governmental and regulatory approvals and consents necessary for its assumption of liability as principal debtor or, as the case may be, as a guarantor in respect of this Trust Deed and the Notes, the Receipts and the Coupons in place of the Issuer and/or, as the case may be, the Guarantors or the relevant Guarantor (or such previous substitute as aforesaid) and (ii) the Issuer and/or, as the case may be, the Guarantors or the relevant Guarantor has obtained all governmental and regulatory approvals and consents necessary for the guarantee to be fully effective as referred to in sub-clause (c) and (iii) such approvals and consents are at the time of substitution in full force and effect;

(v) (without prejudice to the generality of the preceding sub-clauses of this sub-clause 9.3(a)) where the Substituted Obligor is incorporated, domiciled or resident in or is otherwise subject generally to the taxing jurisdiction of any territory or any political sub-division thereof or any authority of or in such territory having power to tax (the Substituted Territory) other than or in addition to the territory, the taxing jurisdiction of which (or to any such authority of or in which) the Issuer or, as the case may be, the relevant Guarantor is subject generally (the Issuer’s Territory), the Substituted Obligor will (unless the Trustee otherwise agrees) give to the Trustee an undertaking in form and manner satisfactory to the Trustee in terms corresponding to the terms of Condition 12 (Taxation) with the substitution for the reference in that Condition to the Issuer’s Territory of references to the Substituted Territory and in such event the Trust Deed and Notes, Receipts and Coupons will be interpreted accordingly;

(vi) without prejudice to the rights of reliance of the Trustee under sub-clause 9.3(d) (Directors’ certification) the Trustee is satisfied that the said substitution is not materially prejudicial to the interests of the Noteholders;

(vii) the Rating Agency has confirmed in writing to the Trustee that the substitution of the Substituted Obligor will not result in:

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(A) in respect of any Series of Notes which is not specifically rated by any rating agency, a downgrading of the then current credit rating of any rating agency applicable to the class of debt represented by the Notes; or

(B) in respect of any Series of Notes which is specifically rated by any rating agency, a downgrading of the then current credit rating applicable to such Series of Notes by such rating agency;

(b) Change of law: in connection with any proposed substitution of the Issuer or any Guarantor or any previous substitute, the Trustee may, in its absolute discretion and without the consent of the Noteholders or the Couponholders agree to a change of the law from time to time governing the Notes and the Coupons and this Trust Deed provided that such change of law, in the opinion of the Trustee, would not be materially prejudicial to the interests of the Noteholders;

(c) Extra duties: the Trustee shall be entitled to refuse to approve any Substituted Obligor if, pursuant to the law of the country of incorporation of the Substituted Obligor, the assumption by the Substituted Obligor of its obligations hereunder imposes responsibilities on the Trustee over and above those which have been assumed under this Trust Deed;

(d) Directors’ certification: if any two directors of the Substituted Obligor certify that immediately prior to the assumption of its obligations as Substituted Obligor under this Trust Deed the Substituted Obligor is solvent after taking account of all prospective and contingent liabilities resulting from its becoming the Substituted Obligor, the Trustee need not have regard to the financial condition, profits or prospects of the Substituted Obligor or compare the same with those of the Issuer or, as the case may be, the relevant Guarantor (or of any previous substitute under this Clause);

(e) Interests of Noteholders: in connection with any proposed substitution, the Trustee shall not have regard to, or be in any way liable for, the consequences of such substitution for individual Noteholders or the Couponholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory and no Noteholder or Couponholder shall, in connection with any such substitution, be entitled to claim from the Issuer or, as the case may be, the relevant Guarantor any indemnification or payment in respect of any tax consequence of any such substitution upon individual Noteholders or Couponholders;

(f) Release of Issuer or, as the case may be, the relevant Guarantor: any agreement by the Trustee pursuant to sub-clause 9.3(a) (Procedure) shall, if so expressed, operate to release the Issuer or, as the case may be, the relevant Guarantor (or such previous substitute as aforesaid) from any or all of its obligations as principal debtor or, as the case may be, as guarantor, in respect of the Notes, Receipts and Coupons and this Trust Deed (but without prejudice to its liabilities under any guarantee given pursuant to sub-clause 9.3(c)). Not later than fourteen days after the execution of any such documents as aforesaid

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and after compliance with the said requirements of the Trustee, the Substituted Obligor shall cause notice thereof to be given to the Noteholders; and

(g) Completion of substitution: upon the execution of such documents and compliance with the said requirements, the Substituted Obligor shall be deemed to be named in this Trust Deed and the Notes, Receipts and Coupons as the principal debtor in place of the Issuer or, as the case may be, the guarantor in place of the relevant Guarantor (or in each case of any previous substitute under this Clause) and this Trust Deed, the Notes, the Receipts and the Coupons shall thereupon be deemed to be amended in such manner as shall be necessary to give effect to the substitution and without prejudice to the generality of the foregoing any references in this Trust Deed, in the Notes, Receipts and Coupons to the Issuer or, as the case may be, the relevant Guarantor shall be deemed to be references to the Substituted Obligor.

9.4 Rating Confirmations

For the purposes of determining whether or not the exercise by the Trustee of any of its trusts, powers, authorities, duties and discretions under this Trust Deed (including, without limitation, any modification, waiver, authorisation, determination or substitution), is materially prejudicial to the interests of the Noteholders of any Series of Notes, the Trustee shall be entitled to rely on (but is not bound by) any S&P or any Substituted Rating Agency confirmation received in respect thereof.

10. BREACH

Any breach of or failure to comply by the Issuer or the Guarantors with any such terms and conditions as are referred to in Clauses 8 and 9 shall constitute a default by the Issuer or the Guarantors (as the case may be) in the performance or observance of a covenant or provision binding on it under or pursuant to this Trust Deed.

11. ENFORCEMENT

11.1 Legal proceedings

The Trustee may at any time, at its discretion and without further notice, institute such proceedings against the Issuer and the Guarantors as it may think fit to recover any amounts due in respect of the Notes which are unpaid or to enforce any of its rights under this Trust Deed or the Conditions but it shall not be bound to take any such proceedings or any other action under this Trust Deed or the Notes unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by the holders of at least one-fifth in principal amount of the outstanding Notes and (b) it shall have been indemnified and/or secured and/or prefunded to its satisfaction against all Liabilities to which it may thereby become liable and all Liabilities incurred by it in connection therewith and provided that the Trustee shall not be held liable for the consequence of taking any such action and may take such action without having regard to the effect of such action on individual Noteholders, Receiptholders, or Couponholders. Only the Trustee may enforce the provisions of the this Trust Deed and the Notes, Receipts and Coupons and no Noteholder, Receiptholder or Couponholder shall be entitled to proceed directly against the Issuer and/or any

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Guarantor unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.

11.2 Evidence of default

Proof that:

(a) as regards any specified Note the Issuer has made default in paying any principal due in respect of such Note shall (unless the contrary be proved) be sufficient evidence that the Issuer has made the like default as regards all other Notes in respect of which a corresponding payment is then due;

(b) as regards any specified Coupon the Issuer has made default in paying any interest due in respect of such Coupon shall (unless the contrary be proved) be sufficient evidence that the Issuer has made the like default as regards all other Coupons in respect of which a corresponding payment is then due; and

(c) as regards any Talon, the Issuer has made default in exchanging such Talon for further Coupons and a further Talon as provided by its terms shall (unless the contrary be proved) be sufficient evidence that the Issuer has made the like default as regards all other Talons which are then available for exchange,

and for the purposes of Subclauses 11.2(a) and 11.2(b) a payment shall be a “corresponding” payment notwithstanding that it is due in respect of a Note of a different denomination from that in respect of the above specified Note.

12. APPLICATION OF MONEYS

12.1 Application of moneys

All moneys received by the Trustee in respect of the Notes of any Series or amounts payable under this Trust Deed will despite any appropriation of all or part of them by the Issuer (including any moneys which represent principal or interest in respect of Notes, Receipts or Coupons which have become void under the Conditions shall, unless and to the extent attributable, in the opinion of the Trustee, to a particular Series of the Notes, be apportioned pari passu and rateably between each Series of the Notes, and all moneys received by the Trustee under this Trust Deed from the Issuer or, as the case may be, the Guarantors to the extent attributable in the opinion of the Trustee to a particular Series of the Notes or which are apportioned to such Series as aforesaid, be held by the Trustee on trust to apply them (subject to Clause 12.2 (Investment of moneys):

(a) first, in payment or satisfaction of those Liabilities incurred by the Trustee or any Appointee in the preparation, maintenance and execution of the trusts of this Trust Deed (including remuneration and any additional remuneration of the Trustee);

(b) secondly, in or towards payment pari passu and rateably of all interest remaining unpaid in respect of the Notes of the relevant Series and all principal moneys due on or in respect of the Notes of that Series provided that

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where the Notes of more than one Series become so due and payable, such monies shall be applied as between the amounts outstanding in respect of the different Series pari passu and rateably (except where, in the opinion of the Trustee, such monies are paid in respect of a specific Series or several specific Series, in which event such monies shall be applied solely to the amounts outstanding in respect of that Series or those Series respectively); and

(c) thirdly, the balance (if any) in payment to the Issuer (without prejudice to, or liability in respect of, any question as to how such payments shall be dealt with as between the Issuer and the Guarantors and any other person).

Without prejudice to this Clause 10, if the Trustee holds any moneys which represent principal or interest in respect of Notes which have become void or in respect of which claims have been prescribed under Condition 14 (Prescription), the Trustee will hold such moneys on the above trusts.

12.2 Investment of moneys

If the amount of the moneys at any time available for payment of principal and interest in respect of the Notes of any Series under Clause 12.1 (Application of moneys) shall be less than a sum sufficient to pay at least one-tenth of the principal amount of the Notes of such Series then outstanding, the Trustee may, at its discretion, invest such moneys upon some or one of the investments hereinafter authorised with power from time to time, with like discretion, to vary such investments; and such investment with the resulting income thereof may be accumulated until the accumulations together with any other funds for the time being under the control of the Trustee and available for the purpose shall amount to a sum sufficient to pay at least one-tenth of the principal amount of the Notes of such Series then outstanding and such accumulation and funds (after deduction of any taxes and any other deductibles applicable thereto) shall then be applied in the manner aforesaid.

12.3 Authorised Investments

Any moneys which under this Trust Deed may be invested by the Trustee may be invested in the name or under the control of the Trustee in any of the investments for the time being authorised by English law for the investment by trustees of trust moneys or in any other investments, whether similar to those aforesaid or not, which may be selected by the Trustee or by placing the same on deposit in the name or under the control of the Trustee with such bank or other financial institution as the Trustee may think fit and in such currency as the Trustee in its absolute discretion may determine and the Trustee may at any time vary or transfer any of such investments for or into other such investments or convert any moneys so deposited into any other currency and shall not be responsible for any Liability occasioned by reason of any such investments or such deposit whether by depreciation in value, fluctuation in exchange rates or otherwise. If that bank or institution is the Trustee or a subsidiary, holding company or associated company of the Trustee, it need only account for an amount of interest equal to the amount of interest that would be payable by it on such deposit to an independent customer.

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12.4 Payment to Noteholders, Receiptholders and Couponholders

The Trustee shall give notice to the Noteholders in accordance with Condition 19 (Notices) of the date fixed for any payment under Clause 12.1 (Application of Moneys). Any payment to be made in respect of the Notes, Receipts or Coupons of any Series by the Issuer, any Guarantor or the Trustee may be made in the manner provided in Condition 11 (Payments), the Agency Agreement and this Trust Deed and any payment so made shall be a good discharge of such payment to the extent of such payment by the Issuer, the relevant Guarantor or the Trustee (as the case may be).

12.5 Production of Notes, Receipts and Coupons

Upon any payment under Clause 12.4 (Payment to Noteholders, Receiptholders and Couponholders) of principal or interest, the Note, Receipt or Coupon in respect of which such payment is made shall, if the Trustee so requires, be produced to the Trustee or the Paying Agent by or through whom such payment is made and the Trustee shall in respect of a Note, Receipt or Coupon (a) in the case of part payment, enface or cause such Paying Agent to enface a memorandum of the amount and date of payment thereon (or, in the case of part payment of an NGN Temporary Global Note or an NGN Permanent Global Note cause the Principal Paying Agent to procure that the ICSDs make appropriate entries in their records to reflect such payment) or (b) in the case of payment in full, cause such Note, Receipt or Coupon to be surrendered or shall cancel or procure the same to be cancelled and shall certify or procure the certification of such cancellation.

12.6 Noteholders to be treated as holding all Receipts and Coupons

Wherever in this Trust Deed the Trustee is required or entitled to exercise a power, trust, authority or discretion under this Trust Deed, the Trustee shall, notwithstanding that it may have express notice to the contrary assume that each Noteholder is the holder of all Receipts, Coupons and Talons appertaining to each Note of which he is the holder.

12.7 Regulated Activities

Notwithstanding anything in this Trust Deed to the contrary, the Trustee shall not be required to do anything which might constitute a regulated activity for the purpose of the FSMA, unless it is authorised under the FSMA to do so.

The Trustee shall have the discretion at any time (i) to delegate any of the functions which fall to be performed by an authorised person under the FSMA to any agent or person which has the necessary authorisations and licences and (ii) to apply for authorisation under the FSMA and perform any or all such functions itself if, in its absolute discretion, it considers it necessary, desirable or appropriate to do so.

13. TERMS OF APPOINTMENT

By way of supplement to the Trustee Acts, it is expressly declared as follows:

13.1 Reliance on Information

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(a) Advice: the Trustee may in relation to this Trust Deed act on the opinion or advice of or a certificate or any information obtained from any lawyer, banker, valuer, surveyor, broker, auctioneer, accountant or other expert (whether obtained by the Trustee, the Issuer, any Guarantor, any Subsidiary or any Agent) and shall not be responsible for any Liability occasioned by so acting; any such opinion, advice, certificate or information may be sent or obtained by letter, telegram, telex, email or facsimile transmission and the Trustee shall not be liable for acting on any opinion, advice, certificate or information purporting to be so conveyed although the same shall contain some error or shall not be authentic;

(b) Certificate of Directors or Authorised Signatories: the Trustee may call for and shall be at liberty to accept a certificate signed by two Directors and/or two Authorised Signatories of the Issuer or any Guarantor, as the case may be, or other person duly authorised on its behalf as to any fact or matter prima facie within the knowledge of the Issuer or the relevant Guarantor, as the case may be, as sufficient evidence thereof and a like certificate to the effect that any particular dealing, transaction or step or thing is, in the opinion of the person so certifying expedient, as sufficient evidence that it is expedient and the Trustee shall not be bound in any such case to call for further evidence or be responsible for any Liability that may be occasioned by its failing so to do;

(c) Certificate of Auditors: a certificate of the Auditors of the Issuer that in their opinion a Subsidiary is or is not or was or was not at any particular time or during any particular period a Material Subsidiary shall, in the absence of manifest error, be conclusive and binding on the Issuer, the Guarantors, the Trustee, the Noteholders, the Receiptholders and the Couponholders;

(d) Resolution or direction of Noteholders: the Trustee shall not be responsible for acting upon any resolution purporting to be a Written Resolution or to have been passed at any meeting of the Noteholders in respect whereof minutes have been made and signed or a direction of a specified percentage of Noteholders, even though it may subsequently be found that there was some defect in the constitution of the meeting or the passing of the resolution or the making of the directions or in the case of a Written Resolution in writing or a direction or a request it was not signed by the requisite number of Noteholders or that for any reason the resolution purporting to be a Written Resolution or to have been passed at any Meeting or the making of the directions was not valid or binding upon the Noteholders, the Receiptholders and the Couponholders;

(e) Reliance on certification of clearing system: the Trustee may call for any certificate or other document issued by Euroclear, Clearstream, Luxembourg or any other relevant clearing system in relation to any matter. Any such certificate or other document shall, in the absence of manifest error, be conclusive and binding for all purposes. Any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including Euroclear’s EUCLID or Clearstream, Luxembourg’s Cedcom system) in accordance with

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its usual procedures and in which the holder of a particular principal or nominal amount of the Notes is clearly identified together with the amount of such holding. The Trustee shall not be liable to any person by reason of having accepted as valid or not having rejected any certificate or other document to such effect purporting to be issued by Euroclear or Clearstream, Luxembourg or any other relevant clearing system and subsequently found to be forged or not authentic;

(f) Noteholders as a class: whenever in this Trust Deed the Trustee is required in connection with any exercise of its powers, trusts, authorities or discretions to have regard to the interests of the Noteholders, it shall have regard to the interests of the Noteholders as a class and in particular, but without prejudice to the generality of the foregoing, shall not be obliged to have regard to the consequences of such exercise for any individual Noteholder resulting from his or its being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Trustee shall not be entitled to require, nor shall any Noteholder, Receiptholder or Couponholder be entitled to claim, from the Issuer, the Guarantors, the Trustee or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders, Receiptholders or Couponholders except to the extent already provided for in Condition 12 (Taxation) and/or any undertaking given in addition thereto or in substitution therefor under this Trust Deed;

(g) Trustee not responsible for investigations: the Trustee shall not be responsible for, or for investigating any matter which is the subject of, any recital, statement, representation, warranty or covenant of any person contained in this Trust Deed, the Notes or any other agreement or document relating to the transactions herein or therein contemplated or for the execution, legality, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence thereof;

(h) No obligation to monitor: the Trustee shall be under no obligation to monitor or supervise the functions of any other person under the Notes or any other agreement or document relating to the transactions herein or therein contemplated and shall be entitled, in the absence of actual knowledge of a breach of obligation, to assume that each such person is properly performing and complying with its obligations;

(i) Notes held by the Issuer: in the absence of knowledge or express notice to the contrary, the Trustee may assume without enquiry (other than requesting a certificate of the Issuer or any Guarantor under sub-clause 8(f) (Notes held by Issuer and the Guarantors), that no Notes are for the time being held by or for the benefit of the Issuer, any Guarantor or any Subsidiary;

(j) Forged Notes: the Trustee shall not be liable to the Issuer, any Guarantor or any Noteholder, Receiptholder or Couponholder by reason of having accepted

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as valid or not having rejected any Note, Receipt or Coupon as such and subsequently found to be forged or not authentic;

(k) Events of Default: the Trustee shall not be bound to give notice to any person of the execution of this Trust Deed or to take any steps to ascertain whether any Event of Default, Potential Event of Default, Change of Control or Change of Control Put Event has happened and, until it shall have actual knowledge or express notice to the contrary, the Trustee shall be entitled to assume that no such Event of Default, or Potential Event of Default, Change of Control or Change of Control Put Event has happened and that the Issuer and each Guarantor is observing and performing all the obligations on its part contained in the Notes, Receipts and Coupons and under this Trust Deed and no event has happened as a consequence of which any of the Notes may become repayable;

(l) Legal Opinions: the Trustee shall not be responsible to any person for failing to request, require or receive any legal opinion relating to any Notes or for checking or commenting upon the content of any such legal opinion and shall not be responsible for any Liability incurred thereby;

(m) Authorised Amount: the Trustee shall not be concerned, and need not enquire, as to whether or not any Notes are issued in breach of the Authorised Amount;

(n) Trustee not Responsible: the Trustee shall not be responsible for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of this Trust Deed or any other document relating thereto and shall not be liable for any failure to obtain any rating of Notes (where required), any licence, consent or other authority for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, performance, enforceability or admissibility in evidence of this Trust Deed or any other document relating thereto. In addition the Trustee shall not be responsible for the effect of the exercise of any of its powers, duties and discretions hereunder;

(o) Freedom to Refrain: notwithstanding anything else herein contained, the Trustee may refrain from doing anything which would or might in its opinion be contrary to any law of any jurisdiction or any directive or regulation of any agency or any state of which would or might otherwise render it liable to any person and may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation;

(p) Right to Deduct or Withhold: notwithstanding anything contained in this Trust Deed, to the extent required by any applicable law, if the Trustee is or will be required to make any deduction or withholding from any distribution or payment made by it hereunder or if the Trustee is or will be otherwise charged to, or is or may become liable to, tax as a consequence of performing its duties hereunder whether as principal, agent or otherwise, and whether by reason of any assessment, prospective assessment or other imposition of liability to taxation of whatsoever nature and whensoever made upon the Trustee, and whether in connection with or arising from any sums received or distributed

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by it or to which it may be entitled under this Trust Deed (other than in connection with its remuneration as provided for herein) or any investments or deposits from time to time representing the same, including any income or gains arising therefrom or any action of the Trustee in connection with the trusts of this Trust Deed (other than the remuneration herein specified) or otherwise, then the Trustee shall be entitled to make such deduction or withholding or, as the case may be, to retain out of sums received by it an amount sufficient to discharge any liability to tax which relates to sums so received or distributed or to discharge any such other liability of the Trustee to tax from the funds held by the Trustee upon the trusts of this Trust Deed; and

(q) Reliance by Trustee: any certificate or report of the Auditors or any other person called for by or provided to the Trustee (whether or not addressed to the Trustee) in accordance with or for the purposes of this Trust Deed may be relied upon by the Trustee as sufficient evidence of the facts stated therein notwithstanding that such certificate or report and/or any engagement letter or other document entered into by the Trustee in connection therewith contains a monetary or other limit on the liability of the Auditors or such other person in respect thereof and notwithstanding that the scope and/or basis of such certificate or report may be limited by any engagement or similar letter or by the terms of the certificate or report itself.

13.2 Trustee’s powers and duties

(a) Trustee’s determination: The Trustee may determine whether or not a default in the performance or observance by the Issuer or any Guarantor of any obligation under the provisions of this Trust Deed or contained in the Notes, Receipts or Coupons is capable of remedy and if the Trustee shall certify that any such default is, in its opinion, not capable of remedy such certificate shall be conclusive and binding upon the Issuer, the Guarantors, the Noteholders, the Receiptholders and the Couponholders;

(b) Determination of questions: the Trustee as between itself and the Noteholders, the Receiptholders and the Couponholders shall have full power to determine all questions and doubts arising in relation to any of the provisions of this Trust Deed and every such determination, whether made upon a question actually raised or implied in the acts or proceedings of the Trustee, shall be conclusive and shall bind the Trustee, the Noteholders, the Receiptholders and the Couponholders;

(c) Trustee’s discretion: the Trustee shall (save as expressly otherwise provided herein) as regards all the trusts, powers, authorities and discretions vested in it by this Trust Deed or by operation of law have absolute and uncontrolled discretion as to the exercise or non-exercise thereof and the Trustee shall not be responsible for any Liability that may result from the exercise or non-exercise thereof but, whenever the Trustee is under the provisions of this Trust Deed bound to act at the request or direction of the Noteholders, the Trustee shall nevertheless not be so bound unless first indemnified and/or provided with security and/or prefunded to its satisfaction against all actions,

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proceedings, claims and demands to which it may render itself liable and all Liabilities which it may incur by so doing;

(d) Trustee’s consent: any consent or approval given by the Trustee for the purposes of this Trust Deed may be given on such terms and subject to such conditions (if any) as the Trustee may require. The Trustee may give any consent or approval, exercise any power, authority or discretion or take any similar action (whether or not such consent, approval, power, authority, discretion or action is specifically referred to in this Trust Deed) if it is satisfied that the interests of the Noteholders will not be materially prejudiced thereby. For any avoidance of doubt, the Trustee shall not have any duty to the Noteholders in relation to such matters other than that which is contained in the preceding sentence;

(e) Conversion of currency: where it is necessary or desirable for any purpose in connection with this Trust Deed to convert any sum from one currency to another it shall (unless otherwise provided by this Trust Deed or required by law) be converted at such rate(s) of exchange, in accordance with such method and as at such date for the determination of such rate(s) of exchange as may be specified by the Trustee in its absolute discretion as relevant and any rate of exchange, method and date so specified shall be binding on the Issuer, the Guarantors, the Noteholders, the Receiptholders and the Couponholders;

(f) Application of proceeds: the Trustee shall not be responsible for the receipt or application by the Issuer of the proceeds of the issue of the Notes, the exchange of any Temporary Global Note for any Permanent Global Note or Notes in definitive form, the exchange of any Permanent Global Note for Notes in definitive form or the delivery of any Note, Receipt or Coupon to the persons entitled to them;

(g) Error of judgment: the Trustee shall not be liable for any error of judgment made in good faith by any officer or employee of the Trustee assigned by the Trustee to administer its corporate trust matters;

(h) Agents: the Trustee may, in the conduct of the trusts of this Trust Deed instead of acting personally, employ and pay an agent on any terms, whether or not a lawyer or other professional person, to transact or conduct, or concur in transacting or conducting, any business and to do or concur in doing all acts required to be done by the Trustee (including the receipt and payment of money) and the Trustee shall not be responsible for any Liability incurred by reason of the misconduct, omission or default on the part of any person appointed by it hereunder or be bound to supervise the proceedings or acts of any such person;

(i) Delegation: the Trustee may, in the execution and exercise of all or any of the trusts, powers, authorities and discretions vested in it by this Trust Deed, act by responsible officer(s) for the time being of the Trustee and the Trustee may also whenever it thinks fit, whether by power of attorney or otherwise, delegate to any person(s) or fluctuating body of persons (whether being a joint trustee of this Trust Deed or not) all or any of the trusts, powers, authorities

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and discretions vested in it by this Trust Deed and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate with the consent of the Trustee) as the Trustee may think fit in the interests of the Noteholders and the Trustee shall not be bound to supervise the proceedings or acts of and shall not in any way or to any extent be responsible for any Liability incurred by reason of the misconduct, omission or default on the part of such delegate or sub-delegate;

(j) Custodians and nominees: the Trustee may appoint and pay any person to act as a custodian or nominee on any terms in relation to such assets of the trust as the Trustee may determine, including for the purpose of depositing with a custodian this Trust Deed or any document relating to the trust created hereunder and the Trustee shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it hereunder or be bound to supervise the proceedings or acts of any such person; the Trustee is not obliged to appoint a custodian if the Trustee invests in securities payable to bearer;

(k) Maintenance of ratings: the Trustee shall have no responsibility whatsoever to the Issuer, the Guarantors, any Noteholder, Receiptholder or Couponholder or any other person for the maintenance of or failure to maintain any rating of any of the Notes by any rating agency;

(l) Confidential information: the Trustee shall not (unless required by law or ordered so to do by a court of competent jurisdiction) be required to disclose to any Noteholder, Receiptholder or Couponholder confidential information or other information made available to the Trustee by the Issuer or any Guarantor in connection with this Trust Deed and no Noteholder, Receiptholder or Couponholder shall be entitled to take any action to obtain from the Trustee any such information; and

(m) Responsibility for loss: the Trustee shall not be liable or responsible for any Liabilities or inconvenience which may result from anything properly done or properly omitted to be done by it in accordance with the provisions of this Trust Deed.

