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, 2012

or

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

or

¨ SHELL COMPANY 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 14 194/329 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 14 ¹⁹⁴/₃₂₉ pence each 268,325,071

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  ¨

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 18 þ

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		11
	Summary		11
	Segmental Information		14
	Business Overview		15
	Trademarks		38
	Organizational Structure		38
	Property, Plant and Equipment		39
	Environment		39
Item 4A.	Unresolved Staff Comments		41
Item 5.	Operating and Financial Review and Prospects		41
	Introduction		41
	Critical Accounting Policies		42
	Operating Results		44
	Liquidity and Capital Resources		54
Item 6.	Directors, Senior Management and Employees		56
	Directors and Senior Management		56
	Compensation		61
	Board Practices		62
	Employees		65
	Share-based Compensation		65
	Share Ownership		66
Item 7.	Major Shareholders and Related Party Transactions		67
	Major Shareholders		67
	Related Party Transactions		67
Item 8.	Financial Information		67
	Consolidated Statements and Other Financial Information		67
	Significant Changes		68
Item 9.	The Offer and Listing		68
	Plan of Distribution		69
	Selling Shareholders		69
	Dilution		69
	Expenses of the Issue		69

i

		Page
Item 10.	Additional Information		70
	Articles of Association		70
	Material Contracts		72
	Exchange Controls		74
	Taxation		74
	Documents on Display		78
Item 11.	Quantitative and Qualitative Disclosures About Market Risk		78
Item 12.	Description of Securities Other Than Equity Securities		81
	PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		83
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		83
Item 15.	Controls and Procedures		83
Item 16.	[Reserved]		83
Item 16A.	Audit Committee Financial Expert		83
Item 16B.	Code of Ethics		83
Item 16C.	Principal Accountant Fees and Services		84
Item 16D.	Exemptions from the Listing Standards for Audit Committees		84
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		84
Item 16F.	Change in Registrant’s Certifying Accountant		85
Item 16G.	Summary of Significant Corporate Governance Differences from NYSE Listing Standards		85
Item 16H.	Mine Safety Disclosure		86
	PART III
Item 17.	Financial Statements		86
Item 18.	Financial Statements		87
Item 19.	Exhibits		87

ii

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 14 ¹⁹⁴/₃₂₉ 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;

• “Group” or “IHG” 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;

• “ordinary share” or “share” refers, from June 4, 2007 until October 8, 2012 to the ordinary shares of 13 ²⁹/₄₇ pence each in the Company; and following October 9, 2012 to the ordinary shares of 14 ¹⁹⁴/₃₂₉ pence each in the Company;

• “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 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 in this document 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 in this document to “US” refer to the United States of America.

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

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

1

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, 2013 was £1.00 = $1.5180. 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, 2012 are shown as 2012 and references to the year ended December 31, 2011 are shown as 2011, 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 the 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 2012, the Company reported interim financial information at June 30, 2012 in accordance with the Listing Rules of the UK Listing Authority. In addition, it provided quarterly financial information at March 31, 2012 and at September 30, 2012. During fiscal 2013, the Company intends to report interim financial statements for a time period of six months. For each of the first quarter and third quarter, the Company intends to release interim management statements and publish supplementary data for rooms and revenue per available room (“RevPAR”). 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 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.

2

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 of dependence on a wide range of external stakeholders and business partners; the risks related to identifying, securing and retaining franchise and management agreements; the 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 risks associated with the Group’s reliance on its proprietary reservations system and the risk of failures in the system and increased competition in reservations infrastructure; the risks related to information security and data privacy; the risks associated with safety, security and crisis management; the need to find people with the right skills and capability to manage growth and change; 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 risks related to the Group’s ability to borrow and satisfy debt covenants; the funding risks in relation to the defined benefits under its pension plans and the risks associated with difficulties the Group may face insuring its business.

3

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, 2012, 2011, 2010, 2009 and 2008 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.

4

Consolidated income statement data

	Year ended December 31,
	2012			2011			2010			2009			2008
	($ million, except earnings per ordinary share)
Revenue*		1,835			1,768			1,628			1,538			1,897
Total operating profit before exceptional operating items*		614			559			444			363			549
Exceptional operating items*		(4	)		57			(7	)		(373	)		(132	)
Total operating profit/(loss)*		610			616			437			(10	)		417
Financial income		3			2			2			3			12
Financial expenses		(57	)		(64	)		(64	)		(57	)		(113	)
Profit/(loss) before tax		556			554			375			(64	)		316
Tax:
On profit before exceptional items		(153	)		(120	)		(98	)		(15	)		(101	)
On exceptional operating items		1			(4	)		1			112			17
Exceptional tax credit		141			43			—			175			25
		(11	)		(81	)		(97	)		272			(59	)
Profit after tax		545			473			278			208			257
Gain on disposal of discontinued operations, net of tax		—			—			2			6			5
Profit for the year		545			473			280			214			262
Attributable to:
Equity holders of the parent		544			473			280			213			262
Non-controlling interest		1			—			—			1			—
Profit for the year		545			473			280			214			262
Earnings per ordinary share:
Continuing operations:
Basic		189.5¢			163.7¢			96.5¢			72.6¢			89.5¢
Diluted		186.3¢			159.8¢			93.9¢			70.2¢			86.8¢
Total operations:
Basic		189.5¢			163.7¢			97.2¢			74.7¢			91.3¢
Diluted		186.3¢			159.8¢			94.6¢			72.2¢			88.5¢

* Relates to continuing operations.

5

Consolidated statement of financial position data

	At December 31,
	2012		2011		2010		2009		2008
	($ million, except number of shares)
Goodwill and intangible assets		447		400		358		356		445
Property, plant and equipment		1,056		1,362		1,690		1,836		1,684
Investments and other financial assets		239		243		178		175		195
Retirement benefit assets		99		21		5		12		40
Non-current tax receivable		24		41		—		—		—
Deferred tax assets		204		106		88		95		—
Current assets		660		578		466		419		544
Non-current assets classified as held for sale		534		217		—		—		210
Total assets		3,263		2,968		2,785		2,893		3,118
Current liabilities		780		860		943		1,040		1,141
Long-term debt		1,242		670		776		1,016		1,334
Net assets		317		555		278		156		1
Equity share capital		179		162		155		142		118
IHG shareholders’ equity		308		547		271		149		(6	)
Number of shares in issue at period end (millions)		268		290		289		287		286

Dividends

InterContinental Hotels Group PLC paid an interim dividend of 21.0 cents per ADS (equivalent to 13.5 pence per share at the closing exchange rate on August 3, 2012) on September 28, 2012. A special dividend of $1.72 per ADS (equivalent to 108.4 pence per share at the closing exchange rate on September 11, 2012) was paid on October 22, 2012. The Board has proposed a final dividend of 43.0 cents per ADS (equivalent to 27.7 pence per share at the closing exchange rate on February 15, 2013), payable on May 31, 2013, if approved by shareholders at the Annual General Meeting to be held on May 24, 2013, bringing the total IHG dividend, excluding the special dividend, for the year ended December 31, 2012 to 64.0 cents per ADS (equivalent to 41.2 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. Below are also details of the special dividend paid in 2012. In respect of the interim and final dividends for each of 2008, 2009, 2010, 2011 and 2012 such amounts are translated from US dollars into sterling 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,
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
2012		13.50		27.70		41.20		21.0		43.0		64.0

* IHG changed the reporting currency of its Group Consolidated Financial Statements from sterling to US dollars effective from the interim results as at June 30, 2008. Starting with the interim dividend for 2008, all dividends have first been determined in US dollars and converted into sterling immediately before announcement.

Special dividend

	Pence per ordinary share		Cents per ADS
Year ended December 31,
2012		108.40		172.00

6

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.

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. The current outlook for 2013 may worsen due to escalating impacts of the US “fiscal cliff”, change in leadership in China, uncertainty in the Eurozone and ongoing unrest in the Middle East. In addition to trading conditions, the economic outlook also affects the availability of capital to current and potential owners which could impact existing operations and health of the pipeline. 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 as well as the US dollar.

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 contingency planning or recovery capability in relation to a major incident or crisis may prevent operational continuity and consequently impact the value of the brands and/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 dependent upon a wide range of external stakeholders and business partners

The Group is dependent upon the performance, behaviors and reputation of a wide range of business partners and external stakeholders including, but not limited to, owners, contractors, lenders, suppliers, vendors, joint venture partners, agents, third-party intermediaries and other business partners. Further, the number and complexity of interdependencies with stakeholders is evolving. Breakdown in relationships, poor vendor performance, stakeholder behaviors or adverse reputations could impact on the Group’s performance and competitiveness, guest experiences or the reputation of the Group or its brands.

7

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.

There can also be no assurance that the Group will be able to identify, retain or add franchisees to the Group’s 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 prematurely terminating contracts which would adversely impact overall system size and the Group’s financial performance.

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

The Group is reliant upon certain technologies, systems and platforms for the running of its business, particularly those which are highly integrated with business operational processes. Some of these are dependent upon the products and services of third-party technology providers. The failure of any such third-party provider to provide products and/or perform services could materially adversely impact the Group’s business.

The Group may also 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 adversely affect guest experiences, lose customers, fail to attract new customers, 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 existing or new brands and/or fails to sustain the appeal of the Group’s existing or new 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 commoditization (whereby price and/or quality becomes relatively more important than brand identifications due, in part, to the increased prevalence of travel comparison websites and online travel agents), consumer preference and perception, or other factors affecting consumers’ willingness to purchase goods and services provided by the Group.

Given the importance of brand recognition to the Group’s business, the protection of its intellectual property poses a risk due to the variability and change of controls, laws and effectiveness of enforcement globally. 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.

8

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 and/or the failure of a third-party technology provider could lead to prolonged service disruption and may result in significant business interruption, impact the guest booking experience and subsequently impact on revenues. Lack of investment in these systems may also result in reduced capability, stability and 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 and data privacy

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, financial reporting and commercial development. This information is sometimes held in different formats such as digital, paper, voice and video and could be stored in many places including facilities managed by third-party service providers.

The threats towards the Group’s information are dynamic including cyber attacks, fraudulent use, loss or misuse by employees and breaches of the Group’s vendors’ security arrangements amongst others. The legal and regulatory environment and requirements set out by the payment card industry surrounding information security and data privacy across the many jurisdictions in which the Group operates are constantly evolving. If the Group fails to appropriately protect information and ensure relevant controls are in place to enable the release of information through the appropriate channels in a timely and accurate manner, system performance, guest experiences and the reputation of the Group may be adversely affected. This can lead to revenue losses, fines, penalties and other additional costs, including legal fees.

The Group is exposed to a variety of risks associated with safety, security and crisis management

There is a constant need to protect the safety and security of our guests, employees and assets against natural and man-made threats. These include but are not limited to exceptional events such as extreme weather, civil or political unrest, violence and terrorism, serious and organized crime, fraud, employee dishonesty, cyber crime, fire and day-to-day accidents, incidents and petty crime which impact the guest or employee experience, could cause loss of life, sickness or injury and result in compensation claims, fines from regulatory bodies, litigation and impact reputation. Serious incidents or a combination of events could escalate into a crisis which if managed poorly could further expose the Group and its brands to significant adverse reputational damage.

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, failure to 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.

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.

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

Governmental regulations affect countless aspects of the Group’s 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 the Group operates 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 license to operate or reputation damage.

The Group is exposed to the risk of litigation

Certain companies in the Group are the subject of various claims and proceedings. The ultimate outcome of these matters is subject to many uncertainties, including future events and uncertainties inherent in litigation.

In addition, the Group could be at risk of litigation from many parties, including but not limited to, 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. Unfavorable outcomes of claims or proceedings could have a material impact on the Group’s results of operations, cash flow and/or financial position. Exposure to significant litigation or fines 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 a variety of risks associated with its financial stability and 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 favorable.

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 the Notes to the Consolidated Financial Statements on pages F-30 to F-35.

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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, 2012, the Group had 4,602 franchised, managed, owned and leased hotels and 675,982 guest rooms in nearly 100 countries and territories around the world. The Group also manages the hotel loyalty program, Priority Club Rewards (the Group announced on March 26, 2013 that it will be enhancing and renaming the Priority Club Rewards program as “IHG Rewards Club” from July 2013).

In the first quarter 2012, the Group launched two new brands. EVEN Hotels (“EVEN”) is aimed at business and leisure travelers who are looking for a wellness experience in a hotel stay at a mainstream price point. HUALUXE Hotels & Resorts (“HUALUXE”) is the first international upscale hotel brand designed specifically for Chinese guests, to take advantage of both the supply and demand side opportunities the Group sees in China.

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, 2013, InterContinental Hotels Group PLC had a market capitalization of approximately £5.3 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.

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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 a retail and standard commercial property developments business.

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 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.

A small number of hotels have been sold since the end of 2010 and at December 31, 2012, there were two hotels, the InterContinental New York Barclay and the InterContinental London Park Lane that were classified as held for sale. On February 19, 2013, the Company announced that the disposal process for InterContinental London Park Lane had commenced, and was continuing for InterContinental New York Barclay.

Recent acquisitions and dispositions

During 2012, the Group sold its interest in a hotel in the Europe region for a total consideration of $5 million. 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.

The Group also divested a number of investments for total proceeds of $4 million, $15 million and $17 million in 2012, 2011 and 2010, respectively. In 2010, a loan repayment of $11 million was also received.

Capital expenditure in 2012 totaled $133 million compared with $194 million in 2011 and $95 million in 2010.

At December 31, 2012 capital committed, being contracts placed for expenditure on property, plant and equipment and intangible assets not provided for in the Consolidated Financial Statements, totaled $81 million. The Group has also committed to invest up to $60 million in two joint venture arrangements of which $37 million had been spent at December 31, 2012.

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Return of funds

Since March 2004, the Group has returned over £3.9 billion of funds to shareholders by way of special dividends, share repurchase programs and capital returns (see table below).

On August 7, 2012, the Company announced a $1 billion (£640 million) return of funds to shareholders, split between a $0.5 billion (£320 million) special dividend with share consolidation and a $0.5 billion (£320 million) share buyback program. The special dividend was paid on October 22, 2012 and as at March 21, 2013 £68.8 million of shares have been repurchased at an average price per share of 1,621 pence. Purchases are made under the existing authority from shareholders which will be presented for renewal at the Company’s Annual General Meeting to be held in 2013. Any shares repurchased may be canceled or held as treasury shares.

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	N/A(ii)	£	150m	£	120m
£320 million special dividend	Paid in October 2012	£	320m	£	320m
£320 million share buyback	Ongoing	£	320m	£	68.8m
Total		£	4,243m	£	3,961.8m

(i) At March 21, 2013.

(ii) This program was superseded by the buyback program announced on August 7, 2012.

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SEGMENTAL INFORMATION

Geographic segmentation

Following an internal reorganization during 2011, there was a change in the Group’s geographic segments as explained in Note 2 of the Notes to the Consolidated Financial Statements. Comparatives for 2010 were 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, 2012, 2011 and 2010.

	Year ended December 31,
	2012			2011			2010
	($ million)
Revenue(1)
Americas		837			830			807
Europe		436			405			326
AMEA		218			216			213
Greater China		230			205			178
Central(2)		114			112			104
Total		1,835			1,768			1,628
Operating profit before exceptional operating items(1)(3)
Americas		486			451			369
Europe		115			104			78
AMEA		88			84			82
Greater China		81			67			54
Central		(156	)		(147	)		(139	)
Total		614			559			444

	Year ended December 31,
	2012			2011			2010
	(%)
Revenue
Americas		45.6			47.0			49.6
Europe		23.8			22.9			20.0
AMEA		11.9			12.2			13.1
Greater China		12.5			11.6			10.9
Central		6.2			6.3			6.4
Total		100.0			100.0			100.0
Operating profit before exceptional operating items
Americas		79.2			80.7			83.1
Europe		18.7			18.6			17.6
AMEA		14.3			15.0			18.5
Greater China		13.2			12.0			12.1
Central		(25.4	)		(26.3	)		(31.3	)
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 = £0.63 (2011 $1 = £0.62, 2010 $1 = £0.65). In the case of the euro, the translation rate is $1 = €0.78 (2011 $1 = €0.72, 2010 $1 = €0.76).

(2) Central revenue primarily relates to technology 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 $23 million (2011 credit of $35 million, 2010 $8 million); Europe $4 million (2011 $39 million, 2010 $5 million); AMEA $5 million (2011 credit of $26 million, 2010 credit of $6 million); Greater China $nil (2011 $nil, 2010 $nil); and Central $18 million (2011 credit of $35 million, 2010 $nil).

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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, 2012, the Group had over 4,600 franchised, managed, owned and leased hotels and approximately 676,000 guest rooms in nearly 100 countries and territories around the world. The Group also manages the hotel loyalty program, Priority Club Rewards (the Group announced on March 26, 2013 that it will be enhancing and renaming the Priority Club Rewards program as “IHG Rewards Club” from July 2013).

In the first quarter of 2012, the Group launched two new brands. EVEN Hotels is aimed at business and leisure travelers who are looking for a wellness experience in a hotel stay at a mainstream price point. HUALUXE Hotels & Resorts is the first international upscale hotel brand designed specifically for Chinese guests, to take advantage of both the supply and demand side opportunities the Group sees in China.

Industry overview

The hotel industry performed well in 2012 despite challenging economic conditions. The economic outlook deteriorated over the course of 2012 with increased concerns over the Eurozone and weaker performance in the US and China. Global Domestic Product (“GDP”) increased by 2.3% in 2012, compared with 2.9% in 2011 and the year ended with a continued uncertain outlook across the globe.

However, the hotel industry demonstrated its resilience against this challenging economic background. Globally, industry revenue per available room (“RevPAR”), a key industry indicator, increased by 4.5% compared to a 5.9% increase in 2011. The Group performed well against these market conditions, with global RevPAR growth in 2012 of 5.2%.

RevPAR growth 2011 v 2012
2011	2012

¹ Data sourced from Smith Travel Research.

² Comparable hotels.

The global hotel market is estimated to include 21.5 million rooms. Smith Travel Research calculates that there are 7.3 million branded hotel rooms, with the remainder a combination of independent hotels, guesthouses and other types of lodging. The Group believes that it holds the largest share of branded rooms, currently approximately 9% of branded supply, distributed across nearly 100 countries and territories around the world. In 2012 the Group opened 33,922 new rooms worldwide (226 new hotels), resulting in an increase in the number of open Group hotel rooms to 675,982 (4,602 hotels) at December 31, 2012, up 2.7% from 2011, taking into account the removal of hotels which left the Group’s system.

The benefits of a brand, such as the greater security and performance of a global reservation system, loyalty programs and international networks, are clear to many owners and the Group is well-positioned to win the business of owners seeking to grow with a hotel brand. Additionally, the Group 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.

To ensure the Group’s strategy continues to be sustainable in the changing business environment and suitable for the Group’s capabilities, the Group closely monitors markets across the globe and follows key industry and business metrics such as RevPAR, average daily rate, demand, GDP and guest satisfaction.

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The Group’s strategy

With a portfolio of preferred Brands in the most attractive markets, the Group’s talented People are focused on delivering Great Hotels Guests Love and executing a clear set of priorities to achieve its Vision of becoming one of the great companies in the world.

Delivering the elements of the Group’s strategy

“Where we compete”

Competing in relevant consumer segments

The hotel industry is usually segmented according to price point and IHG is focused on the three segments that generate over 90% of branded hotels revenue, namely midscale (broadly three star), upscale (mostly four star) and luxury (five star). However, to build preferred Brands, the Group believes it needs to advance its understanding of its guests and their needs to ensure its brands remain contemporary and relevant.

The Group has therefore completed a fundamental occasion-based needs segmentation analysis to understand why guests book hotels — looking at who they are, the occasion they are traveling for and their needs when traveling. Many guests no longer have a single purpose for their hotel stay — for example, business trips turn into family holidays, and the Group needs to meet these demands, focusing more on the needs of its guests, to deliver loyalty and brand preference. The Group used this analysis to develop the brand proposition for its two new brands, HUALUXE Hotels & Resorts and EVEN Hotels, and it continues to work on this needs-based segmentation to help inform its view of the hotel market and its brand strategies going forward.

Competing in the most attractive markets

The Group’s strategy is to build preferred Brands with scale positions in the most attractive markets globally. Concentrating growth in the largest markets means the Group and owners can operate more efficiently and benefit from enhanced revenues and reduced costs. The Group’s key markets include large developed markets such as the US, UK and Germany, as well as emerging markets like China and India.

The US is the largest market for branded hotels, with 3.38 million rooms, accounting for 69% of all US rooms available. The segment in the US with the greatest share is midscale, with 1.38 million branded hotel rooms, and the Group’s Holiday Inn brand family, comprising Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations and Holiday Inn Resort, is the largest brand in this segment.

In China, the Group sees the greatest opportunity for growth of any single country and its strategy has been to enter the market early, to develop its relationships with key local third-party owners and grow its presence rapidly. In a country with 659,000 branded hotel rooms, the Group is the largest international hotel company with

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over 61,000 rooms across its brands and more than 50,000 in the planning phase or under construction. This rapid pace of openings for the Group has been in anticipation of increasing demand for hotels, driven by a large, emerging middle class and growing domestic and international travel.

The Group is also focused on developing in other high priority markets. It seeks to develop its portfolio of brands in those markets which will be sources of strong hotel demand in the future. The Group has continued to build its position in these markets in the last year. For example, the Group increased the distribution of its core brands in India, building on its leadership position of Holiday Inn. In Russia and the Commonwealth of Independent States (“CIS”), there are opportunities for new construction and conversions as well as strong demand for branded hotels. The Group continues to adapt its business model by market, choosing partnerships and joint ventures where appropriate.

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

During 2012, the Group opened 33,922 rooms in 26 countries and territories, and signed a further 53,812 rooms into its development pipeline (hotels in planning and under construction but not yet opened) across 33 countries and territories. As part of its ongoing commitment to maintaining the quality of its brands, the Group removed 16,288 rooms during the year. As at December 31, 2012, the Group had the second largest pipeline in the industry, with 169,030 rooms in 1,053 hotels across 60 countries and territories. This represents a market share of 12% of all hotels under development, including those that are independent or unaffiliated with a brand.

Competing with an appropriate business model

As can be seen in the diagrams above and below, the Group’s business model is focused on franchising and managing hotels, rather than owning them, enabling it to grow at an accelerated pace with limited capital investment. This allows the Group to focus on building strong, preferred Brands based on relevant consumer needs, leaving asset management and real estate to its local third-party owners 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. It allows the Group to focus on building strong delivery systems such as its branded hotel websites and call centers, creating greater returns for owners.

A key characteristic of the franchised and managed business model is that it is highly cash generative, with a high return on capital employed. This business model enables the Group to focus on growing its fee revenues (Group revenue excluding owned and leased hotels, managed leases (being properties structured for legal reasons

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as operating leases but with the same characteristics as management contracts) and significant liquidated damages) and fee-based margins (operating profit as a percentage of revenue, excluding revenue and operating profit from owned and leased hotels, managed leases and significant liquidated damages).

As at December 31, 2012, 86% of the Group’s operating profit (before regional and central overheads and exceptional items) was derived from franchised and managed operations. In some situations, the Group supports its brands by using its capital to build or support the funding of flagship assets in high-demand locations in order to drive growth. The Group plans to recycle capital by selling these assets when the time is right and to reinvest elsewhere in the business and across its portfolio.

On November 6, 2012, the Group announced that the InterContinental London Park Lane would be the next hotel considered for sale and that discussions regarding the disposal of the InterContinental New York Barclay were progressing and would be opened to a wider group of prospective buyers. On February 19, 2013, the Company announced that the disposal process for InterContinental London Park Lane had commenced, and was continuing for InterContinental New York Barclay.

The Group continues to invest for growth, strengthening both its existing brands and launching new ones.

“How we win”

Winning with a portfolio of preferred Brands

The Group aims to build a portfolio of brands that are bigger, better, and stronger:

• Bigger means the Group has prioritized its growth strategy to build brand scale and leverage this scale through greater operational efficiency.

• Better means a focus on continuous improvement in how the Group develops and delivers its brands to ensure guest needs are met with a consistent, high-quality experience.

• Stronger means a focus on driving brand preference among guests, owners, investors and employees.

As part of the Group’s commitment to deliver against its brand strategy, in 2012, the Group launched two unique new brands to the market, which complement its overall portfolio of brands.

Further information on the Group’s portfolio can be found on page 27.

Winning with talented People

The Group believes that its preferred Brands are brought to life by its talented and passionate People. Therefore to deliver on its brand promise, the Group must attract, retain and develop the very best talent in the industry to service its guests and bring its Brands to life.

The Group directly employed an average of 7,981 people worldwide in the year ended December 31, 2012, whose costs were borne by the Group. When the whole of the Group’s estate is taken into account (including staff working in the franchised and managed hotels) over 350,000 people worked globally across all the Group’s brands as at December 31, 2012.

The four pillars of the Group’s People strategy are:

• Developing a BrandHearted culture: The Group’s brands are brought to life by its talented and passionate People and it has focused on developing and improving its tools, to make it easy for its People to deliver the brand promise. In 2012, the Group launched a new brand framework focused on transforming its brand standards and looked at how it manages projects - all part of developing a BrandHearted culture.

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• Making IHG a great place to work: The Group believes in treating people as individuals and celebrating achievements. The Group calls this “Room to be yourself” and this commitment is brought to life by four key promises. The Group continues to be recognized around the globe as an employer of choice.

• Delivering world-class People Tools to our owners: By partnering with the hotel human resources community, the Group has developed a set of award-winning “People Tools” that not only help increase employee retention and guest satisfaction but also drive efficiencies and increase revenue for the Group’s owners.

• Building a strong leadership team: To grow its business sustainably and responsibly, the Group needs a strong BrandHearted leadership team. Therefore, it has created a “Leadership Framework”, which clearly defines what great leadership looks like to help develop the Group’s leaders of tomorrow.

Being the hotel company for the London 2012 Olympic and Paralympic Villages was a groundbreaking opportunity for the Group, giving its People in London 2012 the opportunity to benefit from new skills and experiences.

Winning with best-in-class Delivery

During 2012, the Group remained focused on attracting guests (room nights) to its hotels and its portfolio of brands. The Group leverages its size and scale to drive demand to its hotels, executing a multi-channel strategy that enables guests to search and book in the most appropriate mode for them, either over the phone, by computer or via an application on a mobile device. The Group maximizes the demand it delivers through these channels through advanced techniques that manage revenue per booking, drive customer loyalty and maximize owner returns. The Group’s channels and loyalty program, Priority Club Rewards, are the engine of the Group’s business.

The Group’s channels

As part of its multi-channel strategy, the Group aims to increase revenue and bookings using its direct channels. During 2012, revenue generated through the Group’s websites increased to $3.4 billion whilst its global call centers answered more than 23 million inbound contacts and drove more than $1.9 billion in revenue for its hotels.

Mobile communications are also having profound effects on the hotel industry and the Group has been quick to adapt to these new channels with significant growth in revenue generated thorough its branded mobile applications, across all major platforms, rising from $2.4 million in 2009 to more than $330 million in 2012.

The Group is also a founding member of roomkey.com, which was launched in 2012 as the first industry-owned hotel search engine, providing another innovative channel to increase guest nights to its brands.

Social media has also changed the way in which the Group communicates with guests and with its stakeholders in general. The Group’s new “Guest Ratings and Review” tool, which launched on its websites in 2012 enables guests to share their thoughts about their hotel experiences so that future guests can take this into account during the booking process.

Priority Club Rewards

Priority Club Rewards was the hotel industry’s first loyalty program and is the largest of its kind in the world with 71.4 million members at the end of 2012, an increase of 13% during the year. In 2012, it won Premier Traveler magazine’s inaugural award for Best Hotel Loyalty Program and Global Traveler magazine’s award for Best Hotel Rewards Program for the eighth consecutive year.

The Group also leverages sales and marketing expertise in order to support its multi-channel strategy. The System Fund (the “Fund”) is a $1.2 billion fund of cash assessments and contributions, collected by the Group from hotels within the Group’s system, and proceeds from the sale of Priority Club Rewards points. The System Fund is managed by the Group for the benefit of hotels in the Group’s system with the objective of driving revenues for the hotels. It is therefore used to pay for marketing, the Priority Club Rewards loyalty program and the global reservation system.

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As a result of the power of its revenue delivery systems the Group has built strong relationships with its owners. These relationships are founded on the ability to deliver high returns to owners using premium revenue generating products. The Group meets with the IHG Owners Association (the organization that represents owners of hotels operating under the Group’s brands across the world) on a regular basis to facilitate the continued development of the Group’s brands and systems.

Winning with Responsible Business practices

With over 4,600 hotels in nearly 100 countries and territories around the world, the Group’s commitment to being a Responsible Business is central to its Vision of being one of the great companies of the world. The Group understands how important it is to champion and protect the trusted reputation of the Group and its brands and this is embedded in its culture. The Group believes that being a responsible business is necessary to enable it to stay ahead of the competition and grow, creating value for all of its shareholders and stakeholders in the long term. Amongst other things, it offers the Group a huge opportunity to innovate, create employment, empower people to perform at their best and feel good about what they do, and drive value for the business. That’s why Responsible Business underpins each of the Group’s three strategic corporate priorities of preferred Brands, talented People and best-in-class Delivery, which work together to determine “How We Win” to create Great Hotels Guests Love.

Governance and leadership

The Group’s Chairman, the Board and its committees (Audit Committee, Corporate Responsibility Committee, Nomination Committee and Remuneration Committee) provide strong leadership and promote a responsible business culture by maintaining high standards in corporate governance, corporate responsibility and internal control and risk management.

Brands

Trusted brands deliver a superior and consistent brand experience and to achieve this, the Group requires a clear brand framework. Brand standards are the foundations of a clear brand framework for all the Group’s hotels and its compliance teams ensure that its hotels deliver in accordance with these. The Group’s brand safety standards assist hotels in providing a safe and secure environment for its guests and employees. The Group’s corporate responsibility programs have also been designed so that they can be implemented throughout the Group’s hotel brands and corporate offices in any region.

People

At the core of being a Responsible Business is ensuring that the actions of all of the Group’s employees working at its corporate offices and hotels maintain the Group’s trusted reputation. Operating an ethical business is vital to maintaining and protecting this trusted reputation and therefore the Group continually keeps under review its internal policies and training to promote understanding, awareness, accountability and transparency.

Delivery

Having in place an effective system of internal controls and risk management is essential to being a Responsible Business. The Group’s tools, processes and procedures ensure a business based on a solid foundation with a commitment to doing the right thing for the benefit of all its stakeholders.

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“Measuring our success”

The Group has a holistic set of carefully selected key performance indicators (“KPIs”) to monitor its success in achieving its strategy. These are organized around the elements of the Group’s strategy:

• “Where we compete”, focusing on relevant consumer segments, the most attractive markets and the appropriate business model; and

• “How we win”, focusing on corporate priorities of preferred Brands, talented People, best-in-class Delivery and Responsible Business.

