| ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
American Depositary Shares of 20 340 ⁄399 pence each |
IHG IHG |
New York Stock Exchange New York Stock Exchange* |
Ordinary Shares of 20 340 ⁄399 pence each |
164,711,854 |
| Large accelerated filer | ☑ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☐ | Emerging growth company | ☐ | |||
Section 13(a) of the Exchange Act. ☐
| US GAAP ☐ |
International Financial Reporting Standards as issued by the International Accounting Standards Board ☑ |
Other ☐ |
| Auditor Firm Id: 876 | Auditor Name: PricewaterhouseCoopers LLP | Auditor Location: Birmingham, United Kingdom |
Table of Contents
Annual Report and Form 20-F 2024
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| 2 | IHG | Annual Report and Form 20-F 2024 | ||||||
Introduction
Welcome to IHG®
Hotels & Resorts
| In this year’s report ... |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 3 | |||||||||||
IHG® Hotels & Resorts is a global
hospitality company with 19 hotel brands,
one of the industry’s largest loyalty
programmes, over 6,600 open hotels
in more than 100 countries,
and a further 2,200 hotels in our
development pipeline.
| Additional Information |
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| Other financial information | 266 | |||||
| Directors’ Report | 276 | |||||
| Group information | 280 | |||||
| Shareholder information | 296 | |||||
| Schedule 1: Condensed Parent Company financial information | 304 | |||||
| Exhibits | 308 | |||||
| Forward-looking statements | 309 | |||||
| Form 20-F cross-reference guide | 310 | |||||
| Glossary | 313 | |||||
| Useful information | 315 | |||||
| The Strategic Report on pages 4 to 110 was approved by the Board on 17 February 2025.
Nicolette Henfrey Company Secretary |
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| 4 | IHG | Annual Report and Form 20-F 2024 | ||||||
Chair’s statement
“The business is united behind an evolved strategy designed to deliver at pace strategic objectives that drive performance and growth of our brands, while creating value for all IHG stakeholders.” 114.4¢ 167.6¢ Final dividend proposed for 2024 Total dividend proposed for 2024 (2023: 104.0¢) (2023: 152.3¢) >$1bn $900m returned to shareholders through share buyback programme share buyback programme approved for 2025 (completed in December 2024) and ordinary dividends
Our commitment to evolve, adapt and drive continuous improvement is central to the organisation’s long-term success, and in 2024 important progress was made to further strengthen IHG Hotels & Resorts for guests, hotel owners, colleagues and shareholders.
Spanning more than 100 countries, IHG is part of a vibrant travel and tourism industry sitting at the heart of economic growth plans globally, with our brands embedded in high-value markets and segments and supported by a talented workforce getting the most out of IHG’s global and local approach. A truly international footprint offers great potential, which has again been capitalised on during 2024 with the further expansion of our brands, continued RevPAR growth and the delivery of a strong financial performance amid a competitive and complex global landscape.
In what was his first full year as Group CEO, Elie Maalouf has brought great clarity to ensuring the organisation is focused on realising IHG’s full potential. The business is united behind an evolved strategy designed to deliver at pace strategic objectives that drive performance and growth of our brands, while creating value for all IHG stakeholders. On behalf of the Board, I would like to congratulate Elie and his leadership team for delivering success across so many fronts this year.
A key element of our progress has been strong colleague engagement with our strategic priorities, which was reflected in various forms of feedback, including IHG’s Colleague HeartBeat survey and the work of our designated Voice of the Employee Non-Executive Director.
IHG’s strategy is being applied to an asset-light, fee-based, predominantly franchised business model that enables us to remain agile to adapt by market, while at the same time building global scale, attracting millions of guests and fostering long-standing relationships with thousands of owners.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 5 | |||||||||||
Crucially, it is a model that is highly cash generative, which enables reinvestment in key areas of IHG’s enterprise to drive demand for our brands and returns for owners, create a rewarding culture for colleagues, and deliver on our commitment to shareholder returns.
The benefits of this approach can be seen through the transformation of the business in recent years and in 2024, we continued to take important steps towards creating an even stronger IHG. This included growing our brands, creating even more rewarding and personalised guest experiences, delivering a compelling loyalty offer, and growing ancillary fee revenues, such as our US co-brand IHG® One Rewards credit cards. As ever, our focus has also remained steadfast on helping our hotel owners run an efficient business with strong returns, and we put great importance on regular dialogue and close collaboration with them, including through the IHG Owners Association.
Our scale also provides a valuable platform to grow responsibly so that we can give back to the communities in which we operate and look after the world around us. Guided by our purpose of delivering True Hospitality for Good, our commitment to care is woven into the fabric of the business and is of increasing importance to all our stakeholders, so I was proud to see us make further progress against our Journey to Tomorrow responsible business plan during the year.
The role of the Board
Against an ever-changing global backdrop, strong governance is fundamental to the success of any business, as is the ability to stay agile and move at pace while retaining focus on longer-term ambitions.
The role of the Board has been to support and constructively challenge the Executive Committee around how we prioritise, manage risk, grow and generate future value. Focus areas in 2024 included growth within a shifting trading environment, the development of our brands and technology platforms, the use of artificial intelligence, and the evolving environmental and societal agenda. Particular focus was also paid to executive remuneration to support IHG’s succession planning and talent development strategy, which is reflected in the 2025 Directors’ Remuneration Policy.
Following Sir Ron Kalifa joining the Board on 1 January 2024, details of which were included in our Annual Report and Form 20-F 2023, there was one other change to the Board during 2024, with Daniela Barone Soares stepping down as Non-Executive Director at end of the year. I would like to thank Daniela for her valuable contribution, particularly in support of our Journey to Tomorrow commitments. Part of my role as Chair is to ensure our Board continues to contain a rich blend of experience, expertise and backgrounds that reflect the evolving nature of our business and stakeholder expectations, and taking into account several Board changes in recent years I am confident we have that in place.
Succession planning and talent development has been a hallmark of IHG for many years. There were two Executive leadership changes and a role expansion in 2024, with Daniel Aylmer replacing Jolyon Bulley as Greater China CEO, following Jolyon’s appointment as Americas CEO, Jolie Fleming appointed as Chief Product & Technology Officer, following George Turner’s decision to leave the business, and the remit of Heather Balsley expanded to include IHG’s commercial function. Each individual has and continues to bring substantial and relevant industry experience, a strong track record of producing excellent results and a thorough understanding of IHG and its business, and I have great confidence in the leadership team delivering further success in what promises to be an exciting next chapter.
Shareholder returns
Following a strong financial performance this year, I am pleased to announce the Board is recommending a final dividend of 114.4 cents per ordinary share, an increase of 10% on the final dividend for 2023. An interim dividend of 53.2 cents was paid in October 2024, taking the total dividend for the year to 167.6 cents, representing an increase of 10% on 2023. An additional $800m was also returned to shareholders through a share buyback programme completed in December 2024, taking the total returns for the year to over $1bn, and the Board has approved a further share buyback of $900m for 2025. The Board expects IHG’s business model to continue its strong long-term track record of generating substantial capacity to enable investment plans that drive growth, fund a sustainably growing ordinary dividend, and return surplus capital to our shareholders.
As we look to the future, we must remain alive to the potential challenges created by geopolitical and macroeconomic uncertainty and conflict in parts of the world, but the industry’s long-term prospects remain attractive. Having proven its resilience over many decades, demand will continue to be driven by several fundamental factors, including people’s inherent desires and needs to travel, and the growing population and rising wealth in emerging markets that further support this.
As ever, our achievements are the result of the hard work of everyone in our hotels and offices, and I look forward with confidence to further strategic progress and success in 2025. I have enjoyed meeting and spending time with colleagues, owners and guests in different markets and would like to thank our teams for their dedication and commitment to bringing our brands to life, and our owners for their long-term confidence in IHG and our brands.
Deanna Oppenheimer
Non-Executive Chair
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| 6 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our brands
A brand
for every
occasion
Our focus on having a diverse selection of brands has transformed our portfolio, enabling us to meet the needs of a broader range of guests and owners, and grow our estate to more than 6,600 hotels globally.
Demand for branded hotels is creating fresh opportunities for expansion in high-growth markets, as guests seek new experiences and owners look to use the advantages of our scale and systems.
To meet this demand, we are investing in and strengthening the enterprise that supports our brands, from our digital channels and IHG One Rewards loyalty programme, to our hotel technology and IHG Hotels & Resorts masterbrand.
Illustrating the confidence owners have in IHG, we celebrated the opening of 371 hotels in 2024 and the signing of another 714 into our pipeline, equivalent to almost two properties a day.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 7 | |||||||||||
Luxury Lifestyle & 27 11 227 20 77 169 open open open open open open 38 9 101 35 61 130 pipeline pipeline pipeline pipeline pipeline pipeline Premium 87 22 415 33 open open open open 90 24 140 32 pipeline pipeline pipeline pipeline Essentials 1,249 3,237 23 76 open open open open 266 637 94 137 pipeline pipeline pipeline pipeline Suites 6 335 30 392 open open open open 54 157 - 183 pipeline pipeline pipeline pipeline Exclusive Partners 55 open 7 pipeline
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| 8 | IHG | Annual Report and Form 20-F 2024 | ||||||
2024 in review
| Financial performance | ||||||||
| In 2024, we delivered an excellent financial performance, with improvements across RevPAR and profit from reportable segments, alongside the return of more than $1 billion to shareholders. |
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|
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| Global RevPAR | Net system size growth | Signings (rooms) | ||||||
| +3.0% | 4.3% | 106,242 | ||||||
| 2023: +16.1% | 2023: 3.8% | 2023: 79,220 | ||||||
|
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| Total gross revenue in IHG’s systema | Total revenue | Revenue from reportable segmentsa | ||||||
| $33.4bn | $4,923m | $2,312m | ||||||
| 2023: $31.6bn | 2023: $4,624m | 2023: $2,164m | ||||||
|
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| Operating | Operating profit from | Basic | ||||||
| profit | reportable segmentsa | EPS | ||||||
| $1,041m | $1,124m | 389.6¢ | ||||||
| 2023: $1,066m | 2023: $1,019m | 2023: 443.8¢ | ||||||
|
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| Adjusted EPSa | Dividend | Share buyback completed | ||||||
| 432.4¢ | 167.6¢ | $800m | ||||||
| 2023: 375.7¢ | 2023: 152.3¢ | 2023: $750m | ||||||
| a. Use of Non-GAAP measures: In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional financial measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures. Further explanation in relation to these measures can be found on pages 103 to 108, and reconciliations to IFRS figures, where they have been adjusted, are on pages 266 to 272. |
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| Regional growth | ||||||||||||
| Strong demand globally from hotel owners for our brands was reflected in the opening of 371 hotels and 714 properties signed into our pipeline, equivalent to almost two a day. |
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| Americas | EMEAA | Greater China | ||||||||||
| Room openings | Room openings | Room openings | ||||||||||
| 16,832 | 23,620 | 18,665 | ||||||||||
| 2023: 10,405 | 2023: 21,174 | 2023: 16,340 | ||||||||||
| Room signings | Room signings | Room signings | ||||||||||
| 26,552 | 50,275 | 29,415 | ||||||||||
| 2023: 28,297 | 2023: 24,787 | 2023: 26,136 | ||||||||||
More on page 90. |
More on page 94. |
More on page 98. |
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| Stakeholders | ||||||||||
| By investing in our iconic brands, leading loyalty programme, and prioritising digital innovation and sustainability, we have continued to enhance guest experiences, expand our portfolio, and deliver strong returns for our hotel owners and shareholders.
|
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| Our shareholders and investors
Our focus on strengthening the
|
– Total dividend payments of $259m and $800m share buyback completed that together returned over $1bn to shareholders for the 2024 financial year.
– New $900m share buyback programme approved for 2025.
– Americas RevPAR growth +2.5%; EMEAA +6.6%; Greater China -4.8%.
– Surpassed 6,600 open hotels; +4.3% net system size growth.
– Signings +34% year-on-year (YOY); conversions +88% YOY to reach record level.
– Operating profit of $1,041m and basic EPS of 389.6¢ achieved in the year.
– $1,124m operating profit from reportable segmentsa, up +10% vs 2023.
– Adjusted EPSa grew +15% to 432.4¢.
– Fee margina 61.2%, up +1.9%pts, driven by strong trading together with new and growing ancillary fee streams. |
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|
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| Our hotel owners
Owners choose to work with
|
– Enterprise contribution of 81% of total room revenue (vs 72% four years ago), illustrating success of our loyalty programme, technology platforms, sales and distribution channels.
– Guest How You Guest campaign increased awareness of IHG Hotels & Resorts brand.
– New brand prototypes and procurement programmes launched to reduce costs.
– New US co-brand credit card agreements further drive revenue and customer loyalty.
– Agreement with NOVUM Hospitality will double presence in priority market Germany. |
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| Our guests
We focus on ensuring the services,
|
– Outperformed key competitors on Guest Satisfaction Index in all three regions.
– Grew loyalty members to over 145m, up from over 130m at the end of 2023.
– New and continued partnerships providing loyalty members access to music and sporting events.
– Enhanced websites and award-winning mobile app; downloads of mobile app increased more than 20% YOY.
– Updated guest room and public space designs, and food and beverage offering. |
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| Our people
We champion a high-performance
|
– Employee engagement maintained at 87%. A Mercer Global Best Employer.
– Strengthened our leadership pipeline through our accelerated talent programmes, including Journey to GM (general manager) and RISE.
– Strengthened learning and development offer through IHG® University.
– Ranked 28th on Fortune’s 100 Best Companies to Work For, recognised as a top company for women in the US by Forbes, certified as one of Singapore’s and Greater China’s Best Workplaces 2024, and in the top 10 on Financial Times Europe’s Diversity Leaders 2024 list. |
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| Our communities and suppliers
We aim to improve millions of lives by
|
– Launched global partnership with Action Against Hunger to help tackle food insecurity and deliver lasting change in thousands of communities.
– Supported charities providing aid following 27 natural disasters.
– Refreshed IHG® Academy, giving over 43,000 people free access to skills and training.
– Over two million lives improved through community partnerships and programmes, Giving for Good month and partnership with Action Against Hunger. |
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| Our planet
We are committed to reducing carbon,
|
– 11.5% reduction in carbon emissions per available room and a 9.4% reduction in energy per available room compared with 2019 baseline. Total carbon emissions increased 7.2% over the same period.
– Launched Low Carbon Pioneers programme to help encourage wider adoption of carbon reduction practices across IHG’s estate.
– Introduced brand standards removing single-use plastic bottles from guest rooms and meetings in Europe.
– Updated IHG Green Engage® environmental platform to strengthen hotel measurement of energy, water and waste.
|
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| 10 | IHG | Annual Report and Form 20-F 2024 | ||||||
2024 in review continued
From growing our brands and elevating the guest and owner
experience, to strengthening our enterprise and caring for
the world around us, here are some of the highlights of 2024.
From special moments Going the extra mile for our guests. In 2024, we maintained our outperformance versus key competitors on the Guest Satisfaction Index in all three regions, with our success down to those all-important personal touches. Take the Holiday Inn Express® in Richmond, Virginia, whose staff not only found a four-year-old’s lost beloved soft toy but took it on a tour of the hotel before returning it to its happy owner complete with pictures of its fun adventure in an accompanying email. Now that’s True Hospitality for Good. A warm welcome at more fantastic hotels. From the mountains of Japan and foodie hotspots, to the white-sand beaches of the Maldives and vibrant city centres, we celebrated opening 371 hotels in 2024, as well as signing 714 more – equivalent to almost two a day.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 11 | |||||||||||
A Mercer Global . Best Employer We are proud to say IHG is a business all about people, with a rich culture and a place where colleagues get behind our strategy to be the hotel company of choice for guests and owners. In 2024, this was reflected by maintaining our high overall employee engagement score of 87% and being named a Mercer Global Best Employer. Fighting food insecurity with Action Against Hunger . We announced a multi-year partnership with Action Against Hunger, one of the world’s largest NGOs combating hunger. Helping to support and fund its nutrition programmes, this work complements existing partnerships IHG and its hotels have in many local markets that together aim to strengthen the food system in a community – from providing tools and training to reduce food waste, to diverting surplus food to those in need.
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| 12 | IHG | Annual Report and Form 20-F 2024 | ||||||
2024 in review continued
From …rewards Loyalty that keeps on growing… Fuelled by new partnerships, more points and fresh stay experiences, our IHG One Rewards loyalty programme grew to more than 145 million members in 2024. A powerful commercial engine. The success of our commercial engine across our loyalty programme, technology platforms, sales and distribution channels was illustrated by the percentage of room revenue booked through IHG-managed channels and sources reaching 81% for 2024 – up 9% in four years.
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Getting noticed in all the right places. Our masterbrand strategy continued to drive awareness of the IHG Hotels & Resorts brand as we launched a new chapter for our Guest How You Guest global marketing campaign, secured new partnerships with sporting events and music festivals, and began rolling out a simplified ‘By IHG’ brand endorsement. Leading the way in luxury. We have built one of the world’s largest Luxury & Lifestyle portfolios in recent years to meet growing demand for one-of-a-kind travel experiences. Momentum continued to build in this higher-fee segment in 2024, with 46 properties awarded prestigious Condé Nast Traveler’s Readers’ Choice Awards and 14 earning Michelin Keys. …to awardsg
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| 14 | IHG | Annual Report and Form 20-F 2024 | ||||||
2024 in review continued
Milestone momentsin Greater China. We strengthened our position as one of the leading international hotel companies in Greater China by reaching 789 open hotels by the end of 2024. At the start of 2025, we reached a landmark 800th hotel opening, along with celebrating IHG’s 50th anniversary in the region. Reducing waste in our hotels. Building on the important work we have been doing to reduce waste in our operations for many years, we made further progress against our commitments by introducing two new brand standards to remove single-use plastic bottles in guest rooms and across meetings and events in Europe.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 15 | |||||||||||
Growing demand for co-brand credit cards. Our US co-brand credit card holders stay more and spend more in our hotels, and 2024 was a record-breaking year for new applications, with double-digit percentage growth in total card customers. We also signed new card agreements during the year that will significantly increase revenues for IHG in the years ahead. Taking our brands to new markets. Demand for our brands stretched far and wide in 2024, with 29 debut openings for individual IHG brands across the globe. This included Staybridge Suites opening its doors for the first time in Spain and our first opening for Vignette™ Collection in the Maldives. We also saw the return of Regent® Hotels to the Americas – the Regent Santa Monica Beach. West
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| 16 | IHG | Annual Report and Form 20-F 2024 | ||||||
Chief Executive Officer’s review
of “I am the incredibly work being proud done to accelerate grow our outstanding performance, brands and take around IHG Hotels the world, & Resorts to its full potential.” Elie Maalouf Chief Executive Officer 371 714 hotels opened hotels signed (2023: 275) (2023: 556) 44% 21% of total openings and signings were of our pipeline now represented for our Holiday Inn® Brand Family by Luxury & Lifestyle brands +3.0% 119 global RevPAR growth hotels signed through initial agreement with NOVUM Hospitality that doubles our presence in Germany
| a. | Use of Non-GAAP measures: In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional financial measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures. Further explanation in relation to these measures can be found on pages 103 to 108, and reconciliations to IFRS figures, where they have been adjusted, are on pages 266 to 272. |
In my first full year as Group CEO, I am incredibly proud of the work being done to accelerate performance, grow our outstanding brands around the world, and take IHG Hotels & Resorts to its full potential as the hotel company of choice for guests and hotel owners.
We began 2024 by evolving our strategy to best capitalise on the investments we have made in our brands and enterprise platform in recent years, and I have been hugely impressed with how colleagues have got behind our plans. We have built real momentum over the past 12 months characterised by growth of not just our brands but also our technological capabilities, loyalty programme and ability to be a force for good in our communities.
Collectively, our work is resonating with stakeholders, driving awareness of our portfolio and consumer preference for our brands, strengthening our reputation as a valued partner with owners, and building further trust in IHG. I have seen this first-hand during visits to many markets around the globe to speak with colleagues, owners, shareholders and investors.
Strategic progress
In 2024, we expanded into new markets, with many of our brands making their debuts in new countries. We also strengthened our presence in high-growth markets such as Greater China, India, Japan and Saudi Arabia, as well as Germany, where we signed a long-term agreement with NOVUM Hospitality that doubles our presence there and secures European debuts for Garner™ and Candlewood Suites®.
Quality remains key to maintaining the trusted reputation of our brands, and fresh design and service concepts supported our Holiday Inn Brand Family in generating 44% of openings and signings. Momentum also continued to build behind our newer brands, including Garner, which in its first full year since launch reached 117 open and pipeline hotels. Its excellent progress illustrates appetite for quicker-to-market conversions, which represented around half of total room openings and signings in 2024.
We have transformed our position in Luxury & Lifestyle in recent years, with our brands now representing 14% of our system size and 21% of our pipeline. Flagship openings included Regent Santa Monica Beach in the US and Six Senses Kyoto in Japan, while Vignette Collection is tracking ahead of schedule, having surpassed 50 open and pipeline hotels just three years since launch.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 17 | |||||||||||
Along with attractive brands, our success depends on having powerful loyalty and technology platforms that drive performance and unlock value for our owners. IHG One Rewards grew to more than 145 million members, who are now booking more than 60% of room nights globally. We entered into new long-term US co-brand credit card agreements and more strategic partnerships to further drive membership, deliver more business to our hotels, and provide guests with fresh experiences.
The next chapter of our Guest How You Guest global marketing campaign also went live across TV and streaming platforms in the US ahead of an international rollout to further grow awareness of our brand portfolio. We have also begun simplifying our brand endorsement from ‘an IHG Hotel’ to ‘By IHG’ across brands in the Americas and EMEAA to improve its visibility.
We strengthened what is a leading suite of technology for guests and owners. New features went live on our mobile app, which generated over 20% more revenue year-on-year, grew downloads by more than 20% and won three Webby Awards, including Best Travel App. Our Guest Reservation System is offering guests more choice while helping hotels maximise revenue from their property’s unique attributes. New revenue management capabilities went live in around 3,500 hotels globally to help drive top-line revenue, and we rolled out new property management systems to provide above-property, cloud-based solutions that can deploy efficient enhancements at scale.
Collectively, our investments are creating greater value for owners, with the percentage of room revenue booked through IHG-managed channels and sources rising from 72% to 81% in the past four years, while our Guest Satisfaction Index showed we had maintained our outperformance versus key competitors in all three regions. In parallel, we are focused on reducing the cost to build, open and operate our hotels. Working closely with our owners, we increased procurement options and introduced efficient prototypes for many of our brands, and we worked with governments and trade bodies on important issues to support the industry on a broader scale.
As we strengthen the business, it’s important we do so responsibly and sustainably for our people, communities and planet.
Our people are at the heart of our success as a global business and we took further steps to develop and retain talent across the organisation, including adding more tailored learning tools on IHG University. We were there for our communities, announcing a global partnership with Action Against Hunger to help tackle food insecurity, alongside responding to natural disasters, and making a positive difference to thousands of people during our annual Giving for Good month.
We continue to focus on reducing the environmental impact of our hotels, including launching our Low Carbon Pioneers programme – the first community of its kind in our industry designed to help us test, learn and share findings on sustainability measures. Our work to improve the efficiency of our hotel estate has reduced both emissions and energy per available room compared with a 2019 baseline. However, the lack of a clean energy infrastructure in our markets, alongside the opening of more hotels during that period, means that total carbon emissions have increased overall since 2019. We remain committed to reducing emissions and will continue our many initiatives, working closely with our hotel owners while at the same time continuing to evaluate our approach and performance in the rapidly changing sustainability landscape.
Strong performance
In parallel to our strategic progress, we delivered an excellent financial performance for the year. Increases in both daily rate and occupancy, combined with the breadth of our diverse international footprint, pushed global RevPAR 3.0% ahead of 2023, with growth in each of leisure, business and groups travel. Trading momentum continued in the Americas, with RevPAR up 2.5%, while EMEAA was up 6.6% following strong demand across Continental Europe and East Asia & Pacific. RevPAR in Greater China was -4.8% due to unusually strong comparatives a year ago, when there was a strong rebound in demand following the lifting of pandemic restrictions, and some short-term impacts on consumer confidence. However, we remain encouraged by long-term demand drivers in the region, and in 2024 saw record levels of development activity.
This overall performance, coupled with fee margin growth and disciplined cost management, helped deliver operating profit of $1,041m.
Operating profit from reportable segmentsa rose 10% to $1,124m. Basic EPS was 389.6¢, while adjusted EPSª grew 15% to 432.4¢ and we returned over $1bn to shareholders through ordinary dividend payments and a $800m share buyback programme. A new $900m share buyback programme for 2025 has been approved.
The long-term confidence owners have in IHG and our brands drove the opening of 371 hotels in 2024, which contributed to net system size growth of 4.3%. Another 714 hotels were signed – an increase of 34% year-on-year – taking our development pipeline to 2,210 hotels, representing future system size growth of 33%. As we look ahead, industry forecasts expect strong guest demand to continue, underpinned by long-term drivers, such as people’s desire to travel and a growing global middle class.
In February 2025, we acquired RubyTM as our 20th brand, which complements our existing portfolio with an exciting, distinct and high-quality offer for both guests and owners in popular city destinations. The urban micro space is a franchise-friendly model with attractive owner economics, and we see excellent opportunities to not only expand the Ruby brand’s strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions.
The many awards we received this year are a testament to the progress we are making towards being a brand of choice for guests, the best long-term partner for owners and a great place to work for colleagues. These include again being named a Mercer Global Best Employer, Holiday Inn® voted the most trusted travel and hospitality brand in the US, recognition from Forbes, Fortune Best Companies and the Financial Times for our inclusive culture, and dozens of our Luxury & Lifestyle hotels being awarded Condé Nast Traveler Readers’ Choice Awards and Michelin Keys.
I would like to thank the Board for its support throughout 2024 and our talented and passionate colleagues for their commitment to delivering True Hospitality for Good and hard work to grow IHG to its full potential. I would also like to thank our owners for their partnership and the continued trust they place in our business and brands.
Elie Maalouf
Chief Executive Officer
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| 18 | IHG | Annual Report and Form 20-F 2024 | ||||||
Industry overview
A strong
and resilient
sector full of
opportunity
We operate in an industry with high growth potential, underpinned by strong long-term fundamentals.
The global hotel industry strengthened to record RevPAR levels in 2024 as stable employment markets, resilient consumer spending and robust levels of business activity created supportive conditions for growth.
The $730 billion hotel industry has compelling structural growth drivers, underpinned by factors including the inherent needs and desires to travel for business and leisure purposes, and an expanding middle class in emerging markets with increasing disposable incomes. Spend on travel continues to be an area of resilient discretionary spending by consumers, while demand for business travel remains robust. Easing inflationary pressures and the turn in the interest rate cycle over the last 12 months has supported stable employment markets and robust levels of business activity and economic growth. Whilst in some countries geopolitical risk and economic outlook present challenges and uncertainties, overall conditions for the global industry remain supportive for continued growth.
In what is a relatively fragmented sector, with 57% of rooms affiliated with a global or regional chain, competitor pressures in the branded space remain intense as all major players pursue growth strategies through a combination of organic growth, partnership arrangements and acquisitions.
Branded hotel penetration has steadily increased as a long-term trend, with this expected to continue to grow as consumers look to trusted brands to meet their evolving expectations, particularly when it comes to state-of-the-art technology and the skills, scale and resources required to provide enjoyable, effective and sustainable stays. Hotels affiliated with a major global brand and enterprise system also tend to generate higher owner returns.
While there have been short-term challenges impacting the completion and opening of new-build hotels, primarily driven by the cost and availability of financing, there remains a long-term need for new hotel supply to satisfy the demand drivers previously mentioned. Global hotel room net new supply increased at a CAGR of 2.3% over the 10 years from 2014 to 2024, with industry forecasts showing a similar rate in the years beyond.
Cost remains a significant barrier to building a scale position in the global hotel industry, whether that’s due to investment to build and maintain the properties, establishing strong loyalty programmes and technology platforms, or developing and marketing leading brands.
The hotel industry is cyclical: long-term fluctuations in RevPAR tend to reflect the interplay between industry demand, supply and the macro-economic environment. At a local level, political and economic factors, as well as those such as terrorism, oil market conditions and significant weather events, can also impact demand and supply. While the potential for macro-economic challenges from factors such as lingering inflation, higher borrowing costs and geopolitical flashpoints create some ongoing uncertainty in 2025, the attractive industry fundamentals that led to the sector outpacing global economic growth in 17 out of 25 years between 2000 and 2024 remain firmly in place for the long term.
As a global business, with a footprint in more than 100 countries, operating in the midst of change and uncertainty is something IHG is very used to and this experience continues to be one of our greatest strengths. Our strategy of developing a strong brand portfolio and an industry-leading loyalty programme, together with our fee-based income streams and prevalent midscale positioning, means IHG is well positioned to remain resilient through varying economic cycles.
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The hotel industry has long-term growth drivers…
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| 1.6% | $44tn | 2.3% | ||||
| US disposable personal income
Source: Federal Reserve Economic Data (FRED) |
Globally, middle income
Source: The Brookings Institution
|
Global hotel room net new supply
Source: STR |
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with significant barriers to entry…
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| The top five hotel groupsa have
Share of top five branded hotel groups
a. Includes IHG, Marriott International, Inc., Hilton Worldwide Holdings Inc., Wyndham Hotels & Resorts Inc., Accor S.A.
Source: STR |
Share expected to further expand
Branded share of global industry
|
Consumers value loyalty
79%
of consumers are more likely to recommend brands with good
Source: Bond, in partnership with Visa
85%
of consumers are more likely to
Source: Bond, in partnership with Visa |
||||
|
Source: STR
|
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|
and a track record of growth
|
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| Global hotel revenues have outpaced GDP growth,
Global industry revenue vs global GDP, indexed to 1999
|
Global industry RevPAR ($)
RevPAR movements are illustrative
Source: STR
Global rooms supply (m rooms)
Supply growth further reflects the attractiveness of the hotel industry
Source: STR |
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| 20 | IHG | Annual Report and Form 20-F 2024 | ||||||
Trends shaping our industry
Continuing to
evolve and adapt
| The tourism industry continues to demonstrate strong fundamentals. Travel remains a top priority for many, maintaining its status as a leading category for discretionary spending. There are several impactful trends with the potential to reshape the hospitality landscape. |
Loyalty programmes are becoming increasingly competitive, hotel formats are continuing to evolve driven by demand for types of blended travel, and personalised experiences enabled by technology and data are becoming essential. We see these trends leading to the prioritisation of customer-centric strategies, and investment in products that align with evolving traveller expectations. | |||
| Flexibility of loyalty programmes
|
||||
| The lodging loyalty landscape is becoming increasingly competitive as guest expectations continue to evolve, becoming more immediate, personalised, and experience-based. To fulfil guest expectations, loyalty programmes are having to become increasingly flexible, utilising data-driven insights on customer preferences.
A McKinsey study found that hotel guests utilise more than two competing loyalty programmes a year, which is more than airline and cruise travellers. |
With younger generations more likely to transact with multiple programmes, and competition strengthening amongst global peers, it will be necessary to further expand reward personalisation. Increasing the breadth of offerings for members to select from, whilst utilising advanced analytics to tailor messaging, will give members control over their desired benefits, helping support a diverse portfolio of brands.
The strength of loyalty programmes is supported by customer experiences during their stay. |
Frontline teams are vital in delivering the core product that loyalty programmes are built around. Initiatives to develop the ability of teams to deliver exceptional experiences, such as the IHG Climb gamification platform, which led to 1.5–2.5x increase in loyalty delivery for highly engaged hotels and will continue to be a priority of industry leaders looking to develop robust brand and programme preferences. | ||
|
Our responses include:
|
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|
– Offering members the ability to personalise benefits via Milestone Rewards by selecting what they value most (including Food & Beverage Rewards and bonus points).
– Expanding Reward Night flexibility, including discounts for new hotels, ability to use points on both non-standard room types and Confirmable Suite Upgrades, plus exclusive Reward Night discount access for Platinum and Diamond members.
– Introducing free points transfer for our Diamond Elite and Business Rewards members, allowing our most active members to share their rewards with friends, family or colleagues.
– Forming exclusive partnerships providing our members culturally relevant, personalised experiences, including events such as the US Open Tennis Championships and Six Nations rugby.
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| Space for everyone
|
||||
| The lodging industry is rapidly transforming, with evolving formats that cater to diverse traveller needs and preferences. Industry leaders are complementing traditional hotel models with innovative alternatives that emphasise flexibility, authenticity, and unique experiences.
|
As Gen Z starts to enter the middle class, the requirement for variation will become even more essential.
Demand continues to grow for shared spaces, and increasingly lifestyle offerings that provide guests the opportunity to connect with the location and fellow travellers. By meeting these needs through carefully designed bars, lounge areas and restaurants, hotels of all chain scales will be able to facilitate guest desires to work flexibly, immerse themselves in experiences and connect locally.
The industry is embracing the desire for spaces dedicated to wellness and fitness. From rooftop yoga studios and immersive spa retreats to interactive gaming lounges and AI-enhanced gyms, properties are incorporating elements that encourage guests to relax, recharge and play.
At the top-end, luxury brands are investing heavily in branded residential offerings, with projects increasing by more than 180% over the last decade. |
The segment is becoming increasingly competitive due to the presence of major lodging companies alongside uber-luxury retail brands. | ||
|
Our responses include:
– Expanding our portfolio of branded residences across our Luxury & Lifestyle brands, with signings in 2024 including the Regent Residences Dubai at Marasi Marina and Six Senses Telluride in Colorado.
– Introducing Holiday Inn Express Generation 5 and Holiday Inn H5 public spaces to match the desire for local connections with the requirements of the modern traveller, facilitating social connection and co-working.
– Continuing growth of new brands designed to accommodate developing guest needs. Brands launched since 2019 have grown 62% in 2024. |
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| Rapidly evolving technology
|
||||
| The technology landscape is rapidly changing, driven by advancements in automation and artificial intelligence (AI). Today’s consumers have heightened expectations, seeking control, convenience, and speed across every industry they interact with.
To adapt to these expectations, hotels are embracing modern, cloud-based systems that simplify operations and alleviate pressure on front-desk staff. Hotel owners seek technology to automate tasks and streamline their operations, while guests increasingly seek technology that gives them more control.
Hotel companies are modernising their core platforms, with a shift towards cloud-based systems to optimise operations, pricing, reservations, and customer relationship management. |
The digital stay experience is an increasingly important guest expectation, with mobile check-ins, digital room keys, kiosks, and automated check-outs growing in popularity and becoming mainstream. This renewed focus on self-service not only leads to guest control but also hotel operational efficiencies.
Additionally, the integration of AI offers more personalised guest experiences, with chatbots that provide instant support and tailored recommendations, while predictive analytics enhance pricing, staffing, and inventory management for hotel operators. However, these innovations also introduce significant data protection challenges, requiring robust infrastructure to safeguard sensitive information and systems. |
Our responses include:
– We are undergoing a multi-year modernisation of our core systems, introducing new property management solutions that transform hotel operations and payment processes to address global and regional needs.
– Creating a dedicated task force focused on digital stay experience, with the goal of empowering guests with greater flexibility and control.
– We are developing new capabilities, including a cutting-edge customer relationship management system, and investing in self-service options to elevate guest satisfaction.
– Our commitment to cybersecurity remains steadfast, focusing on the protection of our systems against existing and potential threats.
– Utilising AI to upgrade system intelligence and enable our hotel and corporate colleagues to work more efficiently. |
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| 22 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our business model
| What we do |
|
|||||||||||||
| We provide an enterprise platform for hotel owners to join the IHG system through a family |
This in turn attracts further new-build hotel investment and existing hotels to convert to IHG’s brands, which grows our system size. We predominantly franchise our brands and manage hotels on behalf of third-party hotel owners, with the decision largely driven by market maturity, owner preference and, in certain cases, the particular brand. |
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|
|
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| The growth of our
RevPAR indicates the value guests ascribe to a given hotel brand or market, and grows when they stay more often or pay higher prices. Room supply and the size of our system also reflect capturing structural growth drivers of increasing demand to travel and experience, |
as well as how attractive the hotel industry and IHG is as an investment from a hotel owner’s perspective.
IHG is an asset-light business, with a focus on growing fee revenues and fee margins, which we can do with limited capital requirements. This enables us to grow and invest in our business while generating high returns on invested capital and strong cash flow.
Hotels in the Essentials category tend to be franchised, while Luxury & Lifestyle hotels are predominantly managed. Our broad geographic spread and weighting towards essential business and domestic leisure drives comparative resilience during times of economic downturn. |
We have made excellent progress in expanding our presence in the Luxury & Lifestyle segment, which generally generates higher fees per room. This category is currently 14% of IHG’s system size, and comprises 21% of the future growth pipeline.
We do not employ colleagues in franchise hotels, nor do we control their day-to-day operations, policies or procedures. That being said, IHG and our franchise hotels are committed to delivering a consistent brand experience and conducting business responsibly and sustainably. |
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|
Total system size
|
||||||||||||||
| 987,125 rooms |
|
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|
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| Total development pipeline
|
||||||||||||||
| 325,252
rooms
a. Includes Iberostar Beachfront Resorts, which joined IHG’s system and pipeline as part of a long-term commercial agreement.
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| How we generate revenue |
|
|||||||
| As an asset-light business, revenue attributable to IHG is the fees charged to third-party hotel owners, rather than the entire revenue base of the hotels themselves. IHG also receives various ancillary fee streams. |
In 2024, IHG’s revenue from fee business was $1,774m (which generated an operating profit of $1,085m). For the small number of owned, leased and managed lease hotels, the entire revenue of these hotels is attributable to IHG, which in 2024 was $515m (generating an operating profit of $45m). Total revenue reported for IHG in 2024 was $4,923m, which additionally includes $1,611m of System Fund revenue, $1,000m of reimbursable revenue, and $23m of insurance activities revenue. |
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| 24 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our business model continued
| How we drive operating profit |
|
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| Our asset-light business model requires a limited increase in IHG’s own operating expenditure to support our revenue growth, which delivers operating profit and fee margin growth. |
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|
|
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| The benefit of operational efficiencies, along with brands and markets becoming more mature, supported fee margin expansion that averaged around 130bps a year between 2009 and 2019 in total for IHG.
In 2024, our fee margin increased by 190bps, which was ahead of the 100–150bps annual improvement on average over the medium to long-term that is expected to be driven by positive operating leverage.
|
For franchised hotels, the flow through of revenue to operating profit is higher than it is at managed hotels, given the fee model and our well-invested scale platform, where limited resources are required to support the addition of an incremental hotel.
This is most evident in our Americas region, where fee margins are the highest, reflecting our scale and more than 90% of our hotels operating under our franchised model. |
Across our managed hotels, the flow through of revenue to profit can be lower, given higher operating expenditure on operations teams supporting the hotel network.
Our owned, leased and managed lease hotels tend to have significantly lower margins than our fee business This is because we not only record the entire revenue of the hotel, but also the entire cost base, which includes staff and maintenance of the hotel. |
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| Fee margin by region | ||||||||||
| Americas | EMEAA | |||||||||
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|
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| Greater China | Total IHG | |||||||||
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|
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| Capital allocation |
|
|||||||||
| Our priorities for the uses of the cash flow that IHG generates are consistent with previous years and comprise three pillars: |
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|
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| Shareholder returns 2022–24 ($bn) | ||||||||||
|
|
1 Invest in the business We look to strategically drive growth, while maintaining strict control on investments and our day-to-day capital expenditures. |
2 Target sustainable IHG has a dividend policy where we would look to grow the ordinary dividend each year, while balancing all our stakeholder interests and ensuring our long-term success. |
3 Return surplus The Board expects our asset-light model to provide the opportunity to routinely return additional capital to shareholders such as through share buybacks. |
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 25 | |||||||||||
| Capital expenditure |
|
|||||||
| Spend incurred by IHG can be summarised as follows: | ||||||||
| Type | What is it? | Recent examples | ||||||
| Key money and maintenance capital expenditure | Key money is expenditure used to access strategic opportunities, particularly in high-quality and
Maintenance capital expenditure is devoted to the maintenance of our systems and corporate offices, along with our owned, leased and managed lease hotels. |
Examples of key money include investments to secure representation for our brands in prime locations.
Examples of maintenance spend include investment in corporate technology and software, as well as office refurbishment and maintenance. Across our owned, leased and managed lease hotels we invest in refurbishment of public spaces and guest rooms. |
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| Recyclable investments to drive the growth of our brands and our expansion in priority markets |
Recyclable investments are capital used to acquire real estate or investment through joint ventures, equity capital, or loans to facilitate third-party ownership of hotel assets. This expenditure is strategic to help build brand presence.
We would look to divest these investments at an appropriate time and reinvest the proceeds across the business. |
Examples of recyclable investments in prior years include our EVEN Hotels brand, where we used our capital to develop three hotel properties in the US to showcase the concept. These hotels were subsequently sold and now operate under franchise agreements.
More recently, recyclable investments have included the initial purchasing of sites for the Six Senses brand to be developed in key markets in the US. |
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| System Fund capital investments for strategic investment to drive growth at hotel level |
The development of tools and systems that hotels use to drive performance. This is charged back to the System Fund over the life of the asset. | We continue to invest in a range of upgraded technology solutions, including the ongoing development of IHG’s mobile app and IHG One Rewards loyalty evolution. | ||||||
| Dividend policy and shareholder returns |
|
|||||||
| The Board consistently reviews the Group’s approach to capital allocation and seeks to maintain an efficient balance sheet and investment grade credit rating. |
||||||||
| IHG has an excellent track record of returning funds to shareholders through ordinary and special dividends, and share buybacks. The ordinary dividend paid to shareholders increased at an 11% CAGR between 2004 and 2019, and at a 10% CAGR after resuming dividend payments at the end of 2021.
Our asset-light business model is highly cash generative through the cycle and enables us to invest in our brands and strengthen our enterprise. When reviewing dividend recommendations, the Board looks to ensure that any recommendation does not harm the sustainable success of the Company and that there are sufficient distributable reserves to pay any recommended dividend. The Board assesses the Group’s ability to pay a dividend bearing in mind its responsibilities to its stakeholders and its objective of maintaining an investment grade credit rating. |
One of the measures we use to monitor this is net debt:adjusted EBITDA where we aim for a ratio of 2.5–3.0x.
$500m of surplus capital was returned via a buyback programme announced in August 2022, $750m via a programme announced in February 2023, and then a further $800m via a subsequent programme in 2024. The highly cash-generative nature of our business model means we expect to have substantial ongoing capacity to return further surplus capital to shareholders, such as through share buybacks, as we look to move leverage into our target range over time.
The Board intends to continue sustainably growing the ordinary dividend and to typically pay dividends weighted approximately one-third to the interim and two-thirds to the final payment. |
In February 2024, IHG’s Board proposed a final dividend of 104.0¢ in respect of 2023, representing growth of 10% on that for 2022. The proposal was subsequently approved at the AGM and paid to shareholders on 14 May 2024.
In August 2024, IHG’s Board declared an interim dividend of 53.2¢ per share, representing growth of 10% on 2023’s interim dividend. This was paid to shareholders on 3 October 2024.
The Board is proposing a final dividend of 114.4¢ in respect of 2024, representing growth of 10% on that for 2023. The proposed total dividend for the year is therefore 167.6¢. Further, the Board have approved a share buyback programme to return an additional $900m of surplus capital in 2025. Given expectations for growth and EBITDA in 2025, leverage is expected to be around the lower end of our target range of 2.5–3.0x. |
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| 26 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our business model continued
| Driving ancillary fee streams |
|
|||||||
| Ancillary fee streams further leverage the strength of IHG’s brands and our powerful enterprise platform. As well as additional fee revenue, they typically flow through to operating profit at a high incremental margin, therefore contributing to overall fee margin accretion.
|
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|
|
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| Loyalty points sales to consumers |
Our loyalty programme, IHG One Rewards, allows members to earn points through qualifying stays and through third-party partnerships and programmes. Points revenue is generated through hotel assessments from qualifying stays, third-party points purchases to support partnership arrangements, and points purchased by members. Points revenue was previously included in the System Fund, but from the start of 2024 a portion of revenue from the sale of certain loyalty points is attributed to fee business revenue, delivering approximately $25m incrementally to revenue and operating profit from reportable segments in 2024. The change applied to 50% of proceeds from points sold in 2024 and will increase to 100% in 2025, approximately doubling the benefit to IHG’s reportable segments. Further points revenue growth is expected in future years as the number of points sold continues to increase, driven by the growth in the attraction and scale of the IHG One Rewards Programme. In 2024, the programme grew to over 145 million members who are responsible for over 60% of room nights consumed globally. |
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|
|
||||||||
| Co-brand credit cards |
Co-brand credit cards drive further membership and loyalty to our IHG One Rewards programme, deepening guest relationships and delivering more business to our hotels. Co-brand credit card partners pay fees to IHG for:
– access to our loyalty programme and customer base and the rights to use IHG brands;
– arranging for the provision of future benefits to members who have earned points or free night certificates;
– performing marketing services.
IHG One Rewards co-brand credit card holders stay even more frequently and spend more in IHG hotels. 2024 was a record-breaking year for new account applications, there was double-digit percentage growth year-on-year in total card customers, and total card spend was around 25% higher than before the relaunch of card products two years’ earlier. In November 2024, IHG entered into new agreements with our card issuing and financial services partners that were effective immediately from that date and have an initial term running through to 2036. Under prior arrangements, fees recognised within IHG’s operating profit from reportable segments were $39m in 2023, with these expected to be double that level in 2025. |
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||||||||
| Branded residential properties |
A further example of driving ancillary fees through the strength of IHG’s brands is their use to generate increased sales of residential property, typically alongside a hotel development with shared services and facilities. This industry segment has increased by 180% over the last decade. IHG already has more than 30 branded residential projects that are open or selling properties across five brands in 15 countries, and more in the pipeline including further projects where sales will launch in 2025. Signings in 2024 involving branded residences included Kimpton Monterrey in Mexico, the Regent Residences Dubai at Marasi Marina, and several for Six Senses, such as in the US at Telluride in the Colorado Rockies and Riverstone Estate in Foxburg, Pennsylvania, and at Dubai Marina. Fees earned by IHG from branded residences are recognised within IHG’s operating profit from reportable segments. |
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 27 | |||||||||||
| Why hotel owners choose to work with IHG |
|
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| Hotel owners choose to work with IHG because of the trust they have in our brands and our track record in delivering strong returns.
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Global sales organisation We have developed a global sales enterprise to drive higher-quality, lower-cost revenue to our hotels Sustainability tools and expertise We have developed tools, training and programmes to support hotels and provide better data and insights to enable them to reduce their energy, waste and water consumption Procurement We use our scale to reduce costs for owners, with procurement programmes for hotel goods, services and construction Strength of brands A portfolio of brands across industry segments, designed to drive owner returns Investment in hotel lifecycle management and operations We have invested in technology, systems and processes to support performance, increase efficiencies and drive returns for our owners Technology Our cloud-based platforms are improving operational efficiency and delivering strong returns, with our revenue and property management capabilities and Guest Reservation System providing advanced insights, simplifying operations and driving revenue Strong loyalty programme and enterprise contribution Over 80% of room revenue delivered to hotels by IHG’s managed channels and sources Commercial engine We have invested in our digital platforms, data and analytics, marketing and partnerships to provide guests with more choice and benefits and owners with higher-value customers at lower cost of acquisition
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| 28 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our strategy
Making it happen Our ambition to be the hotel company of choice for guests and owners is underpinned by strategic investments in our brands, people, technology and scale. Over the long term, with disciplined execution, our strategy drives the growth of our brands in high-value markets. It creates value for all our stakeholders and delivers sustained growth in profits and cash flows, which can be reinvested in our business and returned to shareholders. Our strategic priorities and the behaviours that drive them have been designed to put the expanded brand portfolio we have built in recent years at the heart of our business, and our owners and guests at the heart of our thinking. They recognise the crucial role of a well-invested loyalty programme and technology systems, and ensure we meet our growing responsibility to care for and invest in our people, and to make a positive difference to our communities and planet. Our strategy is inspired and informed by our purpose of providing True Hospitality for Good, which is underpinned by our commitment to a culture of operating and growing in a responsible, ethical and inclusive manner. This sets the tone for how we do business, enabling us to focus on creating value for all stakeholders as we build an even stronger IHG. What we do Provide True Hospitality for Good Why we do it To be the hotel company of choice for guests and owners How we make it happen Relentless Brands Leading Care for focus guests and commercial our people, on growth owners love engine communities and planet Our growth behaviours Ambitious Dedicated Courageous Caring
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 29 | |||||||||||
Relentless focus on growth We are accelerating the global growth of our brands on the back of a transformed portfolio that’s giving our guests and owners more choices across segments. In 2024, our brands continued to reach new markets, we expanded our presence in high-growth ones, grew and strengthened both new and existing brands, and extended our presence in Luxury & Lifestyle. More on pages 30 to 31. Brands guests and owners love We are focused on delivering tailored services and solutions to meet the expectations of guests and owners. In 2024, we strengthened guest benefits for IHG One Rewards, enhanced stay experiences, continued to build awareness of our IHG Hotels & Resorts masterbrand and reduced costs for owners. More on pages 32 to 33. Leading commercial engine We invest in the tools, technology and solutions that make the biggest difference for guests and owners. Among the key highlights in 2024 were the launch of new technology systems to elevate the guest experience, drive hotel performance and increase owner returns, and continuing to build membership and engagement through IHG One Rewards. More on pages 34 to 35. Care for our people, communities and planet With more than 6,600 hotels in our global estate, it’s vital that as we grow, we do so responsibly and sustainably for our communities, the environment and the long-term success of our business. In 2024, we took further steps to invest in our people and culture, deliver lasting change to our communities and make our hotels more sustainable. More on pages 36 to 37.
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| 30 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our strategy continued
Relentless focus on growth The transformation of our portfolio is fuelling our growth for today and tomorrow. We have grown from 10 to 19 brands since 2015 to diversify across segments and meet guest and owner demand, while at the same time investing in the continued success of our established brands. Global expansion is supported by investment in our enterprise, including a leading loyalty programme, masterbrand and a powerful suite of technology products. >6,600 >2,200 >40% hotels open globally pipeline hotels, representing of global pipeline future system size growth of 33% under construction Signed long-term agreement with NOVUM Hospitality, which will double our presence in Germany – a priority growth market. Holiday Inn Brand Family generated 44% of hotel openings and signings globally in 2024.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 31 | |||||||||||
What we achieved in 2024
We opened 371 hotels in 2024 to surpass 6,600 globally and signed 714 properties into our pipeline – the equivalent of almost two a day – to take it to more than 2,200 hotels.
We are focused on capitalising on strong travel demand in markets with big growth opportunities. During the year, 29 openings represented a country debut for a particular IHG brand. We expanded our presence in high-growth markets, including India, Japan, Saudi Arabia, and Greater China, where record levels of development activity took our pipeline in the region to 549 hotels at the end of 2024 – its largest ever size, representing almost 60% of the region’s current system size. In Germany, one of our largest markets in Europe, we signed a long-term deal with NOVUM Hospitality that will double IHG’s presence. The agreement includes properties joining IHG through the new Holiday Inn – the niu brand collaboration, and has brought Candlewood Suites and Garner to Europe for the first time.
The enduring appeal of our established brands once again shone through, with our Holiday Inn Brand Family generating 44% of hotel openings and signings globally. Momentum behind our new brands also continued, with Garner having already reached 23 open hotels and a pipeline of 94 properties since becoming franchise-ready in the US in 2023, while avid® hotels grew its pipeline to 137 properties – almost double today’s existing system size. Atwell Suites® surpassed a pipeline of 50 hotels for the first time and launched in Greater China to capitalise on the appetite for our brands in this high-growth market. Premium brand voco™ hotels achieved debut openings in India, Sweden and Malaysia on its way to reaching 177 open and pipeline hotels. Underlining the huge growth potential of our newest brands, our seven most recently launched or acquired brands – not including Garner or our commercial agreement with Iberostar – now represent 17% of our pipeline.
Following acquisitions and new brand launches in recent years, we have established one of the industry’s biggest Luxury & Lifestyle portfolios and our six brands continued to drive our growth and performance. We achieved 133 openings and signings in this higher-fee segment in 2024, with Six Senses® Hotels, Resorts & Spas reaching 65 open and pipeline hotels, with debut openings in Japan and the Caribbean. Regent reached 20 open and pipeline properties, including the opening of another flagship property – Regent Santa Monica Beach, which marked the return of the brand to the Americas. Vignette Collection celebrated debut signings in key markets such as the Maldives, Spain and Turkey to surpass 50 open and pipeline hotels in just three years since launch, tracking ahead of our long-term target to attract more than 100 properties by 2031. A debut opening on the Greek islands was one of 25 openings and signings for InterContinental® Hotels & Resorts on the back of an exciting brand evolution in 2024, taking its system size to 227 and its pipeline to 101, which reflects its strong future growth opportunities. Kimpton® Hotels & Restaurants continued its global expansion, with a debut signing in the Turks and Caicos Islands and a first opening in the Dominican Republic adding to the brand’s growing presence in prime leisure destinations. A first opening in the Caribbean was among 42 openings and signings for Hotel Indigo®, further reflecting IHG’s success in internationalising its brands.
The strong future growth prospects of Luxury & Lifestyle are reflected by our portfolio now representing 14% of our current system size and 21% of our pipeline. Illustrating our growing reputation, 46 hotels were awarded Condé Nast Traveler Readers’ Choice Awards – more than double the number of two years ago – while 14 earned Michelin Keys.
In our Exclusive Partners category, we continued to integrate the Iberostar Beachfront Resorts brand into our systems, with 55 out of up to 70 properties from the original agreement in 2022 added to IHG’s system, as we capitalise on the growing demand for resort and all-inclusive stays.
Conversion deals were again central to our growth, representing around 50% of both room openings and signings. This strong performance reflects the appeal of our brands and wider enterprise to owners, alongside a sharpened strategic focus on driving these quicker-to-market opportunities. In Greater China, for example, we have a dedicated Conversions and Contract Renewals team and we collaborate closely with owners to deliver a quick return on investment. There were also 340 new-build signings globally during the year – another key indication of growing developer confidence.
What’s to come
We have grown our development pipeline to more than 2,200 hotels, the equivalent of 33% of today’s system size. This, together with investments in our enterprise, lays the foundation for continued system size growth in the years ahead.
Supporting this, we will further expand our presence in high-growth markets, such as Greater China, Germany, Japan, Saudi Arabia and India.
We will continue to assert the competitive advantage of our Essentials brands so we can extend their leadership in major markets by optimising their cost to build, open and operate, while at the same time accelerating conversion deals. We will also drive expansion of our newer brands by strengthening their performance and taking them into more new markets globally.
We will embed our Luxury & Lifestyle capabilities to further strengthen our reputation with guests and owners, and accelerate the growth of our brands. Linked to this, we will continue to develop a world-class branded residences offer following strong progress in 2024, which included signing the first Regent Residences in Dubai and Six Senses Residences Dubai Marina, which will be the world’s tallest residential tower once complete.
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| 32 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our strategy continued
Brands guests and owners love Staying successful means putting ourselves in the shoes of our guests, corporate customers and owners in everything we do. This is how we are creating unrivalled service and tailored experiences in our hotels, and attractive investment opportunities with strong returns for our owners. Maintained outperformance versus key competitors on Guest Satisfaction Index in all three regions. Launched new chapter of Guest How You Guest marketing campaign to increase awareness of IHG Hotels & Resorts masterbrand for guests and owners. >145m ~10% IHG One Rewards loyalty reduction in cost per occupied programme grown to room for Essentials and Suites brands over 145 million members through procurement programmes and enhanced Food & Beverage offer
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What we achieved in 2024
Strong leisure, business and group demand pushed Global RevPAR up 3.0% in 2024, as we continued to position IHG as first choice for guests and owners. The work we are doing in collaboration with our owners and hotel teams to elevate the guest experience has helped IHG maintain its outperformance versus key competitors on the externally measured Guest Satisfaction Index in all three regions. This included strengthening our IHG One Rewards loyalty programme with fresh experiences, rewards and stay enhancements that helped it grow to more than 145m members. Reward Night redemption is also around 30% higher than prior to the programme refresh two years ago, demonstrating strong member engagement and driving increased owner returns.
Our award-winning mobile app is unlocking the full power of IHG One Rewards, making it easier than ever before to enrol, manage and recognise members. Regular updates are improving the guest experience, IHG® Wi-Fi Auto Connect is automatically connecting loyalty members to hotel wi-fi globally, and the upsell of unique room attributes – such as room size and view – is enabling travellers to tailor their stays as they book with us.
Reflecting continuous investment in our portfolio, in 2024 we launched a new breakfast programme for avid in the US and Canada featuring more choice for guests and reducing costs for owners. For Holiday Inn Express, further optimisation of its breakfast menu is driving 5–10% cost reductions for owners. We also recently launched new public space designs, marketing campaigns and an upgraded coffee service for the brand. We also rolled out a new visual identity for Holiday Inn and have seen rapid owner adoption of its upgraded breakfast buffet service, which is delivering outperformance in key guest metrics and lower labour costs for owners. Testament to our success in keeping this iconic brand feeling fresh, in 2024 Holiday Inn was voted Most Trusted Brand in US Travel and Hospitality by Morning Consult for the fourth consecutive year, as well as Leading Budget Hotel Brand at the World Travel Awards.
For our hotel owners, we are focused on capturing demand and strengthening the performance of their hotels. IHG One Rewards is playing a central role and our masterbrand strategy is supporting it in building engagement with guests by growing awareness and strengthening the perception of our brands in several ways. Our global marketing campaigns, such as the latest instalment of our Guest How You Guest campaign, are increasing IHG’s appeal with key demographics. Our exclusive partnerships also continue to reward loyal guests and raise IHG’s profile, with IHG One Rewards members redeeming points in exchange for unique experiences at sporting events and music festivals, as well as exclusive member privileges with other leading brands. In late 2024, we also began simplifying our brand endorsement from ‘an IHG hotel’ to ‘By IHG’ across properties in the Americas and EMEAA to create a bolder connection between our masterbrand and brand portfolio across new signage, digital channels and global distribution listings.
We work closely with our hotel teams and owners to drive performance – connecting with general managers on calls and at regional conferences, and with owners through webinars, meetings and events. Our New Owner Orientation programme in the US provides extra support for owners new to IHG, and we welcomed thousands of owners to the IHG Americas Investors & Leadership Conference to share the latest innovations to strengthen their businesses.
Efficient new hotel space designs are reducing costs per key and driving brand consistency, including new prototypes for our extended-stay brands. More hotels are also joining our procurement programmes across Food & Beverage and other operational supplies and services. Together with further enhancements to breakfast menus and our new in-lobby 24/7 bean-to-cup coffee programme, these are further lowering costs per occupied room across Essentials and Suites brands. In the Americas, we are extending our procurement services across Premium and Luxury & Lifestyle hotels to provide savings on a wider range of supplies and services and a full procure-to-pay solution for owners, while our WeChat ecommerce platform in Greater China is providing access to thousands of construction materials. We also lowered our standard loyalty assessment fee for owners during 2024, increased certain Reward Night reimbursements they receive back out of the System Fund when points are redeemed for stays and reduced the IHG® Ignite marketing fee for participating hotels in the Americas and EMEAA.
Making hotel operations more sustainable is crucial to the future of our owners’ businesses, IHG and our industry, and we are taking active steps to help our hotels measure and manage their environmental impact. In 2024, we launched our industry-first Low Carbon Pioneers programme to help us test, learn and share findings on sustainability measures; we upgraded our Green Engage environmental management platform to strengthen how properties manage energy, water and waste; and we incorporated more energy conservation measures (ECMs) into hotel brand standards to reduce energy usage and costs.
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For more on Planet, see pages 60 to 63. |
We continue to work with the IHG Owners Association, which represents the interests of thousands of owners and operators, to roll out key projects and ensure our owners are fully aware of the operational and commercial support we are providing. This includes collaborating with governments, trade bodies and peers to support the industry on a broader scale on prominent issues.
What’s to come
We will continue to develop our masterbrand strategy to lift awareness of our brands. This includes extending the reach of our Guest How You Guest campaign across channels and international markets, supported by targeted regional promotions and brand marketing campaigns – including the latest for Holiday Inn Express. In addition, we will invest further in developing strategic partnerships and continue to roll out our new ‘By IHG’ endorsement across our brands in 2025.
Our focus on quality and consistency of the guest experience relies on continued investment in loyalty benefits, service and digital products to give our hotels a competitive edge, supported by increased use of data, analytics and AI.
We will drive owner returns by continuing to fine-tune our brand formats to reduce cost per key across new projects and renovations, while at the same time improving the guest experience. This includes opening our first new-build prototype for Holiday Inn featuring elevated Food & Beverage, redesigned guest rooms and versatile public spaces. We will also strengthen our groups and meetings offer to further capitalise on strong business and group demand.
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| 34 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our strategy continued
Our strategy continued Leading commercial engine We are investing in the technology and tools that drive commercial success and make the biggest difference to guests, owners and hotel teams. This powerful commercial engine enhances the guest experience while driving returns for owners and encouraging them to grow further with IHG. >20% >60% 81% increase in revenue driven by IHG One Rewards mobile app year-on-year room nights globally booked by IHG One Rewards members – increasing loyalty penetration room revenue booked through IHG-managed channels and sources – up from 72% four years ago ~3,500 ~30% hotels now featuring our new revenue management system of guests seeing an upsell offer at some point in their booking journey Entered into new long-term US co-brand credit card agreements. Announced first approved new property management system to create greater value for owners.
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What we achieved in 2024
The success of our enterprise is illustrated by our ability to provide hotel owners with higher-value customers at a lower cost of customer acquisition. In 2024, we saw the percentage of room revenue booked through IHG-managed channels and sources reach 81% – up 9% in four years.
Our IHG One Rewards loyalty programme is playing a key role, with members spending approximately 20% more in hotels than non-members and being around 10 times more likely to book direct. In 2024, we continued to find fresh ways to provide them with leading value, richer benefits and greater choice on the way to growing the programme to over 145 million members. Loyalty penetration also increased, with members now responsible for over 60% of all room nights booked globally, and rising to around 70% in the US and Americas overall.
Knowing that recognised members typically spend more in hotels than non-members, we are working closely with our hotel teams to embed a culture of loyalty. During the year, we provided training, tools and hosted our Loyalty Week in EMEAA, as well as our first in the Americas to further support them in strengthening delivery on property. In addition, we continued rolling out IHG Climb across the Americas, with our interactive gaming-based platform engaging teams to help drive performance towards their key loyalty metrics. With highly engaged hotels already seeing significant improvements in performance, we have begun rolling out IHG Climb for Sales to support our sales leaders.
New accounts and average card spend grew across our US co-brand credit cards, which are an important way of driving membership of IHG One Rewards and business to our hotels. Building on our progress, we signed new agreements with our providers in 2024, with total fees to IHG expected to significantly increase from the start of the new agreements and to continue growing over the term.
Our mobile app once again played an integral role in driving deeper engagement with IHG One Rewards, with regular updates further increasing loyalty contribution, direct bookings and incremental spend during stays. Revenue driven by the app increased more than 20% year-on-year, downloads were also up over 20% and it won three prestigious Webby Awards in 2024 – including Best Travel App and Best User Experience. Its success underlines a further shift in preference for mobile devices, with the app and other mobile channels now accounting for two-thirds of all digital bookings. As part of our digital-first strategy, we are also providing AI-backed translations for digital content into 20 languages, saving hotels time and money. We sent over 12 million personalised hotel-to-guest messages in 2024 – 84% more than the previous year – while AI is providing a more intuitive experience for our Digital Concierge chatbot service, which had three million conversations with guests. AI is also enabling IHG Voice to automatically handle customer calls to reduce the workload for busy hotel teams, while our 24/7 asynchronous service is helping guests resolve their queries with reservations and customer care agents via chat. Building on the progress we are making, a new digital check-out experience was piloted in over 300 US hotels and robots were in use in more than 350 properties in Greater China to fulfil basic guest requests, such as delivering towels and other amenities.