13.3 Financial matters

(a) Professional charges: Any trustee being a banker, lawyer, broker or other person engaged in any profession or business shall be entitled to charge and be paid all usual professional and other charges for business transacted and acts done by him or his partner or firm on matters arising in connection with the trusts of this Trust Deed and also his properly incurred charges in addition to disbursements for all other work and business done and all time spent by him or his partner or firm on matters arising in connection with this Trust Deed, including matters which might or should have been attended to in person by a trustee not being a banker, lawyer, broker or other professional person;

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(b) Expenditure by the Trustee: nothing contained in this Trust Deed shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties or the exercise of any right, power, authority or discretion hereunder if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not assured to it; and

(c) Trustee may enter into financial transactions with the Issuer and Guarantors: no Trustee and no director or officer of any corporation being a Trustee hereof shall by reason of the fiduciary position of such Trustee be in any way precluded from making any contracts or entering into any transactions in the ordinary course of business with the Issuer, any Guarantor or any Subsidiary, or any person or body corporate directly or indirectly associated with the Issuer, any Guarantor, or any Subsidiary, or from accepting the trusteeship of any other debenture stock, debentures or securities of the Issuer or any Subsidiary, any Guarantor or any person or body corporate directly or indirectly associated with the Issuer or any Subsidiary, and neither the Trustee nor any such director or officer shall be accountable to the Noteholders, the Receiptholders, the Couponholders, the Issuer, any Guarantor or any Subsidiary, or any person or body corporate directly or indirectly associated with the Issuer, any Guarantor or any Subsidiary, for any profit, fees, commissions, interest, discounts or share of brokerage earned, arising or resulting from any such contracts or transactions and the Trustee and any such director or officer shall also be at liberty to retain the same for its or his own benefit.

13.4 Disapplication

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Trustee in relation to the trusts constituted by this Trust Deed. Where there are any inconsistencies between the Trustee Acts and the provisions of this Trust Deed, the provisions of this Trust Deed shall, to the extent allowed by law, prevail and, in the case of any such inconsistency with the Trustee Act 2000, the provisions of this Trust Deed shall constitute a restriction or exclusion for the purposes of that Act.

13.5 Trustee Liability

(a) Nothing in this Trust Deed shall in any case in which the Trustee has failed to show the degree of care and diligence required of it as trustee having regard to the provisions of this Trust Deed conferring on it any trusts, powers, authorities or discretions exempt the Trustee from or indemnify it against any liability for breach of trust of which it may be guilty in relation to its duties under this Trust Deed.

(b) Notwithstanding any provision of this Trust Deed to the contrary, the Trustee shall not in any event be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits, goodwill, reputation, business opportunity or anticipated saving), whether or not foreseeable, even if the Trustee has been advised of the likelihood of such loss or damage and regardless of whether the claim for loss

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or damage is made in negligence, for breach of contract, breach of trust or otherwise; provided however, that this clause shall not be deemed to apply in the event of a determination of fraud on the part of the Trustee in a judgement by a court having jurisdiction.

14. COSTS AND EXPENSES

14.1 Remuneration

(a) Normal remuneration: The Issuer shall pay to the Trustee remuneration for its services as trustee as from the date of this Trust Deed, such remuneration to be at such rate as may from time to time be agreed between the Issuer and the Trustee. Such remuneration shall be payable in advance on the anniversary of the date hereof in each year and the first payment shall be made on the date hereof. Such remuneration shall accrue from day to day and be payable (in priority to payments to the Noteholders, Receiptholders or Couponholders up to and including the date when, all the Notes having become due for redemption, the redemption moneys and interest thereon to the date of redemption have been paid to the Principal Paying Agent or the Trustee, provided that if upon due presentation (if required pursuant to the Conditions) of any Note, Receipt or Coupon or any cheque, payment of the moneys due in respect thereof is improperly withheld or refused, remuneration will be deemed not to have ceased to accrue and will commence again to accrue until payment to such Noteholder, Receiptholder or Couponholder is made).

(b) Extra remuneration: In the event of the occurrence of an Event of Default, a Potential Event of Default, a Change of Control or a Change of Control Put Event or the Trustee considering it expedient or necessary or being requested by the Issuer or any Guarantor to undertake duties which the Trustee and the Issuer or such Guarantor agree to be of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee under this Trust Deed, the Issuer shall pay to the Trustee such additional remuneration as shall be agreed between them.

(c) Value added tax: The Issuer shall in addition pay to the Trustee an amount equal to the amount of any value added tax or similar tax chargeable in respect of its remuneration under this Trust Deed.

(d) Failure to agree: In the event of the Trustee and the Issuer failing to agree:

(i) (in a case to which sub-clause 14.1(a) applies) upon the amount of the remuneration; or

(ii) (in a case to which sub-clause 14.1(b) applies) upon whether such duties shall be of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee under this Trust Deed, or upon such additional remuneration,

such matters shall be determined by a merchant bank (acting as an expert and not as an arbitrator) selected by the Trustee and approved by the Issuer or,

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failing such approval, nominated (on the application of the Trustee) by the President for the time being of The Law Society of England and Wales (the expenses involved in such nomination and the fees of such merchant bank being payable by the Issuer) and the determination of any such merchant bank shall be final and binding upon the Trustee and the Issuer.

(e) Expenses: The Issuer shall also pay or discharge all costs, charges and expenses properly incurred by the Trustee in relation to the preparation and execution of, the exercise of its powers and the performance of its duties under, and in any other manner in relation to, this Trust Deed, including but not limited to legal and travelling expenses and any stamp, issue, registration, documentary and other taxes or duties paid or payable by the Trustee in connection with any action taken or contemplated by or on behalf of the Trustee for enforcing, or resolving any doubt concerning, or for any other purpose in relation to, this Trust Deed.

(f) Indemnity: Without prejudice to the right of indemnity by law given to trustees, the Issuer shall indemnify the Trustee and every Appointee and keep it or him indemnified against all Liabilities to which it or he may be or become subject or which may be properly incurred by it or him in the preparation or execution or purported execution of any of its or his trusts, powers authorities and discretions under this Trust Deed or its or his functions under any such appointment or in respect of any other matter or thing done or omitted in any way relating to the Trust Deed or any such appointment (including all Liabilities incurred in disputing or defending the foregoing). The Trustee may use reasonable endeavours to provide to the Issuer written evidence of any Liabilities referred to in this Clause.

(g) Payment of amounts due: All amounts due and payable pursuant to sub clauses 14.1(e) (Expenses) and 14.1(f) (Indemnity) shall be payable by the Issuer on the date specified in a demand by the Trustee; the rate of interest applicable to such payments shall be one per cent. per annum above the base rate from time to time of HSBC Bank plc and interest shall accrue:

(i) in the case of payments made by the Trustee prior to the date of the demand, from the date on which the payment was made or such later date as specified in such demand;

(ii) in the case of payments made by the Trustee on or after the date of the demand, from the date specified in such demand, which date shall not be a date earlier than the date such payments are made.

All remuneration payable to the Trustee shall carry interest at the rate specified in this Clause 14.1(g) (Payment of amounts due) from the due date thereof.

(h) Apportionment of expenses: The Trustee shall apportion the costs, charges, expenses and liabilities incurred by the Trustee in the preparation and execution of the trusts of this Trust Deed (including remuneration of the

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Trustee) between the several Series of Notes in such manner and in such amounts as it shall, in its absolute discretion, consider appropriate.

(i) Discharges: Unless otherwise specifically stated in any discharge of this Trust Deed the provisions of this Clause 13.5(a) (Costs and Expenses) shall continue in full force and effect notwithstanding such discharge.

(j) Payments: All payments to be made by the Issuer to the Trustee under this Trust Deed shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within any relevant jurisdiction or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer shall pay such additional amount as will, after such deduction or withholding has been made, leave the Trustee with the full amount which would have been received by it had no such withholding or deduction been required.

14.2 Stamp duties

The Issuer will pay all stamp duties, registration taxes, capital duties and other similar fees, duties or taxes (if any), including interest and penalties, payable on or in connection with (a) the constitution and issue of the Notes, Receipts and Coupons, (b) the initial delivery of the Notes, (c) any action taken by the Trustee (or any Noteholder, Receiptholder or Couponholder where permitted or required under this Trust Deed so to do) to enforce the provisions of the Notes or this Trust Deed and (d) the execution and delivery of this Trust Deed. If the Trustee (or any Noteholder, Receiptholder, or Couponholder where permitted under this Trust Deed so to do) shall take any proceedings against the Issuer in any other jurisdiction and if for the purpose of any such proceedings this Trust Deed or any Note is taken into any such jurisdiction and any stamp duties or other duties or taxes become payable thereon in any such jurisdiction, the Issuer will pay (or reimburse the person making payment of) such stamp duties or other duties or taxes (including penalties).

14.3 Exchange rate indemnity

(a) Currency of Account and Payment: The Contractual Currency is the sole currency of account and payment for all sums payable by the Issuer and the Guarantors under or in connection with this Trust Deed, the Notes, the Receipts and the Coupons including damages;

(b) Extent of Discharge: an amount received or recovered in a currency other than the Contractual Currency (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding up or dissolution of the Issuer or any Guarantor or otherwise) by the Trustee or any Noteholder, Receiptholder or Couponholder in respect of any sum expressed to be due to it from the Issuer or any Guarantor will only discharge the Issuer or any Guarantor to the extent of the Contractual Currency amount which the

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recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so);

(c) Indemnity: if that Contractual Currency amount is less than the Contractual Currency amount expressed to be due to the recipient under this Trust Deed or the Notes, the Receipts or the Coupons, the Issuer and the Guarantor will indemnify the Trustee or any Noteholder, Receiptholder or Couponholder against any Liability sustained by it as a result. In any event, the Issuer and the Guarantor will indemnify the recipient against the cost of making any such purchase; and

(d) any deficiency arising or resulting from any variation in rates of exchange between (i) the date as of which the local currency equivalent of the amounts due or contingently due under this Trust Deed (other than this Clause) is calculated for the purposes of any bankruptcy, insolvency or liquidation of the Issuer or, as the case may be, the Guarantor and (ii) the final date for ascertaining the amount of claims in such bankruptcy, insolvency or liquidation. The amount of such deficiency shall be deemed not to be reduced by any variation in rates of exchange occurring between the said final date and the date of any distribution of assets in connection with any such bankruptcy, insolvency or liquidation.

14.4 Indemnities separate

The indemnities in this Clause 13.5(a) constitute separate and independent obligations from the other obligations in this Trust Deed, will give rise to separate and independent causes of action, will apply irrespective of any indulgence granted by the Trustee and/or any Noteholder, Receiptholder or Couponholder and will continue in full force and effect despite any judgment, order, claim or proof for a liquidated amount in respect of any sum due under this Trust Deed or the Notes, the Receipts or the Coupons or any other judgment or order. Any such Liability as referred to in sub-clause 14.3(c) (Indemnity) shall be deemed to constitute a Liability suffered by the Trustee, the Noteholders, the Receiptholders and the Couponholders and no proof or evidence of any actual Liability shall be required by the Issuer or any Guarantor or its liquidator or liquidators.

15. APPOINTMENT AND RETIREMENT

15.1 Appointment of Trustees

The power of appointing new trustees of this Trust Deed shall be vested in the Issuer but no person shall be appointed who shall not previously have been approved by an Extraordinary Resolution of the Noteholders. A trust corporation may be appointed sole trustee hereof but subject thereto there shall be at least two trustees hereof one at least of which shall be a trust corporation. Any appointment of a new trustee hereof shall as soon as practicable thereafter be notified by the Issuer to the Agents and the Noteholders. The Noteholders shall together have the power, exercisable by Extraordinary Resolution, to remove any trustee or trustees for the time being hereof.

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The removal of any trustee shall not become effective unless there remains a trustee hereof (being a trust corporation) in office after such removal. If, in such circumstances, no appointment of such a new trustee has become effective within 60 days of the date of such Extraordinary Resolution, the Trustee shall be entitled to appoint a Trust Corporation as trustee of this Trust Deed, but no such appointment shall take effect unless previously approved by an Extraordinary Resolution.

15.2 Co-trustees

Notwithstanding the provisions of Clause 15.1 (Appointment of Trustees), the Trustee may, upon giving prior notice to the Issuer and the Guarantors but without the consent of the Issuer or the Guarantors or the Noteholders, the Receiptholders or the Couponholders, appoint any person established or resident in any jurisdiction (whether a trust corporation or not) to act either as a separate trustee or as a co-trustee jointly with the Trustee:

(a) if the Trustee considers such appointment to be in the interests of the Noteholders, the Receiptholders or the Couponholders; or for the purposes of conforming to any legal requirements, restrictions or conditions in any jurisdiction in which any particular act or acts are to be performed; or

(b) for the purposes of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction either of a judgment already obtained or of this Trust Deed.

15.3 Attorneys

The Issuer and each Guarantor hereby irrevocably appoints the Trustee to be its attorney in its name and on its behalf to execute any such instrument of appointment. Such a person shall (subject always to the provisions of this Trust Deed) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Trustee by this Trust Deed) and such duties and obligations as shall be conferred on such person or imposed by the instrument of appointment. The Trustee shall have power in like manner to remove any such person. Such remuneration as the Trustee may pay to any such person, together with any attributable Liabilities incurred by it in performing its function as such separate trustee or co-trustee, shall for the purposes of this Trust Deed be treated as Liabilities incurred by the Trustee.

15.4 Retirement of Trustees

Any Trustee for the time being of this Trust Deed may retire at any time upon giving not less than 60 days’ notice in writing to the Issuer without assigning any reason thereof and without being responsible for any Liabilities occasioned by such retirement. The retirement of any Trustee shall not become effective unless there remains a trustee hereof (being a trust corporation) in office after such retirement. The Issuer hereby covenants that in the event of the only trustee hereof which is a trust corporation giving notice under this Clause it shall use its reasonable endeavours to procure a new trustee, being a trust corporation, to be appointed and if the Issuer has not procured the appointment of a new trustee within 30 days of the expiry of the Trustee notice referred to in this Clause 15.4, the Trustee shall be entitled to procure forthwith a new trustee.

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15.5 Competence of a majority of Trustees

Whenever there shall be more than two trustees hereof the majority of such trustees shall (provided such majority includes a trust corporation) be competent to execute and exercise all the trusts, powers, authorities and discretions vested by this Trust Deed in the Trustee generally.

15.6 Powers additional

The powers conferred by this Trust Deed upon the Trustee shall be in addition to any powers which may from time to time be vested in it by general law or as the holder of any of the Notes, the Receipts or the Coupons.

15.7 Merger

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Clause, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

16. NOTICES

16.1 Addresses for notices

All notices and other communications hereunder shall be made in writing and in English (by letter, telex or fax) and shall be sent as follows:

(a) Issuer: if to the Issuer, to it at:

InterContinental Hotels Group PLC

Broadwater Park

Denham

Buckinghamshire UB9 5HR

Fax:     01895 512 101

Attention:             The General Counsel and Company Secretary

(b) Guarantors: if to the Guarantors, to them c/o the Issuer

(c) Trustee: if to the Trustee, to it at:

HSBC Corporate Trustee Company (UK) Limited

8 Canada Square

London E14 5HQ

Fax: +44 20 7991 4350

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Attention: CTLA Trustee Service Administration

16.2 Effectiveness

Every notice or other communication sent in accordance with Clause 15.1 shall be effective as follows:

(a) Letter or fax: if sent by letter, it shall be deemed to have been delivered 7 days after the time of despatch and if sent by fax it shall be deemed to have been delivered at the time of despatch; and

(b) Telex: if sent by telex, upon receipt by the sender of the addressee’s answerback at the end of transmission;

provided that any such notice or other communication which would otherwise take effect after 4.00 p.m. on any particular day shall not take effect until 10.00 a.m. on the immediately succeeding business day in the place of the addressee.

16.3 No Notice to Couponholders or Receiptholders

Neither the Trustee nor the Issuer nor any Guarantor shall be required to give any notice to the Couponholders or Receiptholders for any purpose under this Trust Deed and the Couponholders and Receiptholders shall be deemed for all purposes to have notice of the contents of any notice given to the Noteholders in accordance with Condition 19.

17. LAW AND JURISDICTION

17.1 Governing law

This Trust Deed and the Notes, and any non-contractual obligations arising out of or in connection with this Trust Deed and the Notes, are governed by English law.

17.2 English courts

The courts of England have exclusive jurisdiction to settle any dispute (a Dispute), arising out of or in connection with this Trust Deed or the Notes (including a dispute regarding the existence, validity or termination of this Trust Deed or the Notes or any non-contractual obligation arising out of or in connection with them) or the consequences of their nullity.

17.3 Appropriate forum

The parties agree that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that they will not argue to the contrary.

18. SEVERABILITY

In case any provision in or obligation under this Trust Deed shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the

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remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

19. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No person shall have any right to enforce any provision of this Trust Deed under the Contracts (Rights of Third Parties) Act 1999, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

20. COUNTERPARTS

This Trust Deed may be executed in any number of counterparts, each of which shall be deemed an original.

IN WITNESS WHEREOF this Trust Deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the date first before written.

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FIRST SUPPLEMENTAL TRUST DEED

EXECUTION CLAUSES

The Issuer

EXECUTED and DELIVERED as a DEED by	)
	)	/s/ Richard Solomons
as attorney for	)	/s/ George Turner
INTERCONTINENTAL HOTELS GROUP PLC	)
Witness:         Signature: /s/ Martin Bennett                          Name: Martin Bennett
The Guarantors
EXECUTED and DELIVERED as a DEED by	)
INTERCONTINENTAL HOTELS LIMITED	)
a company incorporated in England and Wales	)	/s/ Ralph Wheeler
acting by	)	/s/ George Turner
	)
a director of the Company and a director of the company/the company secretary	) )
EXECUTED and DELIVERED as a DEED by	)
SIX CONTINENTS LIMITED	)
a company incorporated in England and Wales	)	/s/ Ralph Wheeler
acting by	)	/s/ George Turner
	)
a director of the Company and a director of the company/the company secretary	) )

The Trustee

EXECUTED and DELIVERED as a DEED by	)
	)
for	)	/s/ John Pickthorn
HSBC CORPORATE TRUSTEE	)
COMPANY (UK) LIMITED	)
Witness:        Signature: /s/ Anne Danhaive                        Name: Anne Danhaive

EX-4.C.I

Exhibit 4(c)(i)

Employment Agreement

between

Six Continents Limited

as Company

and

TRACY ROBBINS

as Executive

relating to

the employment of the Executive with the Company

CONTENTS

1.	Appointment	3
2.	Duties and Powers	4
3.	Mobility	4
4.	Remuneration	4
5.	Short Term Incentive Schemes	5
6.	Long Term Incentive and Share Plans	5
7.	Expenses and Gratuities	5
8.	Professional Memberships	5
9.	Company Car	6
10.	Holidays	6
12.	Sickness and Incapacity	7
13.	Notification of Absence	7
13.	Pension	7
14.	Private Medical Insurance	8
15.	Additional Benefits	8
16.	Exclusive Service	8
17.	Intellectual Property	8
18.	Confidentiality	10
19.	Restrictive Covenants	11
20.	Notification of Restrictions	11
21.	Directorships	11
22.	Garden Leave	12
23.	Termination	13
24.	Return of Property	14
25.	Disciplinary and Grievance Procedure	15
26.	Data Protection	15
27.	Notices	15
28.	Assignment	15
29.	Third Party Rights	15
30.	Law and Jurisdiction	15
31.	Prior Agreements and other employment-related conditions	16
32.	Collective Agreements	16
33.	Severability and Amendments	16
34.	Interpretation	16

2

THIS AGREEMENT is dated 9 August 2011 and made

BETWEEN:

(1) Six Continents Limited (the “Company”), registered in England and Wales as company number 913450 and a company in the InterContinental Hotels Group, with its registered office at Broadwater Park, Denham, Buckinghamshire, UB9 5HR; and

(2) TRACY ROBBINS (the “Executive”), of

Pope House, Brackney Terrace, Chiswick, London, W1.

THE PARTIES AGREE THAT:

1 Appointment

1.1 The Company shall employ the Executive and the Executive agrees to serve the Company and any other Group Company or Group Companies as required by the Board or any person authorised by the Board for that purpose, in the capacity of a Director and EVP, HUMAN RESOURCES AND HEAD OF OPERATIONS SUPPORT of IHG . The Executive’s reward band is 1.

1.2 Employment hereunder shall commence on 9 August 2011 and shall continue (subject to termination as provided for below) unless and until terminated by either party giving to the other not less than the following notice period in writing, expiring at any time:

(a) notice period from the Company to the Executive: 52 weeks

(b) notice period from the Executive to the Company: 26 weeks

1.3 The Executive’s period of continuous employment with the Group commenced on 12 December 2005.

1.4 The Executive warrants that:

1.4.1 the Executive is not prevented from performing the Executive’s duties in accordance with the terms of this agreement by any obligation or duty owed to any other party, whether contractual or otherwise; and

1.4.2 the Executive has all necessary qualifications and memberships required for the Executive to perform the Executive’s duties under this Agreement and is not and has not been subject to any prohibition, censure, criticism or disciplinary sanction by any professional, regulatory or other body or authority which would prevent the Executive from performing any duties under this Agreement or undermine the confidence of the Board in the Employment by the Company.

1.5 Employment is conditional upon the following conditions, if required by the Company:

(a) the Executive undergoing a medical examination with a medical practitioner nominated by the Company, the results of which are satisfactory to the Company;

(b) the Executive providing to the Company copies or other verification of academic, professional or other business qualifications notified to the Company.

3

2 Duties and Powers

2.1 The Executive shall exercise such powers, perform such duties (if any) commensurate with his status as EVP, Human Resources and Head of Operations Support and comply with such reasonable and lawful directions in relation to the business of the Company or any other Group Company as the Board or any person authorised by the Board for the purpose may, from time to time, confer upon or assign or give to him.

2.2 The Executive shall, during the continuance of this Agreement (unless prevented by ill health or accident or as otherwise agreed by the Board in writing), devote substantially the whole of the Executive’s working time and attention and abilities to the Business and shall use the Executive’s reasonable endeavours to promote and protect the general interests and welfare of the Company, the Group and any other Group Company to which the Executive may from time to time render the Executive’s services under this Agreement.

2.3 The Executive shall at all times promptly give to the Board (in writing if so requested) all such information, explanations and assistance as it may require in connection with the Business and the Executive’s employment under this Agreement.