In particular, the Group uses the following measures to monitor performance:

• fee revenues and fee-based margins;

• global RevPAR;

• system contribution — the proportion of business delivered to Group hotels by its dedicated IHG booking channels;

• employee engagement; and

• Responsible Business practices.

These KPIs are used to measure the progress of the Group to deliver Great Hotels Guests Love and achieve its Vision of becoming one of the great companies of the world.

The Group’s performance against these KPIs over the 2010-2012 period is summarized below:

“Where we compete”

Strategic priorities	KPIs	Current status and 2012 development	2013 priorities
Most attractive markets and appropriate business model To accelerate profitable growth of its core business in its most attractive markets where presence and scale really count using the right business model to drive its fee revenue and income streams.	Net rooms supply Growth in fee revenue1 Fee-based margins	• System size grown to 675,982 rooms; • 4,602 hotels opened globally; • built scale of Hotel Indigo brand to 50 hotels globally; and • fee-based margins of 42.6%, up two percentage points on 2011, a particularly strong result.	• Accelerate growth strategies in quality locations in agreed scale markets; and • continue to leverage scale.

¹  At constant currency.

²  One percentage point growth on an underlying basis.

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“How we win” — Delivering Great Hotels Guests Love

Strategic priorities	KPIs	Current status and 2012 development	2013 priorities
Preferred Brands Operate a portfolio of preferred, locally-relevant 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 $	•Clarified the brand propositions for Holiday Inn and Holiday Inn Express and celebrated the Holiday Inn 60th anniversary; •continued the repositioning of Crowne Plaza; •achieved two new brand launches in two geographies; and •achieved strong brand successes in Greater China, particularly through the growth of HUALUXE Hotels & Resorts with 15 signings for the brand and improved the strength of Crowne Plaza through brand preference and awareness.	•Invest to build long-term brand preference for the Holiday Inn brand family; •continue the repositioning of the Crowne Plaza brand; •support growth of its new brands: EVEN Hotels in the US and HUALUXE Hotels & Resorts in Greater China; and •continue to deliver a consistent brand experience and increased guest satisfaction through its needs-based segmentation analysis.
Talented People Create hotels that are well run, with brands brought to life by people who are proud of the work they do.	Employee engagement scores Average of two Employee Engagement surveys per year	•New brand management training launched for General Managers; •all of its corporate offices and more than 4,000 Group hotels participated in Celebrate Service week, its global employee recognition event; •created a new Mandarin recruitment site and launched career pages on social networking platforms in China to continue its aim to be employer of choice; and •industry-leading suite of People Tools now embedded in its franchised and managed hotel estate.	•Empower its frontline teams with the tools and training to consistently deliver great guest experiences that build brand preference, advocacy and repeat business; •continue to strengthen its talent pipeline and succession planning to meet its growth ambitions; •instill a winning culture through strong leadership and performance management; and •build on its strong employer brand to make the Group a magnet for talent.

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Strategic priorities	KPIs	Current status and 2012 development	2013 priorities
Best-in-class Delivery Generate higher returns for owners and the Group through increased revenue share, improved operating efficiency and growing margins.	Total gross revenue Actual $billion	•Launched strategic industry partnership in roomkey.com; •71.4 million Priority Club Rewards members — 8.4 million new members enrolled in 2012, up 13% on 2011; and •global Group sales force with 17,600 sales professionals.	•Continue to strengthen the Group’s system of delivering profitable demand to hotels; •put in place the required technology infrastructure to enable growth; and •continue to increase business from its loyalty program, Priority Club Rewards.
Responsible Business Take a proactive stance and seek creative solutions on environmental sustainability and sustainable communities in a way that drives shared value for the Group, owners, guests and the communities in which IHG operates.	Hotels signed-up to Green Engage Hotels, cumulative Participants benefiting from the IHG Academy	•2,219 of the Group’s hotels enrolled in Green Engage by end of 2012; •11.7% energy savings in the Group’s owned and managed estate by end of 2012 (on a per available room night basis); •industry standard for measuring carbon was launched in 2012 and included in Green Engage via the Group’s new carbon calculator; •over 150 IHG Academy programs by the end of 2012; and •fan base of the “IHG Planet CR” Facebook page expanded to over 20,000 by the end of 2012.	•Work to ensure all Group hotels that are enrolled in Green Engage effectively use the tool for the greatest impact; •continue to drive awareness and engagement around the IHG Shelter in a Storm Programme; •continue to expand the IHG Academy program throughout the world; and •focus on driving awareness of the Group’s approach to corporate responsibility across internal and external stakeholder groups using a variety of channels, to maximize employee pride, and reinforce the Group’s reputation as a Responsible Business.

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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, 2012, 2011 and 2010.

	Year ended December 31,
	2012			2011			2010
	($ million)
Revenue(1)
Americas
Franchised		541			502			465
Managed		97			124			119
Owned and leased		199			204			223
		837			830			807
Europe
Franchised		91			86			76
Managed		147			118			70
Owned and leased		198			201			180
		436			405			326
AMEA
Franchised		18			19			15
Managed		152			151			155
Owned and leased		48			46			43
		218			216			213
Greater China
Franchised		3			2			2
Managed		89			77			60
Owned and leased		138			126			116
		230			205			178
Central(2)		114			112			104
Total		1,835			1,768			1,628
Operating profit before exceptional operating items(1)(3)
Americas
Franchised		466			431			392
Managed		48			52			21
Owned and leased		24			17			13
Regional overheads		(52	)		(49	)		(57	)
		486			451			369
Europe
Franchised		65			65			55
Managed		32			26			17
Owned and leased		50			49			38
Regional overheads		(32	)		(36	)		(32	)
		115			104			78
AMEA
Franchised		12			12			8
Managed		90			87			88
Owned and leased		6			5			4
Regional overheads		(20	)		(20	)		(18	)
		88			84			82

Footnotes on page 26.

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	Year ended December 31,
	2012			2011			2010
	($ million)
Greater China
Franchised		4			3			3
Managed		51			43			30
Owned and leased		45			37			33
Regional overheads		(19	)		(16	)		(12	)
		81			67			54
Central(2)		(156	)		(147	)		(139	)
Total		614			559			444

	Year ended December 31,
	2012		2011		2010
	(%)
Revenue
Americas
Franchised		29.5		28.4		28.6
Managed		5.3		7.0		7.3
Owned and leased		10.8		11.6		13.7
		45.6		47.0		49.6
Europe
Franchised		5.0		4.9		4.7
Managed		8.0		6.7		4.3
Owned and leased		10.8		11.3		11.0
		23.8		22.9		20.0
AMEA
Franchised		1.0		1.1		0.9
Managed		8.3		8.5		9.5
Owned and leased		2.6		2.6		2.7
		11.9		12.2		13.1
Greater China
Franchised		0.2		0.1		0.1
Managed		4.8		4.4		3.7
Owned and leased		7.5		7.1		7.1
		12.5		11.6		10.9
Central		6.2		6.3		6.4
Total		100.0		100.0		100.0

Footnotes on page 26.

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	Year ended December 31,
	2012			2011			2010
	(%)
Operating profit before exceptional operating items
Americas
Franchised		75.9			77.1			88.3
Managed		7.8			9.3			4.7
Owned and leased		3.9			3.0			2.9
Regional overheads		(8.4	)		(8.7	)		(12.8	)
		79.2			80.7			83.1
Europe
Franchised		10.6			11.6			12.4
Managed		5.2			4.6			3.8
Owned and leased		8.1			8.8			8.6
Regional overheads		(5.2	)		(6.4	)		(7.2	)
		18.7			18.6			17.6
AMEA
Franchised		2.0			2.1			1.8
Managed		14.6			15.6			19.8
Owned and leased		1.0			0.9			0.9
Regional overheads		(3.3	)		(3.6	)		(4.0	)
		14.3			15.0			18.5
Greater China
Franchised		0.7			0.5			0.7
Managed		8.3			7.7			6.7
Owned and leased		7.3			6.6			7.4
Regional overheads		(3.1	)		(2.8	)		(2.7	)
		13.2			12.0			12.1
Central		(25.4	)		(26.3	)		(31.3	)
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 = £0.63 (2011 $1 = £0.62, 2010 $1 = £0.65). In the case of the euro, the translation rate is $1 = €0.78 (2011 $1 = €0.72, 2010 $1 = €0.76).

(2) Central revenue primarily relates to technology 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 $23 million (2011 credit of $35 million, 2010 $8 million); Europe $4 million (2011 $39 million, 2010 $5 million); AMEA $5 million (2011 credit of $26 million, 2010 credit of $6 million); Greater China $nil (2011 $nil, 2010 $nil); and Central $18 million (2011 credit of $35 million, 2010 $nil).

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 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 2012 was $7.2 billion. Priority Club Rewards membership reached 71 million customers as at December 31, 2012, compared to 63 million as at December 31, 2011.

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Central Reservations System Technology:    The Group owns 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. During 2012, the Group entered into a five-year technology outsourcing agreement with International Business Machines Corporation (“IBM”), pursuant to which IBM operates and maintains the infrastructure of the HolidexPlus system.

Reservations Call Centers:    The Group operates 10 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. The Group is a founding member of roomkey.com, which was launched in 2012 as the first industry-owned online hotel search engine.

During 2012 the Group’s leading mobile booking platforms realized $330 million in revenues, up from $2.4 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.

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 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, 2012
	Room numbers		Hotels
InterContinental Hotels & Resorts		57,314		170
Crowne Plaza Hotels & Resorts		108,307		392
Holiday Inn Hotels & Resorts(1)		231,488		1,247
Holiday Inn Express		205,631		2,192
Staybridge Suites		20,696		189
Candlewood Suites		28,675		299
Hotel Indigo		5,661		50
Other		18,210		63
Total		675,982		4,602

(1) Included Holiday Inn Club Vacations (3,701 rooms, 10 hotels) and Holiday Inn Resort properties (8,806 rooms, 37 hotels).

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InterContinental Hotels & Resorts

	Americas		Europe		AMEA		Greater China
Average room rate $(1)		181.58		251.80		214.01		171.37
Room numbers(2)		17,756		9,394		20,791		9,373

(1) For the year ended December 31, 2012; quoted at constant US dollar exchange rate. Average room rate is for comparable InterContinental hotels.

(2) At December 31, 2012.

InterContinental Hotels & Resorts (“InterContinental”) is the Group’s luxury brand located in key cities and resort destinations across more than 60 countries worldwide. With over 60 years of experience, talented people supported by outstanding facilities help the Group to 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 guests to share their knowledge to enjoy great experiences that enrich their lives.

InterContinental hotels are principally managed by the Group. At December 31, 2012, there were 170 InterContinental hotels which represented 8% of the Group’s total hotel rooms. During 2012, six InterContinental hotels were added to the portfolio, while five hotels were removed.

Crowne Plaza Hotels & Resorts

	Americas		Europe		AMEA		Greater China
Average room rate $(1)		110.3		134.26		142.22		100.55
Room numbers(2)		48,730		19,566		18,559		21,452

(1) For the year ended December 31, 2012; quoted at constant US dollar exchange rate. Average room rate is for comparable Crowne Plaza hotels.

(2) At December 31, 2012.

Crowne Plaza Hotels & Resorts (“Crowne Plaza”) is the Group’s upscale brand and is currently the world’s fourth largest full-service hotel brand in the upper segments. The brand continues to appeal to business travelers, providing facilities and services that cater to these types of travelers. The Group continues to progress the multi-year Crowne Plaza repositioning program. As part of the Group’s commitment to strengthen the brand, quality audits have been carried out at almost all Crowne Plaza hotels in The Americas and Europe and the Group has been actively managing the estate in order to drive brand consistency.

The majority of Crowne Plaza hotels are operated under franchise agreements in the US and Europe, and managed in other markets by the Group. In China, Crowne Plaza is the largest international upscale brand. At December 31, 2012, there were 392 Crowne Plaza hotels which represented 16% of the Group’s total hotel rooms. During 2012, 21 Crowne Plaza hotels were added to the portfolio, while 16 hotels were removed.

The Holiday Inn Family of Brands

The Holiday Inn brand family, which comprises Holiday Inn, Holiday Inn Club Vacations, Holiday Inn Resort and Holiday Inn Express, is the world’s largest midscale hotel brand by number of rooms at December 31, 2012. It is the largest brand in the Group’s portfolio predominantly operating under franchise agreements in The Americas and Europe and management agreements elsewhere.

Holiday Inn is for the contemporary traveler looking for innovative comfort in a relaxing hotel environment. Holiday Inn aims to provide guests familiarity, convenience and reliability while supporting and meeting all guest needs. As official hotel provider to the London 2012 Olympic and Paralympic Games, the Group opened the Holiday Inn London, Stratford City. In 2012, the brand celebrated its 60th birthday and opened the largest Holiday Inn to date — the stunning Holiday Inn Macao Cotai Central, China with 1,224 rooms.

Holiday Inn Club Vacations, the Group’s timeshare business in North America, provides guests with all the benefits of a vacation home with none of the hassle.

Holiday Inn Resort is our Holiday Inn brand family’s resort proposition, with 37 properties currently in the portfolio, for guests who work hard but also want to lead a balanced life.

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Holiday Inn Express is a brand for the traveler looking for efficiency. The brand offers a straightforward, uncomplicated guest experience providing the things a guest needs, and is delivered in a way that is stimulating and engaging. One of the world’s fastest growing hotel brands, it is geared to the smart business or private traveler who appreciates value without compromising on comfort and style.

Holiday Inn Hotels & Resorts

	Americas			Europe		AMEA		Greater China
Average room rate $(1)		102.02			112.36		121.68		82.21
Room numbers(2)(4)		146,661	(3)		46,610		17,440		20,777

(1) For the year ended December 31, 2012; quoted at constant US dollar exchange rate. Average room rate is for comparable Holiday Inn hotels.

(2) At December 31, 2012.

(3) The Americas total includes Holiday Inn Club Vacations (3,701 rooms).

(4) Includes Holiday Inn Resorts properties — Americas 4,240 rooms, Europe 362 rooms, AMEA 3,311 rooms and Greater China 893 rooms.

Holiday Inn Hotels & Resorts (including Holiday Inn Club Vacations and Holiday Inn Resort) (“Holiday Inn”) are predominantly operated under franchise agreements. At December 31, 2012, there were 1,247 Holiday Inn hotels which represented 34% of the Group’s total hotel rooms, of which 63% were located in The Americas. During 2012, 48 Holiday Inn hotels were added to the portfolio, while 41 hotels were removed.

Holiday Inn Express

	Americas		Europe		AMEA		Greater China
Average room rate $(1)		102.12		93.04		76.15		49.88
Room numbers(2)		168,398		24,903		2,877		9,453

(1) For the year ended December 31, 2012; quoted at constant US dollar exchange rate. Average room rate is for comparable Holiday Inn Express hotels.

(2) At December 31, 2012.

Holiday Inn Express hotels are almost entirely operated under franchise agreements. At December 31, 2012, there were 2,192 Holiday Inn Express hotels worldwide which represented 30% of the Group’s total hotel rooms, of which 82% were located in The Americas. During 2012, 114 new Holiday Inn Express hotels were added to the portfolio, while 36 hotels were removed.

Staybridge Suites

	Americas		Europe		AMEA
Average room rate $(1)		104.11		110.30		140.02
Room numbers(2)		19,787		605		304

(1) For the year ended December 31, 2012; quoted at constant US dollar exchange rate. Average room rate is for comparable Staybridge Suites hotels.

(2) At December 31, 2012.

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. Staybridge Suites played a significant role in IHG’s partnership with the London 2012 Olympic and Paralympic Games by opening the Staybridge Suites London-Stratford City property.

The Staybridge Suites brand is principally operated under management contracts and franchise agreements. At December 31, 2012 there were 189 Staybridge Suites hotels, which represented 3% of the Group’s total hotel rooms, of which 96% (183 hotels) were located in The Americas. During 2012, 11 hotels were added to the portfolio, one hotel was removed and 17 Staybridge Suites hotels under the Group’s management were renovated as part of a renovation program by the owner, Hospitality Properties Trust.

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Candlewood Suites

	Americas
Average room rate $(1)		72.68
Room numbers(2)		28,675

(1) For the year ended December 31, 2012; quoted at constant US dollar exchange rate. Average room rate is for comparable Candlewood Suites hotels.

(2) At December 31, 2012.

Candlewood Suites is the Group’s North American-focused midscale extended stay brand that provides guests with a home-like stay at great value. A trust system has always prevailed for this brand — the “Candlewood Cupboard” which is a convenient place for the Group’s guests to stock up on essentials and treats on an honor system and the newly launched “Lending Locker” enables guests to borrow kitchen apparatus, such as coffee grinders.

The Candlewood Suites brand is operated under management contracts and franchise agreements. At December 31, 2012, there were 299 Candlewood Suites hotels, which represented 4% of the Group’s total rooms, all of which were located in The Americas. During 2012, a net 14 hotels were added to the portfolio and 59 Candlewood Suites hotels under management by the Group were renovated by the owner, Hospitality Properties Trust, as part of the Group’s commitment to deliver a great brand for guests.

Hotel Indigo

	Americas		Europe		Greater China
Average room rate $(1)		125.74		224.60		183.13
Room numbers(2)		4,307		949		405

(1) For the year ended December 31, 2012; quoted at constant US dollar exchange rate. Average room rate is for comparable Hotel Indigo hotels.

(2) At December 31, 2012.

Hotel Indigo is the Group’s boutique brand, and the world’s first global boutique hotel brand focused on guests who appreciate art and design and who want to experience something different. Hotel Indigo provides guests with the refreshing design and service experience synonymous with a boutique hotel, aligned with the local neighbourhood story.

The Hotel Indigo brand is principally operated under franchise agreements. At December 31, 2012, there were 50 Hotel Indigo hotels, 37 located in The Americas. During 2012, 13 hotels were added to the portfolio, and two hotels were removed.

EVEN Hotels

EVEN Hotels was launched in February 2012, following extensive customer research, in order to create a brand that meets a traveler’s holistic wellness needs. EVEN is aimed at business and leisure travelers who are looking for a wellness experience in a hotel stay at a mainstream price point. The Group is investing up to $150 million in establishing the brand, owning and managing the first hotels to ensure the brand achieves its potential and market share growth in the US. During 2012, the Group signed the first EVEN hotel, in the heart of midtown Manhattan, New York.

HUALUXE Hotels & Resorts

HUALUXE was officially launched in March 2012 and is the first international upscale hotel brand designed specifically for Chinese guests, to take advantage of both the supply and demand side opportunities the Group sees in China. The brand is tailored to address the specific needs of domestic Chinese guests focusing on the unique aspects of Chinese etiquette, the importance of rejuvenation, status recognition and local customs and heritage. It will enable the Group to expand in China’s key gateway cities but will also drive growth in its

30

secondary cities where a specifically Chinese offer is appealing. The brand could open in key global gateway cities in the future as outbound travelers from China are forecasted to reach 100 million in the next 10-15 years. During 2012, the Group signed 15 hotels for the brand.

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 63% of the Group’s operating profit before central overheads and exceptional operating items during 2012.

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)		63		15		11		11

(1) At December 31, 2012.

(2) For the year ended December 31, 2012.

Americas

In The Americas, the largest proportion of rooms is operated under the franchise business model (91% 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 3,555 hotels (449,617 rooms), The Americas represented 67% of the Group’s room count and 63% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2012. 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 628 hotels (102,027 rooms) at the end of 2012, Europe represented 15% of the Group’s room count and 15% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2012. Profits are primarily generated from hotels in the United Kingdom and Continental European gateway cities.

AMEA

In AMEA, almost 82% of rooms are operated under the managed business model. The majority of hotels are in the midscale and upscale segments. Comprising 232 hotels (62,737 rooms) at December 31, 2012, AMEA represented 9% of the Group’s room count and 11% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2012.

Greater China

In Greater China, almost 96% of rooms are operated under the managed business model. The majority of hotels are in the midscale and upscale segments. Comprising 187 hotels (61,601 rooms) at December 31, 2012, Greater China represented 9% of the Group’s room count and 11% of the Group’s operating profit before central overheads and exceptional operating items during the year ended December 31, 2012. At December 31, 2012 there were 160 hotels (50,916 rooms) in the pipeline.

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The following table shows information concerning the geographical locations and ownership of the Group’s hotels as at December 31, 2012.

	Franchised				Managed				Owned and leased				Total
	Hotels		Rooms		Hotels		Rooms		Hotels		Rooms		Hotels		Rooms
Americas
InterContinental		28		7,737		22		8,529		3		1,490		53		17,756
Crowne Plaza		172		45,243		11		3,487		—		—		183		48,730
Holiday Inn(1)(2)		792		137,956		26		8,010		2		695		820		146,661
Holiday Inn Express		1,930		168,146		1		252		—		—		1,931		168,398
Staybridge Suites		157		16,572		26		3,215		—		—		183		19,787
Candlewood Suites		238		21,124		61		7,551		—		—		299		28,675
Hotel Indigo		34		3,792		3		515		—		—		37		4,307
Other		3		7,279		46		8,024		—		—		49		15,303
Total		3,354		407,849		196		39,583		5		2,185		3,555		449,617
Europe
InterContinental		8		1,912		20		6,565		2		917		30		9,394
Crowne Plaza		72		16,640		12		2,926		—		—		84		19,566
Holiday Inn(2)		224		35,136		64		11,474		—		—		288		46,610
Holiday Inn Express		210		24,657		2		246		—		—		212		24,903
Staybridge Suites		4		605		—		—		—		—		4		605
Hotel Indigo		10		949		—		—		—		—		10		949
Total		528		79,899		98		21,211		2		917		628		102,027
AMEA
InterContinental		6		1,956		58		18,455		1		380		65		20,791
Crowne Plaza		7		1,399		58		17,160		—		—		65		18,559
Holiday Inn(2)		20		3,950		54		13,283		1		207		75		17,440
Holiday Inn Express		9		2,127		3		750		—		—		12		2,877
Staybridge Suites		—		—		2		304		—		—		2		304
Other		6		1,428		7		1,338		—		—		13		2,766
Total		48		10,860		182		51,290		2		587		232		62,737
Greater China
InterContinental		1		570		20		8,300		1		503		22		9,373
Crowne Plaza		—		—		60		21,452		—		—		60		21,452
Holiday Inn(2)		2		1,476		62		19,301		—		—		64		20,777
Holiday Inn Express		1		138		36		9,315		—		—		37		9,453
Hotel Indigo		—		—		3		405		—		—		3		405
Other		—		—		1		141		—		—		1		141
Total		4		2,184		182		58,914		1		503		187		61,601
Total
InterContinental		43		12,175		120		41,849		7		3,290		170		57,314
Crowne Plaza		251		63,282		141		45,025		—		—		392		108,307
Holiday Inn(1)(2)		1,038		178,518		206		52,068		3		902		1,247		231,488
Holiday Inn Express		2,150		195,068		42		10,563		—		—		2,192		205,631
Staybridge Suites		161		17,177		28		3,519		—		—		189		20,696
Candlewood Suites		238		21,124		61		7,551		—		—		299		28,675
Hotel Indigo		44		4,741		6		920		—		—		50		5,661
Other		9		8,707		54		9,503		—		—		63		18,210
Total		3,934		500,792		658		170,998		10		4,192		4,602		675,982

(1) Included Holiday Inn Club Vacations (10 hotels, 3,701 rooms).

(2) Included Holiday Inn Resort properties (Americas 17 hotels, 4,240 rooms; Europe 3 hotels, 362 rooms; AMEA 14 hotels, 3,311 rooms and Greater China 3 hotels, 893 rooms).

32

Room Count and Pipeline

During 2012, the number of hotels and rooms which are franchised, managed, owned or leased by the Group increased by 122 hotels (17,634 rooms).

Openings of 226 hotels (33,922 rooms) were driven by continued expansion in the US, particularly within the Holiday Inn brand family which opened more than 11,000 rooms over 2012, and Greater China. The level of removals fell from 198 hotels (33,078 rooms) in 2011 to 104 hotels (16,288 rooms) in 2012, as anticipated following the completion of the Holiday Inn relaunch.

At the end of 2012, the pipeline totaled 1,053 hotels (169,030 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 Group’s brands is demonstrated by over 50% of pipeline rooms being outside of The Americas region, including 30% in Greater China.

Excluding 25 hotels (4,796 rooms) signed as part of the US government’s Privatization of Army Lodgings initiative in 2011, signings increased from 331 hotels (50,628 rooms) to 356 hotels (53,812 rooms). Signings during 2012 included 15 hotels for the HUALUXE brand, as well as the first signing for the EVEN brand.

During 2012, the opening of 33,922 rooms contributed to a net pipeline decline of 11,454 rooms. Active management out of the pipeline of deals that have become dormant or no longer viable contributed to a reduction of 31,344 rooms, representing a decrease of 11.8% over 2011.

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 82 hotels (7,419 rooms) to 3,555 hotels (449,617 rooms). Openings of 148 hotels (16,618 rooms) included 113 Holiday Inn brand family hotels (12,566 rooms), representing more than 70% of openings for the region. Six Hotel Indigo openings (639 rooms) helped the brand reach the 50 property milestone globally by the end of 2012. 22 hotels (1,927 rooms) opened as Staybridge Suites hotels and Candlewood Suites hotels, the Group’s extended stay brands. 66 hotels (9,199 rooms) were removed from the system in 2012, compared to 153 hotels (24,284 rooms) in 2011.

The Americas pipeline totaled 670 hotels (72,573 rooms) as at December 31, 2012. Signings of 226 hotels (25,536 rooms) included 173 hotels (18,866 rooms) in the Holiday Inn brand family, as well as the first signing for the EVEN brand, a flagship property in the heart of midtown Manhattan, New York. The pipeline decreased by 105 hotels (11,877 rooms) compared to 2011.

Europe

During 2012, Europe hotel and room count increased by 16 hotels (2,142 rooms) to 628 hotels (102,027 rooms). Openings of 39 hotels (5,477 rooms) included 31 hotels in the Holiday Inn brand family (4,233 rooms). Hotel Indigo continued to build momentum in the region, with five hotel openings, doubling the system size in Europe for the brand. 23 hotels (3,335 rooms) were removed from the system in 2012.

The Europe pipeline totaled 91 hotels (15,184 rooms) as at December 31, 2012. Signings of 48 hotels (7,023 rooms) increased from 2011 levels and included 35 hotels (5,489 rooms) in the Holiday Inn brand family, including the first two Holiday Inn Express hotels in Russia. Seven Hotel Indigo hotels (572 rooms) were signed, including three more hotels in the UK and firsts for the brand in France, Spain and Israel. 16 hotels (3,044 rooms) were removed from the pipeline in 2012. The pipeline decreased by seven hotels (1,498 rooms) compared to 2011.

33

AMEA

The AMEA hotel and room count in the year increased by four hotels (1,654 rooms) to 232 hotels (62,737 rooms). The level of openings increased from 10 hotels (2,907 rooms) in 2011 to 16 hotels (4,243 rooms) in 2012. These included four hotels for the InterContinental brand, including the 197-room InterContinental Danang Sun Peninsula Resort in Vietnam, as well as the first Holiday Inn Express hotels in Bahrain, India and Thailand. Six Crowne Plaza hotels (1,777 rooms) were opened in 2012, including resort locations in Thailand and Jordan. 12 hotels (2,589 rooms) were removed from the system in 2012.

The AMEA pipeline totaled 132 hotels (30,357 rooms) as at December 31, 2012. Signings of 36 hotels (7,866 rooms) included 24 hotels (4,657 rooms) in the Holiday Inn brand family. In addition, six InterContinental hotels (1,728 rooms) were signed, including resort locations in Thailand and Australia. 10 hotels (2,850 rooms) were removed from the pipeline in 2012, compared to 32 hotels (8,243 rooms) in 2011. The pipeline increased by 10 hotels (773 rooms) compared to 2011.

Greater China

The Greater China hotel and room count in the year increased by 20 hotels (6,419 rooms) to 187 hotels (61,601 rooms). Openings of 23 hotels (7,584 rooms) included the Holiday Inn Macao Cotai Central (1,224 rooms), the largest Holiday Inn in the world. Eight Crowne Plaza hotels (2,996 rooms) and two Hotel Indigo hotels (224 rooms) were opened in 2012.

The Greater China pipeline totaled 160 hotels (50,916 rooms) as at December 31, 2012. Signings of 46 hotels (13,387 rooms) increased from 38 hotels (12,112 rooms) in 2011 and included 15 hotels for the newly launched HUALUXE brand, together with 12 Crowne Plaza hotels (4,527 rooms). 12 hotels (4,655 rooms) were removed from the pipeline in 2012. The pipeline increased by 11 hotels (1,148 rooms) compared to 2011.

	Hotels							Rooms
Global hotel and room count at December 31,	2012		2011		Change over 2011			2012		2011		Change over 2011
Analyzed by brand:
InterContinental		170		169		1			57,314		57,598		(284	)
Crowne Plaza		392		387		5			108,307		105,104		3,203
Holiday Inn(1)		1,247		1,240		7			231,488		228,256		3,232
Holiday Inn Express		2,192		2,114		78			205,631		196,666		8,965
Staybridge Suites		189		179		10			20,696		19,567		1,129
Candlewood Suites		299		285		14			28,675		27,500		1,175
Hotel Indigo		50		39		11			5,661		4,564		1,097
Other		63		67		(4	)		18,210		19,093		(883	)
Total		4,602		4,480		122			675,982		658,348		17,634
Analyzed by ownership type:
Franchised		3,934		3,832		102			500,792		489,071		11,721
Managed		658		637		21			170,998		164,993		6,005
Owned and leased		10		11		(1	)		4,192		4,284		(92	)
Total		4,602		4,480		122			675,982		658,348		17,634

(1) Included Holiday Inn Club Vacations (2012: 10 hotels, 3,701 rooms; 2011: 7 hotels, 2,928 rooms) and Holiday Inn Resort properties (2012: 37 hotels, 8,806 rooms; 2011: 32 hotels, 7,809 rooms).