Our technology systems are giving our brands, business and owners a competitive edge. As part of a reimagined approach to revenue management, our new revenue management system is now live in around 3,500 properties and incorporating leading data science, machine learning and forecasting tools to deliver advanced insights and pricing recommendations that drive top-line revenue for hotels. We have also begun rolling out a new property management system (PMS) to create greater value for owners. This can be accessed via a mobile phone, with a single cloud-based view across properties improving ease of hotel operations and enabling us to deploy fast, efficient enhancements at scale. Following successful pilots, we have partnered with HotelKey to launch our first system in the US and Canada for our select-service hotels.
In Greater China, over 400 select-service hotels have implemented a new property management system. Through our Guest Reservation System (GRS), around 30% of guests are seeing an upsell offer at some point in their booking journey and we will scale this further in 2025. When selected, upsell offers are achieving average nightly room revenue increases of around $20 across our Essentials and Suites brands and around $40 for Luxury & Lifestyle. This is driving share shift into premium rooms and more revenue to hotel owners.
What’s to come
We will continue to drive enrolments for IHG One Rewards by providing new benefits and working closely with our hotel teams to deliver a consistent loyalty experience on property. Linked to this, we are working on a new customer relationship management platform for our loyalty programme that delivers a more seamless guest experience, more tailored solutions to enquiries and connects with guests on their preferred channels.
Continuing our focus on driving high-quality revenue through our best-in-class platforms, we will fine-tune the customer journey across our channels, such as our mobile app, to make it as easy as possible for guests to book stays at our hotels and increase revenue for owners. We will complete the implementation of the new revenue management system across our estate and continue to roll out our new PMS with HotelKey, which is expected to be in place in approximately 1,500 properties in the Americas and EMEAA by the end of 2025.
Following pilots in the UK, France, Germany, Italy and Spain in 2024, we will continue working towards establishing a new payment solution in Europe that strengthens security, speeds up processing and reduces owner costs.
Having entered into new agreements for our US co-brand credit cards, we will continue to evaluate opportunities to grow this important ancillary fee stream further in the US, while continuing to assess the opportunity to launch new co-branded credit cards in new markets.
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| 36 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our strategy continued
Care for our people, communities and planet With more than 6,600 hotels in communities around the world, IHG values the opportunity to be a force for good by positively impacting the lives of millions and protecting the world around us. Guiding our actions is Journey to Tomorrow – a 2030 responsible business plan aligned to our purpose of True Hospitality for Good and the evolving expectations of our stakeholders. Partnered with Action Against Hunger to help deliver lasting change in thousands of communities across the globe. 87% overall employee engagement, with IHG named a Mercer Global Best Employer >4.2m lives improved since 2021 through our collective action and work with charity partners 11.5% reduction in carbon emissions per available room compared with 2019
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What we achieved in 2024
Our people
Building a culture where everyone is valued, respected and able to thrive is fundamental to attracting and retaining a talented workforce and achieving our growth ambitions. In 2024, IHG was ranked among the best places for women to work in the US, and we remain committed to building talent and leadership capabilities for our hotels through programmes such as Journey to GM and our Global RISE mentoring programme, both of which saw continued success in welcoming new participants and placing candidates into GM roles during the year.
Engaging with colleagues is central to our culture and we hold listening forums so they can express their views throughout the year. This includes our colleague engagement survey, where we maintained our score of 87% to be accredited as a Mercer Global Best Employer.
To help develop and retain talent, a corporate onboarding platform for new starters was developed in 2024, along with the introduction of tailored learning tools for IHG University and a new mobile app to improve access to its resources. We also launched IHG Metaverse for prospective candidates to immerse themselves in life at IHG, and continued to build engagement with our careers website, which attracted 5.6 million visitors in 2024.
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For more on people, see pages 53 to 57. |
Our communities
Our Journey to Tomorrow plan includes a commitment to improve the lives of 30 million people through skills training, disaster response and food security.
In 2024, we helped improve the lives of more than two million people through our community partnerships and programmes. This included our IHG Academy, which inspires the next generation through skills training, where during the year, more than 43,000 participants benefited from work experience, internships, apprenticeships and free online training.
We responded to 27 natural disasters by supporting charity partners in their relief and recovery efforts, and we launched a global partnership with Action Against Hunger – one of the largest global NGOs combating hunger. Using the strength of our IHG Hotels & Resorts masterbrand, we are driving awareness of food security with millions of guests globally and supporting Action Against Hunger in treating malnourished children.
This work complements our existing long-standing community partnerships.
Every September, IHG colleagues take part in Giving for Good month to give back to their communities, and this year we worked with over 1,450 charities across events spanning 84 countries to improve the lives of nearly half a million people.
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For more on communities, see page 58. |
Our planet
We are helping our hotels measure and manage their environmental impact, working closely with our hotel teams and owners to reduce carbon emissions, waste and water on property.
Our asset-light business model means that more than 60% of emissions under our carbon target come from franchisees not under IHG’s direct control. Our decarbonisation strategy focuses on three areas: implementing energy efficiency measures in hotels; pioneering low-carbon hotels; and supporting hotels in sourcing renewable energy.
In 2021, we set a target to reach a 46% absolute reduction in GHG emissions by 2030 from our franchised, managed, owned, leased and managed lease hotels, from a 2019 baseline. This target has been validated by the Science Based Targets initiative (SBTi).
Our ongoing commitment to decarbonisation has driven an 11.5% reduction in carbon emissions per available room and a 9.4% reduction in energy per available room in 2024 compared to 2019. However, the lack of a clean energy infrastructure in our markets, alongside the opening of more hotels around the world, means that total carbon emissions are up 7.2% since 2019. As a result, despite our ongoing efforts, we are not on track to meet our 2030 target. We remain dedicated to the actions we are taking to assist hotel owners in reducing carbon emissions and while our programmes will require time to scale, the actions we are taking today will improve operational efficiency of IHG hotels and prepare us for accelerated decarbonisation once market factors are more favourable.
We continued decarbonising existing hotels during the year by supporting them in incorporating new energy conservation measures (ECMs) into brand standards and updating our Green Engage platform to improve their measurement of energy, water and waste. We also launched the Low Carbon Pioneers programme to help drive the development of hotels that operate at very low or zero carbon emissions.
This industry-first community of energy efficient hotels, which have no fossil fuels combusted on sitea and are backed by renewable energy, will help us test, learn and share findings across our estate.
We do not directly procure renewable energy for our franchised properties, but assist hotels in other ways, including connecting them with Community Solar programmes in select US markets. In addition, several of our global offices, including our headquarters in Windsor in the UK and Atlanta in the US, are procuring 100% renewable electricity.
To reduce waste, we introduced brand standards in Europe to eliminate single-use plastic bottles from guest rooms and meetings, and launched a guide for US owners on disposing of major hotel commodity items. Since launching our global food waste training e-learning module in 2022, it has been accessed by more than 2,700 hotels and over 53,700 courses have been completed by managed and franchised hotel colleagues.
To reduce water usage, we continued integrating water-reduction measures into brand standards. In 2024, our water intensity (m³ of water use per available room) decreased by 1.8% compared to 2019. We anticipate that as we implement water efficiency brand standards across our estate, this improvement in water efficiency will continue to grow. At the same time, our absolute water footprint has increased by 9% since 2023 due to our continued business growth.
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For more on planet, see page 60. |
What’s to come
We remain focused on investing in attracting, developing and retaining the talent we need at corporate and hotel level, and will strengthen how we drive high performance across the organisation.
In our communities, we will champion our Action Against Hunger partnership and continue strengthening our collective impact as we work towards improving the lives of 30 million people. We will also embed our refreshed IHG Academy offer by developing new elements for online learning.
To manage our environmental impact, we will continue implementing our decarbonisation roadmap. This includes further developing our Low Carbon Pioneers programme, and working with industry bodies and governments to help speed up the industry’s transition to a greener, more resilient future.
| a. | Except for backup generators that fall below 5% of the hotel’s total annual energy consumption. |
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Our key performance indicators (KPIs)
| Our KPIs are carefully selected to allow us to monitor the delivery of our strategy and long-term success. They are organised around our strategy, which articulates our purpose, ambition and priorities (see page 28). KPIs are reviewed annually by senior management to ensure continued alignment, and are included in internal reporting and regularly monitored. |
Measures included are those considered most relevant in assessing the performance of the business and relate to our growth and commitment to key stakeholders including owners, guests, employees, shareholders and the communities in which we work.
KPIs should be read in conjunction with the other sections of the Strategic Report, and where applicable, references to specific relevant topics are noted against each KPI. |
| Link between KPIs and Director remuneration
As we continue to focus on delivering high-quality growth, Directors’ remuneration for 2024 was directly related to key aspects of our strategy. The following indicates which KPIs have impacted Directors’ remuneration:
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Annual Performance Plan
– 70% was linked to operating profit from reportable segmentsa.
– 15% was linked to strategic focus on net system size growth through openings.
– 15% was linked to strategic focus on future net system size growth through signings. |
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Long Term Incentive Plan
– 30% was linked to Total Shareholder Return.
– 40% was linked to relative net system size growth.
– 30% was linked to cash flow generation. |
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For more information on Directors’ remuneration, see pages 138 to 175. |
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| Link to our strategy
Our four strategic priorities are core to our success and represented as follows: |
Relentless focus on growth |
Brands guests and owners love |
Leading commercial engine |
Care for our people, communities and planet |
| Net rooms supply | Signings | |||||||
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Net total number of rooms in the IHG system.
Increasing our rooms supply provides significant advantages of scale, including increasing the value of our loyalty programme. This measure is a key indicator of achievement of our growth agenda (see page 30). |
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Gross total number of rooms added to the IHG pipeline.
Continued signings secure the future growth of our system and ongoing efficiencies of scale. Signings indicate our ability to deliver sustained growth (see page 30). |
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| 2024 status
– Net system size increased by 4.3%, with gross system growth of 6.2% and a removals rate of 1.9%. Total rooms supply was 987,125.
– Significant increase in the level of signings with 106,242 rooms (714 hotels). Total pipeline of 325,252 rooms increased by 9.5% compared to 2023, with more than 40% under construction.
– Continued strength of the Holiday Inn Brand Family with 29,053 rooms opened and 44,528 rooms signed, representing more than 40% of our total rooms signings.
– Signed 17,703 rooms as part of the initial NOVUM Hospitality agreement, with the first 10,186 rooms opened. |
– Further momentum of our Luxury & Lifestyle portfolio with 7,741 rooms opened and 16,238 rooms signed.
– Expansion of Iberostar Beachfront Resorts with 1,986 rooms opened and 2,193 rooms signed in 2024.
– Continued growth of our recently launched brands with:
– voco growing to 87 hotels open and a further 90 properties in the pipeline across more than 25 countries;
– 17 Atwell Suites signed, taking the pipeline to 54 properties, including its debut in Greater China;
– Vignette Collection growing to 20 open and 35 pipeline hotels since its launch in 2022; |
– avid hotels adding nine openings and 22 signings, taking the estate to 76 hotels open with a further 137 in the pipeline; and
– the continued global expansion of Garner since its launch in 2023 to 23 properties open across the US, UK, Germany and Japan, and a further 94 properties in the pipeline.
2025 priorities
– Continue to invest and focus on our brands in the largest markets and segments to deliver strong net system size growth.
– Extend the reach of the Holiday Inn Brand Family in major markets.
– Accelerate the expansion of avid hotels in the US, and further scale Atwell Suites, Garner and voco internationally.
– Further strengthen our Luxury & Lifestyle offer and capabilities, including branded residences. |
| a. | Use of Non-GAAP measures: In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional financial measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures. Further explanation in relation to these measures can be found on pages 103 to 108, and reconciliations to IFRS figures, where they have been adjusted, are on pages 266 to 272. |
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| Global RevPAR growth | Growth in underlying fee revenuesa | |||||||
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| Revenue per available room: rooms revenue divided by the number of available rooms.
RevPAR growth indicates the increased value guests ascribe to our brands in the markets in which we operate and is a key measure widely used in our industry (see page 18). Definition of this key performance measure can be found on page 103. |
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Revenue from reportable segments excluding revenue from insurance activities, revenue from owned, leased and managed lease hotels, significant liquidated damages and current year acquisitions, stated at constant currency.
Underlying fee revenue growth demonstrates the continued attractiveness to owners and guests of IHG’s franchised and managed business (see page 23). |
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| Total gross revenue from hotels in IHG’s system |
Enterprise contribution to revenue | |||||||
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| Total rooms revenue from franchised hotels and total hotel revenue from managed, exclusive partner and owned, leased and managed lease hotels. Other than for owned, leased and managed lease hotels, it is not revenue wholly attributable to IHG, as it is mainly derived from hotels owned by third parties.
The growth in gross revenue from IHG’s system illustrates the value of our overall system to our owners (see page 23). Definition of this key performance measure can be found on page 103. |
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The percentage of room revenue booked through IHG managed channels and sources: direct via our websites, apps and call centres; through our interfaces with Global Distribution Systems (GDS) and agreements with Online Travel Agencies (OTAs); other distribution partners directly connected to our reservation system; and Global Sales Office business or IHG One Reward members that book directly at a hotel.
Enterprise contribution is one indicator of IHG value-add and the success of our technology platforms, and our marketing, sales and loyalty distribution channels (see page 34). |
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2024 status
| – | RevPAR growth in 2024 was driven by both rate and occupancy, as Groups, Business and Leisure demand continued to strengthen. |
| – | Through 2024 we remained committed to supporting our owners to optimise returns as we: |
| – | generated incremental value for owners from the up-sell of unique room attributes and guest-stay extras through our industry-leading Guest Reservation System; |
| – | lowered the standard loyalty assessment fee owners pay into the System Fund and increased certain Reward Night reimbursements to improve owner economics; |
| – | rolled out the new cloud-based Revenue Management System (RMS) to around 3,500 hotels which utilises leading data science and forecasting tools to deliver advance insights and recommendations to owners; |
| – | initiated work on next-generation PMS, a cloud-based platform enabling deployment of efficient enhancements; |
| – | continued to focus on design and build, operation and renovation, including localised supply chains in key growth markets for Essentials and Suites brands and the rollout of WeChat mobile commerce platform for construction materials in Greater China; |
| – | improved enterprise contribution to 81% in 2024, with strong growth across IHG mobile app and other mobile channels that account for two-thirds of all digital bookings; |
| – | strengthened our IHG Hotels & Resorts masterbrand to further promote our portfolio of brands; |
| – | increased the IHG One Rewards programme to more than 145 million members, demonstrating strong member engagement and driving owner returns; and |
| – | secured new co-brand credit card agreements in the US, creating more opportunities for guests to engage with IHG One Rewards and more value for our owners. |
2025 priorities
| – | Continue to evolve and utilise data-driven insights to enhance owner returns and enhance the guest experience. |
| – | Further utilise our Guest Reservation System capabilities to generate more room up-sell opportunities and also stay enhancements through the cross-sell of non-room extras, maximising revenue generation to owners by leveraging the unique attributes of their inventory. |
| – | Further scale and invest in IHG One Rewards to support the growth and engagement of loyalty members. |
| – | Continue to evolve quality, design and hotel format innovation to optimise owner returns and meet guest needs. |
| – | Increase contribution from IHG One Rewards members by driving direct booking through our mobile and digital channels. |
| – | Further rollout of the RMS, enabling data and forecasting insights to owners and evolving the revenue services offer. |
| – | Continue to deploy our next-generation PMS to enable efficient enhancements. |
| – | Continue to grow the co-brand credit cards programme in the US, and explore potential for launch in other markets. |
| a. | Use of Non-GAAP measures: In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional financial measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures. Further explanation in relation to these measures can be found on pages 103 to 108, and reconciliations to IFRS figures, where they have been adjusted, are on pages 266 to 272. |
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| 40 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our key performance indicators continued
| Guest Love |
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Fee margina | ||||||||||
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IHG’s guest satisfaction measurement indicator.
Guest satisfaction is fundamental to our continued success and is a key measure to monitor our ability to deliver an experience that meets and exceeds guests’ expectations (see page 32 for details). |
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Operating profit as a percentage of revenue, excluding System Fund, reimbursement of costs, revenue and operating profit from owned, leased and managed lease hotels, significant liquidated damages, insurance activities and exceptional items.
Our fee margin indicates the profitability of our fee revenue and the benefit of our asset-light business model (see page 22). |
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2024 status |
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– Guest satisfaction of 81.5% improved compared to the prior year, reflecting increases in quality and investment in the guest experience.
– Externally measured Guest Satisfaction Index achieved scores over 100, outperforming our competitors, as we focus on guest experience improvements.
– Continued plans to ensure a consistent high-quality experience for each of our brands, including improvements in food and beverage, hotel condition and service.
2025 priorities
– Continue to improve the guest experience and elevate brand performance by prioritising quality and experience across areas such as loyalty recognition, digital engagement, food and beverage, service, public spaces and amenities.
– Utilise strategies such as training programmes, data-driven insights, improvement plans and renovations to minimise the number of underperforming properties within the portfolio.
– Incorporate GenAI to deliver actionable guest insights that drive strategic decision-making and empower actions to enhance the brand and hotel experience. |
2024 status
– Fee margin increased by 1.9%pts to 61.2%, driven by strong trading together with new and growing ancillary fee streams.
– Around 1.3%pts was driven by operational leverage and a further 0.6%pts was from the sale of certain loyalty points, together with certain other ancillary revenues, now being reported within IHG’s results from reportable segments.
2025 priorities
– Maintain our cost and efficiency focus.
– Leverage technology applications and process enhancements to achieve operational efficiencies.
– Continue to reinvest in the business to drive growth and further expand margin over the long term. |
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IHG® Academyb |
Employee engagement survey scoresc |
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The number of participants in our in-person IHG Academy programmes and the number of registered users on the IHG Skills Builder platform.
Sustained or increased participation in these areas reflects our progress in fostering career-building opportunities and strengthening engagement within the communities we serve (refer to page 58 for further analysis). |
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Colleague HeartBeat survey, completed by IHG employees or colleagues employed at owned, leased or managed leased hotels and managed hotels.
We measure employee engagement to monitor risks relating to talent (see page 48) and to help us understand the issues that are relevant to our people as we build an inclusive culture (see page 37). |
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2024 status
– Activated our refreshed IHG Academy offering within managed and franchised hotels.
– Continued to offer internships and work experience placements across hotels and corporate functions.
– Improved the user onboarding experience for our IHG Skills Builder platform.
– Increased our IHG Skills Builder registrations by more than 23,000.
2025 priorities
– Continue to embed our refreshed IHG Academy offering in our hotels and increase activation within their local communities.
– Introduce updated tracking tool for hotels to capture internship participation data.
– Design, test and launch a virtual offering for our IHG Discover programme.
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2024 status – Our score of 87% in 2024 is 9%pts higher than the external top quartile benchmark.
– We consistently achieved high engagement scores across our Hotel and Corporate populations, demonstrating our ongoing commitments to global colleague development and retention.
2025 priorities
– Further drive effectiveness in our technology and processes to improve speed of decision making and innovation.
– Continue to foster our inclusive culture through leadership development and colleague lifecycle activities.
– Continued focus on our Luxury & Lifestyle and General Manager capability and talent pipelines.
– Expand our HR technology to service more of our hotel estate and increase technology capabilities in our corporate offices. |
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| a. | Use of Non-GAAP measures: In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional financial measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures. Further explanation in relation to these measures can be found on pages 103 to 108, and reconciliations to IFRS figures, where they have been adjusted, are on pages 266 to 272. |
| b. | 2021, 2022 and 2023 figures have been restated due to improvements in data collection and reporting. |
| c. | The 2020 Colleague HeartBeat engagement index is not comparable to 2021 onwards. Due to the pandemic, employees in corporate offices and reservation centres, and managed hotel general managers were invited to participate in a shortened survey. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 41 | |||||||||||
| Adjusted free cash flowa,b | ||||
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| Cash flow from operating activities excluding payments of deferred or contingent purchase consideration, recyclable contract acquisition costs, cash flows relating to exceptional items, interest receipts related to owner loans and lease incentives, less purchase of shares by employee share trusts, gross maintenance capital expenditure, and lease payments, and including finance lease income relating to sub-leases, and any payments or repayments related to investments supporting the Group’s insurance activities.
Adjusted free cash flowa provides funds to invest in the business, sustainably grow the dividend and return any surplus to shareholders (see page 24). It is a key component in measuring the ongoing viability of our business (see page 109). |
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2024 status
– Adjusted free cash flow decreased by $182m to $655m as growth in operating profit from reportable segmentsa was offset by a decrease in the System Fund and reimbursable result, increased contract acquisition costs, and higher interest and tax payments.
2025 priorities
– Continue to deliver strong conversion of adjusted earningsa into adjusted free cash flow.
– Timely management of capital deployment in line with business priorities.
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| Greenhouse gas emissions | ||||||
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| Total market-based GHG emissions (measured in tonnes of CO2e) across our corporate offices, franchised estate, owned, leased and managed lease hotels. For further details on our carbon footprint methodology, please refer to pages 75 to 76.
Our target is to achieve a 46% reduction in absolute Scope 1, 2, and Scope 3 (including energy from FERA and franchised hotels) GHG emissions by 2030, from a 2019 baseline. This target is validated by the Science Based Targets initiative (SBTi).
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2024 status
– Our ongoing commitment to decarbonisation has driven an 11.5% reduction in carbon emissions per available room and a 9.4% reduction in energy per available room in 2024 compared to 2019.
– However, the lack of a clean energy infrastructure in our markets, alongside the opening of more hotels around the world, means that total carbon emissions are up 7.2% since 2019. As a result, despite our ongoing efforts, we are not on track to meet our 2030 target.
– We remain dedicated to the actions we are taking to assist hotel owners in reducing carbon emissions and while our programmes will require time to scale, the actions we are taking today will improve operational efficiency of IHG hotels and prepare us for accelerated decarbonisation once market factors are more favourable.
2025 priorities
– Continue implementing our decarbonisation roadmap focusing on energy efficiency measures in the existing estate, transitioning to renewable energy and developing new-build hotels operating with very low or zero carbon emissions.
– Using our global scale, we will continue to actively engage with external stakeholders to support hotel owners to reduce operational costs, boost revenue, and meet industry standards for sustainability, ultimately benefiting both the industry and our communities.
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| a. | Use of Non-GAAP measures: In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional financial measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures. Further explanation in relation to these measures can be found on pages 103 to 108, and reconciliations to IFRS figures, where they have been adjusted, are on pages 266 to 272. |
| b. | Re-presented to reflect the updated definition of adjusted free cash flow (see pages 107 to 108). |
Table of Contents
| 42 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our stakeholders
Engaging and cultivating strong relationships with both internal
and external stakeholders is crucial for fostering collaboration,
driving innovation, and ensuring the long-term success and
sustainability of IHG.
| Shareholders and investors | ||||||||||||
| Our ability to maintain strong relationships with shareholders and institutional investors is fundamental to our ability to access capital markets and ensure IHG’s long-term success. |
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| What impacted them in 2024
– The impact of geopolitical unrest on the hospitality sector in certain regions, which could affect IHG’s trading performance and financial results or influence its capital allocation policy.
– Executive remuneration policies, including the potential use of discretion, alignment with workforce pay and talent retention.
– Environmental concerns and wider sustainability issues.
– CEO succession and Board composition. |
Engagement
– Regular roadshow investor meetings and participation at investor conferences by Executive Directors, senior leadership and the Investor Relations team.
– Extensive consultations between the Chair of the Remuneration Committee and institutional investors and proxy vote advisers.
– Meetings with the Chair, IHG’s General Counsel and the Investor Relations team to discuss governance, sustainability and workforce practices. |
Outcomes
– Continued investor confidence in IHG’s performance, long-term viability and leadership, as demonstrated through feedback received and across AGM results.
– Enhanced understanding of shareholder and investor focus areas, including in relation to remuneration policy and environmental, social and governance matters.
– Continued investor confidence in the composition of IHG’s Board and Executive Committee. |
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See a description of our dividend policy on page 25, our KPIs on pages 38 to 41, key matters discussed by the Board on pages 124 and 125 and engagement with shareholders relating to Executive Director remuneration on page 171. |
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Visit ihg.plc/investors for more information. | |||
| Guests | ||||||||||||
| Our ability to offer a selection of brands that provide high-quality stay experiences, great value and loyalty rewards is key to attracting and building trust with IHG’s guests, while continuing to drive commercial performance and revenue. | ||||||||||||
| What impacted them in 2024
– Increased travel demand and for access to a broader range of locations and experiences.
– Continued desire to book and stay seamlessly.
– Rising cost of living.
– Increased competitiveness amongst brands.
– Interest in the social and sustainability profiles of companies. |
Engagement
– Continued to team up with major events to enable IHG One Rewards members to redeem points in exchange for unique experiences.
– Continued improvement of next-generation mobile app.
– Guest satisfaction surveys.
– Grew brands in markets with strong travel demand.
– New public space and guest room designs. |
Outcomes
– Continuous improvement to IHG One Rewards programme, providing more ways to earn and redeem points.
– Increased choice in growth markets, including Greater China, India, Saudi Arabia, Japan and Germany.
– Introduced global partnership with Action Against Hunger and EV charging points in certain markets. |
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See our Guest Love KPI on page 40 and how the Board had regard for guests as part of its consideration of strategic and operational matters on pages 124 to 125. |
| Hotel owners | ||||||||||||
| IHG’s success relies on hotel owners investing in our brands. To remain attractive, we focus on the breadth of our brand portfolio and the effectiveness of our IHG One Rewards loyalty programme and wider enterprise. | ||||||||||
| What impacted them in 2024
– High operating costs, including energy, food and beverage.
– Labour shortages, supply chain challenges and financial and operational constraints caused by global macro-economic factors.
– Ability to capture and drive high levels of demand for their hotels. |
Engagement
– Direct meetings with CEO and Regional CEOs.
– IHG Owners Association collaboration.
– Owners and investors conferences.
– Portfolio and individual hotel reviews covering operational, strategic and industry trend updates.
– Conferences, training, webinars, regular newsletters and bulletins.
– Hotel lifecycle and finance team support.
– Collaboration with governments and industry to support owners’ businesses and sector more broadly. |
Outcomes
– Continued focus on IHG One Rewards loyalty programme.
– Introduced brands to more high-growth markets.
– Continued incorporating energy conservation measures into brand standards to reduce utility bills.
– Introduced or enhanced technology systems to support owners in managing their properties, revenue and guest reservations.
– Procurement programmes to drive savings.
– Next-generation formats for Holiday Inn, Holiday Inn Express, Candlewood Suites and Staybridge Suites. |
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See Brands Guest and Owners Love on pages 32 to 33. |
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Visit owners.org for further information about the IHG Owners Association. | |||
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 43 | |||||||||||
The company measures engagement effectiveness through KPIs, performance, talent retention, surveys and adherence to policies.
It also considers external stakeholders’ views to enhance reputation
as well as commercial and social awareness.
| People | ||||||||||||
| Delivery of our purpose to provide True Hospitality for Good means upholding our Room for You promise and working in a responsible way to cultivate IHG’s strong, global culture and respect for all stakeholders. |
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| What impacted them in 2024
– Economic uncertainty, geopolitical climate and cost of living through higher inflation levels.
– Attraction and retention of hotel talent.
– Increased technological expectations of guests and colleagues, increased use of AI and automation technologies.
– Colleague expectations regarding hybrid working, career development and company culture. |
Engagement
– Shortened and simplified our corporate onboarding programme in US, UK, Germany, India and the Philippines, increasing speed of onboarding.
– Continued our Board-led ‘Voice of the Employee’ feedback sessions with all stakeholder groups.
– Embedded the growth behaviours we launched in 2024 into our people processes. |
Outcomes
– Delivered 2024 global merit process and simplified our performance management processes.
– Increased focus on our general manager pipeline.
– Expanded our HR technology.
– 2024 employee engagement score of 87%, with IHG named once again as a Mercer Global Best Employer. |
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See our employee engagement KPI on page 40, how the Board had regard for people in Board and remuneration decisions on pages 139, 142 to 143, and 165 to 166, Voice of the Employee disclosure on page 135, and our statement on employee engagement on page 277. |
| Communities | ||||||||||||
| Our responsible business approach and the commitments we have made to create a better and more sustainable future through our Journey to Tomorrow programme actively involve and support the communities in which we operate. |
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| What impacted them in 2024
– Access to business skills development and local employment opportunities.
– Challenges related to the cost of living and food poverty, exacerbated by geopolitical unrest.
– The impacts of environmental challenges.
– Natural disasters, including hurricanes in the US and floods in Europe. |
Engagement
– Collaboration with local education providers and community organisations, as part of our focus on offering skills-building and training opportunities.
– Launch of our multi-year global partnership with one of the world’s largest food NGOs, Action Against Hunger.
– Giving for Good month: a programme of activities and employee volunteering days.
– Partnering with organisations to strengthen our efforts to prevent trafficking and support survivors. |
Outcomes
– Over 43,000 people trained and upskilled through our IHG Academy offerings in 2024.
– Over two million lives improved through community partnerships and programmes, including Giving for Good month and our partnership with Action Against Hunger.
– Colleagues worked with over 1,450 charities across events spanning 84 countries.
– Responded to 27 natural disasters around the world. |
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See our IHG Academy KPI on page 40, and Responsible Business Committee Report on pages 134 and 135. |
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Visit ihgplc.com/responsible-business for further information on our community commitments. | |||
| Suppliers | ||||||||||||
| Responsible supplier relationships are vital for IHG in driving efficiency and effectiveness throughout our supply chains. |
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| What impacted them in 2024
– Ongoing uncertainty and disruption in supply chains.
– Increased focus on sustainability and integrity within supply chains.
– Increased consumer desire for sustainable goods and services. |
Engagement
– We commenced a supply chain engagement exercise for two of our high-risk commodities to learn more about transparency in the supply chain. Surveys were distributed in 2024 and learnings will be addressed in 2025.
– Through the Hospitality Alliance for Responsible Procurement (HARP), we kick-started a decarbonisation learning plan for specific suppliers, including a webinar to help shortlisted suppliers build their own decarbonisation strategies. |
Outcomes
– Identified alternative solutions with suppliers where supply was impacted across our corporate and hotel estate.
– Remained agile by adjusting our approach to goods and services sourced from affected regions.
– Increased collaboration opportunities with sustainable suppliers and for sustainable goods in alignment with our Journey to Tomorrow ambitions. |
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Further information about how the Board considered supply chain and procurement is on page 80, and our business relationships, including our statement of business relationships with suppliers, customers and others, is on page 278. |
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Visit ihgplc.com/responsible-business for further information about our approach to responsible procurement. |
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Table of Contents
| 44 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our risk management
The delivery of IHG’s refreshed strategic objectives and overall
ambition requires us to continuously balance opportunities
for strategic advantage or efficiency with the need to remain
resilient and agile in the short and longer term.
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How we define and review our risk appetite and risk tolerance |
How we identify, discuss and escalate risks, including emerging factors
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| Key accountabilities and activities
The Board, supported by the Audit Committee, Executive Committee and delegated committees, is accountable for:
– establishing a framework of prudent and effective controls, that enable risks to be assessed and managed;
– ongoing consideration of emerging and evolving uncertainties across a wide range of topics and timeframes;
– reviewing the overall levels of risk within the business, our resilience to individual and aggregated uncertainties and implications for strategic decision-making;
– evaluating our risk appetite and tolerance as part of setting strategy and objectives, and cascading this through:
– our values and behaviours;
– our Code of Conduct, delegations of authority and other key global policies;
– our goals and targets;
– frequent leadership communications to guide decisions and set priorities; and
– reviewing policies, initiatives and learnings to determine if they have operated within acceptable risk tolerances where priorities have shifted or additional actions were required to continuously enhance our future resilience.
Key milestones and outcomes
– Executive Committee and Board strategy meetings, considering the level of risk we are willing to take across our strategic priorities.
– Refining and communicating our bold ambitions through our strategic priorities and associated growth behaviours.
– Periodic review of key global policies, including the Delegation of Authority.
– Dedicated Executive Sub-Committee to review our risk financing and insurance strategy.
– Annual mandatory Code of Conduct training to all colleagues. |
Key accountabilities and activities
– Management teams across IHG are aware of the challenges our current industry context creates, and risks are identified, discussed and escalated through a variety of steps across our decision-making calendar, including specific interventions facilitated by our global Risk and Assurance team. In 2024 these have included:
– portfolio risk reviews with the full Executive Committee;
– deep dive discussions of each principal risk with nominated Executive Committee sponsors;
– regional and functional leadership risk conversations on risk prioritisation and preparedness across their area of the business;
– ongoing engagement with first-line teams with day-to-day responsibilities for identifying and managing risk within key decisions, programmes and transactions, and escalating where appropriate;
– a principal risk survey gathering senior leader opinions on changes in trends and velocity of our principal risks and to capture emerging risk topics; and
– targeted discussions of identified emerging topics, including generative AI, supply chain resilience and climate-related factors, with external insight where valuable. We think about emerging risks as:
– new risks, or existing risks in a new context, when the nature and value of the impact are not yet known or understood; and
– factors with an increasing impact and probability over a longer time horizon.
Key milestones and outcomes
– Review of first-line risk profiles culminating in regional/ functional leadership team meetings facilitated by the Risk and Assurance team.
– Refreshed risk profiles for each principal risk, considering trend indicators, reviewed with Executive Committee sponsors.
– Mid- and full-year Executive Committee principal risk review, reported to the Board. |
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This section should be read together with the 2024 Board focus areas and activities and its delegated committees, and:
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Pages 112 to 177 for 2024 focus activities and its delegated committees. |
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Pages 28 to 37 for Our Strategy. |
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Pages 20 and 21 for more detailed discussion of trends impacting our industry. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 45 | |||||||||||
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How we integrate our risk management and internal control framework components within our business processes
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How the Board obtains assurance in our risk management and resilience |
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| Key accountabilities and activities
– Managing risk isn’t one dimensional and management teams across IHG apply many levers and routines to anticipate, address and respond to uncertainty as they drive to achieve business objectives.
– To align across the many different operational and functional teams, the Risk and Assurance team describe our risk management and internal control framework using a deliberately simple structure that can be applied to any principal risk area.
– Elements of the framework are subject to ongoing review and adjustment by management teams, supported by subject matter experts for key areas.
– The Audit Committee reviews the ongoing effectiveness of the risk management and internal control framework.
Key milestones and outcomes
– Review of key controls for each principal risk with relevant Executive Committee sponsors.
– Consideration of preparedness and resilience to risk with each of the Executive Committee members leadership team.
The following pages describe illustrative examples of our key controls, and we will be reviewing the materiality of these controls in 2025. |
Key accountabilities and activities
– Our governance arrangements enable the Board and its delegated committees to receive insight and conclude on the appropriateness of our risk management and overall resilience during the year. These include:
– risk and control considerations within presentations from executive leadership on strategic delivery and major programmes;
– specific updates on matters potentially impacting our overall resilience, including the conflict in the Middle East, and our crisis management and business continuity frameworks;
– briefings on specific risk and control topics from key second-line teams, such as information security, privacy, ethics and compliance, financial governance, operational safety and security, loyalty and System Fund controls;
– review of our group insurance arrangements, including cyber;
– independent third-line internal audit reporting on specific reviews, thematic observations on the effectiveness of the risk management and internal control framework, and trends from confidential disclosure channel reporting and investigations; and
– updates from Risk and Assurance and the external auditors to the Audit Committee in relation to corporate governance developments.
For further information on how the Board and senior management obtain assurance in our risk management and resilience see pages 112 to 177 which detail the 2024 focus areas and activities for the Board and its delegated committees.
Key milestones and outcomes
– The Board concludes on the effectiveness of IHG’s risk management and internal control framework.
– Annual assessment of Global Internal Audit.
– Annual assessment of external Auditor. |
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Our Risk Factors on pages 280 to 287. |
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Further detail on formal risk appetite and tolerance is provided in this report. For example, our appetite for financial risk is described in note 23 to the Group Financial Statements on pages 236 to 240.
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Table of Contents
| 46 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our principal risks and uncertainties
Like many companies, we continue to face a dynamic and
uncertain environment, which includes multiple factors from
outside IHG and other inherent execution risks relating to our
own internal initiatives.
Multiple factors have the potential to affect the level of uncertainty in relation to our principal risks. These risks are materially unchanged and have been used for structured engagement with senior leaders.
Internal survey responses during 2024 indicated that each principal risk should be viewed as trending upwards in impact, likelihood and velocity.
The Risk and Assurance team reviews with management teams whether these trends and our existing levels of preparedness create a need to evolve
our risk management and internal control framework, refresh our resilience plans to anticipate threats or position ourselves to exploit opportunities. This includes how leadership teams allocate their attention and the level of reporting visibility and assurance that they may require in 2025.
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Realities for 2025–2027…
We are monitoring a range of external and internal factors:
– Macroeconomic pressures – recessionary, inflationary and interest rate dynamics, energy and other cost-of-living pressures.
– Geopolitical volatility and conflict, heightening cyber threats, supply chain disruption, shifts in trade policy and increased use of tariffs.
– Onerous and increasing legislative or regulatory and compliance developments (including influenced by political shifts).
– Uncertain central bank policies and increasing development or financing costs for owners.
– Pace of digitalisation, including generative AI developments, rapidly evolving technology ecosystems, third-party dependencies, cloud capabilities and increasing regulations to new technologies in particular generative AI.
– Aggressive brand, loyalty and partnership strategies from existing and new competitors.
– Intensifying expectations of growth and scale, including in new markets, brands and partnerships.
– Labour and talent scarcity and costs, including expectations for compensation.
– Pressure on colleague wellbeing and labour relations in certain markets.
– Growing opportunities for operational efficiency and effectiveness, including organisational models, and automation.
– Continuing stakeholder interest in environmental, social and governance performance.
– Frequency of climate-related natural disasters.
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…refreshed principal risks – 2025–2027
Our principal risks are articulated as uncertainties that will often present an opportunity and a threat at the same time:
1 Guest preferences or loyalty for IHG branded hotel experiences and channels
2 Owner preferences for, or ability to invest in, our brands
3 Talent and capability attraction or retention
4 Data and information usage, storage, security and transfer
5 Ethical and social expectations
6 Legal, regulatory and contractual complexity or litigation exposures
7 Supply chain efficiency and resilience (including corporate and hotel products and services)
8 Operational resilience to incidents or disruption or control breakdown (including geopolitical, safety and security, cybersecurity, fraud and health-related)
9 Our ability to deliver technological or digital performance or innovation (at scale, speed, etc.)
10 The impact of climate-related physical and transition risks
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 47 | |||||||||||
| Guest preferences or loyalty for IHG branded hotel experiences and channels | ||||||||||||||||
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Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
Our strategic objectives and growth ambitions mean we actively pursue opportunities for effective investment to support our masterbrand, new brands, loyalty programme, new Exclusive Partners, Luxury & Lifestyle expansion plans and digital platforms.
We also aim to carefully deliver on fundamental expectations of our individual and corporate guests, underpinning their trust in, and loyalty for, our brands. For example, how we meet increasing guest demands for personalisation, for safety, or in relation to our response to climate change and our brands’ impact on the environment.
If we are unable to manage this uncertainty effectively it could impact our competitive positioning, our openings and signings ambitions and our guests’ and owners’ trust in and preference for our brands.
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Example factors discussed with management to monitor trending
– Future consumer travel preferences and megatrends (including heightened customer sensitivity to price).
– Loyalty proposition, competitiveness and ability to deliver change (including at property level through our business model).
– Brand positioning relative to competitors, as measured by social reviews and guest preference indices.
– Brand awareness and health, including for our masterbrand and loyalty programmes. |
Illustrative key controls
Culture and leadership:
– Brand strategies and standards to define consistent guest experiences.
– Defined accountabilities for individual brands and brand segmentations, including IHG masterbrand and loyalty.
– Targets for brand and loyalty performance.
– Brand, service and loyalty colleague training and educational resources.
Processes and controls:
– Governance processes for the introduction of brand standards, loyalty, technology, and hotel projects.
Monitoring and reporting:
– Quality evaluations at hotels and guest surveys to measure guest experience.
– Executive reporting on key guest-facing metrics. |
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Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024 | |||||||||||||||
| – Global Chief Commercial and Marketing Officer
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– Reviews of brand category and masterbrand awareness, loyalty, co-brand and responsible business strategies.
– Review of competitor activity analysis.
– Review of new brand and partnership projects. |
– The Internal Audit plan included independent assurance on monitoring arrangements for brand standards and new hotel performance compliance and data transmissions for key loyalty channels. |
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| Link to strategy |
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| Owner preferences for, or ability to invest in, our brands | ||||||||||||||||
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Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
Our growth ambitions require us to take calculated risks to attract owners while continuing to drive returns for our existing and potential owners.
Continuing macroeconomic uncertainty and inflation create significant pressures on owners’ financial capacity that must be considered carefully as we pursue opportunities to drive brand preference and focus on relentless growth.
These opportunities need to be balanced with the risks associated with increasingly complex deal structures, new strategic relationships, expansion into new markets and a need to risk our own capital to pursue inorganic growth or to incentivise deals in key locations for key brands. We also recognise our responsibilities as a franchisor and manager of our brands.
If we fail to respond effectively to this risk, we will lose competitiveness and may not realise the opportunities to grow our brand footprint.
|
Example factors discussed with management to monitor trending
– Owner financial capacity (current and future), including continuing the impact of macroeconomic uncertainties.
– Preference for and confidence in IHG’s enterprise platforms.
– IHG’s ability to drive bottom line returns and preference for existing and potential owners, relative to competition.
– Overall owner advocacy and relationship strength, gathered through feedback from owners. |
Illustrative key controls
Culture and leadership:
– IHG masterbrand, loyalty and individual brand strategies.
– Governance structures and leadership responsibilities to monitor owner returns and support owner finance.
– Colleague training on drivers of loyalty and owner returns.
Processes and controls:
– Specific projects focused on owner returns (including sustainability, procurement, hotel technology, learning).
– Brand development processes with ROI targets.
– Compliance processes, including Guest Love and quality evaluations.
Monitoring and reporting:
– Regular tracking of cost to build, open and operate hotels.
– Key Executive Committee metrics on Growth and Enterprise, and Loyalty contribution.
– Tracking of external data and competitor analysis.
– Measurement of ongoing performance and strategy delivery. |
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|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024 | |||||||||||||||
| – Global Chief Commercial and Marketing Officer
– Regional CEOs
|
– Priority market updates from regional CEOs.
– Review of new brand, partnership and key owner-facing technology initiatives.
– Review of System Fund and loyalty programme changes.
– Review of energy, water and waste strategies. |
– The Internal Audit plan included independent assurance on governance for the Low Carbon Pioneers programme and data integrity for key owner metrics.
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| Link to strategy |
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For further information on why hotel owners choose to work with IHG see page 27.
Table of Contents
| 48 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our principal risks and uncertainties continued
| Talent and capability attraction or retention | ||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
Our growth ambitions are dependent on high- quality talent across our hotels, reservations offices and corporate functions.
We continue to face a competitive market and uncertainties in relation to the availability, recruitment and retention of sufficient quality, quantity and breadth of talent.
We need to balance our responsibilities and commitments to our colleagues’ development and wellbeing, whilst maintaining productivity, collaboration and appropriate labour relations, in an environment of highly pressurised growth and growing stakeholder expectations of transparency and disclosure.
IHG has the ability to manage talent and retention risks directly in relation to IHG employees but relies on owners and third-party suppliers to manage these risks within their businesses.
If we do not anticipate and respond appropriately to this uncertainty, it could impact our ability to operate and grow hotels, the effectiveness and efficiency of our key corporate functions and executive leadership, and it could heighten risks of exposure to non-compliance or litigation.
|
Example factors discussed with management to monitor trending
– The competitiveness and attractiveness of our recruitment, learning and talent development offer within the hospitality market as well as alternative industries.
– The health of our internal talent and succession pipeline and development pathways, including the impact of expectations of productivity, agility and performance.
– Key talent engagement and turnover.
– External macro factors, including evolving expectations on inclusion in the workplace, labour practices, our operational practices and remuneration structures, and potential for political and regulatory volatility.
Illustrative key controls
Culture and leadership:
– Employer brand strategies and policies.
– Defined accountabilities and steering structures for key talent leadership topics, including leadership boards and employee resource groups. |
– Short- and long-term incentive programmes, incorporating specific incentives for key teams, colleague travel benefits.
– Training and education resources on people leadership and management, including employer branding, supported by external expertise and insight.
Processes and controls:
– Global annual talent and performance cadence, including talent forums and supporting technology.
– Compensation and benefits benchmarking, including executive remuneration.
– Specific recruitment/hiring processes, onboarding and offboarding processes, internship programmes.
Monitoring and reporting:
– Ongoing Executive Committee tracking of performance and culture and key people metrics. |
||||||||||||||
|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Chief Human Resources Officer
|
– Review of Executive Committee talent and succession pipeline.
– Review of remuneration and incentive strategies and policies.
– Review of Voice of the Employee feedback.
– Review of Journey to Tomorrow people targets. |
– The Internal Audit plan included independent assurance on foundational controls for key people systems following a major transition.
|
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| Link to strategy |
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| Data and information usage, storage, security and transfer | ||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
Our ambitions require us to use data as a strategic asset – to drive revenue and marketing efficiency, improve and personalise the customer experience, grow loyalty and empower decisions.
There are opportunities and efficiencies available from cloud-based capabilities, and storage and technology advancements and innovation, including AI.
These opportunities are consciously balanced with our responsibilities to manage large volumes of data safely and responsibly, across increasingly complex data flows, business partnerships, applications and platforms.
If we fail to respond to this risk effectively, we face operational, financial, and reputational impacts to the range of high-value assets we are responsible for, or we may miss chances to capitalise on the opportunities that effective use of data can bring. In addition, if the data we use is not accurate, this may impair decision-making and/or lead to lack of trust or satisfaction by our stakeholders.
|
Example factors discussed with management to monitor trending
– Expectations for personalisation, commercialisation and monetisation of data in support of commercial performance.
– Data infrastructure complexity, including relationships with third-party cloud providers, loyalty/customer platforms and hotel systems.
– Cybersecurity threats and trends, including agile threat actors and fraudsters, and growing use of AI tools to perpetrate attacks.
– Developments in regulatory complexity and enforcement, including privacy laws in certain territories and growing expectations for data integrity.
Illustrative key controls
Culture and leadership:
– Information governance operating framework.
– Policies for information security, handling personal data including requirements relating to AI.
– Colleague awareness campaigns on phishing and general security education and testing. |
– Centralised expertise for information security, privacy and governance.
Processes and controls:
– Privacy and information security risk assessments and horizon scanning.
– IHG privacy framework, including privacy impact assessment process.
– Third-party risk management programme to monitor potential breaches with critical vendors.
Monitoring and reporting:
– Sarbanes-Oxley Act 2002 (SOX) compliance testing of key data controls.
– Management monitoring of information security issues and privacy programme development.
– Independent assessments of key controls for payment cardholder data and international money and security transfers. |
||||||||||||||
|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Global Chief Product and Technology Officer
– Global Chief Commercial and Marketing Officer
– Executive Vice President General Counsel and Company Secretary
|
– Presentations from the Chief Information Security Officer on cyber risks and management strategies.
– Review of data privacy programmes.
– Updates on cyber insurance renewal strategy. |
– The Internal Audit plan included several independent reviews of foundational controls relating to access and asset management, data governance and loss prevention, and cloud provider security. |
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| Link to strategy |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 49 | |||||||||||
| Ethical and social expectations | ||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
As IHG operates in more than 100 countries and continues to explore new growth opportunities, we are continually exposed to evolving expectations from our stakeholders (including our owners, colleagues, guests, investors, workers in our supply chains, and our local communities) in relation to ethical and responsible business conduct across our wider business and supply chain, extending beyond compliance with laws.
We are committed to monitoring, reinforcing, and communicating the continued effectiveness of our human rights approach, our social responsibility and environmental performance.
If we fail to effectively respond to this risk, it has the potential to impact our performance and growth in key markets as well as cause reputational damage.
|
Example factors discussed with management to monitor trending
– Interest in our ethical and social performance from the media and investors.
– External stakeholder expectations for IHG to manage and drive ethical and responsible business through our supply chains and across our wider business, including our franchised properties.
– Industry benchmarking, noting the challenging operating environment in many markets to build brands while also considering stakeholder responsibilities.
– Corporate account interest in travel and hospitality ethical and social performance.
– Colleague perceptions of our performance.
Illustrative key controls
Culture and leadership:
– IHG Code of Conduct supported by individual policies and brand standards on ethical and social topics. |
– Formal IHG position statements including Modern Slavery statement and Approach to Tax.
– Defined accountabilities for key responsible business topic steering and oversight.
– Journey to Tomorrow goals, community strategy, partnerships, and engagement in cross-industry groups.
– Mandatory and support training on responsible business topics.
Processes and controls:
– Periodic risk assessments (anti-bribery, human rights, new country entry)
– Owner/supplier due diligence processes.
– Responsible labour requirements for hotels.
Monitoring and reporting:
– Executive tracking of human rights performance, responsible procurement metrics and confidential disclosure channel reporting trends.
– Tracking of Code of Conduct training levels for key leaders. |
||||||||||||||
|
Executive Risk Sponsor
|
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Executive Vice President General Counsel and Company Secretary
– Executive Vice President Global Corporate Affairs
– Chief Human Resources Officer
|
– Review of Code of Conduct
– Updates on strategies for ethics and compliance, community partnerships, human rights and responsible procurement supported by external perspectives. |
– The Internal Audit team maintained oversight of the confidential reporting hotline and supported independent investigations where required.
|
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| Link to strategy |
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|
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| Legal, regulatory and contractual complexity or litigation exposures | ||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
The global business regulatory and contractual environment continues to evolve rapidly, adding complexity and uncertainty.
Our business ambitions and strategy consciously expose us to these trends, reflecting the complexity of our global operations across multiple jurisdictions, our business relationships and models, and where we target growth or digital innovation.
Factors to consider include the nature of our franchise relationships with hotel owners, our interactions with our suppliers (including major technology partners), and our stakeholder responsibilities. We consider such exposures carefully as part of our decision-making, drawing on an extensive network of legal advisers.
We recognise that failure to address this risk effectively, and non-compliance or inadequate compliance, could expose us to regulatory breaches, significant monetary and non-monetary penalties, adverse litigation and associated reputational harm which could impact confidence in the IHG brand and our ability to perform in key markets.
|
Example factors discussed with management to monitor trending
– The scope and maturity of regulation, including ongoing legislative changes impacting our franchise relationships with hotel owners, our interactions with our suppliers, our responsibilities to consumers and to colleagues and generative AI.
– The frequency and severity of regulatory enforcement, which can vary considerably between territories, and which is subject to political influence. This includes ongoing use of sanctions and countermeasures as foreign policy tools.
– The rapid evolution of litigation and class action lawsuits, including the impact of external funding for lawsuits increasing costs and claim volumes.
Illustrative key controls
Culture and leadership:
– IHG Code of Conduct supported by individual policies on regulatory matters (anti-bribery, sanctions, antitrust, etc.) and an overarching policy governance framework.
– Defined accountabilities, steering and oversight for information governance, safety, privacy, regulatory compliance.
|
– Education and training resources for first-line colleagues on key legal, regulatory, and contractual requirements.
Processes and controls:
– Risk assessments on specific regulatory matters.
– Specific control processes, including third-party due diligence, franchise disclosure, new country entry, sanctions monitoring, HR procedures and entity management.
– Compliance programmes for key regulatory requirements such as safety, anti-bribery, anti-trust, privacy.
Monitoring and reporting:
– Executive-level reporting on operational safety and security, privacy, ethics and compliance, human rights trends and litigation matters.
– Corporate governance and regulatory developments updates. |
||||||||||||||
|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Executive Vice President General Counsel and Company Secretary
|
– Review of corporate governance, regulatory and corporate affairs developments (including external advice).
– Specific updates on regulatory topics including privacy, tax, fraud, franchise law and litigation. |
– The Internal Audit plan included independent assurance on arrangements for horizon scanning for incoming laws and project governance as teams prepare for new regulatory requirements. |
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| Link to strategy |
|
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Table of Contents
| 50 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our principal risks and uncertainties continued
| Supply chain efficiency and resilience (including corporate and hotel products and services) | ||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
Macroeconomic uncertainties continue to impact corporate and hotel supply chains. Supporting our owners to source cost-efficient products or services and to safeguard supply chains can offer competitive opportunity and resilience.
Moreover, in an increasingly interconnected world, our strategic ambitions require us to work closely with a wide range of third parties to access capabilities and innovation, and to access scale efficiencies in our corporate spending.
We need to balance these opportunities with potential exposures to IHG, increasing demands for transparency, and important data responsibilities as we work with a complex range of third-party technology suppliers.
Failure to respond to this risk may impact hotel opening and performance, commercial channels, and margins for our owners, as well as IHG’s financial performance and reputation.
|
Example factors discussed with management to monitor trending
– The complexity of our corporate supply chain (including partners we work with, marketing investments we make and outsourced services).
– External geopolitical, economic and environmental instability, including trade and other government policies.
– Economic or financial downturns, impacting commodity pricing (for example, energy, food and beverages, labour) and inflation.
– Legislative, regulatory, and code changes, including demands for transparency and due diligence across global supply chains.
– The complexity and competitiveness of the hotel supply chain, including how we support procurement across global markets.
Illustrative key controls
Culture and leadership:
– Key policies and delegated authorities to structure how we engage with suppliers |
(for example, capital expenditure controls, policies for procurement, information security, supplier conduct, supported by training resources).
– Dedicated cross-business forum to review supply chain risk and control matters.
Processes and controls:
– Supplier financial risk ratings, due diligence assessments and certifications, and onboarding and offboarding processes.
– Responsible procurement risk assessment and roadmaps.
Monitoring and reporting:
– Tracking of service level agreements, regular meetings and executive status updates for strategic suppliers.
– Tracking of supplier code acceptance and monitoring of adverse supplier practices.
– Tracking of responsible procurement and third-party information security indicators. |
||||||||||||||
|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Chief Financial Officer
– Chief Product and Technology Officer
– Executive Vice President General Counsel and Company Secretary
|
– Presentations on efficiency and effectiveness initiatives throughout the year.
– Supply chain risk considerations within market updates from regional CEOs.
– Review of specific major supplier contracts. |
– The Internal Audit plan included independent assurance on project governance during a major supply chain system transition and monitoring of procurement policy compliance in a key market.
|
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| Link to strategy |
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|
|
||||||||||||||||
| Operational resilience to incidents or disruption or control breakdown (including geopolitical, safety and security, cybersecurity, fraud and health-related) |
||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
In a high-growth, fast-paced and complex global business, we depend upon the overall resilience of key processes, infrastructure and relationships.
We recognise that we need to consider and prepare for uncertainties across our operations, including fire, life safety and security threats, geopolitical volatility, health-related concerns and natural disasters.
We also need to anticipate potential disruption to technology and information security from external threats and operational breakdown and potential breakdowns in our financial management and control systems, including the risk of fraudulent behaviour, which may be heightened in the current economic environment.
Building resilience supports long-term viability and enables us to take advantage of opportunities. Failure to respond effectively could impact reputation, lead to financial loss and claims and undermine stakeholder confidence in our brands.
|
Example factors discussed with management to monitor trending
– Increasing internal and external threat levels linked to uncertain geopolitics, cyber crime and fraud, insider threats, natural catastrophes and extreme weather events.
– Potential for human-related failures such as control breakdowns resulting from organisational changes and fatigue.
– Exposure to system and infrastructure failures, with inherent stresses due to the complexity and age of key infrastructure and evolving supplier and data ecosystem.
– Heightened stakeholder expectations of how IHG responds to disruption, including new notification requirements in key territories.
Illustrative key controls
Culture and leadership:
– Centralised expertise in resilience, safety and security, threat management, and information security, complemented by cross-business oversight of financial control and fraud risk management. |
– Refreshed crisis management framework, including a network of trained crisis duty directors, escalation parameters and third-party expertise on call.
– Targeted awareness campaigns for potential threats (for example, phishing).
Processes and controls:
– Ongoing management risk assessments in executive leadership teams, supported by intelligence assessments for geopolitical events.
– Contractual provisions (for example, specific language on information security, crisis management, insurance requirements).
– Specific preventative controls, including privileged access reviews.
– Business continuity and disaster recovery planning for key processes and services.
Monitoring and reporting:
– Periodic external benchmarking of programme maturity (safety, cyber, threat management).
– Compliance reporting to senior management.
– Ongoing control monitoring – including SOX testing (financial, IT controls). |
||||||||||||||
|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Executive Vice President General Counsel and Company Secretary
– Chief Financial Officer
– Chief Product and Technology Officer
– Regional CEOs
|
– Reporting on operational safety and security, serious incidents and threats, financial control and governance, fraud risk management and cyber security.
– PwC assurance on SOC1 control reports.
– Specific updates on Middle East conflict. |
– The Internal Audit plan included independent assurance on change management controls for key hotel security measures and governance of important finance process improvements. |
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| Link to strategy |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 51 | |||||||||||
| Our ability to deliver technological or digital performance or innovation (at scale, speed, etc.) | ||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
We are pursuing a high-paced, multi-year roadmap of investments to enhance our technology, developing our own talent and working with a wide range of suppliers, partners and academic institutions to leverage their insights, while the pace of innovation and competition in digital behaviours in the hospitality industry and wider society continues to accelerate rapidly.
In doing this, we will consciously expose ourselves to uncertainty. This involves applying machine learning, AI and generative AI to enhance and personalise guest experiences, marketing and analytics and to improve effectiveness and efficiency, including in-hotel operations.
We will need to maintain the right balance between disruptive and incremental innovation, while maintaining the performance of our foundational technology platforms and channels.
If we fail to address this risk, we may not capitalise on opportunities to maintain or increase guest and owner preferences for IHG and its brands and/or reduce our resilience.
|
Example factors discussed with management to monitor trending
– The current state of our foundational technology infrastructure and applications in order to position ourselves for fast progress with innovation.
– Talent and capabilities, working with thought leaders, and collaborating with key suppliers and partners to ensure that we have competitive capabilities, knowledge and insights as stakeholder needs and preferences evolve rapidly and as partnering with a range of major tech suppliers on generative AI developments increases.
– Our ability to execute and govern a programme of significant multi-year investments, particularly where we are increasingly reliant on third parties. |
Illustrative key controls
Culture and leadership:
– Refreshed Product and Technology leadership team during 2024.
– Accountabilities for product ownership across website, app, loyalty platforms, supported by development teams.
– Defined leadership accountability for technology innovation, closely aligned with technology architecture responsibilities.
– External networking and thought leadership, including engagement with educational institutions and consultants.
– Generative AI Steering Committee
Processes and controls:
– Formalised change management processes, including roadmaps for phased rollout of technology initiatives.
– Defined generative AI governance processes.
Monitoring and reporting:
– Executive-level monitoring of current programme execution.
– Tracking of technology debt. |
||||||||||||||
|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Chief Product and Technology Officer
– Global Chief Commercial and Marketing Officer
|
– Review of product and technology strategies and key initiative rollout updates.
– Review of cybersecurity status and risks.
– Updates on technology rollout to support data across our global estate. |
– The Internal Audit plan included several independent reviews of technology programmes relating to new applications, cloud arrangements and procurement of Artificial Intelligence capabilities. |
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| Link to strategy |
|
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|
|
||||||||||||||||
| The impact of climate-related physical and transition risks | ||||||||||||||||
|
Why this uncertainty is important to the achievement of our strategic objectives over the next 2–3 years
Climate change presents a range of physical and transition risks for IHG and the wider hospitality sector.
Our TCFD assessment details both physical and transition risks to IHG, and we will continue to assess the aggregate impact of climate change on our wider stakeholders, including incremental costs for our third-party hotel owners.
Our business model means that we share these uncertainties with the owners of hotels carrying IHG’s brands, and we are reliant on their continued appetite and capacity to invest in hotels as profitable assets in the short and long term.
The potential impact of climate change-related uncertainties is an integral part of other principal risks; however, if we fail to react to physical and transition risks effectively overall, or to position ourselves to capitalise on opportunities that the low-carbon transition may bring, then this has the potential to impact IHG’s reputation, performance and growth in key markets.
|
Example factors discussed with management to monitor trending
– Evolving regulatory and fiscal interventions, including reporting requirements on corporates.
– Expectations of investors and ratings agencies changes.
– Cost implications for owners, for example, to build, convert and renovate hotel assets.
– Corporate client preferences and whether climate considerations influence travel and spending decisions.
– Exposure to acute and chronic physical risks for our open and pipeline hotels over the short, medium and longer term. |
Illustrative key controls
Culture and leadership:
– Definition of planet related goals and programmes within overall strategy.
– Industry and stakeholder engagement on key topics including industry standards and financial incentives.
– Steering Committee accountabilities for Journey to Tomorrow and decarbonisation.
Processes and controls:
– Periodic external assessment support for physical and transition risks.
– Energy reduction processes and resources (including brand standards and e-learning) to help mitigate cost risks for owners.
Monitoring and reporting:
– Hotel energy use reporting via IHG Green Engage tool.
– Executive tracking of TCFD metrics. |
||||||||||||||
|
Executive Risk Sponsor |
Examples of how the Board obtained assurance on our risk management and resilience in 2024
|
|||||||||||||||
| – Chief Financial Officer
– Executive Vice President Global Corporate Affairs
|
– Review of TCFD disclosures and the embedding of climate considerations in strategy, governance, risk management and performance management, supported by external expertise.
– Review of climate data, reporting and assurance strategies. |
– The Internal Audit plan included ongoing independent assurance on management progress with energy data estimation methodologies.
|
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| Link to strategy |
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Table of Contents
| 52 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business
Aligned to our purpose of True Hospitality for Good and building on years of important progress, Journey to Tomorrow puts IHG on a longer-term path to positive change for our people, communities and planet. Our 10-year responsible business plan Our goal is to help shape the future of responsible travel together with those who stay, work and partner with us. We will support our people and make a positive difference to local communities, while preserving our planet’s beauty and diversity… not just today but long into the future. Our planet Carbon Our people Communities and energy Waste Water Champion an Improve the Reduce our Pioneer the Conserve water inclusive culture lives of 30 million energy use and transformation and help secure where everyone people in our carbon emissions to a minimal water access can thrive communities around in line with waste hospitality in those areas the world climate science industry at greatest risk Empower our people to help shape the future of responsible travel
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 53 | |||||||||||
Our people
| Our 2030 commitments | ||||
|
– Drive gender balance and a doubling of under-represented groups across our leadership.
– Cultivate an inclusive culture for our colleagues, owners and suppliers.
– Support all colleagues to prioritise their wellbeing and the wellbeing of others.
– Drive respect for and advance human rights. |
|
|||
| 2024 highlights
87% Sustained employee engagement 87% (2024). A Mercer Global
Top 10
Ranking 8th on Financial Times Europe’s Diversity Leaders 2024 list; recognised as a top company for
|
Creating our high- performance culture
The growth behaviours we introduced at the beginning of 2024 (ambitious, dedicated, caring and courageous) now form the basis of our evolving culture. These will inform how we attract, select, onboard, develop and reward our colleagues, and we use them to drive increased performance. In 2024 we have looked at areas that enable our colleagues to perform at their best, including:
– increasing levels of collaboration by updating our approach to hybrid working and encouraging colleagues to prioritise face-to-face time, while still maintaining flexibility;
– increasing our effectiveness in performance management, replacing quarterly check-ins with frequent one-to-one performance conversations that review priorities and provide actionable feedback; and
– continuing to develop our approach to reward and recognition to attract, retain, motivate and engage top talent, supported by robust governance that ensures fairness and consistency across our global population. |
Fair pay is very important to us and is reflected in our 2024 UK Gender Pay Gap measure, which has continued its downward trajectory, with the improvement in median gap in 2024 standing at 13.8% versus 15.9% in 2023.