2.4 The Executive shall work normal business hours, which are 35 hours per week, and such additional hours as may be necessary in the performance of the Executive’s duties and powers under this Agreement. The nature of the Executive’s job is such that the Executive is largely able to prioritise tasks, determine the time and effort the Executive devotes to those tasks and when the Executive does them. To the extent the Executive therefore determines the Executive’s working hours outside normal business hours, the additional hours will not count as working time towards the weekly working time limit of 48 hours on average. No overtime will be paid with respect to any hours by the executive outside normal business hours.

2.5 The Executive will promptly disclose to the Board full details of any wrongdoing by any employee or officer of any Group Company (including the Executive) where that wrongdoing is material to that employee’s employment by the relevant company or to the interests or reputation of any Group Company.

3 Mobility

3.1 The Executive’s principal place of work is Broadwater Park, Denham, Buckinghamshire. The Executive’s principal place of work may be changed to such place or places within the United Kingdom as the Company shall reasonably require. Should the Company wish the Executive to relocate outside the United Kingdom such relocation shall be the subject of agreement between the Company and the Executive.

3.2 The Executive may be required to travel both inside and outside the United Kingdom on the business of the Company or any Group Company in the proper performance of the Executive’s duties from time to time.

4 Remuneration

4.1 The Company shall pay to the Executive a salary at the annual rate of £400,000. Such salary shall be payable not less frequently than every month on a date which will be no later than the last day of the month and shall be deemed to accrue from day to day. Such salary shall include any director’s fees payable to the Executive. The Company shall be entitled to procure payment of the salary for administrative reasons by another Group Company.

4

4.2 The salary payable to the Executive pursuant to clause 4.1 shall be subject to review in accordance with the Company’s practice from time to time but there shall be no obligation on the Company to increase such salary.

4.3 The Company shall be entitled at any time to deduct from the Executive’s remuneration (which includes salary, salary supplement, any bonus, vacation or other pay) any sums owing to it or to any other Group Company (including but not limited to any advance of a cash float to cover business expenses, any advance of pay, vacation pay relating to vacation taken in excess of entitlement) by the Executive to which deduction the Executive expressly hereby consents.

5 Short Term Incentive Schemes

5.1 The Executive shall be eligible to participate in the Company’s or any Group Company (as appropriate) discretionary incentive scheme or schemes applicable from time to time for employees in the Executive’s reward band, subject to the rules of such relevant scheme(s). Details of the current applicable scheme(s) will be provided to the Executive. Awards are determined in accordance with the rules of the applicable scheme.

5.2 Subject to the Company’s obligations in clause 5.1, the Company reserves the right in its absolute discretion, to vary the terms and/or any targets and/or level of bonus opportunity and/or bonus payable, under any incentive scheme from time to time in operation. Any bonus paid is not pensionable and is subject to deductions for tax and social security contributions.

6 Long Term Incentive Share Plans

6.1 The Executive shall be eligible to participate in such share option or other share ownership schemes as the Company or the Group may operate from time to time and which are applicable to employees in the Executive’s reward band, subject to the rules of the relevant scheme(s). Details of any current applicable scheme(s) will be provided to the Executive. Awards are determined in accordance with the rules of the applicable scheme.

6.2 Subject to the Company’s obligations in clause 6.1, the Company reserves the right, in its absolute discretion, to vary the terms of any such scheme or withdraw any such plan without providing any replacement. Any payment made under this clause is not pensionable and is subject to deductions for tax and social security contributions.

7 Expenses and Gratuities

7.1 In accordance with Company policy, the Company shall pay or refund to the Executive all reasonable travelling, entertainment and other similar out of pocket expenses properly and wholly incurred by the Executive in the proper performance of the Executive’s duties subject to production by the Executive of such evidence of such expenses as the Company may require. If the Executive is provided with a Company credit card or charge card, the Executive shall use it only for such expenses as the Executive is entitled under this sub-clause to have reimbursed by the Company.

7.2 The Executive shall at all times comply with the Group’s policies in force from time to time regarding acceptance of gifts, gratuities and/or benefits.

8 Professional Memberships

8.1 In accordance with and subject to Company policy, and upon prior approval, the Company shall pay for up to two memberships with recognised professional bodies where membership of such professional body is directly related to and required in relation to the Executive’s job from time to time or the Executive’s normal professional skill.

5

8.2 Where required, whether by the Company, law, any regulatory organisation or otherwise, the Executive should at all times during the Executive’s employment with the Company maintain the Executive’s membership of such professional, trade or other bodies necessary for the proper performance of the Executive’s duties.

9 Company Car

9.1 In accordance with and subject to the rules of the Company Car policy for employees in the reward band which applies to the Executive, the Company shall, at its option, either:

(a) make available to the Executive a motor car (“the Car”) for the Executive’s use or;

(b) pay the Executive a taxable, non-pensionable car allowance at a level to be determined by the Company. The allowance will be paid monthly in arrears in the same manner as the Executive’s salary.

9.2 A copy of the relevant car policy shall be provided to the Executive and the Executive is required to comply with its rules from time to time. The Company reserves the right, in its reasonable discretion, to vary the rules and/or standard of car and/or level of car allowance available to employees in the Executive reward band which applies to the Executive.

10 Holidays

10.1 The Company’s holiday year is 1 January to 31 December (the “Holiday Year”).

10.2 In addition to public holidays, the Executive shall be entitled to paid vacation in each Holiday Year in accordance with the stated policy for the Executive’s reward band in the principal place of work, to be taken at times to be agreed with the Company in advance. Subject to clause 10.3, no payment will be made for vacation days not taken in the Holiday Year in which they arise although the Executive may carry forward any unused vacation days from one Holiday Year to the next, subject to a maximum of 5 days to be carried forward into the following Holiday Year.

10.3 Upon termination of this Agreement the Executive shall be entitled to payment in lieu of any untaken outstanding vacation entitlement in the Holiday Year during which the Executive’s employment terminates, which entitlement shall accrue on a pro-rata monthly basis.

10.4 Upon termination of the Executive’s employment under this Agreement, the Company shall be entitled to deduct from any sum owed by the Company to the Executive a sum representing overpayment of salary with respect to the number of vacation days which the Executive has taken in excess of the Executive’s accrued vacation entitlement calculated on a pro-rata monthly basis as at the date of the termination of the Executive’s employment and the Executive hereby authorises the Company to make such deduction.

10.5 The Company shall be entitled to require the Executive to take all or any part of any accrued untaken vacation entitlement during the period of notice to terminate the Executive’s employment (including, for the avoidance of doubt, during any period of garden leave pursuant to clause 22).

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11 Sickness and Incapacity

11.1 When the Executive is absent from work and unable to perform the Executive’s duties under this Agreement satisfactorily by reason of any injury, illness or other reason satisfactory to the Company and subject to compliance with clause 12, the Executive shall be entitled to receive the Executive’s full salary and other contractual benefits for up to the first 26 weeks of any such absence and thereafter the Executive shall receive half the Executive’s salary.

11.2 Any salary payable pursuant to this clause shall be inclusive of the amount of any benefit or statutory sick pay to which the Executive may be entitled during the period of such inability under any local law for the time being in force.

11.3 The Executive shall submit to a medical examination by a doctor appointed by the Company at the request of the Chief Executive, at the expense of the Company, at any time during the continuance of this Agreement, whether or not the Executive is absent by reason of sickness, injury or other incapacity. The Executive consents to the Company’s Chief Executive or General Counsel from time to time obtaining a copy of the Executive’s medical records from the Executive’s medical practitioner in circumstances where the Company deems such a step to be required. The Executive further agrees that the Executive shall authorise the medical practitioner and the Company’s Chief Executive or General Counsel to discuss further any matters arising from such medical report, diagnosis or prognosis to the extent relevant to the Executive’s employment or the performance of the Executive’s duties and the Company shall disclose the content of all such communications to the Executive.

11.4 If the Executive is absent from work by reason of injuries sustained wholly or partly as a result of actionable negligence, nuisance or breach of any statutory duty on the part of any third party other than the Company or any Group Company, the Executive shall promptly inform the Executive’s line manager of that fact and the Company in its discretion may require the Executive to take all reasonable steps to recover from such third party or its insurers compensation including repayment of all sums paid to the Executive by the Company under this clause in respect of absence. Any such sums (which are paid to the Executive by the Company on that basis) shall in turn be repaid by the Executive when and to the extent that the Executive recovers compensation for loss of earnings from that third party or its insurers by legal action or otherwise less reasonable cost incurred in recovering any such compensation.

12 Notification of Absence

12.1 If the Executive is unable to come to work for any reason and the Executive’s absence has not previously been authorised by the Company, the Executive must notify the Company as soon as practicable and in accordance with the stated policy for the Executive’s reward band in the principal place of work.

13 Pension

13.1 The Company operates various pension schemes. The Executive may be a member of the applicable pension scheme as determined by the Executive’s start date with the Company and the Executive’s reward band (“the Scheme”) at the applicable level and subject to the terms of the trust deed and rules governing the Scheme from time to time, including, without limitation, any powers of alteration and discontinuance. The Executive’s membership of the Scheme shall be in substitution for, and shall operate to the exclusion of, any agreement or representation whether written or oral in relation to pension entitlement made with or to the Executive by any person on behalf of the Company or any Group Company at any time prior to the date of this Agreement.

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14 Private Medical Insurance

14.1 The Executive, the Executive’s spouse and any dependent unmarried children under age 21 (or 25 if in full time education) or such older age as required by applicable law, as the case may be, will to the extent eligible (as determined by the Executive’s reward band and any applicable plan rules) participate in and receive benefits under the private medical and insurance plans made available by the Company (and any other plans which the Company may provide from time to time) subject to the rules or insurance policies constituting such plans from time to time.

14.2 A copy of the relevant private medical and insurance plans shall be provided to the Executive and the Executive is required to comply with their rules from time to time. The Company reserves the right, in its absolute discretion, to vary the plans or to suspend (for a fixed or indefinite period) or withdraw the plans without providing any replacement.

14.3 In the event that the Executive claims under any insurance plan referred to in sub-clause 14.1 and such claim is rejected by the insurer, the Company shall not be obliged to issue proceedings in relation to such claim.

15 Additional Benefits

15.1 In the event that any special terms apply to the Executive, these are as set out in the Executive’s offer letter.

16 Exclusive Service

16.1 The Executive will devote substantially the whole of the Executive’s working time, attention and skill to the Employment. In the event that the Executive wishes to take up an external non-executive directorship during the Employment, such position will be subject to Board approval.

16.2 At the request of the Company, the Executive will disclose promptly in writing to the Company all the Executive’s outside business interests (for example, office holdings or directorships).

16.3 Without prejudice to clause 16.1 above, and subject to clause 16.4 below, during the Employment the Executive will not be directly or indirectly engaged or concerned in the conduct of any activity which is similar to or competes with any activity carried on by any Group Company (except as a representative of the Company or with the written consent of the Board) nor make preparations to be engaged or interested either directly or indirectly in any business or occupation which is similar to or competes with any activity carried on by any Group Company.

16.4 The Executive may not without written consent of the Board hold or be interested in investments which amount to more than five percent of the issued investments of any class of any one company whether or not those investments are listed or quoted on any recognised Stock Exchange or dealt in on the Alternative Investments Market.

17 Intellectual Property

17.1 The Executive acknowledges that:

(i) the Executive may make Inventions in the course of the Employment, whether in the Executive’s normal or other specifically assigned duties; and

(ii) the Executive has a special obligation to further the interests of the Group as a whole and of each Group Company.

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17.2 If the Executive makes or is involved in making an Invention during the Employment, the Executive will promptly inform the Company. The Executive will give the Company sufficient details of any Invention to allow the Company to assess the Invention and to decide whether the Invention belongs to the Company. The Company will treat any Invention which is notified to it under this clause 17, but which does not belong to the Company, as confidential.

17.3 If an Invention belongs to the Company, the Executive will act as a trustee for the Company in relation to that Invention and will, at the request and expense of the Company do everything necessary to:

(i) vest all right, title and interest in the Invention in the Company or its nominee with full title guarantee;

(ii) secure full patent or other appropriate protection for the Invention anywhere in the world; and

(iii) defend the Company’s or its nominees rights in the Invention and assist with enforcement anywhere in the world.

17.4 If the Executive creates or is involved in creating any Work during the Employment, the Executive will promptly give the Company full details of it.

17.5 The Executive will, at the request and expense of the Company, do everything necessary to:

(i) assign to the Company to the extent allowed by law, or will assign all the Executive’s right, title and interest in any current or future Work (whether now existing or brought into being in the future);

(ii) act as a trustee for the Company in relation to all such Works; and

(A) vest all right, title and interest in any Work in the Company or its nominee;

(B) secure full registered or unregistered protection for any Work anywhere in the world; and

(C) defend the Company’s or its nominee’s rights in any Work and assist with enforcement anywhere in the world.

17.6 If the Executive generates any Information or is involved in generating any Information during the Employment the Executive will promptly give to the Company full details of it and the Executive acknowledges that such Information belongs to the Company.

17.7 If the Executive becomes aware of any infringement or suspected infringement of any intellectual property right in any Invention, Work or Information the Executive will promptly notify the Company in writing.

17.8 The Executive will not copy, disclose or make use of any Invention, Work or Information without the Company’s prior written consent except to comply with this clause 17 or as necessary for the proper performance of the Executive’s duties.

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17.9 The Executive acknowledges that for the purpose of the Copyright and Rights in Databases Regulations 1997 (as from time to time amended, extended or re-enacted) the Company shall be treated as the maker of any such databases, where such database is created by the Executive during the Employment.

17.10 So far as permitted by law the Executive irrevocably waives any rights the Executive may have under Chapter IV (Moral Rights) of Part 1 of the Copyright, Designs and Patents Act 1988 and any foreign corresponding rights in respect of all Works.

17.11 Rights and obligations under this clause 17 will continue after the termination of this agreement in respect of all Inventions, Works and Information made or obtained during the Employment and will be binding on the personal representatives of the Executive.

17.12 The Executive agrees that the Executive will not by the Executive’s acts or omissions do anything which would or might prejudice the rights of any Group Company under this clause 17.

17.13 Except as necessary or desirable in the performance of the Executive’s duties, the Executive will not make copies of any computer files belonging to any Group Company or their service providers and will not introduce any of the Executive’s own computer files into any computer used by the Company.

18 Confidentiality

18.1 As Confidential Information will from time to time become known to the Executive, the Company considers and the Executive acknowledges that the following restraints are necessary for the reasonable protection by the Company of its business or the business of the Group, the customers and trade connections thereof or their respective affairs.

18.2 The Executive shall not at any time, either during the continuance of or for a period of five years after the termination of the Executive’s employment with the Company, use, disclose or communicate to any person whatsoever any Confidential Information or any Trade Secrets of which the Executive has or may have become possessed during the Executive’s employment with the Company or supply the names or addresses of any clients, customers, suppliers or agents of the Company or any Group Company to any person except in the proper course of the Business or as authorised in writing by the Board or as ordered by a Court of competent jurisdiction or as required to be disclosed by any law, regulation, governmental or other official body.

18.3 The Executive shall not at any time either during the continuance of or after the termination of the Executive’s employment with the Company make, other than for the benefit of the Company or any Group Company, any notes or memoranda relating to any matter within the scope of the Business or concerning any of the dealings or affairs of the Company or any Group Company.

18.4 The Executive shall use the Executive’s best endeavours during the continuance of the Employment to prevent the publication, disclosure or misuse of any Confidential Information and shall not remove, nor authorise others to remove, from the premises of the Company or of any Group Company any Confidential Information except to the extent strictly necessary for the proper performance of the Executive’s or the other person’s duties to the Company or any Group Company.

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18.5 The Executive shall promptly disclose to the Company full details of any knowledge or suspicion the Executive has (whether during or after the Employment) of any actual, threatened or pending publication, disclosure or misuse by any person (including the Executive) of any Confidential Information and shall provide all reasonable assistance and co-operation (at the Company’s expense) as the Company may request in connection with any action or proceedings it may take or contemplate in respect of any such publication, disclosure or misuse.

18.6 This clause 18 is without prejudice to the Executive’s equitable duty of confidence.

18.7 Nothing in this Agreement shall preclude the Executive from making a protected disclosure in accordance with the provisions set out in the Employment Rights Act 1996 which should be made in accordance with the Company’s Disclosure Procedure.

19 Restrictive Covenants

19.1 The provisions of Schedule 1 shall take effect as though part of this Agreement.

20 Notification of Restrictions

20.1 The Executive agrees that, in the event of the Executive receiving from any person an offer of employment (whether oral or in writing and whether accepted or not) either during the continuance of this Agreement or during the continuance in force of all or any of the restrictions set out in clause 18 and Schedule 1 of this Agreement, without prejudice to the Executive’s obligations in relation to confidentiality, the Executive will provide to the person making the offer details of the substance of the restrictions contained in clause 18 and Schedule 1.

21 Directorships

21.1 The Executive shall accept appointment as a director of the Company and of any such Group Company or other company as the Company may reasonably require in connection with the Executive’s appointment under this Agreement and the Executive shall resign without claim for compensation from office as a director of any such company (other than the Company or IHG) at any time on request by the Company, which resignation shall not affect the continuance in any way of this Agreement. The Executive shall immediately account to the Company for any director’s fees or other emoluments, remuneration or payments either receivable or received by the Executive by virtue of the Executive’s holding office as such director (or waive any right to the same if so required by the Company).

21.2 Upon the termination of the Executive’s employment with the Company however arising and for whatsoever reason the Executive shall, upon the request of the Board, resign without claim for compensation (but without prejudice to any claim the Executive may have for damages for breach of this Agreement) from:

(a) office as a director of the Company or of any Group Company or of any other company in which the Executive holds a directorship at the Company’s request; and

(b) all offices held by the Executive in any or all of such companies; and

(c) all trusteeships held by the Executive of any pension plan or other trusts established by the Company, any Group Company or any other company with whom the Executive has had dealings as a consequence of the Executive’s employment by the Company.

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21.3 Should the Executive fail to resign from office as a director or from any other office or trusteeship in accordance with clauses 21.1 or 21.2, either during the Executive’s employment, when so requested by the Company, or on its termination, the Company is hereby irrevocably authorised to appoint a person in the Executive’s name and on the Executive’s behalf to execute any documents and to do all things required to give effect to the resignation.

21.4 Save with the prior agreement in writing of the Company, the Executive shall not, during the continuance of this Agreement, resign from any office as a director of the Company, any Group Company or of any other company in which the Executive holds a directorship at the Company’s request or do anything that would cause the Executive to be disqualified from continuing to act as a director.

22 Garden Leave

22.1 At any time after the Executive gives notice to terminate the Employment, the Employer gives notice to terminate the Employment as a result of the Executive’s breach of contract or gross misconduct, or if the Executive resigns without giving due notice and the Company does not accept the Executive’s resignation, the Company may, at its absolute discretion, require the Executive to take a period of absence called garden leave (the “Garden Leave Period”). The provisions of this clause shall apply to any Garden Leave Period.

22.2 The Company may require that the Executive will not, without prior written consent of the Board during the Garden Leave Period:

22.2.1 enter or attend the premises of the Company or any other Group Company; or

22.2.2 contact or have any communication with any customer or client of the Company or any other Group Company in relation to the business of the Company or any other Group Company (other than purely social contact); or

22.2.3 contact or have any communication with any employee, officer, director, agent or consultant of the Company or any other Group Company in relation to the business of the Company or any other Group Company (other than purely social contact); or

22.2.4 remain or become involved in any aspect of the business of the Company or any other Group Company except as required by such companies.

22.3 During the Garden Leave Period the Company may require the Executive:

22.3.1 to comply with the provisions of clause 24, save that the Executive will not be required to return the Car; and

22.3.2 to immediately resign from any directorship, trusteeships or other offices which the Executive holds in the Company, any other Group Company or any other company where such directorship or other office is held as a consequence or requirement of the Employment, unless the Executive is required to perform duties to which any such directorship, trusteeship or other office relates in which case the Executive may retain such directorships, trusteeships or other offices while those duties are ongoing. The Executive hereby irrevocably appoints the Company to be the Executive’s attorney to execute any instrument and do anything in the Executive’s name and on behalf of the Executive to effect the Executive’s resignation if the Executive fails to do so in accordance with this clause 22.3.2.

22.4 During the Garden Leave Period, the Executive will be entitled to receive the Executive’s salary and all contractual benefits in accordance with the terms of this Agreement.

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22.5 At the end of the Garden Leave Period, the Company may, at its sole and absolute discretion, pay the Executive salary in lieu of the balance of any period of notice given by the Company or the Executive (less any deductions the Company is required by law to make.

22.6 During the Garden Leave Period:

22.6.1 the Executive shall provide such assistance as the Company or any Group Company may require to effect an orderly handover of the Executive’s responsibilities to any individual or individuals appointed by the Company or any Group Company to take over the Executive’s role or responsibilities;

22.6.2 the Executive shall be available to deal with requests for information, provide assistance, be available for meetings and to advise on matters relating to work (unless the Company has agreed that the Executive may be unavailable for a period); and

22.6.3 the Company may appoint another person to carry out the Executive’s duties in substitution for the Executive.

22.7 All duties of the Employment (whether express or implied), shall continue throughout the Garden Leave Period (in particular the duty of fidelity) save as expressly varied by this clause 22. The Executive agrees that the exercise by the Company of its rights pursuant to this clause 22 shall not entitle the Executive to claim that the Executive has been constructively dismissed.

23 Termination

23.1 This Agreement and the Executive’s employment with the Company hereunder may be terminated immediately by the Company without prior notice if the Executive at any time:

(a) commits any act of gross misconduct or gross incompetence or other repudiatory breach of contract; or

(b) without reasonable excuse and with prior written warning, repeats or continues any misconduct or neglect in the discharge of the Executive’s duties or other breach of contract (not falling within 23.1(a) above); or

(c) has a bankruptcy order made against the Executive or if the Executive makes any arrangement or composition with the Executive’s creditors or has an interim order made against the Executive pursuant to Section 252 of the Insolvency Act 1986; or

(d) is convicted of any criminal offence other than an offence which, in the reasonable opinion of the Board, does not affect the Executive’s position as an employee of the Company (bearing in mind the nature of the duties in which the Executive is engaged and the capacity in which the Executive is employed); or

(e) by the Executive’s actions or omissions, brings the name or reputation of the Company or any Group Company into serious disrepute or prejudices the interests of the business of the Company or any other Group Company.

Any delay by the Company in exercising such right to termination shall not constitute a waiver thereof.

23.2 In the event of termination pursuant to clause 23.1, the Company shall not be obliged to make any further payment to the Executive beyond the amount of any remuneration and payment in lieu of outstanding untaken vacation entitlement actually accrued up to and including the date

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of such termination and the Company shall be entitled to deduct from such remuneration any sums owing to it or to any other Group Company (including but not limited to any advance of a cash float to cover business expenses, any advance of pay, vacation pay relating to vacation taken in excess of accrued entitlement) by the Executive to which deduction the Executive expressly hereby consents.

23.3 In the event of the termination of the Employment of the Executive for whatever reason and whether by notice or in any other manner whatsoever, the Executive agrees that the Executive will not at any time after such termination represent the Executive as still having any connection with the Company or any Group Company save as a former employee for the purpose of communicating with prospective employers or complying with any applicable statutory requirements.

23.4 In the event that the Executive is incapacitated by ill health, accident or any other cause from performing the Executive’s duties under this Agreement for a period of 39 weeks or more (whether consecutive or not) in any continuous period of 2 years, then the Company may terminate this Agreement by giving to the Executive six months notice, in writing expiring at any time (whether or not the Executive remains incapacitated from performing the Executive’s duties under this Agreement) provided always that the Executive shall receive all benefits lawfully due to the Executive under this Agreement calculated up to the date of termination of employment.

23.5 As an alternative to serving notice pursuant to clause 1.2 or 23.4 and without prejudice to the provisions of clauses 23.1 and 23.2, the Company may, in its absolute discretion, terminate this Agreement without prior notice and make a payment in lieu of the notice which the Executive would have been entitled during the period of notice of termination equal to the basic salary to which the Executive would have been entitled during the period of notice on the basis that the Executive’s basic salary would have been at the rate applying at the date of termination (less deductions for income tax and any other deductions the Company is required by law to make). Where the Company uses such discretion, this Agreement will terminate upon payment to the Executive of such sum.