34

	Hotels							Rooms
Global pipeline at December 31,	2012		2011		Change over 2011			2012		2011		Change over 2011
Analyzed by brand:
InterContinental		48		51		(3	)		15,713		17,623		(1,910	)
Crowne Plaza		98		108		(10	)		31,183		34,643		(3,460	)
Holiday Inn(1)		243		267		(24	)		44,988		50,750		(5,762	)
Holiday Inn Express		452		470		(18	)		51,760		52,201		(441	)
Staybridge Suites		71		95		(24	)		7,544		10,026		(2,482	)
Candlewood Suites		78		94		(16	)		6,742		8,062		(1,320	)
Hotel Indigo		47		59		(12	)		5,869		7,179		(1,310	)
HUALUXE		15		—		15			4,904		—		4,904
EVEN		1		—		1			230		—		230
Other		—		—		—			97		—		97
Total		1,053		1,144		(91	)		169,030		180,484		(11,454	)
Analyzed by ownership type:
Franchised		744		853		(109	)		82,901		96,513		(13,612	)
Managed		309		291		18			86,129		83,971		2,158
Total		1,053		1,144		(91	)		169,030		180,484		(11,454	)

(1) Included Holiday Inn Club Vacations (nil in 2012; 2011 1 hotel, 658 rooms) and Holiday Inn Resort properties (12 hotels, 2,390 rooms in 2012; 2011 15 hotels, 3,037 rooms).

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.

35

RevPAR

The following tables present RevPAR statistics for the year ended December 31, 2012 and a comparison to 2011. 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 between January 1, 2011 and December 31, 2012, therefore excluding new hotels, hotels closed for major refurbishment and hotels sold during that period.

The comparison with 2011 is at constant US dollar exchange rates.

	Franchised						Managed						Owned and leased
	2012			Change vs 2011			2012			Change vs 2011			2012			Change vs 2011
Americas
InterContinental
Occupancy		63.5	%		2.6	%pts		75.1	%		3.2	%pts		81.4	%		0.1	%pts
Average daily rate		127.55			2.9	%		205.58			5.7	%		261.26			7.3	%
RevPAR		81.00			7.4	%		154.32			10.5	%		212.68			7.4	%
Crowne Plaza
Occupancy		61.9	%		0.9	%pts		71.6	%		(3.6	)%pts		—			—
Average daily rate		109.57			3.9	%		117.95			9.1	%		—			—
RevPAR		67.88			5.4	%		84.40			3.8	%		—			—
Holiday Inn
Occupancy		62.4	%		1.6	%pts		72.4	%		0.3	%pts		69.4	%		(5.1	)%pts
Average daily rate		100.30			3.2	%		125.03			9.2	%		107.76			0.2	%
RevPAR		62.56			5.9	%		90.57			9.6	%		74.78			(6.7	)%
Holiday Inn Express
Occupancy		65.6	%		1.5	%pts		84.7	%		2.7	%pts		—			—
Average daily rate		101.97			3.6	%		172.29			12.0	%		—			—
RevPAR		66.92			6.1	%		145.95			15.8	%		—			—
Staybridge Suites
Occupancy		74.6	%		1.5	%pts		71.7	%		(6.1	)%pts		—			—
Average daily rate		101.60			3.9	%		116.41			6.7	%		—			—
RevPAR		75.81			6.0	%		83.49			(1.7	)%		—			—
Candlewood Suites
Occupancy		70.5	%		1.3	%pts		66.7	%		(8.1	)%pts		—			—
Average daily rate		74.26			4.0	%		68.53			11.3	%		—			—
RevPAR		52.33			6.0	%		45.68			(0.8	)%		—			—
Hotel Indigo
Occupancy		68.7	%		3.7	%pts		72.8	%		6.9	%pts		—			—
Average daily rate		123.03			3.0	%		140.33			7.5	%		—			—
RevPAR		84.51			8.8	%		102.22			18.6	%		—			—
Other		—
Occupancy		—			—			89.2	%		8.4	%pts		—			—
Average daily rate		—			—			97.61			(0.9	)%		—			—
RevPAR		—			—			87.03			9.5	%		—			—

36

	Franchised						Managed						Owned and leased
	2012			Change vs 2011			2012			Change vs 2011			2012			Change vs 2011
Europe
InterContinental
Occupancy		60.0	%		(0.6	)%pts		65.8	%		(1.5	)%pts		83.5	%		2.4	%pts
Average daily rate		248.42			0.9	%		195.75			0.6	%		452.50			2.2	%
RevPAR		149.08			(0.2	)%		128.79			(1.7	)%		377.66			5.2	%
Crowne Plaza
Occupancy		68.5	%		0.3	%pts		77.5	%		1.6	%pts		—			—
Average daily rate		131.81			0.9	%		147.25			0.4	%		—			—
RevPAR		90.24			1.3	%		114.04			2.6	%		—			—
Holiday Inn
Occupancy		65.4	%		0.0	%pts		75.8	%		1.4	%pts		—			—
Average daily rate		112.78			1.8	%		111.37			0.2	%		—			—
RevPAR		73.77			1.8	%		84.40			2.0	%		—			—
Holiday Inn Express
Occupancy		70.4	%		0.5	%pts		45.7	%		0.3	%pts		—			—
Average daily rate		93.13			1.8	%		68.46			(7.2	)%		—			—
RevPAR		65.56			2.6	%		31.31			(6.6	)%		—			—
Staybridge Suites
Occupancy		78.5	%		4.7	%pts		—			—			—			—
Average daily rate		110.30			(3.1	)%		—			—			—			—
RevPAR		86.58			3.0	%		—			—			—			—
Hotel Indigo
Occupancy		92.4	%		0.2	%		—			—			—			—
Average daily rate		224.60			4.1	%		—			—			—			—
RevPAR		207.56			4.2	%		—			—			—			—

	Franchised						Managed						Owned and leased
	2012			Change vs 2011			2012			Change vs 2011			2012			Change vs 2011
AMEA
InterContinental
Occupancy		70.9	%		(2.8	)%pts		66.8	%		3.0	%pts		66.2	%		(5.3	)%pts
Average daily rate		221.50			8.4	%		214.87			1.1	%		136.82			(2.8	)%
RevPAR		157.05			4.2	%		143.59			5.9	%		90.54			(10.0	)%
Crowne Plaza
Occupancy		70.3	%		0.4	%pts		72.2	%		3.1	%pts		—			—
Average daily rate		131.19			2.3	%		143.00			(1.1	)%		—			—
RevPAR		92.17			2.9	%		103.31			3.3	%		—			—
Holiday Inn
Occupancy		69.5	%		2.3	%pts		73.3	%		2.3	%pts		78.6	%		(8.6	)%pts
Average daily rate		123.23			6.7	%		120.46			0.9	%		162.69			2.7	%
RevPAR		85.65			10.3	%		88.23			4.3	%		127.96			(7.3	)%
Holiday Inn Express
Occupancy		61.7	%		2.8	%pts		—			—			—			—
Average daily rate		76.15			14.2	%		—			—			—			—
RevPAR		46.98			19.7	%		—			—			—			—
Staybridge Suites
Occupancy		—			—			82.2	%		2.7	%pts		—			—
Average daily rate		—			—			140.02			(1.8	)%		—			—
RevPAR		—			—			115.04			1.6	%		—			—
Other
Occupancy		72.8	%		0.1	%pts		66.9	%		5.6	%pts		—			—
Average daily rate		133.59			1.8	%		97.84			(2.5	)%		—			—
RevPAR		97.3			2.0	%		65.48			6.4	%		—			—

37

	Franchised						Managed						Owned and leased
	2012			Change vs 2011			2012			Change vs 2011			2012			Change vs 2011
Greater China
InterContinental
Occupancy		82.3	%		(1.1	)%pts		59.5	%		4.0	%pts		77.8	%		2.8	%pts
Average daily rate		239.27			4.8	%		144.18			2.1	%		395.30			2.9	%
RevPAR		196.85			3.5	%		85.76			9.5	%		307.62			6.7	%
Crowne Plaza
Occupancy		—			—			57.3	%		(0.8	)%pts		—			—
Average daily rate		—			—			100.55			3.3	%		—			—
RevPAR		—			—			57.58			1.9	%		—			—
Holiday Inn
Occupancy		81.0	%		3.3	%pts		63.0	%		0.2	%pts		—			—
Average daily rate		47.93			(7.2	)%		82.95			3.7	%		—			—
RevPAR		38.84			(3.2	)%		52.29			4.1	%		—			—
Holiday Inn Express
Occupancy		79.1	%		3.1	%pts		71.7	%		5.2	%pts		—			—
Average daily rate		33.86			(5.4	)%		50.22			4.8	%		—			—
RevPAR		26.79			(1.5	)%		36.01			13.1	%		—			—
Hotel Indigo
Occupancy		—			—			54.7	%		16.4	%pts		—			—
Average daily rate		—			—			183.13			2.3	%		—			—
RevPAR		—			—			100.08			46.0	%		—			—

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)

38

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.

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, 2012.

Net book value at December 31, 2012	Americas		Europe		AMEA		Greater China		Total
	($ million)
Land and buildings.		300		274		11		264		849
Fixtures, fittings and equipment		50		77		25		55		207
		350		351		36		319		1,056

In addition, there were two hotels, the InterContinental New York Barclay and the InterContinental London Park Lane, with a total net book value of $524 million that were classified as held for sale at December 31, 2012.

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 10 hotels, including $187 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, 2012 amounted to $66 million.

Charges over one hotel totaling $89 million exist as security provided to the Group’s pension plans.

ENVIRONMENT

As a leading hotel company, the Group is in a particularly strong position to help make tourism increasingly responsible. That is why for the Group, Responsible Business underpins all of the Group’s strategic priorities. The Group aims to harness the role hotels play in society in order to create shared value for its business, its guests, the environment and the communities where it operates, whether that is conserving and protecting resources, helping local people build skills and improve their employability or providing refuge when disaster strikes. Corporate responsibility is an essential element of doing business responsibly.

The Group’s corporate responsibility ambition is to transform hospitality for more sustainable communities and better lives. It works to find innovative ways to build and run hotels that can fulfill the Group’s brand promises, tackle the environmental and social challenges it faces and create shared value for the Group and its stakeholders.

The Group focuses its corporate responsibility activities in two areas that make sense to its business and where it believes it can make the most difference — the environment and the local community.

Environmental sustainability — the Group drives environmental sustainability through its online environmental management platform Green Engage; and

Sustainable communities — the Group creates local economic opportunity, particularly through the IHG Academy, and it provides shelter when disaster strikes through the IHG Shelter in a Storm Programme.

39

Environmental sustainability

The Group is committed to designing, building and operating more environmentally sustainable hotels, something it believes is essential to being a Responsible Business and delivering Great Hotels Guests Love. Through Green Engage, the Group’s online environmental management platform, it provides its hotel owners with a roadmap to develop and operate more sustainable hotels.

Green Engage

The environmental impact of the Group’s hotels is managed through every stage of the hotel lifecycle by Green Engage. Green Engage tracks the use of energy, carbon and the management of waste in the Group’s properties along with the associated costs. An important feature in Green Engage is Green Solutions — over 200 actions a property can implement to reduce its environmental impact. Green Engage can help hotels become up to 25% more energy efficient, so it makes both environmental and financial sense.

In 2012, the Group continued to invest in Green Engage, adding new features such as the carbon calculator, energy and water benchmarks and multi-unit reporting. As at December 31, 2012, 2,219 of the Group’s hotels were enrolled in Green Engage and its user base has since grown to over 2,260 hotels. The Group’s aim is to have its entire estate tracking, managing and reporting its environmental impact over time.

Sustainable communities

The Group’s scale gives it a real opportunity to improve and transform the lives of local people in the communities where the Group operates. Its community strategy, which sets out how it can seek to create local economic opportunity, is critical to achieving economic success and delivering Great Hotels Guests Love. In 2012 the Group continued to increase the focus on the community, successfully expanding both the IHG Academy program and the IHG Shelter in a Storm Programme.

IHG Academy

The IHG Academy is a collaboration between individual Group hotels or corporate offices and local education providers and/or community organizations providing local people with the opportunity to develop skills and improve their employment prospects in one of the world’s largest hotel companies.

Within a consistent framework, each IHG Academy is tailored to meet the needs of local communities as well as hotels around the world.

Currently the Group has over 150 IHG Academy programs in 37 countries around the world and its vision is to have as many Group hotels as possible participating in an IHG Academy. The Group’s ability to build skills and raise aspirations across hundreds of communities continues to show the Group’s commitment to this program.

IHG Shelter in a Storm Programme

Through the IHG Shelter in a Storm Programme, the Group’s hotels receive guidance on when and how best to respond when natural or man-made disasters occur. The Group’s global partnership with CARE allows it to draw on expertise in humanitarian assistance and helps it find appropriate partners in the area when disaster strikes, directing help to where it is needed.

The IHG Shelter Fund, a pool of funds from the fundraising efforts of the Group’s hotels and corporate offices, is a key element of the IHG Shelter in a Storm Programme, enabling the Group to respond quickly when disaster strikes, instead of waiting to raise funds after the event.

In 2012, $545,000 was raised for the IHG Shelter in a Storm Programme and the fund was put into action to support 10 disasters in six countries, including responding to severe flooding and a cyclone in Fiji, Superstorm Sandy on the US East Coast, flooding in Manila and the UK, wildfires in Colorado and Hurricane Isaac on the US Gulf Coast.

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In 2013, the Group will continue to enhance environmental sustainability, create local economic opportunity and to engage stakeholders to champion the corporate responsibility agenda and protect the Group’s trusted reputation.

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, 2012, the Group had 4,602 franchised, managed, owned and leased hotels and 675,982 guest rooms in nearly 100 countries and territories around the world. The Group also manages the hotel loyalty program, Priority Club Rewards (the Group announced on March 26, 2013 that it will be enhancing and renaming the Priority Club Rewards program as “IHG Rewards Club” from July 2013).

In the first quarter 2012, the Group launched two new brands. EVEN Hotels is aimed at business and leisure travelers who are looking for a wellness experience in a hotel stay at a mainstream price point. HUALUXE Hotels & Resorts is the first international upscale hotel brand designed specifically for Chinese guests, to take advantage of both the supply and demand side opportunities the Group sees in China.

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 3.8% to $1,835 million and operating profit before exceptional items increased by 9.8% to $614 million during the 12 months ended December 31, 2012.

Fee revenue, which is Group revenue excluding revenue from owned and leased hotels, significant liquidated damages received in 2012 and 2011 and properties that are structured for legal reasons as operating leases, but with the same characteristics as management contracts, increased by 6.8% when translated at constant currency (applying 2011 exchange rates).

The 2012 results reflect continued RevPAR growth in each of the regions, with an overall RevPAR increase of 5.2%, including a 3.2% increase in average daily rate. The results also benefited from overall system size growth of 2.7% year-on-year to 675,982 rooms. Group RevPAR growth remained robust for the year, reflecting favorable supply and demand dynamics in the US over 2012, although trading was also adversely affected by the impact of Eurozone uncertainty as well as industry-wide challenges in Greater China in the latter part of the year related to the political leadership change.

Operating profit improved in each of the regions. RevPAR growth of 6.1% in The Americas helped drive an operating profit increase of $42 million (9.5%), after excluding the benefit of a $3 million liquidated damages receipt in 2012 and a $10 million liquidated damages receipt in 2011. Operating profit in Europe increased by $11 million (10.6%), with RevPAR growth of 1.7%. Operating profit in AMEA increased by $13 million (17.3%), after adjusting for a $6 million liquidated damages receipt in 2011 and the disposal of a hotel asset and partnership interest that contributed $3 million in profits in 2011, reflecting RevPAR growth of 4.9%. Strong operating profit growth of $14 million in Greater China reflected an 11.6% increase in system size as well as 5.4% RevPAR growth.

Operating profit margin was 42.6%, up 2.0 percentage points on 2011 (a particularly strong result which the Group anticipates will revert back to move normal levels of growth in 2013), after adjusting for owned and leased hotels, The Americas and Europe managed leases and significant liquidated damages received in 2012 and 2011.

41

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 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 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.

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.

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Goodwill, intangible assets, and property, plant and equipment

Capitalized goodwill is not amortized but is subject to 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.

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, either from use or from sale.

Following the full impairment of Americas managed goodwill in 2009, the remaining balance of goodwill of $93 million at December 31, 2012, 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 2012, a previously recorded impairment charge relating to a North American hotel was reversed in full following a re-assessment of its recoverable amount, based on the market value of the hotel as determined by an independent professional property valuer. There were no impairment charges in 2012.

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 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 2012, an exceptional credit of $141 million arose, representing the recognition of $104 million of deferred tax assets, principally relating to pre-existing overseas tax losses, whose value has become more certain as a result of a change of law and the resolution of prior period tax matters, together with the associated release of $37 million of tax contingencies.

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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 $623 million at December 31, 2012.

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.

For the year ended December 31, 2012 the results include exceptional items totaling a net credit of $138 million (2011 $96 million credit, 2010 $4 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,
	2012			2011			2010
	($ million)
Total revenue		1,835			1,768			1,628
Operating profit before exceptional operating items		614			559			444
Exceptional operating items		(4	)		57			(7	)
Operating profit		610			616			437
Net financial expenses		(54	)		(62	)		(62	)
Profit before tax		556			554			375
Tax.		(11	)		(81	)		(97	)
Profit after tax		545			473			278
Gain on disposal of assets, net of tax		—			—			2
Profit for the year		545			473			280
Earnings per ordinary share:
Basic		189.5	¢		163.7	¢		97.2	¢
Adjusted		141.5	¢		130.4	¢		98.6	¢
Average US dollar to sterling exchange rate	$	1:£0.63		$	1:£0.62		$	1:£0.65

44

Year ended December 2012 compared with year ended December 2011

Revenue increased by 3.8% to $1,835 million and operating profit before exceptional items increased by 9.8% to $614 million during the 12 months ended December 31, 2012.

Exceptional operating items

Exceptional operating items totaled a net loss of $4 million. Exceptional gains included a $23 million impairment reversal and the release of a $9 million liability no longer required relating to the 2003 demerger of the Group from Six Continents PLC. Exceptional charges included $16 million from the reorganization of the Group’s support functions together with a restructuring in the AMEA region, $2 million loss on disposal of an interest in a hotel and $18 million write-off of software.

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 decreased by $8 million to $54 million primarily due to lower average debt levels.

Financing costs included $2 million (2011 $1 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 2012 also included $19 million (2011 $18 million) in respect of the InterContinental Boston finance lease.

Taxation

The effective rate of tax on operating profit, excluding the impact of exceptional items, was 27% (2011 24%). Excluding the impact of prior year items the equivalent tax rate would be 30% (2011 36%). This rate is higher than the average UK statutory rate of 24.5% 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 $142 million (2011 $39 million). This represented, primarily, the recognition of $104 million of deferred tax assets whose value has become more certain as a result of a change in law and the resolution of prior period tax matters, together with the associated release of $37 million of provisions. In 2011 this related to a revision of the estimated tax impacts of an internal reorganization completed in 2010.

Net tax paid in 2012 totaled $122 million (2011 $90 million) including $3 million paid (2011 $1 million) in respect of disposals. Tax paid represents an effective rate of 22% (2011 16%) on total profits and is lower than the effective income statement tax rate of 27% 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.

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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.

The Group earns approximately 60% of its revenues in the form of franchise, management or similar fees, with almost 90% of the Group’s branded hotels being franchised. In jurisdictions in which the Group does franchise business, the prevailing tax law will generally provide for the Group to be taxed in the form of local withholding taxes based on a percentage of fees rather than based on profits. Costs to support the franchise business are normally incurred regionally or globally and therefore profits for an individual franchise jurisdiction cannot be separately determined.

Earnings per ordinary share

Basic earnings per ordinary share in 2012 was 189.5¢, compared with 163.7¢ in 2011. Adjusted earnings per ordinary share was 141.5¢, against 130.4¢ in 2011.

Highlights for the year ended December 31, 2012

The following is a discussion of the year ended December 31, 2012 compared with the year ended December 31, 2011.

Group results

	Year ended December 31, 2012			Year ended December 31, 2011			Change
	($ million)						%
Revenue
Americas		837			830			0.8
Europe		436			405			7.7
AMEA.		218			216			0.9
Greater China		230			205			12.2
Central		114			112			1.8
Total		1,835			1,768			3.8
Operating profit before exceptional operating items(1)
Americas		486			451			7.8
Europe		115			104			10.6
AMEA.		88			84			4.8
Greater China		81			67			20.9
Central		(156	)		(147	)		(6.1	)
Total		614			559			9.8

(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 $23 million (2011 credit of $35 million); Europe $4 million (2011 $39 million); AMEA $5 million (2011 credit of $26 million); Greater China $nil (2011 $nil); and Central credit of $18 million (2011 credit of $35 million).

Revenue increased by 3.8% to $1,835 million and operating profit before exceptional items increased by 9.8% to $614 million during the 12 months ended December 31, 2012.

Fee revenue, which is Group revenue excluding revenue from owned and leased hotels, significant liquidated damages received in 2012 and 2011 and properties that are structured for legal reasons as operating leases, but with the same characteristics as management contracts, increased by 6.8% when translated at constant currency (applying 2011 exchange rates).

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The 2012 results reflect continued RevPAR growth in each of the regions, with an overall RevPAR increase of 5.2%, including a 3.2% increase in average daily rate. The results also benefited from system size growth of 2.7% year-on-year to 675,982 rooms. Group RevPAR growth remained robust for the year, reflecting favorable supply and demand dynamics in the US over 2012, although trading was also affected by the impact of Eurozone uncertainty as well as industry-wide challenges in Greater China in the latter part of the year related to the political leadership change.

Operating profit improved in each of the regions. RevPAR growth of 6.1% in The Americas helped drive an operating profit increase of $42 million (9.5%), after excluding the benefit of a $3 million liquidated damages receipt in 2012 and a $10 million liquidated damages receipt in 2011. Operating profit in Europe increased by $11 million (10.6%), with RevPAR growth of 1.7%. Operating profit in AMEA increased by $13 million (17.3%), after adjusting for a $6 million liquidated damages receipt in 2011 and the disposal of a hotel asset and partnership interest that contributed $3 million in profits in 2011, reflecting RevPAR growth of 4.9%. Strong operating profit growth of $14 million in Greater China reflected an 11.6% increase in system size as well as 5.4% RevPAR growth.

At constant currency, central overheads increased from $147 million in 2011 to $158 million in 2012 ($156 million at actual currency), reflecting investment in infrastructure and capabilities to support the growth of the business.

Americas

	Year ended December 31, 2012			Year ended December 31, 2011			Change
	($ million)						%
Revenue
Franchised		541			502			7.8
Managed		97			124			(21.8	)
Owned and leased		199			204			(2.5	)
Total		837			830			0.8
Operating profit before exceptional operating items
Franchised		466			431			8.1
Managed		48			52			(7.7	)
Owned and leased		24			17			41.2
		538			500			7.6
Regional overheads		(52	)		(49	)		(6.1	)
Total		486			451			7.8

Revenue and operating profit before exceptional items increased by $7 million (0.8%) to $837 million and by $35 million (7.8%) to $486 million respectively. RevPAR increased 6.1%, with 4.1% growth in average daily rate. US RevPAR was up 6.3% in 2012 despite uncertainty regarding the presidential election and the “fiscal cliff” in the latter part of the year.

Franchised revenue increased by $39 million (7.8%) to $541 million. Royalties growth of 8.7% was driven by RevPAR growth of 6.0%, including 6.1% for Holiday Inn Express, together with system size growth of 2.3%. Operating profit increased by $35 million (8.1%) to $466 million.

Managed revenue decreased by $27 million (21.8%) to $97 million and operating profit decreased by $4 million (7.7%) to $48 million. Revenue and operating profit included $34 million (2011 $59 million) and $nil (2011 $1 million) respectively from managed leases. Excluding properties operated under this arrangement, as well as the benefit of a $3 million liquidated damages receipt in 2012 and a $10 million liquidated damages receipt in 2011, revenue and operating profit grew by $5m (9.1%) and $4 million (9.8%) respectively. Growth was driven by a RevPAR increase of 7.3%, including 9.6% for Holiday Inn.

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Owned and leased revenue declined by $5 million (2.5%) to $199 million and operating profit grew by $7 million (41.2%) to $24 million. Excluding the impact of disposals, revenue increased by $4 million (2.1%) and operating profit increased by $8 million (50.0%). The increase in revenue was driven by RevPAR growth of 6.3%, offset by the impact of the partial closure of an owned hotel in the Caribbean. The operating profit increase of $7 million included a $1 million year-on-year benefit from lower depreciation recorded for the InterContinental New York Barclay since the hotel was categorized as held for sale in the first quarter of 2011, after which no depreciation was charged, and a $3 million year-on-year benefit relating to one off reorganization costs at one hotel in 2011.

Europe

	Year ended December 31, 2012			Year ended December 31, 2011			Change
	($ million)						%
Revenue
Franchised		91			86			5.8
Managed		147			118			24.6
Owned and leased		198			201			(1.5	)
Total		436			405			7.7
Operating profit before exceptional operating items
Franchised		65			65			—
Managed		32			26			23.1
Owned and leased		50			49			2.0
		147			140			5.0
Regional overheads		(32	)		(36	)		11.1
Total		115			104			10.6

Revenue and operating profit before exceptional items increased by $31 million (7.7%) to $436 million and by $11 million (10.6%) to $115 million respectively. RevPAR increased by 1.7%, with 1.2% growth in average daily rate despite challenging economic conditions across Europe.

Franchised revenue increased by $5 million (5.8%) to $91 million, whilst operating profit was flat at $65 million. At constant currency, revenue increased by $8 million (9.3%) and operating profit increased by $3 million (4.6%). Growth was mainly driven by an increase in royalties of 2.7% (7.5% at constant currency) reflecting RevPAR growth of 1.8%, together with system size growth of 4.0%.

Managed revenue increased by $29 million to $147 million (24.6%) and operating profit increased by $6 million (23.1%) to $32 million. Revenue and operating profit included $80 million (2011 $46 million) and $2 million (2011 $nil) respectively from managed leases. Excluding properties operated under this arrangement and on a constant currency basis, revenue decreased by $1 million (1.4%) reflecting a 4.3% decrease in system size partially offset by RevPAR growth of 1.0%. On the same basis, operating profit grew by $5 million (19.2%).

In the owned and leased estate, revenue decreased by $3 million (1.5%) to $198 million and operating profit increased by $1 million (2.0%) to $50 million. At constant currency and excluding the impact of disposals, revenue increased by $10 million (5.1%) and operating profit increased by $4 million (8.3%). The InterContinental London Park Lane and the InterContinental Paris Le Grand delivered year-on-year RevPAR growth of 8.0% and 2.5% respectively.

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AMEA

	Year ended December 31, 2012			Year ended December 31, 2011			Change
	($ million)						%
Revenue
Franchised		18			19			(5.3	)
Managed		152			151			0.7
Owned and leased		48			46			4.3
Total		218			216			0.9
Operating profit before exceptional operating items
Franchised		12			12			—
Managed		90			87			3.4
Owned and leased		6			5			20.0
		108			104			3.8
Regional overheads		(20	)		(20	)		—
Total		88			84			4.8

Revenue and operating profit before exceptional items increased by $2 million (0.9%) to $218 million and by $4 million (4.8%) to $88 million respectively. RevPAR increased 4.9%, with 1.2% growth in average daily rate, with robust trading in Southeast Asia and Japan, partly offset by continuing uncertainty impacting some markets in the Middle East.

On both a constant and actual currency basis, franchised revenue decreased by $1 million (5.3%) to $18 million and operating profit was flat at $12 million.

Managed revenue and operating profit increased by $1 million (0.7%) to $152 million and by $3 million (3.4%) to $90 million respectively. At constant currency, excluding the benefit of a $6 million liquidated damages receipt in 2011 and after adjusting for the disposal of a hotel asset and partnership interest in Australia, which contributed $3 million to operating profit in 2011, revenue and operating profit increased by $7 million (4.8%) and $11 million (14.1%) respectively. RevPAR growth was 4.6% and although year-end system size was 7.1% higher than at the end of 2011, due to the phasing of openings towards the end of the year, rooms available during the year grew by only 2.2%. Operating profit in 2012 benefited from a $1 million increase in profit from an associate and $2 million lower year-on-year bad debt expense.

In the owned and leased estate, revenue and operating profit increased by $2 million (4.3%) to $48 million and by $1 million (20.0%) to $6 million respectively.

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Greater China

	Year ended December 31, 2012			Year ended December 31, 2011			Change
	($ million)						%
Revenue
Franchised		3			2			50.0
Managed		89			77			15.6
Owned and leased		138			126			9.5
Total		230			205			12.2
Operating profit before exceptional operating items
Franchised		4			3			33.3
Managed		51			43			18.6
Owned and leased		45			37			21.6
		100			83			20.5
Regional overheads		(19	)		(16	)		(18.8	)
Total		81			67			20.9

Revenue and operating profit before exceptional items increased by $25 million (12.2%) to $230 million and by $14 million (20.9%) to $81 million respectively. RevPAR increased 5.4% with 3.1% growth in average daily rate.

Franchised revenue increased by $1 million (50.0%) to $3 million and operating profit by $1 million (33.3%) to $4 million, boosted by the opening of the 1,224-room Holiday Inn Macao Cotai Central.

Managed revenue increased by $12 million (15.6%) to $89 million and operating profit increased by $8 million (18.6%) to $51 million. RevPAR growth of 5.6% reflected continued economic growth in the region, although the whole industry was affected in the latter part of the year by the 10-year political leadership change and the Diaoyu/Senkaku islands territorial dispute. There was also continued significant system size growth for the managed estate in the region (9.7% rooms growth in 2012 following 14.2% rooms growth in 2011).

Owned and leased revenue increased by $12 million (9.5%) to $138 million and operating profit increased by $8 million (21.6%) to $45m, with RevPAR growth of 6.7% at the InterContinental Hong Kong.

Regional costs increased by $3 million (18.8%) to $19 million reflecting increased investment in operations and infrastructure in the region.

Central

	Year ended December 31, 2012			Year ended December 31, 2011			Change
	($ million)						%
Revenue		114			112			1.8
Gross central costs		(270	)		(259	)		(4.2	)
Net central costs		(156	)		(147	)		(6.1	)

Net central costs increased by $9 million from $147 million in 2011 to $156 million (6.1%) in 2012. At constant currency, net central costs increased by $11 million (7.5%). The movement was driven by investment in infrastructure and capabilities to support the growth of the business. Central revenue mainly comprised technology fee income.

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System Fund

	Year ended December 31, 2012		Year ended December 31, 2011		Change
	($ million)				%
Assessment fees and contributions received from hotels		1,106		1,025		7.9
Proceeds from sale of Priority Club Rewards points		144		128		12.5
		1,250		1,153		8.4

In the year to December 31, 2012, Fund income increased by 8.4% to $1,250 million primarily as a result of growth in hotel room revenues. 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 Consolidated income statement.

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, restated where appropriate to reflect the change in the Group’s geographical segments following an internal reorganization during 2011.

Group results

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.

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

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.

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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 categorized 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 reorganization costs relating to one hotel in 2011.

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

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

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.

Greater China

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

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.

System Fund

In the year to December 31, 2011, 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.