Beyond pay, we place great importance on our colleagues’ health and wellbeing. This year we enhanced our Employee Room Benefit Programme, which gives colleagues more opportunities to stay at our properties at reduced rates and enjoy their leisure time, whilst driving brand loyalty. In the Philippines we proudly extended our healthcare offer to allow single colleagues to cover dependent parents, reducing the burden of costly healthcare for many people, and in Singapore we have extended health cover to ensure that both locals and expatriates have the same access to private healthcare. |
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Table of Contents
| 54 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Our people continued
|
Attracting, engaging and developing our talent
Our approach to talent attraction
We are committed to attracting and retaining a skilled and broad workforce that fosters IHG’s distinct culture across our global business. Our investments in technology have enhanced our recruitment capability, broadening our reach. This year we launched our Metaverse, which provides candidates with the ability to immerse themselves in our IHG experience through virtual events and interactive sessions. The IHG Academy Talent Attraction Programme remains committed to supporting hotels in future-proofing their frontline hiring needs by providing a comprehensive suite of career preparation resources, including career workshops, free online learning modules, and hands-on, in-person experiences. In 2024, IHG Academy attracted more than 43,000 participants (over 8,000 more compared to 2023).
We have evolved our IHG Careers website to improve user engagement, generating 5.6 million visitors in 2024, and amplified our social presence, garnering more than 11.3 million views of our employer brand globally during the year.
Special guest, Penny, being |
We have enhanced our candidate journey and have introduced a platform with conversational AI that engages talent beyond vacancies. Already launched to Early Careers, this platform will expand to support all GM and corporate opportunities, inviting a wider audience to explore a career at IHG.
Employee engagement survey
In our 2024 survey, our overall employee engagement stood at 87%, unchanged from last year, which once again saw IHG accredited as a Mercer Global Best Employer. The survey also highlighted areas of strength and where we can go even further. We have actions plans in place to further enable rapid and high-quality decision making.
Building hotel talent
GMs are critical to the success of every hotel, delivering the brand promise and driving performance of the business every day. As a result, finding and retaining high-performing GMs is top of mind for our owners. To this end, we have strengthened our GM pipeline through various programmes, led by our accelerated talent programme Journey to GM. Delivering one cohort per year over four years, this programme has resulted in a talent pipeline of 195 hotel executives to support our growing properties, translating to more than 40% of GM placements in 2024 from graduates of this programme. |
Our RISE programme, which began in 2018, continues to be another avenue for growing our GM pipeline, developing female leadership for our hotels and promoting careers at IHG. Since its inception, more than 300 women have graduated, and in 2024 we had 134 participants join our programme.
Room to Grow
Our employer brand includes our Room for You commitment, which is made up of three promises to support our people throughout their careers by giving them Room to Belong, Room to Grow and Room to Make a Difference. Our Room to Grow offering for our corporate colleagues has continued to evolve, with the focus being on how we encourage and support more effective career conversations. As part of this we have expanded our development resources, and these are now easily accessed through our newly launched internal careers microsite. We also hosted a Room to Grow Week for our corporate colleagues, supported through our partnership with Amazing If. The events in the week were attended live by more than 2,600 colleagues and were designed to bring to life resources available to help them plan their development. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 55 | |||||||||||
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| We have also scaled our corporate onboarding platform (initially piloted in 2023 in four locations) to be available in most of our corporate offices. Further enhancements have included reducing the onboarding time from 100 days to 30 days to quickly help set new colleagues up for success and provide simple, effective guidance for managers, so they are ready to support their new team members from day one.
Investing in our learning and development
In 2024, IHG University marked its first anniversary of enhancing our learning offer for owners, hotels, and corporate colleagues.
Through collaboration with owner representatives, we have strengthened our owner learning solutions in critical areas such as financing, construction and pre-opening, all designed to empower owners to optimise asset performance, maximise their return on investment and build understanding of effective partnering with IHG. |
In hotels, we have simplified the user experience, making it easier for learners to navigate our extensive learning solutions by introducing both new and streamlined guidance on learning standards organised by role. We enhanced learning technology to offer tracked On-the-Job Training, and provided direct access to hotel learning consumption data through IHG reporting.
We have also expanded access to our learning offer through a new mobile app, providing learners an alternative way to consume content.
Through our partnership with Skillsoft, we’ve seen an increase of more than 160% in consumption of IHG University content year-on-year for colleagues on property and above property around the world; 50% of that learning is accessed in non-English languages.
We also advanced the implementation of our Executive Development Programme, Leading for Growth, with 99% of IHG’s Vice Presidents and above participating. This initiative encouraged senior leaders to reflect on their current leadership practices while exploring avenues for future growth and development, ultimately enhancing their ability to lead teams and navigate the external landscape. |
Creating an inclusive culture where everyone can thrive
Creating a culture where everyone feels valued and able to thrive is fundamental to our ability to attract, develop and retain a broad range of talent with different experiences and backgrounds. This culture is supported by our Room for You promise, as well as our Global and Regional leadership boards, whose members meet several times a year to shape our priorities, monitor progress and ensure that we fulfill our commitment to creating an environment where all of our employees can develop and thrive. Recognising that each of our markets is unique, the boards work closely with regional teams to ensure that we drive development of our employees at the local level. Our culture has been an important thread across our business strategy for many years and is underpinned by our inclusion policy, which reflects the global nature of our business (https://www.ihgplc.com/~/ media/
Insights from our Colleague HeartBeat engagement survey’s Inclusion Index are also among the ways we are tracking our culture. In 2024, the Index showed that 89% of employees considered IHG to have an inclusive culture.
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Being a responsible business continued
Our people continued
| In line with UK corporate governance requirements and recommendations, we remain committed to having leaders who represent the global nature and broad geographic spread of our business.
We have a gender-balanced employee population, of which 52%a is female, and, globally, 36% of our leaders working at VP level and above are female (against an ambition of 39% |
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by 2025). In addition, Forbes has recognised IHG as one of the world’s top companies for women.
As there is no universal definition of
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Thanks to the self-disclosure of employeesc, we know that 22% of our global leaders working at VP level and above are racially or ethnically diverse, against a global ambition of 26% by 2025, and represent multiple nationalities.
We have identified the UK and US – where we have our largest populations of corporate colleagues – as markets in which we want to increase ethnic representation. We have set ambitions for the percentage of leaders working at VP level and above that are ethnically diverse in each market – 26% by 2025 in the US and 20% by 2027 in the UK. At the end of 2024, we stood at 18% in the US and 8% in the UK.
Our Employee Resource Groups (ERGs), which are employee organised, are central to creating and maintaining IHG’s culture across the business. These groups bring together people of various backgrounds, experiences and skills and their allies to share perspectives and celebrate important cultural moments throughout the year, including Black History Month, International Day of Persons with Disabilities, International Women’s Day and Pride Month. |
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| As at 31 December 2024 |
Male |
Female | Total | |||||||||||||||
| Directors | 6 | 5 | 11 | |||||||||||||||
| Executive Committee | 6 | 4 | 10 | |||||||||||||||
| Executive Committee direct reports | 37 | 25 | 62 | |||||||||||||||
| Senior managers | ||||||||||||||||||
| (including subsidiary directors) | 75 | 28 | 103 | |||||||||||||||
| All employees | ||||||||||||||||||
| (whose costs were borne by the Group or the System Fund) | 5,326 | 7,261 | 12,587 | |||||||||||||||
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a. All Corporate and Reservations employees plus GMs in managed hotels as of 31st December 2024.
b. Ethnically and racially diverse includes ethnic/racial minorities, as per government guidance in the US and UK (such as Black, Asian, mixed heritage and Hispanic (Latino for US)). We also count local leaders in markets such as Asia and the Middle East because they have historically been and continue to be under-represented in the most senior levels of business.
c. 87% of our leadership (VP and above) have self-disclosed globally. |
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We have continued to see significant growth of our ERGs and now have more than 5,000 members across 36 chapters.
Recognising our Culture
In 2024, recognition for the strength of IHG’s workplace culture included IHG reaching 28th on Fortune’s 100 Best Companies to Work For, alongside being certified as a Great Place To Work for the second year in a row. IHG also ranked eighth of 850 companies in the Financial Times Diversity Leaders 2025 and third out of 76 organisations by the EDI Maturity Curve by WiHTL and DiR.
We were also certified as one of Singapore’s Best Workplaces 2024 and Greater China’s Best Workplaces 2024 by Great Place To Work®. To find out more on how we are creating a culture where everyone can thrive, read more in our 2024 Responsible Business Report (ihgplc.com/responsible-business). |
Our approach to Wellbeing
We have increased the impact of our Room to Belong offering for our corporate employees by simplifying our wellbeing hub, increasing awareness of our global employee assistance programme, which is available 24/7, and continuing to encourage connections with our employee resource groups.
We also continue to invest in three recharge days for corporate colleagues throughout the year, where they are encouraged to focus on their wellbeing and recovery. |
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| As at 31 December 2024 |
Ethnically |
Total | ||||||||||||
| Directors | 4 | 11 | ||||||||||||
| Executive Committee | 2 | 10 | ||||||||||||
| Global VPs and above | 50 | 224 | ||||||||||||
| UK VPs and above | 5 | 59 | ||||||||||||
| US VPs and above | 23 | 125 | ||||||||||||
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| 58 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Our communities
| Our 2030 commitments | ||||||
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– Improve the lives of 30 million people in our communities around the world.
– Drive economic and social change through skills training and innovation.
– Support our communities when natural disasters strike.
– Collaborate to aid those facing food poverty. |
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| 2024 highlights
>2.3ma
lives improved through our collective action and work with our charity partners
27
natural disasters responded to, supporting charities in critical recovery efforts |
We have pledged to improve the lives of 30 million people by 2030, focusing on driving economic and social change through skills training and innovation, supporting communities during natural disasters, and collaborating to combat food poverty.
Achieving our pledge requires collaboration with guests, colleagues, and owners, as well as strong relationships with NGOs and community organisations. We work closely with our hotels, regions, and brands to create partnerships and initiatives that offer support through financial contributions, in-kind donations, and volunteering. We work with local organisations that are addressing specific needs, through to creating large partnerships to tackle broader social issues and drive meaningful action.
Local action and Giving for Good Month
Our commitment to improve lives is powered by our colleagues, who dedicate their time, skills, and passion to meet social needs in their communities. Activities span the entire year but every September, IHG colleagues participate in Giving for Good month for a focused month of action. |
In 2024, more than 23,000 colleagues dedicated more than 79,000 hours to improve the lives of nearly half a million people – double the number from last year. Events spanned 84 countries and we worked with more than 1,450 charities.
More than 50 projects were selected as winners in our Giving for Good awards, which recognise the most impactful and inspirational projects globally.
Skills training
Launched in 2006, our IHG Academy aims to increase social mobility by enabling individuals to build essential skills for the workforce, and has provided training experiences to more than 190,000 people. In 2024, we refreshed our IHG Academy by introducing three newly branded programmes: IHG Discover, IHG Skills Builder, and IHG Career Launcher. During the year, more than 43,000 participants benefitted from work experience, internships, apprenticeships, and free online learning.
Number of people attending the IHG Academyb
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| a. The methodology IHG uses for “lives improved” focuses on the number of individuals directly engaged through IHG’s community impact programmes, using the Business for Societal Impact (B4SI) framework to assess IHG’s community investments, measuring inputs, outputs, outcomes, and long-term societal impacts.
b. 2021, 2022 and 2023 figures have been restated due to improvements in data collection and reporting. |
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IHG Discover connects us directly with communities through student workshops, providing insights into hospitality careers. In 2024, we hosted Discover Workshops across all our regions globally, with more than 13,000 participants.
Our Skills Builder platform, refreshed in 2024, offers more than 250 courses, and has increased registered users by more than 23,000. We continue to work with external partners to create bespoke content for their user groups designed to increase localised employment within hospitality.
The Career Launcher programme delivered more than 6,000 internships and 500 apprenticeships in 2024 to further develop future talent. |
Disaster response
We take pride in supporting our communities during times of need and we have continued collaborating with various humanitarian aid partners worldwide to help their essential relief and recovery efforts.
In 2024, we responded to 27 natural disasters, from hurricanes in the US and floods in Europe, to typhoons in Southeast Asia and China. We work closely with charity relief experts CARE International and the American Red Cross, and for colleagues impacted by natural disasters, we activate the IHG Disaster Colleague Assistance Fund to provide short-term support to obtain food and secure living conditions. |
Collaborating to aid those facing food poverty
Food insecurity remains a critical issue, with one in three people globally uncertain about their next meal. In 2024, we launched our global partnership with Action Against Hunger. By supporting the lifesaving work of one of the world’s largest food NGOs and using the strength of our IHG Hotels & Resorts masterbrand to drive awareness of food shortages, we can take a significant step forward in helping provide food security around the globe.
Our existing partnerships with local food banks and charities also continue to thrive. In the US, we work with the food recovery and distribution company Goodr to recover and distribute excess food, donating 28,800 meals through the hotel food waste recovery programme since its launch in 2022. We are proud to have celebrated our sixth year of partnership with OzHarvest, a food rescue organisation in Australia. Throughout this time, we have broadened our collaboration to include various branches of the network in Japan, Vietnam and New Zealand.
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We support the Red Cross in humanitarian emergencies, providing vital aid to those affected by disasters.
Action Against Hunger’s mobile teams provide essential healthcare and nutrition support globally (image taken in the Darién region of Colombia). |
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Being a responsible business continued
Our planet
| Carbon and energy – our 2030 commitments | ||
| – Reduce our energy use and carbon emissions in line with climate science.
– Implement a 2030 science-based target that delivers 46% absolute reduction in carbon dioxide emissions from our franchised, managed, owned, leased and managed lease hotels.
– Target 100% new-build hotels to operate at very low/zero carbon emissions by 2030.
– Maximise/optimise the role of renewable energy. |
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| Carbon and energy
By actively pursuing decarbonisation and minimising our environmental impact, we create long-term value for our hotel owners and IHG. This enhances IHG’s reputation and assists owners in managing rising operational costs, securing supply chains, and mitigating financial risks associated with climate change.
Our asset-light business model means that most of our hotels are owned by third parties, with more than 60% of emissions under our carbon target generated by franchisees. We are committed to supporting owners – many of whom are small business owners – in their decarbonisation efforts, and improving operational efficiency by providing a wide range of tools and resources.
In 2021, we set a target to reduce absolute Scope 1, 2, and Scope 3 (including energy from FERA and franchised hotels), by 46% by 2030 from a 2019 baseline, a goal validated by the Science Based Targets initiative (SBTi). |
Our emissions reduction plan focuses on three key objectives: implementing energy efficiency measures in hotels; pioneering low-carbon hotels; and supporting hotels to source renewable energy. We prioritise operational changes that require minimal resources, followed by impactful energy efficiency projects, such as procuring renewable energy and implementing high-efficiency retrofits.
Decarbonising existing hotels is a significant challenge, especially considering that around 80% of the world’s buildings projected to exist in 2050 are already built. To address this, we collaborate closely with our hotels to improve energy efficiency, providing resources and support. We have integrated energy conservation measures (ECMs) into our brand standards, focusing on those with paybacks under five years, and are developing additional standards tailored to specific regions and segments. Each property is assigned customised annual energy reduction targets, which are monitored as part of broader hotel performance metrics. These targets are tailored for the region and climate, supported by compliance reporting and a commitment to data quality.
To reinforce our commitments, we have aligned our Directors’ Remuneration Policy with our decarbonisation strategy. Carbon measures are now part of our Long Term Incentive Plan (LTIP) for Executive Directors and senior leaders, linking decarbonisation targets to the adoption of ECMs in both new and existing hotels.
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This integrated approach aims to drive meaningful change throughout the organisation.
In terms of new developments, we are working towards the goal of having our newly built hotels operate at very low or zero carbon emissions. Over the past three years, we have incorporated 17 ECMs into our new-build brand standards, most of which are also in place for our existing hotels. These target key areas such as kitchens, heating and cooling, lighting, and swimming pools.
In July 2024, we launched our Low Carbon Pioneers programme, which brings together energy-efficient hotels that do not combust fossil fuels on-site and are powered by renewable energy. This programme is the first of its kind in the industry, allowing IHG to test and share sustainability practices while inspiring more properties to adopt carbon reduction measures. Low Carbon Pioneer hotels feature sustainable solutions, including high-efficiency heat pumps and fully electric kitchens, and hold third-party sustainability certifications, such as Green Key.
Helping hotels access renewable energy can enable them to quickly reduce emissions, particularly in regions with carbon-intensive electricity grids. |
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| Where credible renewable energy markets exist, we assist our managed hotels in negotiating renewable electricity contracts and several of our global offices, including our headquarters in Windsor in the UK and Atlanta in the US, are procuring 100% renewable electricity. While most of our hotels operate under franchise agreements, which limits our direct procurement capabilities, we strive to help hotel owners access renewable energy solutions where we can. Our Community Solar programme, available in select US states, allows hotels to subscribe to local solar projects, offering certified Renewable Energy Certificates and potential cost savings. Additionally, we are exploring on-site renewable energy options, particularly for hotels in remote areas.
Our ongoing commitment to decarbonisation has driven an 11.5% reduction in carbon emissions per available room and a 9.4% reduction in energy per available room in 2024 compared to 2019. However, the lack of a clean energy infrastructure in our markets, alongside the opening of more hotels around the world, means that total carbon emissions are up 7.2% since 2019.
InterContinental Kuala Lumpar’s state-of-the-art solar panels. |
As a result, despite our ongoing efforts, we are not on track to meet our 2030 target of 46% reduction. We remain dedicated to the actions we are taking to assist hotel owners in reducing carbon emissions and while our programmes will require time to scale, the actions we are taking today will improve operational efficiency of IHG hotels and prepare us for accelerated decarbonisation once market factors are more favourable. | By promoting supportive regulations and incentives, we aim to facilitate an operating environment conducive to sustainable practices, benefiting both the industry and our communities.
As proud members of initiatives such as the World Sustainable Hospitality Alliance (WSHA) and the World Travel & Tourism Council (WTTC), we share best practices and develop industry-wide sustainability tools.
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| Waste – our 2030 commitments | ||
| – Eliminate single-use items, or move to reusable or recyclable alternatives across the guest stay.
– Minimise food going to waste through a ‘prevent, donate, divert’ plan.
– Collaborate to achieve circular solutions for major hotel commodity items. |
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| Waste
With millions of guests visiting our hotels each year, we have a unique opportunity to promote more sustainable travel by minimising the impact of the products and services we offer. The world generates over two billion tonnes of waste annually, with more than a third not managed responsibly. |
According to the United Nations Environment Programme, an estimated
Our goals and KPIs focus on actionable steps that empower hotels to effectively reduce waste. |
This year, we have continued to implement action plans across our three regions, specifically aimed at eliminating single-use items, minimising food waste, and promoting circularity.
To support our efforts, our hotels have access to a Single-Use Items Toolkit, which provides a best-practice guide for reducing, reusing, replacing, and recycling single-use items.
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Being a responsible business continued
Our planet continued
| This globally available toolkit features examples from our brands and insights tailored to properties with varied waste management infrastructures.
Additionally, we have established brand standards focused on reducing plastic waste. In 2019, we became the first global hotel group to commit to replacing bathroom miniatures with full-size amenities, which has been incorporated into brand standards across all hotels worldwide. This year, we launched two new brand standards to eliminate plastic water bottles from guest rooms, meetings and events in all hotels across Europe by December 2025. To assist hotels in this transition, we created a guidebook outlining alternative solutions, such as water filtration systems and reusable bottles. Building on this progress, we plan to extend these standards to other EMEAA markets in 2025.
We are also collaborating with our suppliers to enhance sustainable options for guest-room amenities (such as toothbrushes, toothpaste, soap and combs). We began incorporating these options into our brand standards in EMEAA in 2022 and expanded the programme into Greater China this year. For our Premium and Essential brands in Greater China, guest-room amenities such as toothbrushes will now be made from post-consumer recycled plastic and packaged in bags made from sugarcane fibres. For our Luxury & Lifestyle brands, amenities will be crafted from bamboo, and the packaging is printed with soy ink and is FSC certified. |
To further promote sustainable practices, we have strengthened guest-facing communications around sustainable amenities, encouraging responsible travel behaviours while offering certain items upon request to minimise waste. In Greater China, guests at participating hotels have the option to forgo the hotel’s guest-room amenities during their stay to earn green energy points. This initiative is part of our collaboration with Ant Forest’s tree-planting programme on the Alipay app, where users can accumulate virtual points for making low-carbon lifestyle choices. In 2024, we expanded the programme to 445 hotels across 11 brands and 116 cities.
For hotels undergoing renovations in the US, we launched a guide that provides them with tips and resources on handling major hotel commodity items to dispose of waste in an environmentally responsible way – recommending approaches and organisations with capabilities to manage these items, including potential opportunities to repurpose items through local donations.
To effectively combat food waste, we have implemented a comprehensive approach that focuses on training, monitoring, reducing waste at the source and donating surplus food whenever possible. |
We have established global food waste training programmes for all regions and hotels, encouraging properties to actively monitor their food waste and take necessary actions.
Since launching in 2022, the e-learning module has been accessed by more than 2,700 hotels and over 53,700 courses completed by managed and franchised hotel colleagues. To track progress, hotels are encouraged to record daily food waste and report monthly totals into the IHG Green Engage environmental data management platform. The platform was enhanced this year, with an intuitive reporting dashboard that assists hotels to track their performance against peers. The initiative is also supported by back-of-house posters that provide easy-to-implement food-saving tips, standardised labels for food waste bins, and a detailed guide highlighting methods for reducing food waste.
To minimise single-use plastics and reduce waste at the source, our Holiday Inn Express hotels in the US are transitioning their Express Start® breakfast bars to bulk condiments, including reusable smallware for items such as jams, ketchup, and honey. This change not only lowers costs for hotel owners but also empowers guests to control their consumption, further supporting our goals to reduce food waste.
Additionally, we focus on donating surplus food whenever possible. Our collaboration with the Too Good To Go app in 119 hotels across Europe has successfully connected properties with customers looking to purchase unsold surplus food. In 2024, more than 41,000 meals were saved from going to waste, which increased by 33% from 2023, demonstrating growth in the number of hotels using the app and the meals rescued. For more details on how we support our communities through food redistribution initiatives, please see page 58.
Since our global food waste training e-learning module was launched in 2022, it has been accessed by more than 2,700 hotels and over 53,700 courses have been completed by managed and franchised hotel colleagues.
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| A number of voco hotels donated a proportion of their filtered water sales to Just a Drop, with funds supporting access to improved WASH facilities for more than 250 people in Trapeang Svay, Cambodia. |
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| Water – our 2030 commitments | ||
| – Implement tools to reduce the water footprint of our hotels.
– Mitigate water risk through stakeholder collaboration to deliver water stewardship at basin level.
– Collaborate to ensure adequate water, sanitation and hygiene (WASH) conditions for our operating communities. |
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| Water
As global water demand exceeds supply in many regions, it is vital for us to support hotels, particularly those located in areas experiencing high water stress or drought risk. By assisting these properties in adapting to their challenges, we can help minimise service disruptions, reduce water consumption, and contribute to the conservation of this invaluable resource.
Since 2019, we have been part of the UN CEO Water Mandate, which represents a commitment to six principles aimed at mobilising business leaders around water, sanitation, and the UN SDGs. As part of our involvement, we are members of the Water Resilience Coalition, which seeks to prioritise global water stress on the corporate agenda and preserve the world’s freshwater resources through collaborative efforts.
Our focus is on reducing water use, mitigating water risks, and supporting communities in need of adequate WASH conditions. To achieve these goals, we are implementing regional action plans that emphasise awareness, conservation, and stewardship. |
This regional approach enables us to effectively address the diverse water-related risks and opportunities that exist across different markets, ensuring that our efforts are both impactful and sustainable.
To assess water risks at all hotel locations based on usage-to-supply ratios, we use the World Resources Institute Aqueduct Water Risk Atlas. We disclose this information in accordance with the SASB framework, which includes details on water use in regions facing extreme and high water scarcity. This data, combined with our assessment of factors such as flooding, drought, and water depletion, informs our focus areas for effective water management.
We aim to improve water efficiency by implementing water reduction measures that we have integrated into our brand standards globally. These standards require hotels to install high-efficiency, low-flow aerated showerheads and taps by the end of 2025. On average, these measures can decrease water consumption by 11 litres per minute for showerheads and 3 litres per minute for taps.
We monitor our performance using Green Engage, our environmental data management platform, where hotels are required to regularly submit their water consumption data (for detailed water data, please refer to page 48 of our 2024 Responsible Business Report).
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In 2024, our water intensity (m³ of water use per available room) decreased by 1.8% compared to 2019. We anticipate that as we implement water efficiency brand standards across our estate, this improvement in water efficiency will continue to grow. At the same time, our absolute water footprint has increased by 9% since 2023 due to our continued business growth.
In our Americas region, we are developing a comprehensive document for hotels to guide them in water conservation, which we plan to launch in 2025. In addition, we are actively evaluating solutions for water conservation and stewardship, with plans to conduct pilot programmes in 2025 to drive our progress towards our Journey to Tomorrow commitments. We will share key insights across the EMEAA and Greater China regions to inform their next steps.
We recognise that water issues impact local communities and so we also focus our water partnerships to align with our community impact commitments to ensure that we are targeting initiatives that have dual benefit. For more on how we support our communities, see page 58. |
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Being a responsible business continued
Transition Plan
Addressing climate change is a shared responsibility that
extends to all businesses. As a leader in our industry, we are
committed to operating sustainably and supporting global
efforts to combat this critical issue.
Reducing our emissions
By taking action on climate change, we can reduce our environmental footprint, strengthen resilience to future risks, and meet growing demands from guests, investors, and colleagues for responsible and sustainable practices.
Our work to reduce emissions across our business focuses on three principal objectives: implementing energy efficiency measures in hotels; pioneering low-carbon hotels; and supporting hotels to source renewable energy.
Our fee-based, asset-light business model allows for rapid growth of our hotel estate and higher returns with lower economic risk, but it also means we have limited control and influence over a significant proportion of the emissions generated across our business.
More than 60% of the emissions covered under our carbon target are generated by our franchisees. We are committed to working closely with them, many of whom are small business owners, to support their efforts in decarbonising their properties and improving operational efficiency.
| 1. | Implementing energy efficiency measures in hotels |
We work with owners and hotel teams to provide them with essential training, tools and resources to help maximise their energy efficiency (see page 65 for details).
To encourage uptake of the emission reduction options available, we have modelled the financial impacts of each for our third-party hotel owners and teams. That starts with changes requiring minimal resources.
Options include end-of-life equipment replacement, high-efficiency retrofits and electrification measures.
Additionally, we’ve continued to integrate ECMs into our brand standards, focusing on those with paybacks under five years and tailored to specific regions and segments. In the past three years, we have implemented 17 ECMs into our new-build brand standards, supplementing the ECMs already in place for our existing hotels. These will reduce the energy used in our hotels in several key areas, including kitchens, heating and cooling, lighting and swimming pools.
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To drive further action, we integrate annual energy reduction targets into our broader hotel performance monitoring processes. Tailored by region, brand, and climate zone, these energy reduction targets are complemented by reporting compliance goals and a focus on verifiable data to enhance quality and transparency.
Internally, we reinforce our commitments by aligning our Directors’ Remuneration Policy with our people, communities, and planet strategic priorities. We have incorporated carbon measures into the LTIP for our Executive Directors and senior leaders. This alignment includes specific targets related to decarbonisation actions. By integrating these strategies, we aim to create a cohesive approach that drives meaningful change across all levels of the business.
| 2. | Pioneering low-carbon hotels |
To support the future development of IHG hotels, we aim to test, learn, and share insights on innovative approaches that can accelerate our efforts and inspire broader adoption of carbon reduction practices across our estate. We have collaborated with technical experts to establish a definition of a low-carbon building, and in July 2024, we launched our Low Carbon Pioneers programme. This programme brings together energy-efficient hotels that have no fossil fuels combusted on sitea and are backed by renewable energy. This group of low operational carbon hotels is the first of its kind in the industry with the ambition to inspire other properties to join the programme and help encourage wider adoption of carbon reduction practices.
Each Low Carbon Pioneer hotel will have an operational sustainability certification, such as Green Key, or sustainable building certification, such as LEED, BREEAM or EDGE. A hotel has 12 months upon opening to achieve this certification. To track and measure their energy data, Low Carbon Pioneer hotels will use IHG’s Green Engage environmental platform.
As part of the programme, we are also developing a low-carbon ready group of hotels in preparation for when it becomes possible to fully back all energy with renewables in countries or districts where this is not currently available.
| 3. | Supporting hotels source renewable energy |
Helping hotels access renewable energy can enable them to quickly reduce emissions, particularly in regions with carbon-intensive electricity grids. We are actively exploring options for how we can facilitate renewable energy options for owners, and we are mapping opportunities globally, prioritising procurement in mature markets where we have a significant presence. We also apply insights from emerging markets to enhance our approach.
Although most of our hotels operate under franchise agreements, limiting our direct procurement opportunities, we strive to assist hotel owners in accessing renewable energy. A notable initiative is our Community Solar programme, active in select US states such as Maryland, Illinois, Maine and New York. This programme allows hotels to subscribe to local solar projects, receiving Green-e® certified Renewable Energy Certificates and discounts on their electricity bills, resulting in up to a 10% reduction in costs.
Where credible renewable energy markets exist, we assist our managed hotels in negotiating renewable electricity contracts and several of our global offices, including our headquarters in Windsor in the UK and Atlanta in the US, are procuring 100% renewable electricity. We continue to explore the delivery of a broader renewable energy programme that can be accessed by a wider range of our hotels.
Support for owners
Choosing to partner with IHG offers our hotel owners access to the tools and resources (right) to build their knowledge, skills and awareness of ways to reduce their hotel energy consumption and reduce emissions.
| a. | Except for backup generators that fall below 5% of the hotel’s total annual energy consumption. |
| Tools and resources to help our owners |
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Enhanced online environmental management platform |
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Every IHG hotel is given access to our IHG Green Engage system, our online environmental management platform, which helps hotel teams make greener choices, charts their progress, and measures and reports their energy, water and waste data. It also provides more than 200 green solutions to drive utility efficiency. Green Engage has been supporting our hotels to reduce their environmental impact since 2009. To ensure its continued success, we launched Green Engage 2.0 in 2024 to enhance the interactivity and usability of the platform, giving hotels better insights into performance against targets.
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Carbon and energy training |
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Our hotel energy and carbon reduction e-learning modules advise hotel colleagues on how to reduce costs and drive revenue by providing effective strategies to reduce their hotel’s energy use. These modules cover the global context, the commercial and competitive advantages of sustainability efforts, and what hotels need to do to meet their energy reduction targets. Checklists and 10-minute training guides are also available to help general managers implement the top no-cost energy saving behavioural changes within their teams.
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Centralised data collection |
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IHG continues to invest in utility data acquisition solutions to improve data quality. This includes our collaboration with energy specialists to offer hotels a centralised data feed solution to collect utility information, which is then sent directly into the Green Engage system. The collected data enables improved analytics for hotels to drive efficiencies in utility management and strengthen hotel Requests for Proposals to corporate clients globally.
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Energy reduction tool |
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The IHG HERO tool guides hotels on the most effective ECMs for their specific building. The tool provides indicative capital costs, energy reductions and payback periods for ECMs based on the hotel’s facilities, climate and energy use. Since launching the tool in 2022, more than 740 hotels have used it to guide their capital spending. The tool is in all regions and launched in Greater China in 2024.
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Incentives | |||
| We are supporting hotels to identify financial incentives available to them to help fund energy efficiency investments. Owners in our Americas region have free access to reports on tax incentives and utility rebates available to their hotels. We have also partnered with an ‘energy efficiency as a service’ supplier that can provide financing, installation and maintenance of ECMs and then shares the energy cost savings with the hotel.
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Being a responsible business continued
2024 transition plan continued
The external landscape
As a global leader in the hospitality industry, IHG is committed to driving sustainability and decarbonisation efforts across our operations. However, the landscape in which we operate presents challenges that are outside our control and influence our ability to achieve our goals.
Through partnerships with organisations such as the World Sustainable Hospitality Alliance (WSHA) and the World Travel & Tourism Council, we contribute to industry-wide initiatives and by collaborating with our peers, we harness collective expertise to enhance our environmental performance and decarbonisation efforts across the sector.
IHG has supported the WSHA with developing the industry’s Pathway to Net Positive Hospitality, and has contributed to tools for measuring sustainability. In 2023, IHG became a founding member of the Hospitality Alliance for Responsible Procurement (HARP). HARP aims to improve supplier sustainability by fostering close collaboration with trading partners to build transparency and scale positive impact across the industry’s value chains, while operating with the appropriate governance and compliance controls.
Using our global scale, we actively engage with external stakeholders to support hotel owners, including to reduce operational costs, boost revenue and meet industry standards for sustainability, ultimately benefiting both the industry and our communities.
However, the majority of the countries that IHG operates in do not have national net zero policies, which are crucial to providing infrastructure and incentives to support IHG’s decarbonisation target.
The key external factors at the macro and industry level that impact the speed at which IHG is able to decarbonise are outlined below.
| Macro factors | ||||
| Energy infrastructure
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National regulations
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Carbon accounting standards
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| High electricity costs can reduce the business case for electrifying hotels, making it harder to shift to cleaner energy options.
Availability of renewable energy sources and grid capacity for clean energy adoption impact decarbonisation. |
National and local environmental laws, taxes and standards can have a significant impact on the pace and scope of the achievement of our carbon reduction commitments. | Current lack of clarity and confidence in future carbon accounting and certification rules, such as the use of market-based solutions like Renewable Energy Certificates, inhibits effective business planning. | ||
| Industry factors | ||||
| High cost of retrofits
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Technology and innovation
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Employee turnover
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| Retrofitting buildings for energy efficiency (such as through heating, ventilation and air conditioning (HVAC) or insulation upgrades or on-site renewable energy installations) can be costly and disruptive, slowing decarbonisation efforts.
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Limited availability, maturity and costs of low-carbon technologies (such as building materials, efficient lighting and HVAC systems) affect the ability to implement decarbonisation solutions. | The hotel industry faces high employee turnover, making it harder to maintain consistent sustainability practices with high levels of retraining required. | ||
| Value chain factors | ||||
| Franchise business model
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Supply chain emissions
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Market demand
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| Many hotel franchisees are small business owners with limited resources and access to credit, making it harder to invest in costly decarbonisation efforts. They might not face the same regulatory or investor expectations concerning carbon performance as IHG does. |
The carbon footprint of suppliers can play a significant role in a hotel’s overall emissions. Procurement of hotel goods and services, such as energy, operating supplies and equipment, food and beverage, furniture, predominantly occurs at local hotel level and are purchased by our franchisees.
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Guest preferences for sustainable practices and eco-friendly products and services can impact the pace at which a business decarbonises. | ||
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Our carbon performance
as a growing business
Our ongoing commitment to decarbonisation has driven an 11.5% reduction in carbon emissions per available room and a 9.4% reduction in energy per available room in 2024 compared to 2019. However, the lack of a clean energy infrastructure in our markets, alongside the opening of more hotels around the world, means that total carbon emissions are up 7.2% since 2019.
| GHG emissions | ∎ Scope 1 | |
| Tonnes of CO2e market-based | ∎ Scope 2 (market-based) | |
| ∎ Scope 3 | ||
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Our target
In 2021, we set an ambition to reduce absolute Scope 1, 2, and Scope 3 (including energy from FERA and franchised hotels), 46% by 2030 from a 2019 base year. This target received validation from the Science Based Targets initiative (SBTi) to align with climate science.
Having an ambitious target has been a catalyst for driving change, providing us with a clear goal to work towards. It has fostered a culture of accountability and innovation, motivating our teams to develop new strategies to meet our objectives and collaborate across departments and with external partners.
Since setting our target, we have undertaken extensive work to map out the pathways to achieve it, identifying key initiatives to drive progress, focusing on the areas we can control and influence. However, some of the key external enablers that we anticipated would support our efforts have not materialised as expected:
| – | A challenging global economic environment coming out of the Covid-19 pandemic has hindered owners’ ability to invest in initiatives. |
| – | Grid decarbonisation has been slower than anticipated. |
| – | There remains uncertainty regarding future consumer demand for higher-priced sustainable good and services. |
| – | Limited access to suitable renewable energy options that are scalable. For example, current market conditions and available risk mitigation strategies for virtual Power Purchase Agreements do not make these a suitable option for IHG’s asset-light business model – which typically does not involve responsibility for hotel-level energy procurement. |
To be able to achieve our 2030 targets, several significant external shifts would be required, such as the development of a reliable clean energy grid across all our geographies and a commercial and operating landscape that supports energy efficiency and carbon reduction.
Another critical factor is addressing the substantial pricing differences between electricity and gas, this gap must be narrowed to make renewable energy more competitive and financially viable. For example, in the UK, electricity is around four times the cost of gas per kWh. Furthermore, advancements in market conditions and technology are essential, particularly in terms of lowering costs and increasing the availability of high-impact ECMs that can significantly reduce emissions.
Unfortunately, these necessary shifts are beyond IHG’s control and are unlikely to occur quickly enough. As a result, despite our ongoing efforts, we are not on track to meet our 2030 target. We remain dedicated to the actions we are taking to assist hotel owners in reducing carbon emissions, including by the following means:
| – | We will continue to drive and constantly reassess initiatives across our decarbonisation pillars to maximise our impact, and we remain dedicated to the actions we are taking to assist hotel owners in reducing carbon emissions. While our programmes will require time to scale, the actions we are taking today will improve operational efficiency of IHG hotels and prepare us for accelerated decarbonisation once market factors are more favourable. |
| – | Leveraging our scale and market position, we will strive to influence change across the hospitality industry. We are committed to sharing our learnings and best practices with industry peers and stakeholders to foster collective progress towards sustainability goals. |
| – | We will also maintain ongoing, transparent reporting against our existing targets. This accountability is crucial for tracking our progress and identifying areas for improvement. |
The sustainability standards landscape is rapidly evolving, making it essential for us to reflect on the implications for IHG. This includes re-evaluating our carbon reduction target and conducting a thorough review of emerging industry standards, as well as anticipated updates to carbon accounting standards, target validation criteria and evolving technologies. Focusing on how IHG can control and influence our decarbonisation efforts will also be essential, as these considerations will significantly shape our strategies and ensure that our initiatives remain relevant and effective across the regions and communities we serve.
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| 68 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Delivering on the recommendations of TCFD
Compliance with Listing Rule 6.6.6R(8)
Our Task Force on Climate-related Financial Disclosures (TCFD) reporting for 2024 is integrated into our Annual Report, and is consistent with the Companies Act requirements and the London Stock Exchange (LSE) Listing Rule 6.6.6R(8). This includes consistency with all 11 TCFD recommendations and their corresponding recommended disclosures.
The disclosures are supplemented by additional content within the 2024 Responsible Business Report. The table below provides a cross-reference for where this information can be found across these documents.
To enhance our disclosure further, we are strengthening our processes for identifying and assessing the impacts of climate-related risks and opportunities across short-, medium-, and long-term timeframes.
An update on this ongoing work will be provided in our next Annual Report, under strategy disclosures (b) and (c) of the TCFD framework.
| TCFD section and summary of recommended disclosure | Pages | |
| Governance: |
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| Disclose the organisation’s governance around climate-related risks and opportunities |
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| a) The Board’s oversight of climate-related risks and opportunities. |
See page 69 of our TCFD disclosure and 122 for an overview of Board oversight and governance, which includes climate change.
Directors’ Remuneration Policy: ihgplc.com/investors/corporate-governance/ directors-remuneration-policy |
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| b) Management’s role in assessing and managing climate-related risks and opportunities. |
See page 69 of this report. | |
| Strategy: |
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| Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material |
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| a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. |
See pages 71 and 72 for our climate-related risks and opportunities. | |
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| b) Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. |
See page 70 for description of impact and pages 36 and 37 for an overview of IHG’s four strategic priorities, including ‘Care for our people, communities and planet’.
See pages 64 to 67 for more on our decarbonisation strategy and performance. |
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| c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. |
See pages 70 to 72 of this report.
See how the business balances opportunities for strategic advantage or efficiency with the need to remain resilient and agile in the short and longer term, including climate change, on pages 44 and 45. |
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| Risk management: |
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| Disclose how the organisation identifies, assesses, and manages climate-related risks |
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| a) Describe the organisation’s processes for identifying and assessing climate-related risks. |
See page 70 for details of how we develop scenarios to evaluate transition and physical risks and opportunities and pages 71 and 72 for the current assessment.
See pages 44 to 51 for details on how we evaluate principal risks, including climate change. |
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| b) Describe the organisation’s process for managing climate-related risks. |
See pages 70 and 44 to 51 which details how we consider climate-related factors within our broader risk management discussions, current risk management and strategic responses to build business resilience, and illustrative key management controls. | |
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| c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. |
See pages 44 to 51 which shows the impact of climate-related physical and transition risks as one of our 10 principal risks, noting that climate-related uncertainties are also evaluated as an integral part of other principal risks. | |
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| TCFD section and summary of recommended disclosure | Pages | |
| Metrics and targets: |
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| Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material |
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| a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. |
See page 73. See pages 38 to 41 for IHG’s KPIs, including our carbon footprint. |
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| b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. |
See page 73 for our metrics and targets information.
See pages 74 to 76 for our Streamlined Energy and Carbon Reporting (SECR) table which includes Scope 1, 2 and 3 GHG emissions. |
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| c) Describe the targets used by the organisation to manage climate-related risks and opportunities, and performance against targets. |
See page 73 for our metrics and targets section.
See page 52 which outlines our Journey to Tomorrow commitments.
See page 67 of our Transition Plan which details our performance against our carbon target. |
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Governance
Board oversight of climate-related risks and opportunities
Our approach to responsible business is driven by a culture of strong governance and supported by robust policies. The Board oversees all aspects of the Group’s strategy, including in relation to decarbonisation, and ensuring that effective controls and risk management systems are in place. It holds teams accountable for managing IHG’s climate risks and assessing performance against climate targets.
The following Board Committees also consider and advise the Board on risk topics within their respective remits, all of which encompass the consideration of climate-related risks.
The Audit Committee
| – | The Audit Committee is responsible on behalf of the Board for reviewing IHG’s climate-related risks and opportunities as identified by management, and ensuring that IHG maintains robust risk management and internal control systems covering all material controls. The Audit Committee also reviews the integrity of IHG’s financial reporting and the potential impact of climate change on the Group’s financial position, and considers data validation, assurance and controls around all data, including non-financial data. See pages 128 to 133 for our Audit Committee Report. |
The Responsible Business Committee
| – | The Responsible Business Committee advises the Board on IHG’s responsible business strategy and objectives, which covers climate change within the context of our wider Group Strategy. The Committee provides oversight of our Journey to Tomorrow goals, Transition Plan and decarbonisation commitments, including recommending and reporting progress on carbon-related LTIP measures to the Remuneration Committee. |
The Remuneration Committee
| – | The Remuneration Committee determines the remuneration of Executive Directors, Executive Committee and Chair of the Board and reviews wider workforce remuneration to ensure that this is aligned with the interests of shareholders, the UK corporate governance environment, and our environmental and climate-related goals. To further embed our climate goals across the business and ensure accountability at the senior level, the Remuneration Committee, as advised by the Responsible Business Committee, has incorporated measures relating to our carbon target, into the LTIP and reports to the Board on progress against these measures. Find more details of our Directors’ Remuneration Policy at ihgplc.com/investors/ corporate-governance/directors-remuneration-policy |
| See page 73 for more details of our metrics and targets, including remuneration. |
Management’s governance of climate-related risks and opportunities
The management of climate-related risks and opportunities in relation to IHG’s objectives and plans is the responsibility of our Executive Committee. Specific Executive Committee sponsors have been nominated for the principal risk relating to climate change and day-to-day execution is overseen by the Regional Environment Steering Committees.
The TCFD Steering Committee has responsibility for identifying and reviewing potential impacts of climate-related risks and opportunities, measuring their impact and integrating climate scenario analysis into our business strategy. We introduced Regional Environment Steering Committees in 2023 to oversee development as well as implementation of regional decarbonisation and environment strategies, reflecting the need for approaches tailored to different geographies. The Chief Sustainability Officer is responsible for monitoring progress against our carbon reduction commitment and reporting progress to the Executive Committee and the Responsible Business Committee. The Audit Committee reviews the ongoing effectiveness of the risk management and internal control framework.
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See our Governance section on pages 111 to 177 and Board reports from pages 128 to 175 which provides detail on 2024 actions. | |
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See page 127 for how the Board’s competence is assessed. | |
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See pages 64 to 67 of our Transition Plan for details on our climate-related actions and stakeholder engagement specific to climate. | |
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See pages 128 to 133 for our Audit Committee Report. | |
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| 70 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Delivering on the recommendations of TCFD continued
Strategy
With hotels in thousands of communities all over the world, our business and brands touch the lives of millions of people every day. We understand that in our role as a major global hospitality company, we have an important part to play in addressing the impacts of climate change. The success of IHG over the long term depends on the environmental and social sustainability of our operations, the resilience of our supply chain and our ability to manage the potential impact of climate change on our business model and performance.
We identify climate change as one of our 10 principal risks, and our strategic planning includes consideration of the potential impacts of varied climate conditions and policy environments.
Given our asset-light model, we believe our strategic response to climate-related risks is well-suited to address the identified challenges and maximise associated opportunities. This response is a core part of our ‘Care for our people, communities, and planet’ pillar of our business strategy. Our Journey to Tomorrow programme includes specific carbon targets and a comprehensive decarbonisation strategy.
Risk management
Identifying and assessing IHG’s climate-related risks and opportunities
In accordance with TCFD recommendations, we’ve assessed climate risks and opportunities against (1) transition risks: related to the transition to a low-carbon economy, and (2) physical risks: related to the physical impacts of climate change in our three regions (Americas, EMEAA and Greater China):
| – | To assess potential transition impacts, we have used the International Institute for Applied Systems Analysis’ Shared Socioeconomic Pathways to capture how societal, economic and technological trends could evolve under three selected temperature rise scenarios. |
| – | To assess potential physical impacts, we have aligned the temperature rise scenarios in our analysis with the Intergovernmental Panel on Climate Change’s 1.5°C, 2°C and 4°C aligned Representative Concentration Pathways (RCPs) 2.6, 4.5 and 8.5, respectively. |
We have considered these over the short-, medium- and long-term.
At IHG, we assess the connections between climate-related risks and opportunities and other principal risks to ensure that climate change is embedded in our risk management processes and addressed through our business strategy.
Determining the materiality of climate-related risks and opportunities to IHG
Our climate analysis helps us identify risks that could have a ‘potentially material impact’ on IHG, meaning they could directly affect our revenue, costs, or reputation if we don’t take steps to mitigate them.
When we look at climate risks and opportunities, we consider how they might influence our financial performance, factoring in future revenue and cost growth from our long-range strategic plan. Our approach to materiality regarding potential revenue or cost impacts is consistent with what we use in our Financial Statements.
It is important to note that much of the data we use in our scenario and risk analyses relies on various assumptions, which can create uncertainties. As data availability and quality improve, we will gain a better understanding of these uncertainties, helping us assess how resilient our business is under different climate scenarios. We also expect that new regulatory frameworks will generate more comprehensive datasets, supporting our quantification work.
While our current assessments do not indicate any material financial impact, the risks attached to climate change are evolving, and these will continue to be assessed against the Group’s judgments and estimates.
We are committed to monitoring changing trends and evolving climate-related regulations in order to inform how our climate risk responses may need to evolve. This includes compliance with the UK Sustainability Disclosure Requirements when applicable.
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See page 197 for critical accounting policies and the use of judgments, estimates and assumptions regarding climate change. See the forward-looking statements on page 309. |
Management of climate-risks
Our risk identification and scenario analysis considers the potential impact on IHG’s objectives and allows for discussion of strategic and operational steps to enable us to build business resilience where needed or to position us to take opportunities presented by the climate transition. Pages 71 and 72 outline our current management response to the four identified potentially material climate risks and opportunities. To enable our risks to inform business decisions effectively, risk reviews are conducted by the EC and management teams and reviewed by the Board, to align with the business decision-making cycle. Our Risk and Assurance team conducts regular meetings with IHG leaders and teams responsible for assessing and managing risks. These conversations consider a range of uncertainties, such as the effect of climate change on hospitality, and the steps being taken to reduce IHG’s exposure, which may be relevant to the delivery of teams’ objectives and IHG’s success.
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See pages 64 to 67 for our Transition Plan. |
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See page 28 for an overview of IHG’s four strategic priorities, including ‘Care for our people, communities and planet’. | |
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See pages 44 to 51 for details on how we evaluate principal risks, including climate change. | |
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See how the Board considered strategic and operational matters on page 124. | |
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See metrics and targets on page 73 for information on IHG’s capital allocation. | |
| Climate risk time horizons | Description |
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| Short (1–5 years) |
Our short-term horizon encompasses our financial going concern and viability statement assessments, along with our budget-setting timeline. Our hotel energy performance targets are also aligned to this timeframe. | |
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| Medium (6–15 years) |
Our medium-term time horizon reflects our 10-year responsible business plan, Journey to Tomorrow, and our climate-related targets. It also reflects our time horizon from a strategic planning perspective. | |
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| Long (16–30 years) |
A long-term time horizon of up to 30 years aligns with national government policy and regulatory timeframes: for example, the UK’s 2050 net-zero target and global climate agreements. It also reflects the longer-term nature of the contracts we sign with our owners. | |
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IHG’s potentially material climate-related risks and opportunities, if unmitigated
| Risk/opportunity description |
Unmitigated potential risks and opportunities |
IHG’s risk management and strategic response to build business resilience |
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| Risk/opportunity 1: IHG’s ability to decarbonise in line with stakeholder expectations |
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| Potential short- term (1–5 years) impact under a 1.5°C scenario, if unmitigated |
Reputational: If IHG fails to decarbonise in line with stakeholder expectations, there is a potential short-term reputational risk, particularly under 1.5°C. This risk could extend into the medium to long term if IHG’s decarbonisation progress lags behind competitors. Conversely, performing better than our peers could bolster IHG’s reputation for sustainability. Under a 4°C scenario, the reputational risk diminishes as broader failure to meet targets becomes more common.
Market: Increasing investor expectations for low-carbon progress could disadvantage IHG if we fail to demonstrate sufficient progress. Misalignment with hotel owners on decarbonisation plans could also create challenges.
Policy and legal: The ability of governments to align their policies and plans to their climate change commitments will determine what speed IHG can decarbonise. |
Our decarbonisation efforts are embedded within IHG’s strategic priority to ‘Care for our people, communities, and planet’.
We are actively engaging with our stakeholders, being transparent in our reporting, and taking meaningful actions based on those emissions we have most direct control over.
Our programmes will require time to scale and the actions we are taking today will improve operational efficiency of our buildings and prepare us for accelerated decarbonisation once local market factors, such as renewable energy support for electricity grids, are more favourable.
Our decarbonisation strategy and Transition Plan, outlined on pages 64 to 67, detail our actions, dependencies and progress towards our decarbonisation target. |
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| Risk/opportunity 2: Changing consumer preferences towards sustainable travel |
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| Potential short- term (1–5 years) impact under a 1.5°C scenario, if unmitigated |
Market: Growing demand for sustainable travel could impact IHG’s financial performance. The effect could be either positive or negative, depending on IHG’s ability to adapt to these changing preferences. The impact could be more material under a 1.5°C scenario, than 2°C, and 4°C.
We have undertaken additional analysis this year to better understand the potential financial impact on IHG. This has included segmenting our customer base and assessing how risk levels would vary. Our findings have shown that the greatest risk is among our corporate customers, as many have publicly committed to reducing their carbon footprint. However, business travel emissions do not currently account for a material percentage of our corporate clients’ overall emissions profile and therefore are not typically expected to be a significant lever in reaching their carbon targets at this time. Additionally, it is not yet clear whether and to what extent carbon offset programmes will be used by corporate clients to facilitate a level of necessary business travel while still enabling them to achieve their overall carbon reduction ambitions. |
We are committed to reducing the environmental impact of our hotels by providing training, tools, and resources, alongside fostering innovation through cross-industry partnerships. We work with owners to unlock commercial value from these initiatives and, whether for business or leisure, we aim to offer a sustainable stay as part of the IHG guest experience. In 2024, we launched our Low Carbon Pioneer programme, continued to promote our Greener Stay initiative, supported hotels with third-party sustainability certifications and continued our Meeting for Good programme, addressing demand for sustainable options.
We acknowledge the need to analyse other components of this risk to determine its overall materiality, including corporate and leisure consumer preferences for sustainable stays. While we cannot discount the risk of leisure travellers making more sustainable travel choices, there is currently insufficient evidence to suggest that this is a significant factor in decision-making. As more data becomes available, we will explore other components of this risk and continue to refine our assumptions and modelling of the medium and long-term risk. |
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See page 65 for more on our Low Carbon Pioneer programme. | |||||
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| 72 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Delivering on the recommendations of TCFD continued
| Risk/opportunity description |
Unmitigated potential risks and opportunities |
IHG’s risk management and strategic response to build business resilience |
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| Risk/opportunity 3: Increased frequency and severity of extreme weather events |
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| Potential long- term (16–30 years) impact under a 2°C and 4°C scenario, if unmitigated |
Acute: Rising global temperatures and the resulting increase in the frequency and severity of extreme weather events creates an inherent risk of disruption to IHG hotel operations, worsening under a 4°C scenario. Disruptions from such events could impact hotel revenues (and the fee income received by IHG), potentially reducing the appeal of the hotel industry to owners in specific locations. Additionally, IHG may face reputational risks if we do not respond effectively to these events or provide adequate support to affected owners and communities.
Hotel-level analysis conducted in 2023 indicates that there could be significant increases in incidences of severe storms in the US, China, and Southeast Asia by 2050. Whilst these could impact revenue and owner returns at individual hotels, our preliminary financial analysis to date suggests that our asset-light franchise model and geographical diversity means that, on an aggregated basis, this risk is unlikely to have a material financial impact to IHG at the Group level.
In 2024, we started further analysis to understand how certain acute physical risks might change in the future and how they could impact our operations. This work is still ongoing. |
We have an enterprise-wide approach to business resilience planning that includes identifying risks, ensuring readiness, responding effectively, and facilitating recovery from operational disruptions.
We support our hotels and surrounding communities in the aftermath of natural disasters through our humanitarian aid partners, Disaster Colleague Assistance Fund, and natural disaster guides.
Our regional teams use physical climate risk data to inform and support their environment work.
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For more information on our disaster response efforts, see page 21 of our 2024 Responsible Business Report.
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Further information about how the Board considered supply chain and procurement is on page 50 and our responsible procurement activities on page 80. | |||||
| Risk/opportunity 4: Significant changes in long-term weather patterns |
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| Impact to be determined |
Chronic: As global temperatures rise, chronic physical risks, such as persistent changes in weather patterns, are expected to intensify, particularly under higher temperature scenarios. These changes could lead to higher operating costs for hotel owners, shifts in customer travel patterns and disruptions in resource availability due to population migration and supply chain disruption. These may impact IHG’s financial performance and growth potential in certain markets.
Our analysis identified that IHG’s hotel locations are more exposed to long-term persistent chronic climate risks than to short-term acute shocks. Significant risks include heat stress in Southeast Asia, the UAE, China, and India, and water stress in regions such as the US, China, Australia, Mexico, and Saudi Arabia. Extreme temperature, prolonged heatwaves and heavy rainfall are expected to increase under a 4°C scenario (RCP 8.5) to 2030 and 2050.
In 2024 we started additional analysis to improve our understanding of the significance of this chronic risk. We have focused on the potential impact of long-term temperature change on energy usage in hotels through increased and/or cooling demands. This work is ongoing. |
We support our hotel owners in implementing efficient building practices, including energy and water efficiency and the use of renewable energy sources, to reduce reliance on resources and strengthen hotel resilience. In water management, we guide owners on adhering to brand standards for efficiency, such as installing low-flow fixtures. In drought-affected areas, hotels are bound by local water restrictions, with examples of hotels implementing desalination and engaging with nature and local communities.
Our regional teams use physical climate risk data to inform and support their environment work and are continuing to assess the effects of water stress at the hotel level.
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See pages 34 to 37 of our 2024 Responsible Business Report for more detail on our Journey to Tomorrow water commitments and performance monitoring. | |||||
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Metrics and targets
To help us manage our climate-related risks and opportunities, we have developed metrics and targets in line with TCFD recommended disclosures. Where determination of supplemental metrics and targets are still in progress, or we do not consider the category to be relevant to IHG, we have provided details below.
GHG emissions and progress against SBT
We use our carbon footprint, calculated as absolute GHG emissions using the GHG Protocol Corporate Accounting and Reporting Standard methodology, to track progress against our decarbonisation strategy and our 2030 carbon reduction target (see pages 64 to 67 for more details on our progress against this target). Details of our strategy, challenges and dependencies for IHG to meet this target are also detailed on page 66 of our Transition Plan.
We also track our year-on-year absolute GHG emissions performance against our 2019 baseline, along with our carbon intensity metrics, which can be found in our Streamlined Energy and Carbon Reporting on pages 74 to 76.
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A breakdown of our GHG emissions, intensity metrics and methodology can be found on pages 75 and 76 in our Streamlined Energy and Carbon Reporting (SECR).
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Our Scope 3 risks can be found in the dependencies section of our Transition Plan on page 66. |
Remuneration
To support our broader growth strategy, as well as our decarbonisation strategy and transition opportunities, we have embedded carbon metrics that focus on supporting owners to reduce energy costs and drive better hotel performance into executive remuneration under the Directors’ Remuneration Policy. Our Executive Directors and other senior leaders LTIP include targets relating to the integration of ECMs into brand standards across new-build and existing hotels. We track these measures during the cycle and we report on achievement in our Directors’ Remuneration Report at the end of each cycle.
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For more details of our Directors’ Remuneration Policy see ihgplc.com/investors/corporate-governance/directors-remuneration-policy
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See pages 138 to 175 for more on our Directors’ Remuneration Report and 2024/26 LTIP cycle. |
Capital deployment
Given the asset-light nature of our business model, we do not consider IHG capital deployment to be a material lever for managing our climate-related risks and opportunities, or for implementing our Transition Plan. For our owned, leased and managed leased hotels in UK, Europe and the US, costs for energy efficiency and carbon reduction are included within our five-year capital plan.
Internal carbon pricing
Given that a large portion of our emissions stem from our franchised estate, where our control is limited, we have determined that a conventional internal carbon price would not be the most impactful decarbonisation mechanism. Consequently, our efforts are directed toward more suitable mechanisms, as outlined in our
Transition Plan on pages 64 to 67.
External carbon price
Our revenue-based fee structure largely insulates us from exposure to carbon pricing legislation. However, we recognise that hotel owners may bear a substantial proportion of any potential carbon costs. To help maintain the long-term appeal of their hotels as investments, we actively support them in decarbonisation efforts.
Transition risk and opportunities
We track the year-on-year performance of our GHG emissions as our key metric and manage these risks using our carbon reduction target and associated decarbonisation strategy as outlined on pages 64 and 65 of our Transition
Plan.
We also use bespoke hotel-level energy reduction metrics and targets, as well as our remuneration targets, to drive the uptake of ECMs across our estate.
Other environmental indicators help us to assess our performance against peers, including energy, renewables and water and waste data. However, these metrics are currently used for internal monitoring purposes only as we continue to work to improve our data accuracy.
We will explore further potential metrics that may be relevant for IHG to monitor and manage our climate-related opportunities and will disclose these when appropriate.
|
|
See our environmental performance data on pages 46 to 52 of our 2024 Responsible Business Report. |
Physical risks
We have identified the acute and chronic physical risks facing IHG’s current and upcoming hotel locations and we are now in the process of developing key internal metrics to effectively monitor these risks, which will be disclosed in future reports.
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|
See risk table on page 72 for details of the physical risks IHG is most exposed to. |
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| 74 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Streamlined Energy and Carbon Reporting (SECR)
The following table shows our annual GHG performance and accounts for both our GHG emissions and energy use in the UK and globally, in accordance with the Streamlined Energy and Carbon Reporting (SECR) requirements.
Every IHG hotel is required to report their monthly energy consumption and each one is assigned an annual energy reduction target which is integrated into hotel-level metrics and key performance indicators.
This year, we launched the Low Carbon Pioneers programme, an industry-first initiative that brings together energy-efficient hotels that do not combust fossil fuels on-site and are backed by renewable energy. We also updated our Green Engage environmental platform, introducing a more intuitive reporting dashboard that helps hotels track their performance, and we embedded energy efficiency measures into our brand standards in areas such as kitchens, heating and cooling, and swimming pools.
More details of our global actions to reduce carbon and energy can be found in our Transition Plan on pages 64 to 67 alongside our carbon performance.
|
|
See our transition plan on pages 64 to 67 for more information on our SBT and progress and page 41 for more information on our carbon KPI. |
| 2024 | 2023 | 2019 (baseline) | ||||||||||||||||||||||||||||||||||
| Energy Use (MWh) | Global | UK | Global | UK | Global | UK | ||||||||||||||||||||||||||||||
| Managed hotels, owned, leased and managed lease hotels and corporate offices | Fuel from boilers, furnaces, generators and company-owned vehicle fuel | 1,799,167 | 26,796 | 1,832,591 | 28,411 | 1,808,870 | 32,991 | |||||||||||||||||||||||||||||
|
|
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| Electricity, heat steam and cooling (from non-renewable sources) | 4,380,270 | – | 4,041,486 | – | 3,519,282 | 1,228 | ||||||||||||||||||||||||||||||
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| Validated renewable electricitya | 157,093 | 33,635 | 130,211 | 31,405 | 120,373 | 27,461 | ||||||||||||||||||||||||||||||
| Franchised hotels | Fuel from boilers, furnaces and generators | 3,284,796 | 275,086 | 3,331,516 | 276,669 | 3,341,608 | 304,243 | |||||||||||||||||||||||||||||
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| Electricity, heat steam and cooling (from non-renewable sources) | 5,361,021 | 261,125 | 5,084,420 | 248,837 | 4,910,854 | 281,504 | ||||||||||||||||||||||||||||||
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| Validated renewable electricitya | 51,585 | 896 | 54,771 | 865 | 43,940 | 718 | ||||||||||||||||||||||||||||||
| Global | Total energy use | 15,033,932 | 597,538 | 14,474,995 | 586,187 | 13,744,927 | 648,145 | |||||||||||||||||||||||||||||
| a. | Renewable energy purchased or generated by hotels or corporate offices which have provided evidence of a Renewable Energy Certificate. |
| Note: renewable energy use from hotels that do not provide evidence will not be accounted for as renewable. |
| 2024 | 2023 | 2019 (baseline) | ||||||||||||||||||||||||||||||||||||||
| Global GHG emissions (tCO2e) | Global | UK | Global | UK | Global | UK | ||||||||||||||||||||||||||||||||||
| Managed hotels, owned, leased and managed lease hotels and corporate offices |
Scope 1 (fuel from boilers, furnaces, generators and company-owned vehicle fuel) | 359,349 | 4,961 | 373,652 | 5,208 | 378,110 | 6,023 | |||||||||||||||||||||||||||||||||
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| Scope 2 (electricity, heat, steam and cooling) | market-based | 2,187,060 | 70 | 2,014,601 | 65 | 1,846,670 | 10,471 | |||||||||||||||||||||||||||||||||
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| Scope 2 (electricity, heat, steam and cooling) | location- based | 2,225,936 | 7,035 | 2,037,390 | 6,568 | 1,852,422 | 7,406 | |||||||||||||||||||||||||||||||||
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| Scope 3 FERA (fuel and energy related activities) | 582,181 | 2,501 | 541,528 | 2,614 | 484,407 | 2,343 | ||||||||||||||||||||||||||||||||||
| Franchised hotels | Scope 3 Franchise | 2,823,595 | 144,748 | 2,688,267 | 140,677 | 2,844,304 | 162,341 | |||||||||||||||||||||||||||||||||
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| Scope 3 Franchise FERA | 591,022 | 24,709 | 561,956 | 23,979 | 552,908 | 23,157 | ||||||||||||||||||||||||||||||||||
| Global | Total market-based GHG emissions | 6,543,207 | 176,989 | 6,180,004 | 172,543 | 6,106,399 | 204,335 | |||||||||||||||||||||||||||||||||
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| 2024 | 2023 | 2019 | ||||||||||||||||||||||||||||||||||
| Global GHG intensity metrics (tCO2e) | Global | UK | Global | UK | Global | UK | ||||||||||||||||||||||||||||||
| Managed hotels, owned, leased and managed lease hotels and corporate offices |
Total gross revenue ($m)a | 12,229 | 288 | 11,593 | 258 | 11,952 | 310 | |||||||||||||||||||||||||||||
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| Scope 1 + 2 per total gross revenue ($000)a | 0.2082 | 0.0175 | 0.2060 | 0.0204 | 0.1861 | 0.0532 | ||||||||||||||||||||||||||||||
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| Scope 1 + 2 per available room night | 0.0116 | 0.0015 | 0.0114 | 0.0018 | 0.0129 | 0.0081 | ||||||||||||||||||||||||||||||
| Franchised hotelsb | Scope 3 Franchise per available room night | 0.0057 | 0.0041 | 0.0056 | 0.0040 | 0.0069 | 0.0048 | |||||||||||||||||||||||||||||
| Globalc | Total GHG emissions per available room night | 0.0092 | 0.0046 | 0.0090 | 0.0045 | 0.0104 | 0.0057 | |||||||||||||||||||||||||||||
| a. | Denominator is total gross revenue (TGR) associated with our managed hotels, owned, leased, managed lease hotels only (figure also provided on page 87). |
| b. | Excludes FERA emissions. |
| c. | Global includes all GHG emissions aligned to SBT (incl. Managed FERA and Franchised FERA emissions). |
| 2024 | 2023 | 2019 | ||||||||||||||||||||||||||||||
| Additional mandatory disclosures (out of scope of SBT) | Global | UK | Global | UK | Global | UK | ||||||||||||||||||||||||||
| Energy – from business mileage in employee-owned vehicles (MWh) | 205 | 205 | – | – | – | – | ||||||||||||||||||||||||||
| Total energy use including business mileage in employee-owned vehicles (MWh) | 15,034,137 | 597,743 | 14,474,995 | 586,187 | 13,744,927 | 648,145 | ||||||||||||||||||||||||||
| GHG emissions – from business mileage in employee-owned vehicles (tCO2e) | 50 | 50 | – | – | – | – | ||||||||||||||||||||||||||
| Total market-based GHG emissions including business mileage in employee-owned vehicles (tCO2e) | 6,543,257 | 177,039 | 6,180,004 | 172,543 | 6,106,399 | 204,335 | ||||||||||||||||||||||||||
Statement of data methodology
IHG’s methodology for collecting and reporting energy, carbon and water data focuses on consistency, transparency, and accuracy. By following established standards and best practices, we aim to give a clear picture of our energy and water use and carbon emissions, which will help us make informed decisions and plan effectively.