23.6 Once notice has been given, either by the Company or the Executive pursuant to clauses 1.2 or 23.4, the Company may, in its absolute discretion, at any time during such notice terminate this Agreement without prior notice and make a payment in lieu of such unexpired period of notice equal to the basic salary to which the Executive would have been entitled during the period of notice on the basis that the Executive’s basic salary would have been at the rate applying at the date of termination (less deductions for income tax and any other deductions the Company is required by law to make) and the Agreement will terminate immediately thereafter.

23.7 In the event of termination of the Agreement, all or any payments under any applicable incentive schemes will be calculated and payable in accordance with the rules of the respective schemes.

24 Return of Property

24.1 Immediately on request following notice of termination being served by either the Company or the Executive and in any event upon the termination of the Executive’s employment with the Company for whatsoever cause, the Executive shall immediately deliver up to the Company or its authorised representative any property of the Company or any other Group Company which may be in the Executive’s possession, custody or under the Executive’s control, including, without limitation, the Car, the Car keys, laptop, mobile telephone, electronic organiser, wireless devices, minutes, memoranda, correspondence, notes, records, reports,

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sketches, plans or other documents or writing (which shall include information recorded or stored in writing or on magnetic tape or disk or otherwise recorded or stored for reproduction whether by mechanical or electronic means and whether or not such reproduction will result in a permanent record being made) and any copies thereof, whether or not the property was originally supplied to the Executive by the Company or any other Group Company.

24.2 If so requested, the Executive shall provide to the Company a signed statement confirming that the Executive has fully complied with clause 24.1.

25 Disciplinary and Grievance Procedure

25.1 The Executive’s employment is subject to the disciplinary and grievance rules and procedures of the Company from time to time. The Company’s disciplinary and grievance procedures do not form part of the Executive’s contractual terms and conditions of employment.

26 Data Protection

26.1 The Executive consents to the Company and any other Group Company holding and processing, both electronically and manually, the data it collects in relation to the Executive, in the course of the Executive’s employment for the purposes of the Company’s administration and management of its employees and its business and for compliance with applicable procedures, laws and regulations and to the transfer, storage and processing by the Company or any other agent of such data outside the European Economic Area and outside the United States and where applicable, and in particular, to and in the United States and any other country in which the Company or any other Group Company has offices.

27 Notices

27.1 Any notice to be given under this Agreement shall be given in writing and may be sent, addressed in the case of the Company to its registered office for the time being and in the case of the Executive to the Executive at the Executive’s last known place of residence or given personally and any notice given by post shall be deemed to have been served at the expiration of 48 hours after the same was posted.

28 Assignment

28.1 The benefit of each agreement and obligation of the Executive under this Agreement may be assigned to and enforced by all successors or assigns for the time being carrying on the Business and such agreements and obligations shall operate and remain binding notwithstanding the termination of the employment of the Executive.

29 Third Party Rights

29.1 To the extent permitted by law, no person other than the parties to this agreement and any Group Company shall have the right to enforce any term of this agreement under the Contracts (Rights of Third Parties) Act 1999. For the avoidance of doubt, save as expressly provided in this clause the application of the Contracts (Rights of Third Parties) Act 1999 is specifically excluded from this agreement, although this does not affect any other right or remedy of any third party which exists or is available other than under this Act.

30 Law and Jurisdiction

30.1 English law

This Agreement shall be governed by, and construed in accordance with, English law.

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30.2 Jurisdiction

In relation to any legal action or proceedings arising out of or in connection with this Agreement (“Proceedings”), each of the parties irrevocably submits to the exclusive jurisdiction of the English courts and waives any objection to Proceedings in such courts on the grounds of venue or on the grounds that Proceedings have been brought in an inappropriate forum.

31 Prior Agreements and other employment-related conditions

31.1 Without prejudice to the terms of the Offer Letter such terms being incorporated by reference herein, this Agreement shall be in substitution for any other subsisting offer letter, agreement, service agreement or contract of employment (oral or otherwise) made between the Company and the Executive or between any other Group Company and the Executive and where any inconsistency exists between this Agreement and the Offer Letter the terms of the Offer Letter shall prevail.

31.2 The Executive’s employment is subject to the Company’s non-contractual rules, policies and procedures which apply for the Executive’s location. If there is any conflict between the non-contractual rules, policies and procedures from time to time and the Executive’s contractual terms and conditions, the contractual terms and conditions shall prevail.

31.3 The Executive warrants and agrees that the Executive is not entering into this Agreement in reliance on any representation not expressly set out in this Agreement.

32 Collective Agreements

32.1 There are no collective agreements currently in force which affect directly or indirectly the terms and conditions of the Executive’s employment.

33 Severability and Amendments

33.1 If any provision of this Agreement or of a clause hereof, or of any part of Schedule 1 is determined to be illegal or unenforceable by any court of law or any competent governmental or other authority, but would be valid if part of their wording were deleted, such clause shall be severable and enforceable and will apply with such deletion as may be necessary to make it valid or effective. The parties shall negotiate in good faith to replace any such illegal or unenforceable provisions with suitable substitute provisions which will maintain as far as possible the purposes and the effect of this Agreement.

34 Interpretation

34.1 In this Agreement:

“Affiliate” means, in respect of any company, a company which is its subsidiary, subsidiary undertaking or holding company, or a company which is a subsidiary or subsidiary undertaking of that holding company.

“the Board” means the Board of Directors of IHG or the Directors present at a duly convened meeting of the Directors at which a quorum is present and acting throughout or a duly authorised committee of the Board.

“the Business” means (taken together) the business of IHG and the business of any other Group Company with which the Executive is required by the Board under clause 2 to be concerned.

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“Confidential Information” means confidential information (which may include commercially sensitive information) relating to the business of the Company or any Group Company or any of their respective customers or their affairs and which includes but is not limited to Trade Secrets, ideas, inventions, business methods, business practices and processes, finances, prices, costs financial marketing/development/ manpower plans, strategy documents or intentions, products/product specifications, confidential emails/letters/memos marketing and promotion of products, packages or offers, names and addresses and other details of suppliers, customers, agents of the Company or any Group Company, computer systems and software, information relating to employees, know-how or other matters connected with the products or services manufactured, marketed, provided or obtained by the Company or any Group Company or their respective customers.

“Employment” means the employment governed by this Agreement.

“Group” means the Company and any Affiliate of the Company and “Group Company” shall be construed accordingly.

“IHG” means InterContinental Hotels Group PLC.

“Information” means any idea, method or information, which is not an Invention or Work, generated by the Executive either:

(i) in the course of the Executive’s Employment; or

(ii) outside the course of the Executive’s Employment but relating to the business, finance or affairs of any Group Company.

“Invention” means any invention relating to or capable of being used in the business of any Group Company as carried on from time to time.

“month” means a calendar month.

“Offer Letter” means the letter from the Chief Executive Officer setting out the principal terms of the Executive’s Employment.

“Trade Secrets” means trade secrets and information of such a highly confidential nature as to require the same treatment as trade secrets, of IHG or any Group Company or any supplier, customer, or agent of the Company or any Group Company.

“Work” means any idea; method; discovery; computer programme; semiconductor chip layout; database; drawing; literary work; product, packaging or other design; trade or service mark; logo; domain name or other work (whether registrable or not and whether a copyright work or not) which is not an Invention and which the Executive creates or is involved in creating:

(i) in connection with the Executive’s Employment; or

(ii) relating to or capable of being used in those aspects of the business of the Group Companies in which the Executive is involved from time to time.

34.2 In this Agreement, where the context admits:

(a) words and phrases the definitions of which are contained or referred to in the UK Companies Act 2006 shall be construed as having the meanings so attributed to them;

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(b) references to any statute or statutory provisions include a reference to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and any reference to a statutory provision shall include any subordinate legislation made from time to time under that provision;

(c) references to a “person” include any individual, company, body corporate, corporation sole or aggregate, government, state or agency of a state, firm, partnership joint venture, association, organisation or trust (in each case, whether or not having separate legal personality and irrespective of the jurisdiction in or under the law of which it was incorporated or exists) and a reference to any of them shall include a reference to the others;

(d) any reference to “writing” shall include typewriting, printing, lithography, photography, telex, facsimile and the printed out version of a communication by electronic mail and other modes of representing or reproducing words in a legible form;

(e) words denoting the singular shall include the plural and vice versa;

(f) the employment of the Executive are references to the employment by the Company whether or not during the continuance of this Agreement; and

(g) the masculine gender shall be deemed to include the feminine gender.

34.3 Headings are inserted for convenience only and shall not affect the construction of this Agreement.

IN WITNESS whereof, this Agreement has been entered into the day and year first above written.

SIGNED by	)
George Turner	)	/s/ George Turner
for and on behalf of	)
the Company

Signature

Name: GEORGE TURNER

Address:	Broadwater Park, Denham, Buckinghamshire UB9 5HR
Occupation:	EVP, General Counsel & Company Secretary

SIGNED and	)
DELIVERED	)	/s/ Tracy Robbins
by the Executive	)

Signature

Name: TRACY ROBBINS

Address:     Pope House, Brackney Terrace, Chiswick, London, W.1

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SCHEDULE 1

1. 1.1 In this Schedule 1 the expressions below have the meaning ascribed to them respectively below:

“Competing Enterprise” shall mean (a) any person, corporation, partnership, venture or other entity (“entity”) which engages either (i) in the business of managing, franchising, running, leasing, owning or joint venturing at least 50 hotels, or (ii) in the business of any online booking agency in respect of hotel rooms (“hotel booking”) and in the case of (i) and (ii) the entity’s shares are publicly traded and such entity has a market capitalisation of not less than one billion pounds sterling (for these purposes “market capitalisation” shall be the aggregate market value of the ordinary shares of the entity) and (b) any Competitor;

“Competitor” shall mean any of the following companies and/or any of their holding companies or subsidiaries from time to time:

(i) Accor SA

(ii) Hilton Worldwide

(iii) Starwood Hotels & Resorts Worldwide, Inc.

(iv) Marriott International, Inc.

(v) Global Hyatt Corporation

(vi) Choice Hotels International Inc.

(vii) Wyndham Worldwide Corporation

(viii) Four Seasons Holdings, Inc.

“Garden Leave Period” has the meaning given in Clause 22 of the Agreement above;

“Key Person” shall mean any person who was a band 4 level or above employee of the Company or any other Group Company (including for this purpose any General Manager of any hotel owned or managed by the Company or any other Group Company) and with whom the Executive had material contact or dealings in performing the duties of the Employment at any time during the period of 12 months ending on the Termination Date;

“Relevant Period” shall mean the period of six months beginning with the Termination Date but reduced by one day for each day of a Garden Leave Period;

“Restricted Activities” shall mean executive, managerial, directorial, administrative, strategic, business development or supervisory responsibilities and activities relating to any competing enterprise; and

“Termination Date” shall mean the date on which the Employment terminates.

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1.2 The Executive agrees that during the Relevant Period the Executive will not without the prior written consent of the Company:

(i) become associated with or engage in any Restricted Activity in respect of any Competing Enterprise, whether as officer, director, employee, principal, partner, agent, executive, independent contractor or shareholder (other than as a holder of not in excess of 5% of the outstanding voting shares of any publicly traded company) in competition with any business of the Company or any other Group Company being carried on by the Company or any other Group Company at the Termination Date but excluding (a) any association or engagement which solely relates to Restricted Activities which the Executive had not been involved in to a material extent in the course of the Employment at any time during the period of 12 months ending on the Termination Date, or (b) the Executive’s employment by a unit of a Competing Enterprise which unit is not itself engaged in hotel ownership, hotel management, hotel franchising, hotel running, hotel leasing, hotel joint-venturing or hotel booking (as defined above), so long as the Executive’s duties and responsibilities with respect to such employment are limited to the business of such unit, or (c) the Executive’s employment by an entity which includes a Competing Enterprise where such Competing Enterprise produces revenues that account for less than 5% of the gross revenues of the entity and performing services for such Competing Enterprise is not a material part of the Executive’s responsibilities; and

(ii) either on his own behalf or for or with any other person whether directly or indirectly, solicit or induce or attempt to solicitor induce any Key Person to leave the employ of the Company or any other Group Company whether or not such person would commit any breach of his contract of employment by leaving the service of the Company or any other Group Company; and

(iii) either on his own behalf or for or with any other person, whether directly or indirectly, interfere with or try to terminate or reduce the level of supplies (whether of products and/or services) by a supplier to the Company or any other Group Company provided the Executive was concerned or involved to a material extent with the supply or products or services by that supplier to the Company or a Group Company in the course of the employment at any time during the 12 months period ending on the Termination Date.

1.3 The Executive agrees that each of the paragraphs contained in sub-clause 1.2 of this Schedule 1 constitute an entirely separate and independent covenant on the Executive’s part and the validity of one paragraph shall not be affected by the validity or unenforceability of another.

1.4 The Executive agrees that the Executive will at the request and cost of the Company enter into a direct agreement or undertaking with any Group Company whereby the Executive will accept restrictions and provisions corresponding to the restrictions and provisions contained in sub-clause 1.2 of this Schedule 1 (or such of them as may be reasonable and appropriate in the circumstances) in relation to such activities and such areas and for such a period as such company may reasonably require for the protection of its legitimate interests but provided that the duration of such restrictions and provisions are no greater than the Relevant Period.

1.5 The Executive agrees that having regard to the facts and matters set out above the restrictive covenants contained in this Schedule 1 are necessary for the protection of the business and confidential information of the Company and other Group Companies.

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EX-4.C.II

Exhibit 4(c)(ii)

Employment Agreement

between

Six Continents Limited

as Company

and

THOMAS SINGER

as Executive

relating to

the employment of the Executive with the Company

CONTENTS

1.	Appointment	3
2.	Duties and Powers	3
3.	Mobility	4
4.	Remuneration	4
5.	Short Term Incentive Schemes	5
6.	Long Term Incentive and Share Plans	5
7.	Expenses and Gratuities	5
8.	Professional Memberships	5
9.	Company Car	6
10.	Holidays	6
12.	Sickness and Incapacity	6
13.	Notification of Absence	7
13.	Pension	7
14.	Private Medical Insurance	8
15.	Additional Benefits	8
16.	Exclusive Service	8
17.	Intellectual Property	8
18.	Confidentiality	10
19.	Restrictive Covenants	11
20.	Notification of Restrictions	11
21.	Directorships	11
22.	Garden Leave	12
23.	Termination	13
24.	Return of Property	14
25.	Disciplinary and Grievance Procedure	15
26.	Data Protection	15
27.	Notices	15
28.	Assignment	15
29.	Third Party Rights	15
30.	Law and Jurisdiction	15
31.	Prior Agreements and other employment-related conditions	16
32.	Collective Agreements	16
33.	Severability and Amendments	16
34.	Interpretation	16

2

THIS AGREEMENT is dated                             2011 and made

BETWEEN:

(1) Six Continents Limited (the “Company”), registered in England and Wales as company number 913450 and a company in the InterContinental Hotels Group, with its registered office at Broadwater Park, Denham, Buckinghamshire, UB9 5HR; and

(2) THOMAS SINGER (the “Executive”), of 242 Sheen Lane, East Sheen, London SW14 8RL.

THE PARTIES AGREE THAT:

1 Appointment

1.1 The Company shall employ the Executive and the Executive agrees to serve the Company and any other Group Company or Group Companies as required by the Board or any person authorised by the Board for that purpose, in the capacity of a Director and CHIEF FINANCIAL OFFICER of IHG . The Executive’s reward band is 1.

1.2 Employment hereunder shall commence on 27 September 2011 and shall continue (subject to termination as provided for below) unless and until terminated by either party giving to the other not less than the following notice period in writing, expiring at any time:

(a) notice period from the Company to the Executive: 52 weeks

(b) notice period from the Executive to the Company: 26 weeks

1.3 The Executive warrants that:

1.3.1 the Executive is not prevented from performing the Executive’s duties in accordance with the terms of this agreement by any obligation or duty owed to any other party, whether contractual or otherwise; and

1.3.2 the Executive has all necessary qualifications and memberships required for the Executive to perform the Executive’s duties under this Agreement and is not and has not been subject to any prohibition, censure, criticism or disciplinary sanction by any professional, regulatory or other body or authority which would prevent the Executive from performing any duties under this Agreement or undermine the confidence of the Board in the Employment by the Company.

1.4 Employment is conditional upon the following conditions, if required by the Company:

(a) the Executive undergoing a medical examination with a medical practitioner nominated by the Company, the results of which are satisfactory to the Company;

(b) the Executive providing to the Company copies or other verification of academic, professional or other business qualifications notified to the Company.

2 Duties and Powers

2.1 The Executive shall exercise such powers, perform such duties (if any) commensurate with his status as Chief Financial Officer and comply with such reasonable and lawful directions in relation to the business of the Company or any other Group Company as the Board or any person authorised by the Board for the purpose may, from time to time, confer upon or assign or give to him.

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2.2 The Executive shall, during the continuance of this Agreement (unless prevented by ill health or accident or as otherwise agreed by the Board in writing), devote substantially the whole of the Executive’s working time and attention and abilities to the Business and shall use the Executive’s reasonable endeavours to promote and protect the general interests and welfare of the Company, the Group and any other Group Company to which the Executive may from time to time render the Executive’s services under this Agreement.

2.3 The Executive shall at all times promptly give to the Board (in writing if so requested) all such information, explanations and assistance as it may require in connection with the Business and the Executive’s employment under this Agreement.

2.4 The Executive shall work normal business hours, which are 35 hours per week, and such additional hours as may be necessary in the performance of the Executive’s duties and powers under this Agreement. The nature of the Executive’s job is such that the Executive is largely able to prioritise tasks, determine the time and effort the Executive devotes to those tasks and when the Executive does them. To the extent the Executive therefore determines the Executive’s working hours outside normal business hours, the additional hours will not count as working time towards the weekly working time limit of 48 hours on average. No overtime will be paid with respect to any hours by the executive outside normal business hours.

2.5 The Executive will promptly disclose to the Board full details of any wrongdoing by any employee or officer of any Group Company (including the Executive) where that wrongdoing is material to that employee’s employment by the relevant company or to the interests or reputation of any Group Company.

3 Mobility

3.1 The Executive’s principal place of work is Broadwater Park, Denham, Buckinghamshire. The Executive’s principal place of work may be changed to such place or places within the United Kingdom as the Company shall reasonably require. Should the Company wish the Executive to relocate outside the United Kingdom such relocation shall be the subject of agreement between the Company and the Executive.

3.2 The Executive may be required to travel both inside and outside the United Kingdom on the business of the Company or any Group Company in the proper performance of the Executive’s duties from time to time.

4 Remuneration

4.1 The Company shall pay to the Executive a salary at the annual rate of £540,000. Such salary shall be payable not less frequently than every month on a date which will be no later than the last day of the month and shall be deemed to accrue from day to day. Such salary shall include any director’s fees payable to the Executive. The Company shall be entitled to procure payment of the salary for administrative reasons by another Group Company.

4.2 The salary payable to the Executive pursuant to clause 4.1 shall be subject to review in accordance with the Company’s practice from time to time (the first of which shall be 1 April 2013) but there shall be no obligation on the Company to increase such salary.

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4.3 The Company shall be entitled at any time to deduct from the Executive’s remuneration (which includes salary, salary supplement, any bonus, vacation or other pay) any sums owing to it or to any other Group Company (including but not limited to any advance of a cash float to cover business expenses, any advance of pay, vacation pay relating to vacation taken in excess of entitlement) by the Executive to which deduction the Executive expressly hereby consents.

5 Short Term Incentive Schemes

5.1 The Executive shall be eligible to participate in the Company’s or any Group Company (as appropriate) discretionary incentive scheme or schemes applicable from time to time for employees in the Executive’s reward band, subject to the rules of such relevant scheme(s). Details of the current applicable scheme(s) will be provided to the Executive. Awards are determined in accordance with the rules of the applicable scheme.

5.2 Subject to the Company’s obligations in clause 5.1, the Company reserves the right in its absolute discretion, to vary the terms and/or any targets and/or level of bonus opportunity and/or bonus payable, under any incentive scheme from time to time in operation. Any bonus paid is not pensionable and is subject to deductions for tax and social security contributions.

6 Long Term Incentive Share Plans

6.1 The Executive shall be eligible to participate in such share option or other share ownership schemes as the Company or the Group may operate from time to time and which are applicable to employees in the Executive’s reward band, subject to the rules of the relevant scheme(s). Details of any current applicable scheme(s) will be provided to the Executive. Awards are determined in accordance with the rules of the applicable scheme.

6.2 Subject to the Company’s obligations in clause 6.1, the Company reserves the right, in its absolute discretion, to vary the terms of any such scheme or withdraw any such plan without providing any replacement. Any payment made under this clause is not pensionable and is subject to deductions for tax and social security contributions.

7 Expenses and Gratuities

7.1 In accordance with Company policy, the Company shall pay or refund to the Executive all reasonable travelling, entertainment and other similar out of pocket expenses properly and wholly incurred by the Executive in the proper performance of the Executive’s duties subject to production by the Executive of such evidence of such expenses as the Company may require. If the Executive is provided with a Company credit card or charge card, the Executive shall use it only for such expenses as the Executive is entitled under this sub-clause to have reimbursed by the Company.

7.2 The Executive shall at all times comply with the Group’s policies in force from time to time regarding acceptance of gifts, gratuities and/or benefits.

8 Professional Memberships

8.1 In accordance with and subject to Company policy, and upon prior approval, the Company shall pay for up to two memberships with recognised professional bodies where membership of such professional body is directly related to and required in relation to the Executive’s job from time to time or the Executive’s normal professional skill.

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8.2 Where required, whether by the Company, law, any regulatory organisation or otherwise, the Executive should at all times during the Executive’s employment with the Company maintain the Executive’s membership of such professional, trade or other bodies necessary for the proper performance of the Executive’s duties.

9 Company Car

9.1 In accordance with and subject to the rules of the Company Car policy for employees in the reward band which applies to the Executive, the Company shall, at its option, either:

(a) make available to the Executive a motor car (“the Car”) for the Executive’s use or;

(b) pay the Executive a taxable, non-pensionable car allowance at a level to be determined by the Company. The allowance will be paid monthly in arrears in the same manner as the Executive’s salary.

9.2 A copy of the relevant car policy shall be provided to the Executive and the Executive is required to comply with its rules from time to time. The Company reserves the right, in its reasonable discretion, to vary the rules and/or standard of car and/or level of car allowance available to employees in the Executive reward band which applies to the Executive.

10 Holidays

10.1 The Company’s holiday year is 1 January to 31 December (the “Holiday Year”).

10.2 In addition to public holidays, the Executive shall be entitled to paid vacation in each Holiday Year in accordance with the stated policy for the Executive’s reward band in the principal place of work, to be taken at times to be agreed with the Company in advance. Subject to clause 10.3, no payment will be made for vacation days not taken in the Holiday Year in which they arise although the Executive may carry forward any unused vacation days from one Holiday Year to the next, subject to a maximum of 5 days to be carried forward into the following Holiday Year.

10.3 Upon termination of this Agreement the Executive shall be entitled to payment in lieu of any untaken outstanding vacation entitlement in the Holiday Year during which the Executive’s employment terminates, which entitlement shall accrue on a pro-rata monthly basis.

10.4 Upon termination of the Executive’s employment under this Agreement, the Company shall be entitled to deduct from any sum owed by the Company to the Executive a sum representing overpayment of salary with respect to the number of vacation days which the Executive has taken in excess of the Executive’s accrued vacation entitlement calculated on a pro-rata monthly basis as at the date of the termination of the Executive’s employment and the Executive hereby authorises the Company to make such deduction.

10.5 The Company shall be entitled to require the Executive to take all or any part of any accrued untaken vacation entitlement during the period of notice to terminate the Executive’s employment (including, for the avoidance of doubt, during any period of garden leave pursuant to clause 22).

11 Sickness and Incapacity

11.1 When the Executive is absent from work and unable to perform the Executive’s duties under this Agreement satisfactorily by reason of any injury, illness or other reason satisfactory to the Company and subject to compliance with clause 12, the Executive shall be entitled to receive the Executive’s full salary and other contractual benefits for up to the first 26 weeks of any such absence and thereafter the Executive shall receive half the Executive’s salary.

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11.2 Any salary payable pursuant to this clause shall be inclusive of the amount of any benefit or statutory sick pay to which the Executive may be entitled during the period of such inability under any local law for the time being in force.

11.3 The Executive shall submit to a medical examination by a doctor appointed by the Company at the request of the Chief Executive, at the expense of the Company, at any time during the continuance of this Agreement, whether or not the Executive is absent by reason of sickness, injury or other incapacity. The Executive consents to the Company’s Chief Executive or General Counsel from time to time obtaining a copy of the Executive’s medical records from the Executive’s medical practitioner in circumstances where the Company deems such a step to be required. The Executive further agrees that the Executive shall authorise the medical practitioner and the Company’s Chief Executive or General Counsel to discuss further any matters arising from such medical report, diagnosis or prognosis to the extent relevant to the Executive’s employment or the performance of the Executive’s duties and the Company shall disclose the content of all such communications to the Executive.