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LIQUIDITY AND CAPITAL RESOURCES

Sources of liquidity

The Group is primarily financed by a $1.07 billion syndicated bank facility which expires in November 2016 (the “Syndicated Facility”), £250 million of public bonds which are repayable on December 9, 2016 and £400 million of public bonds which are repayable on November 28, 2022. The $1.07 billion Syndicated Facility was undrawn at the year end. The £400 million 3.875% bonds, which were issued during the year under the Group’s £750 million Medium Term Notes program, extend the maturity profile and diversify the sources of the Group’s debt. Short-term borrowing requirements are met from drawings under bilateral bank facilities. Additional funding is provided by the 99-year finance lease (of which 93 years remain) on the InterContinental Boston. In the Group’s opinion, the available facilities are sufficient for the Group’s present liquidity requirements.

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 £400 million public bonds were issued on November 28, 2012 at a coupon of 3.875% and were initially priced at 98.787% of face value and are unsecured. Interest is payable annually on November 28, in each year commencing November 28, 2013 to the maturity date.

At December 31, 2012, gross borrowings were $1,258 million, including the finance lease obligation of $212 million. The currency denomination of the borrowings was $212 million of US dollar denominated borrowings, $1,041 million of sterling denominated borrowings and $5 million of New Zealand dollar denominated borrowings. The impact of the currency swaps traded in December 2009 is to convert $415 million of these sterling denominated borrowings above into US dollar denominated borrowings; the fair value of the currency swaps disclosed as a component of net debt was a liability of $11 million at December 31, 2012.

The Group held cash and short-term deposits at December 31, 2012 amounting to $195 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. 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 although $7 million (2011 $2 million) is held in a country where repatriation is restricted as a result of foreign exchange regulations.

Net debt of $1,074 million at December 31, 2012, comprised the gross borrowings of $1,258 million and the currency swap fair value of $11 million less cash and short-term deposits of $195 million.

The Syndicated Facility contains two financial covenants: interest cover and net debt divided by earnings before interest, tax, depreciation and amortization (“EBITDA”). 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 $472 million for the year ended December 31, 2012 (2011 $479 million) after the payment of additional UK pension scheme contributions which were $57 million higher than in 2011.

Cash flow from operating activities is the principal source of cash used to fund the ongoing operating expenses, interest payments, maintenance capital expenditure and normal 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.

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Cash from investing activities

Net cash outflows due to investing activities totaled $128 million (2011 $38 million) comprising capital expenditure of $133 million (2011 $194 million) including investment in the technology infrastructure of $70 million (2011 $46 million), less proceeds from the disposal of hotels and investments of $5 million (2011 $156 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 Group had committed contractual capital expenditure of $81 million at December 31, 2012 (2011 $14 million), reflecting its commitment to invest in the growth of the Group’s brands.

Cash used in financing activities

Net cash used in financing activities totaled $329 million (2011 $334 million), after the payment of shareholder returns of $786 million (2011 $148 million), including a $505 million special dividend and $107 million of share buybacks. Net borrowings increased by $533 million (2011 decreased by $119 million) largely due to the issue of new long-term bonds. $84 million (2011 $75 million) was spent on share purchases in order to fulfill share incentive awards.

Overall net debt increased during the year by $536 million to $1,074 million at December 31, 2012.

Off-balance sheet arrangements

At December 31, 2012, 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, 2012:

	Total amounts committed		Less than 1 year		1-3 years		3-5 years		After 5 years
	($ million)
Long-term debt obligations(i)(ii)		1,067		—		5		415		647
Interest payable(ii)		354		51		102		76		125
Finance lease obligations(iii)		3,396		16		32		32		3,316
Operating lease obligations		387		47		59		44		237
Agreed pension scheme contributions(iv)		87		62		25		—		—
Capital contracts placed		81		81		—		—		—
		5,372		257		223		567		4,325

(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 93 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 $37 million had been spent at December 31, 2012.

In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts. Forecast payments of $6 million have been provided for in the Financial Statements and the maximum unprovided exposure under such guarantees is $50 million at December 31, 2012.

As of December 31, 2012, the Group had outstanding letters of credit of $38 million mainly relating to self insurance programs.

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The Group may occasionally 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, 2012, there were no such guarantees in place.

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 benefit 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 $97 million at December 31, 2012, 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 benefit 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 allowances which will also close to future accrual with effect from July 1, 2013; at December 31, 2012, these arrangements had an IAS 19 deficit of $62 million.

The most recent actuarial valuation of the InterContinental Hotels UK Pension Plan was carried out as at March 31, 2012 and showed a deficit of £132 million on a funding basis. Under the recovery plan agreed with the trustees, the Group aims to eliminate this deficit by July 31, 2014 principally through additional Company contributions of £130 million. In respect of these additional Company contributions, £10 million was paid in July 2012, £45 million was paid in October 2012, £30 million is due for payment in July 2013, £15 million is due for payment in July 2014 and £30 million will be paid into a funding trust on release of a trustee charge over a hotel asset. The amount in the funding trust may be available for release to the plan on July 31, 2014 to the extent that a funding deficit remains at that time. The plan is formally valued every three years, or earlier with the agreement of the Company and trustees, and future valuations could lead to changes in the amounts payable by the Company.

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, 2012 the plans had a combined deficit of $98 million. In 2013, 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, 2013 were:

Directors	Title	Initially appointed to the Board		Date of next reappointment by shareholders
Patrick Cescau	Director and Chairman		2013		2013
David Kappler(1)	Director and Senior Independent Director		2004		2013
Kirk Kinsell	Director		2010		2013
Jennifer Laing(1)	Director		2005		2013
Jonathan Linen(1)	Director		2005		2013
Luke Mayhew(1)	Director		2011		2013
Dale Morrison(1)	Director		2011		2013
Tracy Robbins	Director		2011		2013
Tom Singer	Director and Chief Financial Officer		2011		2013
Richard Solomons	Director and Chief Executive		2003		2013
Ying Yeh(1)	Director		2007		2013

(1) Non-executive independent director.

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

* In April 2013 Kenneth MacPherson will join the Group as Chief Executive, Greater China. With effect from June 1, 2013 Keith Barr will be appointed to the newly created position of Chief Commercial Officer, responsible for brands, sales, marketing and distribution. During the transition Larry Light will continue in his role as Chief Brands Officer. Following the transition Larry will stay on as a senior IHG advisor.

Former Directors and Officers

Graham Allan served as a Director until June 2012. David Webster served as a Director and Chairman of InterContinental Hotels Group PLC until December 2012.

Directors and Officers

Patrick Cescau, Non-Executive Chairman

Appointed to the Board: January 1, 2013

Skills and Experience: From 2005 to 2008, Patrick was Group Chief Executive of Unilever Group, having previously been Chairman of Unilever PLC, Vice-Chairman of Unilever NV and Foods Director, following a progressive career with the Company, which began in France in 1973. Prior to being appointed to the Board of Unilever NV in 1999, as Finance Director, he was Chairman of a number of the Company’s major operating companies and divisions, including in the USA, Indonesia and Portugal.

Board Contribution: Patrick has held board positions for more than 12 years in leading global businesses and brings extensive international experience in brands, consumer products, as well as finance. As Chairman, Patrick is responsible for leading the Board and ensuring it operates in an effective manner and promoting constructive relations with shareholders. Patrick is Chairman of the Nomination Committee.

Other Appointments: Currently a Non-Executive Director of International Consolidated Airlines Group S.A. and the Senior Independent Director and Non-Executive Director of Tesco PLC. Patrick is also a trustee of the Leverhulme Trust and Chairman of the St Jude India Children’s Charity. He was formerly a Senior Independent Director and Non-Executive Director of Pearson PLC and a Director at INSEAD.

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Richard Solomons, Chief Executive

Appointed to the Board: February 10, 2003

Skills and Experience: A chartered accountant and a member of the Executive Committee of the World Travel & Tourism Council. From 2003 to 2011 Richard was Chief Financial Officer and Head of Commercial Development. Since joining the Group in 1992 he has held a variety of senior financial and operational roles, including Chief Operating Officer of The Americas Hotels division and Finance Director of the Hotels business prior to the separation of Six Continents PLC in April 2003. He became Chief Executive in July 2011.

Board Contribution: Richard has extensive experience in finance and is responsible for the executive management of the Group and ensuring the implementation of Board strategy and policy.

Tom Singer, Chief Financial Officer

Appointed to the Board: September 26, 2011

Skills and Experience: Prior to joining the Group, Tom 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.

Board Contribution: Tom has extensive financial experience obtained from UK and international finance roles. He is responsible, together with the Board, for overseeing the financial operations of the Group and setting its financial strategy.

Kirk Kinsell, President, The Americas

Appointed to the Board: August 1, 2010

Skills and Experience: Kirk has 30 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. He became an Executive Committee member in September 2007 and was previously President, Europe, Middle East and Africa until June 2011.

Board Contribution: Kirk has vast experience in the hospitality industry and is responsible for the business development and performance of all the hotel brands and properties in The Americas region.

Tracy Robbins, Executive Vice President, Human Resources and Group Operations Support

Appointed to the Board: August 9, 2011

Skills and Experience: Tracy has over 27 years’ experience in human resources roles in service industries. She 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 Human Resources Director for Forte Hotels Group. She also spent seven years at Tesco PLC as a Retail Human Resources Manager where she implemented a culture change and restructuring strategy across 150 stores.

Board Contribution: Tracy has many years of experience in human resources and is responsible for global talent management, leadership development, employee reward strategy and implementation, organizational capability and operations support.

David Kappler, Senior Independent Non-Executive Director

Appointed to the Board: June 21, 2004

Skills and Experience: David is a fellow of the Chartered Institute of Management Accountants. Formerly Chief Financial Officer of Cadbury Schweppes plc and Non-Executive Chairman of Premier Foods plc. He also served as a Non-Executive Director of Camelot Group plc and HMV Group plc.

Board Contribution: David brings over 35 years’ knowledge and experience in financial reporting, risk management and internal financial controls. As Chairman of the Audit Committee he is responsible for leading the Committee to ensure internal controls and risk management systems are in place. David is Chairman of the Audit Committee.

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Other Appointments: David is a Non-Executive Director of Shire plc, a member of the Europe Advisory Council of Trilantic Capital Partners and Chairman of ADS2 Brands Limited.

Jennifer Laing, Independent Non-Executive Director

Appointed to the Board: August 25, 2005

Skills and Experience: Jennifer 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, she has over 30 years’ experience in advertising including 16 years with Saatchi & Saatchi.

Board Contribution: Jennifer has over 30 years’ experience in marketing and advertising and is Chairman of the Corporate Responsibility Committee, responsible for the Corporate Responsibility objectives and strategy. Jennifer is Chairman of the Corporate Responsibility Committee.

Other Appointments: Currently a Non-Executive Director of Hudson Global, Inc., a US human resources company and Premier Foods plc, a branded food producer.

Jonathan Linen, Independent Non-Executive Director

Appointed to the Board: December 1, 2005

Skills and Experience: Jonathan 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.

Board Contribution: Jonathan has over 25 years’ experience working in the financial and branded sectors and is a member of the Remuneration Committee.

Other Appointments: Currently a Non-Executive Director of Yum! Brands, Inc. and Modern Bank, N.A., a US private banking company. Jonathan also serves on a number of US councils and advisory boards.

Luke Mayhew, Independent Non-Executive Director

Appointed to the Board: July 1, 2011

Skills and Experience: Luke is currently a Non-Executive Director of Brambles Limited, a global provider of supply chain and information management solutions. Previously he served for 12 years on the Board of John Lewis Partnership, including as Managing Director of the Department Store Division. Luke also spent five years at British Airways PLC and seven years at Thomas Cook Group PLC in senior positions. He was also a Non-Executive Director of WH Smith PLC and Chairman of Pets at Home Group Limited.

Board Contribution: Luke has over 30 years’ experience in senior roles in the branded sector and is Remuneration Committee chairman at Brambles Limited and has been since 2006. As Chairman of the IHG Remuneration Committee he is responsible for setting the remuneration policy. Luke is Chairman of the Remuneration Committee.

Other Appointments: Currently a Non-Executive Director of Brambles Limited.

Dale Morrison, Independent Non-Executive Director

Appointed to the Board: June 1, 2011

Skills and Experience: A founding partner of TriPointe Capital Partners, a private equity firm. Dale was previously President and Chief Executive Officer of McCain Foods Limited and President and Chief Executive Officer of Campbell Soup Company.

Board Contribution: Dale has over 10 years’ experience in sales and marketing positions, and over 25 years’ experience in general management, having held senior positions in the branded foods sector.

Other Appointments: Currently a Non-Executive Director of International Flavors & Fragrances Inc., a producer of flavors and fragrances, and Chairman of Findus Group Limited, a frozen food company.

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Ying Yeh, Independent Non-Executive Director

Appointed to the Board: December 1, 2007

Skills and Experience: Ying 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. She was, for 15 years, a diplomat with the US Foreign Service in Hong Kong and Beijing until 1997.

Board Contribution: Ying has over 20 years’ experience gained from working in senior positions in global organizations across a broad range of sectors.

Other Appointments: Currently a Non-Executive Director of AB Volvo, a transportation related products and services company, ABB Ltd, a global leader in power and automation technologies and Samsonite International S.A., a travel luggage company.

Other members of the Executive Committee

In addition to the Executive Directors on the Board, the Executive Committee comprises:

Keith Barr, Chief Executive, Greater China

Joined the Group: 2000

Skills and Experience: Keith has over 20 years’ experience in the hospitality industry. He has held 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.

Key responsibilities: These include business development and performance of all the hotel brands and properties in the Greater China region.

Angela Brav, Chief Executive, Europe

Joined the Group: 1988

Skills and Experience: Angela has over 24 years’ experience in the hospitality industry, including hotel operations, franchise relations and technology solutions. She has held various senior roles in the Group’s US and European businesses prior to becoming Chief Operating Officer, North America. She was appointed Chief Executive, Europe in August 2011.

Key responsibilities: These include business development and performance of all the hotel brands and properties in Europe.

Larry Light, Chief Brands Officer

Joined the Group: 2012

Skills and Experience: Larry is one of the world’s leading brand consultants and was formerly Chief Marketing Officer for McDonald’s. Larry has held previous executive roles in media, marketing and advertising for BBDO Worldwide and Ted Bates Advertising and has made many academic contributions on branding principles and methods.

Key responsibilities: These include building on the Group’s strategy of developing and nurturing a powerful portfolio of preferred brands.

Eric Pearson, Executive Vice President and Chief Information Officer

Joined the Group: 1997

Skills and Experience: Eric has a background in engineering and technology and started his career at IHG over 15 years ago. Since then he has held various senior positions in the field of emerging technologies and global e-commerce. Eric most recently held the position of Chief Marketing Officer for The Americas region.

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Key responsibilities: These include global technology, including IT systems and information management, throughout the Group.

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

Joined the Group: 2002

Skills and Experience: Jan has 31 years’ experience in the hospitality industry. He held various senior positions in the Asia and Australasia region. He became Managing Director, Asia Australasia in June 2009. Following the amalgamation of our Middle East and Africa region with our Asia Australasia region, he became Chief Executive, Asia, Middle East and Africa in August 2011.

Key responsibilities: These include business development and performance of all the hotel brands and properties in Asia, Middle East and Africa.

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

Joined the Group: 2008

Skills and Experience: George is a solicitor and qualified to private practice in 1995. Prior to joining the Group, George spent 12 years with Imperial Chemical Industries PLC where he held a number of key positions including Deputy Company Secretary. He was appointed Executive Vice President, General Counsel and Company Secretary in January 2009.

Key responsibilities: These include corporate governance, risk management, insurance, regulatory, internal audit, legal, corporate responsibility and public affairs.

Steven Sickel, who has been an interim member of the Executive Committee, will return to his full-time role leading Distribution Relationship Marketing in June 2013.

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 2012, the aggregate compensation (including pension contributions, bonus and awards under the long term incentive plans) of the Directors and officers of the Company was $30.0 million. The aggregate amount set aside or accrued by the Company in fiscal 2012 to provide pension retirement or similar benefits for those individuals was $0.8 million. An amount of $8.6 million was charged in fiscal 2012 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 aggregate 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”), sets out the terms under which annual performance-related bonuses are awarded, and 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. In relation to 2012, a fixed percentage of the bonus was awarded in the form of shares with no voluntary deferral and no matching shares. Awards of deferred shares under the ABP 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 340,924 (2011 528,213) shares were awarded to participants.

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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 2012, conditional rights over 2,698,714 (2011 3,257,364) 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 2012 and no options were granted in the year under the plan. The latest date that any options currently outstanding 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 66 and pages F-47 to F-49.

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, Tom 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. Patrick Cescau was appointed as Non-Executive Chairman on January 1, 2013 following the retirement of David Webster on December 31, 2012. David Webster’s appointment as Non-executive Chairman, effective from January 1, 2004, was subject to six months’ notice. Patrick Cescau’s appointment as Non-Executive Chairman, effective from January 1, 2013, is subject to 12 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. 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
Tom Singer		September 26, 2011		12 months

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

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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.

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, 2012.

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 Audit and Remuneration Committee’s terms of reference.

Executive Committee

Its role is to consider and manage a range of important strategic and business issues facing the Group. Amongst many other things 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.

Governance: The Committee is chaired by the Chief Executive and usually meets monthly. Members of the Committee comprise the Executive Directors and the most senior executives from the Group. The Committee recommends to the Board significant decisions which require its approval.

Audit Committee

The Audit Committee is chaired by David Kappler who has recent and relevant financial experience. During 2012, the other Committee members were Graham Allan (until his retirement on June 15, 2012), Jennifer Laing and Dale Morrison. All Audit Committee members are independent.

The Committee’s key responsibilities are set out below:

• to review the integrity of the Company’s internal financial controls, internal controls and risk management systems, as well as review reports from management, Global Internal Audit (“GIA”) and the external auditors (Ernst & Young LLP (“E&Y”));

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

• to review and maintain the role and effectiveness of the internal audit function;

• to oversee the Group’s relations with our external auditors and make recommendations on their appointment, reappointment, removal and independence;

• to pre-approve the external auditor’s non-audit work and associated fees; and

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

The Committee was in place throughout 2012. The Committee had the opportunity to meet with the internal and external auditors on at least four occasions in the year without the presence of management.

The Board is satisfied that David Kappler has recent and relevant financial experience as a qualified accountant and former Chief Financial Officer of Cadbury Schweppes plc. At the invitation of the Committee, the Chief Executive, Chief Financial Officer, Head of GIA and external auditors attend meetings.

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E&Y have been the Group’s independent external auditors since 2003. To ensure the auditor’s independence is safeguarded, lead audit partners rotate every five years. In 2011 the lead audit partner was rotated. The Committee reviews the relationship the Group has with E&Y annually and for the year ended December 31, 2012, the Committee was satisfied with the independence, objectivity and effectiveness of the relationship with E&Y as the external auditors.

A key factor that may impair the external auditors’ independence is a lack of control over the volume of non-audit services. To address this issue all proposals for non-audit work are subject to pre-approved limits and additionally there is a prohibition on the undertaking of certain services. The Committee is aware of, and sensitive to, investor body guidelines on non-audit fees.

The Head of GIA is responsible for reporting and ensuring findings of internal audit work are brought to the attention of local management and the Committee as appropriate. During 2012 GIA operated in all the Group’s principal regions.

Remuneration Committee

The Remuneration Committee, chaired by Luke Mayhew, also comprises the following independent Non-Executive Directors: David Kappler, Jonathan Linen and Ying Yeh. 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.

The Board plans for its own succession with the support of the Committee. Independent consultants are engaged for all Non-Executive Director appointment searches. The Committee remains focused, on behalf of the Board, on Board succession planning for both Executive and Non-Executive Directors. By way of example, since 2008 eight Directors have joined the Board and seven have left. During 2012, the Committee also considered a more detailed review of the talent pool within the business, looking to future succession planning for Executive Directors.

Corporate Responsibility Committee

The Corporate Responsibility Committee is chaired by Jennifer Laing. During 2012 the other Committee members were Graham Allan (until his retirement on June 15, 2012), Luke Mayhew, Dale Morrison from November 2, 2012, Richard Solomons and Ying Yeh. The Corporate Responsibility Committee ensures that the Company has in place the right policies, management, measurement systems and key programs to enable it to deliver against its Corporate Responsibility strategy.

Disclosure 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.

Governance: The Committee is chaired by the Group’s Financial Controller. Members of the Committee comprise the Company Secretary and other senior executives. The Committee reports to the Chief Executive, the Chief Financial Officer and to the Audit Committee.

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General Purposes Committee

The Committee 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.

Governance: The 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 and the other Executive Directors are notified in advance of the business of the meeting.

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 85.

EMPLOYEES

The Group employed 7,981 people worldwide in the year ended December 31, 2012 whose costs were borne by the Group. Of these, 94% were employed on a full-time basis and 6% were employed on a part-time basis.

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

	Americas		Europe		AMEA		Greater China		Central		Total
2012		2,552		1,866		1,195		1,051		1,317		7,981
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

The costs of the above employees are borne by the Group. In addition, the Group employs 5,018 (2011 4,462, 2010 4,489) people who work in managed hotels or directly on behalf of the System Fund and whose costs are borne by those hotels or by the Fund.

When the Group’s entire estate is taken into account (including employees working in the franchised and managed hotels who are not employed by IHG) over 350,000 people worked globally across the Group’s brands as at December 31, 2012.

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, 2012, the minimum wage for individuals between 18 and under the age of 21 was £4.98 per hour and £6.19 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 2012, conditional rights over 2,698,714 shares were awarded to employees under the Long Term Incentive Plan and 340,924 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, 2013 were:

Directors	Ordinary shares of 14  194/329 pence			% of shares outstanding(3)
Patrick Cescau		Nil			N/A
David Kappler		1,308			N/A
Kirk Kinsell		405,281	(1)		0.14
Jennifer Laing		3,148			N/A
Jonathan Linen		6,853	(2)		N/A
Luke Mayhew		1,866			N/A
Dale Morrison		4,233	(2)		N/A
Tracy Robbins		256,126			N/A
Tom Singer		228,696			N/A
Richard Solomons		983,092			0.35
Ying Yeh		Nil			N/A
Officers
Keith Barr		127,756			N/A
Angela Brav		139,978			N/A
Larry Light		Nil			N/A
Eric Pearson		220,291			N/A
Jan Smits		216,272			N/A
George Turner		117,397			N/A

(1) 594 of which are held as ADSs.

(2) All of which are held as ADSs.

(3) 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, 2012 in options to subscribe for shares in InterContinental Hotels Group PLC are set out on page F-49.

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, 2013*					March 21, 2012					March 25, 2011
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
Southeastern Asset Management, Inc.		N/A		N/A			38,519,075		13.23	%		N/A		N/A
FIL Limited (Fidelity International)		N/A		N/A			13,850,157		4.76	%		N/A		N/A
Cedar Rock Capital Limited		14,923,417		5.56	%		14,923,417		5.13	%		14,923,417		5.13	%
JP Morgan Asset Management Holdings Inc.		N/A		N/A			N/A		N/A			14,592,363		5.01	%
Blackrock, Inc.		14,505,612		5.40	%		14,505,612		4.98	%		14,505,612		4.98	%
Capital Research and Management Company.		N/A		N/A			14,495,664		4.98	%		14,495,664		4.98	%
Legal & General Group Plc		11,336,113		4.22	%		11,336,113		3.89	%		N/A		N/A
Lloyds Banking Group plc		N/A		N/A			13,619,563		4.68	%		N/A		N/A

* The figures do not reflect the share consolidation on a 14 for 15 basis or the $0.5 billion share buyback program announced on August 7, 2012.

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, 2013, 16,715,367 ADSs equivalent to 16,715,367 ordinary shares, or approximately 6.23% of the total ordinary shares in issue, were outstanding and were held by 787 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, 2013, there were a total of 49,290 record holders of ordinary shares, of whom 328 had registered addresses in the United States and held a total of 1,353,107 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, 2012 up to March 21, 2013.

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 claims and 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.

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Notwithstanding the above, the Company notes the matters set out below. Litigation is inherently unpredictable and as at March 26, 2013, the outcome of these matters cannot be reasonably determined.

1. On April 20, 2012, the owner of a former hotel in China filed an arbitration petition with the China International Economic Trade Arbitration Committee against a Group company, Holiday Inns (China) Limited (‘‘HICL’’) seeking compensation for losses relating to the alleged mismanagement of the hotel. HICL subsequently filed a counterclaim. The Group intends to defend against this claim vigorously and pursue its counterclaim. As at March 26, 2013, it is not possible to determine whether any loss is probable or to estimate the amount of any loss.

2. On July 31, 2012, the UK’s Office of Fair Trading (the ‘‘OFT’’) issued a Statement of Objections alleging that the Company (together with Booking.com B.V. and Expedia, Inc.) infringed competition law in relation to the online supply of room only hotel accommodation by online travel agents.

The Company is cooperating fully with the investigation. The OFT has not yet reached a decision as to whether competition law has been breached.

3. On August 10, 2012, the former owner of a hotel in China filed an arbitration notice with the International Economic and Trade Arbitration Commission Shanghai Committee (“CIETAC Shanghai”) containing numerous allegations in connection with the termination of a hotel management agreement and seeking damages from a Group company, Inter-Continental Hotels Corporation (“IHC”). IHC has subsequently filed with the International Economic and Trade Arbitration Commission in Beijing (“CIETAC Beijing”) a parallel claim against the owner for breach of contract.

On March 22, 2013, CIETAC Shanghai ruled in the owner’s favor and granted an award of RMB 150,379,000 (approximately $24 million) against IHC. IHC’s parallel claim against the owner has not yet been determined. IHC intends to pursue all available means of appeal against CIETAC Shanghai’s ruling. IHC also intends to pursue vigorously its parallel claim in CIETAC Beijing. $24 million is included in contingent liabilities in Note 29 of the Consolidated Financial Statements in respect of the award against IHC.

4. On August 20, 2012, two plaintiffs filed a class action complaint in California against several online travel companies and hotel companies, including a Group company, InterContinental Hotels Group Resources, Inc. in connection with alleged anti-competitive practices. Several similar complaints have since been filed across the US by other plaintiffs alleging similar claims. All of these cases have been centralized in the Northern District of Texas, and consolidated for the purposes of pretrial proceedings (with the exception of cases which have been voluntarily dismissed). It is not possible to determine whether any loss is probable or to estimate the amount of any loss.

The Group intends to defend against these claims vigorously. As at March 26, 2013, the outcome of these matters cannot be reasonably determined.

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, 2012.

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.

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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
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
2012		17.25		11.57		27.82		17.99
	£ per ordinary share				$ per ADS
Year ended December 31,	High		Low		High		Low
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		14.97		11.57		23.67		17.99
Second quarter		15.73		13.95		24.70		21.84
Third quarter		17.25		15.02		27.02		23.16
Fourth quarter		17.10		15.24		27.82		24.50
2013
First quarter (through to March 21, 2013)		20.22		17.07		30.64		27.82
	£ per ordinary share				$ per ADS
Month ended	High		Low		High		Low
September 2012		16.50		15.96		26.72		25.37
October 2012		16.69		15.30		26.93		24.62
November 2012		16.91		15.24		27.16		24.50
December 2012		17.10		16.44		27.82		26.38
January 2013		18.80		17.07		29.74		27.82
February 2013		19.89		18.94		30.64		28.59
March 2013 (through to March 21, 2013)		20.22		19.47		30.36		29.32

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.

PLAN OF DISTRIBUTION

Not applicable.

SELLING SHAREHOLDERS

Not applicable.

DILUTION

Not applicable.

EXPENSES OF THE ISSUE

Not applicable.

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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.

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.

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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.

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 2013 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.

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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 2012, the Group updated its Euro Medium Term Note program (the “Program”) and issued a tranche of £400,000,000 3.875% notes due November 28, 2022.

1. On November 9, 2012, an amended and restated 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, as supplemented by the first supplemental trust deed dated July 7, 2011 between the same parties relating to the Program was amended 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).

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. Each Tranche of Notes will be issued on the terms and conditions set out in the updated Base Prospectus dated November 9, 2012 (the “Base Prospectus”) as amended and/or supplemented by a document setting out the final terms (the “Final Terms”) of such Tranche or in a separate prospectus specific to such Tranche (the “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% Notes due December 9, 2016 (the “2009 Issuance”).

Final Terms were issued pursuant to the Base Prospectus on November 26, 2012 in respect of the issue of a Tranche of £400,000,000 3.875% Notes due November 28, 2022 (the “2012 Issuance”).

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The Final Terms issued under each of the 2009 Issuance and the 2012 Issuance provide 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 each of the Final Terms dated December 7, 2009 relating to the 2009 Issuance and the Final Terms dated November 26, 2012 relating to the 2012 Issuance) on the Company’s website at www.ihgplc.com. The Notes issued pursuant to the 2009 Issuance and the Notes issued pursuant to the 2012 Issuance are referred to as “£250 million 6% bonds” and the “£400 million 3.875% bonds” respectively 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 or 2012.

3. On November 9, 2012, the Issuer and the Guarantors entered into a dealer agreement (the “Dealer Agreement”) with HSBC Bank PLC as arranger (the “Arranger”) and Citigroup Global Markets Limited, HSBC Bank PLC, Lloyds TSB Bank PLC, Merrill Lynch International, Mitsubishi UFJ Securities International PLC 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. The facility was undrawn at December 31, 2012.

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.

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.

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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 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 provisions of the Internal Revenue Code of 1986, as amended (the “Code”) known as the Medicare Contribution tax or the tax consequences to holders subject to special rules, such as

• certain financial institutions;

• insurance companies;

• dealers and traders in securities who use a mark-to-market method of tax accounting;

• persons holding ordinary shares or ADSs as part of a hedge, straddle, conversion transaction, integrated transaction or wash sale or persons entering into a constructive sale with respect to the ordinary shares or ADSs;

• 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;

• persons who acquired the Company’s 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.

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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”).

As used herein, a “US holder” is a beneficial owner of ordinary shares or ADSs who is for US federal income tax purposes (i) a citizen or individual resident of the US, (ii) a 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 Code, 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 (“HMRC”), 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. In practice, HMRC will also regard holders of ADSs as the beneficial owners of the ordinary shares represented by those ADSs (although case law has cast some doubt on this). The discussion below assumes that HMRC’s position is followed. 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 described 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 by US holders of American depositary shares. Such actions would also be inconsistent with the claiming of the preferential rates of tax, described below, for qualified dividend income. Accordingly, the availability of the preferential rates 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 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 (the “IRS”) as dividends.

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Subject to applicable limitations and the discussion above regarding concerns expressed by the US Treasury, dividends paid to certain non-corporate US holders will be taxable at the preferential rates applicable to long-term capital gain if the dividends constitute qualified dividend income. 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 these preferential rates.

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, or eligible for relief for allowable losses, 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.

The concept of ordinary residence is proposed to be abolished with effect from 6 April 2013.