In 2024, a review of the data methodology was conducted to implement improvements in reporting and reduce the amount of estimation by moving the process in-house. These improvements have been applied to both current and historical data, including our 2019 baseline in line with our restatement methodology on page 76. This statement outlines the sources of data, how we will collect it, the method for calculations, and the reporting processes used for the period 1 January 2024 to 31 December 2024.
Data collection and validation
Hotels and corporate sites are required to enter monthly energy consumption data into our online environmental management system, IHG Green Engage™. Sample data is validated by our internal teams using hotel utility bills or evidence of meter readings.
Missing and outlier data points are replaced with an average of an individual hotel’s data. If not available, averages from similar hotels within the brand group, climate zone, or region are used.
Current-year December data is estimated based on average values from the previous December. Any differences between estimated and actual data will be incorporated in next year’s restated inventory.
Renewable electricity is only accounted for where the corresponding Renewable Energy Certificates or energy contracts are available, stating that the purchased electricity is 100% renewable. We only include data that is validated by internal teams and a trusted third-party verification provider, ensuring the integrity of our claims. The importance of improving our reporting processes has been recognised and efforts are being made to validate an even greater share of renewable energy across our hotels.
Note: Data from our Exclusive Partner brand (i.e. Iberostar Beachfront Resorts) are not included in our environmental data (or in the above tables).
Calculating GHG emissions
To calculate GHG emissions (CO2, N2O, CH4, HFCs), the GHG Protocol Corporate Accounting and Reporting Standard is used under the operational control approach. The most recent emissions factors are used from sources including IEA, USEPA, and DESNZ*, with all emissions reported in metric tonnes (tCO2e).
Emissions reporting aligns with IHG’s science-based target, focusing on material emissions approved by the Science-Based Targets initiative (SBTi). Scope 3 emission categories included Category 14 Franchises and Category
| 3 | FERA. |
In accordance with SECR regulations, IHG also reports UK emissions (Scope 3, Category 6) from business travel related to emissions from the transportation of employees for business-related activities in vehicles not owned or controlled by IHG. At present, the methodology does not cover broader Scope 3 categories but work is underway to develop a methodology for measuring these wider Scope 3 greenhouse gas emissions.
| * | IEA: International Energy Agency, USEPA: United States Environmental Protection Agency, DESNZ: Department for Energy Security and Net Zero (UK). |
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| 76 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Streamlined Energy and Carbon Reporting (SECR) continued
Emissions scope definitions
| – | Scope 1 emissions are direct GHG emissions from the combustion of fuels on-site, in company-owned vehicles and from refrigerant losses from our managed, owned, leased and managed lease hotels and corporate offices. |
| – | Scope 2 emissions are indirect GHG emissions generated by the energy purchased or acquired by our managed, owned, leased and managed lease hotels and corporate offices. A market-based method has been used to calculate total GHG emissions as this aligns with our SBT, however we have also reported Scope 2 location-based emissions for reference in the table. |
| – | Scope 3 emissions are indirect GHG emissions that occur in IHG’s value chain. The Scope 3 emissions included within our SBT are material to IHG in accordance with the SBTi criteria. This includes Category 3 (FERA) from IHG’s managed, owned, leased and managed lease hotels and corporate offices, as well as Category 14 (Franchises), which includes the Scope 1 and 2 market-based emissions of our franchised hotels’ energy consumption and their Scope 3 FERA. |
External verification
Each year we obtain third-party verification over our energy and carbon data to ISO 14064-3 to a limited level of assurance verification.
Restatement methodology
Restatements may be necessary due to the following reasons:
Methodology change: Adjustments in calculation methods or enhancements in the accuracy of emission factors or activity data that lead to a material impact on the reported data.
Corrections: The identification of material errors, with a threshold of +/-5%, or a series of cumulative errors that collectively have a material impact on the data.
Structural change: If we undergo a structural change affecting the scope of our reporting in future periods, we will recalculate the baseline for target-related data and any other relevant data to ensure consistent performance monitoring. IHG’s system size is continually changing as new hotels enter our system. As a result, we restate our emissions annually to include conversion hotels that were operational in previous years but not recorded in IHG’s system.
|
|
Our carbon, energy and water data has been verified by a third party, the verification statements can be found at ihgplc.com/responsible-business/ reporting |
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 77 | |||||||||||
Our culture – where our values
lead us to act with integrity
Our culture shapes our actions and provides the foundation
for how we behave responsibly, guiding us in our mission
to deliver True Hospitality for Good.
| Our values |
| Our values, championed by the Board and Executive Committee, shape our behaviours and business ethics, guiding the way we execute our strategy, make decisions, and fulfil our purpose. |
|
|
Our structure
and governance
The IHG Board holds the ultimate responsibility for ensuring that our culture and working methods align with our purpose and strategy. Throughout the year, the Board and its Committees receive updates, presentations, and reviews of metrics, reports, and scorecards related to the progress of our strategic priorities, all viewed through the lens of governance and culture.
The Board actively challenges and supports the Group’s senior leaders, especially when there is a need to adjust policies or initiatives to maintain the alignment between strategy and culture.
The Board delegates the day-to-day responsibility of shaping and embedding the Company culture to the CEO, who, along with the Executive Committee
(EC), sets the tone from the top in fostering a workplace environment that encourages openness, honesty, and empowers employees to provide feedback and raise concerns. The EC is responsible for executing the Group’s strategy and keeping the Board updated on both the Group’s operations and its workplace culture.
IHG’s hotel development and operations are organised on a regional basis (Americas, EMEAA and Greater China) and are supported by global functions in the key areas of Marketing, Commercial and Technology, Finance, Human Resources, Corporate Affairs, and Business Reputation and Responsibility.
The management of regional and global teams is structured into leadership teams, each responsible for executing IHG’s strategic priorities in alignment with the Group’s culture and values.
Decisions regarding hotel developments and capital expenditures go through the relevant deal approval and expenditure committees, in accordance with the Group’s Global Delegation of Authority Policy (DOA). The DOA outlines the controls for financial commitments and expenditure approvals.
For commitments exceeding specified thresholds or certain types of proposals, approval from the Group’s Capital Committee is required, which reports to the EC. The Group’s corporate legal structure consists of over 350 subsidiaries worldwide, providing the legal framework necessary to support the Group in entering into contracts and making commitments.
|
Information on the Board’s monitoring and assessment of our culture is included on page 124. |
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| 78 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Our culture continued
Code of Conduct
and related policies
IHG’s Code of Conduct (Code) sets the standard for how we do business at IHG, and underpins our commitment to providing True Hospitality for Good. The Code seeks to enable colleagues to make the right decisions, in compliance with the law and IHG’s expectations about conduct. The Board, EC and all colleagues working in IHG corporate offices, reservation centres, managed, owned, leased and managed lease hotels must comply with the Code. We expect those we do business with, including our franchisees, to uphold similar principles and standards. The Code is reviewed and approved by the Board on an annual basis, and is supported by annual e-learning requirements. We continue to enhance our engagement and measurement approaches. We monitor and assess how our values are being embedded into our culture through a variety of methods, such as through direct engagement, employee engagement surveys, tracking of e-learning completion and our confidential reporting hotline.
The Code contains an overview of our values and Group-level policies, including those relating to human rights, respect in the workplace, equal opportunities, accurate reporting, information security, anti-bribery and corruption, and the environment. It also provides guidance on how colleagues can raise concerns or seek further help.
Additional detail regarding other areas of the Code, such as our commitment to creating a culture of inclusion is on pages 55 and 56. Initiatives to respond to legal and regulatory uncertainties and ethical and social expectations are on page 49.
|
IHG’s Code of Conduct is available in corporategovernance/code-of-conduct |
|
Speaking up
A core component of our people culture is respect in the workplace. IHG has zero tolerance to any form of discrimination, harassment or bullying, in line with our Respect in the Workplace Policy. While we uphold our responsibility to behave ethically and protect IHG’s reputation, it is possible that in limited instances, a colleague may act in a way that conflicts with the principles set out in the Code. Guidance is given to report concerns directly to line managers, supervisors or local HR representatives. A confidential reporting hotline and online reporting facility are available and globally advertised. Concerns can also be reported to the Head of Risk and Assurance or the General Counsel and Company Secretary. The Board routinely reviews summaries of reported concerns and ensures that processes are in place for investigations and follow-up.
Safety and security
IHG is dedicated to ensuring a safe, secure, and healthy environment for all colleagues, guests, and visitors. All operations must adhere to relevant health, safety, and security laws. In addition to legal compliance, IHG proactively seeks opportunities to enhance the management of safety and security risks, implementing mandatory Brand Safety Standards across all hotels worldwide to ensure consistency. Initiatives addressing safety and security risks can be found on page 50.
Bribery and corruption
IHG is committed to operating with integrity. Colleagues are not permitted to engage in bribery or any form of financial crime, including fraud, money laundering, violations or circumvention of economic and trade sanctions and tax evasion or the facilitation of tax evasion. This standard also applies to agents, consultants and other service providers who do work on our behalf.
Our Anti-Bribery Policy sets out our zero tolerance approach and is applicable to all Directors, EC members, employees and colleagues in managed, owned, leased and managed lease hotels. It is accompanied by anti-bribery content in our mandatory Code of Conduct e-learning module.
Our Gifts and Entertainment Policy and guidance further support our approach in this area.
Initiatives to respond to legal, regulatory, ethical and compliance risks are more broadly discussed on page 49.
Handling information responsibly
We are committed to ensuring that guests, loyalty programme members, colleagues, shareholders, owners and other stakeholders trust the way we manage data. As part of our privacy and information security programmes, we have standards, policies and procedures in place to manage how personal data can be used and should be protected. Our e-learning training for employees on handling information responsibly is a mandatory annual requirement and covers topics such as password and email security, using personal data in accordance with our policies and privacy commitments, how to work with vendors, and transferring data securely. This year we held tabletop exercises to practise our ability to detect and respond to potential security events.
We continue to develop our privacy and security programmes to address evolving requirements and take account of developing best practice. The Board regards cybersecurity as a critical business discipline and it regularly receives updates on the Group’s cybersecurity risk management and control arrangements.
|
|
See page 48 for further detail on uncertainties storage, security and transfer. |
Our behaviours
By demonstrating our growth behaviours, our leaders and employees create an environment that encourages high performance, while operating responsibly in a way that helps us achieve our strategic priorities and purpose. Our policies, communications, learning programmes and performance management processes reflect these behaviours, ensuring they act as a compass for how we do things and help us create an inclusive culture for all.
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|
Human rights
An integral part of our global approach to responsible business is to drive respect for and advance human rights in accordance with internationally recognised standards. Our Human Rights Policy sets out our commitment to respect the human rights of all individuals impacted by our business activities – our guests, our colleagues, workers in our supply chain and the communities in which we operate – and our expectation that those with whom we do business – including our suppliers, owners, and franchisees – uphold similar standards.
We seek to advance human rights by working with others to strengthen our practices and address common industry challenges, including through our membership of the World Sustainable Hospitality Alliance. |
This year, teams across the business continued to collaborate to gain a deeper understanding of how our salient human rights are being identified and to address findings of our 2023 global human rights assessment.
Driving compliance with IHG’s Responsible Labour Requirements (RLRs) across our managed, owned, leased and managed lease estate remains a priority for the human rights programme.
In 2024, we launched new e-learning on responsible recruitment and labour practices to build internal capabilities to identify and address common risks faced by migrant workers during recruitment and working in hotels. We also conducted on-site assessments including direct worker engagement, with selected hotels to evaluate implementation of the RLRs and to better understand current practices and common challenges. |
Action plans to address areas for improvement, as well as learnings to further enhance the RLRs, are in development.
In 2024, we also completed a review of our confidential reporting hotline to ensure alignment with the effectiveness criteria outlined in the UN Guiding Principles on Business and Human Rights and continued to strengthen human rights due diligence in our supply chain. |
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For further details on our human rights progress, please see page 17 of our Responsible Business Report and our Modern Slavery Statement.
|
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|
Section 172 statement
Details of how the Directors have had regard to the
Further details can be found throughout the Strategic |
Climate-related financial disclosures
In accordance with Section 414CB of the UK Companies
Reporting requirements |
|||||||||
| stakeholder engagement disclosures on pages 42 and 43.
Non-financial and sustainability information statement
Non-financial and sustainability information, produced to comply with sections 414CA and 414CB of the Companies Act 2006, including a description of policies, due diligence processes, outcomes and risks and opportunities can be found as set out below. Internal verification and disclosure controls apply to all information covered in these areas.
– Impact of the Company’s activities on the environment on pages 52 to 63, 68 to 73, and 74 to 76.
– Social matters on pages 58 and 59.
– Anti-corruption and anti-bribery matters on page 78.
– Employee matters on pages 53 to 57, 125, 139, 142 to 143 and 165 to 166.
– Respect for human rights on page 79.
– A description of the Group’s business model on pages 22 to 27.
– The Group’s principal risks on pages 46 to 51.
– The Group’s KPIs on pages 38 to 41.
|
Page | |||||||||
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a) Group’s governance for assessing and managing climate-related risks and opportunities
|
69 and 122 |
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|
b) How climate-related risks and opportunities are identified, assessed and managed
|
70 to 72 |
|||||||||
|
c) How processes for identifying, assessing, and managing climate-related risks are integrated into the overall Group Risk Management
|
70 and 44 to 51 |
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|
d) Description of climate-related risks and opportunities, and time periods over which they are assessed
|
70 to 72 |
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e) Impact of the climate-related risks and opportunities on the Group’s business model and strategy
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71 to 72 |
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f) Analysis of the resilience of the Group’s business model and strategy (climate-related scenarios)
|
70 |
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g) Targets used by the Group to manage climate-related risks and to realise climate-related opportunities
|
73 |
|||||||||
|
h) Key performance indicators (including basis of calculating) used to assess progress against targets identified under (g)
|
41 and 74 to 76 |
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| 80 | IHG | Annual Report and Form 20-F 2024 | ||||||
Being a responsible business continued
Our culture continued
Responsible procurement
Growing our business innovatively and sustainably, while working to the highest standards of business conduct, plays a crucial role in our supplier selection processes and in how we continue to work with our existing suppliers. We are committed to working with suppliers who meet our ethical standards and also share the values of our responsible business plan – Journey to Tomorrow.
What we do already
Our supply chains are split between hotel and corporate spend. Hotel procurement predominately occurs at the local level because our hotels are primarily owned by independent third-party franchisees responsible for managing their own supply chains.
In key markets the IHG Global Procurement team has created procurement programmes for certain goods and services related to building, opening, renovating and operating a hotel, which hotels and owners can leverage. Our corporate supply chain covers expenditure areas such as technology, office buildings and facilities management, marketing and professional services.
To help manage and monitor our corporate supply chain Enterprise Procurement Policy, a Centralised Purchase Order Desk and a Purchase Order system is in place to govern and oversee third-party corporate expenditure. We continue to roll out our procure-to-pay systems to support owned, leased and managed hotels in key markets. Several global technology and outsourcing providers have been identified as strategic supplier relationships given the nature of their services. IHG engages with these suppliers to harness innovation, provide customer service, manage risk, and promote value realisation.
We continue to integrate responsible business pre-contract criteria in our supply chain due diligence activities. To ensure that suppliers operate with the same integrity and respect as we do, IHG requires new corporate suppliers to confirm their acceptance of the IHG Supplier Code of Conduct (Supplier Code) at the onboarding stage or demonstrate that they have equivalent policies in place.
At the end of 2024, 100% of new suppliers had signed the Supplier Code. It is also a contractual requirement for centrally-negotiated programmes from which our hotels can purchase.
Recommended sourcing guidance is additionally provided to managed and franchised hotels when purchasing locally.
Our new source-to-contract management technology solution contains a supplier management module enriched with additional data feeds to provide a broader view of the supplier, including better visibility of IHG’s focus areas such as labour practices, sustainability, and financial risks.
IHG continues to comply with the statutory reporting duties on payment practices and performance.
|
Corporate and hotel supply activities are driven by our Global Procurement strategy and guided by our responsible business agenda, with oversight from IHG’s Responsible Business Committee. In 2024 we continued to build our risk programmes with refreshed risk profiles based on IHG’s material supply chain risks. Recognising that global supply chain risks go beyond Procurement, we continue cross-functional collaboration through the Supply Chain Risk Leadership Council.
|
What we achieved in 2024
We advanced our digital procurement strategy, implementing a new, source-to-contract system and a new financial risk rating tool which provides improved insight across both public and private suppliers, helping us better assess supplier financial risk.
We have matured and automated our approach to supplier due diligence, incorporating a revised due diligence questionnaire into our new digital procurement system, covering both environmental and human-rights related topics.
This year, we have introduced an updated Responsible Sourcing Guide for our suppliers and wider Global Procurement function that includes a set of relevant third-party certifications and guidelines by commodity, intended to support and educate our suppliers in high-risk supply chain operations.
As a founding member of the Hospitality Alliance for Responsible Procurement (HARP), facilitated by EcoVadis, we leveraged this partnership to develop and deliver a comprehensive Decarbonisation learning plan for high-emitting suppliers.
After an EcoVadis benchmarking exercise, we expanded platform usage with new usage criteria for suppliers, increased the number of supplier invitations and increased scope to include both hotel and corporate suppliers.
To date, we have requested 188 suppliers globally to participate in the EcoVadis sustainability assessment.
This year we further developed the programme by beginning to work with suppliers to improve their sustainability performance through identifying, issuing and developing corrective action plans.
We commenced a supply chain engagement exercise to learn more about transparency in the supply chain. Surveys were distributed in 2024 and learnings will be addressed in 2025.
In 2024, we began collaborating with a leading third party to pilot supplier audits in AMER and EMEAA, focusing on labour and environmental practices. This builds on the existing on-site supplier audit programme in Greater China.
What’s to come
Next year, we will further establish our collaborative relationships within the HARP network and plan to support suppliers’ capabilities to address Human Rights risks in their supply chains.
We will initiate a review of both our Procurement Policy and Supplier Code of Conduct to align with our two-year review cycle for these crucial governance documents.
Working in collaboration with our suppliers, we will continue to strengthen our approach to ongoing supplier due diligence. We will complete our pilot of a supplier audit programme to support our supply chain engagement exercise initiated this year.
In 2025, we will continue the ongoing deployment of integrated procure-to-pay systems in managed hotels. This initiative aims to build upon the existing foundations to enhance our current deployments and expand coverage to additional markets.
We will remain committed to promoting the implementation of sustainable solutions that align with our Journey to Tomorrow commitments and enhance hotel supply chains for ECMs. Additionally, within the framework of HARP, we will continue to collaborate with our identified suppliers to provide education and training on carbon reduction.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 81 | |||||||||||
Chief Financial Officer’s review
|
|
Operating profit
Operating profit of $1,041m decreased by $25m from the prior year. Operating profit from reportable segmentsa increased to $1,124m compared to $1,019m in 2023.
Revenue growth through a combination of RevPAR, system expansion and ancillary fee streams, combined with cost management resulted in a 1.9%pts increase in fee margina to 61.2%. We achieved this while continuing to reinvest in the business.
Cash generation and liquidity
We generated net cash from operating activities of $724m and adjusted free cash flowa decreased by $182m to $655m, compared to the prior year. During 2024, we returned over $1.0bn to shareholders through a combination of ordinary dividends and share buybacks.
Our net debt:adjusted EBITDA ratio at the end of the year finished at 2.3x, beneath the 2.5–3.0x range we aim to maintain.
The Board has proposed a final dividend of 114.4¢, +10% vs 2023, taking the dividend for the year to 167.6¢. The Board has also approved a further share buyback programme to return an additional $900m to shareholders.
Our uses of cash remain unchanged: ensuring the business is appropriately invested in to optimise growth; funding a sustainably growing dividend; and then returning excess funds to shareholders.
Future growth
We continue to focus on our multi-year commitment to enhance our brands, loyalty programme, technology platforms and ancillary fee streams.
We are confident that the strength of our enterprise platform and our operating model will continue to drive value creation in line with our growth algorithm, enabling further investment for future growth and additional shareholder returns.
Michael Glover Chief Financial Officer |
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| In 2024, increased demand led to continued RevPAR growth, and we further expanded our estate globally. These factors combined with changes to System Fund arrangements, which lowered the loyalty assessment fee that owners pay into the System Fund, and the new co-brand credit card agreements, resulted in solid revenue growth. Sustained fee margina expansion drove increased profitability, and our well-established cash-generative business model and strong balance sheet resulted in over $1bn returned to shareholders, while continuing to support investment for future growth.
Trading performance
We continued to position IHG as the preferred choice for guests and owners by further strengthening our loyalty and technology platforms, expanding our estate into new markets and improving owner economics.
Strong Groups, Business and Leisure demand supported global RevPAR growth of 3.0%, driven by increases in both rate and occupancy. |
Although performance varied by quarter across all regions, full year RevPAR in the Americas and EMEAA increased compared to 2023, while Greater China decreased having been impacted by prior year comparatives and shifts in demand mix, including the expansion of outbound leisure travel.
System growth
The strength of our brands and enterprise contributed to gross system growth of 6.2%.
Conversions represented around half of openings and signings. In the year, 106.2k rooms were signed, including 17.7k rooms that entered the pipeline with the NOVUM Hospitality agreement. This will see IHG’s presence in Germany double and strengthen our position in this priority market.
Our ongoing commitment to the quality and consistency of our estate resulted in a removals rate of 1.9%. Net system size increased by 4.3% year-on-year. |
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| a. | Use of Non-GAAP measures: In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional financial measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures. Further explanation in relation to these measures can be found on pages 103 to 108, and reconciliations to IFRS figures, where they have been adjusted, are on pages 266 to 272. |
Table of Contents
| 82 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance
Group
Group Income Statement summary
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
2024 vs 2023 % change |
2022 $m |
2023 vs 2022 % change |
||||||||||||||||||||||||||||||||
| Revenuea | ||||||||||||||||||||||||||||||||||||
| Americas | 1,141 | 1,105 | 3.3 | 1,005 | 10.0 | |||||||||||||||||||||||||||||||
| EMEAA | 748 | 677 | 10.5 | 552 | 22.6 | |||||||||||||||||||||||||||||||
| Greater China | 161 | 161 | – | 87 | 85.1 | |||||||||||||||||||||||||||||||
| Central | 262 | 221 | 18.6 | 199 | 11.1 | |||||||||||||||||||||||||||||||
| Revenue from reportable segmentsb | 2,312 | 2,164 | 6.8 | 1,843 | 17.4 | |||||||||||||||||||||||||||||||
| System Fund and reimbursable revenues | 2,611 | 2,460 | 6.1 | 2,049 | 20.1 | |||||||||||||||||||||||||||||||
| Total revenue | 4,923 | 4,624 | 6.5 | 3,892 | 18.8 | |||||||||||||||||||||||||||||||
| Operating profita | ||||||||||||||||||||||||||||||||||||
| Americas | 828 | 815 | 1.6 | 761 | 7.1 | |||||||||||||||||||||||||||||||
| EMEAA | 270 | 215 | 25.6 | 152 | 41.4 | |||||||||||||||||||||||||||||||
| Greater China | 98 | 96 | 2.1 | 23 | 317.4 | |||||||||||||||||||||||||||||||
| Central | (72 | ) | (107 | ) | (32.7 | ) | (108 | ) | (0.9 | ) | ||||||||||||||||||||||||||
| Operating profit from reportable segmentsb | 1,124 | 1,019 | 10.3 | 828 | 23.1 | |||||||||||||||||||||||||||||||
| Analysed as: | ||||||||||||||||||||||||||||||||||||
| Fee business |
1,085 | 992 | 9.4 | 805 | 23.2 | |||||||||||||||||||||||||||||||
| Owned, leased and managed lease |
45 | 29 | 55.2 | 19 | 52.6 | |||||||||||||||||||||||||||||||
| Insurance activities |
(6 | ) | (2 | ) | 200.0 | 4 | NM | c | ||||||||||||||||||||||||||||
| System Fund and reimbursable result | (83 | ) | 19 | NM | c | (105 | ) | NM | c | |||||||||||||||||||||||||||
| Operating profit before exceptional items | 1,041 | 1,038 | 0.3 | 723 | 43.6 | |||||||||||||||||||||||||||||||
| Operating exceptional items | – | 28 | NM | c | (95 | ) | NM | c | ||||||||||||||||||||||||||||
| Operating profit | 1,041 | 1,066 | (2.3 | ) | 628 | 69.7 | ||||||||||||||||||||||||||||||
| Net financial expenses | (140 | ) | (52 | ) | 169.2 | (96 | ) | (45.8 | ) | |||||||||||||||||||||||||||
| Analysed as: | ||||||||||||||||||||||||||||||||||||
| Adjusted interest expenseb |
(165 | ) | (131 | ) | 26.0 | (122 | ) | 7.4 | ||||||||||||||||||||||||||||
| System Fund interest |
50 | 44 | 13.6 | 16 | 175.0 | |||||||||||||||||||||||||||||||
| Foreign exchange (losses)/gains |
(25 | ) | 35 | NM | c | 10 | 250.0 | |||||||||||||||||||||||||||||
| Fair value (losses)/gains on contingent purchase consideration | (4 | ) | (4 | ) | 0.0 | 8 | NM | c | ||||||||||||||||||||||||||||
| Profit before tax | 897 | 1,010 | (11.2 | ) | 540 | 87.0 | ||||||||||||||||||||||||||||||
| Tax | (269 | ) | (260 | ) | 3.5 | (164 | ) | 58.5 | ||||||||||||||||||||||||||||
| Analysed as: | ||||||||||||||||||||||||||||||||||||
| Adjusted taxb |
(262 | ) | (253 | ) | 3.6 | (194 | ) | 30.4 | ||||||||||||||||||||||||||||
| Tax attributable to System Fund |
(4 | ) | (3 | ) | 33.3 | – | NM | c | ||||||||||||||||||||||||||||
| Tax on foreign exchange (losses)/gains |
(3 | ) | 3 | NM | c | 4 | (25.0 | ) | ||||||||||||||||||||||||||||
| Tax on exceptional items and exceptional tax |
– | (7 | ) | NM | c | 26 | NM | c | ||||||||||||||||||||||||||||
| Profit for the year | 628 | 750 | (16.3 | ) | 376 | 99.5 | ||||||||||||||||||||||||||||||
| Adjusted earningsd | 697 | 635 | 9.8 | 511 | 24.3 | |||||||||||||||||||||||||||||||
| Basic weighted average number of ordinary shares (millions) | 161.2 | 169.0 | (4.6 | ) | 181.0 | (6.6 | ) | |||||||||||||||||||||||||||||
| Earnings per ordinary share | ||||||||||||||||||||||||||||||||||||
| Basic | 389.6¢ | 443.8¢ | (12.2 | ) | 207.2¢ | 114.2 | ||||||||||||||||||||||||||||||
| Adjustedb | 432.4¢ | 375.7¢ | 15.1 | 282.3¢ | 33.1 | |||||||||||||||||||||||||||||||
| Dividend per share | 167.6¢ | 152.3¢ | 10.0 | 138.4¢ | 10.0 | |||||||||||||||||||||||||||||||
| Average US dollar to sterling exchange rate | $1:£0.78 | $1:£0.80 | (2.5 | ) | $1:£0.81 | (1.2 | ) | |||||||||||||||||||||||||||||
| a. | Americas and EMEAA include revenue and operating profit before exceptional items from both fee business and owned, leased and managed lease hotels. Greater China includes revenue and operating profit before exceptional items from fee business. |
| b. | Definitions for non-GAAP measures can be found in the ‘Key performance measures and non-GAAP measures’ section on pages 103 to 108 along with reconciliations of these measures to the most directly comparable line items within the Group Financial Statements which can be found on pages 266 to 272. |
| c. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
| d. | Adjusted earnings as used with adjusted earnings per share, a non-GAAP measure. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 83 | |||||||||||
Highlights for the year
ended 31 December 2024
Trading increased in the year, benefiting from normalised demand across many key markets. In the Americas, trading in the second half of the year exceeded the first half, with both Groups and Business ahead of 2023 levels. EMEAA saw continued strength, with performance normalising in several markets across this diverse region. Greater China was impacted by strong prior year comparatives and the shifting demand patterns, including an expansion of leisure travel to other markets, particularly elsewhere in Asia Pacific, as seen benefiting demand in our EMEAA region.
Revenue
RevPAR increased year-on-year by 2.6% in the first quarter, 3.2% in the second quarter, 1.5% in the third quarter, 4.6% in the fourth quarter and 3.0% in the full year. Compared to 2023, average daily rate increased by 2.1% and occupancy was 0.6%pts higher.
Our other key driver of revenue, net system size, increased by 4.3% year-on-year to 987,125 rooms.
Total revenue increased by $299m (6.5%) to $4,923m, including a $151m increase in System Fund and reimbursable revenue. Revenue from reportable segmentsa increased by $148m (6.8%) to $2,312m, driven by the improved trading conditions, and the revenue recognised from the sale of loyalty points and co-brand credit card fees. Underlying revenuea increased by $157m (7.3%) to $2,304m, with underlying fee revenuea increasing by $111m (6.7%) to $1,774m. Owned, leased and managed lease revenue increased by $44m (9.3%) to $515m.
Operating profit and margin
Operating profit decreased by $25m from $1,066m to $1,041m, including the non-repeat of $28m operating exceptional income recorded in the prior year, and a $102m decrease in the reported System Fund and reimbursable result, from a $19m profit in 2023 to a $83m loss in 2024.
Operating profit from reportable segmentsa increased by $105m (10.3%) to $1,124m. Fee business operating profit increased by $93m (9.4%) to $1,085m, due to the improvement in trading which drove a $10m increase in incentive management fees to $178m, combined with the recognition of ancillary fee revenue. Owned, leased and managed lease operating profit improved from $29m to $45m. Underlying operating profita increased by $118m (11.7%) to $1,128m.
Fee margina increased by 1.9%pts over the prior year to 61.2%. Around 1.3%pts was driven by operational leverage as a result of strong trading. A further 0.6%pts was due to a portion of proceeds from the sale of certain loyalty points, together with other ancillary revenues, now being reported within IHG’s results from reportable segments.
The impact of the movement in average USD exchange rates for 2023 compared to 2024 netted to a $12m impact on operating profit from reportable segmentsa when calculated as restating 2023 figures at 2024 exchange rates, but negatively impacted operating profit from reportable segmentsa by $16m when applying 2023 rates to 2024 figures.
If the average exchange rate during January 2025 had existed throughout 2024, the 2024 operating profit from reportable segmentsa would have been $12m lower.
System Fund and reimbursable result
The Group operates a System Fund to collect and administer assessments from hotel owners for specified purposes of use including marketing, reservations, certain hotel services and the Group’s loyalty programme, IHG One Rewards. The System Fund also benefits from certain proceeds from the sale of loyalty points under third-party co-branding arrangements and the sale of points directly to members and other third parties. The Fund is not managed to generate a surplus or deficit for IHG over the longer term, but is managed for the benefit of hotels in the IHG system with the objective of driving revenues for the hotels in the system.
The growth in the IHG One Rewards programme means that, although assessments are received from hotels upfront when a member earns points, more revenue is deferred each year than is recognised in the System Fund. This can lead to accounting losses in the System Fund each year as the deferred revenue balance grows which do not necessarily reflect the Fund’s position and the Group’s capacity to invest.
Reimbursable revenues represent reimbursements of expenses incurred on behalf of managed and franchised properties and relate, predominantly, to payroll costs at managed properties where IHG is the employer. As IHG records reimbursable expenses based upon costs incurred with no added mark up, this revenue and related expenses have no impact on either operating profit or net profit for the year.
In the year to 31 December 2024, System Fund and reimbursable revenues increased $151m (6.1%) to $2,611m. The positive impact of continued strength in travel demand was partially offset by the changes to the System Fund arrangement that included a reduction in owner loyalty assessments and a portion of the revenue from the sale of certain loyalty points, together with certain other ancillary revenues, that are now being reported within IHG’s results from reportable segmentsa.
The reported System Fund and reimbursable result declined to an $83m loss from a $19m profit, primarily due to the increased investments in marketing, loyalty, and commercial activities, combined with the aforementioned changes to the System Fund arrangement.
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
Table of Contents
| 84 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Group continued
Operating exceptional items
Exceptional items are identified by virtue of their size, nature or incidence and are excluded from the calculation of adjusted earnings per ordinary sharea as well as other Non-GAAP measures in order to allow a better understanding of the underlying trading performance and trends of the Group and its reportable segments. Examples of exceptional items can include, but are not restricted to, gains and losses on the disposal of assets, impairment charges and reversals, the costs of individually significant legal cases or commercial disputes and reorganisation costs.
Operating exceptional items for the year to 31 December 2024 net to $nil (2023: $28m). 2024 comprised costs of $12m relating to litigation and commercial disputes offset by $12m of impairment reversals, which are classified as exceptional for consistency with the treatment of the corresponding impairments in 2020.
Further information on exceptional items can be found in note 6 to the Group Financial Statements.
Net financial expenses
Net financial expenses increased to $140m from $52m. Net financial expenses include foreign exchange losses of $25m (2023: $35m gain), total interest costs on public bonds, which are fixed rate debt, of $123m (2023: $78m) and interest expense on lease liabilities of $30m (2023: $29m).
Adjusted interesta which excludes exceptional finance expenses and foreign exchange gains/losses and adds back interest attributable to the System Fund, increased by $34m to an expense of $165m. The increase in adjusted interesta was primarily driven by an increase in interest on bonds of $45m and interest attributable to the System Fund of $6m, partially offset by a $24m increase in financial income.
Interest expense on lease liabilities was $30m (2023: $29m).
Fair value gains and losses on contingent purchase consideration
Contingent purchase consideration arose on the acquisition of Regent. The net loss of $4m (2023: $4m) is principally due to the impact of the unwind of the discount due to the passage of time. The total contingent purchase consideration liability at 31 December 2024 is $73m (31 December 2023: $69m).
Taxation
The adjusted tax ratea for 2024 was 27% (2023: 28%). Taxation within exceptional items totalled $nil (2023: charge of $7m) and relates to the tax impacts of the operating exceptional items. Tax paid in 2024 totalled $309m (2023: $243m).
IHG pursues an approach to tax that is consistent with its business strategy and its overall business conduct principles. The approach seeks to ensure full compliance with all tax filing, payment and reporting obligations on the basis of communicative and transparent relationships with tax authorities. The IHG Audit Committee reviews IHG’s approach to tax annually, including consideration of the Group’s current tax profile. Further information on tax can be found in note 8 to the Group Financial Statements.
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IHG’s Approach to Tax policy is available at ihgplc.com/responsible-business under policies. |
Earnings per ordinary share
The Group’s basic earnings per ordinary share is 389.6¢ (2023: 443.8¢). Adjusted earnings per ordinary sharea increased by 56.7¢ to 432.4¢.
Dividends and returns
The Board is proposing a final dividend of 114.4¢ in respect of 2024, which is growth of 10% on 2023. With the interim dividend of 53.2¢ paid in October 2024, the total dividend for the year would therefore be 167.6¢, representing an increase of 10%. The ex-dividend date is Thursday 3 April 2025 and the Record Date is Friday 4 April 2025. The corresponding dividend amount in Pence Sterling per ordinary share will be announced on Monday 28 April 2025, calculated based on the average of the market exchange rates for the three working days commencing 23 April 2025. Subject to shareholder approval at the AGM on Thursday 8 May 2025, the dividend will be paid on Thursday 15 May 2025.
The dividend payments in 2024 have returned $259m to IHG’s shareholders. An additional $800m of surplus capital was returned to shareholders through a share buyback programme that concluded in December 2024. This repurchased 7,544,912 shares at an average price of £82.41 per share and reduced the total number of voting rights in the Company by 4.6%.
The Board has approved a further share buyback programme to return an additional $900m to shareholders in 2025.
Share price and market capitalisation
The IHG share price closed at £99.54 on Tuesday 31 December 2024, up 40.4% from £70.90 on 29 December 2023. The market capitalisation of the Group at the year-end was £15.8bn.
| For a discussion of 2023 results, and the changes compared to 2022, refer to the 2023 Annual Report and Form 20-F. |
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ihgplc.com/investors | |||
| under Annual Report. | ||||
Accounting principles
The Group results are prepared under International Financial Reporting Standards (IFRS) as described on page 197 of the Group Financial Statements. The application of IFRS requires management to make judgements, estimates and assumptions, and those considered critical to the preparation of the Group results are set out on page 198.
The Group discloses certain financial information both including and excluding exceptional items. For comparability of the periods presented, some of the performance indicators in this performance review are calculated after eliminating these exceptional items. An analysis of exceptional items is included in note 6.
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 85 | |||||||||||
Adjusted EBITDAa reconciliation
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
2024 vs 2023 $m change |
2022 $m |
2023 vs 2022 $m change |
||||||||||||||||||||||||||||||||
| Cash flow from operations | 1,149 | 1,219 | 961 | |||||||||||||||||||||||||||||||||
| Cash flows relating to exceptional items | (8 | ) | 29 | 43 | ||||||||||||||||||||||||||||||||
| Impairment (loss)/reversal on financial assets | (16 | ) | 1 | (5 | ) | |||||||||||||||||||||||||||||||
| Other impairment charges | (6 | ) | – | – | ||||||||||||||||||||||||||||||||
| Other non-cash adjustments to operating profit | (77 | ) | (60 | ) | (61 | ) | ||||||||||||||||||||||||||||||
| System Fund and reimbursable result | 83 | (19 | ) | 105 | ||||||||||||||||||||||||||||||||
| System Fund depreciation and amortisation | (80 | ) | (83 | ) | (86 | ) | ||||||||||||||||||||||||||||||
| Other non-cash adjustments to System Fund result | (37 | ) | (23 | ) | (24 | ) | ||||||||||||||||||||||||||||||
| Working capital and other adjustments | (56 | ) | (79 | ) | (101 | ) | ||||||||||||||||||||||||||||||
| Capital expenditure: contract acquisition costs net of repayments | 237 | 101 | 64 | |||||||||||||||||||||||||||||||||
| Adjusted EBITDAa | 1,189 | 1,086 | 103 | 896 | 190 | |||||||||||||||||||||||||||||||
Group Cash Flow summary
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||
| |
2024 $m |
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2023 $m Re-presented |
b |
|
2024 vs 2023 $m change |
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|
2022 $m Re-presented |
b |
|
2023 vs 2022 $m change |
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| Adjusted EBITDAa | 1,189 | 1,086 | 103 | 896 | 190 | |||||||||||||||||||||||||||||||
| Working capital and other adjustments | 56 | 79 | 101 | |||||||||||||||||||||||||||||||||
| Repayments/(payments) related to investments supporting the Group’s insurance activities | 5 | (11 | ) | 7 | ||||||||||||||||||||||||||||||||
| Impairment loss/(reversal) on financial assets | 16 | (1 | ) | 5 | ||||||||||||||||||||||||||||||||
| Other impairment charges | 6 | – | – | |||||||||||||||||||||||||||||||||
| Other non-cash adjustments to operating profit | 77 | 60 | 61 | |||||||||||||||||||||||||||||||||
| System Fund and reimbursable result | (83 | ) | 19 | (105 | ) | |||||||||||||||||||||||||||||||
| Non-cash adjustments to System Fund result | 117 | 106 | 110 | |||||||||||||||||||||||||||||||||
| Capital expenditure: key money contract acquisition costs, net of repayments | (206 | ) | (101 | ) | (64 | ) | ||||||||||||||||||||||||||||||
| Capital expenditure: gross maintenance | (31 | ) | (38 | ) | (44 | ) | ||||||||||||||||||||||||||||||
| Net interest paid | (113 | ) | (83 | ) | (104 | ) | ||||||||||||||||||||||||||||||
| Tax paid | (309 | ) | (243 | ) | (211 | ) | ||||||||||||||||||||||||||||||
| Principal element of lease payments, net of finance lease receipts | (42 | ) | (28 | ) | (36 | ) | ||||||||||||||||||||||||||||||
| Purchase of own shares by employee share trusts | (27 | ) | (8 | ) | (1 | ) | ||||||||||||||||||||||||||||||
| Adjusted free cash flowa | 655 | 837 | (182 | ) | 615 | 222 | ||||||||||||||||||||||||||||||
| Cash flows relating to exceptional items | 8 | (29 | ) | (43 | ) | |||||||||||||||||||||||||||||||
| Capital expenditure: gross recyclable investments | (68 | ) | (50 | ) | (15 | ) | ||||||||||||||||||||||||||||||
| Capital expenditure: gross System Fund capital investments | (45 | ) | (46 | ) | (35 | ) | ||||||||||||||||||||||||||||||
| Deferred purchase consideration paid | (13 | ) | – | – | ||||||||||||||||||||||||||||||||
| Disposals and repayments, including proceeds from other financial assets | 15 | 8 | 9 | |||||||||||||||||||||||||||||||||
| Repurchase of shares, including transaction costs | (804 | ) | (790 | ) | (482 | ) | ||||||||||||||||||||||||||||||
| Dividends paid to shareholders | (259 | ) | (245 | ) | (233 | ) | ||||||||||||||||||||||||||||||
| Dividends paid to non-controlling interest | – | (3 | ) | – | ||||||||||||||||||||||||||||||||
| Net cash flow before other net debta movements | (511 | ) | (318 | ) | (193 | ) | (184 | ) | (134 | ) | ||||||||||||||||||||||||||
| Add back principal element of lease repayments | 46 | 28 | 36 | |||||||||||||||||||||||||||||||||
| Exchange and other non-cash adjustments | (45 | ) | (131 | ) | 178 | |||||||||||||||||||||||||||||||
| (Increase)/decrease in net debta | (510 | ) | (421 | ) | (89 | ) | 30 | (451 | ) | |||||||||||||||||||||||||||
| Net debta at the beginning of the year | (2,272 | ) | (1,851 | ) | (1,881 | ) | ||||||||||||||||||||||||||||||
| Net debta at the end of the year | (2,782 | ) | (2,272 | ) | (510 | ) | (1,851 | ) | (421 | ) | ||||||||||||||||||||||||||
| a. | Definitions for non-GAAP measures can be found in the ‘Key performance measures and non-GAAP measures’ section on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
| b. | Re-presented to reflect the updated definition of adjusted free cash flow (see pages 107 to 108). |
Table of Contents
| 86 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Group continued
Cash flow from operations
For the year ended 31 December 2024, cash flow from operations was $1,149m, a decrease of $70m on the previous year. This was led by the decrease in System Fund and reimbursable result together with increased contract acquisition costs, partly offset by higher operating profit from reportable segmentsa. Cash flow from operations is the principal source of cash used to fund interest and tax payments, capital expenditure, ordinary dividend payments and additional returns of capital of the Group.
Adjusted free cash flowa
Adjusted free cash flowa was an inflow of $655m, a decrease of $182m on the prior year. Adjusted EBITDAa increased by $103m due to the improvement in trading and the expansion of ancillary fee streams. This was offset by a $102m decrease in the System Fund and reimbursable result, reflecting increased investments in marketing, loyalty and commercial activities together with a decline in revenues driven by the changes to the System Fund arrangement described above, a $105m increase in key money contract acquisition costs net of repayments, a $30m increase in net interest paid reflecting the increase in average net debt and $66m higher tax payments. Working capital and other adjustments of $56m includes $214m of cash inflow related to deferred revenue, driven primarily by the $124m related to the loyalty programme and $100m of upfront cash flows associated with the new US co-brand credit card agreements.
Net and gross capital expenditure
Net capital expenditurea was $253m (2023: $146m) and gross capital expenditurea was $350m (2023: $242m). Gross capital expenditurea comprised: $206m of key money contract acquisition costs; $31m of maintenance; $68m gross recyclable investments; and $45m System Fund capital investments. Net capital expenditurea includes offsets from disposals of property, plant and equipment of $9m, proceeds from other financial assets of $6m, and $82m System Fund depreciation and amortisation.
Net debta
Net debta increased by $510m from $2,272m at 31 December 2023 to $2,782m at 31 December 2024. There were $1,063m of payments related to ordinary dividends and the share buyback programmes, including transaction costs, during the year. The change in net debta includes adverse net foreign exchange impacts of $3m and $42m of other non-cash adjustments.
Cash and borrowings
Net debta of $2,782m (2023: $2,272m) is analysed by currency as follows:
| 2024 $m |
2023 $m |
|||||||||||
| Borrowings | ||||||||||||
| Sterling* | 1,473 | 2,076 | ||||||||||
| US dollar* | 2,290 | 1,481 | ||||||||||
| Euros | 3 | 4 | ||||||||||
| Other | 24 | 33 | ||||||||||
| Cash and cash equivalents | ||||||||||||
| Sterling | (462 | ) | (918 | ) | ||||||||
| US dollar | (369 | ) | (266 | ) | ||||||||
| Euros | (26 | ) | (19 | ) | ||||||||
| Canadian dollar | – | (7 | ) | |||||||||
| Chinese renminbi | (99 | ) | (55 | ) | ||||||||
| Other | (52 | ) | (57 | ) | ||||||||
| Net debta | 2,782 | 2,272 | ||||||||||
| Average net debt level | 2,639 | 2,155 | ||||||||||
| * | Including the impact of derivative financial instruments. |
Cash and cash equivalents includes $2m (2023: $30m) that is not available for use by the Group due to local exchange controls, $15m (2023: $14m) which is restricted for use on capital expenditure under hotel lease agreements and $5m (2023: $12m) subject to contractual and regulatory restrictions.
|
|
Information on the maturity profile and interest structure of borrowings is included in notes 21 to 23 to the Group Financial Statements. |
Borrowings included bank overdrafts of $17m (2023: $44m), which were matched by an equivalent amount of cash and cash equivalents under the Group’s cash pooling arrangements. Under these arrangements, each pool contains a number of bank accounts with the same financial institution, and the Group pays interest on net overdraft balances within each pool.
Overseas subsidiaries are typically in a cash-positive position and the matching overdrafts are held by the Group’s central treasury company in the UK.
|
|
Information on the Group’s approach to allocation of capital resources can be found on pages 24 and 25. |
Sources of liquidity
As at 31 December 2024, the Group had total liquidity of $2,319m (31 December 2023: $2,572m), comprising $1,350m of undrawn bank facilities and $969m of cash and cash equivalents (net of overdrafts and restricted cash). The change in total liquidity from December 2024 of $253m is primarily due to net cash outflows of $511mb, offset by net additional bond funding and repayment of currency swaps of $242m.
The Group currently has $3,257m of sterling and euro bonds outstanding. The bonds mature in August 2025 (£300m), August 2026 (£350m), May 2027 (€500m), October 2028 (£400m), November 2029 (€600m) and September 2031 (€750m). There are currency swaps in place on the euro bonds, fixing the May 2027 bond at £436m, the November 2029 bond at $657m and the September 2031 bond at $834m. The Group currently has senior unsecured long-term credit ratings of BBB from S&P and Baa2 from Moody’s.
The Group is further financed by a $1.35bn syndicated bank revolving credit facility (RCF). The final one-year extension option was exercised during the year and the facility now matures in 2029. There are two financial covenants: interest cover and leverage ratio. Covenants are tested at half year and full year on a trailing 12-month basis. The leverage ratio requires Covenant net debt to Covenant EBITDA below 4.0:1 and the interest cover covenant requires a ratio of Covenant EBITDA to Covenant interest payable above 3.5:1.
At 31 December 2024 the leverage ratio was 2.35 and the interest cover ratio was 9.72. See note 23 to the Financial Statements for further information. The RCF was undrawn at 31 December 2024.
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
| b. | As shown in the Cash Flow summary on page 85. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 87 | |||||||||||
The Group is in compliance with all of the applicable financial covenants in its loan documents, none of which are expected to present a material restriction on funding in the near future.
It is management’s opinion that the current working capital levels and available facilities are sufficient for the Group’s present liquidity requirements.
Off-balance sheet arrangements
At 31 December 2024, the Group had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on the Group’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Contingent liabilities
Contingent liabilities include guarantees over loans made to facilitate third-party ownership of hotels of up to $31m. The Group may also be exposed to additional liabilities resulting from litigation and security incidents. See note 29 to the Group Financial Statements for further details.
Future cash requirements from contractual obligations
The Group’s future cash flows arising from contractual commitments relating to long-term debt obligations (including interest payable), derivatives, lease liabilities and other financial liabilities are analysed in note 23 to the Group Financial Statements.
Other cash requirements relate to future pension scheme contributions (see note 26 to the Group Financial Statements) and capital commitments (see note 29 to the Group Financial Statements).
The Group also has future commitments for key money payments which are contingent upon future events and may reverse.
Disaggregation of total gross revenue in IHG’s system
Total gross revenue provides a measure of the overall strength of the Group’s brands. It comprises total rooms revenue from franchised hotels and total hotel revenue from managed, exclusive partner and owned, leased and managed lease hotels and excludes revenue from the System Fund and reimbursement of costs. Other than owned, leased and managed lease hotels, total gross revenue is not revenue attributable to IHG as it is derived from hotels owned by third parties. The definition of this key performance measure can be found on page 103.
| 12 months ended 31 December | ||||||||||||||||||||
| 2024 $bn |
2023 $bn |
% changea |
||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||
| InterContinental | 5.3 | 5.1 | 3.3 | |||||||||||||||||
| Kimpton | 1.4 | 1.3 | 5.6 | |||||||||||||||||
| Hotel Indigo | 1.0 | 0.9 | 14.9 | |||||||||||||||||
| Crowne Plaza | 3.7 | 3.7 | 0.5 | |||||||||||||||||
| Holiday Inn Express | 9.6 | 9.2 | 3.8 | |||||||||||||||||
| Holiday Inn | 6.0 | 6.0 | 1.7 | |||||||||||||||||
| Staybridge Suites | 1.3 | 1.2 | 6.6 | |||||||||||||||||
| Candlewood Suites | 0.9 | 0.9 | 5.4 | |||||||||||||||||
| Otherb | 4.2 | 3.3 | 25.0 | |||||||||||||||||
| Total | 33.4 | 31.6 | 5.7 | |||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||
| Franchisedc (revenue not attributable to IHG) | 21.2 | 20.0 | 5.8 | |||||||||||||||||
| Managed (revenue not attributable to IHG) | 11.7 | 11.1 | 5.3 | |||||||||||||||||
| Owned, leased and managed lease (revenue recognised in Group income statement) | 0.5 | 0.5 | 9.7 | |||||||||||||||||
| Total | 33.4 | 31.6 | 5.7 | |||||||||||||||||
Total gross revenue in IHG’s system increased by 5.7% (6.5% increase at constant currency) to $33.4bn as a result of improved trading conditions and growth in the number of hotels in our system.
| a. | Year-on-year percentage movement calculated from source figures. |
| b. | Includes Holiday Inn Club Vacations. |
| c. | Includes exclusive partner hotels. |
Table of Contents
| 88 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Group continued
Group hotel and room count
| Hotels | Rooms | |||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||
| Six Senses | 27 | 2 | 1,950 | 189 | ||||||||||||||||||||||||
| Regent | 11 | 1 | 3,212 | 125 | ||||||||||||||||||||||||
| InterContinental | 227 | 5 | 73,784 | 284 | ||||||||||||||||||||||||
| Vignette Collection | 20 | 9 | 3,965 | 1,682 | ||||||||||||||||||||||||
| Kimpton | 77 | (1 | ) | 14,031 | 310 | |||||||||||||||||||||||
| Hotel Indigo | 169 | 16 | 22,793 | 2,575 | ||||||||||||||||||||||||
| voco | 87 | 25 | 20,376 | 4,869 | ||||||||||||||||||||||||
| HUALUXE | 22 | 2 | 6,002 | 473 | ||||||||||||||||||||||||
| Crowne Plaza | 415 | 7 | 113,624 | 1,392 | ||||||||||||||||||||||||
| EVEN Hotels | 33 | 7 | 5,082 | 1,151 | ||||||||||||||||||||||||
| Holiday Inn Express | 3,237 | 66 | 343,957 | 7,640 | ||||||||||||||||||||||||
| Holiday Inn | 1,249 | 47 | 225,332 | 9,422 | ||||||||||||||||||||||||
| Garner | 23 | 21 | 2,400 | 2,242 | ||||||||||||||||||||||||
| avid hotels | 76 | 9 | 6,802 | 775 | ||||||||||||||||||||||||
| Atwell Suites | 6 | 4 | 556 | 370 | ||||||||||||||||||||||||
| Staybridge Suites | 335 | 10 | 36,523 | 1,203 | ||||||||||||||||||||||||
| Holiday Inn Club Vacations | 30 | – | 9,868 | 342 | ||||||||||||||||||||||||
| Candlewood Suites | 392 | 16 | 34,817 | 1,320 | ||||||||||||||||||||||||
| Iberostar Beachfront Resorts | 55 | 6 | 19,586 | 1,986 | ||||||||||||||||||||||||
| Other | 138 | 14 | 42,465 | 2,572 | ||||||||||||||||||||||||
| Total | 6,629 | 266 | 987,125 | 40,922 | ||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||
| Franchiseda | 5,596 | 240 | 718,217 | 37,616 | ||||||||||||||||||||||||
| Managed | 1,017 | 27 | 264,872 | 3,501 | ||||||||||||||||||||||||
| Owned, leased and managed lease | 16 | (1 | ) | 4,036 | (195 | ) | ||||||||||||||||||||||
| Total | 6,629 | 266 | 987,125 | 40,922 | ||||||||||||||||||||||||
| a. | Includes exclusive partner hotels. |
Openings of 59,117 rooms (371 hotels) represented an 11,198 rooms (96 hotels) increase from 2023, including 10,186 rooms (58 hotels) conversions as part of the NOVUM Hospitality agreement.
During the year, 29,053 rooms (186 hotels) opened in the Holiday Inn Brand Family. Other notable openings included the return of Regent to the US, and the international expansion of Garner into the UK, Germany and Japan since being franchise-ready in the US in September 2023. Conversions represented around half of all openings.
As we continued to focus on the quality of our estate, 18,195 rooms (105 hotels) left the IHG system in 2024, compared to 13,343 rooms (76 hotels) in 2023. The removals rate of 1.9% increased against 1.5% in the prior year.
Net system size increased by 4.3% year-on-year to 987,125 rooms.
|
|
|
Total number of hotels |
| 6,629 |
| 2023: 6,363
|
|
|
|
Total number of rooms |
|
987,125 |
| 2023: 946,203 |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 89 | |||||||||||
Group pipeline
| Hotels | Rooms | |||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||
| Six Senses | 38 | (4 | ) | 2,895 | (162 | ) | ||||||||||||||||||||||
| Regent | 9 | (2 | ) | 1,987 | (455 | ) | ||||||||||||||||||||||
| InterContinental | 101 | 1 | 25,692 | 421 | ||||||||||||||||||||||||
| Vignette Collection | 35 | 17 | 6,389 | 4,333 | ||||||||||||||||||||||||
| Kimpton | 61 | 7 | 12,133 | 1,372 | ||||||||||||||||||||||||
| Hotel Indigo | 130 | (2 | ) | 19,431 | (1,508 | ) | ||||||||||||||||||||||
| voco | 90 | 16 | 15,628 | 2,887 | ||||||||||||||||||||||||
| HUALUXE | 24 | (1 | ) | 6,293 | (50 | ) | ||||||||||||||||||||||
| Crowne Plaza | 140 | 14 | 35,269 | 2,827 | ||||||||||||||||||||||||
| EVEN Hotels | 32 | (1 | ) | 5,567 | 184 | |||||||||||||||||||||||
| Holiday Inn Express | 637 | 5 | 79,222 | 1,203 | ||||||||||||||||||||||||
| Holiday Inn | 266 | 20 | 51,677 | 5,776 | ||||||||||||||||||||||||
| Garner | 94 | 89 | 8,767 | 8,435 | ||||||||||||||||||||||||
| avid hotels | 137 | (4 | ) | 10,649 | (928 | ) | ||||||||||||||||||||||
| Atwell Suites | 54 | 13 | 5,460 | 1,336 | ||||||||||||||||||||||||
| Staybridge Suites | 157 | (7 | ) | 17,315 | (870 | ) | ||||||||||||||||||||||
| Holiday Inn Club Vacations | – | (2 | ) | – | (832 | ) | ||||||||||||||||||||||
| Candlewood Suites | 183 | 32 | 14,299 | 2,342 | ||||||||||||||||||||||||
| Iberostar Beachfront Resorts | 7 | 2 | 2,447 | 207 | ||||||||||||||||||||||||
| Other | 15 | 1 | 4,132 | 1,780 | ||||||||||||||||||||||||
| Total | 2,210 | 194 | 325,252 | 28,298 | ||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||
| Franchiseda | 1,598 | 172 | 191,605 | 17,521 | ||||||||||||||||||||||||
| Managed | 611 | 22 | 133,492 | 10,777 | ||||||||||||||||||||||||
| Owned, leased and managed lease | 1 | – | 155 | – | ||||||||||||||||||||||||
| Total | 2,210 | 194 | 325,252 | 28,298 | ||||||||||||||||||||||||
| a. | Includes exclusive partner hotels. |
The global pipeline totalled 325,252 rooms (2,210 hotels) at the end of 2024, an increase of 28,298 rooms (194 hotels) from the prior year, as signings outpaced openings and terminations.
Group signings of 106,242 rooms (714 hotels) in 2024 represented a 27,022 rooms (158 hotels) increase from the prior year, and included 17,703 rooms (119 hotels) as part of the initial NOVUM Hospitality agreement. Conversions represented around half of signings in the year.
|
|
|
Total number of hotels in the pipeline
|
| 2,210 |
| 2023: 2,016
|
|
|
|
Total number of rooms in the pipeline
|
| 325,252 |
| 2023: 296,954 |
Table of Contents
| 90 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Americas
|
We ended 2024 with strong growth in hotel openings across the Americas. We’re confident in maintaining this growth momentum through delivering strong owner returns, innovation across our brand portfolio and technology platforms and providing memorable guest experiences.
Industry performance
Industry RevPAR in the Americas increased by 3.5% year-on-year driven by average daily rate which increased by 3.4%, while occupancy was broadly flat at 0.1%.
US lodging industry growth continued to normalise in 2024. RevPAR increased by 1.8%, driven by average daily rate increasing by 1.7% while occupancy remained flat year-on-year. Performance in the US was led by strong recovery from Groups and Business activity, whilst Leisure demand moderated. US industry growth was impacted by subdued domestic demand in the summer, with Americans continuing to travel abroad in record numbers. Room supply increased by 0.5%, with conversion activity also increasing year-on-year. RevPAR in the US upper midscale chain scale, where the Holiday Inn and Holiday Inn Express brands operate, increased by 1.3%.
RevPAR increased by 20.5% in Latin America, with growth in Argentina of 155.2% primarily driven by average daily rate.
RevPAR in Mexico increased by 6.8% and in Canada RevPAR grew by 4.4%.
IHG’s regional
IHG’s comparable RevPAR in the Americas grew by 2.5% compared to 2023, driven by a 2.0% increase in average daily rate and a 0.3%pts increase in occupancy.
The region is predominantly represented by the US, where comparable RevPAR grew by 1.7% year-on-year, and where we are most weighted towards our upper midscale brands, Holiday Inn and Holiday Inn Express. US RevPAR for the Holiday Inn brand grew by 1.0%, while the Holiday Inn Express brand increased by 1.3%. Comparable RevPAR in Mexico grew by 10.6%, while Canada increased by 3.3%. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 91 | |||||||||||
Americas results
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
2024 vs 2023 % change |
2022 $m |
2023 vs 2022 % change |
||||||||||||||||||||||||||||||||
| Revenue from the reportable segmenta | ||||||||||||||||||||||||||||||||||||
| Fee business | 979 | 957 | 2.3 | 879 | 8.9 | |||||||||||||||||||||||||||||||
| Owned, leased and managed lease | 162 | 148 | 9.5 | 126 | 17.5 | |||||||||||||||||||||||||||||||
| Total | 1,141 | 1,105 | 3.3 | 1,005 | 10.0 | |||||||||||||||||||||||||||||||
| Operating profit from the reportable segmenta | ||||||||||||||||||||||||||||||||||||
| Fee business | 795 | 787 | 1.0 | 741 | 6.2 | |||||||||||||||||||||||||||||||
| Owned, leased and managed lease | 33 | 28 | 17.9 | 20 | 40.0 | |||||||||||||||||||||||||||||||
| 828 | 815 | 1.6 | 761 | 7.1 | ||||||||||||||||||||||||||||||||
| Operating exceptional items | 4 | 27 | (85.2 | ) | (46 | ) | NM | b | ||||||||||||||||||||||||||||
| Operating profit | 832 | 842 | (1.2 | ) | 715 | 17.8 | ||||||||||||||||||||||||||||||
Review of the year
ended 31 December 2024
With 527,994 rooms (4,491 hotels), the Americas represented 53% of IHG’s room count. The key profit-generating market is the US, and the Group is also represented in Latin America, Canada, Mexico and the Caribbean. In the region, 93% of rooms are operated under the franchised business model, primarily under our brands in the upper midscale segment (including the Holiday Inn Brand Family). Of IHG’s 19 hotel brands, 18 are represented in the Americas.