11.4 If the Executive is absent from work by reason of injuries sustained wholly or partly as a result of actionable negligence, nuisance or breach of any statutory duty on the part of any third party other than the Company or any Group Company, the Executive shall promptly inform the Executive’s line manager of that fact and the Company in its discretion may require the Executive to take all reasonable steps to recover from such third party or its insurers compensation including repayment of all sums paid to the Executive by the Company under this clause in respect of absence. Any such sums (which are paid to the Executive by the Company on that basis) shall in turn be repaid by the Executive when and to the extent that the Executive recovers compensation for loss of earnings from that third party or its insurers by legal action or otherwise less reasonable cost incurred in recovering any such compensation.

12 Notification of Absence

12.1 If the Executive is unable to come to work for any reason and the Executive’s absence has not previously been authorised by the Company, the Executive must notify the Company as soon as practicable and in accordance with the stated policy for the Executive’s reward bank in the principal place of work.

13 Pension

13.1 The Company operates various pension schemes. The Executive may be a member of the applicable pension scheme as determined by the Executive’s start date with the Company and the Executive’s reward band (“the Scheme”) at the applicable level and subject to the terms of the trust deed and rules governing the Scheme from time to time, including, without limitation, any powers of alteration and discontinuance. The Executive’s membership of the Scheme shall be in substitution for, and shall operate to the exclusion of, any agreement or representation whether written or oral in relation to pension entitlement made with or to the Executive by any person on behalf of the Company or any Group Company at any time prior to the date of this Agreement.

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14 Private Medical Insurance

14.1 The Executive, the Executive’s spouse and any dependent unmarried children under age 21 (or 25 if in full time education) or such older age as required by applicable law, as the case may be, will to the extent eligible (as determined by the Executive’s reward band and any applicable plan rules) participate in and receive benefits under the private medical and insurance plans made available by the Company (and any other plans which the Company may provide from time to time) subject to the rules or insurance policies constituting such plans from time to time.

14.2 A copy of the relevant private medical and insurance plans shall be provided to the Executive and the Executive is required to comply with their rules from time to time. The Company reserves the right, in its absolute discretion, to vary the plans or to suspend (for a fixed or indefinite period) or withdraw the plans without providing any replacement.

14.3 In the event that the Executive claims under any insurance plan referred to in sub-clause 14.1 and such claim is rejected by the insurer, the Company shall not be obliged to issue proceedings in relation to such claim.

15 Additional Benefits

15.1 In the event that any special terms apply to the Executive, these are as set out in the Executive’s offer letter.

16 Exclusive Service

16.1 The Executive will devote substantially the whole of the Executive’s working time, attention and skill to the Employment. In the event that the Executive wishes to take up an external non-executive directorship during the Employment, such position will be subject to Board approval.

16.2 At the request of the Company, the Executive will disclose promptly in writing to the Company all the Executive’s outside business interests (for example, office holdings or directorships).

16.3 Without prejudice to clause 16.1 above, and subject to clause 16.4 below, during the Employment the Executive will not be directly or indirectly engaged or concerned in the conduct of any activity which is similar to or competes with any activity carried on by any Group Company (except as a representative of the Company or with the written consent of the Board) nor make preparations to be engaged or interested either directly or indirectly in any business or occupation which is similar to or competes with any activity carried on by any Group Company.

16.4 The Executive may not without written consent of the Board hold or be interested in investments which amount to more than five percent of the issued investments of any class of anyone company whether or not those investments are listed or quoted on any recognised Stock Exchange or dealt in on the Alternative Investments Market.

17 Intellectual Property

17.1 The Executive acknowledges that:

(i) the Executive may make Inventions in the course of the Employment, whether in the Executive’s normal or other specifically assigned duties; and

(ii) the Executive has a special obligation to further the interests of the Group as a whole and of each Group Company.

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17.2 If the Executive makes or is involved in making an Invention during the Employment, the Executive will promptly inform the Company. The Executive will give the Company sufficient details of any Invention to allow the Company to assess the Invention and to decide whether the Invention belongs to the Company. The Company will treat any Invention which is notified to it under this clause 17, but which does not belong to the Company, as confidential.

17.3 If an Invention belongs to the Company, the Executive will act as a trustee for the Company in relation to that Invention and will, at the request and expense of the Company do everything necessary to:

(i) vest all right, title and interest in the Invention in the Company or its nominee with full title guarantee;

(ii) secure full patent or other appropriate protection for the Invention anywhere in the world; and

(iii) defend the Company’s or its nominees rights in the Invention and assist with enforcement anywhere in the world.

17.4 If the Executive creates or is involved in creating any Work during the Employment, the Executive will promptly give the Company full details of it.

17.5 The Executive will, at the request and expense of the Company, do everything necessary to:

(i) assign to the Company to the extent allowed by law, or will assign all the Executive’s right, title and interest in any current or future Work (whether now existing or brought into being in the future);

(ii) act as a trustee for the Company in relation to all such Works; and

(A) vest all right, title and interest in any Work in the Company or its nominee;

(B) secure full registered or unregistered protection for any Work anywhere in the world; and

(C) defend the Company’s or its nominee’s rights in any Work and assist with enforcement anywhere in the world.

17.6 If the Executive generates any Information or is involved in generating any Information during the Employment the Executive will promptly give to the Company full details of it and the Executive acknowledges that such Information belongs to the Company.

17.7 If the Executive becomes aware of any infringement or suspected infringement of any intellectual property right in any Invention, Work or Information the Executive will promptly notify the Company in writing.

17.8 The Executive will not copy, disclose or make use of any Invention, Work or Information without the Company’s prior written consent except to comply with this clause 17 or as necessary for the proper performance of the Executive’s duties.

17.9 The Executive acknowledges that for the purpose of the Copyright and Rights in Databases Regulations 1997 (as from time to time amended, extended or re-enacted) the Company shall be treated as the maker of any such databases, where such database is created by the Executive during the Employment.

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17.10 So far as permitted by law the Executive irrevocably waives any rights the Executive may have under Chapter IV (Moral Rights) of Part 1 of the Copyright, Designs and Patents Act 1988 and any foreign corresponding rights in respect of all Works.

17.11 Rights and obligations under this clause 17 will continue after the termination of this agreement in respect of all Inventions, Works and Information made or obtained during the Employment and will be binding on the personal representatives of the Executive.

17.12 The Executive agrees that the Executive will not by the Executive’s acts or omissions do anything which would or might prejudice the rights of any Group Company under this clause 17.

17.13 Except as necessary or desirable in the performance of the Executive’s duties, the Executive will not make copies of any computer files belonging to any Group Company or their service providers and will not introduce any of the Executive’s own computer files into any computer used by the Company.

18 Confidentiality

18.1 As Confidential Information will from time to time become known to the Executive, the Company considers and the Executive acknowledges that the following restraints are necessary for the reasonable protection by the Company of its business or the business of the Group, the customers and trade connections thereof or their respective affairs.

18.2 The Executive shall not at any time, either during the continuance of or for a period of five years after the termination of the Executive’s employment with the Company, use, disclose or communicate to any person whatsoever any Confidential Information or any Trade Secrets of which the Executive has or may have become possessed during the Executive’s employment with the Company or supply the names or addresses of any clients, customers, suppliers or agents of the Company or any Group Company to any person except in the proper course of the Business or as authorised in writing by the Board or as ordered by a Court of competent jurisdiction or as required to be disclosed by any law, regulation, governmental or other official body.

18.3 The Executive shall not at any time either during the continuance of or after the termination of the Executive’s employment with the Company make, other than for the benefit of the Company or any Group Company, any notes or memoranda relating to any matter within the scope of the Business or concerning any of the dealings or affairs of the Company or any Group Company.

18.4 The Executive shall use the Executive’s best endeavours during the continuance of the Employment to prevent the publication, disclosure or misuse of any Confidential Information and shall not remove, nor authorise others to remove, from the premises of the Company or of any Group Company any Confidential Information except to the extent strictly necessary for the proper performance of the Executive’s or the other person’s duties to the Company or any Group Company.

18.5 The Executive shall promptly disclose to the Company full details of any knowledge or suspicion the Executive has (whether during or after the Employment) of any actual, threatened or pending publication, disclosure or misuse by any person (including the Executive) of any Confidential Information and shall provide all reasonable assistance and co-operation (at the Company’s expense) as the Company may request in connection with any action or proceedings it may take or contemplate in respect of any such publication, disclosure or misuse.

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18.6 This clause 18 is without prejudice to the Executive’s equitable duty of confidence.

18.7 Nothing in this Agreement shall preclude the Executive from making a protected disclosure in accordance with the provisions set out in the Employment Rights Act 1996 which should be made in accordance with the Company’s Disclosure Procedure.

19 Restrictive Covenants

19.1 The provisions of Schedule 1 shall take effect as though part of this Agreement.

20 Notification of Restrictions

20.1 The Executive agrees that, in the event of the Executive receiving from any person an offer of employment (whether oral or in writing and whether accepted or not) either during the continuance of this Agreement or during the continuance in force of all or any of the restrictions set out in clause 18 and Schedule 1 of this Agreement, without prejudice to the Executive’s obligations in relation to confidentiality, the Executive will provide to the person making the offer details of the substance of the restrictions contained in clause 18 and Schedule 1.

21 Directorships

21.1 The Executive shall accept appointment as a director of the Company and of any such Group Company or other company as the Company may reasonably require in connection with the Executive’s appointment under this Agreement and the Executive shall resign without claim for compensation from office as a director of any such company (other than the Company or IHG) at any time on request by the Company, which resignation shall not affect the continuance in any way of this Agreement. The Executive shall immediately account to the Company for any director’s fees or other emoluments, remuneration or payments either receivable or received by the Executive by virtue of the Executive’s holding office as such director (or waive any right to the same if so required by the Company).

21.2 Upon the termination of the Executive’s employment with the Company however arising and for whatsoever reason the Executive shall, upon the request of the Board, resign without claim for compensation (but without prejudice to any claim the Executive may have for damages for breach of this Agreement) from:

(a) office as a director of the Company or of any Group Company or of any other company in which the Executive holds a directorship at the Company’s request; and

(b) all offices held by the Executive in any or all of such companies; and

(c) all trusteeships held by the Executive of any pension plan or other trusts established by the Company, any Group Company or any other company with whom the Executive has had dealings as a consequence of the Executive’s employment by the Company.

21.3 Should the Executive fail to resign from office as a director or from any other office or trusteeship in accordance with clauses 21.1 or 21.2, either during the Executive’s employment, when so requested by the Company, or on its termination, the Company is hereby irrevocably authorised to appoint a person in the Executive’s name and on the Executive’s behalf to execute any documents and to do all things required to give effect to the resignation.

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21.4 Save with the prior agreement in writing of the Company, the Executive shall not, during the continuance of this Agreement, resign from any office as a director of the Company, any Group Company or of any other company in which the Executive holds a directorship at the Company’s request or do anything that would cause the Executive to be disqualified from continuing to act as a director.

22 Garden Leave

22.1 At any time after the Executive gives notice to terminate the Employment, the Employer gives notice to terminate the Employment as a result of the Executive’s breach of contract or gross misconduct, or if the Executive resigns without giving due notice and the Company does not accept the Executive’s resignation, the Company may, at its absolute discretion, require the Executive to take a period of absence called garden leave (the “Garden Leave Period”). The provisions of this clause shall apply to any Garden Leave Period.

22.2 The Company may require that the Executive will not, without prior written consent of the Board during the Garden Leave Period:

22.2.1 enter or attend the premises of the Company or any other Group Company; or

22.2.2 contact or have any communication with any customer or client of the Company or any other Group Company in relation to the business of the Company or any other Group Company (other than purely social contact); or

22.2.3 contact or have any communication with any employee, officer, director, agent or consultant of the Company or any other Group Company in relation to the business of the Company or any other Group Company (other than purely social contact); or

22.2.4 remain or become involved in any aspect of the business of the Company or any other Group Company except as required by such companies.

22.3 During the Garden Leave Period the Company may require the Executive:

22.3.1 to comply with the provisions of clause 24, save that the Executive will not be required to return the Car; and

22.3.2 to immediately resign from any directorship, trusteeships or other offices which the Executive holds in the Company, any other Group Company or any other company where such directorship or other office is held as a consequence or requirement of the Employment, unless the Executive is required to perform duties to which any such directorship, trusteeship or other office relates in which case the Executive may retain such directorships, trusteeships or other offices while those duties are ongoing. The Executive hereby irrevocably appoints the Company to be the Executive’s attorney to execute any instrument and do anything in the Executive’s name and on behalf of the Executive to effect the Executive’s resignation if the Executive fails to do so in accordance with this clause 22.3.2.

22.4 During the Garden Leave Period, the Executive will be entitled to receive the Executive’s salary and all contractual benefits in accordance with the terms of this Agreement.

22.5 At the end of the Garden Leave Period, the Company may, at its sole and absolute discretion, pay the Executive salary in lieu of the balance of any period of notice given by the Company or the Executive (less any deductions the Company is required by law to make.

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22.6 During the Garden Leave Period:

22.6.1 the Executive shall provide such assistance as the Company or any Group Company may require to effect an orderly handover of the Executive’s responsibilities to any individual or individuals appointed by the Company or any Group Company to take over the Executive’s role or responsibilities;

22.6.2 the Executive shall be available to deal with requests for information, provide assistance, be available for meetings and to advise on matters relating to work (unless the Company has agreed that the Executive may be unavailable for a period); and

22.6.3 the Company may appoint another person to carry out the Executive’s duties in substitution for the Executive.

22.7 All duties of the Employment (whether express or implied), shall continue throughout the Garden Leave Period (in particular the duty of fidelity) save as expressly varied by this clause 22. The Executive agrees that the exercise by the Company of its rights pursuant to this clause 22 shall not entitle the Executive to claim that the Executive has been constructively dismissed.

23 Termination

23.1 This Agreement and the Executive ‘s employment with the Company hereunder may be terminated immediately by the Company without prior notice if the Executive at any time:

(a) commits any act of gross misconduct or gross incompetence or other repudiatory breach of contract; or

(b) without reasonable excuse and with prior written warning, repeats or continues any misconduct or neglect in the discharge of the Executive’s duties or other breach of contract (not falling within 23.1(a) above); or

(c) has a bankruptcy order made against the Executive or if the Executive makes any arrangement or composition with the Executive’s creditors or has an interim order made against the Executive pursuant to Section 252 of the Insolvency Act 1986; or

(d) is convicted of any criminal offence other than an offence which, in the reasonable opinion of the Board, does not affect the Executive’s position as an employee of the Company (bearing in mind the nature of the duties in which the Executive is engaged and the capacity in which the Executive is employed); or

(e) by the Executive’s actions or omissions, brings the name or reputation of the Company or any Group Company into serious disrepute or prejudices the interests of the business of the Company or any other Group Company.

Any delay by the Company in exercising such right to termination shall not constitute a waiver thereof.

23.2 In the event of termination pursuant to clause 23.1, the Company shall not be obliged to make any further payment to the Executive beyond the amount of any remuneration and payment in lieu of outstanding untaken vacation entitlement actually accrued up to and including the date of such termination and the Company shall be entitled to deduct from such remuneration any sums owing to it or to any other Group Company (including but not limited to any advance of a cash float to cover business expenses, any advance of pay, vacation pay relating to vacation taken in excess of accrued entitlement) by the Executive to which deduction the Executive expressly hereby consents.

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23.3 In the event of the termination of the Employment of the Executive for whatever reason and whether by notice or in any other manner whatsoever, the Executive agrees that the Executive will not at any time after such termination represent the Executive as still having any connection with the Company or any Group Company save as a former employee for the purpose of communicating with prospective employers or complying with any applicable statutory requirements.

23.4 In the event that the Executive is incapacitated by ill health, accident or any other cause from performing the Executive’s duties under this Agreement for a period of 39 weeks or more (whether consecutive or not) in any continuous period of 2 years, then the Company may terminate this Agreement by giving to the Executive six months notice, in writing expiring at any time (whether or not the Executive remains incapacitated from performing the Executive’s duties under this Agreement) provided always that the Executive shall receive all benefits lawfully due to the Executive under this Agreement calculated up to the date of termination of employment.

23.5 As an alternative to serving notice pursuant to clause 1.2 or 23.4 and without prejudice to the provisions of clauses 23.1 and 23.2, the Company may, in its absolute discretion, terminate this Agreement without prior notice and make a payment in lieu of the notice which the Executive would have been entitled during the period of notice of termination equal to the basic salary to which the Executive would have been entitled during the period of notice on the basis that the Executive’s basic salary would have been at the rate applying at the date of termination (less deductions for income tax and any other deductions the Company is required by law to make). Where the Company uses such discretion, this Agreement will terminate upon payment to the Executive of such sum.

23.6 Once notice has been given, either by the Company or the Executive pursuant to clauses 1.2 or 23.4, the Company may, in its absolute discretion, at any time during such notice terminate this Agreement without prior notice and make a payment in lieu of such unexpired period of notice equal to the basic salary to which the Executive would have been entitled during the period of notice on the basis that the Executive’s basic salary would have been at the rate applying at the date of termination (less deductions for income tax and any other deductions the Company is required by law to make) and the Agreement will terminate immediately thereafter.

23.7 In the event of termination of the Agreement, all or any payments under any applicable incentive schemes will be calculated and payable in accordance with the rules of the respective schemes.

24 Return of Property

24.1 Immediately on request following notice of termination being served by either the Company or the Executive and in any event upon the termination of the Executive’s employment with the Company for whatsoever cause, the Executive shall immediately deliver up to the Company or its authorised representative any property of the Company or any other Group Company which may be in the Executive’s possession, custody or under the Executive’s control, including, without limitation, the Car, the car keys, laptop, mobile telephone, electronic organiser, wireless devices, minutes, memoranda, correspondence, notes, records, reports, sketches, plans or other documents or writing (which shall include information recorded or stored in writing or on magnetic tape or disk or otherwise recorded or stored for reproduction whether by mechanical or electronic means and whether or not such reproduction will result in a permanent record being made) and any copies thereof, whether or not the property was originally supplied to the Executive by the Company or any other Group Company.

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24.2 If so requested, the Executive shall provide to the Company a signed statement confirming that the Executive has fully complied with clause 24.1.

25 Disciplinary and Grievance Procedure

25.1 The Executive’s employment is subject to the disciplinary and grievance rules and procedures of the Company from time to time. The Company’s disciplinary and grievance procedures do not form part of the Executive’s contractual terms and conditions of employment.

26 Data Protection

26.1 The Executive consents to the Company and any other Group Company holding and processing, both electronically and manually, the data it collects in relation to the Executive, in the course of the Executive’s employment for the purposes of the Company’s administration and management of its employees and its business and for compliance with applicable procedures, laws and regulations and to the transfer, storage and processing by the Company or any other agent of such data outside the European Economic Area and outside the United States and where applicable, and in particular, to and in the United States and any other country in which the Company or any other Group Company has offices.

27 Notices

27.1 Any notice to be given under this Agreement shall be given in writing and may be sent, addressed in the case of the Company to its registered office for the time being and in the case of the Executive to the Executive at the Executive’s last known place of residence or given personally and any notice given by post shall be deemed to have been served at the expiration of 48 hours after the same was posted.

28 Assignment

28.1 The benefit of each agreement and obligation of the Executive under this Agreement may be assigned to and enforced by all successors or assigns for the time being carrying on the Business and such agreements and obligations shall operate and remain binding notwithstanding the termination of the employment of the Executive.

29 Third Party Rights

29.1 To the extent permitted by law, no person other than the parties to this agreement and any Group Company shall have the right to enforce any term of this agreement under the Contracts (Rights of Third Parties) Act 1999. For the avoidance of doubt, save as expressly provided in this clause the application of the Contracts (Rights of Third Parties) Act 1999 is specifically excluded from this agreement, although this does not affect any other right or remedy of any third party which exists or is available other than under this Act.

30 Law and Jurisdiction

30.1 English law

This Agreement shall be governed by, and construed in accordance with, English law.

30.2 Jurisdiction

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In relation to any legal action or proceedings arising out of or in connection with this Agreement (“Proceedings”), each of the parties irrevocably submits to the exclusive jurisdiction of the English courts and waives any objection to Proceedings in such courts on the grounds of venue or on the grounds that Proceedings have been brought in an inappropriate forum.

31 Prior Agreements and other employment-related conditions

31.1 Without prejudice to the terms of the Offer Letter such terms being incorporated by reference herein, this Agreement shall be in substitution for any other subsisting offer letter, agreement, service agreement or contract of employment (oral or otherwise) made between the Company and the Executive or between any other Group Company and the Executive and where any inconsistency exists between this Agreement and the Offer Letter the terms of the Offer Letter shall prevail.

31.2 The Executive’s employment is subject to the Company’s non-contractual rules, policies and procedures which apply for the Executive’s location. If there is any conflict between the non-contractual rules, policies and procedures from time to time and the Executive’s contractual terms and conditions, the contractual terms and conditions shall prevail.

31.3 The Executive warrants and agrees that the Executive is not entering into this Agreement in reliance on any representation not expressly set out in this Agreement.

32 Collective Agreements

32.1 There are no collective agreements currently in force which affect directly or indirectly the terms and conditions of the Executive’s employment.

33 Severability and Amendments

33.1 If any provision of this Agreement or of a clause hereof, or of any part of Schedule 1 is determined to be illegal or unenforceable by any court of law or any competent governmental or other authority, but would be valid if part of their wording were deleted, such clause shall be severable and enforceable and will apply with such deletion as may be necessary to make it valid or effective. The parties shall negotiate in good faith to replace any such illegal or unenforceable provisions with suitable substitute provisions which will maintain as far as possible the purposes and the effect of this Agreement.

34 Interpretation

34.1 In this Agreement:

“Affiliate” means, in respect of any company, a company which is its subsidiary, subsidiary undertaking or holding company, or a company which is a subsidiary or subsidiary undertaking of that holding company.

“the Board” means the Board of Directors of IHG or the Directors present at a duly convened meeting of the Directors at which a quorum is present and acting throughout or a duly authorised committee of the Board.

“the Business” means (taken together) the business of IHG and the business of any other Group Company with which the Executive is required by the Board under clause 2 to be concerned.

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“Confidential Information” means confidential information (which may include commercially sensitive information) relating to the business of the Company or any Group Company or any of their respective customers or their affairs and which includes but is not limited to Trade Secrets, ideas, inventions, business methods, business practices and processes, finances, prices, costs financial marketing/development/ manpower plans, strategy documents or intentions, products/product specifications, confidential emails/letters/memos marketing and promotion of products, packages or offers, names and addresses and other details of suppliers, customers, agents of the Company or any Group Company, computer systems and software, information relating to employees, know-how or other matters connected with the products or services manufactured, marketed, provided or obtained by the Company or any Group Company or their respective customers.

“Employment” means the employment governed by this Agreement.

“Group” means the Company and any Affiliate of the Company and “Group Company” shall be construed accordingly.

“IHG” means InterContinental Hotels Group PLC.

“Information” means any idea, method or information, which is not an Invention or Work, generated by the Executive either:

(i) in the course of the Executive’s Employment; or

(ii) outside the course of the Executive’s Employment but relating to the business, finance or affairs of any Group Company.

“Invention” means any invention relating to or capable of being used in the business of any Group Company as carried on from time to time.

“month” means a calendar month.

“Offer Letter” means the letter from the Executive Vice President HR setting out the principal terms of the Executive’s Employment.

“Trade Secrets” means trade secrets and information of such a highly confidential nature as to require the same treatment as trade secrets, of IHG or any Group Company or any supplier, customer, or agent of the Company or any Group Company.

“Work” means any idea; method; discovery; computer programme; semiconductor chip layout; database; drawing; literary work; product, packaging or other design; trade or service mark; logo; domain name or other work (whether registrable or not and whether a copyright work or not) which is not an Invention and which the Executive creates or is involved in creating:

(i) in connection with the Executive’s Employment; or

(ii) relating to or capable of being used in those aspects of the business of the Group Companies in which the Executive is involved from time to time.