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 amount realized and its tax basis in the ordinary shares or ADSs, each determined in US dollars. 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 capital gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. The deductibility of capital losses is subject to limitations.

PFIC Rules

The Company believes that it was not a PFIC for US federal income tax purposes for its 2012 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 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

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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 rates 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. If the Company were to be treated as a PFIC in any taxable year in which a US holder held ordinary shares or ADSs, a US holder may be required to file an annual report with the IRS 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 reportable 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 information reporting and 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. UK legislation does however provide for stamp duty (in the case of transfers) or SDRT to be 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 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.

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Following litigation on the subject, HMRC has accepted that it will no longer seek to apply the 1.5% SDRT charge when new shares are issued to a clearance service or depositary receipt system on the basis that the charge is not compatible with EU law. In HMRC’s view, the 1.5% SDRT or stamp duty charge will continue to apply to transfers of shares into a clearance service or depositary receipt system unless they are an integral part of an issue of share capital. This view is currently being challenged in further litigation. 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 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.

Most of the Group’s surplus funds are held in the United Kingdom or United States, although $7 million (2011 $2 million) is held in a country where repatriation is restricted as a result of foreign exchange regulations.

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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, whilst maximizing the amount of US dollars borrowed to reflect the predominant trading currency. At December 31, 2012, the Group held currency swaps with a principal of $415 million (2011 $415 million) and short dated foreign exchange swaps with principals of €75 million (2011 €75 million) and $170 million (2011 $nil).

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, 2012 or December 31, 2011.

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 $2.8 million (2011 $3.3 million, 2010 $3.5 million) and increase net assets by an estimated $1.8 million (2011 decrease of $10.4 million, 2010 decrease of $5.6 million). Similarly, a five cent fall in the euro: US dollar rate would reduce the Group’s profit before tax by an estimated $2.3 million (2011 $1.9 million, 2010 $1.4 million) and decrease net assets by an estimated $16.1 million (2011 $10.3 million, 2010 $8.2 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 in major currencies were fixed rate debt at December 31, 2012.

At December 31, 2012, the Group did not hold any interest rate swaps (2011 notional principals held of $100 million swapping floating for fixed).

Based on the year-end net debt position and given the underlying maturity profile of investments, borrowings and hedging instruments at that date, neither a one percentage point rise in US dollar, euro nor sterling interest rates would impact the annual net interest charge in the current or prior two years.

The tables on page 80 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 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, 2012

	Expected to mature before December 31,
	2013		2014		2015			2016			Thereafter			Total			Fair  value(i)
	($ million, except percentages)
Long-term debt:
Fixed rate public bonds 2016 (sterling)		—		—		—			403			—			403			456
Fixed rate payable									6.0	%		—			6.0	%
Fixed rate public bonds 2022 (sterling)		—		—		—			—			638			638			652
Fixed rate payable												3.9	%		3.9	%
Fixed rate lease debt (US dollar)		—		—		—			—			212			212			268
Fixed rate payable												9.7	%		9.7	%
Variable rate bank debt (New Zealand dollar)		—		—		5			—			—			5			5
Variable interest rate payable						4.7	%								4.7	%
	(local currency million, except percentages)
Currency swaps:
Principal receivable (sterling)		—		—		—			250			—			250			(19	)
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.

81

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, 2012 the Company received $624,329 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, 2012, 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, 2012. 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 significant 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.

83

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,
	2012		2011
	($ million)
Audit fees		4.6		3.7
Audit-related fees		2.1		1.8
Tax fees		0.5		0.7
Total		7.2		6.2

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		28,982,476
Month 2		1,749,286	£	13.97		0		28,982,476
Month 3		275,000	£	14.40		0		28,982,476
Month 4 (no purchases in this month)		0		0.00		0		28,982,476
Month 5 (no purchases in this month)		0		0.00		0		28,982,476
Month 6 (no purchases in this month)		0		0.00		0		29,084,373	*
Month 7 (no purchases in this month)		0		0.00		0		29,084,373
Month 8 (no purchases in this month)		0		0.00		0		29,084,373
Month 9 (no purchases in this month)		0		0.00		0		29,084,373
Month 10		1	£	16.63		0		27,217,301	†
Month 11		3,358,500	£	16.05		3,358,500		23,858,801
Month 12		2,235,460	£	16.55		785,460		23,073,341

* Reflects the resolution passed at the Company’s Annual General Meeting held on May 25, 2012.

† Reflects the resolution passed at the Company’s General Meeting held on October 8, 2012.

84

The Group’s current $500 million share repurchase program was announced on August 7, 2012. By March 21, 2013, 4,243,960 shares had been repurchased at an average price of 1,621 pence per share (approximately £68.8 million).

During fiscal 2012, 3,474,286 ordinary shares were purchased by the Company’s Employee Share Ownership Trust at prices ranging from 1,387 pence to 1,665 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 2012 is contained in the Company’s Annual Report and Financial Statements for the year ended December 31, 2012.

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, 2013 the Board consisted of the Chairman, independent at the time of his appointment, four Executive Directors and six 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, 2013 and throughout 2012 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

85

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 sterling and the US dollar amount of the declared dividend is translated into sterling at the prevailing exchange rate immediately prior to their announcement.

86

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, 2012, 2011 and 2010		F-5
Consolidated statement of comprehensive income for the years ended December 31, 2012, 2011 and 2010		F-6
Consolidated statement of changes in equity for the years ended December 31, 2012, 2011 and 2010		F-7
Consolidated statement of financial position for the years ended December 31, 2012 and 2011		F-11
Consolidated statement of cash flows for the years ended December 31, 2012, 2011 and 2010		F-12
Notes to the Consolidated Financial Statements		F-13
Schedule for the years ended December 31, 2012, 2011 and 2010
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 the Company (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. (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 March 29, 2012)
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 (incorporated by reference to Exhibit 4(a)(ii) of the InterContinental Hotels Group PLC Annual Report on Form 20-F (File No. 1-10409) dated March 29, 2012)
Exhibit 4(a)(iii)	Amended and Restated Trust Deed dated November 9, 2012 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
Exhibit 4(c)(i)	Tracy Robbins’ service contract dated August 9, 2011 (incorporated by reference to Exhibit 4(c)(i) of the InterContinental Hotels Group PLC Annual Report on Form 20-F (File No. 1-10409) dated March 29, 2012)
Exhibit 4(c)(ii)	Tom Singer’s service contract dated July 26, 2011 (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 March 29, 2012)
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)

87

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 September 26, 2012
Exhibit 4(c)(vi)	Rules of the InterContinental Hotels Group Annual Bonus Plan as amended on September 26, 2012
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 Tom Singer filed pursuant to 17 CFR 240.13a-14(a)
Exhibit 13(a)	Certification of Richard Solomons and Tom 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)

88

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, 2012 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, 2012, 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, 2012, 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, 2012, 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 statement of financial position of InterContinental Hotels Group PLC as of December 31, 2012 and 2011, and the related Consolidated income statement, Consolidated statement of comprehensive income, Consolidated statement of changes in equity and Consolidated statement of cash flows for each of the three years in the period ended December 31, 2012, and the financial statement schedule listed in the Index at Item 18. Financial Statements, and our report dated March 26, 2013 expressed an unqualified opinion thereon.

ERNST & YOUNG LLP

London, England

March 26, 2013

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 statement of financial position of InterContinental Hotels Group PLC as of December 31, 2012 and 2011, and the related Consolidated income statement, Consolidated statement of comprehensive income, Consolidated statement of changes in equity and Consolidated statement of cash flows for each of the three years in the period ended December 31, 2012. 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, 2012 and 2011, and the consolidated results of its operations and its consolidated cash flows for each of the three years in the period ended December 31, 2012, 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, 2012, 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 26, 2013 expressed an unqualified opinion thereon.

ERNST & YOUNG LLP

London, England

March 26, 2013

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, 333-126139 and 333-181334) of InterContinental Hotels Group PLC of the reference to our name in “Item 3. Key information” and our reports dated March 26, 2013, 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, 2012.

ERNST & YOUNG LLP

London, England

March 26, 2013

F-4

INTERCONTINENTAL HOTELS GROUP PLC

CONSOLIDATED INCOME STATEMENT

	Year ended December 31, 2012									Year ended December 31, 2011									Year ended December 31, 2010
	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)		1,835			—			1,835			1,768			—			1,768			1,628			—			1,628
Cost of sales		(772	)		—			(772	)		(771	)		—			(771	)		(753	)		—			(753	)
Administrative expenses		(363	)		(16	)		(379	)		(350	)		(9	)		(359	)		(331	)		(35	)		(366	)
Other operating income and expenses		8			(11	)		(3	)		11			46			57			8			35			43
		708			(27	)		681			658			37			695			552			—			552
Depreciation and amortization (Note 2)		(94	)		—			(94	)		(99	)		—			(99	)		(108	)		—			(108	)
Impairment (Note 2)		—			23			23			—			20			20			—			(7	)		(7	)
Operating profit (Note 2)		614			(4	)		610			559			57			616			444			(7	)		437
Financial income (Note 6)		3			—			3			2			—			2			2			—			2
Financial expenses (Note 6)		(57	)		—			(57	)		(64	)		—			(64	)		(64	)		—			(64	)
Profit before tax		560			(4	)		556			497			57			554			382			(7	)		375
Tax (Note 7)		(153	)		142			(11	)		(120	)		39			(81	)		(98	)		1			(97	)
Profit for the year from continuing operations		407			138			545			377			96			473			284			(6	)		278
Profit for the year from discontinued operations (Note 11)		—			—			—			—			—			—			—			2			2
Profit for the year		407			138			545			377			96			473			284			(4	)		280
Attributable to:
Equity holders of the parent		406			138			544			377			96			473			284			(4	)		280
Non-controlling interest		1			—			1			—			—			—			—			—			—
		407			138			545			377			96			473			284			(4	)		280
Earnings per ordinary share (Note 9)
Continuing operations:
Basic								189.5¢									163.7¢									96.5¢
Diluted								186.3¢									159.8¢									93.9¢
Total operations:
Basic								189.5¢									163.7¢									97.2¢
Diluted								186.3¢									159.8¢									94.6¢

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, 2012			Year ended December 31, 2011			Year ended December 31, 2010
	($ million)
Profit for the year		545			473			280
Other comprehensive income
Available-for-sale financial assets:
Gains on valuation		1			15			17
Losses reclassified to income on impairment		—			3			1
Cash flow hedges:
Losses arising during the year		—			—			(4	)
Reclassified to financial expenses		1			4			6
Defined benefit pension plans:
Actuarial gains/(losses), net of related tax charge of $1 million (2011 $13 million credit, 2010 $7 million credit)		—			(19	)		(38	)
Change in asset restriction on plans in surplus and liability in respect of funding commitments, net of related tax credit of $7 million (2011 $7 million, 2010 $10 million)		(18	)		(4	)		(38	)
Exchange differences on retranslation of foreign operations, including related tax credit of $3 million (2011 $3 million charge, 2010 $1 million credit)		24			(21	)		(4	)
Tax related to pension contributions		19			2			7
Other comprehensive income/(loss) for the year		27			(20	)		(53	)
Total comprehensive income for the year		572			453			227
Attributable to:
Equity holders of the parent		571			452			227
Non-controlling interest		1			1			—
		572			453			227

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, 2012		290			61			101		10		(27	)		(2,893	)		71			189		3,035			547			8		555
Profit for the year		—			—			—		—		—			—			—			—		544			544			1		545
Other comprehensive income:
Gains on valuation of available-for-sale financial assets		—			—			—		—		—			—			1			—		—			1			—		1
Amounts reclassified to financial expenses on cash flow hedges		—			—			—		—		—			—			1			—		—			1			—		1
Change in asset restriction on pension plans in surplus and liability in respect of funding commitments		—			—			—		—		—			—			—			—		(18	)		(18	)		—		(18	)
Exchange differences on retranslation of foreign operations		—			—			—		—		—			—			(1	)		25		—			24			—		24
Tax related to pension contributions		—			—			—		—		—			—			—			—		19			19			—		19
Total other comprehensive income		—			—			—		—		—			—			1			25		1			27			—		27
Total comprehensive income for the year		—			—			—		—		—			—			1			25		545			571			1		572
Issue of ordinary shares		1			1			9		—		—			—			—			—		—			10			—		10
Share capital consolidation		(19	)		—			—		—		—			—			—			—		—			—			—		—
Repurchase of shares		(4	)		(1	)		—		—		—			—			—			—		(106	)		(107	)		—		(107	)
Transfer to capital redemption reserve		—			—			—		1		—			—			—			—		(1	)		—			—		—
Transaction costs relating to shareholder return		—			—			—		—		—			—			—			—		(2	)		(2	)		—		(2	)
Purchase of own shares by employee share trusts		—			—			—		—		(84	)		—			—			—		—			(84	)		—		(84	)
Release of own shares by employee share trusts		—			—			—		—		63			—			—			—		(63	)		—			—		—
Equity-settled share-based cost		—			—			—		—		—			—			—			—		27			27			—		27
Tax related to share schemes		—			—			—		—		—			—			—			—		20			20			—		20
Equity dividends paid		—			—			—		—		—			—			—			—		(679	)		(679	)		—		(679	)
Share of reserve in equity accounted investment		—			—			—		—		—			—			—			—		5			5			—		5
Exchange adjustments		—			2			6		—		—			(8	)		—			—		—			—			—		—
At December 31, 2012		268			63			116		11		(48	)		(2,901	)		72			214		2,781			308			9		317

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, 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-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, 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-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 August 7, 2012, the Group announced a planned $1 billion return to shareholders comprising a $0.5 billion special dividend with share consolidation and a $0.5 billion share repurchase program. The share consolidation was approved on October 8, 2012 at a General Meeting (“GM”) of the Company and became effective on October 9, 2012 on the basis of 14 new ordinary shares of 14 ¹⁹⁴/₃₂₉ pence each for every 15 existing ordinary shares of 13 ²⁹/₄₇ pence each. The special dividend of 172.0¢ per share was paid to shareholders on October 22, 2012 at a total cost of $505 million. Under the authority granted by shareholders at the GM held on October 8, 2012 the share repurchase program commenced in November 2012 resulting in the repurchase of 4,143,960 shares in the period to December 31, 2012 for a total consideration of $107 million. Transaction costs relating to shareholder returns of $2 million, net of tax, have been charged to retained earnings.

No shares were repurchased in 2011 or 2010.

The authority given to the Company at the GM on October 8, 2012 to purchase its own shares was still valid at December 31, 2012. A resolution to renew the authority will be put to shareholders at the Annual General Meeting on May 24, 2013.

The Company no longer has an authorized share capital.

(ii) The share premium reserve and capital redemption reserve are not distributable. The share premium reserve has a balance of $116 million (2011 $101 million, 2010 $94 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 $48.0 million (2011 $26.5 million, 2010 $34.6 million) in respect of 1.8 million (2011 1.5 million, 2010 1.9 million) InterContinental Hotels Group PLC ordinary shares held by employee share trusts, with a market value at December 31, 2012 of $50 million (2011 $26 million, 2010 $37 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 in the 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, 2012 was $nil (2011 $nil, 2010 $4 million liability).

(vi) The currency translation reserve records the movement in exchange differences arising from the translation 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, 2012 was a $17 million net liability (2011 $36 million, 2010 $40 million).

The currency translation reserve includes a cumulative loss of $35 million relating to non-current assets classified as held for sale.

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, 2012			At December 31, 2011
	($ million)
ASSETS
Property, plant and equipment (Note 10)		1,056			1,362
Goodwill (Note 12)		93			92
Intangible assets (Note 13)		354			308
Investment in associates and joint ventures (Note 14)		84			87
Retirement benefit assets (Note 3)		99			21
Other financial assets (Note 15)		155			156
Non-current tax receivable		24			41
Deferred tax assets (Note 25)		204			106
Total non-current assets		2,069			2,173
Inventories (Note 16)		4			4
Trade and other receivables (Note 17)		422			369
Current tax receivable		31			20
Derivative financial instruments (Note 23)		2			3
Other financial assets (Note 15)		6			—
Cash and cash equivalents (Note 18)		195			182
Total current assets		660			578
Non-current assets classified as held for sale (Note 11)		534			217
Total assets (Note 2)		3,263			2,968
LIABILITIES
Loans and other borrowings (Note 22)		(16	)		(21	)
Trade and other payables (Note 19)		(709	)		(707	)
Provisions (Note 20)		(1	)		(12	)
Current tax payable		(54	)		(120	)
Total current liabilities		(780	)		(860	)
Loans and other borrowings (Note 22)		(1,242	)		(670	)
Derivative financial instruments (Note 23)		(19	)		(39	)
Retirement benefit obligations (Note 3)		(187	)		(188	)
Trade and other payables (Note 19)		(563	)		(497	)
Provisions (Note 20)		(1	)		(2	)
Deferred tax liabilities (Note 25)		(93	)		(97	)
Total non-current liabilities		(2,105	)		(1,493	)
Liabilities classified as held for sale (Note 11)		(61	)		(60	)
Total liabilities (Note 2)		(2,946	)		(2,413	)
Net assets		317			555
EQUITY
Equity share capital		179			162
Capital redemption reserve		11			10
Shares held by employee share trusts.		(48	)		(27	)
Other reserves		(2,901	)		(2,893	)
Unrealized gains and losses reserve		72			71
Currency translation reserve		214			189
Retained earnings		2,781			3,035
IHG shareholders’ equity		308			547
Non-controlling interest		9			8
Total equity		317			555

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, 2012			Year ended December 31, 2011			Year ended December 31, 2010
	($ million)
Profit for the year		545			473			280
Adjustments for:
Net financial expenses		54			62			62
Income tax charge		11			81			97
Depreciation and amortization		94			99			108
Impairment		(23	)		(20	)		7
Other exceptional operating items		27			(37	)		—
Gain on disposal of discontinued operations		—			—			(2	)
Equity-settled share-based cost		22			25			26
Other items		(2	)		—			1
Operating cash flow before movements in working capital		728			683			579
Increase in trade and other receivables		(50	)		(11	)		(35	)
Net change in loyalty program liability and System Fund surplus		57			66			10
Increase/(decrease) in other trade and other payables		26			(20	)		131
Utilization of provisions		(12	)		(19	)		(54	)
Retirement benefit contributions, net of cost		(104	)		(44	)		(27	)
Cash flows relating to exceptional operating items		(6	)		(32	)		(21	)
Cash flow from operations		639			623			583
Interest paid		(50	)		(56	)		(59	)
Interest received		2			1			2
Tax paid on operating activities		(119	)		(89	)		(64	)
Net cash from operating activities		472			479			462
Cash flow from investing activities
Purchase of property, plant and equipment		(44	)		(55	)		(62	)
Purchase of intangible assets		(84	)		(48	)		(29	)
Investment in other financial assets		(2	)		(50	)		(4	)
Investment in associates and joint ventures		(3	)		(41	)		—
Disposal of assets, net of costs		4			142			107
Proceeds from other financial assets		4			15			28
Tax paid on disposals		(3	)		(1	)		(4	)
Net cash from investing activities		(128	)		(38	)		36
Cash flow from financing activities
Proceeds from the issue of share capital		10			8			19
Purchase of own shares		(107	)		—			—
Purchase of own shares by employee share trusts		(84	)		(75	)		(53	)
Dividends paid to shareholders		(679	)		(148	)		(121	)
Transaction costs relating to shareholder returns		(2	)		—			—
Issue of long-term bonds		632			—			—
Decrease in other borrowings		(99	)		(119	)		(292	)
Net cash from financing activities		(329	)		(334	)		(447	)
Net movement in cash and cash equivalents in the year		15			107			51
Cash and cash equivalents at beginning of the year		182			78			40
Exchange rate effects		(2	)		(3	)		(13	)
Cash and cash equivalents at end of the year		195			182			78

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, 2012 were authorized for issue to the UK listing authorities in accordance with a resolution of the Directors on February 18, 2013. InterContinental Hotels Group PLC (the “Company”) is incorporated and domiciled in Great Britain and registered in England and Wales.

On March 22, 2013, the Group was subject to an arbitration award in China. As a consequence and as explained in Note 29 to the Consolidated Financial Statements, contingent liabilities include an amount of $24 million which was not included in the Consolidated Financial Statements issued to the UK listing authorities. The Consolidated Financial Statements for the year ended December 31, 2012, for issue on Form 20-F were approved by the Board for filing with the Securities and Exchange Commission on March 26, 2013.

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 was 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.

F-13

Changes in accounting policies

With effect from January 1, 2012, the Group has implemented the following amendments to accounting standards. Neither of these have had any impact on the Group’s financial performance or position during the year and there has been no requirement to restate prior year comparatives.

IFRS 7 (Amendment) “Financial Instruments: Disclosures”, requires additional disclosures about financial assets that have been transferred but not derecognized and about continuing involvement in derecognised assets.

IAS 12 (Amendment) “Income Taxes”, 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.

Segmental information

As explained in Note 2, an internal reorganization during 2011 resulted in a change to the Group’s reportable segments. Comparatives for 2010 were 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 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.

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.

F-14

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 at 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 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, in which case they are capitalized and amortized over the estimated useful life of the asset.

Management contracts

When assets are sold and the 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.

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.

F-15

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 their intended use, or sale, are capitalized as part of the asset cost. 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 or jointly 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 and other movements in the investee’s reserves. 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 recognized in 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 either financial income or expenses 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 defense 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 these 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 surpluses and deficits 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. 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 as set out below unless otherwise indicated, 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.

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 option to defer recognition of some actuarial gains and losses (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 impact of calculating the expected return on plan assets (after relevant asset restrictions) using the same interest rate as applied to discounting the benefit obligations is expected to result in a higher operating profit charge of approximately $3 million in 2013 compared with the 2012 charge under the current version of IAS 19.

IAS 28 (Amendment) “Investments in Associates and Joint Ventures”, which will be adopted by the Group from January 1, 2013, has been renamed as a consequence of the new IFRS 11 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 will be adopted by the Group 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 Group Financial Statements. Based on the preliminary analyzes performed, IFRS 10 is not expected to have any material impact on the investments held by the Group.

IFRS 11 “Joint Arrangements”, which will be adopted by the Group from January 1, 2013, eliminates the option to account for jointly controlled entities (“JCEs”) 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 Interests in Other Entities”, which will be adopted by the Group 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 Group Financial Statements.

IFRS 13 “Fair Value Measurement”, which is effective from January 1, 2013, establishes a single source of guidance under IFRS for fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value when fair value is required or permitted. Based on the preliminary analyzes performed, IFRS 13 is not expected to have a material impact on the Group’s Financial Statements.

IFRS 9 “Financial Instruments: Classification and Measurement”, which is effective from January 1, 2015, introduces new requirements for classifying and measuring financial assets and financial liabilities and, when finalized, will address hedge accounting and impairment of financial assets. The Group will assess the impacts when the final standard is issued.

Note: with the exception of IFRS 9, all of the above will be adopted by the Group with effect from January 1, 2013. IAS 28 (Amendment), IFRS 10, IFRS 11 and IFRS 12 have been endorsed for adoption by the EU with effect from January 1, 2014 and are therefore being adopted early by the Group.

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 = £0.63 (2011 $1 = £0.62, 2010 $1 = £0.65). In the case of the euro, the translation rate is $1 = €0.78 (2011 $1 = €0.72, 2010 $1 = €0.76).

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 = £0.62 (2011 $1 = £0.65, 2010 $1 = £0.64). In the case of the euro, the translation rate is $1 = €0.76 (2011 $1 = €0.77, 2010 $1 = €0.75).

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 2011, 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; 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 for 2010 were 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 activities and income taxes are managed on a group basis and are not allocated to reportable segments.

F-23

Segmental information

Year ended December 31, 2012

Revenue

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Franchised		541		91		18		3		—		653
Managed		97		147		152		89		—		485
Owned and leased		199		198		48		138		—		583
Central		—		—		—		—		114		114
		837		436		218		230		114		1,835

Segmental result

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Franchised		466			65			12			4			—			547
Managed		48			32			90			51			—			221
Owned and leased		24			50			6			45			—			125
Regional and central		(52	)		(32	)		(20	)		(19	)		(156	)		(279	)
Reportable segments’ operating profit		486			115			88			81			(156	)		614
Exceptional operating items (Note 5)		23			(4	)		(5	)		—			(18	)		(4	)
Operating profit		509			111			83			81			(174	)		610

	Group
	($ million)
Reportable segments’ operating profit		614
Exceptional operating items (Note 5)		(4	)
Operating profit		610
Net finance costs		(54	)
Profit before tax		556
Tax		(11	)
Profit for the year		545

All items above relate to continuing operations.

F-24

Year ended December 31, 2012

Assets and liabilities

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Segment assets		725			626			282			390			250			2,273
Non-current assets classified as held for sale		232			302			—			—			—			534
		957			928			282			390			250			2,807
Unallocated assets:
Non-current tax receivable																	24
Deferred tax assets																	204
Current tax receivable																	31
Derivative financial instruments																	2
Cash and cash equivalents																	195
Total assets																	3,263
Segment liabilities		(403	)		(249	)		(58	)		(61	)		(690	)		(1,461	)
Liabilities classified as held for sale		(61	)		—			—			—			—			(61	)
		(464	)		(249	)		(58	)		(61	)		(690	)		(1,522	)
Unallocated liabilities:
Current tax payable																	(54	)
Deferred tax liabilities																	(93	)
Loans and other borrowings																	(1,258	)
Derivative financial instruments																	(19	)
Total liabilities																	(2,946	)

Other segmental information

	Americas			Europe		AMEA			Greater China		Central			Group
	($ million)
Capital expenditure (see below)		25			19		6			7		76			133
Non-cash items:
Depreciation and amortization*		20			23		14			15		22			94
Reversal of previously recorded impairment		(23	)		—		—			—		—			(23	)
Write-off of software		—			—		—			—		18			18
Demerger liability released		—			—		—			—		(9	)		(9	)
Share-based payments cost		—			—		—			—		22			22
Share of profit of associates and joint ventures		—			—		(3	)		—		—			(3	)

* Included in the $94 million of depreciation and amortization is $31 million relating to administrative expenses and $63 million relating to cost of sales.

Reconciliation of capital expenditure

	Americas			Europe		AMEA		Greater China		Central		Group
	($ million)
Capital expenditure per management reporting		25			19		6		7		76		133
Timing differences		(1	)		—		—		2		—		1
Capital expenditure per the Financial Statements		24			19		6		9		76		134
Comprising additions to:
Property, plant and equipment		15			9		2		9		6		41
Non-current assets classified as held for sale		5			—		—		—		—		5
Intangible assets		2			8		4		—		70		84
Investments in associates and joint ventures		2			—		—		—		—		2
Other financial assets		—			2		—		—		—		2
		24			19		6		9		76		134

F-25

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
		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 (Note 5)		57
Operating profit		616
Net finance costs		(62	)
Profit before tax		554
Tax		(81	)
Profit for the year		473

All items above relate to continuing operations.

F-26

Year ended December 31, 2011

Assets and liabilities

	Americas			Europe			AMEA			Greater China			Central			Group
	($ million)
Segment assets		691			816			276			388			228			2,399
Non-current assets classified as held for sale		217			—			—			—			—			217
		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		(427	)		(247	)		(53	)		(54	)		(625	)		(1,406	)
Liabilities classified as held for sale		(60	)		—			—			—			—			(60	)
		(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-27

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-28

Year ended December 31, 2010

Other segmental information

	Americas		Europe		AMEA		Greater China		Central		Group
	($ million)
Capital expenditure		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.

Geographical information

	Year ended December 31,
	2012		2011		2010
	($ million)
Revenue:
United Kingdom		152		139		130
United States		769		740		706
People’s Republic of China (including Hong Kong)		238		210		182
Rest of World		676		679		610
		1,835		1,768		1,628

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, 2012		At December 31, 2011
	($ million)
Non-current assets:
United Kingdom		78		361
United States		590		559
France		329		328
People’s Republic of China (including Hong Kong)		333		331
Rest of World		257		270
		1,587		1,849

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-49 are audited, pages F-36 to F-44 are unaudited.

Staff

	Year ended December 31,
	2012		2011		2010
	($ million)
Costs:
Wages and salaries		547		550		535
Social security costs		44		43		34
Pension and other post-retirement benefits:
Defined benefit plans* (see F-31)		4		8		9
Defined contribution plans		22		22		19
		617		623		597

* Before exceptional items (see page F-31).

Average number of employees, including part-time employees:

	Year ended December 31,
	2012		2011		2010
Americas		2,552		2,895		3,309
Europe		1,866		1,574		1,206
Asia, Middle East and Africa		1,195		1,195		1,142
Greater China		1,051		1,000		964
Central		1,317		1,292		1,237
		7,981		7,956		7,858

The costs of the above employees are borne by IHG. In addition, the Group employs 5,018 (2011 4,462, 2010 4,489) people who work in managed hotels or directly on behalf of the System Fund and whose costs of $353 million (2011 $307 million, 2010 $282 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 598 (2011 545, 2010 500) employees, of which 119 (2011 125, 2010 140) are in the defined benefit section and 479 (2011 420, 2010 360) 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 allowances which will also close to future accrual from July 1, 2013. 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
	2012			2011			2010			2012			2011			2010			2012		2011		2010		2012			2011			2010
	($ million)
Current service costs		5			6			6			1			1			1			—		—		—		6			7			7
Interest cost on benefit obligation		25			28			25			9			10			11			1		1		1		35			39			37
Expected return on plan assets		(28	)		(29	)		(25	)		(9	)		(9	)		(10	)		—		—		—		(37	)		(38	)		(35	)
Operating profit before exceptional items		2			5			6			1			2			2			1		1		1		4			8			9
Exceptional items — curtailment gain		—			(28	)		—			—			—			—			—		—		—		—			(28	)		—
		2			(23	)		6			1			2			2			1		1		1		4			(20	)		9

The curtailment gain in 2011 arose 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.

