SECURITIES AND EXCHANGE COMMISSION
 
 
Washington DC 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 AND 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
 
 
For 21 February 2017
 
 
InterContinental Hotels Group PLC
(Registrant's name)
 
 
Broadwater Park, Denham, Buckinghamshire, UB9 5HJ, United Kingdom
(Address of principal executive offices)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
 
Form 20-F           Form 40-F
 
 
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
 
Yes           No
 
 
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable
 
 
 
 
 
 
EXHIBIT INDEX
 
 
 
 
 
 
 
 
 
 
 
 
 
99.1     Final Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit No: 99.1
 
 
 
 
 
InterContinental Hotels Group PLC
Preliminary Results for the year to 31 December 2016
Financial summary1
Reported
Underlying2
 
2016
2015
% Change
2016
2015
% Change
Revenue
$1,715m
$1,803m
-4.9%
$1,582m
$1,513m
4.6%
Fee Revenue3
$1,380m
$1,349m
2.3%
$1,409m
$1,349m
4.4%
Operating profit
$707m
$680m
4.0%
$702m
$641m
9.5%
Adjusted EPS
203.3¢
174.9¢
16.2%
203.1¢
165.0¢
23.1%
Basic EPS4
195.3¢
520.0¢
(62.4%)
 
 
 
Total dividend per share
94.0¢
85.0¢
11%
 
 
 
Net debt
$1,506m
$529m
 
 
 
 
1All figures before exceptional items unless otherwise noted.  2Excluding owned asset disposals, managed leases and significant liquidated damages at constant FY15 exchange rates (CER).  Underlying adjusted EPS based on underlying EBIT, effective tax rate, and reported interest at actual exchange rates.  3Group revenue excluding owned & leased hotels, managed leases and significant liquidated damages.  4After exceptional items.
 
Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said:
 
"Our results clearly demonstrate our strong operational performance and the success of IHG's long-term strategy, which have delivered a 9.5% increase in underlying profit and a 23% increase in underlying EPS.  Our cash generative business model underpins our decision to announce a $400 million special dividend and to propose an 11% increase in the total dividend for the year.
We continued our focus on enhancing the long-term sustainability of our competitive advantage by evolving our brand portfolio and by driving innovation in our digital and loyalty offer.  We rolled out new formats across our Holiday Inn Brand Family which deliver significant uplifts in guest satisfaction and improved returns for owners, built momentum for our HUALUXE and EVEN Hotels brands, and took Kimpton Hotels & Restaurants and Hotel Indigo into new markets. We also strengthened our loyalty proposition through initiatives including 'Your Rate' helping to drive a 16% increase in member enrolments.
The fundamentals for the hospitality industry remain compelling. Despite the uncertain environment in some markets, we remain confident in the outlook for the year ahead, as well as our ability to deliver sustainable growth into the future."
Financial Highlights
 
●            Strong underlying revenue growth driven by both RevPAR and rooms
-     Global comparable RevPAR up 1.8% (Q4: 1.7%), led by rate up 1.2%, and record occupancy levels.
-     Net room growth of 3.1%, including 8.8% in Greater China. 40k room openings, ~90% in our priority markets.
-     $24.5bn total gross revenue from hotels in IHG's system (up 2% year-on-year; 4% CER).
●            High quality business model, continuing margin growth and low capital intensity drives operating cash flows
-     > 95% profit from the fee business; ~85% of fee revenue linked directly to hotel revenues.
-     Group fee margin of 48.8%, up 3.3%pts (2.5%pts CER); strong progression through efficiency improvements.
-     Net capital expenditure of $185m (gross $241m). Focused investments in brands and new Guest Reservation System, in which we will invest a further ~$90m in 2017 within existing capex guidance of up to $350m gross.
●          Commitment to efficient balance sheet and driving shareholder returns
-     $400m will be returned to shareholders via a special dividend with share consolidation, to be paid in Q2 2017.
-     Total returns since 2003 of $12.8bn, nearly $5bn of which is from underlying operations.
-     Year-end net debt:EBITDA of 1.9x, or 2.4x on a proforma basis assuming payment of the special dividend.
-     Proposed 11% increase in total dividend to 94.0¢ reflects confidence in our long-term sustainable future growth.
 
Strategic progress to enhance our long term competitive advantage
 
●            Strengthening our preferred brands
-     Expanded our luxury footprint and InterContinental Hotels & Resorts' position as the largest luxury hotel brand with eight openings globally, including five in Greater China, and our highest room signings since 2008.
-     Strengthened our boutique portfolio, with six Kimpton openings including our first outside the US in Grand Cayman, three EVEN Hotels openings including two in New York and our first franchise, and opened our 75th Hotel Indigo.
-     Progressed the next phase of the Crowne Plaza refresh, announced in June, to accelerate growth in the Americas supported by $200m investment over 3 years (~$100m system funded, ~$100m within existing capex guidance).
-     Continued to roll out leading edge guest experiences for Holiday Inn Brand Family hotels; new public space designs now in 225 Holiday Inn Express hotels across US and Europe. New room designs driving guest satisfaction uplifts.
-     Signed 20 Holiday Inn Express hotels in Greater China in 8 months, under our new tailored franchising model, taking the total signed for the brand in the region to 47 hotels.
 
●           Growing through targeted hotel distribution
-     Signed 76k rooms into the pipeline, representing over 500 new hotels, the highest number of deals signed since 2008, demonstrating owner confidence in our brands.
-     230k pipeline rooms, up 8%; ~ 45% under construction and ~90% in our ten priority markets.
 
●          Driving revenue delivery through technology and loyalty
-    Industry-leading cloud-based Guest Reservation System remains on track to begin roll-out in 2017.
-    Digital revenue of $4.3bn, up ~$0.3bn year-on-year, with mobile delivering over 50% of digital traffic and $1.6bn of gross revenues globally, and ~60% of direct bookings in Greater China.
-    Enhanced IHG Rewards Club with the launch of Your Rate, our preferential member pricing initiative, which has helped to increase loyalty contribution by 2%pts and driven enrolments up 16% year-on-year.
 
 
 
Americas - Rate led US RevPAR increase driving strong profit growth
 
Comparable RevPAR increased 2.1% (Q4: up 1.5%), driven by 2.0% rate growth. US RevPAR was up 1.8%, led by Holiday Inn up 2.5% and Kimpton up 2.9%. Fourth quarter US RevPAR growth of 1.3% continued to be impacted by our concentration in oil producing markets, where RevPAR was down 6.1%; the remainder of the estate grew 2.2%.
Reported revenue increased 4% (up 5% at CER) and profit increased 6% (up 7% at CER).
On an underlying1 basis, revenue was up almost 6% and operating profit up almost 8%.  Franchise profit increased 5%, driven by RevPAR up 1.9% and rooms growth of 2.0%, which more than funded additional investment in development resources. Managed profit includes an unusually high number of small liquidated damages receipts ($4m total in H2). This was offset by $8m related to our 20% interest in InterContinental New York Barclay and the ongoing impact of new supply on RevPAR growth in New York. We expect a high level of new supply to continue to impact trading in New York in 2017, and that we will continue to incur costs relating to the joint venture as the hotel ramps up post repositioning, although these will largely be offset by related management fees.  Regional overheads declined by $11m on an underlying basis due to a $10m year-on-year decrease in US healthcare costs. 
Opened 24k rooms (188 hotels), our highest level of openings in 5 years, with more than half driven by our Holiday Inn Brand Family.  Our continued focus on maintaining a high-quality estate meant that we removed 15k rooms (103 hotels).  We signed 37k rooms (332 hotels), including 9k rooms (93 hotels) for our extended stay brands, and 2k rooms (19 hotels) across our boutique brands, including a Kimpton in Grenada, our first entry into the country.
 
 
Europe - Market outperformance in priority markets and highest rooms signings for 9 years
 
Comparable RevPAR increased 1.7% (Q4: up 3.1%), driven by rate up 1.4%. UK RevPAR increased 2.6%, led by a robust fourth quarter (up 4.6%) which was boosted by a strong end to the year for tourist arrivals and leisure travel generally. In Germany, RevPAR growth of 6.8% benefitted from a favourable trade fair calendar.  Across the rest of Europe, RevPAR declined by 0.5%, impacted by challenging trading conditions in France, Turkey and Belgium.
Reported revenue declined 14% (10% at CER) and reported operating profit was down 4% (flat at CER), both impacted by the sale of InterContinental Paris - Le Grand in 2015.
On an underlying1 basis, revenue was up 1% and operating profit was flat.  Franchise profit grew 8%, driven by RevPAR up 2.0% and rooms growth of 2.8%.  Managed profit declined by 22% due to difficult trading conditions for our hotels in Paris and the impact of three hotels in key cities as reported in our interim results.
Opened 4k rooms (24 hotels) including the 706 room Holiday Inn Kensington London.  We signed almost 10k rooms (60 hotels) into our system, our highest rooms signings since 2007.  This included a record 17 properties in Germany, a third consecutive record year for the country, where we now have more than 100 properties open or in the pipeline.
 