34.2 In this Agreement, where the context admits:

(a) words and phrases the definitions of which are contained or referred to in the UK Companies Act 2006 shall be construed as having the meanings so attributed to them;

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(b) references to any statute or statutory provisions include a reference to those provisions as amended or re-enacted or as their application is modified by other provisions from time to time and any reference to a statutory provision shall include any subordinate legislation made from time to time under that provision;

(c) references to a “person” include any individual, company, body corporate, corporation sole or aggregate, government, state or agency of a state, firm, partnership joint venture, association, organisation or trust (in each case, whether or not having separate legal personality and irrespective of the jurisdiction in or under the law of which it was incorporated or exists) and a reference to any of them shall include a reference to the others;

(d) any reference to “writing” shall include typewriting, printing, lithography, photography, telex, facsimile and the printed out version of a communication by electronic mail and other modes of representing or reproducing words in a legible form;

(e) words denoting the singular shall include the plural and vice versa;

(f) the employment of the Executive are references to the employment by the Company whether or not during the continuance of this Agreement; and

(g) the masculine gender shall be deemed to include the feminine gender.

34.3 Headings are inserted for convenience only and shall not affect the construction of this Agreement.

IN WITNESS whereof, this Agreement has been entered into the day and year first above written.

SIGNED by	)
George Turner	)	/s/ George Turner
for and on behalf of	)
the Company

Signature

Name: GEORGE TURNER

Address:	Broadwater Park, Denham, Buckinghamshire UB9 5HR
Occupation:	EVP, General Counsel & Company Secretary

SIGNED and	)
DELIVERED	)	/s/ Tom Singer
by the Executive	)

Signature
Name: THOMAS SINGER
Address:	242 Sheen Lane, East Sheen, London SW14 8RL

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SCHEDULE 1

1. 1.1 In this Schedule 1 the expressions below have the meaning ascribed to them respectively below:

“Competing Enterprise” shall mean (a) any person, corporation, partnership, venture or other entity (“entity”) which engages either (i) in the business of managing, franchising, running, leasing, owning or joint venturing at least 50 hotels, or (ii) in the business of any online booking agency in respect of hotel rooms (“hotel booking”) and in the case of (i) and (ii) the entity’s shares are publicly traded and such entity has a market capitalisation of not less than one billion pounds sterling (for these purposes “market capitalisation” shall be the aggregate market value of the ordinary shares of the entity) and (b) any Competitor;

“Competitor” shall mean any of the following companies and/or any of their holding companies or subsidiaries from time to time:

(i) Accor SA

(ii) Hilton Worldwide

(iii) Starwood Hotels & Resorts Worldwide, Inc.

(iv) Marriott International, Inc.

(v) Global Hyatt Corporation

(vi) Choice Hotels International Inc.

(vii) Wyndham Worldwide Corporation

(viii) Four Seasons Holdings, Inc.

“Garden Leave Period” has the meaning given in Clause 22 of the Agreement above;

“Key Person” shall mean any person who was a band 4 level or above employee of the Company or any other Group Company (including for this purpose any General Manager of any hotel owned or managed by the Company or any other Group Company) and with whom the Executive had material contact or dealings in performing the duties of the Employment at any time during the period of 12 months ending on the Termination Date;

“Relevant Period” shall mean the period of six months beginning with the Termination Date but reduced by one day for each day of a Garden Leave Period;

“Restricted Activities” shall mean executive, managerial, directorial, administrative, strategic, business development or supervisory responsibilities and activities relating to any competing enterprise; and

“Termination Date” shall mean the date on which the Employment terminates.

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1.2 The Executive agrees that during the Relevant Period the Executive will not without the prior written consent of the Company:

(i) become associated with or engage in any Restricted Activity in respect of any Competing Enterprise, whether as officer, director, employee, principal, partner, agent, executive, independent contractor or shareholder (other than as a holder of not in excess of 5% of the outstanding voting shares of any publicly traded company) in competition with any business of the Company or any other Group Company being carried on by the Company or any other Group Company at the Termination Date but excluding (a) any association or engagement which solely relates to Restricted Activities which the Executive had not been involved in to a material extent in the course of the Employment at any time during the period of 12 months ending on the Termination Date, or (b) the Executive’s employment by a unit of a Competing Enterprise which unit is not itself engaged in hotel ownership, hotel management, hotel franchising, hotel running, hotel leasing, hotel joint-venturing or hotel booking (as defined above), so long as the Executive’s duties and responsibilities with respect to such employment are limited to the business of such unit, or (c) the Executive’s employment by an entity which includes a Competing Enterprise where such Competing Enterprise produces revenues that account for less than 5% of the gross revenues of the entity and performing services for such Competing Enterprise is not a material part of the Executive’s responsibilities; and

(ii) either on his own behalf or for or with any other person whether directly or indirectly, solicit or induce or attempt to solicitor induce any Key Person to leave the employ of the Company or any other Group Company whether or not such person would commit any breach of his contract of employment by leaving the service of the Company or any other Group Company; and

(iii) either on his own behalf or for or with any other person, whether directly or indirectly, interfere with or try to terminate or reduce the level of supplies (whether of products and/or services) by a supplier to the Company or any other Group Company provided the Executive was concerned or involved to a material extent with the supply or products or services by that supplier to the Company or a Group Company in the course of the employment at any time during the 12 months period ending on the Termination Date.

1.3 The Executive agrees that each of the paragraphs contained in sub-clause 1.2 of this Schedule 1 constitute an entirely separate and independent covenant on the Executive’s part and the validity of one paragraph shall not be affected by the validity or unenforceability of another.

1.4 The Executive agrees that the Executive will at the request and cost of the Company enter into a direct agreement or undertaking with any Group Company whereby the Executive will accept restrictions and provisions corresponding to the restrictions and provisions contained in sub-clause 1.2 of this Schedule 1 (or such of them as may be reasonable and appropriate in the circumstances) in relation to such activities and such areas and for such a period as such company may reasonably require for the protection of its legitimate interests but provided that the duration of such restrictions and provisions are no greater than the Relevant Period.

1.5 The Executive agrees that having regard to the facts and matters set out above the restrictive covenants contained in this Schedule 1 are necessary for the protection of the business and confidential information of the Company and other Group Companies.

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EX-4.C.V

Exhibit 4(c)(v)

RULES OF THE INTERCONTINENTAL HOTELS GROUP

LONG TERM INCENTIVE PLAN

(as amended on 6 December 2007 and 9 February 2012)

Shareholders’ Approval:	15 June 2005
Directors’ Adoption:	15 June 2005
Expiry	15 June 2015

InterContinental Hotels Group Long Term Incentive Plan

Rules

1 Meaning of Words Used

1.1 “Annual Salary” means basic annual salary excluding all payments additional to basic salary (for example mortgage support allowance, expatriate allowance etc.);

“Award” means a Conditional Award, an Option or a conditional award of cash under Rule 3.

“Award Date” means the date the Committee makes the determination under Rule 3.2.

“Change in Ownership under Section 409A” means a “change in ownership” within the meaning of US Treasury Regulation Section 1.409A-3(i)(5)(v). In general, a change in the ownership of a corporation occurs on the date that any one person, or more than one person acting as a group (as defined for purposes of Section 409A), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. However, if any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation. An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This section applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction.

“Committee” means the Board of Directors of the Company or a duly authorised committee.

“Company” means InterContinental Hotels Group PLC (with registered number 5134420).

“Conditional Award” means a conditional award of Shares.

“Employee” means, except for the purposes of Rule 12, any employee or executive director or former employee or former executive director of any Group Company.

“Group Company” means:

(i) the Company;

(ii) a Subsidiary; or

(iii) any other company which is associated with the Company and is so designated by the Committee.

“Lapse Date” is defined in Rule 10.4.

“Option” means a right to acquire Shares at the Option Price.

“Option Plan” means the InterContinental Hotels Group Executive Share Option Plan as amended from time to time.

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“Option Price” means the amount payable for the Shares comprised in an Option, which will be £1, irrespective of the number of Shares acquired, unless the Committee decides otherwise.

“Participant” means an Employee to whom the Committee has made an Award, and includes his personal representatives where appropriate.

“Performance Condition” means the condition specified in relation to an Award.

“Performance Period” means the period specified for which the Performance Condition is to be satisfied.

“Plan” means the InterContinental Hotels Group Long Term Incentive Plan constituted by this document as amended from time to time.

“Reconstruction or Takeover” means any takeover, merger or internal reconstruction, however effected, including a reverse takeover, partial offer, reorganisation or scheme of arrangement sanctioned by the court.

“Rules” means these rules as amended from time to time.

“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended.

“SIPs” means the InterContinental Hotels Group Share Incentive Plan and the Britvic Share Incentive Plan as amended from time to time.

“Shares” means ordinary shares in the Company, and includes any shares representing them following a Reconstruction or Takeover.

“Subsidiary” means a company which is a subsidiary of the Company within the meaning of section 736 of the Companies Act 1985.

“Vested Shares” means in relation to a Conditional Award, the number of Shares to be transferred to a Participant, and in relation to an Option, the number of Shares which may be acquired by a Participant on the exercise of the Option, as determined under Rule 8.1; and “Vest” shall be construed accordingly.

“Vesting Date” is defined in Rule 3.4.

1.2 References in the Plan to any statutory provisions are to those provisions as amended, extended or re-enacted from time to time and include any regulations made under them; and, unless the context otherwise requires, words in the singular include the plural (and vice versa) and words imputing either gender include both genders.

1.3 Headings may be ignored in construing the Rules.

2 Operation of the Plan

The Plan shall be operated and administered by the Company in accordance with the directions of the Committee.

3 Awards

3.1 The Committee may select any one or more Employees for participation in the Plan and grant Awards to them at any time before 15 June 2015.

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3.2 When the Committee grants an Award it shall determine the terms of the Award in its absolute discretion, including:

3.2.1 whether the Award is an Option, a Conditional Award or cash;

3.2.2 the Performance Period;

3.2.3 the Performance Condition;

3.2.4 the maximum number of Shares subject to the Award;

3.2.5 the Vesting Date;

3.2.6 if the Award is an Option, the Option Price, which, for a Participant who is subject to taxation under the federal income tax rules of the United States of America, shall not be less than the fair market value of the underlying Shares on the date of grant and which may not be reduced during the term of the Option except to the extent permitted under Section 409A.

3.3 The Company shall send an award certificate to the Participant specifying the terms of the Award determined under Rule 3.2.

3.4 Subject to Rules 3.5 and 3.6, “Vesting Date” means the business day after the announcement of the Company’s results for the last financial year of the Performance Period; provided, for clarification regarding Awards granted to Participants who are subject to taxation under the federal income tax rules of the United States of America, the Vesting Date shall occur between January 1 and March 15 of the calendar year following the calendar year in which the Performance Period ends.

3.5 The Company may decide in exceptional circumstances that the Vesting Date will be a date within seven days of the announcement of the Company’s results for the last financial year of the Performance Period; provided, for clarification regarding Awards granted to Participants who are subject to taxation under the federal income tax rules of the United States of America, the Vesting Date shall occur between January 1 and March 15 of the calendar year following the calendar year in which the Performance Period ends.

3.6 In the event that the acquisition or disposal of Shares by a Participant is not permitted by law or by any restrictions imposed pursuant to the provisions of any dealing restrictions imposed by the authorities in any relevant jurisdiction, the Vesting Date in respect of that Participant will be deferred until the ending of such restrictions unless the Company decides otherwise; provided, for Awards granted to Participants who are subject to taxation under the federal income tax rules of the United States of America, the Vesting Date will be deferred only to the extent permitted under Section 409A.

4 Individual Limits

4.1 The conditions in Rules 4.2 and 4.3 must both be satisfied.

4.2 Subject to Rules 4.5 and 4.6, an Award must not be made to an Employee if it would at the proposed Award Date cause the aggregate of the market value of Shares or the amount of cash over which Awards have been made in any financial year to exceed:

(i) in the case of an Employee who is a director of the Company, 3 times his Annual Salary as at the Award Date; and

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(ii) in the case of any other Employee, 4 times his Annual Salary as at the Award Date.

4.3 Subject to Rules 4.5 and 4.6 in any financial year no Employee shall be made an Award which would at the proposed Award Date cause the aggregate of:

(i) 20% of the market value of the Shares over which an option is granted under the Option Plan; and

(ii) 33% of the market value of the Shares or amount of cash over which an Award is made under the Plan

to exceed 130% of the Employee’s Annual Salary as at the Award Date.

4.4 For the purpose of Rule 4.3 the market value of a Share shall be calculated as follows:

(i) in respect of options granted under the Option Plan, the market value shall be the option price of the relevant Shares on the date when each option was granted; and

(ii) in respect of Awards under the Plan, the market value shall be the middle market quotation on the Business Day immediately preceding the Award Date.

4.5 The limits in this Rule 4 may be exceeded if the Directors determine that exceptional circumstances make it desirable that Awards should be granted in excess of those limits.

4.6 No account shall be taken of options under the Option Plan or Awards which have been released or have lapsed without being exercised.

5 Plan Limits

5.1 10 per cent. 10 year limit

The number of Shares which may be allocated under the Plan on any day must not exceed 10 per cent. of the ordinary share capital of the Company in issue immediately before that day, when added to the total number of Shares which have been allocated in the previous 10 years under the Plan and any other employee share plan operated by the Company.

5.2 5 per cent. 10 year limit

The number of Shares which may be allocated under the Plan on any day must not exceed 5 per cent. of the ordinary share capital of the Company in issue immediately before that day when added to the total number of Shares which have been allocated in the previous 10 years under the Plan and any other discretionary share plan operated by the Company.

5.3 1.5 per cent. 1 year limit

The number of Shares which may be allocated under the Plan on any day must not exceed 1.5 per cent. of the ordinary share capital of the Company in issue immediately before that day when added to the total number of Shares which have been allocated in the previous 12 months under the Plan, the Annual Bonus Plan and the Option Plan.

5.4 Exclusions

Where the right to acquire Shares is released or lapses without being exercised, the Shares concerned are ignored when calculating the limits in this Rule 5. Shares awarded as partnership shares under the SIPs are also ignored.

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5.5 “Allocate” means granting an option or other right to acquire unissued Shares, or if there is no such grant, the issue and allotment of Shares, and except in the case of the limit in 5.3 includes grants in exchange for rights granted by InterContinental Hotels Group PLC (with registered number 4551528).

6 Ceasing to be an Employee prior to the Vesting Date

6.1 If a Participant dies before the Vesting Date, the Company will as soon as practicable determine the number of Vested Shares relating to his Awards, taking account of the proportion of the Performance Period that has elapsed, and the extent to which the Performance Condition has been satisfied. The Company will procure the transfer of the number of Vested Shares in a Conditional Award or pay cash to the Participant’s personal representatives as soon as practicable and in the case of Awards subject to Section 409A, upon the 60^th day following the Participant’s date of death or otherwise as permitted under Section 409A. An Option may be exercised by the Participant’s personal representatives over the Vested Shares in the period of six months from the date of death, and will lapse if not exercised.

6.2 If a Participant’s office or employment with any Group Company terminates before the Vesting Date for any of the reasons specified in (i) to (vii) below, the number of Vested Shares relating to his Awards shall be the number determined under Rule 8 after the end of the Performance Period, reduced, to reflect the proportion of the Performance Period that had elapsed on the date of termination. The reasons are:

(i) ill-health, injury, disability;

(ii) redundancy;

(iii) retirement in accordance with the terms of a Participant’s contract of employment;

(iv) early retirement by agreement with the Participant’s employer;

(v) the Participant’s employing company being transferred to a person which is not a Group Company;

(vi) a transfer of the undertaking, or part of the undertaking, in which the Participant works to a person which is not a Group Company; or

(vii) any other reason determined by the Company.

The Company will procure the transfer of the Vested Shares in a Conditional Award or pay cash to the Participant on the Vesting Date or, for a Participant who is subject to taxation under the federal income tax rules of the United States of America, between January 1 and March 15 of the calendar year following the calendar year in which the Performance Period ends. An Option may be exercised by the Participant over the Vested Shares in the period of six months from the Vesting Date, and will lapse if not exercised.

6.3 If a Participant’s office or employment with any Group Company terminates before the Vesting Date for any reason not included in Rule 6.2, he shall cease to be a Participant in the Plan and shall not be eligible to receive any Shares or cash in respect of his Awards unless the Company decides otherwise within a reasonable time of the termination in which case the payment timing rules in Rule 6.2 shall apply. If the termination is by reason of gross misconduct, he shall not be eligible to receive any Shares or cash in respect of any Awards in any circumstances.

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6.4 For the purposes of Rule 6, a Participant’s office or employment with a Group Company will not be treated as having terminated until the Participant ceases to be employed by any Group Company and, where the Participant is made redundant or leaves by mutual agreement, until his contractual notice period or severance period has expired (whether or not this has been paid in lieu).

6.5 In the event of a Reconstruction or Takeover before the Vesting Date, the Company will as soon as practicable determine the number of Vested Shares or cash in relation to all Awards, taking account of the proportion of the Performance Period that has elapsed, and the degree to which the Performance Condition has been satisfied. The Company will procure the immediate transfer to each Participant of the Vested Shares in a Conditional Award or payment of the cash so determined; provided, for a Participant who is subject to taxation under the federal income tax rules of the United States of America, the transfer of Shares or payment of cash with respect to an Award subject to Section 409A may be advanced only if the Reconstruction or Takeover constitutes a Change in Ownership under Section 409A in which case the transfer or payment, as applicable, shall be made upon the date of the Reconstruction or Takeover. For a Participant who is subject to taxation under the federal income tax rules of the United States of America, such a Reconstruction or Takeover that is a Change in Ownership under Section 409A shall always trigger an advancement in time of the transfer of Shares or payment of cash. An Option may be exercised by the Participant over the number of Vested Shares in the period of six months from the date of the Reconstruction or Takeover, and will lapse if it has not been exercised. However, in the case of a Reconstruction or Takeover involving the exchange of Shares for shares in another company, or in more than one other company, the Committee may determine that no Shares or cash should be transferred, and that instead the Participant’s right to the Shares comprised in an Award should be replaced by a right to the appropriate number of shares in that other company or companies; and for Participants who are subject to taxation under the federal income tax rules of the United States of America and are subject to Section 409A any such replacement of Shares with shares in that other company or companies, if made, shall be made in a manner consistent with the requirements of Section 409A.

6.6 The Committee has discretion to take such action as it may think appropriate if other events happen which may have an effect on Awards; provided, for a Participant who is subject to taxation under the federal income tax rules of the United States of America, no such action shall result in an advancement in time of the transfer of shares or payment of cash with respect to an Award subject to Section 409A, unless otherwise permitted under Section 409A.

7 Clawback

7.1 Notwithstanding any other Rule of the Plan, if circumstances occur which, in the reasonable opinion of the Committee, justify a reduction in one or more Awards granted to any one or more Participants, the Committee may in its discretion at any time prior to the Vesting Date determine (acting fairly and reasonably) that the cash amount payable under an Award or the number of Shares over which an Award is granted shall be reduced to such amount or number (including to nil) as the Committee considers appropriate in the circumstances.

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7.2 The circumstances in which the Committee may consider that it is appropriate to exercise its discretion under Rule 7.1, include the following:

7.2.1 the misconduct of a Participant which results in or is reasonably likely to result in:

(i) significant reputational damage to the Company, any Group Company or to a relevant business unit (as appropriate);

(ii) a material adverse effect on the financial position of the Company, any Group Company or to a relevant business unit (as appropriate); or

(iii) a material adverse effect on the business opportunities and prospects for sustained performance or profitability of the Company, any Group Company or relevant business unit (as appropriate);

7.2.2 a material misstatement or restatement in the Company’s or any Group Company’s audited financial accounts (other than as a result of a change in accounting practice).

7.3 If the Committee decides to exercise its discretion under this Rule 7, it shall confirm this in writing to each affected Participant. For the purposes of these Rules:

7.3.1 the Award shall be deemed to have been granted over the reduced cash amount or reduced number of Shares (as the case may be); and

7.3.2 any subsequent vesting of an Award shall be determined by reference to this reduced cash amount or reduced number of Shares,

save that if the cash amount or number of Shares is reduced to nil, the Award shall be treated as if it had never been granted and a Participant (including a Participant who has left employment before the Vesting Date other than by reason of death) shall have no rights to any cash amount or Shares.

7.4 Notwithstanding the foregoing, to the extent required to comply with applicable US law, stock exchange listing requirements, and/or any compensation recovery policy adopted by the Committee in the future (whether before or after the grant of any Awards), the Committee may unilaterally amend Rule 7 and such amendment shall be binding on all affected Participants and their outstanding and future Awards; provided, regardless of whether the Committee makes such a unilateral amendment, all Participants shall be bound by any compensation recovery policy adopted by the Company in the future (whether before or after the grant of any Awards).

8 Determination of Awards

8.1 As soon as reasonably practicable after the end of the Performance Period, there shall be calculated:

8.1.1 the extent to which the Performance Condition specified in the invitation has been satisfied; and

8.1.2 the number of Shares which Vest in respect of each Award, or the amount of cash to be awarded to each Participant.

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8.2 In the case of an Option:

8.2.1 the Company will notify the Participant of the number of Vested Shares; and

8.2.2 the balance of the Option lapses forthwith.

9 Vesting of Conditional Awards

9.1 The Company shall transfer or procure the transfer of the Vested Shares or cash to each Participant on the Vesting Date, subject to Rule 11.4.

9.2 Each relevant Group Company will reimburse the Company for any costs incurred in connection with Conditional Awards to Participants who are employed by it.

9.3 The Company will notify each Participant of the number of Vested Shares transferred to him in respect of his Conditional Award and the amount of any tax and social security contributions withheld under Rule 11.4.

10 Exercise of Options

10.1 Except as otherwise provided in Rule 6, a Participant may exercise an Option to the extent that it has Vested at any time from the Vesting Date until the Lapse Date.

10.2 In order to exercise an Option, the Participant must deliver to the Company a notice of exercise in the prescribed form together with payment of the Option Price. The date on which these are received by the Company is the Option exercise date.

10.3 Subject to Rule 11.4, as soon as practicable following the Option exercise date, the Company will procure the transfer of the appropriate number of Shares to the participant.

10.4 The Lapse Date in relation to an Option is the earliest of the following dates:

10.4.1 the second anniversary of the Vesting Date;

10.4.2 subject to Rule 6, the date on which the Participant’s employment with any Group Company ends;

10.4.3 any date specified in Rule 6.

11 General

11.1 Any notice or other document given to any Employee or Participant pursuant to the Plan shall be delivered to him or sent by post to him at his home address according to the records of his employing company or such other address as may appear to the Company to be appropriate. Notices or other documents sent by post shall be deemed to have been given 5 days following the date of posting.

11.2 The decision of the Committee in any question of interpretation of the Rules or any dispute relating to or connected with this Plan shall be final and conclusive.

11.3 The costs of introducing, operating and administering the Plan shall be borne by the Company and the relevant Group Companies.

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11.4 The Company, any relevant Group Company and/or any relevant trustee may withhold any amounts or make such arrangements as are necessary to meet any liability to taxation and social security contributions in respect of the Shares or cash awarded under the Plan. The arrangements may include the sale of some or all of any Shares subject to an Award on behalf of the Participant, and the use of the proceeds to discharge the liability.

11.5 The Company shall have power from time to time to make or vary regulations for the administration and operation of the Plan provided that they are not inconsistent with these Rules.

11.6 The Company may decide to satisfy any Award by paying an equivalent amount in cash, if it considers in its discretion that this would be appropriate.

11.7 With respect to Awards granted to Participants who are subject to taxation under the federal income tax rules of the United States of America, it is intended for such Awards to be exempt from Section 409A and, to the extent such Awards are not so exempt, for such Awards to comply with the requirements of Section 409A; and the provisions of the Plan and any Award document shall be interpreted in a manner that satisfies the requirements of Section 409A, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan or any Award document is not warranted or guaranteed.

12 Terms of Employment

12.1 For the purposes of this Rule 12, “Employee” means any Participant, any Employee (within the meaning of Rule 1) or any other person.

12.2 This Rule 12 applies:

12.2.1 whether the Company has full discretion in the operation of the Plan, or whether the Company could be regarded as being subject to any obligations in the operation of the Plan;

12.2.2 during an Employee’s employment or employment relationship; and

12.2.3 after the termination of an Employee’s employment or employment relationship, whether the termination is lawful or unlawful.

12.3 Nothing in the Rules or the operation of the Plan forms part of the contract of employment or employment relationship of an Employee. The rights and obligations of an Employee are separate from, and are not affected by, the Plan. Participation in the Plan does not create any right to, or expectation of, continued employment or a continued employment relationship.

12.4 The grant of Awards on a particular basis in any year does not create any right to or expectation of the grant of Awards on the same basis, or at all, in any future year.