The amounts recognized in the Consolidated statement of comprehensive income are:

	Pension plans																		Post-employment benefits								Total
	UK									US and other
	2012			2011			2010			2012			2011			2010			2012		2011			2010			2012			2011			2010
	($ million)
Actual return on plan assets		34			53			46			18			4			13			—		—			—			52			57			59
Less: expected return on plan assets		(28	)		(29	)		(25	)		(9	)		(9	)		(10	)		—		—			—			(37	)		(38	)		(35	)
Actuarial gains/(losses) on plan assets		6			24			21			9			(5	)		3			—		—			—			15			19			24
Actuarial (losses)/gains on plan liabilities		(3	)		(22	)		(49	)		(16	)		(26	)		(13	)		5		(3	)		(7	)		(14	)		(51	)		(69	)
Total actuarial gains/(losses)		3			2			(28	)		(7	)		(31	)		(10	)		5		(3	)		(7	)		1			(32	)		(45	)
Change in asset restriction and liability in respect of funding commitments*		(25	)		(11	)		(48	)		—			—			—			—		—			—			(25	)		(11	)		(48	)
		(22	)		(9	)		(76	)		(7	)		(31	)		(10	)		5		(3	)		(7	)		(24	)		(43	)		(93	)

* 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
	2012			2011			2012			2011			2012			2011			2012			2011
	($ million)
Retirement benefit assets
Fair value of plan assets		695			551			17			16			—			—			712			567
Present value of benefit obligations		(507	)		(471	)		(15	)		(12	)		—			—			(522	)		(483	)
Surplus in schemes		188			80			2			4			—			—			190			84
Asset restriction and liability in respect of funding commitments*		(91	)		(63	)		—			—			—			—			(91	)		(63	)
Total retirement benefit assets		97			17			2			4			—			—			99			21
Retirement benefit obligations
Fair value of plan assets		—			—			132			117			—			—			132			117
Present value of benefit obligations		(62	)		(54	)		(232	)		(221	)		(25	)		(30	)		(319	)		(305	)
Total retirement benefit obligations		(62	)		(54	)		(100	)		(104	)		(25	)		(30	)		(187	)		(188	)
Total fair value of plan assets		695			551			149			133			—			—			844			684
Total present value of benefit obligations		(569	)		(525	)		(247	)		(233	)		(25	)		(30	)		(841	)		(788	)

* 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 $2 million (2011 $4 million) relates to a defined benefit pension scheme in Hong Kong. Included within the “US and other” deficit is $2 million (2011 $1 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
	2012		2011		2010		2012		2011		2010		2012		2011		2010
	(%)
Wages and salaries increases		4.5		4.6		5.0		—		—		—		4.0		4.0		4.0
Pensions increases		3.0		3.1		3.5		—		—		—		—		—		—
Discount rate		4.5		4.7		5.3		3.5		4.1		5.2		3.5		4.1		5.2
Inflation rate		3.0		3.1		3.5		—		—		—		—		—		—
Healthcare cost trend rate assumed for next year:
-Pre 65 (ultimate rate reached in 2021)														9.0		9.5		10.0
-Post 65 (ultimate rate reached in 2024)														11.8		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 1.25% 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@ 2013 Non-Annuitant/Annuitant healthy tables for males and females.

F-32

Accordingly, assumed life expectancy at retirement age as follows:

	Pension plans
	UK				US
	2012		2011		2012		2011
	(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)		27		26		21		21
Future pensioners at 65 — female(ii)		30		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

Changes in assumptions used for determining retirement benefit costs and obligations may have a material impact on the income statement and the 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		1.4			20.7			0.2			7.2
Discount rate — 0.25% increase		(1.0	)		(19.1	)		(0.2	)		(6.8	)
Inflation rate — 0.25% increase		1.1			17.9			—			—
Inflation rate — 0.25% decrease		(0.6	)		(15.8	)		—			—
Mortality rate — one year increase		0.5			8.2			0.3			10.1

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, 2012 by approximately $2.4 million (2011 $2.8 million, 2010 $2.5 million).

	Pension plans												Post- employment benefits
	UK						US and other												Total
Movement in benefit obligation	2012			2011			2012			2011			2012			2011			2012			2011
	($ million)
Benefit obligation at January 1,		525			512			233			209			30			27			788			748
Current service cost		5			6			1			1			—			—			6			7
Members’ contributions		1			1			—			—			—			—			1			1
Interest expense		25			28			9			10			1			1			35			39
Benefits paid		(14	)		(13	)		(12	)		(13	)		(1	)		(1	)		(27	)		(27	)
Curtailment gain		—			(28	)		—			—			—			—			—			(28	)
Actuarial loss/(gain) arising in the year		3			22			16			26			(5	)		3			14			51
Exchange adjustments		24			(3	)		—			—			—			—			24			(3	)
Benefit obligation at December 31,		569			525			247			233			25			30			841			788
Comprising:
Funded plans		507			471			193			181			—			—			700			652
Unfunded plans		62			54			54			52			25			30			141			136
		569			525			247			233			25			30			841			788

F-33

	Pension plans												Post- employment benefits
	UK						US and other												Total
Movement in plan assets	2012			2011			2012			2011			2012			2011			2012			2011
	($ million)
Fair value of plan assets at January 1,		551			475			133			130			—			—			684			605
Company contributions		97			40			10			11			1			1			108			52
Members’ contributions		1			1			—			—			—			—			1			1
Benefits paid		(14	)		(13	)		(12	)		(13	)		(1	)		(1	)		(27	)		(27	)
Expected return on plan assets		28			29			9			9			—			—			37			38
Actuarial gain/(loss) arising in the year		6			24			9			(5	)		—			—			15			19
Exchange adjustments		26			(5	)		—			1			—			—			26			(4	)
Fair value of plan assets at December 31,		695			551			149			133			—			—			844			684

The plan assets are comprised as follows:

	2012				2011
	Value				Value
	($ million)		(%)		($ million)		(%)
UK pension plans
Liability matching investment funds		243		35		290		53
Bonds		232		33		74		13
Equities		62		9		93		17
Hedge funds		31		5		56		10
Cash and other		127		18		38		7
Total market value of assets		695		100		551		100
US pension plans
Equities		60		48		58		53
Fixed income		60		48		52		47
Other		4		4		—		—
Total market value of assets		124		100		110		100

The expected overall rates of return on assets, being 4.2% (2011 4.8%, 2010 5.9%) for the UK plan and 6.8% (2011 7.3%, 2010 7.5%) 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 3.5% (2011 3.3%, 2010 4.5%) for liability matching funds and bonds and 6.4% (2011 7.4%, 2010 8.9%) for equities and other return seeking assets. The UK plan is currently implementing a de-risking strategy which is resulting in a move out of return seeking assets into liability matching funds and bonds.

Funding commitments

The most recent actuarial valuation of the InterContinental Hotels UK Pension Plan was carried out as at March 31, 2012 and showed a deficit of £132 million on a funding basis. Under the recovery plan agreed with the trustees, the Group aims to eliminate this deficit by July 31, 2014 principally through additional Company contributions of £130 million. In respect of these additional Company contributions, £10 million was paid in July 2012, £45 million was paid in October 2012, £30 million is due for payment in July 2013, £15 million is due for payment in July 2014 and £30 million will be paid into a funding trust on release of a trustee charge over a hotel asset. The amount in the funding trust may be available for release to the plan on July 31, 2014 to the extent that a funding deficit remains at that time. The plan is formally valued every three years, or earlier with the agreement of the Company and trustees, and future valuations could lead to changes in the amounts payable by the Company.

Company contributions are expected to be $62 million in 2013, including known UK additional contributions of £30 million.

F-34

History of experience gains and losses

UK pension plans	2012			2011			2010			2009			2008
	($ million)
Fair value of plan assets		695			551			475			426			437
Present value of benefit obligations		(569	)		(525	)		(512	)		(461	)		(411	)
Surplus/(deficit) in the plans		126			26			(37	)		(35	)		26
Experience adjustments arising on plan liabilities		(3	)		(22	)		(49	)		(44	)		55
Experience adjustments arising on plan assets		6			24			21			(14	)		(57	)
US and other pension plans	2012			2011			2010			2009			2008
	($ million)
Fair value of plan assets		149			133			130			126			112
Present value of benefit obligations		(247	)		(233	)		(209	)		(197	)		(185	)
Deficit in the plans		(98	)		(100	)		(79	)		(71	)		(73	)
Experience adjustments arising on plan liabilities		(16	)		(26	)		(13	)		(13	)		3
Experience adjustments arising on plan assets		9			(5	)		3			14			(38	)
US post-employment benefits	2012			2011			2010			2009			2008
	($ million)
Present value of benefit obligations		(25	)		(30	)		(27	)		(20	)		(19	)
Experience adjustments arising on plan liabilities		5			(3	)		(7	)		(1	)		1

The cumulative amount of net actuarial losses recognized since January 1, 2004 in the Consolidated statement of comprehensive income is $284 million (2011 $285 million, 2010 $253 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.

F-35

Unaudited information on Directors’ emoluments

Key remuneration principles

IHG’s executive remuneration principles are designed to drive delivery of strategic objectives 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 relocations.

Remuneration policy summary

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.

Business strategy is the driver of our reward structure. The business strategy is explained on page 16.

Individual reward elements for all Executive Directors and Executive Committee members are designed to provide the appropriate balance between fixed remuneration and variable “at risk” reward, linked to both the performance of the Group and the achievements of the individual.

The following table shows a summary of the individual elements of remuneration provided to the Executive Directors. The Annual Performance Plan (“APP”) replaces the Annual Bonus Plan (“ABP”) for senior executives from 2013.

Fixed remuneration	Variable remuneration
Salary Pension Benefits	Annual Performance Plan formerly Annual Bonus Plan	50% cash and 50% shares deferred for three years. Linked to individual and company achievement using performance measures relating to IHG’s strategy. Prior to 2013, linked to individual and company achievement using performance measures relating to: — Individual performance rating — Earning before interest and tax (“EBIT”). Measured over one year.
	Long Term Incentive Plan (“LTIP”)	Share awards vest after three years if performance conditions are met: — 25% relative net rooms growth; — 25% relative revenue per available room (“RevPAR”) growth; and — 50% relative total shareholder return (“TSR”) relative to a competitor group. Measured over three years.

The APP and LTIP are explained further on pages F-38 to F-41.

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The usual pay mix for Executive Directors is as follows at target and maximum levels:

Reward element	% of total remuneration if target achieved			% of total remuneration if maximum achieved
Salary		32	%		20	%
APP		36	%		40	%
LTIP		32	%		40	%

The Remuneration Committee also reviews the balance of fixed and variable remuneration provided to the wider executive population, to ensure these are appropriate relative to the Executive Directors and to market practice.

Salary and benefits

The salary for each Executive Director is reviewed annually and fixed for 12 months from April 1. Salary is the only element of remuneration which is pensionable. Salary recognizes the market value of the role and the individual’s skill, performance and experience.

In reviewing salary changes, the Remuneration Committee considers:

• business and individual performance;

• current remuneration against internal and external benchmarks; and

• average salary increases for the wider IHG workforce.

When external benchmarking is used, the comparator groups are chosen having regard to:

• size — market capitalization, turnover, profits and the number of employees;

• diversity and complexity of the business;

• geographical spread of the business; and

• relevance to the hotel industry.

In addition to salary, benefits are provided to Executive Directors, who are all based in the UK or US, in accordance with local market practice.

Executive Director annual base salaries for 2013 and 2012:

Directors	2013		2013		2012		2012
	(£)		($)		(£)		($)
Richard Solomons		739,000				721,000
Kirk Kinsell*				774,000				755,400
Tracy Robbins		424,300				412,000
Tom Singer		550,800				540,000

* Kirk Kinsell is paid in US dollars and his annual base salary for 2012 and 2013 is shown in US dollars above. The equivalent sterling values calculated using an exchange rate of $1 = £0.63 are: 2012 — £476,562 and 2013 £488,296.

Pensions

IHG operates the following pension arrangements in which the Executive Directors participate:

• for UK executives, the executive section of the InterContinental Hotels UK Pension Plan, which has a defined benefit section (“UK DB Plan”) and a defined contribution section (“UK DC Plan”);

• for UK executives, InterContinental Executive Top-Up Scheme (“ICETUS”);

• for US executives, the DC US 401(k) Plan and the DC Deferred Compensation Plan; and

• for executives outside the UK and US, the InterContinental Hotels Group International Savings and Retirement Plan, or other local plans.

A cash allowance in lieu of pension benefits is offered for UK executives.

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Following an extensive UK pensions review and subsequent consultations with affected employees, it was announced on September 29, 2011 that the UK DB Plan would close to future accrual for existing members with effect from July 1, 2013. The UK DB 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.

As part of the consultation with employees and the plan trustees about these changes, it was agreed that the Enhanced Early Retirement Facility (“EERF”) would be retained. This provides an option for plan members, with the Company’s agreement, to retire within five years of normal retirement age on accrued benefits without reduction. The EERF terms require an executive to obtain the consent of the Company; the consent is discretionary but should not be unreasonably refused. The level of plan funding provides for this facility. The Remuneration Committee considered that the reduction in risk and expense achieved by the closing of the UK DB Plan justified the cost of retaining this facility for existing active members.

The Executive Directors participate as follows:

Richard Solomons participates in the UK DB Plan and the ICETUS on the same basis as other senior UK-based executives. ICETUS 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.

Richard Solomons is eligible for the EERF, which is available to all members of the UK DB Plan. The following table sets out Richard Solomons’ defined benefit pension arrangement at December 31, 2012.

Accrued value of annual pension if retired December 31, 2012	Accrued value of annual pension at December 31, 2012, assuming retirement at normal retirement age (October 9, 2021)
£245,180, of which:	£377,200, of which:
£46,770 is funded	£71,950 is funded
£198,410 is unfunded	£305,250 is unfunded

The increase in the accrued value of the pension in 2012 arises principally from Richard Solomons’ salary review when appointed Chief Executive in July 2011.

Tracy Robbins participated in the executive UK DC Plan on the same basis as other senior UK-based executives until March 2012; from April 2012 she received a cash allowance in lieu of pension benefits.

Tom Singer does not participate in any pension plan and receives a cash allowance in lieu of pension benefits.

Kirk Kinsell participates in the DC US 401(k) Plan and the DC Deferred Compensation Plan.

Further details on the Executive Directors’ pension arrangements are shown on page F-46.

Annual Bonus Plan and Annual Performance Plan

Purpose

The purpose of the ABP (which applied in 2012) and APP (which will apply from 2013 onwards) is to:

• Drive and reward annual performance against both financial and non-financial metrics.

• Align individuals and teams with key strategic priorities.

• Align short-term annual performance with strategy to generate long-term returns to shareholders.

• Take into account personal performance of individuals.

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Structure

Awards under the 2012 ABP are linked to individual performance and EBIT.

Individual performance is based on achievement of specific individual objectives linked directly to strategic objectives, and an assessment against leadership competencies and behaviors.

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 the year to determine an overall performance rating (“OPR”). The OPR determines 30% of the annual award outcome. The objectives and OPRs are reviewed and agreed by the Remuneration Committee.

EBIT performance determines 70% of the annual award outcome. In 2012 threshold payout was 90% of target performance, with maximum payout at 110% of target performance.

Achievement of target performance results in an award of 115% of salary and the maximum annual award an Executive Director can receive in any one year is 200% 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.

			Award as % of salary
Measure	Key performance indicator		Target		Max
Financial		EBIT (70%)		80.5		161
Individual.		OPR (30%)		34.5		69
Total for 2012				115.0		200	*

* Combined EBIT and OPR payout subject to a maximum of 200% of base salary.

2012 EBIT achieved was 101.7% of target for the year. Based on this performance, the following table shows the level of 2012 awards, of which 50% was paid in cash and 50% in deferred shares that will vest after three years.

Outcome for 2012

Directors	EBIT % award		OPR % award		Total award as % of salary
Richard Solomons		93.8		43.1		136.9
Kirk Kinsell		93.8		34.5		128.3
Tracy Robbins		93.8		51.8		145.6
Tom Singer		93.8		34.5		128.3

Structure in 2013

During 2012, a review of the annual incentive arrangements for the Executive Directors was carried out. As a result of this review, the APP is being launched with effect from 2013. It will apply to the Executive Directors, the Executive Committee and other senior executives from 2013, and roll-out to the rest of our eligible corporate employees is planned for 2014.

The APP is being introduced in the context of the broader growth agenda and more closely aligns the annual incentive with IHG’s strategic priorities. The APP will require the achievement of challenging goals in 2013 before the target award is payable.

Achievement of target performance results in an award of 115% of salary and the maximum annual award an Executive Director can receive in any one year is 200% of salary.

A combination of global and regional targets will be used.

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Long Term Incentive Plan

Purpose

The purpose of the LTIP is to:

• Drive and reward delivery of sustained long-term performance on measures that are aligned with the interests of shareholders.

Structure and outcomes

The LTIP allows Executive Directors and other eligible executives to receive share awards, subject to the achievement of performance targets 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.

The performance targets for the 2013/15 cycle are:

• cumulative annual growth in net rooms (25% of the award);

• cumulative annual like-for-like RevPAR growth (25% of the award); and

• IHG’s TSR relative to the Dow Jones Global Hotels index (“DJGH”) (50% of the award).

These performance measures are also used in the 2011/13 and 2012/14 LTIP cycles, granted in 2011 and 2012 respectively. The maximum awards for the 2013/15 cycle also remains consistent being 205% of base salary for the Executive Directors.

Growth in net rooms and RevPAR are measured on a relative basis against the comparator group, comprising the following 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 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 growth 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.

After testing the performance conditions set on grant, the Remuneration Committee will review the vesting outcomes of the net 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.

For the 2010/12 LTIP cycle, the performance measures were 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.

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The specific vesting performance conditions and, where relevant, position as at December 31, 2012 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 — % of salary			Outcome / potential vesting outcomes
2010/2012 cycle
TSR	Growth equal to the DJGH index	Growth exceeds the index by 8% per year or more		20	%		100	%		50	%		102.5	%	Growth exceeded index by 15% per year.
EPS	Growth of 5% per year	Growth of 15% per year or more		20	%		100	%		50	%		102.5	%	Growth of 21.7% per year.
Total vesting outcome															100% of maximum award.
2011/2013 cycle
Net rooms growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	Improved performance needed to achieve threshold vesting.
RevPAR growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	Between threshold and maximum vesting if current performance maintained.
TSR	Growth equal to the DJGH index	Growth exceeds the index by 8% per year or more		20	%		100	%		50	%		102.5	%	Maximum vesting if current performance maintained.
2012/2014 cycle
Net rooms growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	Between threshold and maximum vesting if current performance maintained.
RevPAR growth	Average of the comparator group	1st in the comparator group		20	%		100	%		25	%		51.25	%	Between threshold and maximum vesting if current performance maintained.
TSR	Growth equal to the DJGH index	Growth exceeds the index by 8% per year or more		20	%		100	%		50	%		102.5	%	Maximum vesting if current performance maintained.

(i) Vesting between threshold and maximum occurs on a straight-line basis.

Clawback in incentive plans

For awards made from January 2012, the ABP, APP and LTIP allow the Remuneration Committee discretion to claw back unvested share awards in the following circumstances:

• misconduct that causes significant damage or potential damage to IHG’s prospects, finances or brand reputation; and/or

• actions that lead to material mis-statement or restatement of accounts.

This feature helps to ensure alignment between rewards and shareholder returns.

F-41

Executive shareholding requirement

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 all shares earned (net of any share sales required to meet personal tax liabilities) until the guideline shareholding requirement is achieved.

The following table shows the guideline and actual shareholdings of the Executive Directors:

Directors	Guideline shareholding as % of salary		Shares held outright as % of salary(i)		ABP deferred share awards as % of salary(ii)		LTIP share awards as % of salary(iii)		Total shares and awards as % of salary(iv)
Richard Solomons(v)		300		763		153		693		1,609
Kirk Kinsell		200		557		180		776		1,513
Tracy Robbins		200		355		167		706		1,228
Tom Singer(vi)		200		66		—		715		781

Percentages are based on share price of 1,707.0 pence per share as at December 31, 2012.

(i) Shares held outright by each Executive Director with no restrictions.

(ii) ABP deferred share awards subject to risk of forfeiture if employment ceases.

(iii) LTIP share awards subject to achievement of corporate performance targets.

(iv) Includes shares held outright, ABP deferred shares and LTIP share awards.

(v) Excludes share options held by Richard Solomons, details of which can be found on page F-49.

(vi) Tom Singer joined in 2011 and did not qualify for the 2011 ABP deferred share award.

Share capital

Return of share capital

Background

In October 2012, the Company paid a special dividend to its shareholders. This was accompanied by a share consolidation in order to maintain comparability (as far as possible) of the share price before and after the payment of the special dividend. In addition, the Company commenced a share repurchase program in November 2012.

Implications for outstanding LTIP awards

LTIP award holders were not entitled to receive the special dividend. The effect of the share consolidation was broadly to preserve the value of their awards (subject to normal market fluctuations), so no adjustment was necessary to the number of shares to which awards related.

With regard to the LTIP performance targets, consideration was given by the Remuneration Committee as to whether awards needed to be adjusted in relation to the EPS measure for the 2010/12 LTIP cycle, so that it remained economically equivalent to the target before the share consolidation took place. It was concluded that the maximum award target would have been exceeded by a significant margin even taking such adjustment into account and therefore no adjustment to the performance targets was required.

No adjustment was required to the TSR targets under the 2010/12, 2011/13 and 2012/14 LTIP cycles because the special dividend and share consolidation did not result in IHG’s TSR being impacted (excluding any market fluctuations).

No adjustment was required to the net rooms or RevPAR targets as these did not relate to the share capital of the Company.

Implications for outstanding ABP deferred share awards

ABP award holders, other than Executive Directors and Executive Committee members, hold conditional awards and are not eligible to receive dividends on their awards prior to vesting. They were similarly not entitled to receive the special dividend. The effect of the share consolidation was broadly to preserve the value of their awards (subject to normal market fluctuations), so no adjustment was necessary to the number of shares to which the awards related.

F-42

Executive Committee members hold forfeitable shares, rather than conditional awards (subject to one exception). Accordingly, they received the special dividend and their share awards were subject to the share consolidation.

Kirk Kinsell holds one forfeitable share award and one conditional share award (upon which dividend equivalents are paid in order to ensure economic parity with the rest of the Executive Committee). In order to achieve equality of treatment for Kirk Kinsell, his conditional award was adjusted to place him in the same position as if he had held a forfeitable award, and therefore he received the special dividend and his share award was subject to the share consolidation, in the same way as other Executive Committee members.

Implications for outstanding executive share options

Executive share option holders were not entitled to receive the special dividend. The effect of the share consolidation was broadly to preserve the value of their awards (subject to normal market fluctuations), so no adjustment was made to the number of shares to which the options related.

Share repurchase program

In relation to the share repurchase program, the effect on LTIP awards, ABP deferred shares and share options will be to broadly preserve the value of those awards. No adjustments are required to LTIP performance targets for the same reasons as stated above.

Use of share capital in incentive plans

No awards or grants over shares were made during 2012 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.

Non-Executive Directors’ pay policy and structure

Non-Executive Directors are paid a fee which is agreed by the Executive Directors and the Chairman of the Board, 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 2012 an increase of approximately 3% for the Non-Executive Directors was agreed from January 1, 2013. This increase is broadly in line with anticipated salary increases for executive and senior management employees across the wider organization.

Annual fee rates for 2013 and 2012 are as follows:

Non-Executive Directors	Role	Jan 1, 2013		Jan 1, 2012
		(£)		(£)
David Webster(i)	Chairman of the Board		—		406,000
Patrick Cescau(ii)	Chairman of the Board		400,000		—
David Kappler	Senior Independent Director and Chairman of Audit Committee		108,500		105,060
Luke Mayhew	Chairman of Remuneration Committee		91,000		88,230
Jennifer Laing	Chairman of Corporate Responsibility Committee		80,000		77,520
Others	Non-Executive Director		68,500		66,300

(i) David Webster retired as Chairman on December 31, 2012.

(ii) Patrick Cescau was appointed Chairman on January 1, 2013.

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Service contracts

Notice periods

The Remuneration Committee’s policy is for all Executive Directors to have rolling contracts with a notice period of 12 months. All Executive Directors 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.

Termination

No provisions for compensation for termination following change of control, nor for liquidated damages of any kind upon termination in any circumstances, are included in the current Directors’ contracts. There are no provisions in Executive Directors’ contracts for making a payment in lieu of notice. Instead the parties will rely on common law to assess what, if any, damages may be payable for any loss resulting from termination in breach of contract (subject to the duty to mitigate any loss). In the event of an early termination of an Executive Director’s contract, the policy is to seek to minimize any liability.

Non-executive directorships of other companies

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. Therefore, Executive Directors are 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 would generally be authorized to retain the fees received.

Current Executive Directors do not hold any non-executive directorships of any other company.

Non-Executive Director appointments

Non-Executive Directors have letters of appointment. Patrick Cescau’s appointment as Non-Executive Chairman, effective from January 1, 2013, is subject to 12 months’ notice.

Current Directors’ contracts

Executive Directors	Date of original appointment(i)	Notice period
Richard Solomons	February 10, 2003	12 months
Kirk Kinsell	August 1, 2010	12 months
Tracy Robbins	August 9, 2011	12 months
Tom Singer	September 26, 2011	12 months
Non-Executive Directors
Patrick Cescau	January 1, 2013	12 months
David Kappler	June 21, 2004	N/A
Jennifer Laing	August 25, 2005	N/A
Jonathan Linen	December 1, 2005	N/A
Luke Mayhew	July 1, 2011	N/A
Dale Morrison	June 1, 2011	N/A
Ying Yeh	December 1, 2007	N/A

(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.

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 57 to 61.

F-44

Audited information on Directors’ emoluments

Directors’ remuneration in 2012

The following table sets out the remuneration paid or payable to the Directors in respect of the year to December 31, 2012.

	Base salaries and fees				Performance payments(i)				Benefits(ii)				Total emoluments excluding pensions
	2012		2011		2012		2011		2012		2011		2012		2011
	(£ thousand)
Executive Directors
Richard Solomons(iii)		716		616		494		512		48		20		1,258		1,148
Kirk Kinsell(iv)		474		449		306		360		663		334		1,443		1,143
Tracy Robbins(v)		409		159		300		145		141		39		850		343
Tom Singer(vi)		540		142		826		—		181		46		1,547		188
Non-Executive Directors
David Webster(vii)		406		406		—		—		12		1		418		407
Graham Allan(viii)		31		65		—		—		—		1		31		66
David Kappler		105		103		—		—		2		2		107		105
Jennifer Laing		78		76		—		—		3		—		81		76
Jonathan Linen		66		65		—		—		64		53		130		118
Luke Mayhew(ix)		88		43		—		—		2		—		90		43
Dale Morrison(x)		66		38		—		—		16		13		82		51
Ying Yeh		66		65		—		—		11		6		77		71
Former Directors(xi)		—		674		—		756		1		43		1		1,473
Total		3,045		2,901		1,926		1,773		1,144		558		6,115		5,232

(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-47. Tom Singer’s performance payment includes a cash payment of £480,000 which he received in March 2012 to compensate him for incentives from his previous employer that he had to forgo.

(ii) Benefits for Executive Directors 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. Benefits for Non-Executive Directors include, but are not limited to, travel and accommodation expenses relating to attendance at Board and Committee meetings.

(iii) Richard Solomons was promoted to Chief Executive on July 1, 2011.

(iv) Kirk Kinsell received base salary of $750,800 which equates to the figure in the above table, using an exchange rate of $1 = £0.63. Benefits incorporate the cost of expatriate benefits related to his international assignment prior to taking up his Board appointment as President, The Americas, on June 13, 2011.

(v) Tracy Robbins was appointed as a Director on August 9, 2011. Her benefits include receipt of a cash allowance in lieu of pension contributions of £117,700.

(vi) Tom Singer was appointed as a Director on September 26, 2011. His benefits include receipt of a cash allowance in lieu of pension contributions of £162,000.

(vii) David Webster retired as Chairman of the Board on December 31, 2012.

(viii) Graham Allan retired as a Director on June 15, 2012.

(ix) Luke Mayhew was appointed as a Director on July 1, 2011.

(x) Dale Morrison was appointed as a Director on June 1, 2011.

(xi) 2011 amounts relate to Andrew Cosslett, James Abrahamson and Ralph Kugler, all of whom ceased to be Directors in 2011. Sir Ian Prosser retired as a Director on December 31, 2003. However, he had an ongoing healthcare benefit of £1,326 during the year.

F-45

Directors’ pension benefits

The following information relates to the pension arrangements provided for Richard Solomons under the executive UK DB Plan and the unfunded ICETUS.

The executive UK DB 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 dependents’ pensions on death.

When benefits would otherwise exceed a member’s lifetime or annual allowance under the post-April 2012 pensions regime, these benefits are limited in the InterContinental Hotels UK Pension Plan, but the balance is provided instead by ICETUS.

The UK DB Plan will close to future accruals for existing members with effect from July 1, 2013. ICETUS will also close to future accruals with effect from July 1, 2013.

The following table sets out Richard Solomons’ pension benefits under the UK DB Plan:

	(£)
Directors’ contributions in the year(i)		35,000
Transfer value of accrued benefits at January 1, 2012		6,999,800
Transfer value of accrued benefits at December 31, 2012		8,272,500
Increase in transfer value over the year, less Directors’ contributions(ii)		1,237,700
Absolute increase in accrued pension(iii) (per annum)		72,900
Increase in accrued pension(iv) (per annum)		63,500
Accrued pension at December 31, 2012(v) (per annum)		377,200
Age at December 31, 2012 (years)		51

(i) Contributions paid in 2012 by Mr Solomons under the terms of the plans were 5% of full pensionable salary.

(ii) The increase in the transfer value of accrued benefits for Richard Solomons arises principally from the increase in salary resulting from his appointment as Chief Executive in July 2011.

(iii) The absolute increase in accrued pension during 2012.

(iv) The increase in accrued pension during 2011, excluding any increase for inflation.

(v) Accrued pension is that which would be paid annually on retirement at 60, based on service to December 31, 2012.

Tracy Robbins participated in the executive UK DC Plan until March 2012. This 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 cash allowance in lieu of pension benefits);

• life assurance cover of four times pensionable salary; and

• lump sum contributions payable in the event of ill health.

From April 2012, as a result of the reduction in the Lifetime Allowance, contributions (including potential contributions payable in the event of ill health) ceased and the full value of the company matching contributions was paid as a cash allowance; life assurance cover of four times pensionable salary continued to be provided.

Employer contributions to the UK DC Plan made for Tracy Robbins amounted to £5,000. In addition, Tracy Robbins received a cash allowance in lieu of pension contributions of £117,700.

F-46

Tom Singer does not participate in any pension plan and therefore received a cash allowance in lieu of pension contributions of £162,000; life assurance cover of four times pensionable company salary was also provided.

Kirk Kinsell has retirement benefits provided via the US 401(k) Plan for employees of Six Continents Hotels, Inc. and the US Deferred Compensation Plan (“DCP”). The US 401(k) Plan 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.

Contributions made by and in respect of, Kirk Kinsell in the US plans are⁽ⁱ⁾:

	(£)
Directors’ contributions to DCP in 2012		191,498
Directors’ contributions to US 401(k) in 2012		14,195
Company contribution to DCP in 2012		103,620
Company contribution to US 401(k) in 2012		6,309
Age at December 31, 2012 (years)		57

(i) Sterling values have been calculated using an exchange rate of $1 = £0.63.