 
AMEA - Solid trading offset by oil markets
 
Comparable RevPAR decreased 0.2% (Q4: flat), with rate declines offset by occupancy gains.  Performance outside the Middle East continued to be strong with 3.7% RevPAR growth overall. We continued to outperform the market in India, delivering RevPAR growth of 14.1%, driven by strong corporate business and inbound tourism.  South East Asia (+2.0%), Australia (+2.9%), and Japan (+3.6%) saw good trading, the last against tough comparables.  The Middle East continued to be impacted by declining oil prices, ending the year down 7.0%. 
Total RevPAR was down 2.0% for the year (Q4: down 2.1%) impacted by the proportion of hotel openings in developing markets (2016: ~60%) where RevPARs are significantly lower than developed markets.  We expect the proportion of hotels in developing markets to continue to grow (~65% pipeline vs ~45% system) as we execute our strategy to grow rapidly in markets where the long term demand drivers are favourable and where we see the largest opportunities for growth.  This, combined with a number of other individually small items, means we expect managed profit in 2017 to be broadly in line with 2016.  
Reported revenues declined 2% (down 3% at CER) with profit down 5% on both an actual and constant currency basis.
On an underlying1 basis, revenue was down 4% and operating profit decreased 4%.  Managed profit increased 8%, excluding the $7m reduction flagged at the half year results relating to three long-standing contracts being renewed onto standard market terms and one equity stake disposal.
We opened 4k rooms (17 hotels) including two hotels in Singapore, our first Hotel Indigo and a 451-room Holiday Inn Express, our largest for the brand in the region.  Openings also included our first Holiday Inn Express in Australia, the first of a larger portfolio development across Australasia.  We signed 11k rooms (42 hotels), and entered into an agreement to develop a portfolio of EVEN Hotels in Australia and New Zealand.
 
 
__________________________
1 Excluding owned asset disposals, managed leases and significant liquidated damages at constant FY15 exchange rates (CER).
   
 
Greater China - Market outperformance and rooms growth drive strong fee revenue increase
 
Comparable RevPAR increased by 2.2%, with growth of 3.9% in mainland China offset by declines in Hong Kong and Macau. Fourth quarter RevPAR grew by 3.2% benefitting from 2.8% growth in Hong Kong, the first positive quarter there since late 2014. Full year growth was particularly strong in mainland tier 1 cities, up 6.3%, driven by strong corporate demand, with the rest of the mainland up 2.2%. As we continued to increase our penetration in less developed cities, full year total RevPAR declined 3.1%.
Reported revenue and operating profit declined by 43% (41% at CER) and 36% (33% at CER) respectively, both affected by the disposal of InterContinental Hong Kong in 2015.
Underlying1 revenue was up 13% driven by trading outperformance in key cities and nearly 9% net system growth. Underlying1 operating profit increased 15%, with ongoing investment in growth initiatives more than offset by scale efficiencies and strategic cost management.   
Opened 8k rooms (29 hotels). We opened five InterContinental Hotels & Resorts properties including our third in Beijing and our fifth in Shanghai, now the most in any city globally. We also opened our fourth HUALUXE hotel. Signed 19k rooms (82 hotels), including 20 franchised Holiday Inn Express hotels since launching the new China franchise model in May.
 
Highly cash generative business with disciplined approach to cost control and capital allocation 
 
●            Fee margin growth through strategic cost management
-     Continued focus on strategic cost management. Reported central overheads declined $23m, or $12m on a constant currency basis, benefitting from a $9m increase in central revenues and efficiency improvements.   
-     Group fee margin of 48.8%, increased 3.3%pts (2.5%pts CER).  In 2017, we will leverage scale and control costs to drive fee margin progression, but at a slower rate than 2016 after 560pts of margin expansion in the last 3 years.
●            Strong free cash flow generation fuelling investment
-     Free cash flow of $646m, up 39% year on year (2015: $466m), including a $95m cash receipt on behalf of the system fund from the renegotiation of long term partnership agreements.
-     $241m gross capital expenditure in 2016 (2015: $264m) comprised of: $96m maintenance capex and key money; $40m recyclable investments; and $105m system funded capital investments, offset by $25m proceeds from asset recycling and $31m system fund depreciation received via working capital, resulting in $185m of net capex.
-     Gross capex guidance unchanged at up to $350m per annum into the medium term.  
●            Efficient balance sheet provides flexibility
-     Financial position remains robust, with an on-going commitment to an investment grade credit rating by maintaining our net debt:EBITDA ratio at 2.0x to 2.5x.
-     Issued a £350m, 10-year bond in August 2016, at a 2.125% coupon rate, the lowest funding rate IHG has achieved in the Sterling bond market.
-     Year-end net debt of $1,506m (including $227m finance lease on InterContinental Boston), up $977m on 2015 due to the $1.5bn special dividend paid in May 2016.  Closing net debt is $205m lower due to the impact of exchange rates.
●           Shareholder returns demonstrating confidence in future growth prospects
-     Proposed 11% increase in the final dividend to 64.0¢, taking the total dividend for the year up 11% to 94.0¢, reflecting our confident outlook on our ability to continue delivering sustainable growth into the future.
-     Proposed $400m special dividend with share consolidation, equating to 202.5¢ per share.
 
Foreign exchange - volatile currency markets impact reported revenues and profit
 
Cost benefits from the devaluation of sterling against the dollar were broadly offset by revenue impacts of the strong dollar against a number of currencies, reducing reported profit by $1m.
If the closing December 2016 exchange rates had existed through the first half of 2016, reported operating profit for that period would have reduced by $1m.
A full breakdown of constant currency vs. actual currency RevPAR by region is set out in Appendix 2.
 
Interest, tax and exceptional items
 
Interest: Net financial expenses remained flat at $87m principally due to the devaluation of sterling against the dollar offsetting interest related to the £350m bond raised in August 2016. Annualised bond interest costs will reduce in 2017 following the expiry of the £250m, 6.0% coupon rate bond in December 2016.
 
Tax: Effective rate for 2016 was 30% (2015: 30%).  2017 tax rate expected to be low 30s.
Exceptional operating items:  Exceptional operating items of $29m include $13m related to the Kimpton integration and $16m of impairment charges related to the Barclay associate which owns InterContinental New York Barclay. 
 
 
_____________
1 Excluding owned asset disposals, managed leases and significant liquidated damages at constant FY15 exchange rates (CER).
 
Appendix 1: RevPAR Movement Summary
 
 
Full Year 2016
 
Q4 2016
 
RevPAR
 
Rate
 
Occ.
 
RevPAR
 
Rate
 
Occ.
 
Group
 
1.8%
1.2%
0.4pts
1.7%
1.0%
0.5pts
Americas
 
2.1%
2.0%
0.1pts
1.5%
1.6%
(0.1)pts
Europe
 
1.7%
1.4%
0.2pts
3.1%
1.1%
1.4pts
AMEA
 
(0.2)%
(0.8)%
0.5pts
0.0%
(0.4)%
0.3pts
G. China
 
2.2%
(2.2)%
2.7pts
3.2%
(0.7)%
2.5pts
 
Appendix 2: Comparable RevPAR movement at constant exchange rates (CER) vs. actual exchange rates (AER)
 
 
Full Year 2016
 
Q4 2016
 
CER
 
AER
 
Difference
 
CER
 
AER
 
Difference
 
Group
 
1.8%
0.0%
1.8pts
1.7%
(0.6)%
2.3pts
Americas
 
2.1%
1.4%
0.7pts
1.5%
0.9%
0.6pts
Europe
 
1.7%
(4.4)%
6.1pts
3.1%
(6.6)%
9.7pts
AMEA
 
(0.2)%
0.0%
(0.2)pts
0.0%
0.6%
(0.6)pts
G. China
 
2.2%
(2.4)%
4.6pts
3.2%
(2.1)%
5.3pts
 
 
 
 
 
 
 
 
 
Appendix 3: Full Year System & Pipeline Summary (rooms)
 
 
System
 
Pipeline
 
Openings
 
Removals
 
Net
 
Total
 
YoY%
 
Signings
 
Total
 
Group
 
40,134
 
(17,367)
 
22,767
 
767,135
 
3.1%
 
75,812
 
230,076
 
Americas
 
23,535
 
(15,117)
 
8,418
 
487,993
 
1.8%
 
37,038
 
102,451
 
Europe
 
4,188
 
(830)
 
3,358
 
110,069
 
3.1%
 
9,554
 
23,954
 
AMEA
 
4,473
 
(995)
 
3,478
 
76,051
 
4.8%
 
10,551
 
39,643
 
G. China
 
7,938
 
(425)
 
7,513
 
93,022
 
8.8%
 
18,669
 
64,028
 
 
 
 
 
 
 
 
 
 
 