12.5 No Employee is entitled to participate in the Plan, or be considered for participation in it, at a particular level or at all. Participation in one operation of the Plan does not imply any right to participate, or to be considered for participation in any later operation of the Plan.

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12.6 Without prejudice to an Employee’s right to receive the Shares comprised in an Award subject to and in accordance with the express terms of the Rules and the Performance Condition, no Employee has any rights in respect of the exercise or omission to exercise any discretion, or the making or omission to make any decision, relating to the Award. Any and all discretions, decisions or omissions relating to the Award may operate to the disadvantage of the Employee, even if this could be regarded as capricious or unreasonable, or could be regarded as in breach of any implied term between the Employee and his employer, including any implied duty of trust and confidence. Any such implied term is excluded and overridden by this Rule 12.

12.7 No Employee has any right to compensation for any loss in relation to the Plan, including:

12.7.1 any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of employment or the employment relationship);

12.7.2 any exercise of a discretion or a decision taken in relation to an Award or to the Plan, or any failure to exercise a discretion or take a decision;

12.7.3 the operation, suspension, termination or amendment of the Plan.

12.8 Participation in the Plan is permitted only on the basis that the Participant accepts all the provisions of the Rules, including in particular this Rule 12. By participating in the Plan, an Employee waives all rights under the Plan, other than the right to receive Shares subject to and in accordance with the express terms of the Rules and the Performance Condition, in consideration for, and as a condition of, the grant of an Award under the Plan.

12.9 Nothing in this Plan confers any benefit, right or expectation on a person who is not an Employee. No such third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan. This does not affect any other right or remedy of a third party which may exist.

12.10 Each of the provisions of this Rule 12 is entirely separate and independent from each of the other provisions. If any provision is found to be invalid then it will be deemed never to have been part of these Rules and to the extent that it is possible to do so, this will not affect the validity or enforceability of any of the remaining provisions.

13 Personal Data

13.1 By participating in the Plan the Participant consents to the holding and processing of personal data provided by the Participant to the Company for all purposes relating to the operation of the Plan. These include, but are not limited to:

13.1.1 administering and maintaining Participant records;

13.1.2 providing information to trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan;

13.1.3 providing information to future purchasers of the Company or the business in which the Participant works;

13.1.4 transferring information about the Participant to a country or territory outside the European Economic Area.

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14 Changes to and termination of the Plan

14.1 Subject as provided in this Rule, the Committee may, in its discretion, amend the Rules or any part of the Plan as it considers appropriate. Variations may affect the terms of Awards which have already been made.

14.2 No amendment shall be made which would have the effect of abrogating or altering adversely in any material respect any of the subsisting rights of Participants in relation to Awards, except with the consent of the majority of the Participants affected by the proposed amendment. For a Participant who is subject to taxation under the federal income tax rules of the United States of America, no amendment of the Plan may result in the advancement in timing of the transfer of shares or payment of cash with respect to an Award subject to Section 409A except to the extent permitted by Section 409A.

14.3 The Committee may amend, vary or add to the provisions of the Plan as it considers necessary or desirable to take account of relevant overseas taxation, securities or exchange control laws, provided that the benefits granted to such Participants are not overall more favourable than the benefits granted to other Participants.

14.4 Except as provided in Rule 14.5, the prior approval of the Company in general meeting is required for any proposed change to the Rules to the advantage of present or future Participants which relates to:

14.4.1 the persons to or for whom Awards may be made;

14.4.2 the limitations on the number of Shares which may be allocated under the Plan;

14.4.3 the individual limits under Rule 4;

14.4.4 any rights attaching to Conditional Awards, Options, Awards or Shares;

14.4.5 the terms of this Rule 14.4.

14.5 The approval of the Company in general meeting is not required for any minor changes to the Rules which are:

14.5.1 to benefit the administration of the Plan;

14.5.2 to comply with or take account of the provisions of any proposed or existing legislation;

14.5.3 to take account of any changes to legislation; or

14.5.4 to obtain or maintain favourable tax, exchange control or regulatory treatment of any Group Company or any present or future Participant.

14.6 No amendment shall take effect to the extent that it would cause the Plan to cease to be an “employees’ share scheme” as defined in section 743 of the Companies Act 1985.

14.7 The Committee shall have discretion to terminate the Plan at any time, without prejudice to subsisting Awards.

15 Governing Law

The Plan is governed by English law and if there is any conflict of laws, English law shall prevail. All Group Companies and Participants shall submit to the jurisdiction of the English Courts as regards any matter arising under the Plan.

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EX-4.C.VI

Exhibit 4(c)(vi)

INTERCONTINENTAL HOTELS GROUP

ANNUAL BONUS PLAN

(as amended on 6 December 2007 and 9 February 2012)

Shareholders’ Approval:	15 June 2005
Directors’ Adoption:	15 June 2005
Expiry:	15 June 2015

THE INTERCONTINENTAL HOTELS GROUP ANNUAL BONUS PLAN

1 Meanings of words used

1.1 In these Rules:

“Bonus Award” means an award of cash or Bonus Shares made to a Participant in accordance with the Plan;

“Bonus Shares” means the Shares comprised in a Bonus Award, which may be in the form of a Conditional Award or a Forfeitable Award;

“Change in Ownership under Section 409A” means a “change in ownership” within the meaning of US Treasury Regulation Section 1.409A-3(i)(5)(v). In general, a change in the ownership of a corporation occurs on the date that any one person, or more than one person acting as a group (as defined for purposes of Section 409A), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. However, if any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation. An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This section applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction.

“Committee” means the Board of Directors of the Company or a duly authorised committee;

“Company” means InterContinental Hotels Group PLC (with registered number 5134420);

“Conditional Award” means an award of Bonus Shares within Rule 4.3.1;

“Forfeitable Award” means an award of Bonus Shares within Rule 4.3.2;

“Forfeitable Share Agreement” means the agreement setting out the terms of a Forfeitable Award as required by Rule 4.3;

“Group Company” means the Company, any company which is a subsidiary of the Company within the meaning of Section 736 of the Companies Act 1985 and any other company which is associated with the Company and is so designated by the Committee;

“Matching Shares” means additional Shares specified in a Participant’s notification under Rule 2.6 and awarded under Rule 4.4;

“Option Plan” means the InterContinental Hotels Group Executive Share Option Plan, as amended from time to time;

“Participant” means a person who has been selected to participate in the Plan under Rule 2.2;

“Performance Target” means any target specified for a financial year in relation to a Bonus Award;

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“Plan” means this plan known as “The InterContinental Hotels Group Annual Bonus Plan” in its present form and as from time to time altered in accordance with the Rules;

“LTIP” means the InterContinental Hotels Group Long Term Incentive Plan (formerly known as Performance Restricted Share Plan) as amended from time to time;

“Reconstruction or Takeover” means any takeover, merger or internal reconstruction, however effected, including a reverse takeover, partial offer, reorganisation or scheme of arrangement sanctioned by the court;

“Release Date” in relation to any Bonus Shares subject to a Forfeitable Award, the date on which the Participant is entitled to them free of any restrictions, and in relation to any Matching Shares and any Bonus Shares subject to a Conditional Award, means the date on which the Participant becomes entitled to receive them under Rule 9, as specified in the notification to the Participant under Rule 2.6 and the making of Awards under Rule 4, but in all cases subject to any delay under Rule 9.2 and subject to any advancement under any other provision of the Rules;

“Rules” means these rules as amended from time to time;

“Salary” in relation to a Bonus Award for a financial year, means the basic annual salary in effect on the last day of that financial year excluding all payments additional to basic salary (for example mortgage support allowance, expatriate allowance etc);

“Section 409A” means Section 409A of the US Internal Revenue Code of 1986, as amended.

“Shares” means fully paid ordinary shares in the capital of the Company, and includes any shares representing them following a Reconstruction or Takeover;

“SIPs” means the InterContinental Hotels Group Share Incentive Plan and the Britvic Share Incentive Plan as amended from time to time;

1.2 Where the context admits or requires the singular includes the plural and the masculine includes the feminine and vice versa; references to any statutory provision include any modification or re-enactment.

1.3 Headings will be ignored in construing the Rules.

2 Operation of the Plan

2.1 Timing of Operation: The Committee may decide at any time and at its discretion when the Plan shall be operated.

2.2 Selection of Participants: In relation to any operation of the Plan the Committee may select any employees or executive directors of any Group Company to be Participants in the Plan. The Committee will grant conditional Bonus Awards to the Participants it selects to participate in the Plan. The Committee has the right to withdraw a Participant from the Plan at any time if it considers that the Participant’s failure or inability to contribute to the management team effort warrant this, for example if:

2.2.1 the participant’s personal performance is formally appraised as unsatisfactory

2.2.2 the participant is subject to disciplinary action

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2.2.3 the participant is absent from work due to prolonged illness and is unable to contribute to team performance.

2.3 Performance Target: any Performance Target must relate to a period which is no longer than one financial year.

2.4 Basis of Calculation of Bonus Awards: Bonus Awards to be made on achievement of the Performance Target shall be calculated as a specified percentage of Salary. A Bonus Award will not exceed 200% of Salary.

2.5 Nature of Bonus Awards: Bonus Awards may take the form of cash or Bonus Shares, or a combination of cash and Bonus Shares, as the Committee may determine; provided, for Participants who are subject to taxation under the federal income tax rules of the United States of America, the portion of the Bonus Awards that will be comprised of cash and the portion that will be comprised of Bonus Shares must be determined at the time such Bonus Awards are determined and notified to Participants under Rule 2.6. A Bonus Award of Bonus Shares may take the form of a Conditional Award or a Forfeitable Award and shall be deferred until the Release Date determined by the Committee. The Committee may also determine that a specified ratio of Matching Shares shall be awarded on the Release Date. The Committee may determine that there shall be more than one Release Date in respect of a Bonus Award. The ratio of Matching Shares to Bonus Shares comprised in a Bonus Award shall not exceed one Matching Share to two Bonus Shares.

2.6 Notification of Participants: Participants shall be notified, in writing, that they have been selected for participation in the Plan. The notice shall include details of any Performance Target, the percentage of Salary, the nature of the Bonus Award, the Release Date and, if relevant, the ratio of Matching Shares.

2.7 Variation: Subject to Rule 11.2, the Committee may, at any time after giving notice of participation, vary its terms as regards the operation of the Plan generally or in respect of any Participant and specify any other terms applicable to the operation of the Plan.

3 Starters, leavers and Reconstructions and Takeovers

3.1 The Committee may permit an employee to join the Plan part way through a financial year, on the basis that the Bonus Award is either payable for the full year or pro-rated from the date of entry, at its discretion. The Participant shall be notified of the terms of participation accordingly.

3.2 If a Participant’s employment with any Group Company terminates during the financial year by reason of ill-health, injury, disability, retirement, redundancy, death or as a result of the sale of the business or company by which he is employed, his Bonus Award will be pro-rated to the date of termination or the date of Reconstruction or Takeover, or such later date as the Committee may determine, and will be made in cash rather than in Shares, unless the Committee determines otherwise; provided that, to the extent a Participant’s Bonus Award is subject to Section 409A, such conversion of Shares to cash shall not result in an advancement or acceleration of the payment timing, unless the Participant’s termination of employment is by reason of death, in which case the payment timing shall be advanced and accelerated to the date that is 60 days after the date of his death, or otherwise as permitted under Section 409A .

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3.3 If a Participant’s employment with any Group Company terminates during the financial year for any reason other than those listed in Rule 3.2, he shall not receive any Bonus Award unless the Committee decides otherwise.

3.4 If a Participant’s employment terminates after the end of the financial year, but before Bonus Awards have been made under rule 4, the Participant shall be entitled to receive a payment of cash under rule 4.2, but shall not be entitled to receive a Bonus Award in Shares under rule 4.3. If the reason for the termination was ill-health, injury, disability, retirement, redundancy, death, or the sale of the business or company by which he is employed, the Participant shall be entitled to a cash amount equivalent to the Bonus Award in Shares that would otherwise have been made under rule 4.3, unless the Committee determines otherwise; provided that, to the extent a Participant’s Bonus Award is subject to Section 409A, such conversion of Shares to cash shall not result in an advancement or acceleration of the payment timing, unless the Participant’s termination of employment is by reason of death, in which case the payment timing shall be advanced and accelerated to the date that is 60 days after the date of his death, or otherwise as permitted under Section 409A. The Participant will have no entitlement if the termination was for any other reason, unless the Committee determines otherwise.

3.5 For the purposes of Rule 3 and Rule 8, and subject to the Committee’s discretion to determine otherwise, a Participant’s employment with a Group Company will be treated as having terminated at the following times:

3.5.1 If a Participant’s employment terminates by reason of redundancy, the date of termination will be the date on which the Participant’s notice period would have ended, if that is later than the date of actual termination;

3.5.2 If a Participant resigns, the date of termination will be the date on which notice of resignation is given;

3.5.3 In all other circumstances, the date of actual termination will apply.

3.6 If there is a Reconstruction or Takeover during the financial year, Bonus Awards will be pro-rated to the date of the Reconstruction or Takeover, or such later date as the Committee may determine, and will be made in cash rather than in Shares, unless the Committee determines otherwise. If there is a Reconstruction or Takeover during the period between the end of the financial year and the making of Bonus Awards under rule 4, Bonus Awards will be made in full, and will be made in cash rather than in Shares, unless the Committee determines otherwise. Notwithstanding the foregoing, to the extent a Participant’s Bonus Award is subject to Section 409A, such payment in cash rather than Shares will result in an advancement or acceleration of the payment timing only to the extent provided in Rule 6.3.

4 Making of Bonus Awards

4.1 Calculation of Bonus Award: As soon as practicable after the end of the financial year, the Performance Target (if any) shall be evaluated, and the amount of each Participant’s Bonus Award shall be calculated.

4.2 Bonus Awards in Cash: Bonus Awards payable in cash shall be paid as soon as practicable by the Company or, where relevant the Group Company employing the Participant, and in any event within 90 days of the end of the financial year, with the

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exception of Participants who are subject to taxation under the federal income tax rules of the United States of America, where the payment shall be made no later than 15 March of the calendar year following the financial year.

4.3 Bonus Awards in Shares: in respect of each Bonus Award in Shares, the Company shall determine whether to make it in the form of a Conditional Award or a Forfeitable Award, and shall grant such award to the relevant Participant over the relevant number of Shares as specified in 4.3.1 and 4.3.2 below; provided, for Participants who are subject to taxation under the federal income tax rules of the United States of America, the percentage of Shares that will be a Conditional Award and the percentage of Shares that will be a Forfeitable Award must be determined at the time the Bonus Awards are determined and notified to the Participant under Rule 2.6. The relevant number of Shares will be calculated by reference to the average of the middle market quotation of a Share for the three business days following the announcement of the Company’s results for the relevant financial year or such other days as the Company may determine. The middle market quotation is taken from the Daily Official List of the London Stock Exchange.

4.3.1 Conditional Award: the Participant is entitled to receive the relevant number of Shares on the Release Date, provided he remains an employee of a Group Company until the Release Date.

4.3.2 Forfeitable Award: the relevant number of Shares is transferred to the Participant or his nominee for his absolute benefit but on terms that he may forfeit them if he ceases to be an employee of a Group Company before the Release Date, and on any other terms contained in the Forfeitable Share Agreement. The Participant must sign the Forfeitable Share Agreement within a specified time, and failure to do so will result in the forfeiture of the Shares, unless the Company decides otherwise.

4.3.3 Dividend equivalent: when making a Conditional Award, the Committee may specify that the Participant is entitled to a cash payment equal to the net dividends paid on the Shares between the date of the Bonus Award and the Release Date (less tax), provided he remains an employee of a Group Company until the Release Date. Alternatively the Committee may specify that the Participant is entitled to receive a cash payment equal to each net dividend (less tax) that is paid on the Shares subject to the Bonus Award, as soon as practicable after the dividend is paid, provided he remains an employee of a Group Company until the date on which the dividend is paid,

4.4 Matching Shares: If specified in the Participant’s notification under Rule 2.6, the Company shall at the same time as making the Bonus Award in Shares, also grant to the relevant Participant the right to receive the relevant number of Matching Shares on the Release Date, conditional on the Participant remaining an employee of a Group Company until the Release Date.

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5 Plan limits

5.1 10 per cent. 10 year limit

The number of Shares which may be allocated under the Plan on any day must not exceed 10 per cent. of the ordinary share capital of the Company in issue immediately before that day, when added to the total number of Shares which have been allocated in the previous 10 years under the Plan and any other employee share plan operated by the Company.

5.2 5 per cent. 10 year limit

The number of Shares which may be allocated under the Plan on any day must not exceed 5 per cent. of the ordinary share capital of the Company in issue immediately before that day, when added to the total number of Shares which have been allocated in the previous 10 years under the Plan and any other discretionary employee share plans operated by the Company.

5.3 1.5 per cent. 1 year limit

The number of Shares which may be allocated under the Plan on any day must not exceed 1.5 per cent. of the ordinary share capital of the Company in issue immediately before that day when added to the total number of Shares which have been allocated in the previous 12 months under the Plan, the Option Plan and the LTIP.

5.4 Exclusions

Where a right to acquire Shares is released or lapses without being exercised, the Shares concerned are ignored when calculating the limits in this Rule 5. Shares awarded as partnership shares under the SIPs are also ignored.

5.5 “Allocate” means granting an option or other right to acquire unissued Shares, or if there is no such grant, the issue and allotment of Shares, and except in the case of the limit in 5.3 includes grants in exchange for rights granted by InterContinental Hotels Group PLC (with registered number 4551528).

6 Participant’s Rights before the Release Date

6.1 Shareholder rights: Before the Release Date the Participant has:

6.1.1 all shareholder rights in respect of Bonus Shares which are subject to a Forfeitable Award, and

6.1.2 no shareholder rights in respect of any Bonus Shares which are subject to a Conditional Award or in respect of any Matching Shares.

6.2 Variation of share capital etc: The Committee may vary the number of Shares comprised in a Conditional Award (including any Matching Shares) to take account of any variation of the share capital of the Company, or any special dividend or other transaction which might adversely affect the value of the Shares, to ensure that the Participant is not disadvantaged.

6.3 Reconstruction or Takeover: In the event of a Reconstruction or Takeover, the Committee may determine that the Release Date for the Shares comprised in a Bonus Award (including any Matching Shares), or cash of equivalent value, should be advanced to the effective date of such event, or to such other date as the Committee may think

6

appropriate; provided, for a Participant who is subject to taxation under the federal income tax rules of the United States of America, the Release Date with respect to a Bonus Award subject to Section 409A may be advanced only if the Reconstruction or Takeover constitutes a Change in Ownership under Section 409A in which case the transfer or payment, as applicable, shall be made upon the date of the Reconstruction or Takeover. However, in the case of a Reconstruction or Takeover involving the exchange of Shares for shares in another company, or in more than one other company, the Committee may determine that the Participant’s right to the Shares comprised in a Bonus Award (including any Matching Shares) should be replaced by a right to the appropriate number of shares in that other company or companies; provided, for Bonus Shares of Participants who are subject to taxation under the federal income tax rules of the United States of America, this provision shall not apply if the Reconstruction or Takeover is also a Change in Ownership under Section 409A; and if the Reconstruction or Takeover is not a Change in Ownership under Section 409A, any such replacement of Shares with shares in another company or companies, if made, shall be made in a manner consistent with the requirements of Section 409A.

6.4 Other events: The Committee has discretion to take such action as it may think appropriate if other events happen which may have an effect on Bonus Awards.

7 Clawback

7.1 Notwithstanding any other Rule of the Plan, if circumstances occur which, in the reasonable opinion of the Committee, justify a reduction in one or more Bonus Awards granted to any one or more Participants the Committee may in its discretion at any time:

7.1.1 prior to the Release Date (in the case of a Conditional Award or a Forfeitable Award); or

7.1.2 prior to the payment of a Bonus Award (in the case of a Bonus Award payable in cash),

determine (acting fairly and reasonably) that the cash amount payable under a Bonus Award or the number of Bonus Shares and/or Matching Shares over which a Bonus Award is granted shall be reduced to such amount or number (including to nil) as the Committee considers appropriate in the circumstances and any entitlement to a related dividend equivalent shall be correspondingly reduced.

7.2 The circumstances in which the Committee may consider that it is appropriate to exercise its discretion under Rule 7.1, include the following:

7.2.1 the misconduct of a Participant which results in or is reasonably likely to result in:

(i) significant reputational damage to the Company, any Group Company or to a relevant business unit (as appropriate);

(ii) a material adverse effect on the financial position of the Company, any Group Company or to a relevant business unit (as appropriate); or

(iii) a material adverse effect on the business opportunities and prospects for sustained performance or profitability of the Company, any Group Company or relevant business unit (as appropriate);

7

7.2.2 a material misstatement or restatement in the Company’s or any Group Company’s audited financial accounts (other than as a result of a change in accounting practice).

7.3 If the Committee decides to exercise its discretion under this Rule 7, it shall confirm this in writing to each affected Participant. For the purposes of these Rules, the Bonus Award shall be deemed to have been granted over the reduced cash amount, or reduced number of Bonus Shares or Matching Shares (as the case may be), save that if the Bonus Award is reduced to nil, the Bonus Award shall be treated as if it had never been granted and a Participant (including a Participant who has left employment before the Release Date or the payment date of the cash amount (as the case may be) other than by reason of death) shall have no rights to any cash amount, Bonus Shares, Matching Shares or corresponding dividend equivalent.

7.4 Notwithstanding the foregoing, to the extent required to comply with applicable US law, stock exchange listing requirements, and/or any compensation recovery policy adopted by the Committee in the future (whether before or after the grant of any Awards), the Committee may unilaterally amend Rule 7 and such amendment shall be binding on all affected Participants and their outstanding and future Awards; provided, regardless of whether the Committee makes such a unilateral amendment, all Participants shall be bound by any compensation recovery policy adopted by the Company in the future (whether before or after the grant of any Awards).

8 Termination of employment before the Release Date

8.1 Ill-health, disability, etc.: If the Participant’s employment with a Group Company is terminated before the Release Date by reason of ill-health, injury, disability, retirement, redundancy, death or as a result of the sale of the business or company which he is employed, the Release Date for some or all of the Shares comprised in his Bonus Award, including any Matching Shares, may, at the discretion of the Committee, be advanced to the date of termination, or such other date as the Committee may consider appropriate. If the Committee does not so determine, the Release Date remains unchanged. Notwithstanding the foregoing, if the Participant is subject to taxation under the federal tax rules of the United States of America, the Release Date may not be advanced, unless the Participant’s termination of employment is by reason of death, in which case the payment timing shall be advanced and accelerated to the date that is 60 days after the date of his death, or otherwise as permitted under Section 409A.

8.2 Reconstruction or Takeover: If the Participant’s employment with a Group Company is terminated in connection with a Reconstruction or Takeover before the Release Date, the Release Date in respect of all the Shares comprised in his Bonus Award, including any Matching Shares, is advanced to the date of termination of employment; provided, for the Bonus Shares of Participants who are subject to taxation under the federal income tax rules of the United States of America, (i) if the Reconstruction or Takeover is also a Change in Ownership, this Section 8.2 shall not apply to such Bonus Shares because Section 6.3 would have already taken effect upon the date of the Reconstruction or Takeover; and (ii) if the Reconstruction or Takeover is not also a Change in Ownership, the Release Date shall not be advanced.

8

8.3 Other terminations: If the Participant ceases to be in the employment of any Group Company before the Release Date for any other reason, all Shares subject to Forfeitable Awards are forfeited, and his right to receive Shares pursuant to a Conditional Award on the Release Date is lost, unless the Committee decides otherwise.

8.4 Rule 3.5 applies to the determination of the time when employment terminates.

9 Release Date

9.1 Subject to Rule 3, Rule 7, Rule 8 and Rule 9.2, the Participant is entitled to receive the Shares comprised in his Conditional Award and any award of Matching Shares on the Release Date. However, the Company may decide to satisfy any Conditional Award and any award of Matching Shares by paying an equivalent amount in cash, if it considers in its discretion that this would be appropriate.

9.2 In the event that the acquisition or disposal of Shares by a Participant is not permitted by law or by any restrictions imposed pursuant to the provisions of any dealing restrictions imposed by the authorities in any relevant jurisdiction, the Release Date in respect of that Participant will be deferred until after the ending of such restrictions unless the Committee decides otherwise; provided, for Participants who are subject to taxation under the federal income tax rules of the United States of America, such a deferral shall be effected only to the extent permitted under Section 409A.

10 General

10.1 Notices: Any notice or other document given to any Participant pursuant to the Plan shall be delivered to him or sent by post to him at his home address according to the records of his employing company or such other address as may appear to the Committee to be appropriate. Notices or other documents sent by post shall be deemed to have been given 5 days following the date of posting.