RevPAR performance in the first quarter was negatively impacted by the timing of Easter. Trading then improved in the rest of the year, with RevPAR growth in the fourth quarter exceeding the first three quarters, as the region benefited from strong demand.
Americas comparable RevPAR declined by 0.3% in the first quarter then increased 3.3% in the second quarter, 1.7% in the third quarter, 4.6% in the fourth quarter and 2.5% in the full year, all compared to 2023.
RevPAR in the US increased by 1.7% in the year, reflecting economic stability.
Across our US franchised estate, which is weighted to domestic demand in upper midscale hotels, full year RevPAR increased 1.6% year-on-year. The US managed estate, weighted to upper upscale and luxury hotels in urban locations, saw RevPAR increase by 2.2% in the full year compared to 2023.
Revenue from the reportable segmenta increased by $36m (3.3%) to $1,141m. Operating profit decreased by $10m to $832m, with the increase in revenue being more than offset by the non-repeat of exceptional income recorded in the prior year. Operating profit from the reportable segmenta increased by $13m (1.6%) to $828m.
Revenue and operating profit from the reportable segmenta are further analysed by fee business and owned, leased and managed lease hotels.
Fee business revenuea increased by $22m (2.3%) to $979m. Fee business operating profita increased by $8m (1.0%) to $795m, driven by the trading performance and net system size growth, partially offset by some areas of one-time items and cost investment. This led to fee margina reducing to 81.2%, compared to 82.2% in 2023. There were $21m of incentive management fees earned (2023: $21m).
Owned, leased and managed lease revenue increased by $14m (9.5%) to $162m, with comparable RevPAR up 11.2% compared to 2023, reflecting the specific trading environments related to this small portfolio of hotels. This led to an increase in owned, leased and managed lease operating profit of $5m (17.9%) to $33m.
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
| b. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
For discussion of 2023 results, and the changes compared to 2022, refer to the 2023 Annual Report and Form 20-F.
|
More details online: |
| ihgplc.com/investors under Annual Report. |
Table of Contents
| 92 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Americas continued
Americas hotel and room count
| Hotels | Rooms | |||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||
| Six Senses | 2 | 1 | 81 | 71 | ||||||||||||||||||||||||
| Regent | 1 | 1 | 167 | 167 | ||||||||||||||||||||||||
| InterContinental | 45 | 2 | 16,272 | 598 | ||||||||||||||||||||||||
| Vignette Collection | 2 | 1 | 591 | 236 | ||||||||||||||||||||||||
| Kimpton | 61 | (2 | ) | 11,083 | 188 | |||||||||||||||||||||||
| Hotel Indigo | 75 | 3 | 10,128 | 550 | ||||||||||||||||||||||||
| voco | 19 | 7 | 2,065 | 766 | ||||||||||||||||||||||||
| Crowne Plaza | 104 | (2 | ) | 26,356 | (786 | ) | ||||||||||||||||||||||
| EVEN Hotels | 22 | 3 | 3,122 | 378 | ||||||||||||||||||||||||
| Holiday Inn Express | 2,526 | 17 | 230,749 | 1,996 | ||||||||||||||||||||||||
| Holiday Inn | 677 | (11 | ) | 109,526 | (2,228 | ) | ||||||||||||||||||||||
| Garner | 10 | 8 | 755 | 597 | ||||||||||||||||||||||||
| avid hotels | 76 | 9 | 6,802 | 775 | ||||||||||||||||||||||||
| Atwell Suites | 6 | 4 | 556 | 370 | ||||||||||||||||||||||||
| Staybridge Suites | 312 | 9 | 32,773 | 1,098 | ||||||||||||||||||||||||
| Holiday Inn Club Vacations | 30 | – | 9,868 | 342 | ||||||||||||||||||||||||
| Candlewood Suites | 392 | 16 | 34,817 | 1,320 | ||||||||||||||||||||||||
| Iberostar Beachfront Resorts | 24 | 1 | 9,267 | 240 | ||||||||||||||||||||||||
| Other | 107 | 10 | 23,016 | 1,722 | ||||||||||||||||||||||||
| Total | 4,491 | 77 | 527,994 | 8,400 | ||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||
| Franchiseda | 4,319 | 77 | 491,506 | 8,558 | ||||||||||||||||||||||||
| Managed | 168 | – | 35,151 | (158 | ) | |||||||||||||||||||||||
| Owned, leased and managed lease | 4 | – | 1,337 | – | ||||||||||||||||||||||||
| Total | 4,491 | 77 | 527,994 | 8,400 | ||||||||||||||||||||||||
| a. | Includes exclusive partner hotels. |
Gross system size growth was 3.2% year-on-year. Openings increased by 6,427 rooms (39 hotels) year-on-year to 16,832 rooms (140 hotels), with more than one-third in our Holiday Inn Brand Family. Openings also included nine avid hotels and seven voco properties. Eight Garner hotels opened, bringing the total to 10 properties since the brand became franchise-ready in the US in September 2023. This year also saw the return of Regent to the region, with the opening of the Regent Santa Monica Beach.
During the year, 8,432 rooms (63 hotels) were removed, representing a removal rate of 1.6%. Net system size growth was 1.6% year-on-year.
Total number of hotels
4,491
2023: 4,414
Total number of rooms
527,994
2023: 519,594
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 93 | |||||||||||
Americas pipeline
| Hotels | Rooms | |||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||
| Six Senses | 9 | 1 | 660 | 186 | ||||||||||||||||||||||||
| Regent | – | (1 | ) | – | (167 | ) | ||||||||||||||||||||||
| InterContinental | 11 | (1 | ) | 2,786 | 78 | |||||||||||||||||||||||
| Vignette Collection | 4 | 1 | 475 | 214 | ||||||||||||||||||||||||
| Kimpton | 30 | 2 | 5,685 | 167 | ||||||||||||||||||||||||
| Hotel Indigo | 27 | (4 | ) | 3,238 | (1,099 | ) | ||||||||||||||||||||||
| voco | 23 | 11 | 2,612 | 1,229 | ||||||||||||||||||||||||
| Crowne Plaza | 6 | (3 | ) | 1,044 | (1,166 | ) | ||||||||||||||||||||||
| EVEN Hotels | 8 | (3 | ) | 949 | (290 | ) | ||||||||||||||||||||||
| Holiday Inn Express | 337 | (12 | ) | 32,028 | (1,435 | ) | ||||||||||||||||||||||
| Holiday Inn | 65 | (7 | ) | 7,790 | (849 | ) | ||||||||||||||||||||||
| Garner | 43 | 38 | 3,495 | 3,163 | ||||||||||||||||||||||||
| avid hotels | 137 | (4 | ) | 10,649 | (928 | ) | ||||||||||||||||||||||
| Atwell Suites | 52 | 11 | 5,222 | 1,098 | ||||||||||||||||||||||||
| Staybridge Suites | 142 | (3 | ) | 14,974 | (377 | ) | ||||||||||||||||||||||
| Holiday Inn Club Vacations | – | (2 | ) | – | (832 | ) | ||||||||||||||||||||||
| Candlewood Suites | 175 | 24 | 13,199 | 1,242 | ||||||||||||||||||||||||
| Iberostar Beachfront Resorts | 6 | 1 | 2,176 | (64 | ) | |||||||||||||||||||||||
| Other | 14 | – | 2,352 | – | ||||||||||||||||||||||||
| Total | 1,089 | 49 | 109,334 | 170 | ||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||
| Franchiseda | 1,043 | 49 | 102,075 | 86 | ||||||||||||||||||||||||
| Managed | 46 | – | 7,259 | 84 | ||||||||||||||||||||||||
| Total | 1,089 | 49 | 109,334 | 170 | ||||||||||||||||||||||||
| a. | Includes exclusive partner hotels. |
At 31 December 2024, the pipeline totalled 109,334 rooms (1,089 hotels), representing 21% of the region’s system size.
Signings decreased by 1,745 rooms (increased by 12 hotels) year-on-year to 26,552 rooms (283 hotels). The majority of signings were in our midscale and upper midscale brands including the Holiday Inn Brand Family (8,161 rooms, 83 hotels), Candlewood Suites (3,907 rooms, 56 hotels) and Garner (3,758 rooms, 46 hotels).
9,550 rooms (94 hotels) were removed from the pipeline, compared to 9,047 rooms (84 hotels) in the prior year.
Total number of hotels in the pipeline
1,089
2023: 1,040
Total number of rooms in the pipeline
109,334
2023: 109,164
Table of Contents
| 94 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
EMEAA
|
We delivered strong signings in 2024, reflecting the long-term investments made across our priority markets and our ongoing commitment to deliver to our guests and owners.
We continue to open and sign iconic properties across our portfolio and have expanded our midscale offering, with the launch of Candlewood Suites and Garner into the region. The NOVUM Hospitality agreement has doubled our presence in Germany and demonstrates the confidence owners have in IHG. We have built strong momentum for growth which we will take into 2025 and beyond.
Industry performance
Industry RevPAR in EMEAA increased by 9.1% year-on-year, driven by an improvement in both occupancy and average daily rate by 1.5%pts and 6.7%, respectively. In Europe, RevPAR increased by 7.5% driven by both occupancy and average daily rate. In the UK, industry RevPAR increased by 2.6% compared to 2023. In Germany, RevPAR increased by 6.8% driven by large one-off events, and France saw RevPAR increase 0.3%. RevPAR increased by 4.4% in the Middle East primarily driven by average daily rate.
Elsewhere in EMEAA, East Asia and Pacific benefited from elevated growth in late-to-recover markets and an increase in outbound travel from Greater China. RevPAR in Japan increased by 19.0% and Thailand grew by 14.4%, driven by both occupancy and average daily rate.
IHG’s regional
EMEAA comparable RevPAR increased by 6.6% year-on-year, driven by a 3.6% increase in average daily rate and a 2.0%pts increase in occupancy. In the UK, the region’s largest market, RevPAR increased by 2.3% compared to 2023. Germany saw a RevPAR increase of 8.7% and France grew by 3.5%.
RevPAR in the Middle East and India increased by 5.7% and 12.0%, respectively.
Elsewhere in EMEAA, RevPAR increased by 10.9% in East Asia & Pacific, which included the benefit of outbound leisure travel from Greater China, with Japan and Thailand increasing by 15.0% and 21.5%, respectively. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 95 | |||||||||||
EMEAA results
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
2024 vs 2023 % change |
2022 $m |
2023 vs 2022 % change |
||||||||||||||||||||||||||||||||
| Revenue from the reportable segmenta | ||||||||||||||||||||||||||||||||||||
| Fee business | 395 | 354 | 11.6 | 284 | 24.6 | |||||||||||||||||||||||||||||||
| Owned, leased and managed lease | 353 | 323 | 9.3 | 268 | 20.5 | |||||||||||||||||||||||||||||||
| Total | 748 | 677 | 10.5 | 552 | 22.6 | |||||||||||||||||||||||||||||||
| Operating profit/(loss) from the reportable segmenta | ||||||||||||||||||||||||||||||||||||
| Fee business | 258 | 214 | 20.6 | 153 | 39.9 | |||||||||||||||||||||||||||||||
| Owned, leased and managed lease | 12 | 1 | NM | b | (1 | ) | NM | b | ||||||||||||||||||||||||||||
| 270 | 215 | 25.6 | 152 | 41.4 | ||||||||||||||||||||||||||||||||
| Operating exceptional items | (4 | ) | 1 | NM | b | (49 | ) | NM | b | |||||||||||||||||||||||||||
| Operating profit | 266 | 216 | 23.1 | 103 | 109.7 | |||||||||||||||||||||||||||||||
Review of the year ended 31 December 2024
Comprising 266,474 rooms (1,349 hotels) at the end of 2024, EMEAA represented 27% of IHG’s room count. Revenues are largely generated from hotels in the UK, Middle East, Asia and gateway cities in continental Europe.
The largest proportion of rooms in the UK and continental Europe are operated under the franchised business model, primarily under our upper midscale brands Holiday Inn and Holiday Inn Express. The majority of hotels in markets outside of Europe are operated under the managed business model.
Demand remained strong in 2024, with RevPAR performance across this diverse region normalising in several key markets, reflecting the differing stages of recovery already achieved in the prior year.
EMEAA comparable RevPAR increased year-on-year by 8.9% in the first quarter, 6.3% in the second quarter, 4.9% in the third quarter, 6.9% in the fourth quarter and 6.6% in the full year.
Revenue from the reportable segmenta increased by $71m (10.5%) to $748m. Operating profit increased by $50m to $266m, driven by the increase in revenue but partially offset by the movement in exceptional items. Operating profit from the reportable segmenta increased by $55m (25.6%) to $270m profit. Incentive management fees earned improved to $118m (2023: $101m).
Revenue and operating profit from the reportable segmenta are further analysed by fee business and owned, leased and managed lease hotels.
Fee business revenuea increased by $41m (11.6%) to $395m. Fee business operating profita increased to $258m from $214m in the prior year, driven by the improvement in trading. Fee margina increased to 65.3% in 2024, compared to 60.5% in 2023, with positive operating leverage driven by the trading performance and system growth.
Owned, leased and managed lease revenue increased by $30m to $353m, with comparable RevPAR up 11.9% compared to 2023. The improved trading in this largely urban-centred portfolio resulted in an owned, leased and managed lease operating profit of $12m, up from $1m in the prior year. Excluding the results of one Regent hotel, which exited in 2024 upon lease expiration, revenue increased by $32m and operating profit increased by $12m, year-on-year.
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
| b. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
For discussion of 2023 results, and the changes compared to 2022, refer to the 2023 Annual Report and Form 20-F.
|
|
More details online: |
| ihgplc.com/investors under Annual Report. |
Table of Contents
| 96 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
EMEAA continued
EMEAA hotel and room count
| Hotels | Rooms | |||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||
| Six Senses | 24 | 1 | 1,739 | 118 | ||||||||||||||||||||||||
| Regent | 4 | – | 991 | (45 | ) | |||||||||||||||||||||||
| InterContinental | 121 | 2 | 33,945 | (498 | ) | |||||||||||||||||||||||
| Vignette Collection | 13 | 6 | 2,109 | 903 | ||||||||||||||||||||||||
| Kimpton | 13 | 1 | 2,498 | 122 | ||||||||||||||||||||||||
| Hotel Indigo | 66 | 8 | 8,204 | 1,175 | ||||||||||||||||||||||||
| voco | 51 | 13 | 14,608 | 2,817 | ||||||||||||||||||||||||
| Crowne Plaza | 181 | 3 | 43,890 | 605 | ||||||||||||||||||||||||
| Holiday Inn Express | 360 | 11 | 52,835 | 1,347 | ||||||||||||||||||||||||
| Holiday Inn | 425 | 43 | 77,395 | 8,065 | ||||||||||||||||||||||||
| Garner | 13 | 13 | 1,645 | 1,645 | ||||||||||||||||||||||||
| Staybridge Suites | 23 | 1 | 3,750 | 105 | ||||||||||||||||||||||||
| Iberostar Beachfront Resorts | 31 | 5 | 10,319 | 1,746 | ||||||||||||||||||||||||
| Other | 24 | 5 | 12,546 | 1,102 | ||||||||||||||||||||||||
| Total | 1,349 | 112 | 266,474 | 19,207 | ||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||
| Franchiseda | 931 | 92 | 156,538 | 15,708 | ||||||||||||||||||||||||
| Managed | 406 | 21 | 107,237 | 3,694 | ||||||||||||||||||||||||
| Owned, leased and managed lease | 12 | (1 | ) | 2,699 | (195 | ) | ||||||||||||||||||||||
| Total | 1,349 | 112 | 266,474 | 19,207 | ||||||||||||||||||||||||
| a. | Includes exclusive partner hotels. |
Gross system size growth was 9.6% year-on-year. In 2024, 23,620 rooms (134 hotels) opened, representing an increase of 2,446 rooms (47 hotels) compared to 2023.
Openings included 10,186 rooms (58 hotels) as part of our agreement with NOVUM Hospitality. Other openings included the first Vignette Collection properties in the Maldives, Vietnam and Japan, and the first Staybridge Suites in Spain. Garner made its international debut with openings in Germany, Japan and the UK.
In 2024, 4,413 rooms (22 hotels) were removed compared to 3,571 rooms (19 hotels) in the prior year.
Net system size increased 7.8% year-on-year.
Total number of hotels
1,349
2023: 1,237
Total number of rooms
266,474
2023: 247,267
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 97 | |||||||||||
EMEAA pipeline
| Hotels | Rooms | |||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||
| Six Senses | 28 | (2 | ) | 2,181 | (169 | ) | ||||||||||||||||||||||
| Regent | 7 | – | 1,460 | (8 | ) | |||||||||||||||||||||||
| InterContinental | 60 | 4 | 14,526 | 1,016 | ||||||||||||||||||||||||
| Vignette Collection | 25 | 11 | 4,379 | 2,856 | ||||||||||||||||||||||||
| Kimpton | 15 | – | 2,254 | (111 | ) | |||||||||||||||||||||||
| Hotel Indigo | 49 | (4 | ) | 7,208 | (1,101 | ) | ||||||||||||||||||||||
| voco | 50 | (1 | ) | 9,416 | 509 | |||||||||||||||||||||||
| Crowne Plaza | 59 | 10 | 14,021 | 2,492 | ||||||||||||||||||||||||
| Holiday Inn Express | 89 | – | 14,339 | 1,030 | ||||||||||||||||||||||||
| Holiday Inn | 114 | 28 | 22,819 | 6,697 | ||||||||||||||||||||||||
| Garner | 51 | 51 | 5,272 | 5,272 | ||||||||||||||||||||||||
| Staybridge Suites | 15 | (4 | ) | 2,341 | (493 | ) | ||||||||||||||||||||||
| Candlewood Suites | 8 | 8 | 1,100 | 1,100 | ||||||||||||||||||||||||
| Iberostar Beachfront Resorts | 1 | 1 | 271 | 271 | ||||||||||||||||||||||||
| Other | 1 | 1 | 1,780 | 1,780 | ||||||||||||||||||||||||
| Total | 572 | 103 | 103,367 | 21,141 | ||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||
| Franchiseda | 264 | 90 | 37,572 | 13,056 | ||||||||||||||||||||||||
| Managed | 307 | 13 | 65,640 | 8,085 | ||||||||||||||||||||||||
| Owned, leased and managed lease | 1 | – | 155 | – | ||||||||||||||||||||||||
| Total | 572 | 103 | 103,367 | 21,141 | ||||||||||||||||||||||||
| a. | Includes exclusive partner hotels. |
At 31 December 2024, the EMEAA pipeline totalled 103,367 rooms (572 hotels), representing 39% of the region’s system size.
In 2024, 50,275 rooms (271 hotels) were signed, representing an increase of 25,488 rooms (120 hotels) year-on-year, including 17,703 rooms (119 hotels) as part of the initial NOVUM Hospitality agreement.
In 2024, 5,514 rooms (34 hotels) were removed from the pipeline, compared to 4,797 rooms (29 hotels) in the prior year.
Total number of hotels in the pipeline
572
2023: 469
Total number of rooms in the pipeline
103,367
2023: 82,226
Table of Contents
| 98 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Greater China
|
2024 was a strong year in terms of signings and openings, showing the confidence by owners in both IHG and the future of Greater China, despite trading headwinds. Building on our experience of bringing new brands to market, we launched Atwell Suites and achieved our first signings under the brand in the region. We are well positioned to further accelerate our growth in the years ahead, underpinned by our 50 years’ history in China and continued supportive government policies.
Industry performance in 2024
Greater China industry RevPAR decreased by 3.5% year-on-year driven by declines in both occupancy and average daily rate by 0.7%pts and 2.5% respectively. Macro-economic pressures and increased outbound travel to other Asian destinations led to weak domestic demand and restricted pricing power.
Tier 1 was the only tier to experience RevPAR growth compared to 2023. Tier 1 cities saw a 0.4% increase in RevPAR, driven by occupancy increasing by 1.1%pts. Following strong domestic demand growth in 2023, RevPAR decreased by 6.2% in Tier 2-4 cites driven by a slowing in demand growth and average daily rate declines. RevPAR in Hong Kong SAR increased by 0.3% as occupancy growth offset average daily rate declines. Macau SAR RevPAR grew by 16.3%, with demand increasing 12.9%.
IHG’s regional performance in 2024
IHG’s comparable RevPAR in Greater China decreased by 4.8% compared to 2023, driven by declines in both average daily rate and occupancy of 4.2% and 0.4%pts, respectively. Trading was impacted by strong prior year comparatives due to the resurgence of demand in 2023 following the lifting of travel restrictions. The trading patterns in 2024 have therefore reflected greater normalisation in demand.
In Mainland China, RevPAR decreased by 5.2%. Tier 1 cities declined by 0.6% and Tier 2–4 cities decreased by 7.2% due to strong prior year comparatives from domestic leisure demand, particularly into Tier 4 resort locations.
RevPAR in Hong Kong SAR decreased by 2.0% while RevPAR in Macau SAR declined by 0.2%. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 99 | |||||||||||
Greater China results
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
2024 vs 2023 % change |
2022 $m |
2023 vs 2022 % change |
||||||||||||||||||||||||||||||||||
| Revenue from the reportable segmenta | ||||||||||||||||||||||||||||||||||||||
| Fee business | 161 | 161 | – | 87 | 85.1 | |||||||||||||||||||||||||||||||||
| Total | 161 | 161 | – | 87 | 85.1 | |||||||||||||||||||||||||||||||||
| Operating profit from the reportable segmenta | ||||||||||||||||||||||||||||||||||||||
| Fee business | 98 | 96 | 2.1 | 23 | 317.4 | |||||||||||||||||||||||||||||||||
| Operating profit | 98 | 96 | 2.1 | 23 | 317.4 | |||||||||||||||||||||||||||||||||
Review of the year
ended 31 December 2024
Comprising 192,657 rooms (789 hotels) at 31 December 2024, Greater China represented 20% of the Group’s room count. The majority of rooms in Greater China operate under the managed business model. The franchised segment continues to grow, representing more than one-third of the region’s open rooms and almost half of the region’s pipeline.
Trading performance in 2024 reflected greater normalisation in demand. The first quarter benefited from the improvement in international inbound travel. From the second quarter, the prior year comparatives became tougher, reflecting the timing of resurgent domestic demand in 2023 following the lifting of travel restrictions. In 2024, the industry experienced shifts in demand mix, including the expansion of outbound leisure travel to other markets, such as elsewhere in the Asia Pacific, as seen benefiting demand in our EMEAA region. By the third quarter, the comparatives became sequentially tougher, as the third quarter of 2023 achieved RevPAR levels that exceeded 2019 levels. Comparatives then eased by the fourth quarter.
Compared to 2023, overall Greater China RevPAR increased 2.5% in the first quarter, then decreased 7.0% in the second quarter, 10.3% in the third quarter and 2.8% in the fourth quarter, with a decline of 4.8% in the full year.
Revenue from the reportable segmenta in 2024 remained unchanged from the prior year at $161m, with the effect of negative RevPAR in the comparable estate offset by the incremental revenue from system growth. Incentive management fees decreased from $46m in 2023 to $39m in 2024. Operating profit increased by $2m (2.1%) to $98m, and fee margina increased to 60.9% compared to 59.6% in 2023, supported by scale efficiencies achieved in the year.
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
|
For discussion of 2023 results, and the changes compared to 2022, refer to the 2023 Annual Report and Form 20-F.
|
||||
|
|
More details online: ihgplc.com/investors under Annual Report. |
|||
Table of Contents
| 100 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Greater China continued
Greater China hotel and room count
| Hotels | Rooms | |||||||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||||||
| Six Senses | 1 | – | 130 | – | ||||||||||||||||||||||||||||
| Regent | 6 | – | 2,054 | 3 | ||||||||||||||||||||||||||||
| InterContinental | 61 | 1 | 23,567 | 184 | ||||||||||||||||||||||||||||
| Vignette Collection | 5 | 2 | 1,265 | 543 | ||||||||||||||||||||||||||||
| Kimpton | 3 | – | 450 | – | ||||||||||||||||||||||||||||
| Hotel Indigo | 28 | 5 | 4,461 | 850 | ||||||||||||||||||||||||||||
| voco | 17 | 5 | 3,703 | 1,286 | ||||||||||||||||||||||||||||
| HUALUXE | 22 | 2 | 6,002 | 473 | ||||||||||||||||||||||||||||
| Crowne Plaza | 130 | 6 | 43,378 | 1,573 | ||||||||||||||||||||||||||||
| EVEN Hotels | 11 | 4 | 1,960 | 773 | ||||||||||||||||||||||||||||
| Holiday Inn Express | 351 | 38 | 60,373 | 4,297 | ||||||||||||||||||||||||||||
| Holiday Inn | 147 | 15 | 38,411 | 3,585 | ||||||||||||||||||||||||||||
| Other | 7 | (1 | ) | 6,903 | (252 | ) | ||||||||||||||||||||||||||
| Total | 789 | 77 | 192,657 | 13,315 | ||||||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||||||
| Franchised | 346 | 71 | 70,173 | 13,350 | ||||||||||||||||||||||||||||
| Managed | 443 | 6 | 122,484 | (35 | ) | |||||||||||||||||||||||||||
| Total | 789 | 77 | 192,657 | 13,315 | ||||||||||||||||||||||||||||
Gross system size growth was 10.4% year-on-year, with 18,665 rooms (97 hotels) added to our system in 2024, an increase from 16,340 rooms (87 hotels) in 2023. Openings were mainly in our Holiday Inn Brand Family (11,128 rooms, 66 hotels). Other openings included five voco properties, four EVEN hotels and two Vignette Collection properties.
Removals included 5,350 rooms (20 hotels) in the year, representing a removal rate of 3.0%. Net system size growth was 7.4% year-on-year.
|
Total number of hotels |
| 789 |
| 2023: 712
|
|
Total number of rooms |
| 192,657 |
| 2023: 179,342 |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 101 | |||||||||||
Greater China pipeline
| Hotels | Rooms | |||||||||||||||||||||||||||||||
| At 31 December | 2024 | Change over 2023 |
2024 | Change over 2023 |
||||||||||||||||||||||||||||
| Analysed by brand | ||||||||||||||||||||||||||||||||
| Six Senses | 1 | (3 | ) | 54 | (179 | ) | ||||||||||||||||||||||||||
| Regent | 2 | (1 | ) | 527 | (280 | ) | ||||||||||||||||||||||||||
| InterContinental | 30 | (2 | ) | 8,380 | (673 | ) | ||||||||||||||||||||||||||
| Vignette Collection | 6 | 5 | 1,535 | 1,263 | ||||||||||||||||||||||||||||
| Kimpton | 16 | 5 | 4,194 | 1,316 | ||||||||||||||||||||||||||||
| Hotel Indigo | 54 | 6 | 8,985 | 692 | ||||||||||||||||||||||||||||
| voco | 17 | 6 | 3,600 | 1,149 | ||||||||||||||||||||||||||||
| HUALUXE | 24 | (1 | ) | 6,293 | (50 | ) | ||||||||||||||||||||||||||
| Crowne Plaza | 75 | 7 | 20,204 | 1,501 | ||||||||||||||||||||||||||||
| EVEN Hotels | 24 | 2 | 4,618 | 474 | ||||||||||||||||||||||||||||
| Holiday Inn Express | 211 | 17 | 32,855 | 1,608 | ||||||||||||||||||||||||||||
| Holiday Inn | 87 | (1 | ) | 21,068 | (72 | ) | ||||||||||||||||||||||||||
| Atwell Suites | 2 | 2 | 238 | 238 | ||||||||||||||||||||||||||||
| Total | 549 | 42 | 112,551 | 6,987 | ||||||||||||||||||||||||||||
| Analysed by ownership type | ||||||||||||||||||||||||||||||||
| Franchised | 291 | 33 | 51,958 | 4,379 | ||||||||||||||||||||||||||||
| Managed | 258 | 9 | 60,593 | 2,608 | ||||||||||||||||||||||||||||
| Total | 549 | 42 | 112,551 | 6,987 | ||||||||||||||||||||||||||||
As at 31 December 2024, the pipeline totalled 112,551 rooms (549 hotels), representing 58% of the region’s system size.
Signings of 29,415 rooms (160 hotels) were ahead of last year by 3,279 rooms (26 hotels). Half of signings were in our Holiday Inn Brand Family. Other notable signings included 11 voco hotels, five Kimpton properties and the first two Atwell Suites in the region.
|
Total number of hotels in the pipeline 549 2023: 507
|
| Total number of rooms in the pipeline 112,551 2023: 105,564 |
Table of Contents
| 102 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Central
Central results
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
2024 vs 2023 % change |
2022 $m |
2023 vs 2022 % change |
||||||||||||||||||||||||||||||||||||
| Revenue from the reportable segmenta | ||||||||||||||||||||||||||||||||||||||||
| Fee business | 239 | 200 | 19.5 | 184 | 8.7 | |||||||||||||||||||||||||||||||||||
| Insurance activities | 23 | 21 | 9.5 | 15 | 40.0 | |||||||||||||||||||||||||||||||||||
| Total | 262 | 221 | 18.6 | 199 | 11.1 | |||||||||||||||||||||||||||||||||||
| Gross costs | ||||||||||||||||||||||||||||||||||||||||
| Fee business | (305 | ) | (305 | ) | – | (296 | ) | 3.0 | ||||||||||||||||||||||||||||||||
| Insurance activities | (29 | ) | (23 | ) | 26.1 | (11 | ) | 109.1 | ||||||||||||||||||||||||||||||||
| Total | (334 | ) | (328 | ) | 1.8 | (307 | ) | 6.8 | ||||||||||||||||||||||||||||||||
| Operating loss from the reportable segmenta | ||||||||||||||||||||||||||||||||||||||||
| Fee business | (66 | ) | (105 | ) | (37.1 | ) | (112 | ) | (6.3 | ) | ||||||||||||||||||||||||||||||
| Insurance activities | (6 | ) | (2 | ) | 200.0 | 4 | NM | b | ||||||||||||||||||||||||||||||||
| Total | (72 | ) | (107 | ) | (32.7 | ) | (108 | ) | (0.9 | ) | ||||||||||||||||||||||||||||||
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
| b. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
Review of the year
ended 31 December 2024
Central revenue is mainly comprised of technology fee income, revenue from insurance activities, co-brand licensing fees and, from 2024, a portion of revenue from the consumption of certain IHG One Rewards points.
Central revenue increased by $41m (18.6%) to $262m. This was primarily driven by the new co-brand credit card agreements and changes to the System Fund arrangement in 2024 in which a portion of the revenue from the sale of certain loyalty points, together with certain other ancillary revenues, are now being reported within revenue from fee business. These changes applied to 50% of proceeds from those point sales in 2024 and will increase to 100% from 1 January 2025.
Gross costs increased by $6m (1.8%) year-on-year, driven by significant individual claims in the insurance programme.
The resulting $72m operating loss was a decrease of $35m year-on-year.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 103 | |||||||||||
Key performance measures
and non-GAAP measures
| The Annual Report and Form 20-F presents certain financial measures when discussing the Group’s performance which are not measures of financial performance or liquidity under International Financial Reporting Standards (IFRS). In management’s view, these measures provide investors and other stakeholders with an enhanced understanding of IHG’s operating performance, profitability, financial strength and funding requirements. | These measures do not have standardised meanings under IFRS, and companies do not necessarily calculate these in the same way. As these measures exclude certain items (for example, impairment and the costs of individually significant legal cases or commercial disputes), they may be materially different to the measures prescribed by IFRS and may result in a more favourable view of performance. Accordingly, they should be viewed as complementary to, and not as a substitute for, the measures prescribed by IFRS and as included in the Group Financial Statements (see pages 190 to 196). |
| Linkage of performance measures to Directors’ remuneration and KPIs |
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Annual Performance Plan |
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Long Term Incentive Plan |
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Key Performance Indicators | |||||
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See pages 138 to 175 for more information on Directors’ remuneration and pages 38 to 41 for more information on KPIs. |
| Measure | Commentary | |
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| Global revenue per available room (RevPAR) growth
RevPAR, average daily rate and occupancy statistics are disclosed on pages 273 to 275. |
RevPAR is the primary metric used by management to track hotel performance across regions and brands. RevPAR is also a commonly used performance measure in the hotel industry.
RevPAR comprises IHG’s System (see Glossary, page 313) rooms revenue divided by the number of room nights available and can be derived from occupancy rate multiplied by the average daily rate. Average daily rate is rooms revenue divided by the number of room nights sold.
References to RevPAR, occupancy and average daily rate are presented on a comparable basis, comprising groupings of hotels that have traded in all months in both the current and comparable year. The principal exclusions in deriving this measure are new hotels (including those acquired), hotels closed for major refurbishment and hotels sold in either of the comparable years.
RevPAR and average daily rate are quoted at a constant US$ exchange rate, in order to allow a better understanding of the comparable year-on-year trading performance excluding distortions created by fluctuations in currency movements.
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| Total gross revenue from hotels in IHG’s System
Owned, leased and managed lease revenue as recorded in the Group Financial Statements is reconciled to total gross revenue on page 87. |
Total gross revenue is revenue not wholly attributable to IHG; however, management believes this measure is meaningful to investors and other stakeholders as it provides a measure of System performance, giving an indication of the strength of IHG’s brands and the combined impact of IHG’s growth strategy and RevPAR performance.
Total gross revenue refers to revenue which IHG has a role in driving and from which IHG derives an income stream. IHG’s business model is described on pages 22 to 27. Total gross revenue comprises:
– Total rooms revenue from franchised hotels;
– Total hotel revenue from managed and exclusive partner hotels including food and beverage, meetings and other revenues, reflecting the value driven by IHG and the base upon which fees are typically earned; and
– Total hotel revenue from owned, leased and managed lease hotels.
– Other than total hotel revenue from owned, leased and managed lease hotels, total gross revenue is not revenue attributable to IHG as these managed, franchised and exclusive partner hotels are owned by third parties.
– Total gross revenue is used to describe this measure as it aligns with terms used in the Group’s management, franchise and exclusive partner agreements and, therefore, is well understood by owners and other stakeholders.
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| 104 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Key performance measures and non-GAAP measures continued
| Measure | Commentary | |
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| Revenue and operating profit measures
The reconciliation of the most directly comparable line item within the Group Financial Statements (i.e. total revenue and operating profit, accordingly) to the non-IFRS revenue and operating profit measures is included on pages 266 to 272. |
Revenue and operating profit from (1) fee business, (2) owned, leased and managed lease hotels, and (3) insurance activities are described as ‘revenue from reportable segments’ and ‘operating profit from reportable segments’, respectively, within note 2 to the Group Financial Statements. These measures are presented insofar as they relate to each of the Group’s regions and its Central functions.
Management believes revenue and operating profit from reportable segments are meaningful to investors and other stakeholders as they exclude the following elements and reflect how management monitors the business:
– System Fund and reimbursables – the System Fund is not managed to generate a surplus or deficit for IHG over the longer term, it is managed for the benefit of the hotels within the IHG system. As described within the Group’s accounting policies (pages 199 and 200), the System Fund is operated to collect and administer cash assessments from hotel owners for specific purposes of use including marketing, the Guest Reservation System, certain hotel services and the Group’s loyalty programme. As described within the Group’s accounting policies (pages 199 and 200), there is a cost equal to reimbursable revenues so there is no profit impact. Cost reimbursements are not applicable to all hotels, and growth in these revenues is not reflective of growth in the performance of the Group. As such, management does not include these revenues in their analysis of results. |
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| – Exceptional items – these are identified by virtue of their size, nature or incidence with consideration given to consistency of treatment with prior years and between gains and losses. Exceptional items include, but are not restricted to, gains and losses on the disposal of assets, impairment charges and reversals, the costs of individually significant legal cases or commercial disputes and reorganisation costs. As each item is different in nature and scope, there will be little continuity in the detailed composition and size of the reported amounts which affect performance in successive periods. Separate disclosure of these amounts facilitates the understanding of performance including and excluding such items. The Group’s accounting policy for exceptional items and further detail of those items presented as such are included in the Group Financial Statements (see pages 201 and 215 to 216). |
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| In further discussing the Group’s performance in respect of revenue and operating profit, additional non-IFRS measures are used and explained further below: | ||
| – Underlying revenue; |
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| – Underlying operating profit; |
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| – Underlying fee revenue; and |
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| – Fee margin. |
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| Operating profit measures are, by their nature, before interest and tax. The Group’s reported operating profit additionally excludes fair value changes in contingent purchase consideration, which relates to financing of acquisitions. Management believes such measures are useful for investors and other stakeholders when comparing performance across different companies as interest and tax can vary widely across different industries or among companies within the same industry. For example, interest expense can be highly dependent on a company’s capital structure, debt levels and credit ratings. In addition, the tax positions of companies can vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the various jurisdictions in which they operate. | ||
| Although management believes these measures are useful to investors and other stakeholders in assessing the Group’s ongoing financial performance and provide improved comparability between periods, there are limitations in their use as compared to measures of financial performance under IFRS. As such, they should not be considered in isolation or viewed as a substitute for IFRS measures. In addition, these measures may not necessarily be comparable to other similarly titled measures of other companies due to potential inconsistencies in the methods of calculation.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 105 | |||||||||||
| Measure | Commentary | |
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| Revenue and operating profit measures continued
Underlying revenue and underlying operating profit |
These measures adjust revenue from reportable segments and operating profit from reportable segments, respectively, to exclude revenue and operating profit generated by owned, leased and managed lease hotels which have been disposed, and significant liquidated damages, which are not comparable year-on-year and are not indicative of the Group’s ongoing profitability. The revenue and operating profit of current year acquisitions are also excluded as these obscure underlying business results and trends when comparing to the prior year. In addition, in order to remove the impact of fluctuations in foreign exchange, which would distort the comparability of the Group’s operating performance, prior year measures are restated at constant currency using current year exchange rates.
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| Management believes these are meaningful to investors and other stakeholders to better understand comparable year-on-year trading and enable assessment of the underlying trends in the Group’s financial performance.
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| Underlying fee revenue growth
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Underlying fee revenue is used to calculate underlying fee revenue growth. Underlying fee revenue is calculated on the same basis as underlying revenue as described above but for the fee business only.
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| Management believes underlying fee revenue is meaningful to investors and other stakeholders as an indicator of IHG’s ability to grow the core fee-based business, aligned to IHG’s asset-light strategy.
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| Fee margin
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Fee margin is presented at actual exchange rates and is a measure of the profit arising from fee revenue. Fee margin is calculated by dividing ‘fee operating profit’ by ‘fee revenue’. Fee revenue and fee operating profit are calculated from revenue from reportable segments and operating profit from reportable segments, as defined above, adjusted to exclude revenue and operating profit from the Group’s owned, leased and managed lease hotels as well as from insurance activities and significant liquidated damages.
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| Management believes fee margin is meaningful to investors and other stakeholders as an indicator of the sustainable long-term growth in the profitability of IHG’s core fee-based business, as the scale of IHG’s operations increases with growth in IHG’s system size.
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| Adjusted interest
Financial income and financial expenses as recorded in the Group Financial Statements is reconciled to adjusted interest on page 271. |
Adjusted interest is presented before exceptional items and excludes foreign exchange gains/ losses primarily related to the Group’s internal funding structure and the following items of interest which are recorded within the System Fund:
– Interest income is recorded in the System Fund on the outstanding cash balance relating to the IHG loyalty programme. These interest payments are recognised as interest expense for IHG.
– Other components of System Fund interest income and expense, including capitalised interest, lease interest expense and interest income on overdue receivables.
Given results related to the System Fund are excluded from adjusted measures used by management, these are excluded from adjusted interest and adjusted earnings per ordinary share (see below). |
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| The exclusion of foreign exchange gains/losses provides greater comparability with covenant interest as calculated under the terms of the Group’s revolving credit facility. | ||
| Management believes adjusted interest is a meaningful measure for investors and other stakeholders as it provides an indication of the comparable year-on-year expense associated with financing the business including the interest on any balance held on behalf of the System Fund.
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| 106 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Key performance measures and non-GAAP measures continued
| Measure | Commentary | |
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| Adjusted tax
The tax expense and the tax rate as recorded in the Group Financial Statements are reconciled to adjusted tax and the adjusted tax rate on page 272. |
Adjusted tax excludes the impact of foreign exchange gains/losses, exceptional items, the System Fund and fair value gains/losses on contingent consideration.
Foreign exchange gains/losses vary year-on-year depending on the movement in exchange rates, and fair value gains/losses on contingent consideration and exceptional items also vary year-on-year. These can impact the current year’s tax charge. The System Fund (including interest and tax) is not managed to a surplus or deficit for IHG over the longer term and is, in general, not subject to tax.
Management believes removing these from both profit and tax provides a better view of the Group’s underlying tax rate on ordinary operations and aids comparability year-on-year, thus providing a more meaningful understanding of the Group’s ongoing tax charge.
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| Adjusted earnings per ordinary share
Profit available for equity holders is reconciled to adjusted earnings per ordinary share on page 272. |
Adjusted earnings per ordinary share adjusts the profit available for equity holders used in the calculation of basic earnings per share to remove the System Fund and reimbursable result, interest attributable to the System Fund and foreign exchange gains/losses as excluded in adjusted interest (above), change in fair value of contingent purchase consideration, exceptional items, and the related tax impacts of such adjustments and exceptional tax.
Management believes that adjusted earnings per share is a meaningful measure for investors and other stakeholders as it provides a more comparable earnings per share measure aligned with how management monitors the business.
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| Net debt
Net debt is included in note 22 to the Group Financial Statements. |
Net debt is used in the monitoring of the Group’s liquidity and capital structure and is used by management in the calculation of the key ratios attached to the Group’s bank covenants and with the objective of maintaining an investment grade credit rating. Net debt is used by investors and other stakeholders to evaluate the financial strength of the business.
Net debt comprises loans and other borrowings, lease liabilities, the principal amounts payable and receivable on maturity of derivatives swapping debt values, less cash and cash equivalents. A summary of the composition of net debt is included in note 22 to the Group Financial Statements.
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| Adjusted EBITDA
Cash from operations as recorded in the Group Financial Statements is reconciled to adjusted EBITDA on page 85. |
One of the key measures used by the Group in monitoring its debt and capital structure is the net debt: adjusted EBITDA ratio, which is managed with the objective of maintaining an investment grade credit rating. The Group has a stated aim of targeting this ratio at 2.5-3.0x. Adjusted EBITDA is defined as cash flow from operations, excluding cash flows relating to exceptional items, cash flows arising from the System Fund and reimbursable result, other non-cash adjustments to operating profit or loss, working capital and other adjustments, and contract acquisition costs.
Adjusted EBITDA is useful to investors as an approximation of operational cash flow generation and is also relevant to the Group’s banking covenants, which use Covenant EBITDA in calculating the leverage ratio. Details of covenant levels and performance against these are provided in note 23 to the Group Financial Statements.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 107 | |||||||||||
| Measure | Commentary | |
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| Adjusted free cash flow, gross capital expenditure, net capital expenditure
The reconciliation of the Group’s statement of cash flows (i.e. net cash from investing activities, net cash from operating activities, accordingly) to the non-IFRS cash flow measures and capital expenditure is included on pages 270 to 271.
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These measures have limitations as they omit certain components of the overall cash flow statement. They are not intended to represent IHG’s residual cash flow available for discretionary expenditures, nor do they reflect the Group’s future capital commitments. These measures are used by many companies, but there can be differences in how each company defines the terms, limiting their usefulness as a comparative measure. Therefore, it is important to view these measures only as a complement to the Group statement of cash flows. | |
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| Adjusted free cash flow
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Adjusted free cash flow is net cash from operating activities adjusted for: (1) the inclusion of the cash outflow arising from the purchase of shares by employee share trusts reflecting the requirement to satisfy incentive schemes which are linked to operating performance; (2) the inclusion of gross maintenance capital expenditure; (3) the exclusion of cash flows relating to exceptional items; and (4) where cash flows are split between categories in the Group statement of cash flows, cash flows from investing or financing activities may be included or excluded in adjusted free cash flow to maintain consistency of the measure. This includes: (a) the inclusion of the principal element of lease payments; (b) the exclusion of payments of deferred or contingent purchase consideration included within net cash from operating activities; (c) the exclusion of interest receipts related to owner loans within net cash from operating activities (d) the exclusion of recyclable investments in contract acquisition costs within net cash from operating activities; (e) the inclusion of payments and repayments related to investments supporting the Group’s insurance activities; (f) the inclusion of finance lease income relating to sub-leases where payments on the headlease are included in (a); (g) the exclusion of any lease incentives recorded within operating activities. | |
| Management believes adjusted free cash flow is a useful measure for investors and other stakeholders as it represents the cash available to invest back into the business to drive future growth and pay the ordinary dividend, with any surplus being available for additional returns to shareholders. It is a key component in measuring the ongoing viability of our business and is a key reference point to our investment case.
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| Gross capital expenditure | Gross capital expenditure represents the consolidated capital expenditure of IHG inclusive of System Fund capital investments (see page 25 for a description of System Fund capital investments and recent examples). | |
| Gross capital expenditure is defined as net cash from investing activities, adjusted to include contract acquisition costs and to exclude payments and repayments related to investments supporting the Group’s insurance activities. In order to demonstrate the capital outflow of the Group, cash flow receipts such as those arising from disposals and distributions from associates and joint ventures, and finance lease income, are excluded. Lease incentives and similar contributions received are included in gross capital expenditure as they directly reduce the Group’s outlay. The measure also excludes any material investments made in acquiring businesses, including any subsequent payments of deferred or contingent purchase consideration included within investing activities, which represent ongoing payments for acquisitions. | ||
| Gross capital expenditure is reported as key money, maintenance, recyclable or System Fund. Contract acquisition costs are defined as either key money or recyclable, depending on whether they form part of other recyclable investments, such as any difference between the face and market value of an owner loan on inception. This disaggregation provides useful information as it enables users to distinguish between: | ||
| – Key money, which reflects amounts paid to owners to secure management and franchise agreements; |
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| – Maintenance capital expenditure, which reflects investments to maintain our systems, corporate offices and owned, leased and managed lease hotels; |
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| – System Fund capital investments which are strategic investments to drive growth at hotel level; and |
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| – Recyclable investments (such as all investments in associates and joint ventures and any loans to facilitate third-party ownership of hotel assets), which are generally intended to be recoverable in the medium term and are to drive growth of the Group’s brands and expansion in primary markets. |
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| Management believes gross capital expenditure is a useful measure as it illustrates how the Group continues to invest in the business to drive growth. It also allows for comparison year-on-year.
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| 108 | IHG | Annual Report and Form 20-F 2024 | ||||||
Performance continued
Key performance measures and non-GAAP measures continued
| Measure | Commentary | |
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| Adjusted free cash flow, gross capital expenditure, net capital expenditure continued
Net capital expenditure |
Net capital expenditure provides an indicator of the capital intensity of IHG’s business model. Net capital expenditure is derived from net cash from investing activities, which includes receipts such as those arising from disposals and distributions from associates and joint ventures, adjusted to include contract acquisition costs (net of repayments) and interest receipts from owner loans, and to exclude payments and repayments related to investments supporting the Group’s insurance activities, finance lease income and any material investments made in acquiring businesses, including any subsequent payments of deferred or contingent purchase consideration included within investing activities which are typically non-recurring in nature. | |
| In addition, System Fund depreciation and amortisation relating to property, plant and equipment and intangible assets, respectively, is added back, reducing the overall cash outflow. This reflects the way in which System Funded capital investments are recovered from the System Fund, over the life of the asset (see page 25). | ||
| Management believes net capital expenditure is a useful measure as it illustrates the net capital investment by IHG, after taking into account capital recycling through asset disposal and the funding of strategic investments by the System Fund. It provides investors and other stakeholders with visibility of the cash flows which are allocated to long-term investments to drive the Group’s strategy.
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Changes in definitions to the 2023 Annual Report and Accounts
The following definitions have been amended and prior year reconciliations have been re-presented accordingly:
| – | The definition and calculation of adjusted free cash flow has been amended to exclude the following items from net cash from operating activities: any recyclable investments in contract acquisition costs; any cash flows relating to exceptional items; and interest receipts related to owner loans and any lease incentives. The definition now also includes any payments or repayments of investments supporting the Group’s insurance activities, together with any finance sub-lease income where the related outflow is included within lease principal payments. |
| – | The definition and calculation of gross capital expenditure has been amended to exclude any payments or repayments of investments supporting the Group’s insurance activities, together with any finance sub-lease income. The new definition additionally clarifies that lease incentives are always included in gross capital expenditure wherever they are accounted for in the Group statement of cash flows. |
| – | The definition and calculation of net capital expenditure has been amended to include interest receipts related to owner loans and to exclude any payments or repayments of investments supporting the Group’s insurance activities together with any finance sub-lease income. |
The definition of adjusted free cash flow was amended to reflect changes in the business over recent years, in particular more complex deal structures which can mean that cash flows from those investments are accounted for on a split basis across the Group statement of cash flows. The amended definition aims to eliminate those inconsistencies. The effect of the changes to the adjusted free cash flow definition also ensure that recurring, non-discretionary cash flows are better captured within adjusted free cash flow, and that exceptional cash flows, which can vary significantly from year-to-year are not distorting comparability. Changes have also been made to distinguish between the different underlying nature of contract acquisition costs e.g. key money and contract assets arising from owner loans, which better reflects the way these investments are considered by management and for consistency with the presentation of related assets.
The changes to gross and net capital expenditure definitions in relation to contract acquisition costs and interest receipts align with the changes to the definition of adjusted free cash flow. The change to exclude investments supporting the Group’s insurance activities and finance lease income better reflects the non-discretionary nature of these activities.
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The performance review should be read in conjunction with the Non-GAAP reconciliations on pages 266 to 272 and the Glossary on pages 313 to 314. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 109 | |||||||||||
Viability statement
Trading and profitability improved in 2024 reflecting the continued growth in travel demand and our increase in net system size. Our efficient operating model resulted in Group adjusted free cash flowa of $655m during 2024 and net debta increased by $510m, after $1,063m of ordinary dividends and the share buyback. The Group’s business model is discussed in more detail on pages 22 to 27.
Looking forward, the Directors have determined that the three-year period to 31 December 2027 is an appropriate period to be covered by the viability statement. The Group’s annual financial planning process builds a three-year plan. This detailed plan takes into consideration the principal risks, the Group’s strategy and current and emerging market conditions. The plan then forms the basis for strategic actions taken across the business and is used as the basis for longer-range planning. The plan is reviewed annually by the Directors. Once approved, the plan is then cascaded to the business and used to set performance metrics and objectives. Performance against those metrics and objectives is regularly reviewed by the Directors.
There are a range of possible planning scenarios over the three-year period considered in this review due to macro uncertainties and geopolitical risks affecting markets in each of our regions. There is sustained uncertainty in the US and Europe as the pace of interest rate cuts may be slower than expected and inflation may rebound and impact travel demand. Other macroeconomic and geopolitical factors are also present heading into 2025, such as the real estate sector challenges in China, the continued tensions in the Middle East, conflict in Ukraine, and new US administration policy uncertainty. In assessing the viability of the Group, the Directors have reviewed a number of scenarios, weighting downside risks that would threaten the business model, future performance, solvency and liquidity of the Group more heavily than opportunities.
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Viability scenarios and assumptions
In performing the viability analysis, the Directors have considered a ‘Base Case’ which assumes that global RevPAR in 2025 to 2027 continues to grow in line with market expectations in each of our regions. The assumptions applied in the viability assessment are consistent with those used for Group planning purposes, the going concern assessment, for impairment testing and for reviewing recoverability of deferred tax assets (see further detail on page 197).
The Directors have also reviewed a ‘Severe Downside Case’ which is based on a severe but plausible scenario equivalent to the market conditions experienced through the 2008/09 global financial crisis. This assumes that the performance during 2025 starts to worsen and then RevPAR decreases significantly by 17% in 2026 and increases by 5% in 2027. |
Principal risks
The relative strength and resilience of the IHG business model to severe shocks has been proven by performance through the Covid-19 pandemic, with positive cash flows being generated through one of the most challenging periods of trading in the history of the industry. In assessing the viability of the Group, the Directors have considered the impact of the principal risks as outlined on pages 46 to 51. The discussion on those pages includes a description of why these risks are important to the achievement of our objectives and how the Group manages these risks.
We have considered which principal risks could have the most significant and direct impact to the viability of the Group during the three-year period of assessment and they are shown below, alongside the scenario that is used to model those risks.
| Scenarios modelled | Related to principal risks | |||
| Changes in RevPAR Severe Downside Case
This scenario models a prolonged decrease in RevPAR, which may be driven by external or internal factors. |
– Operational resilience to incidents or disruption or control breakdown (including geopolitical, safety and security, cybersecurity, fraud and health-related).
– Guest preferences or loyalty for IHG branded hotel experiences and channels.
– Talent and capability attraction or retention.
– Our ability to deliver technological or digital performance or innovation (at scale, speed etc).
– Owner preferences for or ability to invest in our brands.
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| One-off events
This scenario models the impact of a specific material incident, which could relate to cybersecurity or an alternative material impact on the cash flow statement. |
– Data and information usage, storage and transfer.
– Legal, regulatory and contractual complexity or litigation exposures. |
| a. | Definitions for Non-GAAP measures can be found on pages 103 to 108. Reconciliations of these measures to the |
| most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
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| 110 | IHG | Annual Report and Form 20-F 2024 | ||||||
Viability statement continued
We have considered the potential impact of the Severe Downside Case on our net system size growth. We do not believe a change in system size growth would have a material impact on the Group during the period under review.
We have also considered the principal risks that may impact the viability of the Group over a longer period; for example, the impact of climate related physical and transition risks. The physical and transition climate risks to which IHG is most exposed are discussed in the TCFD statement on pages 68 to 73. Physical risks are not considered material to the long-term viability of the Group, and transition risks present both opportunities and risks. Whilst some transition risks have been assessed as being potentially material to the Group over the next one to five years under a 1.5°C scenario, this scenario is not considered a likely outcome, leading to the probability of a material impact on the Group’s viability assessment through 31 December 2027 as low.
Funding
The Group’s $1,350m revolving credit facility was extended by one year in 2024 and now matures in 2029 (the bank facility).
There are two financial covenants in the bank facility – interest cover and leverage ratio. The interest cover covenant requires a ratio of Covenant EBITDA to Covenant interest payable above 3.5:1 and the leverage ratio requires Covenant net debt to Covenant EBITDA below 4.0:1. In the event that a covenant test was failed whilst the bank facility was undrawn, the facility could be cancelled by the lenders but would not trigger a repayment demand on the bonds which threatened the viability of the Group. See note 23 to the Group Financial Statements for further details.
| Viability assessment
At 31 December 2024 the Group had cash and cash equivalents of $1,008m plus an undrawn bank facility of $1,350m.
Under the Base Case and Severe Downside Case, the Group is forecast to generate positive free cash flow over the 2025–27 period. The principal risks that could be applicable have been considered and are able to be absorbed within the covenant requirements.
Under the Severe Downside Case, there is headroom to the covenants over the 2025–27 period to absorb multiple additional risks; for example, additional RevPAR impacts and a widespread cybersecurity incident.
The Directors reviewed a number of actions that could be taken if required to reduce discretionary spend, creating substantial additional headroom to the covenants.
The Directors reviewed a reverse stress test scenario to determine what decrease in RevPAR would create a breach of the covenants and the cash reserves that would be available to the Group at that time. The Directors concluded that it was very unlikely that a single risk or combination of the risks considered could create the sustained RevPAR impact required to breach the covenants, except for a significant global event.
None of the scenarios modelled indicates that a covenant amendment would be required but, in the event that it was, the Directors believe it is reasonable to expect that such an amendment could be obtained based on experience of negotiating the waivers and amendments during 2020. The Group also has alternative options to manage this risk, including raising additional funding in the capital markets. We continue to plan to maintain an investment-grade credit rating which provides good access to the debt capital markets.
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In September 2024 the Group issued a seven-year €750m bond. During the assessment period there is a £300m bond maturing in August 2025, a £350m maturity in August 2026 and a €500m bond maturing in May 2027. It has been assumed that there is an annual bond issuance up to one year in advance of maturities.
Conclusion
The Directors have assessed the viability of the Group over the three-year period to 31 December 2027, taking account of the Group’s current position, the Group’s strategy and the principal risks documented in the Strategic Report. Based on this assessment, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 31 December 2027.
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See also our business model on pages 22 to 27, the going concern assessment on page 197 and the impact of the principal risks on pages 46 to 51. |
For and on behalf of the Board
Elie Maalouf
Chief Executive Officer
17 February 2025
Michael Glover
Chief Financial Officer
17 February 2025
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 111 | |||||||||||
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Chair’s overview
|
I also enjoyed several interactions with hotel owners, including meetings with the Chair and CEO of the IHG Owners Association. These helped me and the Board to further understand the benefits IHG brings to its owners as well as the challenges owners face, particularly in respect of financing.
I was also grateful for the opportunity to meet and spend time with more colleagues across various functions and regions and to experience first-hand the strong culture of collaboration and commerciality.
Focus areas and activities
The Board had another active year in 2024, and more information on its activities is given on pages 123 to 125.
The Board focused on the execution of the Group’s growth objectives. The Board had detailed discussions in respect of growth opportunities and was pleased to approve the Group’s long-term agreement with NOVUM Hospitality announced during the year to significantly increase the Group’s presence in Germany.
The Board also focused heavily on the execution of the Group’s ancillary business priorities. For example, the Board and the Audit Committee were closely involved in assessing the changes in the recognition of a portion of IHG One Rewards point sale proceeds from the System Fund to the Group’s fee business revenue, focusing in particular on the accounting and reporting implications as well as the impact of the changes on hotel owners and the Group’s investors.
The Board and the Audit Committee also focused in depth on the new US co-brand credit card arrangements announced during the year. |
|||||
|
Throughout 2024, the Board sought to ensure that the Group’s governance structure and processes remain robust and appropriate as the Group pursues its strategic objectives with an emphasis on growth, efficiency and an increased pace of execution in the context of a rapidly developing environment.
The Board also sought to be responsive to the views of shareholders and other stakeholders. |
To this end, I was pleased to engage in depth with shareholders through a series of governance meetings throughout the year.
The meetings focused in particular on Board and leadership changes, executive remuneration and sustainability, and provided valuable insight into investors’ views and perspectives in these areas. The positive support for the Group’s management and strategy was notable. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 113 | |||||||||||
The Board noted several positive outcomes of the new agreements, including the creation of more opportunities for customers to engage with IHG and the IHG One Rewards loyalty programme, further strengthening IHG’s enterprise helping to deliver more business to hotels and driving significant value for shareholders.
Board composition
During the year, we announced that Daniela Barone Soares was stepping down from the Board at 31 December. I would again like to thank Daniela for her contribution to IHG. Other than Sir Ron Kalifa’s appointment to the Board from 1 January 2024, details of which were included in our Annual Report and Form 20-F 2023, there were no other changes to the Board during the year. An overview of the appointments to the Executive Committee made during the year is included in the Nomination Committee report on pages 136 and 137.
In line with UK corporate governance requirements and recommendations, our Board continues to meet the FTSE Women Leaders Review target for women on a FTSE 100 Board. With regard to the Parker Review, which looks at the ethnic diversity of UK boards and senior management in FTSE 350 companies, IHG continues to exceed the original target set by the Review of at least one director from an ethnically diverse background, with three ethnically diverse directors. IHG has also set targets for ethnic diversity in relation to senior management. Further detail and reporting on these targets can be found on pages 56 and 57.
Committee activities
The Board delegates certain responsibilities to its Committees to assist in ensuring effective corporate governance across the business. During 2024:
| – | the Audit Committee focused on assessing the Group’s financial governance and monitoring its risk management and internal controls systems (see its report on pages 128 to 133); |
| – | the Remuneration Committee focused on incentive plan measures and the approach to performance management and reward (see its report on pages 138 to 175); |
| – | the Responsible Business Committee focused on progress against the 2024 responsible business priorities, which support the Group’s Journey to Tomorrow responsible business plan (see its report on pages 134 and 135); and |
| – | the Nomination Committee focused on Board composition, the execution of Executive Committee succession plans and the internal evaluation (see its report on pages 136 and 137). |
Further detail on the Group’s governance structure is given on page 122.
Board performance review
During the year, an internal review of the effectiveness of the Board and its Committees was undertaken. I am pleased to report that, overall, the review supported the positive conclusions of the Board and its Committees as to their effectiveness. Further details of the internal evaluation can be found on page 127. Individual director feedback assessments were also conducted, details of which can be found on page 127.
Compliance and
our dual listing
IHG continues to operate as a dual-listed company with a premium listing on the London Stock Exchange (LSE) and a secondary listing on the New York Stock Exchange (NYSE). Under the UK listing rules, we are obliged to make a statement as to how we have applied the principles of the UK Corporate Governance Code (the Code). Under the NYSE listing rules, as a foreign private issuer, we are required to disclose any significant ways in which our corporate governance practices differ from those of US companies. To ensure consistency of information provided to both UK and US investors, we produce a combined Annual Report and Form 20-F.
Our Statement of compliance with the Code is on pages 176 and 177. A summary outlining the differences between the Group’s UK corporate governance practices and those followed by US companies can be found on page 300.
Looking forward
In 2025, the Board will focus on the continued delivery of the Group’s strategic objectives, while ensuring that a robust governance framework is maintained.
| Deanna Oppenheimer |
| Chair of the Board 17 February 2025 |
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Our Board of Directors
At 17 February 2025,
our Board of Directors
comprises:
Board Committee membership
Deanna Oppenheimer
Non-Executive Chair
Appointed to the Board: 1 June 2022
Committee membership:
Skills and experience
Deanna is founder of CameoWorks, LLC, an advisory firm to C-Suite executives and BoardReady.io, a non-profit. She previously held several leadership roles at Barclays plc and she has also held a number of Non-Executive board positions, including with Tesco PLC (as Senior Independent Director), Hargreaves Lansdown (Board Chair), and Whitbread PLC (Remuneration Committee Chair), among others.
Board contribution
As Chair, Deanna is responsible for leading the Board and ensuring it operates in an effective manner, promoting constructive relations with IHG’s shareholders and with other stakeholders.
Other appointments
Deanna is a Non-Executive Director of Thomson Reuters Corporation. She also sits on the private board of Slalom Corp. and is a Council Member of the King’s Trust.
Elie Maalouf
Chief Executive Officer (CEO)
Appointed to the Board: 1 January 2018
Skills and experience
Elie was appointed Chief Executive Officer at IHG in July 2023. Prior to this, Elie served as Chief Executive Officer, Americas since February 2015. He joined the Group in 2015 having spent six years as President and Chief Executive Officer of HMSHost Corporation, where he was also a member of the board of directors. Elie brings a broad global experience spanning hotel development, branding, finance, real estate and operations management as well as food and beverage expertise. Prior to joining IHG, Elie was Senior Adviser with McKinsey & Company from 2012 to 2014.
Board contribution
Elie is responsible for the executive management of the Group and ensuring the implementation of Board strategy and policy.
Other appointments
Elie is a member of the Executive Committee of the World Travel & Tourism Council and the U.S. Travel Association CEO Roundtable.