 
Appendix 4: Full Year financial headlines
 
Operating Profit $m
 
Total
 
Americas
 
Europe
 
AMEA
 
G. China
 
Central
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
Franchised
 
693
669
600
575
78
77
12
12
3
5
-
 
-
 
Managed
 
239
241
64
64
22
28
89
90
64
59
-
 
-
 
Owned & leased
 
26
57
24
24
-
1
2
3
-
29
-
 
-
 
Regional overheads
 
(123)
(136)
(55)
(66)
(25)
(28)
(21)
(19)
(22)
(23)
-
 
-
 
Profit pre central overheads
 
835
831
633
597
75
78
82
86
45
70
-
 
-
 
Central overheads
 
(128)
(151)
-
-
-
-
-
-
-
-
(128)
 
(151)
 
Operating profit before exceptional items
 
707
680
633
597
75
78
82
86
45
70
(128)
 
(151)
 
Exceptional items
 
(29)
819
(29)
(41)
-
175
-
(2)
-
698
-
 
(11)
 
Total operating profit
 
678
1,499
604
556
75
253
82
84
45
768
(128)
 
(162)
 
 
 
  Appendix 5: Reported operating profit movement before exceptional items at actual and constant exchange rates
 
Total***
 
Americas
 
Europe
 
AMEA
 
G. China
 
Reported
 
Actual*
 
CER**
 
Actual*
 
CER**
 
Actual*
 
CER**
 
Actual*
 
CER**
 
Actual*
 
CER**
 
Growth/ (decline)
 
4%
 
4%
 
6%
 
7%
 
(4)%
 
0%
 
(5)%
 
(5)%
 
(36)%
 
(33)%
 
  
  Appendix 6: Underlying operating profit movement before exceptional items
Underlying****
 
Total***
Americas
Europe
AMEA
G. China
Growth/ (decline)
10%
8%
0%
(4)%
15%
 
 
Exchange rates:
GBP:USD
EUR:USD
* US dollar actual currency
2016
0.74
0.90
** Translated at constant 2015 exchange rates
2015
0.65
0.90
*** After central overheads
 
 
 
**** At CER and excluding: owned asset disposals, results from managed lease hotels and significant liquidated damages (see below for definitions)
 
 
 
Appendix 7: Definitions
 
CER: constant exchange rates with 2015 exchange rates applied to 2016.
Comparable RevPAR: Revenue per available room for hotels that have traded for all of 2015 and 2016, reported at CER.
Fee revenue: Group revenue excluding owned & leased hotels, managed leases and significant liquidated damages.
Fee margin: adjusted for owned and leased hotels, managed leases, and significant liquidated damages.
Managed lease hotels: properties structured for legal reasons as operating leases but with the same characteristics as management contracts
Americas: Revenue 2016 $34m; 2015 $38m; EBIT 2016 $nil, 2015 $nil. Europe:  Revenue 2016 $77m; 2015 $75m; EBIT 2016 $2m, 2015 $1m. AMEA: Revenue 2016 $51m; 2015 $46m; EBIT 2016 $5m, 2015 $5m.
Owned asset disposals: InterContinental Hong Kong was sold on 30 September 2015 (2016: $nil revenue and $nil EBIT, 2015: $98m revenue and $29m EBIT), InterContinental Paris - Le Grand was sold on 20 May 2015 (2016: $nil revenue and $nil EBIT, 2015: $30m revenue and $1m EBIT).
Significant liquidated damages: $nil in 2016, $3m in 2015 ($3m Americas managed in Q2).
Total gross revenue: total rooms revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels. Other than owned and leased hotels, it is not revenue attributable to IHG, as it is derived mainly from hotels owned by third parties.
Total RevPAR: Revenue per available room including hotels that have opened or exited in either 2015 or 2016, reported at CER.
 
 
Appendix 8: Investor information for proposed 2016 final dividend
 
Ex-dividend date:
 
4 May 2017
 
Record date:
 
5 May 2017 
 
Payment date:
 
22 May 2017
 
Dividend payment:
 
ADRs: 64.0 cents per ADR; The corresponding amount in Pence Sterling per ordinary share will be announced on 11 May 2017, calculated based on the average of the market exchange rates for the three days commencing 8 May 2017.
 
 
Appendix 9: Investor information for proposed special dividend
 
Ex-dividend date:
 
8 May 2017
 
Record date:
 
5 May 2017
 
Payment date:
 
22 May 2017
 
Dividend payment:
 
ADRs:202.5 cents per ADR.  The corresponding amount in Pence Sterling per ordinary share will be announced on 11 May 2017, calculated based on the average of the market exchange rates for the three days commencing 8 May 2017.
 
 
For further information, please contact:
 
Investor Relations (Heather Wood; Adam Smith; Neeral Morzaria):
 
+44 (0)1895 512 176
 
+44 (0)7808 098 724
 
Media Relations (Yasmin Diamond; Zoë Bird):
 
+44 (0)1895 512 008
 
+44 (0)7736 746 167
 
 
 
 
Presentation for Analysts and Shareholders:
A presentation with Richard Solomons, Chief Executive Officer and Paul Edgecliffe-Johnson, Chief Financial Officer will commence at 9:30am London time on 21 February at Goldman Sachs, Rivercourt, 120 Fleet Street, London, EC4A 2BE.  There will be an opportunity to ask questions.  The presentation will conclude at approximately 10:30am.
There will be a live audio webcast of the results presentation on the web address www.ihgplc.com/prelimswebcast.   The archived webcast of the presentation is expected to be on this website later on the day of the results and will remain on it for the foreseeable future.  There will also be a live dial-in facility:
 
 
UK toll:
UK toll free:
US toll:
Passcode:
 
 
+44 (0)20 7108 6248
0800 279 3953
+1 210 795 1098
IHG Investor
 
A replay of the conference call will also be available following the event - details are below. 
 
 
Replay:
Pin:
 
 
+1 866 358 4517
2021
 
 
US conference call and Q&A:
There will also be a conference call, primarily for US investors and analysts, at 9:00am New York Time on 21 February with Richard Solomons, Chief Executive Officer and Paul Edgecliffe-Johnson, Chief Financial Officer. There will be an opportunity to ask questions.
 
 
UK toll:
US toll:
US toll free:
Passcode:
 
 
+44 (0)20 7108 6248
+1 210 795 1098
+1 866 803 2143
IHG Investor
 
A replay of the conference call will also be available following the event - details are below. 
 
 
Replay:
Pin:
 
 
+1 800 839 1335
0228
 
 
Website:
The full release and supplementary data will be available on our website from 7:00am (London time) on 21 February. The web address is www.ihgplc.com/prelims17.
 
 
 
 
Notes to Editors:
 
IHG® (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of hotel brands, including InterContinental® Hotels & Resorts, Kimpton® Hotels & Restaurants, Hotel Indigo®, EVEN® Hotels, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites®.
 
IHG franchises, leases, manages or owns nearly 5,200 hotels and 770,000 guest rooms in almost 100 countries, with nearly 1,500 hotels in its development pipeline. IHG also manages IHG® Rewards Club, the world's first and largest hotel loyalty programme, with more than 100 million enrolled members worldwide. 
 
InterContinental Hotels Group PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales. More than 350,000 people work across IHG's hotels and corporate offices globally.
 
Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: www.ihgplc.com/media and follow us on social media at: www.twitter.com/ihg, www.facebook.com/ihg and www.youtube.com/ihgplc.
 
 
Cautionary note regarding forward-looking statements:
This announcement contains certain forward-looking statements as defined under United States law (Section 21E of the Securities Exchange Act of 1934) and otherwise.  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 PLC'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.  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.  The main factors that could affect the business and the financial results are described in the 'Risk Factors' section in the current InterContinental Hotels Group PLC's Annual report and Form 20-F filed with the United States Securities and Exchange Commission.
 
 
 
This Business Review provides a commentary on the performance of InterContinental Hotels Group PLC
(the Group or IHG) for the financial year ended 31 December 2016.
 
GROUP PERFORMANCE
 
12 months ended 31 December
Group results
2016
2015
%
 
$m
$m
change
Revenue
 
 
 
 
Americas
993
955
4.0
 
Europe
227
265
(14.3)
 
AMEA
237
241
(1.7)
 
Greater China
117
207
(43.5)
 
Central
141
135
4.4
 
 
____
____
___
 
1,715
1,803
(4.9)
 
____
____
___
Operating profit before exceptional items
 
 
 
 
Americas
633
597
6.0
 
Europe
75
78
(3.8)
 
AMEA
82
86
(4.7)
 
Greater China
45
70
(35.7)
 
Central
(128)
(151)
15.2
 
 
____
____
___
 
707
680
4.0
Exceptional operating items
(29)
819
(103.5)
 
___
___
___
Operating profit
678
1,499
(54.8)
Net financial expenses
(87)
(87)
-
 
___
___
___
Profit before tax
591
1,412
(58.1)
 
___
___
___
Earnings per ordinary share
 
 
 
 
Basic
195.3¢
520.0¢
(62.4)
 
Adjusted
203.3¢
174.9¢
16.2
 
 
 
 
 
Average US dollar to sterling exchange rate
$1 : £0.74
$1 : £0.65
13.8
 
 
During the year ended 31 December 2016, revenue decreased by $88m (4.9%) to $1,715m primarily as a result of the sale of InterContinental Paris - Le Grand and InterContinental Hong Kong. Operating profit and profit before tax both decreased by $821m to $678m and $591m, primarily due to the gain on sale of InterContinental Paris - Le Grand and InterContinental Hong Kong during the year ended 31 December 2015. Operating profit before exceptional items increased by $27m (4.0%) to $707m.
 