10.2 Documents sent to Shareholders: The Company is not obliged to send to Participants copies of any documents or notices sent to the holders of its Shares.

10.3 Reimbursement: Each relevant Group Company shall reimburse the Company for any costs incurred in connection with the Bonus Awards to Participants who are employed by them.

10.4 Withholding: The Company, and any relevant Group Company may withhold any amounts or make such arrangements, including the sale of any Shares on behalf of a Participant as are necessary to meet any liability to taxation or social security contributions in respect of any Bonus Award (including any Matching Shares).

10.5 Committee’s decisions final and binding: The decision of the Committee in connection with any interpretation of the Plan Rules or in any dispute relating to any matter relating to the Plan shall be final and conclusive.

10.6 Costs: The costs of introducing and administering the Plan will be borne by the Company.

10.7 Regulations: The Committee will have power from time to time to make or vary regulations for the administration and operation of the Plan provided that the same are not inconsistent with these Rules.

9

10.8 Terms of employment:

10.8.1 For the purposes of this Rule 10.8, “Employee” means any Participant, or any other person.

10.8.2 This Rule 10.8 applies:

(i) whether the Company has full discretion in the operation of the Plan, or whether the Company could be regarded as being subject to any obligations in the operation of the Plan;

(ii) during an Employee’s employment or employment relationship; and

(iii) after the termination of an Employee’s employment or employment relationship, whether the termination is lawful or unlawful.

10.8.3 Nothing in the Rules or the operation of the Plan forms part of the contract of employment or employment relationship of an Employee. The rights and obligations of an Employee are separate from, and are not affected by, the Plan. Participation in the Plan does not create any right to, or expectation of, continued employment or a continued employment relationship.

10.8.4 The grant of Bonus Awards and Matching Shares on a particular basis in any year does not create any right to or expectation of the grant of Bonus Awards and Matching Shares on the same basis, or at all, in any future year.

10.8.5 No Employee is entitled to participate in the Plan, or be considered for participation in it, at a particular level or at all. Participation in one operation of the Plan does not imply any right to participate, or to be considered for participation in any later operation of the Plan.

10.8.6 Without prejudice to an Employee’s right to receive the Bonus Shares comprised in an Award and any Matching Shares subject to and in accordance with the express terms of the Rules and the Performance Condition, no Employee has any rights in respect of the exercise or omission to exercise any discretion, or the making or omission to make any decision, relating to the Bonus Award and any Matching Shares. Any and all discretions, decisions or omissions relating to the Bonus Award or Matching Shares may operate to the disadvantage of the Employee, even if this could be regarded as capricious or unreasonable, or could be regarded as in breach of any implied term between the Employee and his employer, including any implied duty of trust and confidence. Any such implied term is excluded and overridden by this Rule 10.8.

10.8.7 No Employee has any right to compensation for any loss in relation to the Plan, including:

(i) any loss or reduction of any rights or expectations under the Plan in any circumstances or for any reason (including lawful or unlawful termination of employment or the employment relationship);

(ii) any exercise of a discretion or a decision taken in relation to a Bonus Award or Matching Shares or to the Plan, or any failure to exercise a discretion or take a decision;

(iii) the operation, suspension, termination or amendment of the Plan.

10

10.8.8 Participation in the Plan is permitted only on the basis that the Participant accepts all the provisions of the Rules, including in particular this Rule 10.8. By participating in the Plan, an Employee waives all rights under the Plan, other than the right to receive Shares subject to and in accordance with the express terms of the Rules and the Performance Condition, in consideration for, and as a condition of, the grant of a Bonus Award or Matching Shares under the Plan.

10.8.9 Nothing in this Plan confers any benefit, right or expectation on a person who is not an Employee. No such third party has any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Plan. This does not affect any other right or remedy of a third party which may exist.

10.8.10 Each of the provisions of this Rule 10.8 is entirely separate and independent from each of the other provisions. If any provision is found to be invalid then it will be deemed never to have been part of these Rules and to the extent that it is possible to do so, this will not affect the validity or enforceability of any of the remaining provisions.

10.9 Data protection: By participating in the Plan the Participant consents to the holding and processing of personal data provided by the Participant to the Company for all purposes relating to the operation of the Plan. These include, but are not limited to:

10.9.1 administering and maintaining Participant records;

10.9.2 providing information to trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan;

10.9.3 providing information to future purchasers of the Company or the business in which the Participant works;

10.9.4 transferring information about the Participant to a country or territory outside the European Economic Area.

11 Amendments and Termination

11.1 Committee’s powers of amendment: Subject to the following provisions of this rule, the Committee may in its discretion waive, amend or add to the Rules as it thinks fit.

11.2 Participants’ Consent: No amendment shall be made which would have the effect of abrogating or altering adversely in any material respect any of the subsisting rights of Participants in relation to Shares comprised in a Bonus Award, except with the consent of the majority of the Participants affected by the proposed amendment.

11.3 Participants who move overseas: Notwithstanding any other provision of the Plan the Committee may amend, vary or add to the provisions of the Plan as it considers necessary or desirable to take account of, or to mitigate, or to comply with relevant overseas taxation, securities or exchange control laws, provided that the benefits granted to such Participants are not overall more favourable than the benefits granted to other Participants.

11.4 Notice: As soon as reasonably practicable after making any alteration to the Plan, the Committee will give written notice to any Participant materially affected by the alteration.

11.5 Termination of the Plan: The Committee may terminate the Plan at any time.

11

12 Governing Law

12.1 The Plan is governed by English law and if there is any conflict of laws English law will prevail. All Group Companies and all Participants shall submit to the jurisdiction of the English Courts as regards any matter arising under the Plan.

13 Section 409A

13.1 With respect to Awards granted to Participants who are subject to taxation under the federal income tax rules of the United States of America, the Plan is intended to comply with the requirements of Section 409A, and the provisions of the Plan and any Award document shall be interpreted in a manner that satisfies the requirements of Section 409A, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan or any Award document is not warranted or guaranteed.

12

EX-8

Exhibit 8

INDEX OF ENTITIES

Updated from 01.07.11 to 31.12.11

InterContinental Hotels Group:

Name of Entity	Country of Incorporation
“IHG Management” d.o.o. Beograd	Serbia
111 East 48th Street Holdings LLC	Delaware, USA
American Commonwealth Assurance Company Limited	Bermuda
Arabian Hotel Management Co. LLC	Oman
Asia Pacific Holdings Limited	England
Avendra LLC	Delaware, USA
Barclay Operating Corp.	New York, USA
Beijing Orient Express Hotels Co., Ltd	People’s Republic of China
Blue Blood (Tianjin) Equity Investment Management Co., Ltd	People’s Republic of China
BHMC Canada Inc.	Ontario, Canada
BHR Holdings B.V.	The Netherlands
BHR Luxembourg S.A.R.L.	Luxembourg
BHR Overseas (Finance) B.V.	The Netherlands
BHR Pacific Holdings, Inc.	Delaware, USA
BHR Services (France) SARL.	France
BHR US Holdings B.V.	The Netherlands
BHTC Canada Inc.	Ontario, Canada
Bristol Oakbrook Tenant Company	Delaware, USA
Café Biarritz	Texas, USA
Carr 625 First Street LLC	Virginia, USA
Carr 901 N. Fairfax Street LLC	Virginia, USA
CDC San Francisco LLC	Delaware, USA
China Hotel Investment Ltd	Barbados
Compañia Inter-Continental De Hoteles El Salvador SA	El Salvador
Crowne Plaza Amsterdam (Management) BV	The Netherlands
Crowne Plaza LLC	Delaware, USA
D.I.H (Cyprus) SPV (No. 2) Limited	Cyprus
D.I.H. (Cyprus) SPV (No.4) Limited	Cyprus
D.I.H. (Cyprus) SPV (No.6) Limited	Cyprus
D.I.H. (Cyprus) SPV (No.7) Limited	Cyprus
D.I.H. (Cyprus) SPV (No.12) Limited	Cyprus
Duet Smart Hotels (India) Limited	Cyprus
Duet India Hotels (Ahmedabad) Private Ltd	India
Duet India Hotels (Bangalore) Private Ltd	India
Duet India Hotels (Chennai) Private Ltd	India
Duet India Hotels (Chennai OMR) Private Ltd	India
Duet India Hotels (Hyderabad) Private Ltd	India
Edinburgh IC Limited	Scotland
EMERO BV	The Netherlands
General Innkeeping Acceptance Corporation	Tennessee, USA
Gestion Hotelera Gestel, C.A.	Venezuela
Grand Hotel Inter-Continental Paris SNC	France
Graviss Hospitality Limited	India
Guangzhou SC Hotels Services Ltd.	People’s Republic of China
H.I (Burswood) Pty Ltd.	Australia
H.I. (Ireland) Limited	Ireland
HIA Hotels Trust	Australia
H.I. Mexicana Servicios, SA de CV	Mexico
H.I. Soaltee Hotel Company Private Ltd	Nepal
H.I. Soaltee Management Company Ltd	Hong Kong
HI Sugarloaf, LLC	Georgia, USA
Hale International Ltd.	British Virgin Islands
HC International Holdings, Inc	Delaware, USA
HH France Holdings SAS	France

Page 1

INDEX OF ENTITIES

Updated from 01.07.11 to 31.12.11

HH Hotels (EMEA) BV	The Netherlands
HH Hotels (EMEA) BV—Egyptian Branch	Egypt
HH Hotels (EMEA) BV—Russian Branch (TotRusUs)	Russia
HH Hotels (Romania) SRL	Romania
HIA (T) Pty Ltd	Australia
HIM (Aruba) NV	Aruba
Hoft Properties LLC	Delaware, USA
Holiday Hospitality Franchising, Inc.	Delaware, USA
Holiday Inn Cairns Pty Ltd	Australia
Holiday Inn Mexicana S.A.	Mexico
Holiday Inns (Beijing) Ltd.	Hong Kong
Holiday Inns (China) Ltd	Hong Kong
Holiday Inns (Chongqing), Inc.	Tennessee, USA
Holiday Inns (Courtalin) Holdings SAS	France
Holiday Inns (Courtalin) SAS	France
Holiday Inns (England) Ltd.	England
Holiday Inns (Germany) LLC	Tennessee, USA
Holiday Inns (Germany) LLC—German Branch	Germany
Holiday Inns (Guangzhou), Inc.	Tennessee, USA
Holiday Inns (Jamaica) Inc.	Tennessee, USA
Holiday Inns (Jamaica) Inc.—Jamaica Branch	Jamaica
Holiday Inns (Macau) Ltd.	Hong Kong
Holiday Inns (Malaysia) Ltd.	Hong Kong
Holiday Inns (Middle East) Ltd—Cairo Branch	Egypt
Holiday Inns (Middle East) Ltd—Dubai Branch	UAE
Holiday Inns (Middle East) Ltd—Jordan Branch	Jordan
Holiday Inns (Middle East) Ltd.	Hong Kong
Holiday Inns (Philippines), Inc.	Tennessee, USA
Holiday Inns (Philippines), Inc.—Philippines Branch	Philippines
Holiday Inns (Saudi Arabia), Inc.	Tennessee, USA
Holiday Inns (Shanghai) Ltd.	Hong Kong
Holiday Inns (South East Asia) Inc.	Tennessee, USA
Holiday Inns (South East Asia) Inc.—Singapore Branch	Singapore
Holiday Inns (Thailand) Ltd.	Hong Kong
Holiday Inns (U.K.), Inc.	Tennessee, USA
Holiday Inns (U.K.), Inc.—Malta Branch	Malta
Holiday Inns (U.K.), Inc.—UK Branch	England
Holiday Inns Crowne Plaza (Hong Kong), Inc.	Tennessee, USA
Holiday Inns Crowne Plaza (Hong Kong), Inc.—Hong Kong branch	Hong Kong
Holiday Inns de Espana S.A.	Spain
Holiday Inns Holdings (Australia) Pty Ltd.	Australia
Holiday Inns Inc.	Delaware, USA
Holiday Inns Investment (Nepal) Ltd.	Hong Kong
Holiday Inns of America (UK) Ltd.	England
Holiday Inns of Belgium NV	Belgium
Holiday Inns of Belgium NV—Swedish Branch	Sweden
Holiday Pacific Equity Corporation	Delaware, USA
Holiday Pacific Limited Liability Company	Delaware, USA
Holiday Pacific Partners Limited Partnership	Delaware, USA
Hospitality Network Corporation	Japan
Hotel Forum	England
Hotel Guayana C.A.	Venezuela
Hotel HSC Limitada	Brazil
Hotel InterContinental London (Holdings) Limited	England
Hotel Inter-Continental London Ltd.	England
Hotel JV Services LLC	Delaware, USA
Hoteles Estelar de Colombia S.A.	Colombia

Page 2

INDEX OF ENTITIES

Updated from 01.07.11 to 31.12.11

Hoteles Y Turismo HIH Srl	Venezuela
IC Hotelbetriebsfuhrungs GmbH	Austria
IC Hotels Management (Portugal) Unipessoal, Lda	Portugal
IC International Hotels Limited Liability Company	Russia
IHC Buckhead LLC	Georgia, USA
IHC Edinburgh (Holdings)	England
IHC Hopkins (Holdings) Corp.	Delaware, USA
IHC Hotel Ltd.	England
IHC Inter-Continental (Holdings) Corp.	Delaware, USA
IHC London (Holdings)	England
IHC May Fair (Holdings) Ltd.	England
IHC May Fair Hotel Ltd.	England
IHC M-H (Holdings) Corp.	Delaware, USA
IHC Overseas (U.K.) Ltd.	England
IHC UK (Holdings) Ltd	England
IHC United States (Holdings) Corp.	Delaware, USA
IHC Willard (Holdings) Corp.	Delaware, USA
IHG (Australasia) Limited	Singapore
IHG (Marseille) SAS	France
I.H.C. (Thailand) Ltd	Thailand
IHG (Thailand) Limited	Thailand
IHG (Victoria Park) Pty Ltd	Australia
IHG ANA Hotels Group Japan LLC	Japan
IHG ANA Hotels Holdings Co., Ltd	Japan
IHG Bangkok Ltd	British Virgin Islands
IHG Community Development, LLC	Georgia, USA
IHG Cyprus Limited	Cyprus
IHG ECS (Barbados) SRL	Barbados
IHG Franchising Brasil Ltda	Brazil
IHG Franchising DR Corporation	Delaware, USA
IHG Franchising DR Corporation—Dominican Republic Branch	Dominican Republic
IHG Franchising LLC	Delaware, USA
IHG Hotels (New Zealand) Limited	New Zealand
IHG Hotels Limited	England
IHG Hotels Management (Australia) Pty Limited	Australia
IHG Hotels Nigeria Limited	Nigeria
IHG International Partnership	England
IHG İstanbul Otel Yönetim Limited Şirketi	Turkey
IHG IT Services (India) Private Limited	India
IHG Japan (Management) LLC	Japan
IHG Japan (Osaka) LLC	Japan
IHG Management (Maryland) LLC	Maryland, USA
IHG Management (Netherlands) B.V.	The Netherlands
IHG Management (Netherlands) B.V. —Indonesia Branch	Indonesia
IHG Orchard Street Member, LLC	Delaware
IHG PS Nominees Limited	England
IHG Queenstown Limited	New Zealand
IHG Systems Pty Ltd	Australia
IHG Szalloda Budapest Szolgaltato Kft	Hungary
IND East Village SD Holdings LLC	Delaware, USA
InterContinental (Branston) 1 Ltd	England
InterContinental (PB) 1	England
InterContinental (PB) 2 Limited	England
InterContinental (PB) 3 Limited	England
Intercontinental D.C. Operating Corp.	Delaware, USA
Inter-Continental Florida Investment Corp.	Delaware, USA
Inter-Continental Florida Partner Corp.	Delaware, USA

Page 3

INDEX OF ENTITIES

Updated from 01.07.11 to 31.12.11

InterContinental Gestion Hotelera S.L.	Spain
InterContinental Hong Kong Ltd.	Hong Kong
Intercontinental Hospitality Corporation	Delaware, USA
InterContinental Hotel Berlin GmbH	Germany
InterContinental Hotel Düsseldorf GmbH	Germany
Inter-Continental Hoteleira Limitada	Brazil
Inter-Continental Hotels (Montreal) Operating Corp.	Quebec, Canada
Inter-Continental Hotels (Montreal) Owning Corp.	Quebec, Canada
Inter-Continental Hotels (Overseas) Ltd.	England
InterContinental Hotels (Puerto Rico) Inc	Puerto Rico
Inter-Continental Hotels (Singapore) Pte Ltd	Singapore
Inter-Continental Hotels Corporation	Delaware, USA
Inter-Continental Hotels Corporation—Cairo Branch	Egypt
Inter-Continental Hotels Corporation—Jordan Branch	Jordan
Inter-Continental Hotels Corporation—Malta Branch	Malta
Inter-Continental Hotels Corporation—Philippines Branch	Philippines
Inter-Continental Hotels Corporation—Poland Branch	Poland
Inter-Continental Hotels Corporation—Israel Branch	Israel
InterContinental Hotels Corporation de Venezuela C.A.	Venezuela
Intercontinental Hotels Corporation Limited	Bermuda
Intercontinental Hotels Corporation Limited—Kenya Branch	Kenya
Intercontinental Hotels Corporation Limited—Saudi Branch	Saudi Arabia
InterContinental Hotels Group (Asia Pacific) Pte. Ltd.	Singapore
InterContinental Hotels Group (Asia Pacific) Pte. Ltd.—Korean Branch	Korea
InterContinental Hotels Group (Australia) Pty Limited	Australia
InterContinental Hotels Group (Canada) Inc.	Ontario, Canada
InterContinental Hotels Group (Espana) SA	Spain
InterContinental Hotels Group (Greater China) Limited	Hong Kong
InterContinental Hotels Group (Greater China) Limited—Maldives branch	Maldives
InterContinental Hotels Group (India) Pvt. Ltd.	India
InterContinental Hotels Group (Japan) Inc.	Tennessee, USA
InterContinental Hotels Group (Japan) Inc.—Japan Branch	Japan
InterContinental Hotels Group (New Zealand) Limited	New Zealand
InterContinental Hotels Group (Shanghai) Ltd	People’s Republic of China
InterContinental Hotels Group Customer Services Ltd.	England
InterContinental Hotels Group do Brasil Limitada	Brazil
InterContinental Hotels Group Finance (CI)	Jersey
InterContinental Hotels Group Healthcare Trustee Ltd	England
InterContinental Hotels Group Operating Corp.	Delaware, USA
InterContinental Hotels Group PLC	England
InterContinental Hotels Group Resources Inc	Delaware, USA
InterContinental Hotels Group Resources Inc—Guam Branch	Guam
InterContinental Hotels Group Services Company	England
InterContinental Hotels Italia, SrL	Italy
InterContinental Hotels Limited	England
InterContinental Hotels Management GmbH	Germany
InterContinental Hotels Nevada Corporation	Nevada, USA
Intercontinental Hotels of San Francisco, Inc.	Delaware, USA
Inter-Continental Hotels Saudi Arabia Ltd.	Saudi Arabia
Inter-Continental IOHC (Mauritius) Limited	Mauritius
Inter-Continental Management (Australia) Pty Limited	Australia

Page 4

INDEX OF ENTITIES

Updated from 01.07.11 to 31.12.11

Intercontinental Overseas Holding Corporation	Delaware, USA
Intercontinental Overseas Holding Corporation—Bermuda Branch	Bermuda
Intercontinental Overseas Holding Corporation—Czech Republic Branch	Czech Republic
Intercontinental Overseas Holding Corporation—Egyptian Branch	Egypt
Intercontinental Overseas Holding Corporation—Jamaican Branch	Jamaica
Intercontinental Overseas Holding Corporation—Kazakhstan Branch	Kazakhstan
Intercontinental Overseas Holding Corporation—Slovakia Branch	Slovakia
Intercontinental Overseas Holding Corporation—Ukraine Branch	Ukraine
Inthotel SA	Spain
Kenya Hotel Properties Ltd.	Kenya
Kumul Hotels Ltd	Papua New Guinea
Lane Field South Hotel Management LLC	Delaware, USA
Louisiana Acquisitions Corp.	Delaware, USA
Maya Baiduri Sdn Bhd	Malaysia
Nuevas Fronteras S.A.	Argentina
OSPR Pty Ltd.	Australia
P.T. Jakarta International Hotels & Development	Indonesia
Panacon	Louisiana, USA
Pershing Associates	District of Columbia, USA
PML Services LLC	Maryland, USA
Pollstrong Limited	England
Powell Pine, Inc.	Delaware, USA
President Hotel & Tower Co Ltd.	Thailand
Priscilla Holliday of Texas, Inc.	Delaware, USA
PT SC Hotels & Resorts Indonesia	Indonesia
Resort Services International (Cayo Largo), L.P., S.E.	Georgia, USA
SBS Maryland Beverage Company LLC	Maryland, USA
SC Cellars Ltd.	England
SC Hotels International Services, Inc.	Delaware, USA
SC Leisure Group Ltd.	England
SC Luxembourg Investments SARL	Luxembourg
SC NAS 2 Ltd.	England
SC NAS 3	England
SC Quest Ltd	England
SC Racing Gibraltar	Gibraltar
SC Reservations (Philippines) Inc	Tennessee, USA
SC Reservations (Philippines) Inc—Philippines Branch	Phillippines
SCH Insurance Company	Vermont, USA
SCIH Branston 2	England
SCIH Branston 3	England
SF MH Acquisition LLC	Delaware, USA
SFH Associates L.P.	California, USA
Six Continents Corporate Services	England
Six Continents Holdings Ltd.	England
Six Continents Hotels de Colombia SA	Colombia
Six Continents Hotels International Ltd.	England
Six Continents Hotels, Inc.	Delaware, USA
Six Continents International Holdings BV	The Netherlands
Six Continents Investments Ltd.	England
Six Continents Limited	England
Six Continents Overseas Holdings Ltd.	England
Six Continents Restaurants Ltd.	England

Page 5

INDEX OF ENTITIES

Updated from 01.07.11 to 31.12.11

SixCo North America, Inc.	Delaware, USA
Soaltee Hotel Ltd.	Nepal
Societe des Grands Hotels du Liban	Lebanon
Societe des Hotels InterContinental France SNC	France
Societe Immobiliere Kinoise SZARL	Rep of Congo, Zaire
Societe Nouvelle du Grand Hotel SA	France
Southern Pacific Hotel Corporation (BVI) Ltd.	British Virgin Islands
Southern Pacific Hotels Properties Limited	British Virgin Islands
SPHC (IP) Pty Ltd.	Australia
SPHC Group Pty Ltd.	Australia
SPHC Management Ltd.	Papua New Guinea
Tahiti Beachcomber SA	Tahiti
TAK How Investment Limited	Hong Kong
Tian An Hotels International Limited	Hong Kong
Tianjin ICBCI IHG Equity Investment Fund Management Co., Ltd	People’s Republic of China
Tianjin ICBCI IHG Equity Investment Fund Partnership	People’s Republic of China
Trifaith Investments Ltd.	British Virgin Islands
Universal de Hoteles SA	Colombia
White Shield Insurance Company Ltd.	Gibraltar
Willard Associates	District of Columbia, USA
World Trade Center Montreal Hotel Corporation	Quebec, Canada
Yokohama Grand Intercontinental Hotel Co. Ltd.	Japan

Page 6

EX-12.A

Exhibit 12(a)

I, Richard Solomons, certify that:

1. I have reviewed this annual report on Form 20-F of InterContinental Hotels Group PLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 29, 2012

By:	/s/ Richard Solomons
	Name:	Richard Solomons
	Title:	Chief Executive

EX-12.B

Exhibit 12(b)

I, Thomas Singer, certify that:

1. I have reviewed this annual report on Form 20-F of InterContinental Hotels Group PLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 29, 2012

By:	/s/ Tom Singer
	Name:	Tom Singer
	Title:	Chief Financial Officer

EX-13.A

Exhibit 13(a)

906 Certification

The certification set forth below is being submitted in connection with the Annual Report on Form 20-F for the year ended December 31, 2011 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Richard Solomons, the Chief Executive Officer, and Thomas Singer, the Chief Financial Officer of InterContinental Hotels Group PLC, each certifies that, to the best of his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of InterContinental Hotels Group PLC.

Date: March 29, 2012

By:	/s/ Richard Solomons
	Name:	Richard Solomons
	Title:	Chief Executive
By:	/s/ Tom Singer
	Name:	Thomas Singer
	Title:	Chief Financial Officer