Annual Bonus Plan deferred share awards

Directors’ pre-tax share interests during the year were as set out below:

Directors	Financial year on which performance is based for award(i)		ABP awards held at Jan 1, 2012		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, 2012(ii)		Planned vesting date		Value based on share price of 1,707 pence at Dec 31, 2012 (£)
Richard Solomons		2008		66,549				2.23.09		472.6		66,549		2.23.12		1,412.7		940,138
		2009		—
		2010		32,295				2.21.11		1,417.0										30,142		2.21.14		514,524
		2011				36,838		2.20.12		1,391.0										34,382		2.20.15		586,901
Total				98,844		36,838														64,524				1,101,425
Kirk Kinsell		2008		41,427				2.23.09		472.6		41,427		2.23.12		1,412.7		585,239
		2009		—
		2010		27,375				2.21.11		1,417.0										25,550		2.21.14		436,139
		2011				26,360		2.20.12		1,391.0										24,602		2.20.15		419,956
Total				68,802		26,360														50,152				856,095
Tracy Robbins		2008		33,132				2.23.09		472.6		33,132		2.23.12		1,412.7		468,056
		2009		—
		2010		20,377				2.21.11		1,417.0										19,018		2.21.14		324,637
		2011				22,889		2.20.12		1,391.0										21,363		2.20.15		364,666
Total				53,509		22,889														40,381				689,303
Tom Singer(iii)		2010		—
		2011				—
Total				—		—														—				—

(i) For financial year 2008, the award was based on Group EBIT, net annual rooms additions and individual performance measures. For financial year 2009, no annual incentive award was paid. For financial year 2010, the award was based on Group EBIT and individual performance measures. For financial year 2011, the award was based on Group EBIT and individual performance measures.

(ii) InterContinental Hotels Group PLC 13 ²⁹/₄₇p Ordinary Shares were subject to a share consolidation effective from October 9, 2012. For every 15 Existing Ordinary Shares held at 6.00pm on October 8, 2012, shareholders received 14 New Ordinary Shares of 14 ¹⁹⁴/₃₂₉p each and a Special Dividend of 108.4 pence per Existing Ordinary Share. As a consequence, ABP awards held at December 31, 2012 have been reduced accordingly.

(iii) Tom Singer joined the Company and was appointed a Director on September 26, 2011 and did not participate in the 2011 ABP.

All Executive Directors participated in the ABP during the year ended December 31, 2012.

F-47

Special share awards

Details of a special share award which vested during the year ended December 31, 2012 is set out below:

Director	Awards held at Jan 1, 2012		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, 2012		Planned vesting date	Value based on share price of 1,707 pence at Dec 31, 2012 (£)
Tom Singer(i)		46,635				9.27.11		1,055.0		46,635		9.26.12		1,630.0		760,151
Total		46,635		—														—			—

(i) As part of his recruitment terms, Tom Singer received a special share award to compensate for incentives forgone from his previous employer, which vested one year from his appointment as a Director.

Long Term Incentive Plan awards

The awards made in respect of cycles ending on December 31, 2011, 2012, 2013 and 2014 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, 2011, 73.9% of the award vested on February 15, 2012. In respect of the cycle ending on December 31, 2012, the Company out-performed the DJGH index in TSR by 15 percentage points and achieved 21.7% per annum adjusted EPS growth. Accordingly, 100% of the award vested on February 20, 2013.

Directors	End of year to which performance is based for award (Dec 31)(i)		Maximum LTIP awards held at Jan 1, 2012		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, 2012		Maximum value based on share price of 1,707 pence at Dec 31, 2012 (£)
Richard Solomons		2011		173,096				4.3.09		604.0		127,917		1,387.5		1,774,848		2.15.12
		2012		101,818				4.8.10		1,053.0								2.20.13		101,818		1,738,033
		2013		87,234				4.8.11		1,269.0								2.19.14		87,234		1,489,084
		2014				103,722		4.5.12		1,425.0								2.18.15		103,722		1,770,535
Total				362,148		103,722														292,774		4,997,652
Kirk Kinsell		2011		132,256				4.3.09		604.0		97,737		1,387.5		1,356,101		2.15.12
		2012		75,411				4.8.10		1,053.0								2.20.13		75,411		1,287,266
		2013		72,872				4.8.11		1,269.0								2.19.14		72,872		1,243,925
		2014				68,463		4.5.12		1,425.0								2.18.15		68,463		1,168,663
Total				280,539		68,463														216,746		3,699,854
Tracy Robbins		2011		92,657				4.3.09		604.0		68,473		1,387.5		950,063		2.15.12
		2012		55,873				4.8.10		1,053.0								2.20.13		55,873		953,752
		2013		55,248				4.8.11		1,269.0								2.19.14		55,248		943,083
		2014				59,270		4.5.12		1,425.0								2.18.15		59,270		1,011,739
Total				203,778		59,270														170,391		2,908,574
Tom Singer		2012		69,952				9.27.11		1,055.0								2.20.13		69,952		1,194,081
		2013		78,696				9.27.11		1,055.0								2.19.14		78,696		1,343,341
		2014				77,684		4.5.12		1,425.0								2.18.15		77,684		1,326,066
Total				148,648		77,684														226,332		3,863,488
Former Directors
Andrew Cosslett(iii)		2011		226,834				4.3.09		604.0		167,630		1,387.5		2,325,866		2.15.12
		2012		80,403				4.8.10		1,053.0								2.20.13		80,403		1,372,479
		2013		22,906				4.8.11		1,269.0								2.19.14		22,906		391,005
Total				330,143		—														103,309		1,763,484

(i) All details of performance targets in relation to the awards made in respect of cycles ending on December 31, 2012, 2013 and 2014 are provided on page F-41.

F-48

(ii) This award was based on performance to December 31, 2011 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 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.

(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 periods.

Share options

Between 2003 and 2005, grants of options were made under the IHG Executive Share Option Plan. No price was paid for the grant of these options. The performance conditions that applied to these options were satisfied when they became exercisable. No executive share options have been granted since 2005.

Directors	Ordinary shares under option												Weighted average option price at Dec 31, 2012 (pence)		Option price (pence)
	Options held at Jan 1, 2012			Lapsed during the year		Exercised during the year		Share price on date of exercise		Options held at Dec 31, 2012
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
Kirk Kinsell		77,110	(i)				77,110		1,577.63							494.17
		32,040	(ii)				32,040		1,577.63							619.83
Total		109,150			—		109,150				—

(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, 2012 was 1,707.0 pence and the range during the year was 1,157.0 pence to 1,725.0 pence per share.

The gain made by Directors in aggregate on the exercise of options during the year 2012 was £1,142,334 (2011 £nil).

Note 4 — Auditor’s remuneration paid to Ernst & Young LLP

	Year ended December 31,
	2012		2011		2010
	($ million)
Group audit fees		2.8		1.9		1.9
Audit fees in respect of subsidiaries		1.5		1.5		1.6
Tax fees		0.5		0.7		2.1
Interim review fees		0.3		0.3		0.3
Other services pursuant to legislation		0.2		0.4		0.3
Other		1.9		1.4		1.7
		7.2		6.2		7.9

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-49

Note 5 — Exceptional items

	Year ended December 31,
	2012			2011			2010
	($ million)
Continuing operations
Exceptional operating items
Administrative expenses:
Litigation provision(i)		—			—			(22	)
Resolution of commercial dispute(ii)		—			(37	)		—
Pension curtailment gain(iii)		—			28			—
Holiday Inn brand relaunch(iv)		—			—			(9	)
Reorganization and related costs(v)		(16	)		—			(4	)
		(16	)		(9	)		(35	)
Other operating income and expenses:
(Loss)/gain on disposal of hotels (Note 11)		(2	)		37			27
Write-off of software (Note 13)		(18	)		—			—
Demerger liability released(vi)		9			—			—
VAT refund(vii)		—			9			—
Gain on sale of other financial assets(viii)		—			—			8
		(11	)		46			35
Impairment:
Impairment charges:
Property, plant and equipment (Note 10)		—			(2	)		(6	)
Other financial assets (Note 15)		—			(3	)		(1	)
Reversals of previously recorded impairment:
Property, plant and equipment (Note 10)		23			23			—
Associates (Note 14)		—			2			—
		23			20			(7	)
		(4	)		57			(7	)
Tax
Tax on exceptional operating items		1			(4	)		1
Exceptional tax credit(ix)		141			43			—
		142			39			1
		138			96			(6	)
Discontinued operations
Gain on disposal of assets (Note 11)
Tax credit(x)		—			—			2
		—			—			2
		138			96			(4	)

The above items are treated as exceptional by reason of their size or nature.

(i) Related to a lawsuit filed against the Group in The Americas region, for which the final balance was paid in March 2012.

(ii) Related to the settlement of a prior period commercial dispute in the Europe region.

(iii) Related to the closure of the UK defined benefit pension scheme to future accrual with effect from July 1, 2013.

(iv) 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.

(v) Arises from a reorganization of the Group’s support functions together with a restructuring within the AMEA region. In 2010, primarily related to the closure of certain corporate offices together with severance costs arising from a review of the Group’s cost base.

F-50

(vi) Release of a liability no longer required relating to the demerger of the Group from Six Continents PLC.

(vii) Arose in the United Kingdom and relates to periods prior to 1996.

(viii) Related to the gain on sale of an investment in the AMEA region.

(ix) Represents the recognition of $104 million of deferred tax assets, principally relating to pre-existing overseas tax losses, whose value has become more certain as a result of a change in law and the resolution of prior period tax matters, together with the associated release of $37 million of provisions. In 2011 related to a $30 million revision of the estimated tax impacts of an internal reorganization completed in 2010, together with the release of $13 million of provisions. In 2010 a tax charge of $7 million arose relating to this reorganization, comprising the recognition of deferred tax assets of $24 million for capital losses and other deductible amounts, offset by tax charges of $31 million, together with a release of provisions of $7 million.

(x) In 2010, related to tax refunded in respect of a prior year sale.

Note 6 — Finance costs

	Year ended December 31,
	2012		2011		2010
	($ million)
Financial income
Interest income on deposits		2		1		2
Unwinding of discount on other financial assets		1		1		—
		3		2		2
Financial expenses
Interest expense on borrowings		37		42		40
Interest rate swaps fair value transferred from equity		1		4		6
Finance charge payable under finance leases		19		18		18
		57		64		64

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 $2 million (2011 $1 million, 2010 $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-51

Note 7 — Tax

	Year ended December 31,
	2012			2011			2010
	($ million)
Income tax
UK corporation tax at 24.5% (2011 26.5%, 2010 28.0%):
Current period		22			30			21
Adjustments in respect of prior periods(i)		(34	)		(25	)		(29	)
		(12	)		5			(8	)
Foreign tax(ii):
Current period		170			98			122
Benefit of tax reliefs on which no deferred tax previously recognized		(31	)		(16	)		(13	)
Adjustments in respect of prior periods(ii)		(27	)		(65	)		(23	)
		112			17			86
Total current tax		100			22			78
Deferred tax:
Origination and reversal of temporary differences		8			82			47
Changes in tax rates		(2	)		(2	)		(2	)
Adjustments to estimated recoverable deferred tax assets		(105	)		(12	)		(36	)
Adjustments in respect of prior periods(i)		10			(9	)		8
Total deferred tax		(89	)		59			17
Total income tax charge for the year		11			81			95
Further analyzed as tax relating to:
Profit before exceptional items		153			120			98
Exceptional items (Note 5):
Exceptional operating items		(1	)		4			(1	)
Exceptional tax credit(iii)		(141	)		(43	)		—
Gain on disposal of discontinued operations		—			—			(2	)
		11			81			95
Further analyzed as tax relating to:
Continuing operations		11			81			97
Discontinued operations — gain on disposal of assets		—			—			(2	)
		11			81			95

(i) Includes $37 million (2011 $39 million, 2010 $7 million) of exceptional credits 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.

(ii) Represents corporate income taxes on profit taxable in foreign jurisdictions, a significant proportion of which relates to the Group’s US subsidiaries.

(iii) Represents the recognition of $104 million of deferred tax assets, principally relating to pre-existing overseas tax losses, whose value has become more certain as a result of a change in law and the resolution of prior period tax matters, together with the associated release of $37 million of provisions. In 2011 related to a $30 million revision of the estimated tax impacts of an internal reorganization completed in 2010, together with the release of $13 million of provisions. In 2010 a tax charge of $7 million arose elating to this reorganization, comprising the recognition of deferred tax assets of $24 million for capital losses and other deductible amounts, offset by tax charges of $31 million, together with a release of provisions of $7 million.

F-52

Reconciliation of tax charge, including gain on disposal of assets

	Total(i)									Before exceptional items(ii)
				Year ended December 31,
	2012			2011			2010			2012			2011			2010
				(%)
UK corporation tax at standard rate		24.5			26.5			28.0			24.5			26.5			28.0
Non-deductible expenditure and non-taxable income		2.0			1.8			4.1			1.0			2.6			4.2
Net effect of different rates of tax in overseas businesses		9.7			9.0			9.4			9.7			9.8			9.3
Effect of changes in tax rates		(0.3	)		(0.5	)		(0.5	)		(0.1	)		(0.4	)		(0.7	)
Benefit of tax reliefs on which no deferred tax previously recognized		(5.5	)		(2.9	)		(3.7	)		(5.5	)		(3.2	)		(3.6	)
Effect of adjustments to estimated recoverable deferred tax assets		(19.0	)		(2.2	)		(9.7	)		(0.2	)		(0.3	)		(2.3	)
Adjustment to tax charge in respect of prior periods		(9.7	)		(18.1	)		(11.8	)		(2.4	)		(12.1	)		(9.1	)
Other		0.3			1.0			—			0.4			1.3			—
Exceptional items and gain on disposal of assets		—			—			9.4			—			—			—
		2.0			14.6			25.2			27.4			24.2			25.8

(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 $122 million (2011 $90 million, 2010 $68 million) comprises $119 million (2011 $89 million, 2010 $64 million) paid in respect of operating activities and $3 million (2011 $1 million, 2010 $4 million) paid in respect of investing activities.

Tax paid represents an effective rate of 22% (2011 16%, 2010 18%) on total profits and is lower than the effective income statement tax rate of 27% 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.

UK corporation tax of $6 million was paid in the year in settlement of prior period liabilities. UK corporation tax liabilities are not expected to arise in respect of 2012 or for a number of years thereafter due to expenses and associated tax losses attributable principally to employment matters, in particular additional shortfall contributions to the UK pension plan (see Funding commitments on page F-34).

Tax risks, policies and governance

Information concerning the Group’s tax governance can be found in the Taxation section of the Operating Results section on page 45.

Note 8 — Dividends paid and proposed

	Year ended December 31,						Year ended December 31,
	2012		2011		2010		2012		2011		2010
	(cents per share)						($ million)
Paid during the year:
Final (declared for previous year)		39.0		35.2		29.2		113		102		84
Interim		21.0		16.0		12.8		61		46		37
Special		172.0		—		—		505		—		—
		232.0		51.2		42.0		679		148		121
Proposed (not recognized as a liability at December 31):
Final		43.0		39.0		35.2		115		113		101

F-53

The final dividend of 27.7 pence (43.0 cents converted at the closing exchange rate on February 15, 2013) is proposed for approval at the Annual General Meeting (“AGM”) on May 24, 2013 and is payable on the shares in issue at March 22, 2013.

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,
	2012				2011				2010
	Continuing operations		Total		Continuing operations		Total		Continuing operations		Total
Basic earnings per ordinary share
Profit available for equity holders ($ million)		544		544		473		473		278		280
Basic weighted average number of ordinary shares (millions)		287		287		289		289		288		288
Basic earnings per ordinary share (cents)		189.5		189.5		163.7		163.7		96.5		97.2
Diluted earnings per ordinary share
Profit available for equity holders ($ million)		544		544		473		473		278		280
Diluted weighted average number of ordinary shares (millions)		292		292		296		296		296		296
Diluted earnings per ordinary share (cents)		186.3		186.3		159.8		159.8		93.9		94.6

	Year ended December 31,
	2012						2011						2010
	Continuing operations			Total			Continuing operations			Total			Continuing operations			Total
Adjusted earnings per ordinary share
Profit available for equity holders ($ million)		544			544			473			473			278			280
Adjusting items (Note 5):
Exceptional operating items ($ million)		4			4			(57	)		(57	)		7			7
Tax on exceptional operating items ($ million)		(1	)		(1	)		4			4			(1	)		(1	)
Exceptional tax credit ($ million)		(141	)		(141	)		(43	)		(43	)		—			—
Gain on disposal of discontinued operations ($ million)		—			—			—			—			—			(2	)
Adjusted earnings ($ million)		406			406			377			377			284			284
Basic weighted average number of ordinary shares (millions)		287			287			289			289			288			288
Adjusted earnings per ordinary share (cents)		141.5			141.5			130.4			130.4			98.6			98.6
Adjusted diluted earnings per ordinary share
Adjusted earnings ($ million)		406			406			377			377			284			284
Diluted weighted average number of ordinary shares (millions)		292			292			296			296			296			296
Adjusted diluted earnings per ordinary share (cents)		139.0			139.0			127.4			127.4			95.9			95.9

F-54

	2012		2011		2010
	(millions)
Diluted weighted average of ordinary shares is calculated as:
Basic weighted average number of ordinary shares		287		289		288
Dilutive potential ordinary shares — employee share options		5		7		8
		292		296		296

Note 10 — Property, plant and equipment

	Land and buildings			Fixtures, fittings and equipment			Total
				($ million)
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	)
Year ended December 31, 2012
Cost
At January 1, 2012		1,237			917			2,154
Additions		8			33			41
Net transfers to non-current assets classified as held for sale		(265	)		(99	)		(364	)
Reclassification to intangible assets		—			(25	)		(25	)
Disposals		—			(12	)		(12	)
Exchange and other adjustments		15			10			25
At December 31, 2012		995			824			1,819
Depreciation and impairment
At January 1, 2012		(174	)		(618	)		(792	)
Provided		(11	)		(46	)		(57	)
Net transfers to non-current assets classified as held for sale		16			42			58
Reclassification to intangible assets		—			2			2
Impairment reversals (see below)		23			—			23
Disposals		—			11			11
Exchange and other adjustments		—			(8	)		(8	)
At December 31, 2012		(146	)		(617	)		(763	)
Net book value at December 31, 2012		849			207			1,056
Net book value at December 31, 2011		1,063			299			1,362
Net book value at January 1, 2011		1,335			355			1,690

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.

F-55

In 2012, a previously recorded impairment charge relating to a North American hotel was reversed in full following a re-assessment of its recoverable amount, based on the market value of the hotel as determined by an independent professional property valuer.

Of the impairment reversal in 2011, $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). 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, 2012 was $187 million (2011 $190 million).

No borrowing costs were capitalized during the current or prior year.

Charges over one hotel totaling $89 million exist as security provided to the Group’s pension plans.

Note 11 — Assets sold, held for sale and discontinued operations

Assets sold

During the year ended December 31, 2012, the Group sold an interest in a hotel in the Europe region.

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 related 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.

	Year ended December 31,
	2012			2011			2010
				($ million)
Consideration
Current year disposals:
Cash consideration, net of costs paid		4			142			109
Management contract value		—			2			5
		4			144			114
Net assets disposed of		(6	)		(107	)		(87	)
Prior year disposals:
Tax		—			—			2
(Loss)/gain on disposal of assets		(2	)		37			29
Analyzed as:
(Loss)/gain on disposal of hotel assets from continuing operations (Note 5)		(2	)		37			27
Gain on disposal of assets from discontinued operations (Note 5)		—			—			2
		(2	)		37			29
Net cash inflow
Current year disposals:
Cash consideration, net of costs paid		4			142			109
Tax		—			(1	)		(6	)
Prior year disposals:
Costs paid		—			—			(2	)
Tax		(3	)		—			2
		1			141			103

F-56

Assets held for sale

Two hotels, the InterContinental New York Barclay and the InterContinental London Park Lane and one associate investment met the held for sale criteria of IFRS 5 at December 31, 2012. The InterContinental New York Barclay was held for sale at December 31, 2011.

	Year ended December 31,
	2012		2011
	($ million)
Assets and liabilities held for sale
Non-current assets classified as held for sale:
Property, plant and equipment		524		217
Associates		10		—
		534		217
Liabilities classified as held for sale:
Deferred tax (Note 25)		61		60

Discontinued operations

The results of discontinued operations comprise gains arising from prior year hotel disposals of $nil (2011 $nil, 2010 $2 million) and do not impact on segmental results.

	Year ended December 31,
	2012		2011		2010
			(cents)
Earnings per ordinary share from discontinued operations
Basic		—		—		0.7
Diluted		—		—		0.7

Cash flows attributable to discontinued operations were $nil (2011 $nil, 2010 $2 million).

F-57

Note 12 — Goodwill

	Year ended December 31,
	2012			2011
	($ million)
Cost
At January 1,		233			233
Exchange adjustments		1			—
At December 31,		234			233
Impairment
At January 1, and December 31,		(141	)		(141	)
Net book value at December 31,		93			92
Net book value at January 1,		92			92

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,
	2012		2011		2012		2011
	($ million)
Asia Australasia franchised and managed operations		93		92		93		92
Americas managed operations		141		141		—		—
		234		233		93		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 the 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, 2012, the recoverable amount of the CGU has been assessed based on the approved budget for 2013 and strategic plans covering a five-year period, a perpetual growth rate of 3.5% (2011 3.5%) and a discount rate of 14.3% (2011 13.9%).

Impairment was not required at either December 31, 2012 or December 31, 2011 and management believe that the carrying value of the CGU would only exceed its recoverable amounts in the event of highly unlikely changes in the key assumptions.

Americas goodwill

Goodwill relating to The Americas managed operations was impaired in full in 2009. As goodwill impairment cannot be reversed, there is no sensitivity around any assumptions that could lead to further impairment adjustments.

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Note 13 — Intangible assets

	Software			Management contracts			Other intangibles			Total
	($ million)
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	)
Year ended December 31, 2012
Cost
At January 1, 2012		252			231			138			621
Additions		70			—			14			84
Reclassification from property, plant and equipment		25			—			—			25
Disposals		(21	)		—			(3	)		(24	)
Exchange and other adjustments		(1	)		4			2			5
At December 31, 2012		325			235			151			711
Amortization and impairment
At January 1, 2012		(138	)		(116	)		(59	)		(313	)
Provided		(17	)		(10	)		(10	)		(37	)
Reclassification from property, plant and equipment		(2	)		—			—			(2	)
Disposals		2			—			3			5
Exchange and other adjustments		(8	)		—			(2	)		(10	)
At December 31, 2012		(163	)		(126	)		(68	)		(357	)
Net book value at December 31, 2012		162			109			83			354
Net book value at December 31, 2011		114			115			79			308
Net book value at January 1, 2011		83			125			58			266

Software disposals in 2012 include an exceptional write-off of $18 million resulting from a re-assessment of the ongoing value of elements of the technology infrastructure.

Borrowing costs of $0.3 million (2011 $0.4 million) were capitalized during the year in respect of software projects.

The weighted average remaining amortization period for management contracts is 19 years (2011 20 years).

F-59

Note 14 — Investment in associates and joint ventures

	Associates			Joint ventures			Total
	($ million)
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	)
Year ended December 31, 2012
Cost
At January 1, 2012		60			30			90
Reclassification		4			(4	)		—
Additions		—			2			2
Transfer to non-current assets classified as held for sale		(10	)		—			(10	)
Share of profit/(loss)		3			—			3
Dividends		(3	)		—			(3	)
Share of reserve movement		5			—			5
At December 31, 2012		59			28			87
Impairment
At January 1, 2012 and December 31, 2012		(3	)		—			(3	)
Net book value at December 31, 2012		56			28			84
Net book value at December 31, 2011		57			30			87
Net book value at January 1, 2011		43			—			43

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
	2012			2011			2012		2011			2012			2011
	($ million)
Share of statement of financial position
Current assets		22			9			1		3			23			12
Non-current assets		59			70			27		27			86			97
Current liabilities		(6	)		(7	)		—		—			(6	)		(7	)
Non-current liabilities		(11	)		(15	)		—		—			(11	)		(15	)
Non-controlling interests		(8	)		—			—		—			(8	)		—
Net assets		56			57			28		30			84			87
Share of revenue and profit
Revenue		30			28			—		—			30			28
Profit/(loss)		3			2			—		(1	)		3			1
Related party transactions
Revenue from related parties		5			5			—		—			5			5
Amounts owed by related parties		2			1			—		—			2			1
Loans from related parties		—			(2	)		—		—			—			(2	)

F-60

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, 2012		At December 31, 2011
	($ million)
Current
Loans and receivables		6		—
Non-current
Equity securities available-for-sale		112		112
Loans and receivables		43		44
		155		156

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, 2012, $18 million (2011 $15 million) were listed securities and $94 million (2011 $97 million) unlisted; $59 million (2011 $61 million) were denominated in US dollars, $24 million (2011 $23 million) in Hong Kong dollars and $29 million (2011 $28 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 the International Private Equity and Venture Capital Valuation Guidelines, using either the earnings multiple or net assets methodology as appropriate. Listed equity share valuations are based on observable market prices. Dividend income from available-for-sale equity securities of $5 million (2011 $11 million, 2010 $8 million) is reported as other operating income and expenses in the Consolidated income statement.

Loans and receivables consist of trade deposits and restricted cash which are held at amortized cost. A deposit of $37 million was made in 2011 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 $11 million (2011 $10 million); the discount will unwind to the income statement within financial income over the period to repayment. Restricted cash of $29 million (2011 $27 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, 2012			Year ended December 31, 2011
	($ million)
At January 1,		(25	)		(26	)
Provided — exceptional items		—			(3	)
Reclassification		(1	)		3
Amounts written off		—			1
At December 31		(26	)		(25	)

The amount provided as an exceptional item relates in 2011 to an available-for-sale equity investment and arose as a result of a significant and prolonged decline in its 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-61

Note 16 — Inventories

	At December 31, 2012		At December 31, 2011
	($ million)
Finished goods		2		2
Consumable stores		2		2
		4		4

Note 17 — Trade and other receivables

	At December 31, 2012		At December 31, 2011
	($ million)
Trade receivables		344		299
Other receivables		18		28
Prepayments		60		42
		422		369

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, 2012		At December 31, 2011
	($ million)
Americas		186		170
Europe		83		69
Asia, Middle East and Africa		64		61
Greater China		29		27
		362		327

The aging of trade and other receivables, excluding prepayments, at the end of the reporting period is:

	At December 31, 2012							At December 31, 2011
	Gross		Provision			Net		Gross		Provision			Net
	($ million)
Not past due		223		—			223		201		(1	)		200
Past due 1 to 30 days		74		(3	)		71		73		(2	)		71
Past due 31 to 180 days		69		(3	)		66		59		(3	)		56
Past due more than 180 days		43		(41	)		2		40		(40	)		—
		409		(47	)		362		373		(46	)		327

The movement in the provision for impairment of trade and other receivables during the year is as follows:

	Year ended December 31, 2012			Year ended December 31, 2011
	($ million)
At January 1,		(46	)		(58	)
Provided		(18	)		(15	)
Amounts written back		10			7
Amounts written off		7			20
At December 31,		(47	)		(46	)

F-62

Note 18 — Cash and cash equivalents

	At December 31, 2012		At December 31, 2011
	($ million)
Cash at bank and in hand		57		51
Short-term deposits		138		131
		195		182

Short-term deposits are highly liquid investments with an original maturity of three months or less, in various currencies.

Cash and cash equivalents includes $7 million (2011 $2 million) that is not available for use by the Group due to local exchange controls.

Note 19 — Trade and other payables

	At December 31, 2012		At December 31, 2011
	($ million)
Current
Trade payables		117		126
Other tax and social security payable		35		35
Other payables		268		262
Accruals		289		284
		709		707
Non-current
Other payables		563		497

Trade payables are non-interest-bearing and are normally settled within an average of 45 days.

Other payables includes $623 million (2011 $578 million) relating to the future redemption liability of the Group’s loyalty program, of which $108 million (2011 $105 million) is classified as current and $515 million (2011 $473 million) as non-current.

Note 20 — Provisions

	Onerous management contracts			Litigation			Total
	($ million)
At January 1, 2011		10			22			32
Provided		1			—			1
Utilized		(8	)		(11	)		(19	)
At December 31, 2011		3			11			14
Utilized		(1	)		(11	)		(12	)
At December 31, 2012		2			—			2

	At December 31, 2012		At December 31, 2011
	($ million)
Analyzed as:
Current		1		12
Non-current		1		2
		2		14

F-63

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 in 2010 (see Note 5) and related to an action brought against the Group in the Americas region. The final balance was settled in March 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 $2.8 million (2011 $3.3 million, 2010 $3.5 million) and increase net assets by an estimated $1.8 million (2011 decrease of $10.4 million, 2010 decrease of $5.6 million). Similarly, a five cent fall in the euro: US dollar rate would reduce the Group’s profit before tax by an estimated $2.3 million (2011 $1.9 million, 2010 $1.4 million) and decrease net assets by an estimated $16.1 million (2011 $10.3 million, 2010 $8.2 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 in major currencies were fixed rate debt at December 31, 2012.

Based on the year-end net debt position and given the underlying maturity profile of investments, borrowings and hedging instruments at that date, neither a one percentage point rise in US dollar, euro nor sterling interest rates would impact the annual net interest charge in the current or prior two years.

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. Medium and long-term borrowing requirements are met through the $1.07 billion Syndicated Facility which expires in November 2016, through the £250 million 6% bonds that are repayable on December 9, 2016 and through the £400 million 3.875% bonds repayable on November 28, 2022. The $1.07 billion Syndicated Facility was undrawn at the year end. The £400 million 3.875% bonds, which were issued during the year under the Group’s £750 million Medium Term Notes program, extend the maturity profile and diversify the sources of the Group’s debt. Short-term borrowing requirements are met from drawings under bilateral bank facilities.

F-64

The Syndicated Facility contains two financial covenants: interest cover and net debt divided by earnings before interest, tax, depreciation and amortization (“EBITDA”). 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 $195 million which is held predominantly 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 although $7 million (2011 $2 million) is held in a country 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 $1,382 million at December 31, 2012 (2011 $1,085 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’s debt is monitored on the basis of a cashflow leverage ratio, being net debt divided by EBITDA, with the objective of maintaining an investment grade credit rating.

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, 2012. At December 31, 2012, the Group did not hold any interest rate swaps (2011 notional principals held of $100 million swapping floating for fixed). 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, 2012 or December 31, 2011.

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

F-65

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.