Underlyinga Group revenue and underlyinga Group operating profit increased by $69m (4.6%) and $61m (9.5%) respectively.
 
Comparable Group RevPAR increased by 1.8% (including an increase in average daily rate of 1.2%). IHG System size increased by 3.1% to 767,135 rooms, whilst underlying Group fee revenueb increased by 2.3% (4.4% at constant currency).
 
At constant currency, the net central operating loss before exceptional items decreased by $12m (7.9%) to $139m compared to 2015 (but at actual currency decreased by $23m (15.2%) to $128m).
 
Group fee margin was 48.8%, up 3.3 percentage points (up 2.5 percentage points at constant currency) on 2015, after adjusting for owned and leased hotels, managed leases, and significant liquidated damages. Group fee margin benefited from efficiency improvements and by leveraging our global scale.
 
Basic earnings per ordinary share decreased by 62.4% to 195.3¢, whilst adjusted earnings per ordinary share increased by 16.2% to 203.3¢, reflecting the increase in operating profit before exceptional items and the impact of the share consolidation in May 2016.
 
a Underlying excludes the impact of owned asset disposals, significant liquidated damages and the results from managed-lease hotels, translated at constant currency by applying prior-year exchange rates. Underlying operating profit growth also excludes the impact of exceptional items.
b Underlying fee revenue is defined as Group revenue excluding revenue from owned and leased hotels, managed leases and significant liquidated damages.
 
 
 
 
 
   
12 months ended 31 December
 
2016
2015
%
Global total gross revenue
$bn
$bn
change
 
 
 
 
InterContinental
4.6
4.5
2.2
Kimpton
1.1
1.1
-
Crowne Plaza
4.1
4.2
(2.4)
Hotel Indigo
0.4
0.3
33.3
Holiday Inn
6.2
6.2
-
Holiday Inn Express
6.3
6.1
3.3
Staybridge Suites
0.8
0.8
-
Candlewood Suites
0.7
0.7
-
Other brands
0.3
0.1
200.0
 
____
____
____
Total
24.5
24.0
2.1
 
____
____
____
 
 
 
 
Hotels
Rooms
Global hotel and room count
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
187
3
 63,650
1,610
 
Kimpton
61
-
 11,238
262
 
HUALUXE
4
1
 1,096
298
 
Crowne Plaza
408
2
 113,803
519
 
Hotel Indigo
75
10
 8,905
1,241
 
EVEN Hotels
6
3
 1,010
564
 
Holiday Inn1
1,241
15
231,756
3,656
 
Holiday Inn Express
2,497
72
 247,009
10,603
 
Staybridge Suites
236
16
 25,610
1,646
 
Candlewood Suites
362
21
 34,192
1,864
 
Other
97
(1)
28,866
504
 
 
____
____
______
_____
Total
5,174
142
767,135
22,767
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
4,321
102
 542,650
11,902
 
Managed
845
39
 222,073
10,670
 
Owned and leased
8
1
 2,412
195
 
 
____
____
______
_____
Total
5,174
142
767,135
22,767
 
 
____
____
______
_____
 
1Includes 46 Holiday Inn Resort properties (11,652 rooms) and 26 Holiday Inn Club Vacations properties
(7,601 rooms) (2015: 47 Holiday Inn Resort properties (11,518 rooms) and 16 Holiday Inn Club Vacations properties (5,231 rooms)).
 
 
 
Hotels
Rooms
Global pipeline
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
62
10
 17,480
1,804
 
Kimpton
18
-
 3,098
(268)
 
HUALUXE
22
1
 6,956
324
 
Crowne Plaza
90
6
 24,536
1,355
 
Hotel Indigo
75
12
 10,593
1,385
 
EVEN Hotels
6
(2)
 780
(482)
 
Holiday Inn1
261
5
52,678
474
 
Holiday Inn Express
676
74
 83,882
8,277
 
Staybridge Suites
140
26
 15,321
2,680
 
Candlewood Suites
108
10
 9,604
884
 
Other
12
(2)
5,148
(273)
 
 
____
____
______
_____
Total
1,470
140
230,076
16,160
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
1,039
134
 117,694
15,525
 
Managed
431
 7
 112,382
 837
 
Owned and Leased
-
(1)
 -  
(202)
 
 
____
____
______
_____
Total
1,470
140
230,076
16,160
 
 
____
____
______
_____
 
1 Includes 14 Holiday Inn Resort properties (3,531 rooms) (2015: 14 Holiday Inn Resort properties (3,548 rooms)).
 
 
THE AMERICAS
 
12 months ended 31 December
 
2016
2015
%
Americas results
$m
$m
change
 
 
 
 
Revenue
 
 
 
 
Franchised
685
661
3.6
 
Managed
172
166
3.6
 
Owned and leased
136
128
6.3
 
____
____
____
Total
 
993
955
4.0
 
____
____
____
Operating profit before exceptional items
 
 
 
 
Franchised
600
575
4.3
 
Managed
64
64
-
 
Owned and leased
24
24
-
 
 
____
____
____
 
688
663
3.8
Regional overheads
(55)
(66)
16.7
 
____
____
____
 
633
597
6.0
Exceptional items
(29)
(41)
29.3
 
____
____
____
Operating profit
 
604
556
8.6
 
____
____
____
 
 
 
 
 
 
 
 
 
 
Americas Comparable RevPAR movement on previous year
12 months ended
31 December
2016
 
 
Franchised
 
 
Crowne Plaza
1.5%
 
Holiday Inn
2.6%
 
Holiday Inn Express
1.7%
 
All brands
1.9%
Managed
 
 
InterContinental
2.7%
 
Kimpton
2.9%
 
Crowne Plaza
5.7%
 
Holiday Inn
4.9%
 
Staybridge Suites
5.3%
 
Candlewood Suites
1.2%
 
All brands
3.2%
Owned and leased
 
 
EVEN Hotels
15.5%
 
All brands
4.0%
 
Americas results
 
Franchised revenue and operating profit increased by $24m (3.6%) to $685m and by $25m (4.3%) to $600m respectively. Royaltiesa growth of 2.4% was driven by comparable RevPAR growth of 1.9%, including 2.6% for Holiday Inn and 1.7% for Holiday Inn Express, together with 2.0% rooms growth. On a constant currency basis, revenue and operating profit increased by $29m (4.4%) to $690m and by $30m (5.2%) to $605m respectively.
 
Managed revenue increased by $6m (3.6%) to $172m, whilst operating profit stayed flat at $64m due to costs relating to our 20% interest in InterContinental New York Barclay and the ongoing impact of new supply on RevPAR growth in New York. Revenue and operating profit included $34m (2015: $38m) and $nil (2015: $nil) respectively from one managed-lease property. Excluding results from this managed-lease hotel, the benefit of significant liquidated damages receipts (2016: $nil; 2015: $3m) and on a constant currency basis, revenue increased by $16m (12.8%) and operating profit increased by $5m (8.2%) respectively.
 
Owned and leased revenue increased by $8m (6.3%) to $136m, whilst operating profit stayed flat at $24m.
 
Regional overheads decreased by $11m (16.7%) to $55m due to a $10m year-on-year decrease in US healthcare costs.
 
a Royalties are fees, based on rooms revenue, that a franchisee pays to the brand owner for use of the brand name.
 
 
 
 
Hotels
Rooms
Americas hotel and room count
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
48
(2)
 16,408
(701)
 
Kimpton
61
-
 11,238
262
 
Crowne Plaza
164
(8)
 44,116
(2,200)
 
Hotel Indigo
46
6
 5,932
861
 
EVEN Hotels
6
3
 1,010
564
 
Holiday Inn1
774
2
136,744
749
 
Holiday Inn Express
2,154
48
 192,371
5,399
 
Staybridge Suites
226
15
 24,185
1,523
 
Candlewood Suites
362
21
 34,192
1,864
 
Other
84
-
21,797
97
 
 
____
____
______
_____
Total
3,925
85
487,993
8,418
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
3,633
85
 430,866
8,636
 
Managed
286
(1)
 55,302
(413)
 
Owned and leased
6
1
 1,825
195
 
 
____
____
______
_____
Total
3,925
85
487,993
8,418
 
 
____
____
______
_____
 
1 Includes 25 Holiday Inn Resort properties (6,791 rooms) and 26 Holiday Inn Club Vacations properties
(7,601 rooms) (2015: 23 Holiday Inn Resort properties (5,902 rooms) and 16 Holiday Inn Club Vacations properties (5,231 rooms)).
 