Board skills matrix
| Financiala | Strategyb | Risk | Hotels/ Hospitality |
Brands/ Consumerc |
Real Estate |
Internationald | Tech/ Digital |
Sustainability | Franchising | US/UK Corporate Governancee |
CEOf |
|||||||||||||||||||||||||||||||||||||||||||||||||||
| Deanna Oppenheimer | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Graham Allan | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arthur De Haast | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duriya Farooqui | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Byron Grote | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ron Kalifa | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Angie Risley | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sharon Rothstein | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Michael Glover | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elie Maalouf | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 5 | 7 | 6 | 6 | 5 | 2 | 9 | 4 | 2 | 4 | 6 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Experience in a CFO/senior finance role and/or investment banking sector. |
| b. | Experience in a role leading corporate strategy, a management consulting role and/or a divisional CEO role. |
| c. | Experience in consumer/brands organisation or a role as marketing executive with mutibrand background. |
| d. | Experience in a multinational organisation holding responsibility globally/across several regions. |
| e. | Experience in a UK and US listed organisation. |
| f. | Experience in a global CEO role. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 115 | |||||||||||
|
|
|
|
||
| Michael Glover
Chief Financial Officer (CFO)
Appointed to the Board: 20 March 2023
Skills and experience
Michael is an Accounting and Finance graduate of Baylor University and a certified public accountant. He was previously Chief Financial Officer of the Americas and Group Head of Commercial Finance, where he had group-wide responsibility for commercial finance operations, including the global procurement, sales and marketing and technology finance functions, as well as IHG’s System Fund. During his tenure with the business, Michael has held several roles at Group and regional levels, including CFO of IHG’s China region from February 2013 to September 2015, at which time Michael became Group Financial Controller, where he oversaw Tax, Treasury and Financial Reporting group-wide, and delivered a finance transformation programme that enabled significant simplification, automation and the transfer of work to IHG’s service centre.
Before joining IHG in 2004, Michael worked with several large Fortune 250 companies in a wide range of roles, beginning his career at Halliburton Energy Services in 1995.
Board contribution
Michael is responsible, together with the Board, for overseeing the financial operations of the Group.
Other appointments
N/A. |
Graham Allan
Senior Independent Non-Executive Director (SID)
Appointed to the Board: 1 September 2020a
Committee membership:
Skills and experience
Graham was Group Chief Executive of Dairy Farm International Holdings Ltd from 2012 to 2017, a leading Asian retailer headquartered in Hong Kong. He previously served in several senior positions at Pepsico/Yum! Brands from 1992 to 2012. He assumed the role of President of Yum! Restaurants International in 2003 and for 9 years led the growth of global brands KFC, Pizza Hut and Taco Bell across 120 international markets. Prior to his tenure at Yum! Restaurants, Graham was a consultant at McKinsey & Company.
Board contribution
Graham brings to the Board more than 40 years of strategic, commercial and operations experience within consumer–focused businesses across multiple geographies. Graham was appointed as Senior Independent Non-Executive Director from 1 January 2022 and became Chair of the Responsible Business Committee from 1 March 2023.
Other appointments
Graham is Senior Independent Non-Executive Director at Intertek plc, Independent Non-Executive Director of Associated British Foods plc and Independent Non-Executive Director of Americana Restaurants International plc. He also serves as Chairman of Bata Footwear, a private company. |
Arthur de Haast
Independent Non-Executive Director
Appointed to the Board: 1 January 2020
Committee membership:
Skills and experience
Arthur has held several senior roles in the Jones Lang LaSalle (JLL) group, including Chair of JLL’s Capital Markets Advisory Council and Chair and Global CEO of JLL’s Hotels and Hospitality Group. Arthur is also a former Chair of the Institute of Hospitality.
Board contribution
Arthur has more than 30 years’ experience in the capital markets, hotels and hospitality sectors, along with significant board-level knowledge around sustainability.
Other appointments
Arthur is Chair of JLL’s Capital Markets Advisory Council, an Independent Non-Executive Director of Chalet Hotels Limited and Chair of its Risk Management Committee, and a member of the Advisory Board of the Scottish Business School, University of Strathclyde, Glasgow. |
||
| a. Graham was a member of the Board from 1 January 2010 to 15 June 2012 prior to being appointed |
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| 116 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our Board of Directors continued
|
|
|
|
||
| Duriya Farooqui
Independent Non-Executive Director
Appointed to the Board: 7 December 2020
Committee membership:
Skills and experience
Duriya is an Independent Director at Intercontinental Exchange, Inc. (ICE), a leading operator of global exchanges and clearing houses, and provider of mortgage technology, data and listings services. She is also an executive coach and mentor with The Exco Group, focused on helping Fortune 500 companies develop high-performing leadership teams. Duriya was previously President of Supply Chain Innovation at Georgia-Pacific, leading an organisation responsible for supply chain transformation. Prior to this, she was Executive Director of Atlanta Committee for Progress, a coalition of more than 30 CEOs providing leadership on economic growth and inclusion opportunities in Atlanta. Duriya has also been a principal at Bain & Company and Chief Operating Officer of the City of Atlanta.
Board contribution
Duriya’s diverse board and executive-level experience brings valuable insights and perspectives to IHG. She combines more than two decades of relevant expertise in business strategy, transformation and innovation, with a clear commitment to driving responsible operations and diversity.
Other appointments
Duriya is an Independent Director of Intercontinental Exchange, Inc. She serves on the boards of NYSE and ICE NGX, both subsidiaries of ICE, and co-chairs the NYSE Board Advisory Council. She is also a Trustee of Agnes Scott College, a member of the Board of Councilors of The Carter Center and a Board Commissioner of Atlanta Housing. |
Byron Grote
Independent Non-Executive Director
Appointed to the Board: 1 July 2022
Committee membership:
Skills and experience
Byron’s career spanned over 30 years in the international oil and gas sector, including Standard Oil of Ohio and subsequently BP p.l.c, where he held management positions in retail marketing, trading, mining, exploration and production, renewables, petrochemicals, and finance. He served as an Executive Director on the Board of BP p.l.c. for 13 years and was the Chief Financial Officer from 2002 until 2011. He previously served as the Senior Independent Director and Audit Committee Chair at Anglo American plc and Tesco PLC, as a Non-Executive Director and Audit Committee Chair at Unilever PLC and Unilever N.V., and Non-Executive Director at Standard Chartered PLC.
Board contribution
Byron has extensive experience across a range of leading international businesses, both at board level and in senior management positions, particularly in finance and chairing audit committees. He is a participant in the European Audit Committee Leadership Network and a member of the Audit Committee Chairs’ Independent Forum. Byron has been Chair of the IHG Audit Committee since March 2023.
Other appointments
Byron is a Non-Executive Director at Inchcape PLC and on the Supervisory Board of Akzo Nobel N.V., where he is the Deputy Chair and Audit Committee Chair. |
Sir Ron Kalifa
Independent Non-Executive Director
Appointed to the Board: 1 January 2024
Committee membership:
Skills and experience
Ron is a recognised leader in financial services and technology-related businesses. He was formerly Chief Executive Officer of Worldpay for more than 10 years, serving as Vice Chairman thereafter and an Executive Director until February 2020. Ron authored a government-commissioned report ‘Review of UK Fintech’, recommending a new strategy for the UK in financial services. Ron was also Chairman of Network International Holdings Plc until September 2024.
Board contribution
Ron brings to the IHG Board in-depth knowledge of high-growth sectors of financial markets, including payments and fintech strategy. He also has a wealth of experience through his tenure on various boards, including not-for-profit boards.
Other appointments
Ron is Vice Chair and Head of Financial Infrastructure at Brookfield Asset Management. He is a Non-Executive Director and the Senior Independent Director on the Court of Directors of the Bank of England, a Non-Executive Director for the England & Wales Cricket Board and a member of the Council at Imperial College London.
Ron is a Trustee of the Royal Foundation of the Prince and Princess of Wales and Chair of the Sports Honours Committee. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 117 | |||||||||||
|
|
|
|||
| Angie Risley Independent Non-Executive Director
Appointed to the Board: 1 September 2023
Committee membership:
Skills and experience
Angie’s career in human resources has spanned executive roles across a number of sectors, including at United Biscuits; Whitbread as an Executive Director, Group HR Director; and Lloyds Banking Group as a member of the Executive Committee as Group HR Director. She recently retired from Sainsbury’s where she was Group HR Director for 10 years and a member of the Operating Board.
Angie previously served as Non-Executive Director of Serco Group plc (and was Chair of the Remuneration Committee) as well as Sainsbury’s Bank plc, Arriva and Biffa, and she has been a member of the Low Pay Commission.
Board contribution
Angie brings to the IHG Board a wide range of experience from a variety of sectors and a strong background in human resources. Angie became Chair of the Remuneration Committee from 1 January 2024.
Other appointments
Angie is currently the Senior Independent Non-Executive Director, Chair of the Remuneration Committee and a member of the Nomination and Governance Committee at Smith & Nephew plc. |
Sharon Rothstein Independent Non-Executive Director
Appointed to the Board: 1 June 2020
Committee membership:
Skills and experience
Sharon currently serves as Operating Partner of Stripes Group, a growth equity firm investing in high-growth consumer and SaaS (Software as a Service) companies. She previously served as Executive Vice President, Global Chief Marketing Officer and, subsequently, as Executive Vice President, Global Chief Product Officer for Starbucks Corporation. In addition, Sharon has held senior marketing and brand management positions at Sephora LLC, Godiva Chocolatier, Inc., Starwood Hotels & Resorts Worldwide, Inc., Nabisco Biscuit Company and Procter & Gamble Company.
Board contribution
Sharon brings extensive brands, marketing and digital expertise, having worked in senior positions for more than 25 years at iconic global companies. In addition to her knowledge of the hospitality industry, Sharon has wide-ranging board-level experience in a number of consumer-focused businesses.
Other appointments
Sharon serves on the boards of Yelp, Inc. and private companies Califia Farms, LLC, Levain Bakery, Inc., and Pop Up Bagels, Inc. |
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| Board Committee membership
|
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|
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| 118 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our Board of Directors continued
| Changes to the Board, and its Committees, and Executive Committee
|
||
| Daniela Barone Soares | Daniela stood down from the Board on 31 December 2024 | |
| Daniel Aylmer | Daniel was appointed to the Executive Committee as Chief Executive Officer, Greater China in April 2024 | |
| Jolie Fleming | Jolie was appointed to the Executive Committee as Chief Product & Technology Officer in April 2024 | |
| Ron Kalifa | Ron was appointed to the Board as a Non-Executive Director with effect from 1 January 2024 | |
| George Turner | George stood down from the Executive Committee and his role as Chief Commercial and Technology Officer in April 2024 | |
Board and Committee membership and attendance in 2024
| Appointment date | |
Additional/ Committee appointments |
|
Board | |
Audit Committee |
a |
|
Responsible Business Committee |
|
|
Nomination Committee |
|
|
Remuneration Committee |
|
||||||||||||||||||||||||||
| Total meetings held | 8 | 5 | 4 | 5 | 6 | |||||||||||||||||||||||||||||||||||||
| Chair | ||||||||||||||||||||||||||||||||||||||||||
| Deanna Oppenheimerb | 01/06/22 |
|
8/8 | – | – | 5/5 | 6/6 | |||||||||||||||||||||||||||||||||||
| Chief Executive Officer | ||||||||||||||||||||||||||||||||||||||||||
| Elie Maalouf | 01/01/18 | 8/8 | – | – | – | – | ||||||||||||||||||||||||||||||||||||
| Executive Directors | ||||||||||||||||||||||||||||||||||||||||||
| Michael Glover | 20/03/23 | 8/8 | – | – | – | – | ||||||||||||||||||||||||||||||||||||
| Senior Independent Non-Executive Director | ||||||||||||||||||||||||||||||||||||||||||
| Graham Allanc | 01/09/20 |
|
8/8 | 4/5 | 4/4 | 5/5 | – | |||||||||||||||||||||||||||||||||||
| Non-Executive Directors | ||||||||||||||||||||||||||||||||||||||||||
| Daniela Barone Soaresd | 01/03/21 |
|
7/8 | – | 3/4 | – | 4/6 | |||||||||||||||||||||||||||||||||||
| Arthur de Haast | 01/01/20 |
|
8/8 | 5/5 | 4/4 | – | – | |||||||||||||||||||||||||||||||||||
| Duriya Farooqui | 07/12/20 |
|
8/8 | 5/5 | 4/4 | – | – | |||||||||||||||||||||||||||||||||||
| Byron Grote | 01/07/22 |
|
8/8 | 5/5 | – | 5/5 | 6/6 | |||||||||||||||||||||||||||||||||||
| Sir Ron Kalifae | 01/01/24 |
|
7/8 | 4/5 | – | – | 5/6 | |||||||||||||||||||||||||||||||||||
| Angie Risleyf | 01/09/23 |
|
8/8 | – | 3/4 | 4/5 | 6/6 | |||||||||||||||||||||||||||||||||||
| Sharon Rothstein | 01/06/20 |
|
8/8 | 5/5 | 4/4 | – | – | |||||||||||||||||||||||||||||||||||
| a. | In principle, the full Board attends the relevant sections of the Audit Committee meetings when financial results are considered. |
| b. | In principle, the Chair attends all Committee meetings. |
| c. | Graham Allan was unable to attend an Audit Committee meeting due to a prior commitment. |
| d. | Daniela Barone Soares was unable to attend a Board meeting, a Responsible Business Committee meeting and two Remuneration Committee meetings due to prior commitments. Daniela stood down from the Board on 31 December 2024. |
| e. | Ron Kalifa was unable to attend a Board meeting, an Audit Committee meeting and a Remuneration Committee meeting due to a prior commitment. |
| f. | Angie Risley was unable to attend a Responsible Business Committee meeting and a Nomination Committee meeting due to a prior commitment. |
| Board Committee membership and additional appointments key |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 119 | |||||||||||
Our Executive Committee
In addition to Elie Maalouf and
Michael Glover, the Executive
Committee comprises:
Daniel Aylmer
Chief Executive Officer, Greater China
Appointed to the Executive Committee:
April 2024 (joined the Group: 2016)
Skills and experience
Daniel’s expertise in hotel operations and deep understanding of the Chinese market has enabled him to lead IHG’s Greater China region with continued success. Previously, Daniel held the position of Managing Director for the region from 2021 to 2024, where he played a pivotal role in steering the region’s growth by executing strategic priorities, enhancing performance, and fostering an excellent reputation.
Before this, Daniel served as Chief Operating Officer for IHG Greater China, where he provided strategic direction for all managed and franchised full-service hotel operations, contributing significantly to the region’s rapid expansion.
Daniel’s background in hospitality spans Europe, the US, and Asia. With more than 20 years previously at Starwood, he brings invaluable expertise to IHG. Daniel also serves on the executive committee of the British Chamber of Commerce in Shanghai, actively promoting the economic and trade exchanges between China and the UK.
Key responsibilities
Daniel oversees the Greater China market based in Shanghai and is responsible for driving the management, growth, and profitability of the region.
Heather Balsley
Chief Commercial & Marketing Officer
Appointed to the Executive Committee: November 2023 (joined the Group: 2007)
Skills and experience
Heather was appointed as IHG’s Global Chief Customer Officer in November 2023 later becoming Chief Commercial & Marketing Officer in April 2024. Previously, Heather held several senior positions in the Group, including SVP, Global Loyalty & Partnerships, where she was responsible for the Company’s loyalty and partnerships business, including the re-launch of IHG One Rewards and co-brand credit card business. She also served as SVP, Global Marketing, Mainstream Brands and SVP, Americas Brands and Marketing.
Prior to joining IHG, Heather spent seven years as a consultant with Marakon Associates in New York, where she advised Fortune 500 companies on performance-enhancing strategies.
She holds an MBA from Harvard Business School and a bachelor’s degree in Economics and Sociology from Duke University.
Key responsibilities
Heather leads all aspects of IHG’s brand strategy, positioning, marketing, commercial performance, customer data & analytics and the end-to-end customer experience across IHG’s portfolio of 19 brands, including our award-winning IHG One Rewards loyalty programme.
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| 120 | IHG | Annual Report and Form 20-F 2024 | ||||||
Our Executive Committee continued
Jolyon Bulley
Chief Executive Officer, Americas
and Group Transformation Lead,
Luxury & Lifestyle
Appointed to the Executive Committee:
November 2017 (joined the Group: 2001)
Skills and experience
A career hotelier, Jolyon has held a number of significant roles at IHG and, before being appointed as CEO, Americas in 2023, was CEO for Greater China from 2018. In 2021, in addition to his role as CEO for Greater China, Jolyon was appointed to lead the Luxury & Lifestyle Transformation Team.
Prior to that, he was Chief Operating Officer (COO) for the Americas from 2014 to 2017, leading the region’s operations for franchised and managed hotels, in addition to cultivating franchisee relationships and enhancing hotel operating performance. Jolyon also served as COO for Greater China for almost four years, with oversight of the region’s hotel portfolio and brand performance, new hotel openings and owner relations.
Jolyon graduated from William Angliss Institute in Melbourne with a concentration in Tourism and Hospitality.
Key responsibilities
Jolyon is responsible for the management, growth and profitability of the Americas region and the development and defining of a strategy for our Luxury & Lifestyle brands’ performance and growth.
Yasmin Diamond, CB
Executive Vice President,
Global Corporate Affairs
Appointed to the Executive Committee:
April 2016 (joined the Group: 2012)
Skills and experience:
Before joining IHG in 2012, Yasmin was Director of Communications at the Home Office, where she advised the Home Secretary, ministers and senior officials on the strategic development and daily management of all the Home Office’s external and internal communications. She was previously Director of Communications at the Department for Environment, Food and Rural Affairs; Head of Communications for Welfare to Work and New Deal; and Head of Marketing at the Department for Education and Skills.
In 2011, Yasmin was awarded a Companion of the Order of the Bath (CB) in the New Year’s Honours List in recognition of her career in government communications. In addition, Yasmin is an Independent Non-Executive Director of the Rugby Football Union and is a Board Trustee member of the Sustainable Hospitality Alliance.
Key responsibilities
Yasmin is responsible for all global corporate affairs activity, focused on supporting and enabling IHG’s broader strategic priorities. This includes all external, internal, hotel and owner communications; global government affairs work; and leading IHG’s Corporate Responsibility strategy.
Jolie Fleming
Executive Vice President,
Chief Product & Technology Officer
Appointed to the Executive Committee:
April 2024 (joined the Group: 2021)
Skills and experience
Jolie joined IHG in 2021 as Senior Vice President, Guest Products and Platforms (GPP) for IHG’s Commercial and Technology team. In that role, she led the development and launch of technology solutions for the new IHG One Rewards programme and supporting mobile app, new hotel websites and the integration of new partners, including Iberostar.
Jolie’s career has spanned both large corporate environments and start-ups but has focused on a common goal of leading transformative growth through product management, technology, relentless delivery and high-performance teams. Prior to IHG, Jolie spent more than 25 years in technology-first businesses spanning multiple industries. Most recently, Jolie served as the Managing Director of Digital and Customer Experience at E*TRADE by Morgan Stanley where she led its award-winning digital channels.
Key responsibilities
Jolie is responsible for driving the development of all guest, enterprise and owner-facing products and technology, while working across the Group’s regions with marketing, brands, loyalty and operations.
Gender of Board and Executive Committee
| Number of Board members |
Percentage of the Board |
Number of senior positions on the Board (CEO, CFO, SID |
Number in Executive Committee |
Percentage of Executive Committee |
||||||||||||||||||||||||||||||||||||
| Men | 6 | 60% | 3 | 6 | 60% | |||||||||||||||||||||||||||||||||||
| Women | 4 | 40% | 1 | 4 | 40% | |||||||||||||||||||||||||||||||||||
| Not specified/prefer not to say | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 121 | |||||||||||
Nicolette Henfrey
Executive Vice President, General
Counsel and Company Secretary
Appointed to the Executive Committee: February 2019 (joined the Group: 2001)
Skills and experience
Nicolette joined IHG in 2001. Prior to leading the Business Reputation and Responsibility function, she held a number of senior legal roles, including Deputy Company Secretary. During that time, she worked with the Board, Executive Committee and wider organisation to ensure best-in-class delivery and compliance across legal, governance and regulatory areas. Nicolette is a solicitor qualified in England and South Africa and previously worked as a corporate lawyer at Linklaters in London and Findlay & Tait (now Bowmans) in South Africa.
Key responsibilities
Nicolette has global responsibility for all areas of corporate governance, legal, risk management, insurance, regulatory compliance, internal audit and hotel standards.
Wayne Hoare
Chief Human Resources Officer
Appointed to the Executive Committee: September 2020 (joined the Group: 2020)
Skills and experience
Wayne has more than 30 years of experience in HR and joined IHG from RCL FOODS, where he spent seven years as the company’s Chief Human Resources Officer, leading the culture-building and talent strategy for 25,000 employees. Prior to joining RCL FOODS, Wayne spent 26 years at Unilever, where he worked across a broad range of roles in mature and developing markets across Europe, North America, Asia, Africa and the Middle East.
Wayne’s most recent role at Unilever was as SVP, HR – Global Centres of Expertise, where he held responsibility for the Global Talent, Leadership Development and Reward teams. He led the development of the company’s HR strategy to enable a performance culture focused on growth.
Key responsibilities
Wayne has global responsibility for talent management, learning and capability building, inclusion and impact, organisation development, reward and benefit programmes, employee relations and all aspects of the people and organisation strategy for the Group.
Kenneth Macpherson
Chief Executive Officer, EMEAA
Appointed to the Executive Committee: April 2013 (joined the Group: 2013)
Skills and experience
Kenneth became CEO, EMEAA in January 2018. He was previously IHG’s CEO for Greater China, a role he held from 2013 to 2017. He has extensive experience across sales, marketing strategy, business development and operations. In addition to 12 years living and working in China, Kenneth’s career includes experience in Asia, the UK, France and South Africa. Before IHG, he worked for 20 years at Diageo, one of the UK’s leading branded companies. His senior management positions included serving as Managing Director of Diageo Greater China, where he helped to build the company’s presence and led the landmark deal to acquire ShuiJingFang, a leading manufacturer of China’s national drink, and one of the first foreign acquisitions of a Chinese listed company.
Key responsibilities
Kenneth is responsible for the management, growth and profitability of the EMEAA region. He also manages a portfolio of hotels in some of the world’s most exciting destinations, in both mature and emerging markets.
Ethnic background of Board and Executive Committee
| Number of Board members |
Percentage of the Board |
Number of senior positions on the Board (CEO, CFO, SID and Chair) |
Number in Executive Committee |
Percentage of Executive Committee |
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| White British or other White (including minority-white groups) |
7 | 70% | 3 | 8 | 80% | |||||||||||||||||||||||||||||||||||
| Mixed/Multiple Ethnic Groups | – | – | – | – | – | |||||||||||||||||||||||||||||||||||
| Asian/Asian British | 2 | 20% | – | 1 | 10% | |||||||||||||||||||||||||||||||||||
| Black/African/Caribbean/Black British | – | – | – | – | – | |||||||||||||||||||||||||||||||||||
| Other ethnic group | 1 | 10% | 1 | 1 | 10% | |||||||||||||||||||||||||||||||||||
| Not specified/prefer not to say | – | – | – | – | – | |||||||||||||||||||||||||||||||||||
The information in the tables above is compiled from self-reported data from the relevant individuals.
As at 17 February 2025, the Company complies with the following targets on board diversity in accordance with Listing Rule 6.6.6R(9): (i) at least 40% of the individuals on the Board are women; (ii) at least one senior position, namely the Chair of the Board, is held by a woman; and (iii) at least one individual on the Board is from a minority ethnic background.
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| 122 | IHG | Annual Report and Form 20-F 2024 | ||||||
Governance structure
Governance framework
Our governance framework is headed by the Board, which delegates certain management and oversight responsibilities to various Committees to further IHG’s purpose, values and strategy, while conducting business in a responsible manner. Executive management is responsible for the implementation of strategy that is delivered by the Group’s workforce.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 123 | |||||||||||
Board activities
Key areas of focus during the year
| Board meetings | Performance | |||||
| This page gives an overview of some of the regular and standing items discussed and decisions made at Board meetings during the year.
The table on pages 124 and 125 sets out information on the key matters discussed by the Board in 2024 and our Section 172 statement, which includes information about how stakeholders were considered and impacted outcomes.
In several areas, much of the substantive preparation work took place within the Board’s Committees and was later confirmed by the Board, or the whole Board attended certain sections of Committee meetings. Where this was the case, the discussions are treated as having taken place at Board level. |
The Board receives regular updates from the CEO and CFO on recent and current trading, including RevPAR, operating profit, net system size growth and cash flow performance. These were also compared to the results of competitors and budget. Internal projections were compared with the consensus of forecasts by analysts to ensure that the Company’s prospects were appropriately reflected in market expectations. The Board also monitors the progress of the share buyback programme. |
Throughout the year, the Board also receives regional performance updates from each of the regional Chief Executive Officers, covering regional market and competitive landscapes, financial performance, regional strategy and progress on regional initiatives, and risks and mitigation measures. |
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| Governance and assurance | ||||||
| The Board receives regular updates on principal and emerging risks, internal controls, risk management systems, the Group’s risk appetite, litigation, cybersecurity, compliance programmes and the global insurance programme. Committee Chairs also deliver reports on risk topics in relation to the areas of remit for their respective Committees. | The Board receives regulatory development updates from the General Counsel and Company Secretary, covering regulatory changes in areas such as corporate reporting and governance, executive remuneration, shareholder body voting guidelines and other social and environmental matters. The Board also reviewed and approved the Group’s Code of Conduct.
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| Stakeholders | ||||||
| The Board receives a regular report outlining share register movements, relative share price performance, investor relations activities and engagement with shareholders. The Board also considers views shared from the regular investor and analyst perception studies and feedback surveys, as well as individual meetings with investors.
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The Board receives a regular report outlining various geopolitical and social issues pertaining to IHG and its business; corporate affairs activity supporting IHG’s corporate reputation, brands and responsible business agenda; owner and colleague engagement; government and advocacy programmes; and industry-body engagement. |
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| 124 | IHG | Annual Report and Form 20-F 2024 | ||||||
Board activities continued
Key areas of focus during the year continued
Key matters discussed in 2024 and Section 172 statement
Section 172 of the Companies Act 2006 requires a director of a company to promote the success of that company, and in doing so, the director must have regard to six factors. These are: the long-term consequences of a decision; the interests of its employees; business relationships with suppliers, customers and others; its impact on the community and environment; the desirability of maintaining high standards of business conduct; and the need to act fairly between members of the company. The table below summarises some of the main matters dealt with by the Board during the year and how it took the Section 172 factors into account. The relevant Section 172 factors are identified in the table.
| Finance and performance |
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| Shareholder returns
The Board considered and approved a final dividend for 2023, an interim dividend for 2024 and a $800m share buyback programme. |
In considering the dividends paid during the year and the share buyback programme, the Board took into account the creation of value for shareholders, the expectations of analysts in the context of the Company’s trading and viability assessments and capacity to pay, as well as the external environment, including the geopolitical situation and macro-economic developments, while having regard to the Group’s dividend policy.
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Considerations
– Long term
– High standards
– Act fairly between members |
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| Group finance
The Board approved the update of the Group’s Euro Medium Term Note (EMTN) bond programme and the issuance of a €750m bond.
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In approving the EMTN programme update and the €750m bond issuance, the Board considered in particular the Group’s longer-term debt maturity and liquidity profiles as well as the benefits of prudent financial management to the Group’s employees and shareholders. |
Considerations
– Long term
– Employees
– High standards
– Act fairly between members |
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| Financial statements
The Board considered and approved the full and half-year financial results statements, including the going concern and viability statements, and whether the Annual Report was fair, balanced and understandable.
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In reviewing and approving for publication the Group Financial Statements, the Board ensured that the Group had met its regulatory requirements in relation to providing shareholders and other stakeholders with accurate information regarding the Group and further maintained the Group’s reputation for operating with high standards. |
Considerations
– High standards
– Act fairly between members |
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| Strategic and operational matters |
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| Brand portfolio
The Board considered and approved the Group’s execution of a long-term franchise and development agreement with NOVUM Hospitality. |
The Board considered in particular the transaction’s financial and strategic benefits and how the transaction supports the Group’s strategy to grow mainstream brands, focus on priority markets and maintain an asset-light model. The Board also noted the beneficial outcome for hotel owners, through higher brand awareness and loyalty programme engagement. | Considerations
– Long term
– Suppliers and customers
– Community and environment |
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| Ancillary business
The Board approved the new US co-brand credit card arrangements between the Group, JPMorgan Chase Bank and Mastercard. |
The Board recognised the extensive benefits of the new arrangements for IHG, its shareholders, hotel owners and guests, noting how they will create more opportunities for guests to engage with IHG and its loyalty programme; further strengthen IHG’s enterprise and the System Fund for the benefit of hotel owners; and drive significant shareholder value through additional revenues. The Board and the Audit Committee considered the accounting and reporting implications of the agreements.
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Considerations
– Long term
– Suppliers and customers
– High standards
– Act fairly between members |
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| Ancillary business
The Board approved changes to System Fund arrangements involving changes to fees paid by hotel owners into the System Fund and the sharing arrangements for ancillary fee streams.
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The Board carefully considered the impact of the changes on hotel owners and noted the close engagement with the IHG Owners Association. The Board also took into account the beneficial outcome for the Company’s shareholders in terms of the increased revenues being recognised by IHG within its results from reportable segments. The Board and the Audit Committee also considered the accounting and reporting implications of the changes. | Considerations
– Long term
– Suppliers and customers
– High standards
– Act fairly between members |
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| Growth strategy in regions – Americas, EMEAA and Greater China
The Board received in-depth regional updates from the CEOs of each of the Group’s three regions, and provided oversight with regard to the Group’s growth strategy and strategic priorities.
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The Board received regular updates from the Group’s operating regions, covering the Group’s relative brand positioning across the brand segments; enterprise capabilities across key markets and the priorities for driving growth in the national markets, and further focused on actions to accelerate the Group’s growth. In its discussions, the Board paid particular attention to critical owner considerations in relation to optimising owner returns as well as initiatives to reduce energy consumption and food waste. | Considerations
– Long term
– Suppliers and customers
– Community and environment |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 125 | |||||||||||
| Strategic and operational matters continued |
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| Regional operating model
The Board endorsed changes to the EMEAA region operating model. |
In considering the changes to the EMEAA regional operating model, the Board noted in particular the potential to increase awareness and preference for the Group’s brands across a wider geography, enabling further revenue and profit delivery for hotel owners. The Board also took into account how the evolved structure supported talent and succession plans. | Considerations
– Long term
– Suppliers and customers
– Employees |
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| Technology
The Board received regular updates during the year on key technology initiatives. |
The Board received regular updates on key technology initiatives, including the Group’s new revenue management and property management systems; work to optimise technology across the Group’s channels, particularly call centres; and projects to leverage generative AI and enhance reporting platforms. The Board noted in particular the benefits of an enhanced technology offering to hotel owners as well as the Group’s employees. | Considerations
– Long term
– Suppliers and customers
– Employees |
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| Governance |
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| Executive Committee appointments
The Board endorsed the changes and appointments to the Executive Committee during the year. |
In considering the talent and succession planning at the Executive Committee level, the Board focused on the skills, experience and profile required to optimise the Executive Committee, including relevant regional and functional leadership, to facilitate the delivery of the Group’s strategic objectives. | Considerations
– Long term
– Employees
– High standards |
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| People |
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| Our people and culture
The Board participated in and received regular updates from the Voice of the Employee workforce engagement programme. |
The Board participated in employee feedback sessions, and received and considered regular updates from the Voice of the Employee workforce engagement programme, noting continued positive feedback from engagement sessions. A summary of the Voice of the Employee engagement programme activities carried out during 2024 is included on page 135. | Considerations
– Employees
– High standards |
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Annual Board strategy meeting
The 2024 Annual Board strategy meeting was held in Atlanta, the location of the Group’s main corporate office in the USA. The Board undertook a detailed review in respect of the following areas:
| – | the Group’s performance and achievements in the context of the broader industry and macro-economic considerations; |
| – | the Group’s strategy and key strategic choices to guide future priorities; |
| – | key components of the Group’s commercial, marketing and technology strategies; and |
| – | the Group’s financial and value creation strategy, long-term financial considerations and how the Group’s risk appetite informs the strategic choices. |
The sessions provided the Board with a deeper understanding of the strategic choices the Group faces to continue to drive growth and performance and also allowed the Board to focus on the impact of the strategic choices on the Group’s culture of high performance and continuous improvement.
The Board also reflected on the overall effect of the strategic choices on the Group’s risk appetite, risk tolerances and approach to programme and operational risk management.
Outcomes and action items were also addressed at subsequent Board meetings.
Board members were also able to engage informally with colleagues at several leadership functions and at a visit to the Group’s Design Centre.
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See pages 42 and 43 for information about how we have engaged with our stakeholders in 2024. Further details of our regard for our people, communities and the planet are on pages 52 to 63. |
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| 126 | IHG | Annual Report and Form 20-F 2024 | ||||||
Board activities continued
Our shareholders and investors
During 2024, IHG continued its open dialogue with shareholders and investors and conducted its annual programme of investor relations activities with support from its brokers and advisers. The Board received regular updates and considered feedback as outlined on page 123.
The Chair of the Board also held a series of governance meetings with investors during the year. Meetings were held both in-person and virtually and focused on Board and leadership changes, executive remuneration and sustainability. The feedback from investors was positive and investors expressed their support for the Group’s strategy and management.
In addition, our Registrar and American Depositary Receipts (ADR) programme custodians have supported shareholders and ADR holders with their queries.
Committee Chairs and the Senior Independent Director are available for shareholders if they have concerns they wish to discuss.
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Further information on the Board’s engagement with shareholders and investors is included on page 42. |
Annual General Meeting (AGM)
The Board was pleased to meet shareholders in person at the 2024 AGM.
Our 2025 AGM will be held on Thursday 8 May 2025. The notice of meeting will be sent to shareholders and made available on our website in due course.
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Visit ihgplc.com/investors under Shareholder centre. |
Director appointments and induction
Director appointments
Other than Sir Ron Kalifa’s appointment to the Board from 1 January 2024, details of which were included in our Annual Report and Form 20-F 2023, no new appointments to the Board were made during 2024.
New Director inductions
When appointed, all new Directors undergo a comprehensive and formal induction programme that is tailored to meet their individual needs and respective roles on the Board. We believe this is crucial to ensure that our Directors have a full understanding of all aspects of our business and familiarity with the Group’s purpose, culture and values so that they can contribute effectively to the Board.
Tailored induction plans are prepared for new Board members in advance of their appointment to the Board. The plans broadly cover the following topics, while being tailored to their Committee appointments and roles, with a particular emphasis on understanding IHG’s business, long-term strategy, risks and opportunities within the business and governance processes and controls:
| – | information on the Group’s purpose, culture, values and strategy, including its business model, brands and the markets in which it operates; |
| – | key strategic initiatives; |
| – | our approach to internal controls and our risk management strategy; |
| – | information on the Board, its Committees and IHG’s governance processes; |
| – | a reminder of the rules relating to maintaining the confidentiality of inside information and restrictions in dealing in IHG shares, together with a briefing on the policies and procedures IHG has in place to ensure compliance with such rules; and |
| – | meetings with members of the Board and the Executive Committee, senior management from functions across the Group, the external Auditor and other key external advisers. |
Additional appointments
During 2024, the Board considered and endorsed the following additional appointments of Directors:
| – | Graham Allan as Chair of the Remuneration Committee of Intertek plc. |
| – | Ron Kalifa as Chair of the Sports Honours Committee. |
| – | Daniela Barone Soares as Non- Executive Director of Bunzl plc. |
| – | Sharon Rothstein to the board of Pop Up Bagels, Inc. |
| – | Deanna Oppenheimer as a UK Council Member of the King’s Trust. |
In each case, the Board took into account other appointments, the time commitment required for each role and the context of the UK Corporate Governance Code, including institutional investor and proxy adviser guidelines concerning over-boarding. It was concluded that the additional appointments should not adversely impact their performance but should enhance their ability to provide constructive challenge and strategic guidance.
Ongoing Director training and development
We understand the importance of an ongoing training programme for Directors to enable them to fully understand the Group’s business and operations in the context of the rapidly developing environment in which it operates. The Chair and the Committee chairs regularly review the training and development needs of the Board in setting the agendas.
Board and Committee meetings are regularly used to update Directors on developments in the environment in which the business operates and in-depth presentations are provided on key topical areas. In 2024, these sessions included updates on cybersecurity, franchising, privacy, remuneration, and responsible procurement.
In addition, the Company Secretary as well as the Company’s external Auditor provide regular updates on regulatory, corporate governance and legal matters as relevant, and Directors are able to meet individually with senior management if necessary.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 127 | |||||||||||
Board effectiveness evaluation
In line with best practice, the performance and effectiveness of the Board and its Committees are carefully reviewed each year through a formal evaluation process, which is traditionally facilitated externally every three years. An external evaluation was completed in 2023. In 2024, an internal evaluation was undertaken.
| Evaluation process | ||||
| Board members were asked to consider the Board’s overall effectiveness by completing an internal questionnaire, which focused on the following areas: |
– progress in implementing agreed action items from the 2023 effectiveness review;
– Board composition, including knowledge, experience and competencies, and succession planning; |
– Board dynamics and information flow from management to the Board;
– engagement between the Board and management; and
– Board leadership and strategic focus. |
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| Results of Governance Review | ||||
| Strengths: | Areas of focus for the year ahead: | |||
| 1. The responses of Board members to the questionnaire were largely favourable in relation to all areas of the Board’s operation.
2. The Board’s engagement with management continues to be robust and effective, with the right level of support and challenge being brought by the Board.
3. Board members commented positively on overall Board dynamics and discussion, indicating that reporting from Management continues to be well prepared and transparent and that the Board has kept sufficient focus on IHG’s long-term strategy.
4. The Board continues to be effective in safeguarding the governance, reputation, viability and future value of IHG. |
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1. Continued focus on long-term strategy: need to continue balancing short-term and long-term objectives, in particular in the context of an increasingly competitive landscape, complex geopolitical and economic factors, technology opportunities and challenges, and evolving environmental, social and governance trends.
2. Evolving Customer Needs and Industry Trends: maintain its focus on industry trends, whilst further focusing on consumer trends and brand performance and employee culture to remain competitive
3. Board Composition & Succession Planning: good progress had been made in relation to executive succession planning, which should continue to be a focus for 2025. |
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Board Committees
Each of the Board’s Committees were evaluated as part of the broader evaluation process. The internal evaluation process also assessed the effectiveness and support provided by and to the Board Committees.
Through the process, it was confirmed that the Committees have the necessary attributes to support their effective operation and that they are well integrated into the Board decision-making processes.
Each of the Committees reviewed the findings and agreed the respective actions with consideration of the overall Board findings where they were deemed relevant to the Committee’s work. Further details are set out in each Committee Report on pages 129, 134, 137 and 154.
| Performance evaluation of Directors | ||||
| In addition to the internal Board evaluation process outlined above, the SID led the individual performance of the Non-Executive Directors and carried out one-to-one meetings with each of them, focusing on their contribution to the Board and Principal Committees and engagement with fellow Directors, taking into account their relevant skills, knowledge and experience. Particular points of note were shared with the individual Directors and, following a final discussion and feedback session between the Chair and the SID, it was concluded that the Directors perform their duties independently and effectively and that they dedicate sufficient time to discharge their Board responsibilities. |
The performance assessment of the Chair was also led by the SID. The evaluation focused on:
– overall leadership of the Board;
– the Board’s culture and the Chair’s ability to facilitate constructive Board relations; and
– managing the Board in accordance with high standards of corporate governance.
The CEO evaluation was led by the Chair, who collected feedback to a series of questions from the Non-Executive Directors. |
Key areas of focus included:
– the Group’s performance and impact of the CEO;
– the relationship and ability to work collaboratively and transparently with the Board;
– delivery of the Group’s growth agenda;
– regard for community and the environment;
– building talent and organisational capabilities; and
– progress in relation to IHG’s 2024 plan and future strategic priorities. |
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| 128 | IHG | Annual Report and Form 20-F 2024 | ||||||
Audit Committee Report
Highlights
| - | Detailed assessment of the changes made during the year regarding fees paid by owners into the System Fund and the sharing arrangements for ancillary fee streams such as those related to the sale of IHG One Rewards loyalty points. |
| - | nalysis and evaluation of the financial reporting implications of the new US co-brand credit card arrangements entered into during the year, including accounting estimates, the control environment and financial statement disclosures. |
| - | Expansion of deep dives relating to key risk and control topics correlated to our principal and emerging risks from experts across the business. |
Key duties and role
of the Committee
Key objectives and summary of responsibilities
The Audit Committee is responsible for ensuring that IHG maintains a strong control environment. It monitors the integrity of IHG’s financial reporting, including significant financial reporting judgements; maintains oversight and reviews our systems of internal control and risk management; monitors and reviews the effectiveness and performance of internal and external audit functions; and reviews the behaviours expected of IHG’s employees through the Code of Conduct and related policies.
The Committee’s role, responsibilities and authority delegated to it by the Board are set out in its Terms of Reference (ToR), which are reviewed annually and approved by the Board.
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The ToR are available at ihgplc.com/investors under Corporate governance. |
As noted, the Committee focused its attention on reviewing and obtaining assurance in relation to emerging and evolving risks as well as the Group Financial Statements and controls. Other areas of focus over the year have been:
| – | the Group’s global financial governance compliance plans, with particular focus on system and process transitions; |
| – | consideration of an indicative roadmap to ensure compliance with the revised Corporate Governance Code’s requirement of a declaration from Directors regarding the effectiveness of material controls; |
| – | the Group’s approach to compliance with the EU Corporate Sustainability Reporting Directive and the governance structure implemented to provide oversight across the project; |
| – | the evolution of the Group’s brand safety standards framework to address existing and emerging hotel operational safety and security risks, with a continued focus on delivering globally consistent outcomes to manage safety and security risks across the Group’s brands and business models; and |
| – | the Group’s approach to insurance coverage, including the annual renewal of the global property and liability insurance programme. |
Membership and
attendance at meetings
Details of the Committee’s membership and attendance at meetings are set out on page 118. The Chair of the Board, CEO, CFO, Group Financial Controller, Head of Risk and Assurance, General Counsel and Company Secretary, Deputy Company Secretary and our external Auditor attended the Committee’s meetings in 2024. Other attendees are invited to meetings as appropriate and the CEO and all other Directors were invited to Committee meetings where the approval of financial reporting was considered and discussed. The Committee continues to hold private sessions with the internal and external Auditors without the presence of management to ensure that a culture of transparency is maintained.
The Committee Chair continues to have recent and relevant financial experience and all members of the Committee are Independent Non-Executive Directors. In accordance with the Code, the Board also considers that the Committee as a whole possesses competence relevant to the Company’s sector, having a range of financial and commercial experience in the hospitality industry and the broader commercial environment in which the Group operates. Further details of the skills and experience of the Committee members can be found on pages 114 to 117.
Reporting to the Board
Following each Committee meeting, the Committee Chair updates the Board on key issues discussed. The papers and minutes for each meeting are circulated to all Board members, who are invited to request further information if required and to provide any challenge where necessary.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 129 | |||||||||||
Effectiveness of the Committee
During the year, the Committee’s effectiveness was reviewed as part of the internal Board evaluation process. The evaluation responses positively highlighted the quality of leadership and external reporting and the Committee concluded that it remains effective.
Focus areas and activities
Financial and narrative reporting
During the year, the Committee reviewed and recommended approval of the interim and annual Financial Statements (considering the relevant accounting and reporting matters such as key judgement areas, going concern and viability statements, the financial reporting impacts of commercial litigation and disputes, exceptional items and impairment reviews) and the Group’s quarterly trading updates. All members of the Board are asked to attend these meetings.
As well as receiving input and guidance from the external Auditor on the areas outlined above, the Committee also received regular reports from the Chair of the Disclosure Committee, which liaised closely with other external advisers of the Group to ensure that disclosure and regulatory requirements were being appropriately considered and met. Copies of the Disclosure Committee’s minutes were also provided to the Committee.
The Committee received early drafts of the Annual Report and Form 20-F 2024 (Annual Report), and when providing comments considered: (i) the process for preparing and verifying the Annual Report, which included review by the Executive Committee and input from senior employees in the Company Secretariat, Legal, Operations, Strategy, Human Resources, Finance, Risk and Assurance teams; (ii) a report from the Chair of the Disclosure Committee; and (iii) a checklist prepared by the Annual Report team confirming compliance with the relevant regulatory requirements.
The Committee also considered management’s analysis of how the content, taken as a whole, was ‘fair, balanced and understandable’, and whether it contained the necessary information for shareholders to assess the Group’s position, performance, business model and strategy. In order to reach this conclusion, a dedicated project team worked on the contents of the Annual Report and a detailed verification process to confirm the accuracy of the information contained within the Annual Report was undertaken by the Financial Planning and Analysis department. The Committee then considered both the structure and content of the Annual Report to ensure that the key messages were effectively and consistently communicated and that meaningful links between the business model, strategy, KPIs, principal risks and remuneration were clearly identified throughout the Annual Report. The Committee also reviewed the proportionate and consistent consideration of climate matters across the Annual Report, including the Task Force on Climate-Related Financial Disclosures (TCFD) statement and an asset-by-asset review for impairment purposes, and considered that the disclosures were appropriate.
Alongside this review, the Committee considered guidance provided by the Financial Reporting Council (FRC) throughout the year and took into account the updated Corporate Governance Code 2024.
Following a review of the contents of the Annual Report alongside the aforementioned criteria, the Committee reported its recommendation to approve the Annual Report to the Board.
Significant matters in the 2024 Financial Statements
Throughout 2024, the Committee provided ongoing challenge to management’s accounting, reporting and internal controls. The Committee discussed with management and the external Auditor the significant areas of complexity, management judgement and estimation in relation to the Financial Statements, and the impact of any accounting developments or legislative changes. The Committee has satisfied itself that management had adequately identified and considered all potentially significant accounting and disclosure matters. The key items discussed are outlined on pages 132 and 133.
Internal control and risk management
The Board is responsible for establishing procedures to manage risk, overseeing the internal control framework and determining the nature and extent of the principal risks the Company is willing to take to achieve its long-term objectives. The Committee supports the Board by reviewing the effectiveness of the Group’s internal control and risk management systems and assessing emerging and principal risks, and undertook such a review in respect of 2024.
In order to effectively review the internal control and risk management systems, the Committee:
| – | receives regular reports from management, the Risk and Assurance team and the external Auditor on the effectiveness of the systems for risk management and internal controls, including financial, operational and compliance controls; |
| – | reviews the process by which risks are identified (including procedures in place to identify emerging risks and linkage to wider consideration of strategy and resilience) and assesses the timeliness and effectiveness of action taken by management, including regular reports on the Company’s overall risk management and internal controls systems and principal risks; and |
| – | receives regular reports relevant to risk management and internal controls, both financial and non-financial, to ensure that current and emerging risks are identified and assessed and that there is an appropriate management response (see pages 44 to 51 for further detail on our risks and initiatives to manage them). |
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| 130 | IHG | Annual Report and Form 20-F 2024 | ||||||
Audit Committee Report continued
As part of the Committee’s review of the internal control and risk management systems, key financial, operational and compliance controls across the business continue to be monitored and tested throughout the year. The Committee assesses the approach to Sarbanes-Oxley Act 2002 (SOX) compliance in accordance with our US obligations and reviews reports on the progress of the SOX programme at each meeting. During the year, the Committee received updates on the automation of SOX controls and the ongoing programme to streamline the overall control count in line with continued best practice and advances in automation.
During 2024, the Committee considered the activity undertaken by the Risk and Assurance team to enhance the Board’s oversight of risk management and internal controls. The Committee also received presentations on:
| – | cybersecurity and fraud trends and increased areas of focus (including AI and automation); |
| – | regulatory developments relating to franchise law, privacy, ethics and compliance and non-financial reporting; |
| – | litigation risks for franchisees, including risks of vicarious liability for human trafficking and operational safety and security; and |
| – | the impact of IHG’s growth strategy, including evolving geographic and ownership profiles, on operational standards such as brand safety standards. |
Having reviewed the internal controls and risk management systems throughout the year, the Committee concluded that the Group continues to have an effective system of risk management and internal controls, and that there are no material weaknesses in the control environment.
Tax risks, policies and governance
The Group’s CFO has responsibility for tax and tax policies at Board level. These policies and procedures are subject to regular review and update and are approved by the Audit Committee. Procedures to minimise risk include the preparation of thorough tax risk assessments for all transactions carrying material tax risk and, where appropriate, material tax uncertainties are discussed and resolved with tax authorities in advance.
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Our Approach to Tax document is available at ihgplc.com/en/responsible-business/ policies-and-position-statements |
Principal risk areas
During the year, the Committee discussed and assessed the range and aggregate impact of dynamic risks that the Group faced in the context of the ongoing volatility in the geopolitical and macro-economic environment. Factors noted in the Committee’s discussions included:
| – | the pace of digitalisation (for example, rapidly evolving technology ecosystems and cloud capabilities); |
| – | intensifying expectations of growth and scale, including in new markets and with evolving deal structures; and |
| – | growing opportunities for operational efficiency and effectiveness involving organisational models and automation. |
Further details of our principal risks, uncertainties and review process can be found on pages 46 to 51.
Non-audit services
IHG’s Audit and Non-Audit Services Pre-Approval Policy helps to ensure that the external Auditor’s independence and objectivity are not impacted by non-audit services provided by the external Auditor. The policy is reviewed by the Audit Committee annually.
The policy requires that pre-approval is obtained from the Audit Committee for all services provided by the external Auditor before any work can commence, without any de minimis threshold in line with US Securities and Exchange (SEC) requirements and UK ethical standards.
The Committee reviewed the audit and non-audit fees incurred with the external Auditor and noted that there had been no prohibited services (as defined by SOX or under UK ethical standards)
provided to the Group during the year. The Committee is prohibited from delegating non-audit services approval to management and compliance with the policy is actively managed.
IHG is committed to maintaining non-audit fees at a low level and the Committee remains cognisant of the guidelines of investor advisory bodies on non-audit fees. During 2024, 12% of services provided to the Group were non-audit services (2023: 10%), primarily related to System and Organisation Controls Reports. These services are typically performed by external auditors as knowledge of the Company or Group is necessary for the provision of the non-audit services. Details of the fees paid to PwC for non-audit and statutory audit work during 2024 can be found on page 214. The Committee is satisfied that the Company was compliant during the year with the FRC’s Ethical and Auditing Standards in respect of the scope and maximum permitted level of fees incurred for non-audit services provided by PwC. Where non-audit work is performed by PwC, both the Company and PwC ensure adherence to robust processes to prevent the objectivity and independence of the external Auditor being compromised.
Risk and assurance – Internal Audit
The Committee discusses and approves the Internal Audit annual plan, which aims to provide objective and insightful assurance that appropriate controls are in place to support our strategy and growth ambitions. Progress against the Internal Audit plan is reported at each meeting and, during 2024, the Committee reviewed several areas set out in the plan relating to dynamic risk trends, particularly in areas with less mature controls, including data and information usage, operational resilience, and technology and/ or digital performance innovations. The plan also adapted during the year to respond to the evolving ESG regulatory landscape and to consider the impact of ongoing organisational changes on risk management and internal control arrangements.
The Committee also received updates on the arrangements for confidential reporting and on certain investigations supported by Internal Audit during the year.
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The 2025 plan presented to the Committee in December 2024 maintains focus on the integrity of the risk management and internal control system, providing independent assurance to complement management’s own activities where these are relatively mature, well governed and/or regulated. Areas of focus in 2025 include the delivery of key owner and growth-focused initiatives; procurement and technology vendor risk management; and the ability of the Group’s data governance frameworks to meet evolving regulatory requirements.
Following consideration, the Committee confirmed its agreement to the 2025 Internal Audit plan, including the assurance objectives identified. The Committee reviews the results of completed audits and observations from other ongoing assurance and control improvement support, as well as actions taken by management in response to Internal Audit’s work.
The functional effectiveness of Internal Audit is assessed on an ongoing basis and reported to the Committee throughout the year. During 2024, this has involved feedback from auditees and self-assessment of execution against methodology. This has highlighted conformance to recently revised recognised standards for internal auditing and enhanced utilisation of audit technology tools, while identifying opportunities for ongoing improvement, for example, deepening audit team knowledge of key business initiatives and sharing of audit recommendations with regional management. An independent quality evaluation of the function was last conducted in 2023.
Governance and compliance
The Committee is also responsible for reviewing the Group’s Code of Conduct and related policies.
Looking forward
During 2025, the Committee will remain focused on the Group’s internal control and risk management environment and approach to financial reporting. In doing so, the Committee will take into account developments in reporting responsibilities, including those relating to changes in the UK Corporate Governance Code and other regulatory requirements.
External Auditor –
reappointment of PwC
The Committee reviewed and assessed PwC’s performance during the year and considered its reappointment as the Group’s external Auditor. PwC has been the Group’s Auditor since its appointment in March 2021, following a tender process in 2019. During 2024, Andrew Hammond succeeded Giles Hannam as PwC’s lead audit partner.
The Committee regularly reviewed and assessed the progress of the audit throughout the year and also undertook a detailed effectiveness assessment through two surveys; one for Committee members and the other for senior management.
The surveys focused on the following areas:
| – | the quality and service of the audit team; |
| – | audit planning and execution; |
| – | communication with the Committee and senior management; |
| – | the Auditors’ assessment of process controls and financial reporting; and |
| – | the independence and objectivity of the Auditors. |
The responses to the surveys were positive and noted in particular that the PwC audit team had developed a clear audit plan that was effectively communicated, demonstrated strong technical expertise and provided constructive challenge.
During 2024, the Committee also agreed with PwC that reporting would be provided against a series of audit quality indicators to support the Committee’s assessment of audit quality. This reporting was provided for the first time in February 2024.
Accordingly, the Committee concluded that the PwC audit team was providing the required quality in its provision of audit services and maintained appropriate levels of independence and objectivity. The Committee therefore recommended to the Board the continued appointment of PwC as external Auditor.
The Group has complied with the requirements of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014, which relates to the frequency and governance of tenders for the appointment of the external Auditor and the setting of a policy on the provision of non-audit services.
Correspondence with UK regulator
The Group received a letter dated 13 November 2024 from the FRC in respect of the Group’s Annual Report 2023. The FRC did not raise any substantive questions or queries but noted a small number of matters for consideration for the Annual Report 2024. The Group addressed the FRC’s comments and took them into account in the preparation of the Annual Report and Form 20-F 2024.
The FRC’s review was based solely on the annual report and accounts and did not benefit from detailed knowledge of the Group’s business or an understanding of the underlying transactions entered into. It was, however, conducted by staff of the FRC who have an understanding of the relevant legal and accounting framework. The FRC’s letter provided no assurance that the annual report and accounts were correct in all material respects; the FRC’s role was not to verify the information provided to it, but to consider compliance with reporting requirements. The FRC’s letter was written on the basis that the FRC (which includes its officers, employees and agents) accepts no liability for reliance on it by the Company or any third party, including but not limited to investors and shareholders.
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Audit Committee Report continued
| Significant matters in the 2024 Financial Statements |
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| Area for focus |
Issue/Role of the Committee |
Conclusions/Actions taken |
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| Accounting for IHG One Rewards |
Accounting for IHG One Rewards requires significant use of estimation techniques and represents a material deferred revenue balance. The Committee reviews the controls, judgements and estimates related to accounting for IHG One Rewards. | The Committee reviewed the deferred revenue balance, the valuation approach, the results of the external actuarial review and procedures completed to determine the breakage assumption for outstanding IHG One Rewards points. The Committee concluded that the deferred revenue balance is appropriately stated.
The Committee met with senior finance management to review the new US co-brand credit card agreements, the services provided by the Group and the allocation of revenue to each of those services which was supported by a third-party valuation. The Committee concluded that the accounting treatment is appropriate and that the allocation of revenues is not a significant estimate as a material change in estimate is not expected in the next 12 months. |
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| Accounting for the System Fund |
Given the unique nature of the System Fund, the Committee reviews the controls and processes related to System Fund accounting. | The Committee met with senior finance management to review and evaluate the risk areas associated with the System Fund. The Committee reviewed a paper from management summarising the principles determining the allocation of revenues and expenses to the System Fund and the related governance and internal control environment.
The Committee also reviewed management papers concerning changes to System Fund arrangements including the lowering of assessment fees and the treatment of ancillary revenues.
The Committee concluded that the accounting treatment of the System Fund and related disclosures are appropriate. The Committee was satisfied that the changes to the System Fund aligned with terms agreed with owners and that appropriate controls had operated around those changes. |
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| Exceptional items | The Group exercises judgement in presenting exceptional items. The Committee reviews and challenges the classification of items as exceptional based on their size, nature or incidence, with consideration given to consistency of treatment with prior years and between gains and losses. | The Committee discussed with management and reviewed papers outlining the significance, timing and nature of items classified as exceptional (see pages 215 to 216). The Committee reviewed and challenged reversals of prior year items to ensure consistency of treatment. The Committee also considered the sufficiency of disclosure and whether such disclosure explained the rationale for why each item is considered to be exceptional. The Committee concluded that the disclosures and the treatment of the items shown as exceptional are appropriate. | ||
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| Litigation and contingencies |
From time to time, the Group is subject to legal proceedings, the ultimate outcome of each being subject to many uncertainties. The Committee reviews and evaluates the need for provisioning and considers the adequacy of the disclosure. | At each meeting during the year, the Committee discussed with the Group’s General Counsel and senior finance management reports detailing all material litigation matters including commercial disputes. The Committee discussed and agreed any provisioning requirements based on underlying factors. Disclosures were assessed, with particular emphasis on the completeness of uncertainties disclosed. | ||
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| Impairment testing |
Judgement is applied in assessing whether triggering events for impairment testing of assets or cash-generating units have occurred. The Committee scrutinises the methodologies applied and the potential for asset impairment or impairment reversal. | The Committee discussed with management and reviewed reports outlining the approach taken on impairment testing and key assumptions and sensitivities supporting the conclusion on the various asset categories. The Committee examined in detail whether triggering events for impairment testing had occurred. The Committee also considered whether proposed reversals represented real improvements in assets’ potential cash generation or arose only due to passage of time. The Committee agreed with the determinations reached on impairment. | ||
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| Significant matters in the 2024 Financial Statements |
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| Area for focus |
Issue/Role of the Committee |
Conclusions/Actions taken |
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| Regulatory reporting requirements |
The Committee reviews the need for reports and communications required by regulations including the Listing Rules, Market Abuse Regulations, the Companies Act and SEC rules. | The Committee reviewed major events during 2024, including changes to System Fund arrangements and new co-brand credit card agreements, and confirmed appropriateness of market announcements.
The Committee reviewed management’s assessment of the requirement to include an additional Schedule to the Annual Report and Form 20-F comprising condensed parent company financial information presented under IFRS and in US dollars. The Committee concluded that it was appropriate to include the additional Schedule to support compliance with SEC rules and that the Schedule is properly prepared and presented. |
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| Going concern and viability |
The Committee reviews management’s financial modelling to conclude on the appropriateness of the going concern and viability statement. | The Committee reviewed and challenged the scenarios considered by management, the detailed cash flow forecasts and the mitigating actions available to management considered in its going concern assessment to June 2026 and the three-year viability assessment and concluded that these were appropriate. The Committee also reviewed and challenged the reverse stress test assumptions to confirm the viability of the Group. The Committee reviewed going concern disclosures (page 197) and the viability statement (pages 109 and 110) and is satisfied that these are appropriate. | ||
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| Climate risk |
In preparing the Group Financial Statements, the potential impacts of climate change have been considered. | The Committee reviewed an analysis from management summarising the approach taken to consider climate risk in the Group Financial Statements and concluded that the disclosures were appropriate. The Committee agreed that the disclosures made in respect of the TCFD were appropriate. The Committee satisfied itself that the approach across the Annual Report has been proportionate and consistent. | ||
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| Disclosures and accounting policies |
The Committee considers the appropriateness of accounting treatment and disclosures in the Group Financial Statements. | The Committee reviewed management summaries of the accounting treatment of certain contracts executed in the year. The Committee reviewed new financial statement disclosures concerning changes to the System Fund and co-brand credit card agreements. The Committee also reviewed correspondence from the FRC and management proposals to refine other disclosures in certain areas of the Financial Statements.
The Committee concluded that the accounting treatments applied and the disclosures to the Group Financial Statements are appropriate and proportionate. |
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| Impact of IFRS 18 |
IFRS 18 ‘Presentation and Disclosure in Financial Statements’ will be adopted from 1 January 2027. In advance of major new accounting standards, the Committee assesses management’s plan for adoption. | The Committee reviewed a management paper summarising the requirements of IFRS 18 and management’s progress to date in assessing the impacts of the new standard. The Committee concluded that management’s plan for continuing assessment and eventual adoption is appropriate. | ||
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| 134 | IHG | Annual Report and Form 20-F 2024 | ||||||
Responsible Business Committee Report
Key duties and role
of the Committee
Key objectives and summary
of responsibilities
The Committee reviews and advises the Board on the Group’s responsible business objectives and strategy, including its impact on the environment and climate change; social, community and human rights issues; its approach to sustainable development and responsible procurement; and stakeholder engagement in relation to the Group’s approach to responsible business. The Committee is also responsible for assessing the Board’s engagement with the workforce and reviewing the Group’s culture and inclusivity.
The Committee’s role, responsibilities and authority delegated to it by the Board are set out in its Terms of Reference (ToR), which are reviewed annually and approved by the Board.
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The ToR are available at ihgplc.com/investors under Corporate governance. |
Membership and attendance at meetings
The Committee’s membership and attendance at meetings are set out on page 118. The Chair of the Board, CEO, General Counsel and Company Secretary, Executive Vice President, Global Corporate Affairs, Chief Sustainability Officer and Deputy Company Secretary attended all meetings held during the year.
Reporting to the Board
The Committee Chair updates the Board on all key issues raised at Committee meetings. Papers and minutes for each meeting are also circulated to all Board members, who are invited to request further information where necessary.
Effectiveness of the Committee
In 2024, the Committee’s effectiveness was reviewed as part of the internal Board evaluation process. The Committee concluded that it remains effective and meets its responsibilities well. Focus areas identified include consideration of the potential change in market sentiment on environmental and social matters and the impact on the Group’s overall responsible business strategy.
Focus areas and activities
Responsible business commitments
The Committee’s key responsibilities and focus areas over the year have been:
| – | assessing the 2024 strategic priorities that support the Group’s 2030 responsible business commitments and monitoring the progress against them; |
| – | reviewing the status of the Group’s carbon target and the work undertaken by management in respect of the target. This included the integration of energy conservation measures into brand standards, the development of new-build hotels that operate with very low carbon emissions, launch of the Low Carbon Pioneer programme, and the exploration of future options for renewable energy initiatives; |
| – | assessing the Group’s culture and inclusivity, including building talent pipelines for a global business at both the corporate and hotel level; |
| – | working with the Remuneration Committee to consider current and future measures included in the LTIP for Executive Directors and senior leaders, relating to people and the environment; |
| – | reviewing the Group’s human rights programme and Modern Slavery Statement, with particular focus on the Group’s Responsible Labour requirements; |
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| – | monitoring the progress of key workstreams in relation to the Group’s responsible procurement strategy, including its alignment with the Group’s responsible business commitments. Particular attention was given to expanding IHG’s supplier base, supplier due diligence and certification processes, and industry collaboration and regulatory developments relating to the supply chain; and |
| – | assessing the Group’s approach to meeting its commitment to improve the lives of people in our communities around the world and its strategic collaboration with Action Against Hunger. |
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Further information on our 10-year responsible business plan can be found on pages 52 to 63. |
Looking forward
During 2025, the Committee will continue to focus on monitoring the progress of the Group’s responsible business commitments.
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Our Responsible Business Report is available at ihgplc.com/responsible-business |
Voice of the Employee
As IHG’s designated Non-Executive Director (NED) with responsibility for workforce engagement (Voice of the Employee), Duriya Farooqui, supported by the Board and the Group’s Global HR team, held a series of employee interface sessions throughout the year to engage directly with members of IHG’s corporate and hotel workforces, with the aim of sharing feedback with the Board for consideration in its decision-making.