At December 31, 2012, the Group held currency swaps with a principal of $415 million (2011 $415 million) and short dated foreign exchange swaps with principals of €75 million (2011 €75 million) and $170 million (2011 $nil) (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 (2011 $415 million) and short dated foreign exchange swaps with principals of €75 million (2011 €100 million), and $350 million (2011 $100 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, 2012
Non-derivative financial liabilities:
Secured bank loans		—			—			5			—		5
£250m 6% bonds 2016		24			24			453			—		501
£400m 3.875% bonds 2022		25			25			75			772		897
Finance lease obligations		16			16			48			3,316		3,396
Trade and other payables		709			154			191			285		1,339
Provisions		1			1			—			—		2
Derivative financial liabilities:
Forward foreign exchange contracts		(2	)		—			—			—		(2	)
Currency swaps — outflows		26			26			467			—		519
Currency swaps — inflows		(24	)		(24	)		(453	)		—		(501	)
	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 2016		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	)

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-66

Credit risk

The carrying amount of financial assets represents the maximum exposure to credit risk.

	At December 31, 2012		At December 31, 2011
	($ million)
Equity securities available-for-sale		112		112
Derivative financial instruments		2		3
Loans and receivables:
Cash and cash equivalents		195		182
Other financial assets		49		44
Trade and other receivables, excluding prepayments		362		327
		720		668

Fair values

The table below compares carrying amounts and fair values of the Group’s financial assets and liabilities.

	At December 31, 2012						At December 31, 2011
	Carrying value			Fair value			Carrying value			Fair value
	($ million)
Financial assets
Equity securities available-for-sale* (Note 15)		112			112			112			112
Derivatives* (Note 23)		2			2			3			3
Loans and receivables:
Cash and cash equivalents (Note 18)		195			195			182			182
Other financial assets (Note 15)		49			49			44			44
Trade and other receivables, excluding prepayments (Note 17)		362			362			327			327
Financial liabilities
£250 million 6% bonds 2016 (Note 22)		(403	)		(456	)		(384	)		(411	)
£400 million 3.875% bonds 2022 (Note 22)		(638	)		(652	)		—			—
Finance lease obligations (Note 22)		(212	)		(268	)		(209	)		(268	)
Other borrowings (Note 22)		(5	)		(5	)		(98	)		(98	)
Trade and other payables (Note 19)		(1,272	)		(1,272	)		(1,204	)		(1,204	)
Derivatives* (Note 23)		(19	)		(19	)		(39	)		(39	)
Provisions (Note 20)		(2	)		(2	)		(14	)		(14	)

* 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 bonds, approximates book value as interest rates reset to market rates on a frequent basis. The fair value of the £250 million and £400 million bonds is based on their 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 current provisions approximates to their carrying value, including the future redemption liability of the Group’s loyalty program.

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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.

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, 2012										At December 31, 2011
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets
Equity securities available-for-sale		18		—			94		112			15		—			97		112
Derivatives		—		2			—		2			—		3			—		3
Liabilities
Derivatives		—		(19	)		—		(19	)		—		(39	)		—		(39	)

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, 2012			At December 31, 2011
	($ million)			($ million)
At January 1,		97			84
Additions		—			1
Repaid		(1	)		(3	)
Valuation (losses)/gains recognized in other comprehensive income		(2	)		16
Impairment*		—			(1	)
At December 31,		94			97

* The impairment charge recognized in the income statement in 2011 (see Note 5) included $2 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 or by reference to share of net assets. A 10% increase in the average P/E ratio would result in a $5 million increase (2011 $5 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 (2011 $5 million) in the fair value of the investments. A 10% increase in net assets would result in a $2 million increase (2011 $3 million) in the fair value of the investments and a 10% decrease in net assets would result in a $2 million decrease (2011 $3 million) in the fair value of the investments.

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Note 22 — Loans and other borrowings

	At December 31, 2012						At December 31, 2011
	Current		Non-current		Total		Current		Non-current		Total
	($ million)
Secured bank loans		—		5		5		5		—		5
Finance lease obligations		16		196		212		16		193		209
£250 million 6% bonds 2016		—		403		403		—		384		384
£400 million 3.875% bonds 2022		—		638		638		—		—		—
Unsecured bank loans		—		—		—		—		93		93
Total borrowings		16		1,242		1,258		21		670		691
Denominated in the following currencies:
Sterling		—		1,041		1,041		—		384		384
US dollars		16		196		212		16		286		302
Other		—		5		5		5		—		5
		16		1,242		1,258		21		670		691

Secured bank loans

The New Zealand dollar mortgage is secured on the hotel property to which it relates.

Non-current amounts include $5 million (2011 $nil) repayable by installments.

Finance lease obligations

Finance lease obligations, which relate to the 99-year lease (of which 93 years remain) on the InterContinental Boston, are payable as follows:

	At December 31, 2012					At December 31, 2011
	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		3,316			148		3,332			145
		3,396			212		3,412			209
Less: amount representing finance charges		(3,184	)		—		(3,203	)		—
		212			212		209			209

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 2016

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).

£400 million 3.875% bonds 2022

The 3.875% fixed interest sterling bonds were issued on November 28, 2012 and are repayable on November 28, 2022. Interest is payable annually on November 28 in each year commencing November 28, 2013 to the maturity date. The bonds were initially priced at 98.787% of face value and are unsecured.

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Unsecured bank loans

Unsecured bank loans are borrowings under the Group’s Syndicated Facility and its short-term bilateral loan and overdraft facilities. The Syndicated Facility comprises a $1.07 billion five-year revolving credit facility that matures in November 2016. 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 facility was undrawn at the year end.

Facilities provided by banks

	At December 31, 2012						At December 31, 2011
	Utilized		Unutilized		Total		Utilized		Unutilized		Total
	($ million)
Committed		5		1,070		1,075		105		970		1,075
Uncommitted		—		96		96		—		79		79
		5		1,166		1,171		105		1,049		1,154

	At December 31,
	2012		2011
	($ million)
Unutilized facilities expire:
Within one year		96		79
After two but before five years		1,070		970
		1,166		1,049

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,
	2012			2011
	($ million)
Currency swaps		19			39
Forward foreign exchange contracts		(2	)		(3	)
		17			36
Analyzed as:
Current assets		(2	)		(3	)
Non-current liabilities		19			39
		17			36

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, 2012, the Group held currency swaps with a principal of $415 million (2011 $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: $11 million (2011 $29 million) relating to the repayment of the underlying principal and $8 million (2011 $10 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.

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Interest rate swaps

At December 31, 2012, the Group did not hold any interest rate swaps (2011 notional principals held of $100 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, 2012, the Group held short dated foreign exchange swaps with principals of €75 million and $170 million (2011 €75 million). The swaps are used to manage sterling surplus cash and reduce euro and US dollar borrowings whilst maintaining operational flexibility. The foreign exchange swaps have been designated as net investment hedges.

Note 24 — Net debt

	At December 31, 2012			At December 31, 2011
	($ million)
Cash and cash equivalents		195			182
Loans and other borrowings — current		(16	)		(21	)
Loans and other borrowings — non-current		(1,242	)		(670	)
Derivatives hedging debt values (Note 23)		(11	)		(29	)
Net debt		(1,074	)		(538	)

	Year ended December 31, 2012			Year ended December 31, 2011
	($ million)
Movement in net debt
Net increase in cash and cash equivalents		15			107
Add back cash flows in respect of other components of net debt:
Issue of long-term bonds		(632	)		—
Decrease in other borrowings		99			119
(Increase)/decrease in net debt arising from cash flows		(518	)		226
Non-cash movements:
Finance lease obligations		(3	)		(3	)
Exchange and other adjustments		(15	)		(18	)
(Increase)/decrease in net debt		(536	)		205
Net debt at beginning of the year		(538	)		(743	)
Net debt at end of the year		(1,074	)		(538	)

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.

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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, 2011		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
Income statement		12			(26	)		(74	)		6			(6	)		(1	)		(89	)
Statement of comprehensive income		—			—			—			(6	)		—			1			(5	)
Statement of changes in equity		—			—			—			(4	)		—			(1	)		(5	)
Exchange and other adjustments		3			3			(8	)		—			1			(1	)		(2	)
At December 31, 2012		236			114			(215	)		(63	)		33			(155	)		(50	)

	At December 31, 2012			At December 31, 2011
	($ million)
Analyzed as:
Deferred tax assets		(204	)		(106	)
Deferred tax liabilities		93			97
Liabilities held for sale		61			60
		(50	)		51

Deferred gains on loan notes includes $55 million (2011 $55 million) which is expected to fall due for payment in 2016.

The deferred tax asset recognized in respect of losses of $215 million (2011 $133 million) includes $78 million (2011 $104 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 $137 million (2011 $29 million) in respect of revenue tax losses. Deferred tax assets of $22 million (2011 $44 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 $272 million (2011 $358 million), including capital losses with a value of $140 million (2011 $134 million), have not been recognized. These losses may be carried forward indefinitely with the exception of $11 million which expires after four years and $1 million which expires after eight years (2011 $11 million which expires after five years and $1 million which expires after six years). Deferred tax assets with a net tax value of $32 million (2011 $29 million) in respect of employee benefits, up to $34 million (2011 $34 million) in respect of foreign tax credits and $53 million (2011 $52 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, 2012 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. The tax which would arise upon reversal of the temporary differences is not expected to exceed $20 million (2011 $20 million).

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Other short-term temporary differences relate primarily to provisions, accruals, amortization 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 plan, 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 340,924 (2011 528,213, 2010 nil) shares 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 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 2,698,714 (2011 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 2012 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, when operational, 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 2012 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 2012 and at December 31, 2012 no options had been granted under the plan.

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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 2012, 352,115 (2011 397,943) such options were exercised and 106,699 (2011 45,655) lapsed, leaving no such options outstanding at December 31, 2012 (2011 458,814).

The Group recognized a cost of $22 million (2011 $25 million, 2010 $32 million) in operating profit and $1 million (2011 $nil, 2010 $1 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 $10 million (2011 $8 million, 2010 $19 million).

The following table sets forth awards and options granted during 2012. 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 2012		340,924		2,698,714

The Group uses separate option pricing models and assumptions depending on the plan. The following tables set out information about awards granted in 2012, 2011 and 2010:

2012	ABP			LTIP
Valuation model	Binomial			Monte Carlo Simulation and Binomial
Weighted average share price (pence)		1,440.0			1,440.0
Expected dividend yield		2.95	%		2.99	%
Risk-free interest rate					0.59	%
Volatility*					31	%
Term (years)		3.0			3.0

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

* 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.

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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, 2010		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
Granted		341			2,699
Vested		(643	)		(2,621	)
Share capital consolidation		(18	)		—
Lapsed or canceled		(8	)		(1,948	)
Outstanding at December 31, 2012		622			7,160
Fair value of awards granted during the year (cents)
At December 31, 2012		2,199.8			792.5
At December 31, 2011		2,141.1			819.7
At December 31, 2010		N/A	*		1,181.9
Weighted average remaining contract life (years)
At December 31, 2012		1.6			1.2
At December 31, 2011		0.9			1.0
At December 31, 2010		0.7			1.0

The above awards do not vest until the performance and service conditions have been met.

	Number of Shares			Range of option prices		Weighted average option price
	(thousands)			(pence)		(pence)
Executive Share Option Plan
Outstanding at January 1, 2010		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
Exercised		(1,365	)		308.5-619.8		492.8
Lapsed or canceled		(107	)		434.2		434.2
Outstanding at December 31, 2012		698			438.0-619.8		514.8
Options exercisable
At December 31, 2012		698			438.0-619.8		514.8
At December 31, 2011		2,170			308.5-619.8		497.0
At December 31, 2010		3,291			308.5-619.8		489.3

F-75

Included within the options outstanding under the Executive Share Option Plan are options over nil (2011 458,814, 2010 902,412) 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 1,409.5 pence. The closing share price on December 31, 2012 was 1,707.0 pence and the range during the year was 1,157.0 pence to 1,725.0 pence per share.

Summarized information about options outstanding at December 31, 2012 under the share option schemes is as follows:

	Options outstanding and exercisable
Range of exercise prices	Number outstanding		Weighted average remaining contract life		Weighted average option price
(pence)	(thousands)		(years)		(pence)
Executive Share Option Plan
438.0		66		0.4		438.0
491.8 to 494.2		487		1.2		493.9
619.8		145		2.3		619.8
		698		1.3		514.8

Note 27 — Operating leases

During the year ended December 31, 2012, $64 million (2011 $64 million, 2010 $53 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 $19 million (2011 $18 million, 2010 $8 million).

Future minimum lease payments under non-cancelable operating leases are as follows:

	At December 31, 2012		At December 31, 2011
	($ million)
Due within one year		47		46
One to two years		34		41
Two to three years		25		32
Three to four years		22		23
Four to five years		22		21
More than five years		237		255
		387		418

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 (2011 19 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 $10 million (2011 $14 million).

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Note 28 — Capital and other commitments

	At December 31, 2012		At December 31, 2011
	($ million)
Contracts placed for expenditure on property, plant and equipment and intangible assets not provided for in the Consolidated Financial Statements		81		14

The Group has also committed to invest up to $60 million in two investments accounted for under the equity method of which $37 million had been spent at December 31, 2012.

Note 29 — Contingencies

	At December 31, 2012		At December 31, 2011
	($ million)
Contingent liabilities not provided for in the Consolidated Financial Statements		25		8

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 $50 million at December 31, 2012 (2011 $42 million).

As of December 31, 2012, the Group had outstanding letters of credit of $38 million (2011 $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, 2012, there were no such guarantees in place (2011 $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. In particular, the Group is currently subject to an Office of Fair Trading enquiry in the UK and class action law suits in the US. Additionally, on August 10, 2012, the former owner of a hotel in China filed an arbitration notice with the International Economic and Trade Arbitration Commission Shanghai Committee (“CIETAC Shanghai”) containing numerous allegations in connection with the termination of a hotel management agreement and seeking damages from a Group company, Inter-Continental Hotels Corporation (“IHC”). IHC has subsequently filed with the International Economic and Trade Arbitration Commission in Beijing (“CIETAC Beijing”) a parallel claim against the owner for breach of contract. On March 22, 2013, CIETAC Shanghai ruled in the owner’s favor and granted an award of RMB 150,379,000 (approximately $24 million) against IHC. IHC’s parallel claim against the owner has not yet been determined. IHC intends to pursue all available means of appeal against CIETAC Shanghai’s ruling. IHC also intends to pursue vigorously its parallel claim in CIETAC Beijing. At this time, the Directors do not believe that it is more likely than not that the arbitral award will be paid and as such, no provision for the amount has been recognized. An amount of $24 million relating to the award has been included in contingencies.

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 or recognized in contingencies, it is not possible to quantify any loss to which these proceedings or claims under these warranties may give rise, however, as at the date of reporting, the Group does not believe that the outcome of these matters will have a material effect on the Group’s financial position.

F-77

Note 30 — Related party disclosures

	Year ended December 31,
	2012		2011		2010
	($ million)
Total compensation of key management personnel
Short-term employment benefits		20.0		18.8		13.6
Post-employment benefits		0.8		0.8		0.6
Termination benefits		0.6		1.4		—
Equity compensation benefits		8.6		8.1		9.4
		30.0		29.1		23.6

There were no other transactions with key management personnel during the years ended December 31, 2012, 2011 or 2010.

Related party disclosures for associates and joint ventures are included in Note 14.

Key management personnel comprises the Board and Executive Committee.

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,
	2012		2011		2010
	($ million)
Income:*
Assessment fees and contributions received from hotels		1,106		1,025		944
Proceeds from sale of Priority Club Rewards points		144		128		106
Key elements of expenditure:*
Marketing		250		203		170
Priority Club		250		232		250
Payroll costs		221		182		167
Net surplus/(deficit) for the year*		12		19		(51	)
Interest payable to the Fund		2		1		2

* Not included in the Consolidated income statement in accordance with the Group’s accounting policies.

The payroll costs above relate to 4,431 (2011 3,885, 2010 3,927) 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,
	2012		2011		2010
	($ million)
Cumulative short-term net surplus		51		39		20
Loyalty program liability		623		578		531
		674		617		551

The net change in the loyalty program liability and Fund surplus contributed an inflow of $57 million (2011 $66 million, 2010 $10 million) to the Group’s cash flow from operations.

Note 32 — Events after the reporting period

On January 22, 2013, the Group announced that it will receive $31 million in liquidated damages under an agreement with a hotel owner that will result in eight hotels leaving the IHG system on March 1, 2013. The payment was received in full on February 28, 2013.

F-78

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, 2012
Provisions for bad and doubtful debts		46		18		—		(17	)		47
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

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:	Tom Singer
	Title:	Chief Financial Officer

Date: March 26, 2013

EX-4.A.III

EXHIBIT 4(a)(iii)

9 November 2012

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)

AMENDED AND RESTATED TRUST DEED

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		10
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		44
20.	COUNTERPARTS		45

THIS AMENDED AND RESTATED TRUST DEED is made on 9 November 2012 (this Trust Deed)

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) The Issuer, the Guarantors and the Trustee are party to a trust deed dated 27 November 2009, as supplemented by the first supplemental trust deed dated 7 July 2011 (hereinafter the Principal Trust Deed) relating to the Euro Medium Term Note Programme established by the Issuer, pursuant to which, the Issuer may issue from time to time Notes as set out herein (the Programme). The Issuer, the Guarantors and the Trustee desire to amend and restate the Principal Trust Deed in its entirety as set forth in this Trust Deed.

(B) The Trustee has agreed to act as trustee of this Trust Deed on the following terms and conditions.

(C) 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 Programme. Any Notes issued under the Programme on or after the date hereof shall be issued pursuant to this Trust Deed. This does not affect any Notes issued under the Programme or any rights or obligations accrued or incurred under the Principal Trust Deed prior to the date of this Trust Deed.

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

Page 1

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;

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) (Interpretation - Definitions);

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

Page 2

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;

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 14 (Replacement of Notes and Coupons) 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 12 (Events of Default);

Extraordinary Resolution has the meaning set out in Schedule 3 (Provisions for Meetings of Noteholders);

Final Terms has the meaning ascribed to it in the Dealer Agreement;

Page 3

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);

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;

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) (Interpretation - Definitions);

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

Page 4

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 14 (Replacement of Notes, Coupons and Talons) 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;

(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 18 (Notices)) and remain available for payment in accordance with the Conditions;

(c) those which have been purchased and surrendered for cancellation as provided in Condition 9(j) (Redemption and Purchase — Cancellation) and notice of the cancellation of which has been given to the Trustee;

(d) those which have become void under Condition 13 (Prescription);

(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 14 (Replacement of Notes, Coupons and Talons); 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 14 (Replacement of Notes, Coupons and Talons);

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 12 (Events of Default) and 16 (Meetings of Noteholders; Modification and Waiver) and Schedule 3 (Provisions for Meetings of Noteholders);

(iii) any discretion, power or authority, whether contained in this Trust Deed or provided by law, which the Trustee is required to exercise in

Page 5

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 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 (Global Notes) in the form or substantially in the form set out in Part B of 0;

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 12 (Events of Default), 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 9(e) (Redemption and Purchase — Redemption at the option of Noteholders);

Rating Agency means S&P or any of its respective successors or any Substitute Rating Agency and, for the purposes of Condition 9(f) (Redemption and Purchase — Change of Control Redemption), includes any Additional Rating Agency;

Relevant Date has the meaning ascribed to it in Condition 2(a) (Interpretation — Definitions);

Reserved Matter has the meaning set out in paragraph 1 of Schedule 3 (Provisions for Meetings of Noteholders);

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

Page 6

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) (Interpretation — Definitions) 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) (Interpretation — Definitions);

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 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):

(a) 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

(b) 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 14 (Replacement of Notes, Coupons and Talons);

Temporary Global Note means, in relation to any Series, a Global Note to be issued pursuant to Clause 5.1 (Global Notes) in the form or substantially in the form set out in Part A of 0;

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

Page 7

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; and

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 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

Page 8

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;

(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.

Page 9

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:

(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 5.11 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

Page 10

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:

(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 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 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 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 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 (Zero Coupon Note Provisions) 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, 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 provided that on further due presentation of the relevant Note 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

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repayable or the Trustee shall have received any money which it proposes to pay under Clause 12 (Application of Moneys) to the relevant Noteholders 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 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 and Coupons and all sums, documents and records held by them in respect of Notes and Coupons on behalf of the Trustee; and/or

(ii) to deliver up all Notes and Coupons and all sums, documents and records held by them in respect of Notes 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 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 and Couponholders) shall cease to have effect.

3.3 Interest on Floating Rate Notes following Event of Default

If Floating Rate Notes become immediately due and repayable under Condition 12 (Events of Default) 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 12 (Events of Default) (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 and Couponholders shall be made in the relevant currency as required by the Conditions.

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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”, “Coupons”, “Couponholders”, “Talons” and “Talonholders” shall be construed accordingly.

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 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 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

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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 or the Couponholders or the Trustee, whether or not any determination has been made by the Trustee pursuant to Clause 9 (Amendments and Substitution) 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, 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 (Enforcement) 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.

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(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 Trustee for application in or towards the payment of all sums due and unpaid under this Trust Deed in accordance with Clause 12 (Application of Moneys).

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, (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 0. Any Coupons and Talons will also be security printed

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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

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 Coupon as the absolute owner of such Note 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 or Coupon (whether or not such Note 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 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 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 14 (Replacement of Notes, Coupons and Talons) (together in each case, in the case of Definitive Notes, with all unmatured Coupons attached thereto or delivered therewith), and all Coupons paid in accordance

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with the relevant Conditions or which, being mutilated or defaced, have been surrendered and replaced pursuant to Condition 14 (Replacement of Notes, Coupons and Talons), shall forthwith be cancelled by or on behalf of the Issuer and a certificate stating:

(i) the aggregate nominal amount of Notes which have been redeemed and the aggregate amounts in respect of Coupons which have been paid;

(ii) the serial numbers of such Notes in definitive form;

(iii) the total numbers (where applicable, of each denomination) by maturity date of such 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 Coupons and Talons attached thereto or surrendered therewith;

(vi) the aggregate nominal amounts of Notes 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, Coupons and Talons issued by it (other than serial numbers of Coupons) and of their redemption, any cancellation or any payment (as

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the case may be) and of all replacement notes, coupons or talons issued in substitution for lost, stolen, mutilated, defaced or destroyed Notes, Coupons or Talons, (b) that the Principal Paying Agent 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 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 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 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

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Control or Change of Control Put Event and without waiting for the Trustee to take any further action;

(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 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 18 (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 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 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 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 18 (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 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 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 9(b) (Redemption and Purchase — Redemption for tax reasons) and 9(c) (Redemption and Purchase — Redemption at the option of the Issuer) 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 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 or Coupon the Issuer or any Guarantor shall become subject generally to the

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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 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 11 (Taxation) 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 11 (Taxation) 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;

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(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;

(u) Appointment and removal of Agents: give notice to the Noteholders in accordance with Condition 18 (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 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 9 (Redemption and Purchase);

(w) Documents available for inspection: use reasonable endeavours to procure that each Paying Agent makes available for inspection by Noteholders 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 18 (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 12 (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

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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;

(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 (Rating Confirmations), the Trustee may, without any consent or sanction of the Noteholders 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 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 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

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defined in Schedule 3 (Provisions for Meetings of Noteholders).

9.2 Modifications

Without prejudice to Clause 9.4 (Rating Confirmations), the Trustee may from time to time and at any time without any consent or sanction of the Noteholders 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 3 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 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 18 (Notices).

9.3 Substitution

(a) Procedure: Without prejudice to Clause 9.4 (Rating Confirmations), the Trustee may (1) without the consent of the Noteholders 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 and Coupons of any Series and under the Notes and Coupons of that Series and (2) without the consent of the Noteholders 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 and Coupons of any Series and under the Notes 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 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 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 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 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 9.3(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 11 (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 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 and Coupons and this Trust Deed (but without prejudice to its liabilities under any guarantee given pursuant to sub-clause 9.3(c) (Extra duties)). Not later than fourteen days after the execution of any such

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documents as aforesaid 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 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 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 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 (Covenants by the Issuer and the Guarantors) and 9 (Amendments and Substitution) 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 or Couponholders. Only the Trustee may enforce the provisions of the this Trust Deed and the Notes and

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Coupons and no Noteholder or Couponholder shall be entitled to proceed directly against the Issuer and/or any 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 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

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principal moneys due on or in respect of the Notes of that Series provided that 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 12, 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 13 (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 and Couponholders

The Trustee shall give notice to the Noteholders in accordance with Condition 18 (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 or Coupons of any Series by the Issuer, any Guarantor or the Trustee may be made in the manner provided in Condition 10 (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 and Coupons

Upon any payment under Clause 12.4 (Payment to Noteholders and Couponholders) of principal or interest, the Note 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 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 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 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 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:

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13.1 Reliance on Information

(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 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 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

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EUCLID or Clearstream, Luxembourg’s Cedcom system) in accordance with 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 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 or Couponholders except to the extent already provided for in Condition 11 (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 or Couponholder by reason of having accepted as valid or not

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having rejected any Note 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 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 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 and the Couponholders;

(b) Determination of questions: the Trustee as between itself and the Noteholders 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 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 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 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 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 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 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 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 or damage is made in negligence, for breach of contract, breach of trust or

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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 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 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 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) (Normal remuneration) applies) upon the amount of the remuneration; or

(ii) (in a case to which sub-clause 14.1(b) (Extra remuneration) 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, failing such approval, nominated (on the application of the Trustee) by the

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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 Trustee) between the several Series of Notes in such manner and in such amounts as it shall, in its absolute discretion, consider appropriate.

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(i) Discharges: Unless otherwise specifically stated in any discharge of this Trust Deed the provisions of this Clause 14 (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 and Coupons, (b) the initial delivery of the Notes, (c) any action taken by the Trustee (or any Noteholder 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, 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 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 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 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);

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(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 or the Coupons, the Issuer and the Guarantor will indemnify the Trustee or any Noteholder 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 14 (Costs and Expenses) 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 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 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 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. 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.

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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 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 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.

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.

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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 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

Attention: CTLA Trustee Service Administration

16.2 Effectiveness

Every notice or other communication sent in accordance with Clause 16.1 (Addresses for Notices) shall be effective as follows:

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(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

Neither the Trustee nor the Issuer nor any Guarantor shall be required to give any notice to the Couponholders for any purpose under this Trust Deed and the Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the Noteholders in accordance with Condition 18 (Notices).

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 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.

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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.

EXECUTION CLAUSES

The Issuer
EXECUTED and DELIVERED as a DEED by		) /s/ Nicolette Henfrey
Nicolette Henfrey as attorney for		)
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 acting by		)    /s/ Nicolette Henfrey
Nicolette Henfrey		)
a director of the Company and Thomas Singer		) /s/ Tom Singer
a director of the Company		)
EXECUTED and DELIVERED as a DEED by		)
SIX CONTINENTS LIMITED		)
a company incorporated in England and Wales acting by		)    /s/ Nicolette Henfrey
Nicolette Henfrey		)
a director of the Company and Thomas Singer		) /s/ Tom Singer
a director of the Company		)
The Trustee
EXECUTED as a DEED by Anne Danhaive		)
as attorney for		) /s/ Anne Danhaive
HSBC CORPORATE TRUSTEE		)
COMPANY (UK) LIMITED		)
Witness:	Signature: /s/ Philip Cooper
	Name: Philip Cooper

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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, 9 February 2012 and 26 September 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.

2

“Option Plan” means the InterContinental Hotels Group Executive Share Option Plan as amended from time to time.

“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

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.

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

4

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

(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

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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.

5.5 “Allocate” means granting an option or other right to acquire unissued Shares or to acquire Shares which are held by the Company in treasury, or if there is no such grant, the issue and allotment of Shares or the transfer of Shares from treasury, 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

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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.

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

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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.

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

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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.

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.

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

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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.

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.

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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)

RULES OF THE INTERCONTINENTAL HOTELS GROUP

ANNUAL BONUS PLAN

(as amended on 6 December 2007, 9 February 2012 and 26 September 2012)

Shareholders’ Approval:	15 June 2005
Directors’ Adoption:	15 June 2005
Expiry:	15 June 2015

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;

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“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;

“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.

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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

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

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or as a result of the sale of the business or company by which he is employed, his Bonus Award will be prorated 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 .

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.

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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 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.

6

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 to acquire Shares which are held by the Company in treasury, or if there is no such grant, the issue and allotment of Shares or the transfer of Shares from treasury, 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

7

think 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 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 or sustained performance or profitability of the Company, any Group Company or relevant business unit (as appropriate);

8

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 III-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 notbe 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.

8.3 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

9

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.

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

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.

10.8.8 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.

11

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.

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

12

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.

13

EX-8

Exhibit 8

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

InterContinental Hotels Group: All entities

Name of Entity	Country of Incorporation
“IHG Management” d.o.o. Beograd	Serbia
111 East 48th Street Holdings LLC	Delaware, USA
426 Main Ave 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
BCRE IHG 180 Orchard Holdings LLC	Delaware, 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

Page 1

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

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
EVEN Real Estate Holding LLC	Delaware, USA
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
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, LLC	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

Page 2

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

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 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 InterContinental London (Holdings) Limited	England
Hotel Inter-Continental London Ltd.	England

Page 3

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

Hotel JV Services LLC	Delaware, USA
Hoteles Estelar de Colombia S.A.	Colombia
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 (Victoria Park) Trust	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

Page 4

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

IHG Hotels Nigeria Limited	Nigeria
IHG HOTELS SOUTH AFRICA (Pty) Limited	South Africa
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
InterContinental Gestion Hotelera S.L.	Spain
InterContinental Hong Kong Ltd.	Hong Kong
Intercontinental Hospitality Corporation	Delaware, USA
Intercontinental Hospitality Corporation—Greek Branch	Greece
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—Egyptian Branch	Egypt
Inter-Continental Hotels Corporation—Jordan Branch	Jordan

Page 5

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

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 (Shanghai) Ltd—Beijing Branch	People’s Republic of China
InterContinental Hotels Group Customer Services Ltd.	England
InterContinental Hotels Group do Brasil Limitada	Brazil
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 Group Services Company—Swedish Branch	Sweden
InterContinental Hotels Group Services Company—Zurich Branch	Switzerland
InterContinental Hotels Italia, SrL	Italy

Page 6

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

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 IOHC (Mauritius) Limited	Mauritius
Inter-Continental Management (Australia) Pty Limited	Australia
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
Kenya Hotel Properties Ltd.	Kenya
Kumul Hotels Ltd	Papua New Guinea
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.	Texas, USA
PT SC Hotels & Resorts Indonesia	Indonesia
Resort Services International (Cayo Largo), L.P., S.E.	Georgia, USA
Saudi Arabia Intercontinental Hotels C. Ltd.	Saudi Arabia
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

Page 7

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

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
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

Page 8

INDEX OF ENTITIES

Updated from 01.07.12 to 31.12.12

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 9

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 26, 2013

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 26, 2013

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, 2012 (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 26, 2013

By:	/s/ Richard Solomons
	Name:	Richard Solomons
	Title:	Chief Executive
By:	/s/ Tom Singer
	Name:	Thomas Singer
	Title:	Chief Financial Officer