 
 
Hotels
Rooms
Americas pipeline
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
7
3
 2,532
987
 
Kimpton
17
(1)
 2,949
(417)
 
Crowne Plaza
17
2
 3,286
796
 
Hotel Indigo
32
2
 3,965
(59)
 
EVEN Hotels
6
(2)
 780
(482)
 
Holiday Inn1
128
3
17,304
(899)
 
Holiday Inn Express
488
39
 46,796
2,851
 
Staybridge Suites
131
26
 13,896
2,666
 
Candlewood Suites
108
10
 9,604
884
 
Other
11
(2)
1,339
(260)
 
 
____
____
______
_____
Total
945
80
102,451
6,067
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
897
88
 93,295
7,432
 
Managed
48
(7)
 9,156
(1,163)
 
Owned and leased
-
(1)
 -  
(202)
 
 
____
____
______
_____
Total                
945
80
102,451
6,067
 
 
____
____
______
_____
 
1 Includes three Holiday Inn Resort properties (455 rooms) (2015: seven Holiday Inn Resort properties (1,657 rooms)).
 
 
 
 
 
EUROPE
 
12 months ended 31 December
 
 
2016
2015
%
 
Europe results
$m
$m
change
 
 
 
 
 
 
Revenue
 
 
 
 
 
Franchised
102
104
(1.9)
 
 
Managed
125
131
(4.6)
 
 
Owned and leased
-
30
(100.0)
 
 
____
____
____
 
Total
 
227
265
(14.3)
 
 
____
____
____
 
Operating profit before exceptional items
 
 
 
 
 
Franchised
78
77
1.3
 
 
Managed
22
28
(21.4)
 
 
Owned and leased
-
1
(100.0)
 
 
 
____
____
____
 
 
100
106
(5.7)
 
Regional overheads
(25)
(28)
10.7
 
 
____
____
____
 
 
75
78
(3.8)
 
Exceptional items
-
175
(100.0)
 
 
____
____
____
 
Operating profit
 
75
253
(70.4)
 
 
____
____
____
 
 
 
Europe comparable RevPAR movement on previous year
 
 
12 months ended
31 December
2016
 
 
Franchised
 
 
All brands
2.0%
 
 
 
Managed
 
 
All brands
(0.3)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Europe results
 
Franchised revenue decreased by $2m (1.9%) to $102m, whilst operating profit increased by $1m (1.3%) to $78m. On a constant currency basis, revenue and operating profit increased by $6m (5.8%) and $6m (7.8%) respectively.
 
Managed revenue decreased by $6m (4.6%) and operating profit decreased by $6m (21.4%). Revenue and operating profit included $77m (2015: $75m) and $2m (2015: $1m) respectively from managed leases. Excluding properties operated under this arrangement, and on a constant currency basis, revenue decreased by $5m (8.9%) and operating profit decreased by $6m (22.2%). Performance was impacted by difficult trading conditions for our hotels in Paris, and a revenue reduction in relation to three managed hotels; two of which have exited the system and one of which is undergoing a major refurbishment.
 
The last remaining hotel in the owned and leased estate, InterContinental Paris - Le Grand, was sold in 2015. Following this, revenue and operating profit in the estate decreased to nil.
 
 
 
 
Hotels
Rooms
Europe hotel and room count
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
31
(1)
 9,724
(162)
 
Crowne Plaza
92
4
 20,887
618
 
Hotel Indigo
21
2
 1,910
120
 
Holiday Inn1
291
6
 47,829
1,679
 
Holiday Inn Express
234
6
 28,578
1,053
 
Staybridge Suites
7
1
 1,000
123
 
Other
1
(1)
 141
(73)
 
 
____
____
______
_____
Total
677
17
110,069
3,358
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
629
14
 97,030
2,620
 
Managed
48
3
 13,039
738
 
 
____
____
______
_____
Total
677
17
110,069
3,358
 
 
____
____
______
_____
 
1 Includes one Holiday Inn Resort property (88 rooms) (2015: two Holiday Inn Resort properties (212 rooms)).
 
 
 
Hotels
Rooms
Europe pipeline
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
6
1
 813
(69)
 
Kimpton
1
1
149
149
 
Crowne Plaza
14
3
 3,185
512
 
Hotel Indigo
18
7
 2,264
861
 
Holiday Inn
35
(2)
 7,511
(323)
 
Holiday Inn Express
58
13
 9,395
2,197
 
Staybridge Suites
5
1
 637
126
 
Other
-
-
 -  
(31)
 
 
____
____
______
_____
Total
137
24
23,954
3,422
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
111
23
 17,908
3,781
 
Managed
26
1
 6,046
(359)
 
 
____
____
______
_____
Total
137
24
23,954
3,422
 
 
____
____
______
_____
 
 
 
 
ASIA, MIDDLE EAST AND AFRICA (AMEA)
 
12 months ended 31 December
 
 
2016
2015
%
 
AMEA results
$m
$m
change
 
 
 
 
 
 
Revenue
 
 
 
 
 
Franchised
16
16
-
 
 
Managed
184
189
(2.6)
 
 
Owned and leased
37
36
2.8
 
 
 
____
____
____
 
Total
 
237
241
(1.7)
 
 
____
____
____
 
Operating profit before exceptional items
 
 
 
 
 
Franchised
12
12
-
 
 
Managed
89
90
(1.1)
 
 
Owned and leased
2
3
(33.3)
 
 
 
____
____
____
 
 
103
105
(1.9)
 
Regional overheads
(21)
(19)
(10.5)
 
 
____
____
____
 
 
82
86
(4.7)
 
Exceptional items
-
(2)
100.0
 
 
____
____
____
 
Operating profit
82
84
(2.4)
 
 
____
____
____
 
 
 
AMEA comparable RevPAR movement on previous year
 
 
12 months ended
31 December
2016
 
 
Franchised
 
 
All brands
(0.1)%
 
Managed
 
 
All brands
(0.2)%
 
 
 
 
 
 
 
 
 
 
AMEA results
 
On an actual and constant currency basis, franchised revenue and operating profit remained flat at $16m and $12m respectively.
 
Managed revenue and operating profit decreased by $5m (2.6%) to $184m and $1m (1.1%) to $89m respectively. Revenue and operating profit included $51m (2015: $46m) and $5m (2015: $5m) respectively from one managed-lease property. Excluding results from this hotel and on a constant currency basis, revenue decreased by $9m (6.3%) to $134m, whilst operating profit remained flat at $85m. Good underlying growth in our managed business was offset by a $7m revenue reduction in relation to four hotels; three long standing contracts being renewed onto standard market terms and one equity stake disposal.
 
In the owned and leased estate, on an actual and constant currency basis, revenue increased by $1m (2.8%) to $37m and operating profit decreased by $1m (33.3%) to $2m.
 
 
 
 
Hotels
Rooms
AMEA hotel and room count
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
69
1
 21,203
(35)
 
Crowne Plaza
73
2
 20,749
738
 
Hotel Indigo
2
1
 323
131
 
Holiday Inn1
93
2
 21,312
328
 
Holiday Inn Express
34
7
 7,583
1,697
 
Staybridge Suites
3
-
 425
-
 
Other
6
-
 4,456
619
 
 
____
____
______
_____
Total
280
13
76,051
3,478
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
55
3
 12,570
646
 
Managed
223
10
 62,894
2,832
 
Owned and leased
2
-
 587
-
 
 
____
____
______
_____
Total
280
13
76,051
3,478
 
 
____
____
______
_____
 
1 Includes 14 Holiday Inn Resort properties (2,953 rooms) (2015: 15 Holiday Inn Resort properties (3,169 rooms)).
 
 
 
Hotels
Rooms
AMEA pipeline
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
27
5
 6,681
1,332
 
Crowne Plaza
21
2
 5,554
253
 
Hotel Indigo
14
1
 2,582
301
 
Holiday Inn1
48
3
 13,022
1,493
 
Holiday Inn Express
35
(8)
 7,486
(1,858)
 
Staybridge Suites
4
(1)
 788
(112)
 
Other
-
-
 3,530
18
 
 
____
____
______
_____
Total
149
2
39,643
1,427
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
 11
3
 2,406
227
 
Managed
 138
(1)
 37,237
1,200
 
 
____
____
______
_____
Total
149
2
39,643
1,427
 
 
____
____
______
_____
 
1 Includes five Holiday Inn Resort properties (1,256 rooms) (2015: four Holiday Inn Resort properties (1,071 rooms)).
 
 
 
 
 
GREATER CHINA
 
12 months ended 31 December
 
2016
2015
%
Greater China results
$m
$m
Change
 
 
 
 
Revenue
 
 
 
 
Franchised
3
4
(25.0)
 
Managed
114
105
8.6
 
Owned and leased
-
98
(100.0)
 
 
____
____
____
Total
 
117
207
(43.5)
 
____
____
____
Operating profit before exceptional items
 
 
 
 
Franchised
3
5
(40.0)
 
Managed
64
59
8.5
 
Owned and leased
-
29
(100.0)
 
 
____
____
____
 
67
93
(28.0)
Regional overheads
(22)
(23)
4.3
 
____
____
____
 
45
70
(35.7)
Exceptional items
-
698
(100.0)
 
____
____
____
Operating profit
45
768
(94.1)
 
____
____
____
 
 
 
 
 
 
 
 
Greater China comparable RevPAR movement on previous year
12 months ended
31 December
2016
 
 
Managed
 
 
All brands
 
3.0%
 
 
 
 
 
 
Greater China results
 
On an actual and constant currency basis, franchised revenue and operating profit decreased by $1m (25.0%) and by $2m (40.0%) respectively.
 