Role and responsibilities
The role and responsibilities of the designated Voice of the Employee NED are to:
| – | support the design of the structure and content of Board discussions on employee engagement and culture; |
| – | evaluate employee engagement approaches and their effectiveness; |
| – | ensure that employee feedback and interests are factored into the Board’s decisions and KPI setting; |
| – | ensure that the Board, through the Executive Committee, has effective methods of receiving feedback from employees and communicating Board and executive decisions and priorities throughout the organisation; |
| – | ensure that all significant business and budget proposals include a management assessment of the impact on employees; and |
| – | ensure that executives share employee feedback openly, transparently and in a balanced way, including reviewing employee engagement surveys and other employee reports, including whistleblowing. |
2024 engagement
Throughout 2024, Duriya, with the participation of several other NEDs and Chair Deanna Oppenheimer, hosted 14 employee interface meetings to engage with a cross-section of employees, and received detailed feedback. These feedback sessions, which were a mix of in-person and virtual meetings/ forums, included leader groups within the hotel, reservations and corporate populations, and employee resource groups (ERGs), across the UK, US, India, China and various EMEAA countries, as well as colleagues who have recently joined the organisation.
Discussion topics and themes in relation to the feedback received from employees included: workplace culture; leader communications; strategy, prioritisation and collaboration; talent attraction; onboarding and retention; and career development.
Angie Risley, the Chair of the Remuneration Committee, also joined sessions to obtain feedback in relation to IHG’s remuneration policies.
Additional engagement and activities undertaken by Duriya, the Chair of the Board, and other NEDs during the year included:
| – | monitoring and reviewing the content and feedback from global ‘all employee’ CEO calls; |
| – | reviewing employee engagement survey results; |
| – | engaging with the Global HR Leadership team to receive broader cultural insights; and |
| – | engaging directly with senior leaders at Board and Committee meetings and the Board strategy event. |
Insights and learnings
Duriya provided regular feedback to the Responsible Business Committee and the Board throughout the year, with key Board discussions taking place around the insights as well as action planning arising from employee engagement survey results.
Plans for 2025
Duriya will remain as the Board member with responsibility for workforce engagement in 2025, assisted by additional NEDs.
A schedule of discussions and feedback sessions has been arranged for 2025 and will continue to encompass a wide group of employees and leaders from across all regions, including ERGs and Lean In Circles. The discussion topics will be tailored to specifically focus on those areas that support the strategy and the evolving culture. Additionally, the Board will continue to keep the functioning of the Voice of the Employee programme under review to ensure it meets best practice and complies with regulatory developments.
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Nomination Committee Report
Key duties and role
of the Committee
Key objectives and summary of responsibilities
In line with UK corporate governance principles, the Committee reviews the composition of the Board and its Principal Committees, evaluating the balance of skills, experience, independence, knowledge and diversity before making appropriate recommendations to the Board as to any changes. It also ensures that plans are in place for orderly succession both for Directors and other senior executives, and is responsible for reviewing the Group’s senior leadership needs.
The Committee’s role, responsibilities and authority delegated to it by the Board, including processes in relation to appointments, are set out in its Terms of Reference (ToR), which are reviewed annually and approved by the Board. The ToR state that the Committee is responsible for considering and proposing potential candidates for appointment to the Board and maintaining oversight of Board and individual Director performance.
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The ToR are available at ihgplc.com/investors under Corporate governance. |
The Committee’s key responsibilities and focus areas during the year have been:
| – | assessing the composition of the Board and the Principal Committees and succession planning, in accordance with the ToR and consistent with applicable policies; |
| – | overseeing the internal performance evaluation of the Board and its Principal Committees as well as the evaluation of individual Non-Executive Directors; and |
| – | monitoring the Executive Committee and senior leadership talent and succession planning. |
Membership and attendance
at meetings
The Committee’s membership and attendance at meetings are available on page 118. All members of the Committee are Non-Executive Directors. When the Committee considers matters relating to the Chair of the Board, the Senior Independent Non-Executive Director (SID) acts as Committee Chair.
Reporting to the Board
The Committee makes recommendations to the Board for all Board appointments. Minutes are circulated to and reviewed by Committee members, and the Committee Chair reports back to the Board on the activities of the Committee following each meeting.
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Effectiveness of the Committee
and External Evaluation
During 2024, the Committee was reviewed as part of the internal Board evaluation process. Details of the internal evaluation, including how it was conducted and the actions arising from the evaluation, are set out on page 127. The Committee concluded that it remains effective and noted the continued focus on Board composition and executive and senior talent succession.
Focus areas and activities
Board and Principal Committee
composition and succession planning
The Committee regularly reviewed and considered Board refreshment and succession plans. The Committee discussed the balance of skills and competencies across the Board and the Board Committees and, to further inform its analysis, the Committee maintained a Board refreshment schedule, which sets out an overview of the Board’s tenure, gender, ethnicity and Committee assignment considerations.
In its consideration of Board composition and succession plans, the Committee, in line with UK corporate governance requirements, also took into account the external metrics used to measure progress within FTSE 100 companies in relation to gender and ethnic diversity for the Board and senior leadership, noting IHG’s performance against the external benchmarks.
Other than Sir Ron Kalifa’s appointment to the Board from 1 January 2024, details of which were included in our Annual Report and Form 20-F 2023, no new appointments to the Board were made during the year.
Executive Committee appointments
The Committee discussed and considered the changes to the Executive Committee during the year, including the promotion of Daniel Aylmer as CEO Greater China; the promotion of Jolie Fleming as Chief Product and Technology Officer; and the creation of a new Global Commercial and Marketing function, led by Heather Balsley.
The Committee considered the search processes which had been followed to consider candidates for these positions, including the assessment of external and internal candidates as relevant, and concluded it should recommend the appointments to the Board.
Internal evaluation
The Committee oversaw the internal Board and Board Committee evaluation process. The Committee approved the development of questionnaires by Committee Chairs with the support of the Company Secretary, which focused on overall performance and effectiveness as well as matters specific to the Board and respective Committees, before being circulated to Board members.
The Committee also considered and endorsed the approach to individual Non-Executive Director evaluation, with the Senior Independent Non-Executive Director conducting individual Non-Executive Director evaluations as well as the Chair evaluation, to allow for continued independent assessment of Directors’ performance.
Further information on the Board and Committee internal evaluation process as well as the individual Non-Executive Director evaluations can be found on page 127.
Executive Committee talent
and succession
Throughout the year, the Committee also received updates on talent and succession planning at Executive Committee and senior leadership levels, noting in particular progress in relation to building depth of internal talent and a performance culture.
In compliance with the UK Listing Rules, information on the gender and ethnicity balance of the Board and the Executive Committee is included on pages 120 and 121. Information on the gender and ethnicity balance of senior management is included on pages 56 and 57.
The Group’s Global Diversity, Equity, Inclusion and Equal Opportunities Policy reflects the global nature of our business and our desire to create a culture of inclusion across all of the 100 countries we operate in. The policy applies in respect of the Board and its Principal Committees, and when assessing and considering succession planning at Board and Executive Committee levels, the Committee takes diversity considerations into account consistent with the policy. The policy further aligns to the Group’s responsible business commitments and a description of progress against these commitments is included in the 2024 Responsible Business Report, available at ihgplc.com/Responsible Business under Reporting.
Looking forward
In 2025, the Committee will continue to ensure that we have appropriate plans in place for orderly succession of appointments to the Board and to senior management, so that we attract top talent that reflects the owners, guests and communities with whom we do business.
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Directors’ Remuneration Report
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On behalf of the Board, I am delighted to present the Directors’ Remuneration Report for the financial year ended 31 December 2024. In this report, I set out how we are incorporating the expectations of our employees, our shareholders and our wider stakeholders into our approach to executive pay, both for the year in review and as we look ahead to 2025 and beyond.
2024 business performance context
Driven by our ambitious growth algorithm, business performance was excellent across all KPIs during 2024. We grew Global RevPAR by 3.0% and net system size by 4.3%, while operating profit from reportable segmentsa increased by 10.3% to $1,124m.
From an investor perspective, we have seen substantial growth in shareholder value. A total proposed dividend for the year of 167.6c and the completion of a share buyback programme during 2024 of $800m will result in $1bn being returned to shareholders in respect of 2024. A further $900m buyback programme has been approved for 2025.
Overview of 2024 remuneration outcomes
The incentive plan outcomes for 2024 reflect our strong business performance over the short and long term:
– The achievement on Annual Performance Plan (APP) metrics (operating profit from reportable segments, room openings and room signings) resulted in awards for Executive Directors of 63% of maximum, reflecting the above target performance of the business.
– The vesting outcome of the 2022–24 Long Term Incentive Plan (LTIP) award was 85% of maximum. The business continued to deliver against ambitious absolute cash flow targets, generated net system size growth (NSSG) above the median of our most direct peers and achieved upper quartile relative Total Shareholder Return (TSR).
– The Remuneration Committee (Committee) reviewed the formulaic performance outcomes in line with the framework for assessing discretion. The Room openings and Room signings targets for the APP were |
increased during the year, and, as last year, a minor adjustment was made to the LTIP to reflect IHG’s decision to cease operations in Russia. For more information see pages 145 and 146.
The increase in the CEO’s total single figure of remuneration between 2023 and 2024 is primarily due to a higher LTIP value for 2024 relative to 2023. This is the result of higher share price appreciation and stronger performance, with a higher associated vesting outcome.
The Committee agreed a 4% salary increase for Michael Glover for 2024 in line with that for the global corporate workforce. While originally it was intended that Elie Maalouf would not receive a salary increase for 2024, his performance was identified as being particularly strong. It also became apparent during the review carried out during the year that our CEO’s total pay was substantially behind peers. The Committee therefore approved a 4% salary increase with effect from 1 July 2024, which is aligned with the increase for the broader corporate employee base for 2024. This decision was discussed with some of our major shareholders.
Review of remuneration
We have undertaken a significant review of remuneration arrangements for the Executive Directors and other key senior roles during the last year, as well as reviewing pay for the wider workforce, focusing on further strengthening the link between pay and performance (see pages 159 to 166 for further detail). This review has culminated in the development of the first Directors’ Remuneration Policy during my tenure as Chair of the Committee.
The Board’s view is that performance of the Executive Directors has been very strong over the last year, as reflected in corporate performance. In this context an early review of remuneration ahead of the scheduled timing in 2026 was considered a priority to help secure the talent that has proven to be highly effective in evolving and delivering strategic priorities and in the creation of shareholder value. In addition, a new policy will ensure the long term succession imperative.
We have undertaken a detailed process during which we have analysed our inflows and outflows of senior talent, |
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| a. Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
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carried out a full assessment of this market from which we attract talent from and lose talent to, and sought to more closely align Executive Director pay elements with our strategy, the competitive market for talent and the structure for the wider workforce.
We have undertaken several rounds of shareholder consultation, and listened carefully to the feedback. I would like to thank all the shareholders and the proxy bodies I have met for their time, their support and for their valuable insights which have directly shaped our proposals.
Remuneration review timing
While the triennial review of the Directors’ Remuneration Policy is not due until 2026, we are keen to secure support for a revised policy at the 2025 AGM for the following reasons:
| – | We are increasingly experiencing senior talent retention issues and want to secure the retention and incentivisation of Elie Maalouf and Michael Glover at the earliest opportunity as the leaders who have driven the success of the business to date, and whose performance has been exceptional. The Board is confident that Elie and Michael are the right people to deliver on our ambitious growth strategy. |
| – | Putting in place a revised policy now provides a robust framework for retention of senior talent and the succession pipeline for these Executive Director roles. |
| – | With a new policy being put in place in 2025, it will be at least 2030 before the Executive Directors receive any value from new share awards granted in 2025 given a five-year term to release, subject to performance. |
Board changes
As previously reported, Sir Ron Kalifa joined the Board on 1 January 2024. Daniela Barone Soares stepped down from the Board on 31 December 2024. Fees and benefits were payable to Daniela up to the date of stepping down with no further payments being made, in line with the approved policy.
Wider workforce
remuneration and
employee engagement
In 2024, the average budget for salary increases was 4% for our UK and US corporate workforce. The overall average budget for 2025 increases will be 3% for our UK and US corporate workforce.
For the UK leased hotel estate, in agreement with the owner, budgeted 2024 salary increases ranged from 3% to 13% with higher increases applicable for frontline workers. Budgeted 2025 salary increases range from 2% to 9%.
The Real Living Wage will be applied for 12 months from April 2025, as a minimum, for all staff in line with the Real Living Wage Foundation level; zero-hour contracts are not utilised in the UK leased estate. Between 2023 and 2025, entry level salaries in our UK leased hotel estate increased by 15% relative to 7% budgeted increases for our corporate population including senior management.
An additional £8m was made available to the budgeted amount for the personal performance element of our 2024 Annual Performance Plan to increase bonus amounts for our strongest performers below Executive Committee level.
For corporate colleagues, in 2024 we enhanced employee benefits for IHG hotel stays, as well as providing three additional days of leave.
We were pleased to see our overall employee engagement scores remain resilient at 87%, which once again saw IHG accredited as a Mercer Global Best Employer.
IHG was named in the Fortune 100 Best Companies to Work For 2024. We are also pleased to see that our Gender Pay Gap continues to improve, with our median Gender Pay gap in the UK decreasing by 22 percentage points since 2017.
I have had the opportunity to participate in an employee engagement session in 2024 alongside Duriya Farooqui and other Non-Executive Directors as part of our Voice of the Employee sessions (further details of which can be found on page 135). I would like to thank all colleagues involved in these sessions for their time and feedback.
Remuneration for 2025
Executive Directors’ salaries will increase by 3% with effect from 1 April 2025, aligned with the UK and US corporate workforce. The CEO’s salary was reviewed as part of the policy review. Conditional upon approval of the revised policy at the 2025 AGM, the CEO’s base salary will instead be increased by 6.8% rather than 3%. The Committee believes that the proposed increase is fair, necessary in the wider market and business context which has been exceptionally strong, and consistent with practice for corporate employees below Board level.
The APP measures for 2025 will be the same as those for 2024, namely operating profit from reportable segments (70%), room signings and room openings (15% each).
Measures for the 2025–27 LTIP cycle are relative Total Shareholder Return (20%); relative net system size growth (25%); cash flow (20%); adjusted earnings per share (EPS) (25%); and carbon and people metrics (10%). These are the same categories used for the 2024–26 cycle, with increased weighting on EPS and relative net system size growth by 5% each and reduced weighting on carbon and people metrics by 10%. We also increased the level of stretch in the EPS targets (see page 157 for further detail). This is the outcome of a review of LTIP measures in the context of our strategic priorities including our growth algorithm. It was concluded that the weightings of the EPS and relative net system size growth measures should be increased to support the achievement of this.
Subject to approval of the policy, Restricted Stock Unit (RSU) awards will be granted to Executive Directors which will vest subject to meeting an underpin. Further details are set out on page 156.
About this report
This report is longer in length to recognise the important narrative regarding the policy proposals. The Directors’ Remuneration Report (pages 138 to 166) will be put to an advisory vote and the Directors’ Remuneration Policy (pages 167 to 175) will be put to a binding vote by shareholders at the May 2025 AGM.
Angie Risley
Chair of the Remuneration Committee
17 February 2025
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| 140 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Remuneration at a glance
Key
| Within the Directors’ Remuneration Report, we have used colour coding to denote different elements of remuneration as follows:
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Audited information Content contained within a Salary Benefits Pension benefit Long Term Incentive Plan (LTIP) – performance-based shares tinted panel highlighted with an ‘Audited’ tab indicates that all Annual Performance Plan (APP) Long Term Incentive Plan (LTIP) – restricted stock units the information within the panel (up to 70% paid in cash with a minimum Shareholding is audited. of 30% deferred into shares)
Executive Director remuneration in 2024 Elie Maalouf Chief Executive Officer Michael Glover Chief Financial Officer Value (L000) Value (L000) 2024 actual 7,525 2024 actual 3,377 2023 actual 4,242 2023 actual 1,930 How we performed in 2024 Measures used for APP Operating profit from reportable segmentsa ($m) 63.0% Actual 1,135 (59.4% of maximum) 2024 APP achievement (% of maximum) Threshold Target Maximum 1 1,042 1,120 1,198 3 Room signings (k rooms) 2 Actual 106.2 (82.7% of maximum) Threshold Target Maximum 89.8 99.7 109.7 1 Operating profit from reportable segments: 70% 2 Room signings: 15% Room openings (k rooms) 3 Room openings: 15% Actual 59.1 (60.2% of maximum) Threshold Target Maximum – Overall achievement between target 52.1 57.9 63.7 and maximum. – Very strong signings performance a. Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. towards the maximum. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. Measures used for LTIP Relative Total Shareholder Return (%) 84.7% Actual 101.9% (100% of maximum) 2022/24 LTIP achievement (% of maximum) Threshold Maximum 46.5% 86.5% 1 Relative net system size growth (%) 3 Actual 4.2% (61.7% of maximum) 2 Threshold Maximum 3.1% 5.2% 1 Total Shareholder Return: 30% 2 Net system size growth: 40% Absolute cash flow ($bn) 3 Absolute cash flow: 30% Actual 3.02 (100% of maximum) – Overall achievement between target Threshold Maximum and maximum. 1.58 2.11 – Exceptional cash flow and relative TSR performance above maximum targets set. – Strong relative NSSG above median.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 141 | |||||||||||
Aligning variable elements of remuneration to strategy in 2024 What we do Provide True Hospitality for Good Why we do it To be the hotel company of choice for guests and owners How we make it happen Relentless focus Brands guests Leading Care for our people, on growth and owners love commercial engine communities and planet Element Measures and weightings Link to strategy Explanation Annual Operating profit from – The strength and breadth of our portfolio, tailored Performance reportable segments (70%) services and solutions, as well as our technology and Plan (APP) platforms drive consumer preference, owner returns Room signings (15%) and rooms growth; all contributing to our revenues and profit. – Openings and signings are two of our key drivers of Room openings (15%) system size and central to our strategy of accelerating the growth of our brands in high-value markets. – The underlying performance of the business will be reviewed in considering the potential application of discretion to formulaic outcomes of the APP measures. Long Term Relative Total Shareholder – Our strategy is intended to deliver unmatched Incentive Return (20%) guest experiences and unrivalled owner returns Plan (LTIP) for our stakeholders, including competitive total Relative net system shareholder returns. size growth (20%) – Our strategy is to accelerate the growth of our brands in high-value markets by using our global scale and Absolute cash flow (20%) expertise so it is important that this forms a key element of our management team’s LTIP. – Enhancing our customer and owner offer and accelerating the growth of our brands in high-value markets drives sustained growth in cash flows and profits over the long term, which can be reinvested in our business and returned to shareholders. Carbon and people (20%) – Measures aligned to our people and planet business priorities are included in our LTIP targets. Adjusted earnings – EPS provides a measure of the efficiency of the capital per share (20%) structure, as well as promoting further alignment with shareholder experience and value.
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Directors’ Remuneration Report continued
Remuneration at IHG – the wider context
How our reward practices are aligned across all levels of the organisation
Our approach to fairness in reward is an important aspect of our overall reward philosophy and is designed to attract, retain, motivate and engage talent at all levels of the business. It is supported by a robust governance approach that ensures our reward and recognition practices are fair and consistent across our employee population, as well as an alignment between the wider direct workforce and executive remuneration. We regularly review our approach externally, ensuring we are competitive in the different markets in which we operate and meet the needs of employees by offering market-driven reward packages.
Executive Senior All Element Directors management employees Details Fixed Salary – Managers put at the heart of the salary review process, allowing them to use discretion. – Managers reminded of importance of making fair reward decisions consistent with our Code of Conduct to ensure employees are fairly rewarded according to their contribution, skills and experience. Benefits – Corporate colleagues allocated IHG Gold Elite Status. – Employee Room Rate programme enhanced – increasing booking window, and number and type of rooms. – Alignment of healthcare across the UK corporate population. – All UK corporate colleagues are covered for Life Insurance, Income Protection and Critical Illness. – We offer US colleagues a streamlined selection of health and welfare plan designs and providers. We provide both financial and protection benefits to our colleagues through a life and Accidental Death & Dismemberment insurance coverage. Pension – UK and US pension benefits competitive against the market. – Contribution rate for UK corporate, and eligible UK hotel employees, is aligned with 2:1 matching ratio up to 6% of salary from employees and 12% from the Company. – Salary sacrifice available and life cover of 4x base salary for UK pension plan participants. Variable APP – Corporate performance metrics are aligned across corporate colleagues, Executive Directors and Executive Committee (EC). – Bonus deferral for three years in operation for senior management. – Weightings of metrics for all corporate colleagues below EC level are aligned and higher awards can be earned through an employee’s individual performance and contribution to the Company. – L8m funding was made available in addition to the budgeted amount for the personal performance element of our 2024 Annual Performance Plan to increase bonus amounts for our strongest performers. LTIP – Certain senior/mid-management and specialist roles are eligible to participate in the Long Term Incentive Plan, under which performance-based awards vest after three years. RSU – Certain senior/mid-management and specialist roles are eligible to receive an RSU award, which vests after three years. – 659 colleagues were in receipt of an RSU award for the 2024–26 cycle. – At certain job levels, we run an annual nomination process whereby 30% of the population can be nominated to receive an RSU award based on their performance. – Executive Directors do not currently receive RSU awards, but it is proposed that they will from 2025 onwards under the new Directors’ Remuneration Policy. – RSUs are not subject to performance conditions but still align employee interests with those of shareholders. Long – All of the corporate workforce, including Executive Directors, are eligible to receive a Long Service Term Service Award, of varying value, once the employee reaches certain service milestones. Awards – In 2024, 870 corporate colleagues and 814 hotel colleagues globally received cash long-term service awards. Colleague – Available to around 99% of our corporate colleagues below the senior/mid-management Share Plan level, with eligibility opened to colleagues in Spain and Portugal for the first time in 2025. – IHG matches the shares purchased by colleagues on a one-for-one basis. – The registration for the 2025 plan was open to eligible colleagues in Q4 2024 and the take-up rate is 39.6%. – The 2023 plan’s matching shares vested in January 2025 with more than 28,300 shares vesting between 2,296 employees, worth almost L3m. – Colleagues receive dividends and voting rights on purchased shares. Bravo – Colleagues below senior/mid-management level can be nominated for a cash award Recognition through our Bravo recognition scheme for going above and beyond in their roles whilst plan displaying exceptional IHG behaviours. – 12,579 one-off cash awards were made to corporate colleagues and 16,268 cash awards were made to hotel colleagues globally during 2024.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 143 | |||||||||||
Employee engagement on pay
We have several forums for employees to express their opinions on pay. These include employee resource groups (ERGs) and direct engagement with Non-Executive Directors. In 2024, the Chair of the Remuneration Committee met colleagues to understand their views on Executive Director and their own pay. Our employee engagement survey, Colleague HeartBeat, allows employees to give their views on working at IHG. The 2024 employee engagement scores for participating managed and leased hotel and reservations employees and general managers on the questions relating to reward and recognition exceeded our survey provider’s top quartile benchmark.
| Paid fairly | Benefit plan meets needs | |
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| Appropriate recognition | Performance impacts pay | |
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Wellbeing
We continue to promote myWellbeing – a framework to support employees across their health, lifestyle and workplace. The myWellbeing suite of resources, which includes an employee Wellbeing Handbook and guidelines for people managers, has been designed to provide a holistic wellbeing offering. Employees also have access to a global Employee Assistance Programme, which offers counselling, practical guidance on topics such as legal, financial and work matters, and additional health and wellbeing resources.
We have also continued to champion initiatives such as Focused Fridays, where we limit scheduling meetings, and recharge days, where corporate colleagues can spend the day doing whatever they need to unwind. In 2024, all corporate colleagues were given three recharge days to spend as they please, on top of any contracted annual leave they are eligible to receive.
Leased hotel employees
As previously reported, following the acquisition of a number of UK hotels in 2019, employing entities for the estate’s hotels were transferred to IHG. Employment terms, including remuneration and benefits, largely remained in place on their pre-acquisition basis.
As with the model for leased hotels generally, IHG provides hotel management support to the owners of leased hotels in the UK and globally, and makes recommendations on matters, including pay, based on market insight, third-party surveys and experience. Decisions on implementing pay changes are ultimately determined by the hotel estate owner in the context of their own commercial position and equities across the wider portfolio.
| – | Salary increases for 2024 ranged from 3% to 13% and for 2025 range from 2% to 9%, with higher increases applicable for frontline employees. |
| – | The Real Living Wage will continue to be applied as a minimum for all staff in line with the Real Living Wage Foundation level. Zero-hour contracts are not utilised in the UK leased estate. |
| – | Hotel colleagues receive similar benefits to corporate employees, including enrolment into a workplace pension, employee room rates, Employee Assistance Programme, Bravo recognition programme, retail discount vouchers, the myWellbeing programme and refer-a-friend bonus. Frontline colleagues can also receive incentives and performance-driven bonuses, and eligible managers receive an annual performance bonus. |
| – | Between 2023 and 2025, entry level salaries in our UK leased hotel estate increased by 15% relative to 7% budgeted increases for our corporate population including senior management. |
Championing a culture where everyone can thrive
One of our 2030 commitments is to drive gender balance and a doubling of under-represented groups across our leadership, and we are building on the significant progress we have made over the past decade towards achieving gender balance, with 36% of our leaders (VP and above) being female compared to our ambition of 39% by 2025, and a gender-balanced employee population, of which 52% is female. We are delighted to be rated second on the Financial Times Diversity Leaders list in 2024. We have reduced our median Gender Pay Gap in the UK by 22 percentage points since 2017, our first year of reporting.
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Our latest Gender Pay report is available on IHG’s website at ihgplc.com/en/responsible-business/reporting under Reporting. |
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Directors’ Remuneration Report continued
Annual Report on Remuneration
The Annual Report on Remuneration explains how the Directors’ Remuneration Policy was implemented in 2024, the remuneration earned by the Executive Directors and how the Directors’ Remuneration Policy will be implemented in 2025.
Audited
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Single total figure of remuneration – Executive Directors
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| Executive Director | Year | |
Salary £000 |
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Benefits £000 |
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Pension benefit £000 |
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Subtotal £000 |
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APP £000 |
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LTIP £000 |
a |
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Subtotal £000 |
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Other £000 |
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Total £000 |
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| Elie Maalouf | 2024 | 1,010 | 427 | 121 | 1,557 | 1,298 | 4,670 | 5,968 | – | 7,525 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 849 | 203 | 133 | 1,185 | 1,403 | 1,570 | 2,973 | 84 | 4,242 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Michael Gloverb | 2024 | 639 | 86 | 77 | 801 | 813 | 1,614 | 2,426 | 150 | 3,377 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 487 | 47 | 58 | 592 | 797 | 391 | 1,188 | 150 | 1,930 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| a. | LTIP figures for 2023 relate to the 2021–23 LTIP cycle and have been restated using the actual share price of £83.52 on the date of vesting. Figures for 2024 relate to the value of shares for the 2022–24 cycle using the Q4 2024 average closing share price of £92.31. |
| b. | Michael Glover’s 2024 LTIP figure, inclusive of RSU awards, is for the full 2022–24 LTIP cycle. His 2022–24 RSU award and a portion of his 2022–24 LTIP award were granted in May 2022 prior to becoming an Executive Director. The same performance conditions applied to the LTIP award as they did for Executive Directors. The RSU awards for 2022–24 were not subject to any performance conditions. |
Notes to the single total
figure table
Fixed pay
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Salary: salary paid for the year. Salary increases of 4% for 2024 were in line with those for the wider corporate workforce, with Elie Maalouf’s salary increasing from £990,000 to £1,029,600 with effect from 1 July 2024 and Michael Glover’s salary increasing from £620,000 to £644,800 with effect from 1 April 2024. | |
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Benefits: for Executive Directors, this includes, but is not limited to, taxable benefits such as company car allowance and healthcare. | |
Elie Maalouf receives an RPI-linked monthly net housing allowance of £11,200 as at September 2024 (increased by RPI of 3.4%; gross value for reporting purposes of £20,400 per month) towards UK housing costs to facilitate him to carry out his UK-based role whilst maintaining his US home and IHG’s significant US business, government and industry interests.
Other benefits provided include travel costs and allowances (£61,000 for Elie Maalouf; £17,000 for Michael Glover), tax return assistance (£39,000 for Elie
Maalouf; £30,000 for Michael Glover) and healthcare provision (£59,000 for Elie Maalouf; £32,000 for Michael Glover). It has been agreed that Elie Maalouf would settle any employee tax due in respect of travel within the UK with effect from the beginning of the 2024/25 tax year.
Life assurance at four times base salary, critical illness and income protection cover were provided for all Executive Directors, which is aligned to all other UK corporate colleagues who participate in the UK pension plan.
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Pension benefit: for current Executive Directors, in line with the policy, represents cash allowances of 12% of salary paid in lieu of pension contributions. This is in line with the maximum level available to all other participants in the UK pension plan. |
Other
Michael Glover received a gross payment of £150,000 in 2023 and in 2024 as time-limited one-off payments to cover relocation and associated costs. A final payment of £100,000 is due to be made in early 2025 on the second anniversary of his appointment as CFO.
Variable pay
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APP (maximum 70% cash and minimum 30% deferred shares subject to meeting minimum shareholding requirement). |
Operation
Disclosed award levels are determined based on salary as at 31 December 2024 and on a straight-line basis between threshold and target, and target and maximum.
The target award was 100% of salary and the maximum award was 200% of salary.
Any payment made under the APP is subject to minimum levels of performance under the operating profit from reportable segments metric, with the room signings and room opening measures subject to a financial gate:
| – | if operating profit performance is below 85% of target, there would be no payout under these measures; and |
| – | if operating profit performance is between 85% of target and threshold, payout for these measures would be reduced by 50%. |
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Audited
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APP outcome for 2024
The performance measures and outcomes of the 2024 APP were as follows:
| Targets (straight-line payout between) | ||||||||||||||||||||||||||||||||||||||||||||
| Performance measure | Weighting | Threshold (0% payout) |
Target (50% payout) |
Maximum (100% payout) |
Performance achieved |
Achievement | ||||||||||||||||||||||||||||||||||||||
| Operating profit from reportable segmentsa | 70 | % | $1,042m | $1,120m | $1,198m | $1,135m | 118.8 | % | ||||||||||||||||||||||||||||||||||||
| Room signings (k rooms) | 15 | % | 89.8 | 99.7 | 109.7 | 106.2 | 165.3 | % | ||||||||||||||||||||||||||||||||||||
| Room openings (k rooms) | 15 | % | 52.1 | 57.9 | 63.7 | 59.1 | 120.5 | % | ||||||||||||||||||||||||||||||||||||
| Total weighted achievement (% of target) | 126.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total weighted achievement (% of maximum) | 63.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total achievement (% of salary) | 126.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
Adjustments to room openings and room signings targets
The room openings and room signings targets were increased by 5,700 rooms during the year, following levels of in-year deal activity in excess of original expectations at the point that the targets were set. Operating profit performance was above threshold and therefore the financial gate was met for the room signings and room opening measures. The Committee also reviewed the overall performance of the Executive Directors and of the business including relative to peers, and was satisfied that no further adjustments needed to be applied to the formulaic outcomes of the APP measures.
Elie Maalouf and Michael Glover have both met their shareholding requirement and therefore 30% of APP earned for 2024 will be deferred into shares for three years. The only condition attached to deferred shares is continued service.
The resulting amounts earned were as follows:
| Executive Director | Total amount earned (£000) |
Of which paid in cash (£000) |
Of which deferred in shares (£000) |
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| Elie Maalouf | £1,298 | £909 | £389 | |||||||||||||||||
| Michael Glover | £813 | £569 | £244 | |||||||||||||||||
In determining operating profit from reportable segments for APP purposes, budgeted exchange rates for the year are used to ensure like-for-like comparison with the APP target set at the start of the year.
| Operating profit from reportable segments (at actual exchange rates) (see page 209) | $1,124m | |||||
| Operating profit from reportable segments (at 2024 budget exchange rates) | $1,135m | |||||
| Difference due to exchange rates | $11m | |||||
LTIP 2022–24
LTIP outcome for 2022–24 cycle
The following table shows the 2022–24 LTIP performance measures and weightings, the threshold and maximum targets and actual achievement, based on the formulaic outcomes against the three-year targets set in 2022.
| Performance targets | ||||||||||||||||||||||||||||||||||||
| Performance measure and weighting | Threshold (20% vesting) |
Maximum (100% vesting) |
Performance result |
Achievement (% of maximum for measure) |
Weighted achievement (% of maximum award) |
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| Total shareholder return (30%): Three-year growth relative to competitorsa |
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46.5% (Median) |
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86.5% (Upper quartile) |
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101.9% (Above upper quartile) |
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100% | 30.0% | |||||||||||||||||||||||||
| Relative net system size growth (NSSG) with ROCE underpin (40%): Three-year growth relative to competitorsb |
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4th rank (3.1% growth) |
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1st rank (5.2% growth) |
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2nd rank (4.2% growth) |
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61.7% | 24.7% | |||||||||||||||||||||||||
| Absolute cash flow (30%): | 1.58bn USD | 2.11bn USD | 3.02bn USD | 100% | 30.0% | |||||||||||||||||||||||||||||||
| Total % of maximum opportunity vesting | 84.7% | |||||||||||||||||||||||||||||||||||
| a. | TSR comparators for the 2022–24 cycle are Accor S.A., Choice Hotels International Inc., Hilton Worldwide Holdings Inc., Hyatt Hotels Corporation, Marriott International Inc., Melia Hotels International S.A., NH Hotels Group, and Wyndham Hotels & Resorts Inc. |
| b. | NSSG comparators for the 2022–24 cycle are Accor S.A., Choice Hotels International Inc., Hilton Worldwide Holdings Inc., Jin Jiang International Holdings Company Limited, Marriott International Inc. and Wyndham Hotels & Resorts Inc. |
The Committee considered performance against the Return on Capital Employed (ROCE) underpin attached to the NSSG measure. The underpin level of 20% was met, with the average ROCE over the performance period being 29.8%.
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Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Audited
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Adjustments to absolute cash flow target
Over the performance period of the 2022–24 LTIP award, there have been events that have impacted IHG’s cash flow that were unquantified or unforeseen when the original targets were set. The table below shows the reconciliation between reported cash flow and the outcome for the 2022–24 LTIP. This includes adjustments agreed by the Committee to exclude the impact of the exit from Russia, as described on page 128 of the 2022 Directors’ Remuneration Report, and which are consistent with those applied for the 2021-23 LTIP award. These adjustments had no effect on the vesting outcome.
| Reconciliation | Cash flow $bn |
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| Reported cash flow from operations | 3.33 | |||||
| Net cash from investing activities | (0.31 | ) | ||||
| Reported outcome per definition | 3.02 | |||||
| Other adjustments (including exclusion of Russian operations) | 0.00 | |||||
| Adjusted outcome | 3.02 | |||||
Adjustment to NSSG target
As noted above, IHG announced the decision to cease all operations in Russia. Net system size growth performance for IHG and all companies in the peer set for this relative measure has therefore been adjusted to remove the Russia system size from all companies for all years. These events were not budgeted for at the time of setting the 2022–24 targets, and the Committee, in its judgment, considered it was appropriate to adjust for them on the basis that LTIP participants should not be disincentivised from making decisions that are in the long-term interest of shareholders.
No other discretion was applied in determining the vesting level of the 2022–24 LTIP award.
LTIP 2022–24 vesting
The award granted under the 2022–24 cycle will vest on 19 February 2025 based on achievement against targets measured over three years to 31 December 2024. The individual outcomes for this cycle are shown below.
The daily average closing share price over the final quarter of 2024 was 9,231p. This share price was used to calculate the total value of award and the value of award attributable to share price appreciation.
| Executive Director | Number of shares granted |
% of maximum award vested |
Outcome (number of shares vesting) |
Total value of award £000 |
Value of award attributable to share price appreciation £000 |
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| Elie Maaloufa | 59,730 | 84.7% | 50,590 | 4,670 | 2,082 | |||||||||||||||||||||||||||||||
| Michael Glover – LTIPb | 16,538 | 84.7% | 14,007 | 1,293 | 544 | |||||||||||||||||||||||||||||||
| Michael Glover – RSUc | 3,474 | 100.0% | 3,474 | 321 | 152 | |||||||||||||||||||||||||||||||
| a. | Includes 40,101 shares granted on 13 May 2022 with a grant price of 4,842p and a top up of 19,629 shares granted on 13 May 2024 with a grant price of 5,674p. Shares are subject to a two year holding period. |
| b. | Includes 3,860 shares granted on 13 May 2022 with a grant price of 4,842p and a top up of 12,678 shares granted on 13 May 2024 with a grant price of 5,501p. Vested shares from the 2024 grant are subject to a two year holding period. |
| c. | RSU award for 2022–24 cycle received prior to appointment to the Board with a grant price of 4,842p. This award is subject to continued service only. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 147 | |||||||||||
Audited
|
|
Scheme interests awarded during 2024
Annual Performance Plan (APP) – 2023
Half of the bonus earned in respect of the 2023 APP was deferred into shares, with no further conditions save continued service. An average of the closing mid-market share price for the three days following the publication of 2023 results was used to determine the number of shares to be awarded. Details of the resulting shares granted were as follows:
| Executive Director |
Type of award | Award date | Number of shares granted |
Market price £ |
Face value of award at grant £000 |
Vesting date | ||||||||||||||||||||||||||||||||||||||
| Elie Maalouf | Conditional shares | 28 February 2024 | 8,088 | 86.27 | 698 | 1 March 2027 | ||||||||||||||||||||||||||||||||||||||
| Michael Glovera | Conditional shares | 28 February 2024 | 4,817 | 86.27 | 416 | 1 March 2027 | ||||||||||||||||||||||||||||||||||||||
| a. | 4,619 shares relate to Michael Glover’s role as an Executive Director; the other 198 shares relate to the amount received for his previous role. |
Long Term Incentive Plan (LTIP) – 2024–26 cycle
During 2024, awards were granted over shares with a maximum value of 500% of salary for the CEO and 300% of salary for the CFO using an average of the closing mid-market share price for the five days prior to grant. These are in the form of conditional awards over Company shares and do not carry the right to dividends or dividend equivalents during the vesting period. The vesting date for the award is the day after the announcement of our financial year 2026 Preliminary Results in February 2027. These awards will vest to the extent that performance targets are met and will then be held in a nominee account for a further two years in accordance with the post-vest holding requirement, transferring to the award holder in February 2029.
| Executive Director |
Type of award |
Award date |
Performance period |
Basis of award |
Maximum shares awarded |
Market price £ |
Face value of award at grant £000 |
|||||||||||||||||||||||||||||||||||||||||||
| Elie Maalouf | |
Conditional shares |
|
13 May 2024 | |
1 January 2024 to 31 December 2026 |
|
|
500% of salary |
|
63,137 | 78.40 | 4,950 | |||||||||||||||||||||||||||||||||||||
| Michael Glover | |
Conditional shares |
|
13 May 2024 | |
1 January 2024 to 31 December 2026 |
|
|
300% of salary |
|
24,673 | 78.40 | 1,934 | |||||||||||||||||||||||||||||||||||||
The performance measures for the 2024–26 LTIP cycle are as outlined below. NSSG is a relative measure and is measured to 30 September 2026, rather than 31 December 2026, due to the timing at which competitor data is published.
| Measure and weighting | Threshold target (20% vesting) |
Maximum target (100% vesting) |
||||||||||
| Relative TSR (20%)a | Median | Upper quartile | ||||||||||
| Relative NSSG (20%)b | Ranked 4th | Ranked 1st | ||||||||||
| Absolute cash flow (20%) | 2.395bn USD | 3.421bn USD | ||||||||||
| Adjusted EPS (20%) | 5% absolute CAGR | 12% absolute CAGR | ||||||||||
| Carbon and people (20%) – split between four equally weighted measures | ||||||||||||
| Adoption of five existing energy conservation measures (ECMs) |
80% of hotels | 100% of hotels | ||||||||||
| Low/zero carbon hotels open or under construction |
10 hotels | 15 hotels | ||||||||||
| Improvement in ‘Inclusion Index’ scores for ethnically diverse corporate |
|
7% below total population |
|
|
In line with total population |
|
||||||
| Talent interventionsc |
30% of talent promoted | 50% of talent promoted | ||||||||||
Straight-line vesting occurs between threshold and maximum target.
| a. | Comparator companies for TSR are Accor S.A., Choice Hotels International Inc., Dalata Hotel Group PLC, H World Group Limited, Hilton Worldwide Holdings Inc., Hyatt Hotels Corporation, Indian Hotels Company Limited, Jin Jiang International Holdings Company Limited, Marriott International Inc., Melia Hotels International S.A., Minor International, Scandic Hotels Group AB, Shangri-La Hotel Public Company Limited, Whitbread PLC and Wyndham Hotels & Resorts Inc. |
| b. | Comparator companies for NSSG are Marriott International Inc., Hilton Worldwide Holdings Inc., Accor S.A., Jin Jiang International Holdings Company Limited, Wyndham Hotels & Resorts Inc. and Choice Hotels International Inc. |
| c. | Threshold vesting will occur if 30% of talent who took part in the programmes between 2022 and 2024 have been promoted by 31 December 2026 and maximum vesting will occur if 50% of talent who took part in the programmes have been promoted by 31 December 2026. |
Table of Contents
| 148 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Audited
|
|
LTIP – pro-rated awards
During 2024, pro-rated awards were granted to Executive Directors under the 2022–24 LTIP cycle equivalent in value to the quantum of award applying at the time of their respective promotions, pro-rated for the proportion of the performance period served in the promoted role. The share price used to determine the number of shares under award is based on the average of the closing mid-market share price for the five days prior to the point at which the awards would ordinarily have been granted following promotion, which was 10 May 2023 for Michael Glover and 8 August 2023 for Elie Maalouf. These pro-rated awards are consistent with the approved Directors’ Remuneration Policy and historical practice for senior executives who join the Company or are promoted during LTIP cycles.
The pro-rated awards are in the form of conditional awards over Company shares and do not carry the right to dividends or dividend equivalents during the vesting period. The vesting date for the awards is the day after the announcement of our financial year 2024 Preliminary Results in February 2025. These awards will vest to the extent that performance targets are met and will then be held in a nominee account for a further two years, transferring to the Executive Directors in February 2027 following the two-year post-vest holding period.
The performance measures for the 2022–24 LTIP cycle are as outlined on page 145.
| Executive Director |
Type of award | Award date | Performance period | Basis of award |
Maximum shares awarded |
Share price used £ |
Face value £000 |
|||||||||||||||||||||||||||||||||||||||||||
| Elie Maalouf | |
Conditional shares |
|
13 May 2024 | |
1 January 2022 to 31 December 2024 |
|
|
Pro-rated top up to 500% of salary |
|
19,629 | 56.74 | 1,114 | |||||||||||||||||||||||||||||||||||||
| Michael Glover | |
Conditional shares |
|
13 May 2024 | |
1 January 2022 to 31 December 2024 |
|
|
Pro-rated top up to 275% of salarya |
|
12,678 | 55.01 | 697 | |||||||||||||||||||||||||||||||||||||
| a. | Pro-rated award includes shares under entitlement to awards in the 2021–23 cycle, whose performance period had already concluded at the time the pro-rated award was granted. |
Relative importance of spend on pay
The chart below sets out the actual expenditure of the Group on remuneration and distributions to shareholders in 2023 and 2024. Operating profit from reportable segmentsa is also included as this is a significant constituent of the APP.
Expenditure of the Group on remuneration and distributions to shareholders in 2023 and 2024
$m
|
|
|
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 149 | |||||||||||
Audited
Executive Directors’ shareholdings and share interests
Executive Director shareholding requirement
The shareholding requirement under the Directors’ Remuneration Policy in force at the end of 2024 is 500% of salary for the Chief Executive Officer and any US-based Executive Directors, and 300% for other Executive Directors. Executive Directors are expected to hold all net shares earned until the previous shareholding requirement is achieved (300% for the CEO and any US-based Executive Directors, and 200% for other Executive Directors) and at least 50% of all subsequent net shares earned until the current shareholding requirement is met. The number of shares held outright includes all Directors’ beneficial interests and those held by their spouses and other connected persons. It also includes the net value of unvested shares that are not subject to any further performance conditions or underpins.
The minimum shareholding requirement applies for two years post-cessation of employment.
As part of this requirement, shares have been granted and all unvested awards are held in a nominee account, with Executive Directors required to electronically sign an agreement to the terms of the grant, including the post-employment shareholding requirement.
The respective shareholding requirements have been met by Elie Maalouf and Michael Glover as at 31 December 2024.
Shareholdings as a percentage of salary are calculated using the 31 December 2024 closing share price of 9,954p. A combined tax and social security rate of 47% is used for both Michael Glover and Elie Maalouf.
Current Directors’ share interests
The APP deferred share awards are subject to continued service only and are not subject to additional performance conditions. Details on the performance conditions to which the unvested LTIP awards are subject can be found on pages 145 and 147 of this report, and on page 132 of the 2023 Directors’ Remuneration Report.
There have been no changes in the shareholding interests of the Executive Directors since the end of the financial year up to the publication of this report.
Shares and awards held by Executive Directors at 31 December 2024
| Executive
Director |
Number of shares held outright, including those |
APP deferred share awards | LTIP share awards (unvested) | Total number of shares and awards held |
||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||
| Elie Maalouf | 109,462 | 99,265 | 32,921 | 24,833 | 208,149 | 157,908 | 350,532 | 282,006 | ||||||||||||||||||||||||||||||||||||
| Michael Glover | 15,675 | 13,307 | 8,064 | 3,247 | 78,497 | a | 47,152 | 102,236 | 63,706 | |||||||||||||||||||||||||||||||||||
| a. | Includes 3,474 RSU shares granted prior to appointment to the Board, with the balance of 75,023 shares being LTIP shares subject to performance conditions. |
Table of Contents
| 150 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Relative performance graph
The graph below shows the Company’s TSR performance from 31 December 2014 to 31 December 2024, compared with the TSR performance achieved by the FTSE 100 over the same period. The Company is a constituent of the FTSE 100 and therefore this index is considered relevant for comparison purposes.
History of Chief Executive Officer’s remuneration
The table below shows the CEO’s total remuneration and incentive outcomes for the 10 years to 31 December 2024.
| CEO | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||||||||||||||||||||||||||||||
| Single figure of remuneration (£000) |
Elie Maalouf | – | – | – | – | – | – | – | – | 4,242 | 7,525 | |||||||||||||||||||||||||||||||||||||
| Keith Barr | – | – | 2,161 | 3,143 | 3,376 | 1,484 | 3,199 | 4,273 | 4,173 | – | ||||||||||||||||||||||||||||||||||||||
| Richard Solomons | 3,197 | 3,662 | 2,207 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||
| Annual incentive earned (% of maximum) |
Elie Maalouf | – | – | – | – | – | – | – | – | 81.8 | 63.0 | |||||||||||||||||||||||||||||||||||||
| Keith Barr | – | – | 69.7 | 84.1 | 58.7 | 0 | 100.0 | 95.7 | 81.8 | – | ||||||||||||||||||||||||||||||||||||||
| Richard Solomons | 75.0 | 63.9 | 66.8 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||
| LTIP earned (% of maximum) |
Elie Maalouf | – | – | – | – | – | – | – | – | 57.8 | 84.7 | |||||||||||||||||||||||||||||||||||||
| Keith Barr | – | – | 46.1 | 45.4 | 78.9 | 30.6 | 20.0 | 52.1 | 57.8 | – | ||||||||||||||||||||||||||||||||||||||
| Richard Solomons | 50.0 | 49.4 | 46.1 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||
Audited
Payments to past Directors
Sir Ian Prosser, who retired as Director on 31 December 2003, had an ongoing healthcare benefit of £2,312.89 during the year.
Keith Barr stepped down from the Board of IHG on 30 June 2023 with ‘good leaver’ status. His 2022–24 LTIP award will vest in line with the incumbent Executive Directors at a vesting level of 84.7%, with a value of £3,383,000 based on an award of 43,268 shares after pro-rating for service completed. The amount attributable to share price appreciation is £1,608,000.
Payments for loss of office
No payments for loss of office were made to Executive Directors during the year to 31 December 2024.
Pension entitlements
No Executive Director is entitled to any Defined Benefit pension or related benefit from IHG.
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 151 | |||||||||||
CEO pay ratio
Pay ratios will differ significantly between companies, even within the same industry, depending on demographics and business models. The Group’s UK employee demographic, which primarily consisted of largely professional, management and senior corporate roles, changed in 2019 with the addition of a number of hotel employing entities, comprising the UK leased estate, which includes a large proportion of part-time and flexible-working support and service roles. Consistent with past disclosures, we show the ratio both including and excluding the UK hotel employing entities.
| Financial year ended 31 December |
Full population
|
Population excluding hotel employing entities
|
||||||||||||||||||||||||||||||||||||
| Method |
|
25th
|
|
|
Median
|
|
|
75th
|
|
|
25th
|
|
|
Median
|
|
|
75th
|
|
||||||||||||||||||||
| 2024 | Option C |
215:1 | 160:1 | 90:1 | 112:1 | 87:1 | 56:1 | |||||||||||||||||||||||||||||||
| 2023 | Option C |
242:1 | 156:1 | 78:1 | 94:1 | 71:1 | 46:1 | |||||||||||||||||||||||||||||||
| 2022 | Option C |
193:1 | 113:1 | 67:1 | 71:1 | 56:1 | 35:1 | |||||||||||||||||||||||||||||||
| 2021 | Option C |
163:1 | 65:1 | 41:1 | 59:1 | 42:1 | 27:1 | |||||||||||||||||||||||||||||||
| 2020 | Option C |
89:1 | 44:1 | 25:1 | 35:1 | 26:1 | 18:1 | |||||||||||||||||||||||||||||||
| 2019 | Option C |
180:1 | 122:1 | 59:1 | 71:1 | 49:1 | 32:1 | |||||||||||||||||||||||||||||||
| 2018 | Option C |
– | – | – | 72:1 | 48:1 | 29:1 | |||||||||||||||||||||||||||||||
The 2018–2023 figures have been restated to reflect the value of the CEO’s LTIP awards on the date of actual vesting rather than the estimated values used in the respective years’ reports.
What drives the difference in pay between our CEO and other employees?
Pay ratios reflect how remuneration arrangements differ as responsibility increases for more senior roles within the organisation, for example:
| – | A greater proportion of performance-related variable pay and share-based incentives apply for the more senior executives, including Executive Directors, who will have a greater degree of influence over performance outcomes. |
| – | Role-specific incentive plans apply in certain areas such as corporate reservations, sales, hotel development and general managers of IHG managed, owned, leased and managed lease hotels. The target and maximum amounts that can be earned under these plans are typically a higher percentage of base salary for more senior employees, which in turn affect the pay ratio. |
| – | Incentive plans for other corporate employees are typically primarily based on a combination of individual performance and the Group’s operating profit from reportable segments. |
The increase in ratio since 2020, reflects the strong performance of the business and the resulting increases in variable pay outcomes. Overall, on this basis, the Company believes that the median pay ratio for the relevant financial year is consistent with the pay, reward and progression for the Company’s UK employees taken as a whole.
Calculation methodology and supporting information
Option C has been selected for the identification of the percentile employees. IHG prefer to use this method as we are able to produce the most accurate total remuneration figure for all UK employees on a basis comparable with the statutory reporting for Executive Directors using the most recently available data at the time of producing the Annual Report. Specifically, this involves:
| – | compiling all monthly payroll data for all UK employees from 1 January to 31 December 2024 detailing complete variable and fixed remuneration, including pension and taxable benefits such as company car allowance and healthcare; and |
| – | valuing APP for the corporate workforce based on actual 2024 company performance metrics, with target outcome for the personal performance metric, as actual outcomes for this element of the award are not known at the time of writing this report, so that it reflects as much of the same input as for the CEO data as possible at the time of calculation. In practice, personal performance outcomes are subject to manager discretion and can be flexed between 0% and 200% of target. |
Option C requires three UK employees to be identified as the equivalent of the 25th, 50th and 75th percentile. Having identified these employees based on the population as at 31 December 2024, the remuneration for 2024 is calculated on the same basis as the CEO single total figure of remuneration.
The pay arrangements for the six employees – three from the full population and three from the population excluding hotel employing entities – were reviewed alongside those for the employees ranked immediately above and below them to confirm that they were representative of pay levels at these quartiles. The 2024 salary and total pay for the individuals identified at the lower, median and upper quartiles are set out below:
| Year | 25th percentile pay ratio | Median pay ratio | 75th percentile pay ratio | |||||||||||||||||||
| Financial year ended 31 December 2024 – Full population |
Salary £ |
32,196 | 41,524 | 64,740 | ||||||||||||||||||
| Total remuneration £ |
34,938 | 47,116 | 83,303 | |||||||||||||||||||
| Financial year ended 31 December 2024 – Excluding hotel employing entities |
Salary £ |
51,313 | 67,425 | 96,444 | ||||||||||||||||||
| Total remuneration £ |
67,040 | 86,823 | 134,117 | |||||||||||||||||||
Table of Contents
| 152 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Audited
|
|
Single total figure of remuneration: Non-Executive Directors
| Fees £000 |
Taxable benefits £000 |
Total Rounded to the nearest £000 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-Executive Director | Date of original appointment |
Additional/ Committee appointments |
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deanna Oppenheimer | 1 June 2022 |
|
494 | 475 | 56 | 33 | 550 | 508 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Graham Allan |
1 September 2020 |
|
140 | 132 | 2 | 4 | 142 | 136 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daniela Barone Soares | 1 March 2021 |
|
87 | 84 | 10 | 5 | 97 | 89 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arthur de Haast |
1 January 2020 |
|
87 | 84 | 5 | 6 | 92 | 90 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duriya Farooqui |
7 December 2020 |
|
93 | 84 | 17 | 15 | 110 | 99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Byron Grote |
1 July 2022 |
|
116 | 107 | 4 | 5 | 120 | 112 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sir Ron Kalifa |
1 January 2024 | 87 | – | 4 | – | 91 | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Angie Risley |
1 September 2023 |
|
116 | 28 | 20 | 6 | 136 | 34 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sharon Rothstein |
1 June 2020 |
|
87 | 84 | 21 | 8 | 108 | 92 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
See page 118 for Board and Committee membership key and attendance. |
Benefits: For Non-Executive Directors, benefits include taxable travel and accommodation expenses to attend Board meetings away from the designated home location. Under UK income tax legislation, the non-UK based Non-Executive Directors are not subject to tax on some travel expenses; this is reflected in the taxable benefits for Deanna Oppenheimer, Duriya Farooqui and Sharon Rothstein.
Non-Executive Directors’ shareholdings at 31 December 2024
| Non-Executive Director |
2024 | 2023 | ||||||||||||||||||
| Deanna Oppenheimera |
7,000 | 5,000 | ||||||||||||||||||
| Graham Allan |
600 | 600 | ||||||||||||||||||
| Daniela Barone Soares |
150 | 478 | ||||||||||||||||||
| Arthur de Haast |
1,000 | 1,000 | ||||||||||||||||||
| Duriya Farooquia |
200 | 200 | ||||||||||||||||||
| Byron Grotea |
6,800 | 5,300 | ||||||||||||||||||
| Sir Ron Kalifa |
679 | – | ||||||||||||||||||
| Angie Risley |
848 | 848 | ||||||||||||||||||
| Sharon Rothsteina |
2,000 | 2,000 | ||||||||||||||||||
| a. | Shares held in the form of American Depositary Receipts (ADRs). |
There have been no changes in the shareholdings from the end of the financial year to the publication of this report for Non-Executive Directors who have remained in role.
Non-Executive Director fees for 2025
The fees for Non-Executive Directors are reviewed and agreed annually in line with the policy. Increases for 2025 are in line with those for the wider UK and US corporate workforce budget. The resulting fee levels that will be effective from 1 January 2025 will be as follows, with each element independently rounded to the nearest £1,000:
| Annual fee | ||||||||||||||||||||||||||||
| Role |
Increase | |
2025 £000 |
|
|
2024 £000 |
|
|||||||||||||||||||||
| Chair of the Board |
3 | % | 509 | 494 | ||||||||||||||||||||||||
| Non-Executive Director |
3 | % | 90 | 87 | ||||||||||||||||||||||||
| Additional fees |
||||||||||||||||||||||||||||
| Chair of Audit Committee |
3 | % | 30 | 29 | ||||||||||||||||||||||||
| Chair of Remuneration Committee |
3 | % | 30 | 29 | ||||||||||||||||||||||||
| Chair of Responsible Business Committee |
3 | % | 16 | 15 | ||||||||||||||||||||||||
| Senior Independent Director |
3 | % | 39 | 38 | ||||||||||||||||||||||||
| Voice of the Employee role |
3 | % | 10 | 10 | ||||||||||||||||||||||||
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 153 | |||||||||||
Annual percentage change in remuneration of Directors compared to employees
The table below shows the percentage change in each Director’s remuneration compared to that of an average employee between the financial years ended 31 December 2019 to 31 December 2024.
The 2024 remuneration figures for the Directors are taken from the data used to compile the single total figure of remuneration tables shown on pages 144 and 152, prior to any rounding. No employees are directly employed by the Group’s Parent Company, so the average employee data is based on the same UK corporate employee population as that on which the CEO pay ratio is calculated.
All corporate employees have the same corporate performance metrics for the APP as the Executive Directors; however, for corporate employees below Executive Committee level, the weightings of these metrics differ and measures include an individual performance element, the results of which are not available at the time of reporting. For average employee data, we assume that target performance is achieved. Non-Executive Directors are not eligible to participate in any variable remuneration plans.
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salary | APP | Taxable benefits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Executive Director | 2020 | 2021 | 2022 | 2023 | 2024 | 2020 | 2021 | 2022 | 2023 | 2024 | 2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Elie Maalouf | -15% | 22% | 4% | 21% | 19% | -100% | 100% | -1% | -15% | -8% | -9% | 91% | 12% | 247% | 111% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Michael Glover | – | – | – | – | – | – | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-Executive Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deanna Oppenheimer | – | – | – | – | 4% | N/A | N/A | N/A | N/A | N/A | – | – | – | – | 69% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Graham Allan | – | – | 49% | 13% | 6% | N/A | N/A | N/A | N/A | N/A | – | – | 684% | 108% | -36% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daniela Barone Soarees | – | – | – | 3% | 4% | N/A | N/A | N/A | N/A | N/A | – | – | – | 16% | 90% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arthur de Haast | – | 18% | 4% | 3% | 4% | N/A | N/A | N/A | N/A | N/A | – | -1% | 1706% | 28% | -16% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duriya Farooqui | – | – | 4% | 3% | 11% | N/A | N/A | N/A | N/A | N/A | – | – | 100% | 10% | 15% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Byron Grote | – | – | – | – | 9% | N/A | N/A | N/A | N/A | N/A | – | – | – | – | -26% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sir Ron Kalifa | – | – | – | – | – | N/A | N/A | N/A | N/A | N/A | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Angie Risley | – | – | – | – | – | N/A | N/A | N/A | N/A | N/A | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sharon Rothstein | – | – | 4% | 3% | 4% | N/A | N/A | N/A | N/A | N/A | – | – | 100% | -10% | 159% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average employee | -6% | 3% | 14% | 8% | 5% | -100% | 100% | -6% | -9% | -5% | -9% | -11% | 5% | 20% | 15% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes
| – | No data has been reported for Michael Glover, Sir Ron Kalifa and Angie Risley as they joined the Board during 2023 or 2024 and therefore only part-year data is available, which does not enable a full year-on-year comparison with 2024. |
| – | The Remuneration Committee approved an additional fee of £10,000 for the Voice of the Employee Non-Executive Director role for Duriya Farooqui with effect from 1 June 2024. |
| – | Byron Grote was appointed Chair of the Audit Committee with effect from 1 March 2023. |
| – | Elie Maalouf took on the role of Group CEO on 1 July 2023 and therefore his percentage change between 2023 and 2024 reflects a period during 2023 in his previous CEO, Americas role. |
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Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Committee areas of focus in 2024
| – | Approval of the 2023 Directors’ Remuneration Report. |
| – | Review and approval of 2023 remuneration outcomes and 2024 incentive plan structures and targets. |
| – | In-year Company and relative performance tracking. |
| – | Wider workforce remuneration matters. |
| – | Review and tender of Remuneration Committee advisers. |
| – | Review of the Directors’ Remuneration Policy. |
| – | Shareholder engagement process. |
| – | Review of Committee Terms of Reference. |
Key objectives and summary
of responsibilities
The Remuneration Committee approves, on behalf of the Board, all aspects of remuneration for the Executive Directors, the Executive Committee and the Chair of the Board, and also approves the strategy, direction and policy for the remuneration of the senior executives who have a significant influence over the Group’s ability to meet its strategic objectives. Additionally, the Committee reviews wider workforce pay policies and practice to ensure alignment with strategy, values and behaviours and takes this into account when setting Executive Director remuneration. The Committee’s role and responsibilities are set out in its Terms of Reference (ToR), which are reviewed annually and approved by the Board.
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The ToR are available on IHG’s website at ihgplc.com/investors under Corporate governance. |
Membership and
attendance at meetings
The members of the Committee during 2024 were Angie Risley (Chair), Deanna Oppenheimer, Daniela Barone Soares, Bryon Grote and Ron Kalifa. Details of the attendance at Committee meetings are set out on page 118.
During 2024, the Committee was supported internally by the Company Chair, the Group’s CEO and CFO, the General Counsel and Company Secretary, and senior members of the Human Resources and Reward teams as necessary. All attend by invitation to provide further background information and context to assist the Committee in its duties. They are not present for any discussions that relate directly to their own remuneration or where their attendance would not otherwise be appropriate.
Reporting to the Board
The Committee Chair updates the Board on all key issues raised at Committee meetings. Papers and minutes for each meeting are also circulated to all Board members for review and comment.
Non-Executive Directors’
letters of appointment
and notice periods
Non-Executive Directors have letters of appointment, which are available upon request from the Company Secretary’s office.
Deanna Oppenheimer, Non-Executive Chair, is subject to 12 months’ notice and is in compliance with Provision 19 of the UK Corporate Governance Code. No other Non-Executive Directors are subject to notice periods; all Non-Executive Directors are subject to an annual re-election by shareholders at the AGM.
Effectiveness of
the Committee
The effectiveness of the Committee is monitored and assessed regularly by the Chair of the Committee and the Chair of the Board.
Remuneration advisers
IHG appointed Willis Towers Watson (WTW) to act as independent adviser to the Committee in 2024, following a competitive tender process undertaken by the Committee. Deloitte LLP continued to act as independent adviser to the Committee until August 2024, at which point WTW commenced work for the Committee.
Both WTW and Deloitte are members of the Remuneration Consultants Group and, as such, operate under the code of conduct in relation to executive remuneration consulting in the UK. The Committee is therefore satisfied that the advice received from its advisers is objective and independent.
Fees of £163,850 were paid to Deloitte and fees of £164,871 were paid to WTW in respect of the advice provided to the Committee in relation to Director remuneration in 2024. The fees included significant input into the review of the Directors’ Remuneration Policy during the year. Fees were charged at a combination of fixed amounts for specific items of work and hourly rates.
Approach to target setting
Targets are set by the Committee, taking into account IHG’s growth ambitions and long-range business plan as approved by the Board, market expectations and the circumstances and relative performance at the time. The committee sets stretching targets for senior executives that will reflect successful outcomes for the business based on its strategic and financial objectives for the period.
Absolute targets may be set relative to budget and/or by reference to prior results, generally containing a performance range with additional stretch to incentivise outperformance and minimum performance levels for payout.
Relative targets are set against an appropriate comparator group of companies for the relevant measure, for example, relative NSSG in the LTIP was set against our six largest competitors with more than 500,000 rooms, to reflect our strategy of accelerating the growth of our brands in high-value markets.
Performance will be reviewed throughout the period in which it is applicable for, and, if any amendments are required, this will be disclosed in the Directors’ Remuneration Report for the year in which the amendment has been agreed.
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Alignment with Provision 40 of the UK Corporate Governance Code
The Committee has considered the remuneration policy and practices in the context of Provision 40 of the 2018 UK Corporate Governance Code:
| Principle | IHG’s approach | |||
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| Clarity | – Through the combination of short- and long-term incentive plan measures, the Directors’ Remuneration Policy is structured to support financial objectives and the strategic priorities of the business that deliver shareholder returns and long-term value creation.