Managed revenue and operating profit increased by $9m (8.6%) to $114m and by $5m (8.5%) to $64m respectively. Comparable RevPAR increased by 3.0%, whilst the Greater China System size grew by 9.0%, driving a 7.0% increase in total gross revenue derived from rooms business. Total gross revenue derived from non-rooms business increased by 6.8%, primarily due to increased food and beverage revenue. On a constant currency basis, revenue and operating profit increased by $15m (14.3%) to $120m and by $8m (13.6%) to $67m respectively, with ongoing investment in growth initiatives more than offset by scale efficiencies and strategic cost management.   
 
The last remaining hotel in the owned and leased estate, InterContinental Hong Kong, was sold in 2015. Following this, revenue and operating profit in the estate decreased to nil.
 
 
 
 
Hotels
Rooms
Greater China hotel and room count
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
39
5
 16,315
2,508
 
HUALUXE
4
1
 1,096
298
 
Crowne Plaza
79
4
 28,051
1,363
 
Hotel Indigo
6
1
 740
129
 
Holiday Inn1
83
5
 25,871
900
 
Holiday Inn Express
75
11
 18,477
2,454
 
Other
6
-
 2,472
(139)
 
 
____
____
______
_____
Total
292
27
93,022
7,513
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
4
-
 2,184
-
 
Managed
288
27
 90,838
7,513
 
 
____
____
______
_____
Total
292
27
93,022
7,513
 
 
____
____
______
_____
 
1 Includes six Holiday Inn Resort properties (1,820 rooms) (2015: seven Holiday Inn Resort properties (2,235 rooms)).
 
 
 
Hotels
Rooms
Greater China pipeline
at 31 December
 
2016
Change
over 2015
 
2016
Change
over 2015
 
 
 
 
 
Analysed by brand
 
 
 
 
 
InterContinental
 22
1
 7,454
(446)
 
HUALUXE
 22
1
 6,956
324
 
Crowne Plaza
 38
(1)
 12,511
(206)
 
Hotel Indigo
 11
2
 1,782
282
 
Holiday Inn1
 50
1
 14,841
203
 
Holiday Inn Express
 95
30
 20,205
5,087
 
Other
 1
-
 279
-
 
 
____
____
______
_____
Total
239
34
64,028
5,244
 
 
____
____
______
_____
Analysed by ownership type
 
 
 
 
 
Franchised
20
20
 4,085
4,085
 
Managed
219
14
 59,943
1,159
 
 
____
____
______
_____
Total
239
34
64,028
5,244
 
 
____
____
______
_____
 
1 Includes six Holiday Inn Resort properties (1,820 rooms) (2015: three Holiday Inn Resort properties (820 rooms)).
 
 
 
CENTRAL
 
12 months ended 31 December
 
2016
2015
%
Central results
$m
$m
change
 
 
 
 
Revenue
141
135
4.4
Gross costs
(269)
(286)
5.9
 
____
____
____
Operating loss before exceptional items
(128)
(151)
15.2
Exceptional items
 
-
(11)
100.0
 
____
____
____
Operating loss
(128)
(162)
21.0
 
____
____
____
 
 
 
 
 
 
Central results
The net operating loss decreased by $34m (21.0%) compared to 2015. Central revenue, which mainly comprises technology fee income, increased by $6m (4.4%) to $141m (an increase of $9m (6.7%) at constant currency), driven by increases in both comparable RevPAR (1.8%) and IHG System size (3.1%). At constant currency, gross costs decreased by $3m (1.0%) compared to 2015 (a $17m or 5.9% decrease at actual currency) driven by a continued focus on strategic cost management. Net operating loss before exceptional items decreased by $23m (15.2%) to $128m (a $12m or 7.9% decrease to $139m at constant currency).
 
SYSTEM FUND
 
12 months ended 31 December
 
 
2016
2015
%
 
System Fund assessments
$m
$m
change
 
 
 
 
 
 
Assessment fees and contributions received from hotels
1,439
1,351
6.5
 
Proceeds from sale of IHG Rewards Club points
283
222
27.5
 
 
____
____
____
 
Total
 
1,722
1,573
9.5
 
 
____
____
____
 
 
 
 
 
 
 
 
 
 
System Fund assessments
In addition to franchise or management fees, hotels within the IHG System pay assessments and contributions (other than for Kimpton and InterContinental) which are collected by IHG for specific use within the System Fund. The System Fund also receives proceeds from the sale of IHG Rewards Club points. The System Fund is managed for the benefit of hotels in the IHG System with the objective of driving revenues for the hotels.
 
The System Fund is used to pay for marketing, the IHG Rewards Club loyalty programme and the guest reservation system. The operation of the System Fund does not result in a profit or loss for the Group and consequently the revenues and expenses of the System Fund are not included in the Group Income Statement.
 
In the year to 31 December 2016, System Fund income increased by 9.5% to $1,722m primarily as a result of a 6.5% increase in assessment fees and contributions from hotels resulting from increased hotel room revenues, reflecting increases in RevPAR and IHG System size. Continued strong performance in co-branded credit card schemes drove the 27.5% increase in proceeds from the sale of IHG Rewards Club points.
 
 
 
 
OTHER FINANCIAL INFORMATION
 
Exceptional items
Exceptional items totalled a loss of $29m which included $13m relating to the cost of integrating Kimpton into the operations of the Group and a $16m impairment charge relating to the Barclay associate which owns InterContinental New York Barclay, a hotel managed by the Group. The impairment charge reflects the currently depressed trading outlook for the New York market and the high cost of renovation of the hotel.
 
Exceptional 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 were flat at $87m, reflecting the issue of £350m 2.125% public bonds in August 2016, and a full year of interest on the £300m 3.75% bonds issued in August 2015, offset by the impact of a weaker pound on translation of sterling interest expense.
 
Financing costs included $3m (2015: $2m) of interest costs associated with IHG Rewards Club where interest is charged on the accumulated balance of cash received in advance of the redemption of points awarded. Financing costs in 2016 also included $20m (2015: $20m) in respect of the InterContinental Boston finance lease.
 
Taxation
The effective rate of tax on operating profit excluding the impact of exceptional items was 30% (2015: 30%). Excluding the impact of prior-year items, the equivalent tax rate would be 31% (2015: 36%). This rate is higher than the average UK statutory rate of 20% (2015: 20.25%), due mainly to certain overseas profits (particularly in the US) being subject to statutory tax rates higher than the UK statutory rate, unrelieved foreign taxes and disallowable expenses.
 
Taxation within exceptional items totalled a credit of $12m (2015: charge of $8m). In 2016, the credit included a $6m deferred tax credit in respect of the impairment charge relating to the Barclay associate and a $5m deferred tax credit representing future tax relief on $13m of Kimpton integration costs. In 2015, the charge comprised $56m relating to the disposal of InterContinental Hong Kong and InterContinental Paris - Le Grand, a credit of $21m in respect of the 2014 disposal of an 80% interest in InterContinental New York Barclay reflecting the judgement that state tax law changes would now apply to the deferred gain and credits of $27m for current and deferred tax relief on other operating exceptional items of current and prior years.
 
Net tax paid in 2016 totalled $130m (2015: $110m, including $1m in respect of disposals). Tax paid represents an effective rate of 22% (2015: 8%) on total profits and is lower than the effective income statement tax rate of 30% (2015: 30%), primarily due to the timing of US tax payments and the impact of deferred taxes.
 
Dividends
The Board has proposed a final dividend per ordinary share of 64.0¢. With the interim dividend per ordinary share of 30.0¢, the full-year dividend per ordinary share for 2016 will total 94.0¢, an increase of 11% over 2015.
 
In February 2017, the Board proposed a $400m return of funds to shareholders by way of a special dividend and share consolidation.
 
IHG pays its dividends in pounds sterling and US dollars. The sterling amount of the final and special dividend will be announced on 11 May 2017 using the average of the daily exchange rates from 8 May 2017 to 10 May 2017 inclusive.
 
Earnings per ordinary share
Basic earnings per ordinary share decreased by 62.4% to 195.3¢ from 520.0¢ in 2015. Adjusted earnings per ordinary share increased by 16.2% to 203.3¢ from 174.9¢ in 2015.
 
Share price and market capitalisation
The IHG share price closed at £36.38 on 31 December 2016, up from £26.58 on 31 December 2015. The market capitalisation of the Group at the year end was £7.2bn.
 
Capital structure and liquidity management
In August 2016, the Group issued a £350m, 10-year bond at a 2.125% coupon rate, the lowest funding rate the Group has achieved in the sterling bond market. The bonds are repayable in 2026, extending the maturity
profile of the Group's debt.
 
This is in addition to £400m of public bonds which are repayable on 28 November 2022 and £300m of public bonds which are repayable on 14 August 2025. On 9 December 2016, the Group repaid £250m of maturing public bonds which were issued in 2009.
 
The Group is further financed by a $1.275bn revolving syndicated bank facility (the Syndicated Facility) and a $75m revolving bilateral facility (the Bilateral facility) which mature in March 2021, with a one-year extension option exercisable in 2017. $110m was drawn under the Syndicated Facility at the year end.
 
The Syndicated and Bilateral facilities contain the same terms and two financial covenants; interest cover; and net debt divided by earnings before interest, tax, depreciation and amortisation (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.
 
Additional funding is provided by the 99-year finance lease (of which 89 years remain) on InterContinental Boston and other uncommitted bank facilities. In the Group's opinion, the available facilities are sufficient for the Group's present liquidity requirements.
 
Net debt of $1,506m (2015: $529m) is analysed by currency as follows:
 
2016
2015
 
$m
$m
 
 
 
Borrowings
 
 
 
Sterling
1,289
1,405
 
US dollar
418
253
 
Euros
2
4
 
Other
3
4
Cash and cash equivalents
 
 
 
Sterling
(27)
(619)
 
US dollar
(127)
(460)
 
Euros
(12)
(15)
 
Canadian dollar
(8)
(8)
 
Chinese renminbi
(7)
(4)
 
Other
(25)
(31)
 
 
____
____
Net debt
1,506
529
 
____
____
 
 
 
Average debt levels
1,235
1,420
 
____
____
 
 
 
 
 
INTERCONTINENTAL HOTELS GROUP PLC
GROUP INCOME STATEMENT
For the year ended 31 December 2016
 
 
Year ended 31 December 2016
Year ended 31 December 2015
 
 
Before
exceptional
items
Exceptional
items
(note 4)
 
 
Total
Before
exceptional
items
Exceptional
items
(note 4)
 
 
Total
 
$m
$m
$m
$m
$m
$m
 
 
 
 
 
 
 
Revenue (note 3)
1,715
-
1,715
1,803
-
1,803
Cost of sales
(580)
-
     (580)
(640)
-
(640)
Administrative expenses
(339)
(13)
(352)
(395)
(25)
(420)
Share of losses of associates and joint ventures
 
(2)
 
-
 
(2)
 
(3)
 
-
 
(3)
Other operating income and expenses
 
9
 
-
 
9
 
11
 
880
 
891
 
_____
_____
_____
_____
_____
_____
 
803
(13)
790
776
855
1,631
 
 
 
 
 
 
 
Depreciation and amortisation
(96)
-
(96)
(96)
-
(96)
Impairment charges
-
(16)
(16)
-
(36)
(36)
 
_____
_____
_____
_____
_____
_____
 
 
 
 
 
 
 
Operating profit (note 3)
707
(29)
678
680
819
1,499
Financial income
6
-
6
5
-
5
Financial expenses
(93)
-
(93)
(92)
-
(92)
 
_____
_____
_____
_____
_____
_____
 
 
 
 
 
 
 
Profit before tax
620
(29)
591
593
819
1,412
 
 
 
 
 
 
 
Tax (note 5)
(186)
12
(174)
(180)
(8)
(188)
 
_____
_____
_____
_____
_____
_____
Profit for the year from continuing operations
 
434
 
(17)
 
417
413
811
1,224
 
 ____
_____
_____
 ____
_____
_____
 
 
 
 
 
 
 
Attributable to:
 
 
 
 
 
 
 
Equity holders of the parent
431
(17)
414
411
811
1,222
 
Non-controlling interest
3
-
3
2
-
2
 
 
____
_____
____
____
_____
____
 
 
434
(17)
417
413
811
1,224
 
____
_____
_____
____
_____
_____
 
 
 
 
 
 
 
Earnings per ordinary share
(note 6)
 
 
 
 
 
 
Continuing and total operations:
 
 
 
 
 
 
 
Basic
 
 
195.3¢
 
 
520.0¢
 
Diluted
 
 
193.5¢
 
 
513.4¢
 
Adjusted
203.3¢
 
 
174.9¢
 
 
 
Adjusted diluted
201.4¢
 
 
172.7¢
 
 
 
_____
 
_____
_____
 
_____
 
 
 
 
 
 
 
 
 
 
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2016
 
 
 
2016
Year ended
31 December
$m
2015
Year ended
31 December
$m
 
 
 
Profit for the year
417
1,224
 
 
 
Other comprehensive income
 
 
 
 
 
Items that may be subsequently reclassified to profit or loss:
 
 
Gains on valuation of available-for-sale financial assets, net of related tax charge of $nil (2015 $nil)
 
5
 
2
Exchange gains/(losses) on retranslation of foreign operations, net of related tax charge of $3m (2015 $1m)
 
182
 
(2)
Fair value gain reclassified to profit on disposal of available-for-sale financial asset
 
(7)
 
-
Exchange losses reclassified to profit on hotel disposal
-
2
 
_____
_____
 
180
2
Items that will not be reclassified to profit or loss:
 
 
Re-measurement (losses)/gains on defined benefit plans, net of related tax credit of $4m (2015 charge of $4m)
 
-
 
9
Tax related to pension contributions
-
7
 
_____
_____
 
-
16
 
 
 
 
_____
_____
Total other comprehensive income for the year
180
18
 
_____
_____
Total comprehensive income for the year
597
1,242
 
_____
_____
 
 
 
Attributable to:
 
 
 
Equity holders of the parent
594
1,240
 
Non-controlling interest
3
2
 
_____
_____
 
597
1,242
 
_____
 
_____
 
 
 
 
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2016
 
 
Year ended 31 December 2016
 
Equity share capital
 
Other reserves*
 
Retained earnings
Non-controlling interest
 
Total equity
 
$m
$m
$m
$m
$m
 
 
 
 
 
 
At beginning of the year
169
(2,513)
2,653
10
319
 
 
 
 
 
 
Total comprehensive income for the year
 
-
 
180
 
414
 
3
 
597
Transfer of treasury shares to employee share trusts
 
-
 
(24)
 
24
 
-
 
-
Purchase of own shares by employee share trusts
 
-
 
(10)
 
-
 
-
 
(10)
Release of own shares by employee share trusts
 
-
 
39
 
(39)
 
-
 
-
Equity-settled share-based cost
-
-
23
-
23
Tax related to share schemes
-
-
11
-
11
Equity dividends paid
-
-
(1,693)
(5)
(1,698)
Transaction costs relating to shareholder returns
 
-
 
-
 
(1)
 
-
 
(1)
Exchange adjustments
(28)
28
-
-
-
 
_____
_____
_____
_____
_____
At end of the year
141
(2,300)
1,392
8
(759)
 
_____
 
_____
 
_____
 
_____
 
_____
 
 
 
 
Year ended 31 December 2015
 
Equity share capital
 
Other reserves*
 
Retained earnings
Non-controlling interest
 
Total equity
 
$m
$m
$m
$m
$m
 
 
 
 
 
 
At beginning of the year
178
(2,539)
1,636
8
(717)
 
 
 
 
 
 
Total comprehensive income for the year
 
-
 
2
 
1,238
 
2
 
1,242
Purchase of own shares by employee share trusts
 
-
 
(47)
 
-
 
-
 
(47)
Release of own shares by employee share trusts
 
-
 
62
 
(62)
 
-
 
-
Equity-settled share-based cost
-
-
         24
-
24
Tax related to share schemes
-
-
           5
-
5
Equity dividends paid
-
-
(188)
-
(188)
Exchange adjustments
(9)
9
           -
-
-
 
_____
_____
____
____
____
At end of the year
169
(2,513)
2,653
10
319
 
_____
 
_____
 
_____
 
_____
 
_____
 
 
*
Other reserves comprise the capital redemption reserve, shares held by employee share trusts, other reserves, unrealised gains and losses reserve and currency translation reserve.
 
 
 
All items above are shown net of tax.
 
 
 
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF FINANCIAL POSITION
31 December 2016
 
2016
31 December
2015
31 December
 
$m
$m
ASSETS
 
 
Property, plant and equipment
419
428
Goodwill and other intangible assets
1,292
1,226
Investment in associates and joint ventures
111
136
Trade and other receivables
8
3
Other financial assets
248
284
Non-current tax receivable
23
37
Deferred tax assets
48
49
 
_____
_____
Total non-current assets
2,149
2,163
 
_____
_____
Inventories
3
3
Trade and other receivables
472
462
Current tax receivable
77
4
Other financial assets
20
-
Cash and cash equivalents
206
1,137
 
_____
_____
Total current assets
778
1,606
 
_____
_____
Total assets (note 3)
2,927
3,769
 
_____
_____
LIABILITIES
 
 
Loans and other borrowings
(106)
(427)
Derivative financial instruments
(3)
(3)
Loyalty programme liability
(291)
(223)
Trade and other payables
(681)
(616)
Provisions
(3)
(15)
Current tax payable
(50)
(85)
 
_____
_____
Total current liabilities
(1,134)
(1,369)
 
_____
_____
Loans and other borrowings
(1,606)
(1,239)
Retirement benefit obligations
(96)
(129)
Loyalty programme liability
(394)
(426)
Trade and other payables
(200)
(152)
Provisions
(5)
-
Deferred tax liabilities
(251)
(135)
 
_____
_____
Total non-current liabilities
(2,552)
(2,081)
 
_____
_____
Total liabilities
(3,686)
(3,450)
 
_____
_____
Net (liabilities)/assets
(759)
319
 
_____
_____
EQUITY
 
 
Equity share capital
141
169
Capital redemption reserve
9
11
Shares held by employee share trusts
(11)
(18)
Other reserves
(2,860)
(2,888)
Unrealised gains and losses reserve
111
113
Currency translation reserve
451
269
Retained earnings
1,392
2,653
 
_____
_____
IHG shareholders' equity
(767)
309
Non-controlling interest
8
10
 
_____
_____
Total equity
(759)
319
 
_____
_____
 
 
 
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF CASH FLOWS
For the year ended 31 December 2016
 
 
2016
Year ended
31 December
2015
Year ended
31 December
 
$m
$m
 
 
 
Profit for the year
417
1,224
Adjustments reconciling profit for the year to cash flow from operations (note 8)
536
(414)
 
_____
_____
Cash flow from operations
953
810
Interest paid
(75)
(75)
Interest received
4
2
Tax paid on operating activities
(130)
(109)
 
_____
_____
Net cash from operating activities
752
628
 
_____
_____
Cash flow from investing activities
 
 
Purchase of property, plant and equipment
(32)
(42)
Purchase of intangible assets
(175)
(157)
Investment in associates and joint ventures
(14)
(30)
Loan advances to associates and joint ventures
(2)
(25)
Investment in other financial assets
(13)
(28)
Acquisition of business, net of cash acquired
-
(438)
Capitalised interest paid
(5)
(4)
Disposal of hotel assets, net of costs and cash disposed
(5)
1,277
Repayments related to intangible assets
3
-
Loan repayments by associates and joint ventures
-
22
Proceeds from associates and joint ventures
2
9
Repayments of other financial assets
25
6
Tax paid on disposals
-
(1)
 
_____
_____
Net cash from investing activities
(216)
589
 
_____
_____
Cash flow from financing activities
 
 
Purchase of own shares by employee share trusts
(10)
(47)
Dividends paid to shareholders
(1,693)
(188)
Dividend paid to non-controlling interest
(5)
-
Transaction costs relating to shareholder returns
(1)
-
Issue of long-term bonds
459
458
Other new borrowings
-
400
Long-term bonds repaid
(315)
-
New borrowings repaid
-
(400)
Increase/(decrease) in other borrowings
109
(355)
Proceeds from foreign exchange swaps
-
22
 
_____
_____
Net cash from financing activities
(1,456)
(110)
 
_____
_____
 
Net movement in cash and cash equivalents, net of overdrafts, in the year
(920)
1,107
Cash and cash equivalents, net of overdrafts, at beginning of the year
1,098
55
Exchange rate effects
(61)
(64)
 
_____
_____
Cash and cash equivalents, net of overdrafts, at end of the year
117
1,098
 
_____
_____
 
 
 
 
INTERCONTINENTAL HOTELS GROUP PLC
NOTES TO THE PRELIMINARY FINANCIAL STATEMENTS
 
 
1.
Basis of preparation
 
 
The audited consolidated financial statements of InterContinental Hotels Group PLC (the Group or IHG) for the year ended 31 December 2016 have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006.   Other than the change set out below, they have been prepared on a consistent basis using the accounting policies set out in the InterContinental Hotels Group PLC Annual Report and Financial Statements for the year ended 31 December 2015.
 
 
With effect from 1 January 2016, the Group has adopted Amendments to IAS 1 'Disclosure Initiative' which has resulted in the presentation of the loyalty programme liability separately on the Group statement of financial position.
 
 
 
2.
Exchange rates
 
 
The results of operations have been translated into US dollars at the average rates of exchange for the year. In the case of sterling, the translation rate is $1= £0.74 (2015 $1=£0.65). In the case of the euro, the translation rate is $1 = €0.90 (2015 $1 = €0.90).
 
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=£0.81 (2015 $1 = £0.68). In the case of the euro, the translation rate is $1 = €0.95 (2015 $1 = €0.92).
 
 
 
3.
Segmental information
 
 
 
 
 
 
 
Revenue
 
 
 
 
2016
2015
 
 
$m
$m
 
 
 
 
 
Americas 
993
955
 
Europe 
227
265
 
AMEA
237
241
 
Greater China
117
207
 
Central
141
135
 
 
_____
_____
 
Total revenue
1,715
1,803
 
 
_____
_____
 
 
 
 
 
All results relate to continuing operations.
 
 
Profit
2016
$m
2015
$m
 
 
 
 
 
Americas 
633
597
 
Europe 
75
78
 
AMEA
82
86
 
Greater China
45
70
 
Central
(128)
(151)
 
 
_____
_____
 
Reportable segments' operating profit
707
680
 
Exceptional items (note 4)
(29)
819
 
 
_____
_____
 
Operating profit
678
1,499
 
 
 
 
 
Net finance costs
(87)
(87)
 
 
_____
_____
 
Profit before tax
591
1,412
 
 
_____
_____
 
 
 
 
 
All results relate to continuing operations.
 
 
 
 
Assets
2016
$m
2015
$m
 
 
 
 
 
Americas
1,417
1,355
 
Europe
321
383
 
AMEA
249
260
 
Greater China
147
148
 
Central
439
396
 
 
_____
_____
 
Segment assets
2,573
2,542
 
 
 
 
 
Unallocated assets:
 
 
 
Non-current tax receivable
23
37
 
Deferred tax assets
48
49
 
Current tax receivable
77
4
 
Cash and cash equivalents
206
1,137
 
 
_____
_____
 
Total assets
2,927
3,769
 
 
_____
 
_____
 
 
 
 
 
4.
Exceptional items
 
 
2016
$m
2015
$m
 
Exceptional items before tax
 
 
 
 
Administrative expenses:
 
 
 
 
Kimpton integration costs (a)
(13)
(10)
 
 
Venezuelan currency losses (b)
-
(4)
 
 
Reorganisation costs (c)
-
(6)
 
 
Corporate development costs (d)
-
(5)
 
 
 
_______
_______
 
 
 
(13)
(25)
 
 
Other operating income and expenses:
 
 
 
 
Gain on disposal of hotels (e)
-
871
 
 
Gain on disposal of investment in associate (f)
-
9
 
 
 
_____
_____
 
 
-
880
 
    Impairment charges:
 
 
 
 
Associates (g)
(16)
(9)
 
 
Property, plant and equipment (h)
-
(27)
 
 
_____
____
 
 
(16)
(36)
 
 
_____
____
 
 
(29)
819
 
 
_____
_____
 
Tax
 
 
 
 
Tax on exceptional items (i)
12
(8)
 
 
 
_____
_____
 
 
 
 
 
 
 
 
 
 
 
 
 
All items above relate to continuing operations. These items are treated as exceptional by reason of their size or nature.
 
 
a)
Relates to the cost of integrating Kimpton Hotel and Restaurant Group, LLC ('Kimpton') into the operations of the Group.  Kimpton was acquired on 16 January 2015.   The integration programme remains in progress and will be substantially completed in 2017.
 
b)
Arose from changes to the Venezuelan exchange rate mechanisms.
 
c)
Related to the implementation of more efficient processes and procedures in the Group's Global Technology infrastructure to help mitigate future cost increases.
 
d)
Primarily legal costs related to development opportunities.
 
e)
Arose from the sale of InterContinental Paris - Le Grand on 20 May 2015 and InterContinental Hong Kong on 30 September 2015.
 
f)
Related to the disposal of an associate investment in the AMEA region.
 
g)
In 2016, relates to an associate investment in The Americas region and, in 2015, related to an associate investment in the AMEA region, following re-assessments of their recoverable amounts.
 
h)
Related to two hotels in North America following a re-assessment of their recoverable amounts.
 
i)
In 2016, comprises a $6m deferred tax credit in respect of the associate investment impairment, a $5m deferred tax credit representing future tax relief on Kimpton integration costs and $1m credit in respect of other items.  In 2015, comprised a charge of $56m relating to disposal of hotels, a credit of $21m in respect of the 2014 disposal of an 80.1% interest in InterContinental New York Barclay reflecting the judgment that state tax law changes would now apply to the deferred gain, and credits of $27m for current and deferred tax relief on other operating exceptional items of current and prior periods. 
 
 
5.