– Further alignment with shareholder interests is driven by the significant proportion of share-based incentives and Executive Director shareholding requirements.
– Our reward policies are aligned throughout the organisation and include a proportion of performance-related reward, driving engagement for the whole of the workforce.
– We always seek to report our Directors’ Remuneration Policy and performance-related remuneration measures, targets and outcomes in a clear, transparent and balanced way, with relevant and timely communication with all of our stakeholders, including shareholders. |
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| Simplicity | – Our remuneration structure comprises straightforward and well-understood components.
– The purpose, structure and strategic alignment of each element is clearly laid out in the Directors’ Remuneration Policy. |
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| Predictability | – The range of possible values of rewards for Executive Directors is clearly disclosed in graphical form at the time of approving the Directors’ Remuneration Policy. |
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| Risk | – Our Directors’ Remuneration Policy contains a number of elements to ensure that it drives the right behaviours to incentivise the Executive Directors to deliver long-term sustainable growth and shareholder returns and to reward them appropriately: |
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| – the maximum short- and long-term incentive awards are capped as a percentage of salary; |
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| – the Committee has clear policies on discretion, linked to specific measures where necessary, to override formulaic outcomes; |
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| – there are clear and comprehensive malus and clawback provisions; and |
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| – significant shareholding requirements apply for Executive Directors, including the deferral of at least 30% to 50% of bonus in shares; a two-year post-vest holding period for long-term incentive shares and minimum shareholding requirements both during and after employment. |
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| Proportionality | – Individual rewards are aligned to the delivery of strategic business objectives. |
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| – The Committee sets robust and stretching targets to ensure that there is a clear link between the performance of the Group and the awards made to Executive Directors and others. |
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| Alignment to culture |
– IHG has a clear purpose and well-established values and behaviours. The alignment between remuneration incentives and our strategy and the KPIs that underpin the delivery of our strategy, is outlined in the Annual Report on Remuneration. |
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| – Other elements of reward align employees with strong performance, our values and our behaviours, including salary reviews and, across the wider workforce, the short-term incentive plan and our global recognition scheme. |
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| 156 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Board changes
Sir Ron Kalifa joined the Board on 1 January 2024. Details of his appointment were previously reported in IHG’s Annual Report and Form 20-F 2023.
Daniela Barone Soares stepped down from the Board on 31 December 2024. Fees and benefits were payable to Daniela in respect of her role and responsibilities up to the date of stepping down with no further payments being made, in line with the approved Directors’ Remuneration Policy.
Wider workforce
remuneration and employee
engagement
As outlined on page 142, IHG operates an aligned approach to remuneration throughout the organisation. During the year, the Committee reviewed aspects of the Company’s wider workforce remuneration approach as part of its regular meeting agenda.
The Company engaged with the workforce through its employee engagement survey, which covers a number of areas, including pay and benefits competitiveness and wellness. Our overall employee engagement remained at 87% for 2024, placing IHG in the top quartile of employers for engagement and we were named as a Mercer Global Best Employer.
During 2024, the Chair of the Committee joined IHG’s designated Non-Executive Director responsible for workforce engagement in a Voice of the Employee session. These sessions are held throughout the year to engage directly with members of IHG’s corporate and hotel workforce, with the aim of collating and sharing such feedback with the Board for consideration in its decision-making. No concerns were raised regarding Executive Director remuneration or how it aligns with the wider IHG remuneration principles.
Service contracts and notice periods for Executive Directors
The Committee’s policy is for all Executive Directors to have service contracts with a notice period of 12 months from the Company and a notice period of 6 months for the employee. On an exceptional basis to complete an external recruitment successfully, a longer initial notice period reducing to 12 months may be used. This is in accordance with the UK Corporate Governance Code.
All Executive Directors’ appointments and subsequent re-appointments to the Board are subject to election and annual re-election by shareholders at the AGM.
Details of current Executive Directors’ contracts are available on request from the Company Secretary’s office. The respective dates of appointment and notice periods are shown below:
| Executive Director | Date of original appointment to the Board |
Notice period | ||||
| Elie Maalouf | 1 January 2018 | 12 months | ||||
| Michael Glover | 20 March 2023 | 12 months | ||||
Voting on remuneration at the Company’s AGM
The outcomes of the latest remuneration votes are shown below:
| AGM | Votes for | Votes against | Abstentions | |||||||||||||
| Directors’ Remuneration Report | 129,044,097 | 7,530,850 | 172,918 | |||||||||||||
| (advisory vote): 3 May 2024 | (94.49%) | (5.51%) | ||||||||||||||
| Directors’ Remuneration Policy | 103,155,928 | 34,661,408 | 2,043,591 | |||||||||||||
| (binding vote): 5 May 2023 | (74.85%) | (25.15%) | ||||||||||||||
Implementation of Directors’ Remuneration Policy in 2025
This section explains how certain elements of the policy will be applied in 2025.
Salary: Executive Directors
Directors’ salaries are agreed annually in line with the policy. The following salaries are proposed to apply with effect from 1 April 2025:
| Executive Director |
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Increase % |
2025 £ |
2024 £ |
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| Elie Maalouf | 6.8 | 1,100,000 | 1,029,600 | |||||||||||||||||||||
| Michael Glover | 3.0 | 664,350 | 644,800 | |||||||||||||||||||||
Salaries for both Executive Directors will increase by 3% in line with the budget for the wider UK and US corporate workforce. The higher salary increase of 6.8% for Elie Maalouf has been determined in conjunction with the review of the Directors’ Remuneration Policy and is conditional upon receiving shareholder approval for the revised policy at the 2025 AGM.
RSU 2025
Subject to approval of the revised policy, RSU awards will be granted to Executive Directors in 2025. The following underpin will apply:
| – | Vesting of restricted shares will be contingent on the satisfaction of a discretionary underpin which will be assessed by the Committee prior to vesting. The Committee will consider the extent to which the Executive Directors have effectively delivered IHG’s strategy across the vesting period, as well as any factors that have resulted in serious reputational damage or significant financial loss to the Company. |
| – | In making its assessment, the Committee will take into account the experience of stakeholders including our shareholders, owners and guests. Following the vesting date for each award cycle, the Committee will disclose its considerations in assessing the underpin in the relevant Directors’ Remuneration Report. |
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Implementation of Directors’ Remuneration Policy in 2025 continued
APP 2025 and LTIP 2025–27 performance measures and targets
APP
The APP measures for 2025 will be operating profit from reportable segments (70%), room signings and room openings (15% each). These measures and weightings are unchanged on those for 2024, and align with our strategic priorities.
The following table sets out the measures, definitions and weightings for the 2025 APP. Details of the targets are sensitive and will be disclosed alongside the performance achieved in the 2025 Directors’ Remuneration Report.
| Measure | Definition | Weighting | ||||||
| Operating profit from reportable segments | A measure of IHG’s operating profit from reportable segments for the year | 70% | ||||||
| Room signings | Absolute number of new room signings | 15% | ||||||
| Room openings | Absolute number of new room openings | 15% | ||||||
LTIP
Measures for the 2025–27 cycle are relative Total Shareholder Return (20%); relative net system size growth (25%); cash flow (20%); adjusted earnings per share (EPS) (25%); and carbon and people metrics (10%). These are the same categories of metric used for the 2024–26 cycle.
We have undertaken a review of the LTIP measures in the context of our strategic priorities including our growth algorithm. It was concluded that the weightings of the EPS and relative net system size growth measures should be increased to support the achievement of this, with a corresponding reduction to the weighting for carbon and people measures.
The rationale for the inclusion of each of the LTIP metrics is as follows:
| – | Relative Total Shareholder Return reflects our aim to deliver competitive shareholder returns as well as aligning the interests of Executive Directors with those of shareholders. |
| – | Net system size growth (NSSG) relative to our closest competitors reflects our industry-leading growth in our scale ambition. |
| – | Cash flow as a metric measures our ability to deliver consistent, sustained growth in cash flows and profits over the long-term. |
| – | Carbon and people metrics have been simplified for 2025 with two key measures aligned to our growth strategy: Adoption of Energy Conservation Measures (ECMs) in owned, leased, managed and managed lease hotels, and Talent Interventions. Aligned to our decarbonisation strategy, the carbon measure is focused on supporting owners to reduce energy costs and drive better hotel performance via adoption of ECMs. The people measure relates to our primary hotel leadership programme, Journey to GM, to focus attention on developing high quality talent to fuel our long-term growth. |
| – | EPS is a key business metric, prominent in company results reporting and commonly used for valuation purposes. It provides a measure of the efficiency of the capital structure, in that returns of capital can be captured within EPS performance, as well as promoting further alignment with shareholder experience. |
How are performance targets set?
The targets for the 2025–27 LTIP have been set by the Committee, taking into account IHG’s long-range business plan, market expectations and the circumstances and relative performance with the aim of setting stretching targets for senior executives which will reflect successful outcomes for the business based on its long-term strategic objectives.
Aligned with the medium to long-term aspirations of our growth algorithm and with EPS consensus forecasts at the time that the Committee set them, the EPS targets for the 2025–27 cycle have been increased relative to the 2024–26 targets. As well as increasing the threshold target by 1% from 5% to 6% per annum, the maximum target has been increased by 2% from 12% to 14% per annum. This reflects our growth ambitions at the maximum end, with a range to allow for cyclicality of the business and with the intention that, in the absence of a substantial change in circumstances, the range should be enduring over time. Alongside the higher LTIP quantum proposed under the revised policy, this revised maximum target requires our earnings to increase by almost 50% over the performance period for full vesting, and is considered by the Committee to be particularly challenging when compared to those of other FTSE businesses.
Adjusted EPS targets incorporate assumed share buybacks as part of our ongoing shareholder return programme, so the Committee would not expect to adjust performance outcomes at the end of the performance period for buybacks made during the cycle.
Threshold performance will result in 20% vesting, maximum performance will result in 100% vesting, with straight-line vesting in between threshold and maximum.
The details of the targets for the 2025–27 LTIP cycle are set out in the table on the following page.
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Directors’ Remuneration Report continued
Annual Report on Remuneration continued
| Measure | Definition | Weighting | Targets | |||
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Relative Total Shareholder Return (TSR) |
IHG’s performance against a comparator group of global hotel companies against which TSR outcomes are measured: Accor S.A., Choice Hotels International Inc., Dalata Hotel Group PLC, H World Group Limited, Hilton Worldwide Holdings Inc., Hyatt Hotels Corporation, Indian Hotels Company Limited, Jin Jiang International Holdings Company Limited, Marriott International Inc., Melia Hotels International S.A., Minor International, Scandic Hotels Group AB, Shangri-La Hotel Public Company Limited, Whitbread PLC and Wyndham Hotels & Resorts Inc. |
20% |
Threshold: Median of comparator group
Maximum: Upper quartile of comparator group |
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Relative net system size growth |
IHG’s aggregated compound annual growth rate (CAGR) against our six largest competitors with more than 500,000 rooms: Marriott International Inc., Hilton Worldwide Holdings Inc., Accor S.A., Jin Jiang International Holdings Company Limited, Wyndham Hotels & Resorts Inc. and Choice Hotels International Inc. Targets will be set based on increased room count that is consistent with the relevant company’s business plan objectives and practice as at the start of the LTIP cycle. |
25% |
Threshold: Fourth ranked competitor excluding IHG
Maximum: First ranked competitor excluding IHG |
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Absolute cash flow |
Cumulative annual cash generation over the three-year performance period. Absolute cash flow includes reported cash flow from operations and net cash from investing activities. |
20% |
Threshold: $2.595bn
Maximum: $3.993bn |
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Carbon and people |
1. Planet
Adoption of a set of Energy Conservation Measures (ECMs) across the owned, leased, managed and managed lease (CMH) hotels.
2. Talent interventions
Impact of our Journey to GM (J2GM) talent programme. |
10%
(5% each) |
1. Threshold: Weighted average increase in adoption of the five ECMs at CMH hotels of 9% points
Maximum: Weighted average increase in adoption of the five ECMs at CMH hotels of 25% points
2. Threshold: 30% of talent who took part in the J2GM programme commencing between 2023 and 2025 have been promoted by 31 December 2027
Maximum: 50% of talent who took part in the J2GM programme commencing between 2023 and 2025 have been promoted by 31 December 2027 |
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Adjusted earnings per share (EPS) |
Absolute compound annual growth rate (CAGR). |
25% |
Threshold: 6% per annum adjusted EPS CAGR
Maximum: 14% per annum adjusted EPS CAGR |
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Angie Risley
Chair of the Remuneration Committee
17 February 2025
Table of Contents
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 159 | |||||||||||
Introduction to 2025 Directors’
Remuneration Policy
Review process
The following section provides a summary of the process that has been carried out to review the Directors’ Remuneration Policy, including the business context, principles that we have applied, the findings of the review and the resulting proposals that we are tabling as part of a revised Directors’ Remuneration Policy at the 2025 AGM.
We also detail the engagement that we have carried out with our investors, and the changes that we have made to the original proposals as we have listened to shareholders in a two-way engagement process.
Principles
The Committee has followed a data-driven review, underpinned by the following set of principles, to guide the design of a revised approach to senior remuneration that will drive focused execution of strategic priorities and alignment of executive and shareholder interests, at the same time as mitigating retention risks identified by our talent flow analysis:
Principle 1
Reinforce IHG’s pay for performance culture for the senior executive talent cadre, with reward that is commensurate with the long-term value created for shareholders.
Principle 2
Provide clarity to both internal and external stakeholders on IHG’s desired long-term market positioning of executive talent pay relative to a stable set of peer organisations.
Principle 3
Establish a pay policy that is competitive against IHG’s primary talent and business performance competitors, including predominantly US-listed global hotel peers.
Principle 4
Ensure alignment of approach to executive remuneration design across the whole executive team where restricted shares are an established lever used to align individuals with shareholders.
Principle 5
Ensure alignment of approach to executive remuneration principles and structure, where relevant, across the wider corporate workforce.
Business and
performance context
| – | IHG is a truly global business with an increasingly significant US focus, in terms of geographic spread and investor base. In particular: |
| – | With IHG branded hotels in more than 100 countries; our US presence is significant, with around 50% of our total gross revenues and over 70% of our EBIT from reportable segments being generated by the Americas region. |
| – | From a system size perspective, the US is by far our single largest market, at around half of our system size, compared to the UK comprising around 5%. |
| – | Across our shareholder base, around 42% of IHG’s equity ownership is now based in North America compared to 29% in 2018. |
| – | Our key competitors are almost exclusively US-based and listed – Marriott, Hilton, Hyatt, Wyndham and Choice – with Accor being the only major international competitor listed outside the US. |
| – | The business performance has been strong, with share price returns beating market indices and peers (see chart below): |
| – | On an absolute basis, the share price has more than doubled since the start of 2023. Over this same period, |
| our share price increased by 100% above the FTSE 100 index and more than 50% above the S&P 500 index. IHG’s share price growth was also in the upper quartile of global peers. Since 30 April 2020, our share price increased by 176%. |
| – | Across a range of financial measures, we have demonstrated a clear track record of performance through to 2019 and a robust recovery following Covid-19 with clear potential to further grow earnings and dividends (see table on the next page). In terms of performance to date: |
| – | 2024 operating profit from reportable segmentsa ($1,124m) was up 10% on 2023 and 30% ahead of pre-Covid-19 levels. |
| – | Strong growth in revenue combined with a disciplined approach to cost management resulted in an improvement in fee margina from 49.5% in 2021 to 61.2% in 2024. |
| – | As a result of strong cash management, a share buyback programme to return $750m of surplus capital was completed in 2023 with a further $800m programme completed in 2024. |
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108 of the Annual Report and Form 20-F 2024. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
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| 160 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Introduction to 2025 Directors’ Remuneration Policy continued
| Measure | IHG’s strong track record through to 2019 |
IHG’s strong recovery 2023 vs 2019 |
IHG’s strong performance 2024 vs 2023 |
IHG’s strong potential looking ahead over the medium term |
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| RevPAR | +3.9% p.a. | +11% ahead | +3.0% | High single digit % CAGR in fee revenue through combination of RevPAR and system growth |
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Net system size growth |
+3.2% p.a. |
System size +7% larger |
+4.3% |
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| Fee margin expansiona |
+130bps p.a. | +520bps higher | +190bps | +100–150bps p.a. from operating leverage, plus potential for additional improvements | ||||||||||||
| Cash conversion | >100% | >100% | 94% for year | ~100% adjusted earnings into adjusted free cash flow | ||||||||||||
| Ordinary dividends | +11.0% CAGR | +21% higher | +10% | Continue sustainably growing | ||||||||||||
| Total capital returned to shareholders | $13.7bn | Further $1.7bn returned | >$1.0bn in year | Continue returning capital, whilst targeting financial leverage 2.5–3.0x | ||||||||||||
| Adjusted Earnings Per Share growtha | +11.4% CAGR | +24% higher | +15% | +12–15% CAGR | ||||||||||||
| b. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108 of the Annual Report and Form 20-F 2024. |
| Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
| – | We have key risks to our talent and succession pipeline evidenced by talent flows, and pay challenges from competitive pressure, being primarily derived from US markets: |
| – | Analysis shows that we primarily recruit senior talent from, and lose talent to, global hotel organisations in North America and Asia. Based on data for the top five job levels at IHG over a five year period, we have a higher talent outflow (543 people) compared to inflow (237 people) which indicates that we have issues with talent attraction and retention at senior levels (see diagram below). |
| – | Packages have needed to be offered to attract senior executives that are higher than those for existing employees in response to a challenging market, with particular pressure for US employees. We have also lost a number of senior executives, in many cases where our remuneration was lower than that being offered. In some cases we have needed to increase salary, bonus, LTIP and provide significant retention awards to key US individuals in response to competitor offers. |
| – | We have a pay compression issue for IHG’s senior team being closer to the CEO’s remuneration than the market – e.g. the highest paid IHG role below Board is paid 47% of the CEO’s remuneration, whereas it is more typical in the market for a wider gap at 32%. The smaller gap for IHG compared to market further highlights the extent of the gap of our CEO’s remuneration to the market. The proposed changes to the policy will help to address this structural issue. |
| – | The majority of our talent pool for succession to the Executive Committee (EC) and Board is US-based and we compete for talent at all levels with global US-based hotels and other major US employers. Following the departure of our previous CEO and CFO in 2023, we have hired US-based individuals into these roles. Six of the 10 EC roles have changed in the last 18 months, with five of those new individuals being US-based, and more than 50% of our employees in the two levels below EC being US-based. The Committee believes that it would struggle to recruit talent of the calibre required using the existing remuneration policy. |
| – | Our executive remuneration levels are below those of our major hotel competitors, and our quantum and structures have been aligned with majority UK practice, which puts our executives at a relative disadvantage compared with international peers: |
| – | The actual remuneration of our Executive Directors for 2023 was towards or at the bottom ranking of our most comparable international hotel peers (see charts on page 161). |
| – | Hyatt and Choice granted additional one-off awards to their CEOs in the last two years with fair values of $6m and $30m respectively. Many hotel peers, including Choice, Hilton, Hyatt and Wyndham made favourable adjustments to awards during Covid-19, which would not usually be made in a UK environment. |
| – | Our US peers incorporate practices such as time-vesting equity and a lower proportion of long-term incentives being performance-based, no holding periods and cash bonuses without deferral. These features enhance the perceived value of packages in peers, relative to majority and corporate governance best practice in the UK. |
| Marriott International |
Hilton Hotels & Resorts |
Accor | Radisson | Shangri-La Hotels & Resorts |
Hyatt | Four Seasons |
Jumeirah Hotels & Resorts |
Mandarin Oriental Hotel Group |
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| IHG hires from... |
34 | 19 | 11 | 3 | 4 | – | – | 3 | – | |||||||||||||||||||||||||||||
| (237 total) | ||||||||||||||||||||||||||||||||||||||
| IHG loses to... |
50 | 22 | 29 | 15 | 6 | 7 | 5 | – | 4 | |||||||||||||||||||||||||||||
| (543 total): | ||||||||||||||||||||||||||||||||||||||
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 161 | |||||||||||
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Development of global peer group
The Committee went through a lengthy and robust process of considering and formulating an appropriate peer group for Executive Director pay purposes, and held a number of additional meetings in order to test and refine the approach. As a result of this process, we have formed a single global peer group for benchmarking which is data driven and comprised of companies with which we compete for senior talent, in terms of those in the top five levels of the business we attract from and lose to, looking over a five year period.
The peer group that resulted from this process includes our closest hotel peers, and wider travel & leisure sector and adjacent strategic businesses where we have talent flows. In addition to these two sectoral and talent factors, we included companies in the peer group only if they either have a significant consumer element to their business operations or significant presence in Atlanta (or both). This geographic filter reflects our significant operations in Atlanta as well as the US being the most significant talent market for IHG.
We have digital and payment system parallels in our business model with the strategic business peers, the success of which is driven by the booking platform. In the context of these similarities, these hospitality and consumer businesses are also observed to draw on the same talent pool as the hotel peers given the skills required to successfully lead value creation for these companies.
We acknowledge and understand an alternative perspective that the UK market remains the most relevant comparison point. Given the nature of our business and evidence from talent flows, the Board strongly believes that this global peer group is most appropriate for benchmarking.
The median market capitalisation of the resulting group was aligned with our size at the time of developing the peer set. Based on a three-month average to 31 December 2024, eight of the peers are smaller than IHG and eight are larger than IHG by market capitalisation. We excluded some major Atlanta-based businesses identified in the talent flow analysis on the basis that their market capitalisation was significantly higher than IHG’s.
There is overlap between the benchmarking and TSR peer groups as they both include the same group of major hotel industry peers, but they are not identical as they have each been developed for their own purpose. The TSR peer group is derived from a marketable, liquid comparator set based on available global investments in our sector, whereas the benchmarking peer group is reflective of our talent flow analysis. The relative net system size growth measure peer group is also focused on the same core hotel competitor group. The Committee strongly believes each of these peer groups is appropriate for its purpose and all are strategically aligned.
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| 162 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Introduction to 2025 Directors’ Remuneration Policy continued
| Name | |
Base salary (£000) |
|
|
Target bonus (% of base salary) |
|
|
Target total cash (£000) |
|
|
LTI expected value (% of base salary) |
a |
|
LTI maximum value (% of base salary) |
b |
|
Target total direct compensation (£000) |
|
|
Maximum total direct |
|
|||||||||||
| IHG – CEO | 1,030 | 100% | 2,060 | 250% | 500% | 4,633 | 8,237 | |||||||||||||||||||||||||
| Peer group – Upper quartile | 1,110 | 200% | 3,151 | 1,311% | 3,412% | 16,843 | 39,820 | |||||||||||||||||||||||||
| Peer group – Median | 1,011 | 177% | 2,655 | 519% | 951% | 10,352 | 18,758 | |||||||||||||||||||||||||
| Peer group – Lower quartile | 905 | 137% | 2,004 | 223% | 540% | 4,243 | 8,583 | |||||||||||||||||||||||||
| a. | The expected value of long-term incentives (LTI) represents the fair/expected value of an award as at the date of grant, taking into account the specific characteristics of the vehicle awarded (for example, share price volatility, dividend yield) and any applicable performance vesting conditions. The reported expected value represents the sum of the values of all types of LTI award made to an individual in the year, including performance/restricted shares, stock options, deferred bonus matching shares and long-term cash bonuses. For UK organisations, target LTI (Performance Share Plan) is half of the maximum. |
| b. | For organisations that did not disclose their maximum LTI award, it is assumed that: stock option target is 20% of maximum, performance shares/cash target is 50% of maximum, and restricted shares target is 100% of maximum. |
| c. | For organisations that did not disclose their maximum bonus, it is assumed that their target is 60% of maximum. |
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 163 | |||||||||||
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Results of benchmarking exercise
In the business context and with the talent issues in the previous section identified, a benchmarking analysis was carried out to understand in detail the position of our Executive Director remuneration against the global peer group and to support the review. This highlighted the following:
– A non-performance based share element is prevalent practice for CEOs amongst the peers, with 75% of the group having two or more long-term incentive elements.
– While the base salary of the IHG CEO is broadly aligned with the median of the peer group, the total target direct compensation (base salary, on-target bonus and the expected value of long-term incentives) for the CEO of around £4.6m is just above the lower quartile, or around 45% of the median (£10.4m).
– Overall, there is therefore a significant gap to median, with bonus and long-term incentive quantum being the main factors for this gap.
– For reference, including pensions and benefits in the benchmarking analysis, the CEO’s total remuneration (£5.0m) is around 46% of the peer group median (£10.7m).
– For the CFO, there is a similar competitiveness challenge. In this case the CFO’s target remuneration (£2.3m) is around 57% of the peer group median (£4.0m). |
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| 164 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Introduction to 2025 Directors’ Remuneration Policy continued
Proposals and rationale
The following changes are proposed to address these findings, in accordance with the agreed principles of the review.
| Element | CEO: Current | CEO: Proposed | CFO: Current | CFO: Proposed | ||||
|
Salary (% increase) |
£1,029,600 |
£1,100,000 (6.8%) |
£644,800 |
£664,350 (3%) |
||||
|
Bonus maximum (% of salary) |
200% |
300% |
200% |
250% |
||||
|
– Bonus target (% of salary) |
100% |
150% |
100% |
125% |
||||
|
LTIP maximum award (% of salary) |
500% |
800% |
300% |
500% |
||||
|
– LTIP target award (% of salary) |
250% |
400% |
150% |
250% |
||||
|
Restricted stock unit (RSU) award |
n/a |
150% |
n/a |
100% |
||||
|
Target total direct compensation |
£4,633,000 |
£8,800,000 |
£2,258,000 |
£3,820,000 |
||||
|
Minimum shareholding requirement |
500% |
1,000% |
300% |
400% |
||||
|
Total variable pay (% of salary) |
Target: 350% Maximum: 700% |
Target: 700% Maximum: 1,250% |
Target: 250% Maximum: 500% |
Target: 475% Maximum: 850% |
||||
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| * | The original proposals have been revised by the Committee in response to investor engagement. The overall result is a reduction in the positioning against the peer group median from 100% to 85% for CEO and from 100% to 96% for the CFO, primarily due to a reduction in the originally proposed quantum of RSU awards. See the section in relation to shareholder consultation on the following page for further details. |
The Committee understands and acknowledges that the adjustments proposed together represent a substantial change to remuneration levels, particularly the long-term incentive elements. This reflects the scale of the issue identified and the intent to robustly and directly address this talent retention and succession challenge. The Committee also understands the usual UK market expectation that where restricted shares are introduced, this is by way of substitution for performance-based awards using a discount factor of 50%. Given the aim of addressing the differentials between the CEO’s and CFO’s pay to the peer group, this approach was judged not to be appropriate.
Pensions and benefits
Other than the adjustments to salary, there are no proposed changes to the other elements of fixed pay. The approach to pensions and benefits will continue to apply, in particular with pension provision being aligned with that for the corporate workforce.
Other features of the policy
Other features of the policy that will apply are set out below. Many of these conditions are not common practice within the global peer group, but have been retained to align with UK corporate governance best practice.
|
Underpin on RSU awards (3 year vesting period) |
Vesting of restricted shares will be contingent on the satisfaction of a discretionary underpin which will be assessed by the Committee prior to vesting. The Committee will consider the extent to which the Executive Directors have effectively delivered IHG’s strategy across the vesting period, as well as any factors that have resulted in serious reputational damage or significant financial loss to the Company.
In making its assessment, the Committee will take into account the experience of stakeholders including our shareholders, owners and guests. Following the vesting date for each award cycle, the Committee will disclose its considerations in assessing the underpin in the relevant Directors’ Remuneration Report.
This is the underpin that has been discussed with shareholders and which will be applied to RSU awards granted as part of a rigorous decision-making process. Any changes to this underpin for future cycles would only be made after prior consultation with shareholders. |
|
|
Minimum shareholding requirement (CEO: 1,000% of salary, CFO: 400% of salary) |
Ordinarily a shareholding of 700% of salary for CEO and 300% of salary for CFO should be built up over five years. The balance of the total shareholding requirement of 1,000% of salary for CEO and 400% of salary for CFO should be reached over a further period agreed with the Chair of the Board. |
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Other conditions that continue to apply:
Bonus deferral: At least 30% of bonus earned will be deferred into shares for three years if the minimum shareholding requirement has been met, with at least 50% being deferred otherwise.
Post-vesting holding period: A two year holding period will apply for all LTIP and RSU shares after vesting.
Post-cessation shareholding requirement: The full minimum shareholding requirement continues to remain in force for two years following cessation as an Executive Director.
Malus and clawback: Recovery arrangements will continue to apply.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 165 | |||||||||||
The rationale for these changes to remuneration is as follows:
| – | Overall the proposals ensure that remuneration is aligned with the growth aspirations and shareholder value, as the delivery of increased remuneration is primarily through long-term share-based elements in the form of performance shares and restricted shares. |
| – | Positioning of Executive Director total target remuneration will be more closely in alignment with the median of the global peer group than is currently the case. |
| – | The increase to the CEO’s salary is a modest adjustment (6.8%), which minimises the impact on our cost base and reflects the current market position. This increase is in line with actual salary increases received by our strongest performing UK and US employees whose pay was below market levels, over the last three years. |
| – | Other increases are to variable elements, thus driving short- and long-term performance. |
| – | A hybrid structure aligns IHG to international market practice and the peer group pay mix. A restricted share element is a ‘balancing’ element into the total package, acknowledging that key drivers of sustainable business growth have complex co-dependencies under a managed and franchised business model in a cyclical sector. |
| – | The structure is consistent with the long-term incentive structure for senior individuals below Board, as restricted shares are used for the Executive Committee and are the principal or sole tool below this level. Restricted shares have been part of below-Executive Director remuneration packages for nine years and have been effective in aligning interests of senior executives with shareholder value. |
| – | The restricted share underpin ensures that the Committee will allow vesting of RSU awards only if delivery of the strategy is on track. It will assess this in a robust manner prior to approving the vesting of RSU awards by looking at the key growth algorithm metrics, which are already reflected in incentive KPIs, as well as other relevant factors at the time, such as reputation. These factors will be considered by the Committee through the lens of IHG stakeholders including shareholders. |
Shareholder consultation
We have carried out an in-depth consultation process, meeting nearly 60% of our shareholder register and proxy bodies between November 2024 and February 2025.
This consultation exercise has been extremely valuable to us in shaping our proposals. The vast majority of shareholders we have spoken to were very supportive of the evidence for change and the rationale for the proposals. Some important questions were raised in relation to specific areas during consultation, mainly related to the long-term incentive elements of the package rather than salary and bonus levels. The Committee has reflected on the feedback and, while overall the original proposals were considered fit for purpose, in order to respond appropriately to shareholders’ views, the Committee agreed that it was appropriate to make adjustments. Shareholders were very generous in providing additional comments and advice as we refined and tested these adjustments. This process resulted in the following:
| – | Reduction in the originally proposed annual quantum of RSU award, from 300% of salary to 150% for the CEO and from 150% of salary to 100% for the CFO, in response to particular questions on the balance between LTIP and RSU, and overall quantum. This change means the proportion of the CEO’s total long-term incentive that has performance targets is 84%; |
| – | Strengthening the RSU underpin, in particular to specifically include effective delivery of IHG’s strategy over the vesting period; and |
| – | Increase in the size of the shareholding requirement for the CEO from an original proposal of 700% of salary to 1,000%. The resulting requirement exceeds the combined quantum of LTIP and RSU awards and is significant as it doubles the current CEO requirement of 500% of salary. |
While the current Executive Directors already meet the revised shareholding requirements, or are expected to during 2025, a new incumbent may require a long time to reach them, and therefore we have included flexibility to achieve the full requirement over a period longer than five years.
I hope that these changes demonstrate our willingness to listen but also to respond to shareholders. While the Committee’s view was that median peer group positioning was strategically the right competitive position against the market, taking into account the business case for change, the resulting proposals reflect the feedback from some shareholders by reducing the overall positioning to a lower level of around 85% of median for the CEO and 96% of median for the CFO. This positioning also responds to questions on the inclusion of companies with a range of market capitalisations in the peer group, while the Committee continues to strongly believe that the peer group is appropriate based on the talent context.
Broader workforce considerations
As outlined on page 142 of the Annual Report and Form 20-F 2024, IHG operates an aligned approach to remuneration throughout the organisation.
In line with the UK Corporate Governance Code, the Committee reviews pay and employment conditions beyond those of the Executive Committee and takes this into consideration when establishing and implementing policy for Executive Directors. The Committee reviews aspects of the Company’s wider workforce remuneration approach as part of its regular meeting agenda.
We remain committed to paying our employees fairly with respect to their relative responsibilities both internally and externally. Throughout the Group, base salary and benefit levels are set in accordance with prevailing market conditions, policies, practice and relevant regulations in the countries in which employees are based. Differences between Executive Director pay policy and that of other employees reflect the position and responsibilities of the individuals, as well as corporate governance practices in respect of Executive Director remuneration.
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| 166 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Report continued
Introduction to 2025 Directors’ Remuneration Policy continued
Our approach to remuneration is structurally consistent across the corporate population. For example, the same APP corporate performance targets apply to Executive Directors and all levels of the corporate population, and the same LTIP performance measures apply to eligible colleagues below Executive Director level. Executive Directors and other senior management receive a greater proportion of total remuneration in the form of long-term incentives. At Executive Committee level, RSU awards are used alongside performance-related LTIP awards, with the balance of RSU awards increasing below Executive Committee level so that RSU awards are the primary long-term incentive vehicle for those eligible colleagues below the Executive Committee.
Some of the key ways in which we invest in the reward arrangements for our employees are:
| – | Bonus funding: We regularly provide additional bonus funding to enable managers to reward the best performers in our business, and did this again for 2024; |
| – | Peer group: We use a consistent approach to benchmarking pay across the organisation, including reviewing the global peer group for the most senior population below Board. Given the global peer group has been composed on the basis of our talent flows and succession pipeline, it is also being used as a reference point in assessing the pay of the next levels of senior executives where appropriate. While the analysis illustrates that competitive pay issues exist primarily at the Executive Director level, the pay of other senior executives will be considered in the context of the peer group alongside other factors including role location, market risk and succession; |
| – | Salary rises: For the UK leased hotel estate, budgeted salary rises have typically been higher than those for the corporate workforce, with higher increases for frontline workers. The Real Living Wage has been applied as a minimum for all staff in line with the Real Living Wage Foundation level. |
Pay ratios
As part of the review of the policy, the Committee also examined an analysis of the ratios of CEO to workforce pay, using the global peer group as a comparison point for consistency. While acknowledging that reporting requirements differ across geographies, and therefore an exact like-for-like comparison is not possible, the Committee believed it to be important to examine the relativity of pay levels across our peers as a context for the changes to the policy.
The analysis showed that the median 50th percentile CEO pay ratio in 2023 was 355:1 within the global peer group, compared to IHG’s 50th percentile CEO pay ratio for 2023 of 62:1 (UK corporate employees only) and 136:1 (UK corporate and hotel employees).
Following the proposed policy changes, IHG’s projected 50th percentile CEO-to-workforce ratio, based on the new policy and 2024 actual workforce pay, are 101:1 (UK corporate employees only) and 187:1 (UK corporate and hotel employees). These revised ratios remain significantly below the 2023 global peer group median of 355:1. Therefore, the Committee believes the revised policy results in reasonable remuneration levels when viewed from a broader employee perspective.
Target setting
The Committee will continue to ensure that there is significant stretch in targets, requiring upper quartile relative performance for maximum outcomes and with company targets being driven by our growth algorithm. We have increased the stretch in the EPS targets for 2025 to reflect our ambitious plans.
The Committee’s continued focus on setting stretching targets is demonstrated by historical outcomes. Despite the outstanding performance achieved, both strategic and financial in terms of outcomes for shareholders, the average incentive outcomes over the last 10 years have been around 50% of maximum for LTIP (varying from 20% to 85%) and around 70% of maximum for bonus (varying from 0% to 100% – with only one occurrence at 0% and one at 100%), or around 60% of maximum overall. See the Directors’ Remuneration Reports for details of year by year incentive outcomes.
Next steps
The current policy was approved in 2023, and it was supported by 74.85% of our register, including 22 out of our top 25 shareholders. I have subsequently flagged in follow-up shareholder discussions and in the 2023 Directors’ Remuneration Report that further changes would need to be considered in order to help protect our Executive Director retention, succession and talent pipeline. As mentioned above, shareholders have been very supportive in these discussions. Given Executive Director performance has been very strong over the last year, as reflected in our results, a review of remuneration after two years, rather than waiting for the scheduled triennial review in 2026, was considered a priority to help secure the talent that has proven to be highly effective in evolving and delivering strategic priorities and creation of shareholder value.
The Committee is confident that our revised policy will best support the business to address the key risks identified, drive long-term sustainable growth and deliver value for our shareholders. Furthermore, it will strengthen our competitiveness in an increasingly global talent market and allow us to better align remuneration levels and structure with our global peers whilst still reflecting the best practice features expected within the UK environment.
The whole Board is cognisant that the revised remuneration packages required to achieve these goals represent a significant change to the current arrangements, which reflects the scale of the issue we are facing. These proposals have the full support of IHG’s Chair and Board. We will continue to monitor remuneration policy over the coming years and engage with shareholders.
The support of shareholders has been incredibly valuable through this process, and I would like to extend a massive thank you for your engagement and support. I am keen to maintain an open dialogue with shareholders and I am grateful for the active engagement of many of our major shareholders to date, in particular those who I met several times in formulating the policy which is now presented for approval.
Angie Risley
Chair of the Remuneration Committee
17 February 2025
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 167 | |||||||||||
Directors’ Remuneration Policy
The Committee will consider the Directors’ Remuneration Policy (“policy”) annually to ensure it remains aligned with strategic objectives. However, subject to approval by shareholders at the 2025 AGM, it is intended that the policy set out below will apply for three years from 2025; if the policy is proposed to be revised within that timeframe, it will first be presented to be voted upon by shareholders. Where there have been changes to elements from the last policy, these are set out for each element in the table below. Subject to shareholder approval, the policy will take effect immediately following the 2025 AGM.
The process used by the Committee to review the policy, and the reasons for changes made, are set out on pages 159 to 166. No Director or employee participates in discussions or decisions relating to their own remuneration in order to manage conflicts of interest.
| + | The policy will be available to view at www.ihgplc.com/investors under Corporate Governance. |
Future policy table
| Salary | 100% cash | No change in policy | ||||||
| Link to strategy | To attract and retain the key talent responsible for delivering our strategic objectives. Recognise the value of the role and the individual’s skill, performance and experience. | |||||||
| Operation | Base salary is normally reviewed annually and fixed for 12 months from 1 April. In reviewing salaries, the Committee may consider factors including but not limited to: | |||||||
| – business performance; |
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| – personal performance, skills and expertise; |
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| – the average salary increases for the wider IHG workforce; and |
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| – current remuneration assessed against comparable opportunities for an individual to ensure competitiveness. |
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| Maximum opportunity | There is no maximum salary. Salary increases for current Executive Directors will be subject to the factors including the above and will not normally exceed the range of increases applying to the corporate UK and US employee population, except where there is a change in role or responsibility, or another need arises to reassess the competitiveness of salary which warrants either a lesser or a more significant increase. Any such change will be fully explained. | |||||||
| Newly promoted or recruited Executive Directors may, on occasion, have their salaries set below the targeted remuneration level while they become established in role. In such cases, salary increases may be higher than those for the corporate UK and US employee population until the desired positioning is achieved. |
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| Performance framework | An individual’s performance is considered when reviewing salary levels. |
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| Benefits | No change in policy |
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| Link to strategy | To attract and retain the key talent responsible for delivering our strategic objectives with competitive benefits which are consistent with an individual’s role and location. |
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| Operation | IHG pays the cost of providing the benefits on a monthly basis or as required for one-off events. Benefits may include the cost of independent financial advice, car allowance/company car, private healthcare for themselves and their immediate family, medical assessments, life insurance, and other benefits provided from time to time. Direct payment or reimbursement of reasonable expenses incurred in performance of duties for IHG will be met, including any tax and social security due on expenses. Benefits would generally reflect typical practice for the role and location of an Executive Director. Benefits may include relocation and expatriate or international assignment and/or international living costs where appropriate, including, for example, cost of living allowance, travel costs, housing and related costs, professional advice, education allowance, tax equalisation, medical expenses and relocation allowance. | |||||
| Executive Directors are eligible to participate in any all-employee share plans that may be introduced, on the same basis as all other employees. These would be operated within the parameters of the applicable legislation. Currently none of the Executive Directors participate in any such plan. |
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| Maximum opportunity | There is no defined maximum. The Remuneration Committee periodically reviews the cost of benefits to ensure they remain affordable. The value of benefits is dependent on location and market factors. Relocation and expatriate or international assignment costs would generally reflect typical practice for the role and location of an Executive Director. |
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| Performance framework | None. |
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| 168 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Policy continued
Future policy table continued
| Pension | No change in policy |
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| Link to strategy | To attract and retain the key talent responsible for delivering our strategic objectives with appropriate contribution rates to provide funding for retirement. |
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| Operation | UK Executive Directors are eligible to join the IHG UK Defined Contribution Pension Plan (UK Plan). A cash allowance in lieu of pension contributions can be elected by the individual, for example, where pension contributions would be less efficient than cash. | |||||
| Non-UK Executive Directors may be eligible for an alternative local company retirement plan, for example, a DC 401(k) Plan and a DC Deferred Compensation Plan currently operating in the US. |
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| Maximum opportunity | Salary is the only element of remuneration that is pensionable. The maximum employer contribution rate, or cash allowance in lieu of pension contribution, for new and incumbent Executive Directors will not exceed the maximum employer contribution rate available to all other participants in the UK plan, currently 12% of salary. | |||||
| Other contribution rates in excess of this may apply to non-UK Executive Directors in alternative non-UK local retirement plans. The Committee has the discretion to reduce or increase employer contribution rates for Executive Directors in exceptional circumstances where conditions so warrant, or to meet any statutory minimum contribution rate. |
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| Performance framework | None. |
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| Annual Performance Plan (APP) | Part cash and part IHG PLC shares deferred for three years, under the rules of the Deferred Award Plan (DAP) |
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| Link to strategy | – Drives and rewards annual performance normally against both financial and non-financial metrics. |
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| – Aligns individuals and teams with key strategic priorities. |
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| – Aligns short-term annual performance with strategy to generate long-term returns to shareholders. |
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| – Deferral into shares reinforces retention and enhances alignment with shareholders. |
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| Operation | – Awards are made annually, 50% in cash after the end of the relevant financial year and 50% in the form of share awards which vest after three years subject to leaver provisions. Subject to meeting the minimum shareholding requirement, up to 70% of the award may be paid in cash and at least 30% in deferred shares. |
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| – The Committee has discretion to make awards wholly in cash rather than part-cash and part-shares, in exceptional circumstances. |
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| – The share awards are made in the form of conditional awards or forfeitable awards of shares. |
||||||
| – Malus and clawback apply to awards. See page 174 for details. |
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| – The Committee applies judgement and discretion where necessary to ensure approved payout levels are reflective of overall business performance and has the ability to exercise discretion in adjusting the formulaic outcome of the APP to ensure the outcome is reflective of the performance of the Company and the individual over the period. The performance and vesting outcomes and any use of discretion will be fully disclosed and explained in the relevant Directors’ Remuneration Report. |
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| – The Committee may make adjustments to targets and/or measures if a significant one-off event occurs that makes any of the existing targets and/or measures no longer appropriate. Any amended performance targets will be at least as challenging as the ones originally set. |
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| Maximum opportunity | – The maximum annual award is 300% of salary for CEO and 250% of salary for other Executive Directors. |
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| – The target award is normally 50% of the maximum award. |
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| Performance framework | – Normally, 70% of the award is based on the achievement of an operating profit measure and 30% is based on a mixture of strategic and/or personal measures which are reviewed annually and the weighting, measures and targets are determined by the Committee and set in line with key strategic priorities. |
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| – Threshold is up to 50% of target award for each measure. |
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| New for 2025 policy | With effect from the 2025 financial year, the maximum APP award has increased from 200% to 300% for CEO, and from 200% to 250% for other Executive Directors. See pages 164 to 165 for the rationale.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 169 | |||||||||||
| Long-Term Incentive Plan (LTIP) | 100% IHG PLC shares under the rules of the DAP |
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| Link to strategy | Drives and rewards delivery of sustained long-term performance on measures that are aligned with the interests of shareholders. |
|||||
| Operation | – Annual grants of conditional awards or forfeitable awards of shares subject to a performance period normally of at least three years, subject to the achievement of corporate performance targets. |
|||||
| – The Committee will normally also impose such post-vesting holding periods to ensure at least a total five-year period from grant of the awards to the date they are free from any restrictions. |
||||||
| These holding periods normally continue to apply post cessation of employment. |
||||||
| – The Committee has discretion to make cash awards in exceptional circumstances. |
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| – Malus and clawback applies to awards. See page 174 for details. |
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| Maximum opportunity | The maximum annual award is up to 800% of salary for the CEO and up to 500% of salary for other Executive Directors. |
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| Performance framework | – The majority of the LTIP will normally be based on the achievement of financial performance measures. |
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| – The measures and targets are reviewed and may be changed by the Committee annually to ensure alignment with strategic objectives. Normally 20% of the maximum pays out for threshold performance but the Committee may increase this to up to 25% of maximum if this is considered appropriate. |
||||||
| – All targets are typically measured over a performance period of at least three years. |
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| – The Committee may make adjustments to targets and/or measures if a significant one-off event occurs that makes any of the existing targets and/or measures no longer appropriate. Any such adjustments would be disclosed at the first appropriate opportunity. Any amended performance targets will be at least as challenging as the ones originally set. |
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| – The Committee will review the vesting outcomes under the LTIP measures at the end of each three-year cycle against an assessment of several factors, including, but not limited to Group earnings, the quality of financial performance and growth over the period, including relative growth against the market, and the efficient use of capital. If the Committee determines that the vesting outcomes do not appropriately reflect the performance of the Group (the Company and its subsidiaries), it may exercise reasonable discretion to override award outcomes, in particular to override formulaic outcomes, to increase or reduce the number of shares that vest. |
||||||
| – The performance and vesting outcomes and any use of discretion will be fully disclosed and explained in the relevant Directors’ Remuneration Report. |
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| New for 2025 policy |
|
The maximum opportunity has been increased from 500% to 800% of salary for CEO and from 300% to 500% of salary for other Executive Directors. See pages 164 to 165 for the rationale.
|
||||
| Restricted Stock Units (RSU) | 100% IHG PLC shares under the rules of the DAP |
|||||
| Link to strategy | Provides share-based incentivisation aligned with the long-term interests of shareholders, subject to satisfactory underpin performance. |
|||||
| Operation | – Annual grants of conditional awards or forfeitable awards of shares subject to a vesting period normally of at least three years, subject to the achievement of underpin conditions. |
|||||
| – The Committee will normally also impose such post-vesting holding periods to ensure at least a total five-year period from grant of the awards to the date they are free from any restrictions. |
||||||
| These holding periods normally continue to apply post cessation of employment. |
||||||
| – The Committee has discretion to make cash awards in exceptional circumstances. |
||||||
| – Malus and clawback applies to awards. See page 174 for details. |
||||||
| Maximum opportunity | The maximum annual award is up to 150% of salary for the CEO and up to 100% of salary for other Executive Directors. |
|||||
| Performance framework | – RSU awards will be subject to an underpin, set at the time of grant. |
|||||
| – The Committee will review the underpin outcomes at the end of each three-year cycle when determining the appropriate level of vesting. |
||||||
| – The underpin and vesting outcomes and any use of discretion will be fully disclosed and explained in the relevant Directors’ Remuneration Report. |
||||||
| New for 2025 policy | RSU is a new element under the 2025 policy, and aligns the incentive structure for Executive Directors with that for the rest of the senior management population.
|
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| 170 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Policy continued
| Shareholding requirements
|
||||
| Minimum shareholding requirement | – The minimum shareholding requirement is 1,000% of salary for the CEO and 400% of salary for other Executive Directors. This shareholding can include the net value of unvested shares that are not subject to any further performance conditions or underpins. |
|||
| – Ordinarily the shareholding of the CEO should be built up over five years to 700% of salary. The balance of the revised shareholding requirement up to 1,000% of salary should be reached over a further period agreed with the Chair of the Board. |
||||
| – Ordinarily the shareholding of other Executive Directors should be built up over five years to 300% of salary. The balance of the revised shareholding requirement up to 400% of salary should be reached over a further period agreed with the Chair of the Board. |
||||
| – The full minimum shareholding requirement will normally remain in force for two years post-cessation of employment. |
||||
| New for 2025 policy |
The requirement has been increased in 2025 from 500% to 1,000% for the CEO and from 300% to 400% for other Executive Directors. See pages 164 to 165 for the rationale.
|
|||
Performance measures for 2025
APP
The measures for 2025 will be operating profit from reportable segments, room signings and room openings.
Why have we chosen these measures?
Operating profit from reportable segments is a focal measure of business performance for our shareholders and is a function of other critical measures, such as RevPAR, profit margin and fee revenues. The Committee has determined that, for 2025, it continues to be important to the Company’s strategic objectives to focus on new room openings and new room signings in the APP. New room openings are critical to driving both short- and long-term profitable growth and is a recognised key performance measure across the industry, while new room signings provide the best gauge of future growth as they create the path for openings in future years, which will in turn drive profit and revenue growth.
The targets are commercially sensitive and will be disclosed in the Directors’ Remuneration Report following the year for which the bonus is earned.
The Committee retains the flexibility to change the measures and/or weightings during the life of the policy and will consult with shareholders as appropriate on any proposed changes.
How are performance targets set?
Targets may be set relative to budget and/or by reference to prior results and may contain a performance range to incentivise outperformance and minimum performance levels relative to budget and/or prior experience to ensure that poor performance is not rewarded. The 2025 targets are set by the Committee, taking into account IHG’s growth ambitions, market expectations and the circumstances and relative performance at the time, with the aim of setting stretching targets for senior executives, which will reflect successful outcomes for the business based on its strategic objectives for the year.
LTIP
Measures for the 2025–27 cycle are: relative Total Shareholder Return, relative net system size growth, cash flow, adjusted earnings per share (EPS), and carbon and people metrics.
Why have we chosen these measures?
Relative total shareholder return will remain a measure for 2025–27, reflecting our aim to deliver competitive shareholder returns as well as aligning the interests of Executive Directors with those of shareholders.
A net system size growth measure will also remain and, reflecting our industry-leading growth in our scale ambition, will continue to have a relative performance target measured against our closest competitors.
There is no change to the cash flow measure to deliver consistent, sustained growth in cash flows and profits over the long term.
The carbon and people metrics have been simplified for 2025 with two key measures aligned to our growth strategy: Adoption of energy conservation measures (ECMs) in hotels, and Talent Interventions. Aligned to our decarbonisation strategy, the carbon measure is focused on supporting owners to reduce energy costs and drive better hotel performance via adoption of ECMs. The people measure relates to our primary hotel leadership programme, Journey to GM, to focus attention on developing high quality talent to fuel our long-term growth.
An EPS measure will continue to be used for 2025–27. EPS is a key business metric, prominent in company results reporting and commonly used for valuation purposes. It provides a measure of the efficiency of the capital structure, in that returns of capital can be captured within EPS performance, as well as promoting further alignment with shareholder experience.
How are performance targets set?
Targets may be set relative to the expected outcomes of IHG’s long-range business plan and other long-term strategic objectives and may contain a performance range to incentivise outperformance and minimum performance levels to ensure that poor performance is not rewarded. The targets for the 2025–27 LTIP are set by the Committee, taking into account IHG’s long-range business plan, market expectations and the circumstances and relative performance at the time, with the aim of setting stretching targets for senior executives, which will reflect successful outcomes for the business based on its long-term strategic objectives.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 171 | |||||||||||
Illustrative scenarios
The graphs below illustrate the value that could be received by Executive Directors under the policy in respect of 2025, showing:
| – | minimum, which includes salary, benefits and employer pension contributions only (total fixed pay); |
| – | target, which includes total fixed pay (including salary, benefits and pension) and an on-target outcome for the APP (150% of salary for CEO and 125% of salary for CFO), 50% of maximum LTIP vesting and 100% RSU vesting; |
| – | maximum, which includes total fixed pay and a maximum outcome under the APP, LTIP and RSU; and |
| – | maximum plus share price growth, which includes a 50% share price increment for the LTIP and RSU. |
Salaries are those proposed to apply from 1 April 2025. The benefit values included are estimates based on the 2024 values.
Consideration of shareholder views
In updating the policy, we undertook a comprehensive review of executive remuneration, including how it could support the Company’s strategy and better align with shareholders’ interests.
The Committee followed a detailed decision-making process to design the new policy which included discussions on the proposals at six Remuneration Committee meetings. The Committee considered multiple approaches and their appropriateness for IHG, and sought input from management as well as advice from its independent advisers on market practice and shareholder expectations to inform the discussions. An extensive shareholder consultation exercise was also undertaken. To avoid any conflict of interest, no Executive Directors were present for Committee conversations relating to their own pay.
Engagement with our largest shareholders and proxy bodies has been key to this review and the Committee chair has consulted with shareholders to develop the policy, starting in 2024 and continuing into early 2025. In total we have engaged with almost 60% of the shareholder register to date.
This process has allowed the Committee to hear and reflect on shareholder feedback while developing the policy and helped shareholders better understand our business, the competitive environment for talent and the challenges we face. We have valued this engagement with shareholders and the policy has been refined in direct response to the feedback we received.
We remain committed to continuing the dialogue in the run-up to the 2025 AGM and beyond.
Consideration of employment conditions elsewhere in the Group
Whilst decisions on remuneration for employees outside the Executive Committee remain a management responsibility, in line with the UK Corporate Governance Code, the Committee has reviewed pay and employment conditions beyond those of the Executive Committee and takes this into consideration when establishing and implementing policy for Executive Directors.
The Committee also reviews the Company’s reward philosophy and alignment of pay with culture, values and behaviours, as well as salary and incentives policies and practice, including how reward practices are aligned across all levels of the organisation. This has shown a consistent approach to reward and has informed the Committee’s views on the structure and approach to executive pay.
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| 172 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Policy continued
It is the view of the Committee that Executive Director remuneration should be subject to robust and stretching performance conditions supported by strong shareholding and governance requirements.
We remain committed to paying our employees fairly with respect to their relative responsibilities both internally and externally. Throughout the Group, base salary and benefit levels are set in accordance with prevailing market conditions, policies, practice and relevant regulations in the countries in which employees are based. Differences between Executive Director pay policy and that of other employees reflect the position and responsibilities of the individuals, as well as corporate governance practices in respect of Executive Director remuneration. In particular, a key difference in policy for Executive Directors and other senior management is that a greater proportion of total remuneration is delivered as performance-based incentives.
Some of the key ways in which we invest in the reward arrangements for our employees are:
| – | We have regularly provided additional bonus funding to enable managers to reward the best performers in our business; |
| – | We have changed our approach to workforce pay to more closely align outcomes with performance; |
| – | We use a consistent approach to benchmarking pay across the organisation, including reviewing the global peer group for the most senior population below Board; and |
| – | For the UK leased hotel estate, budgeted salary rises have typically been higher than those for the corporate workforce, with higher increases for frontline workers. The Real Living Wage has been applied as a minimum for all staff in line with the Real Living Wage Foundation level. |
While the Company did not consult directly with employees on the new policy, feedback from employee surveys and through direct engagement provides views on a range of employee matters including pay. The Company’s approach to wider workforce engagement is set out in the Directors’ Remuneration Report.
Approach to recruitment or promotion remuneration
The remuneration of any newly recruited or promoted Executive Director will be determined in accordance with this policy and relevant maximum limits, and the elements that would normally be considered by the Group for inclusion are:
| – | salary and benefits, including defined contribution pension participation for a UK Executive Director or cash in lieu of pension, or equivalent local plan for an Executive Director not located in the UK; |
| – | participation (or increased participation) in the APP, typically pro-rated for the year of recruitment or promotion to reflect the proportion of the year remaining after the date of commencement of employment (or promotion); and |
| – | participation in the LTIP and RSU: |
| – | pro-rated awards (or increased awards in the case of promotions) would normally be made in relation to LTIP and RSU cycles outstanding at the time of recruitment (or promotion); but |
| – | no pro-rated award (or increased award) would normally be made for an LTIP or RSU cycle that has less than nine months to run at the date of commencement of employment or promotion. |
The maximum annual variable pay opportunity for a new or promoted Executive Director is 1,250% of salary.
In addition to this, the Committee may, at its discretion, compensate a newly recruited Executive Director for relevant contractual rights forfeited when leaving their previous employer and/or remuneration forgone as a result of leaving their previous employer. The Committee would seek validation of the value of any potential incentives or contractual rights foregone. Awards would be made on a comparable basis to the extent possible, typically taking account of performance achieved (or likely to be achieved), the proportion of the performance period remaining and the form of the award. Compensation would, as far as possible, be in the form of LTIP and/ or RSU awards in order to immediately align a new Executive Director with IHG performance.
Policy on payment
for loss of office
Executive Directors normally have a 12-month notice period from both the Group and Executive Director.
However, neither notice nor a payment in lieu of notice will be given in the event of gross misconduct. In the event of an Executive Director terminating employment, any compensation payable will be determined in accordance with the terms of their service contract and the rules of any relevant incentive plan. Where possible, the Group will seek to ensure that, if a leaver mitigates their losses, for example, by finding new employment, there will be a corresponding reduction in compensation payable for loss of office. An Executive Director may have an entitlement to compensation in respect of their statutory rights under employment protection legislation in the UK or other relevant jurisdiction.
The Committee reserves the right to make any other payments in connection with a Director’s cessation of office or employment where the payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement of any claim arising in connection with the cessation of a director’s office or employment, or otherwise. Any such payments may include, but are not limited to, paying any fees for outplacement assistance and/or the director’s legal and/or professional advice fees in connection with their cessation of office or employment.
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The following table sets out the basis on which payments for loss of office may be made:
| Remuneration component |
Circumstances and approach taken (including, but not limited to): |
|
| Salary and contractual benefits, including pension |
Good leaver: paid up to date of termination or in lieu of notice. Alternatively, the Company may continue to provide benefits that would otherwise have been paid, normally until the end of the notice period. | |
| Other leaver: paid up to date of termination or in lieu of notice, if applicable (other than in the case of gross misconduct). | ||
|
|
Death: paid up to date of death. |
|
| APP award for year of termination |
Good leaver: award settled on usual date, pro-rated for time and subject to the extent that performance conditions are met, in each case unless the Committee decides otherwise in its discretion or if earlier settlement is required in order to comply with applicable tax legislation. Award settled 50% cash and 50% in shares deferred for three years from grant, or such other proportions as permitted under the policy subject to Committee discretion. | |
| Other leaver: no award for year of termination, other than in case of termination after end of performance period but before award settlement, in which case only the cash portion of an award will be settled on the usual date, unless the Committee decides otherwise in its discretion. The share settled portion shall lapse. | ||
|
|
Death: award settled fully in cash immediately, pro-rated for time and subject to the extent that performance conditions are met, in each case unless the Committee decides otherwise in its discretion. |
|
| Unvested APP deferred share awards |
Good leaver: award vests on usual date to the extent that any conditions are met, unless the Committee decides otherwise in its discretion or if earlier settlement is required in order to comply with applicable tax legislation. | |
| Other leaver: award forfeited. | ||
|
|
Death: award settled immediately to the extent that any conditions are met, unless the Committee decides otherwise in its discretion. |
|
| Unvested LTIP and RSU awards |
Good leaver: award vests on usual date, pro-rated for time and subject to the extent that performance conditions, underpins and/or other conditions are met, in each case unless the Committee decides otherwise in its discretion or if earlier settlement is required in order to comply with applicable tax legislation. | |
| Other leaver: award forfeited. | ||
|
|
Death: award vests immediately, pro-rated for time and subject to the extent that performance conditions and/or other conditions are met, unless the Committee decides otherwise in its discretion. |
|
Good leaver status will be applied in accordance with the relevant plan rules, and will normally include death, injury, ill-health or disability, or the individual’s employing company or business ceasing to be part of the Group. In addition, the Committee has discretion to apply good leaver status and, in doing so, will consider factors such as personal performance and conduct, overall Group performance and the specific circumstances of the Executive Director’s departure including, but not restricted to, whether the Executive Director is leaving by mutual agreement. The Committee would only seek to exercise this and its other discretions under the plan rules in exceptional circumstances and the application of any such discretion would be disclosed in full as required in the relevant announcement and Annual Report on Remuneration. To the extent that unvested share awards do not lapse and are not forfeited on leaving, any holding period will continue to apply unless the Committee decides otherwise, other than on death, where any holding period will cease to apply.
Legacy arrangements
The Committee reserves the right to make any remuneration payments and/or payments for loss of office (including exercising any discretions available to it in connection with such payments) notwithstanding that they are not in line with the policy, where the terms of the payment were agreed: (i) before 2 May 2014 (the date the Company’s first shareholder-approved directors’ remuneration policy came into effect); (ii) before the policy set out above came into effect, provided that the terms of the payment were consistent with the shareholder-approved Directors’ Remuneration Policy in force at the time they were agreed; or (iii) at a time when the relevant individual was not a Director of the Company (or other persons to whom the policy set out above applies) and, in the opinion of the Committee, the payment was not in consideration for the individual becoming a Director of the Company or such other person.
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| 174 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Remuneration Policy continued
For these purposes, ‘payments’ include the Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the payment are ‘agreed’ no later than at the time the award is granted. This policy applies equally to any individual who is required to be treated as a Director under the applicable regulations.
Use of discretion by the Remuneration Committee
Malus and clawback in incentive plans
The APP terms and DAP rules (under which deferred bonus, LTIP and RSU awards are granted) allow the Committee discretion to reduce (including to nil) or recover incentive plan awards if circumstances occur that, in the reasonable opinion of the Committee, justify a reduction (including to nil) or recovery of one or more awards granted to any one or more participants.
Malus provisions relate to unvested awards whilst clawback applies for the three years post-payment or vesting (including the cash element of the APP).
The circumstances in which the Committee may consider it appropriate to exercise its discretion for malus and/or clawback include the following:
| – | an event or series of events occurs which the Committee consider to constitute corporate failure of the Company or the Group; |
| – | there has been a material misstatement, error, or misrepresentation in the financial statements of the Group, any member of the Group, or any business unit or undertaking for which the participant has significant responsibility (other than as a result of a change in accounting practice); |
| – | an award was granted or vests on the basis of erroneous or misleading information, assumptions or calculations; |
| – | the action or conduct of a participant, in the reasonable opinion of the Committee, amounts to fraud or gross misconduct; |
| – | the participant leaves office or employment by reason of summary dismissal by any member of the Group or where the Committee subsequently determines that, prior to leaving, circumstances had arisen which would have justified the participant’s summary dismissal; |
| – | serious reputational damage or significant financial loss to the Company, any member of the Group or a relevant business unit arises as a result of the participant’s conduct, misconduct or otherwise; or |
| – | any other triggers or circumstances occur which the Committee determines justifies the application of malus and/or clawback. This may include, where appropriate, negligence on the part of the Executive Directors. |
These features help ensure alignment between executive reward and shareholder interests and are in line with the UK Corporate Governance Code. All Executive Directors are required to sign (including electronically) forms of acceptance at the time of grant to indicate their acknowledgement and agreement that awards are subject to malus and clawback.
Other uses of discretion
The Committee reserves certain discretions in relation to the outcomes for Executive Directors under the Group’s incentive plans. These operate in two main respects:
| – | enabling the Committee to ensure that outcomes under these plans are consistent with the underlying performance of the business; the conduct, capability or performance of the individual; any windfall gains; the total value that would otherwise be received compared to the maximum value intended (or any other reason at the discretion of the Committee); and the experience of stakeholders, at the same time as providing a high degree of clarity for shareholders as to remuneration structure and potential quantum; and |
| – | enabling the Committee to treat leavers in a way that is fair and equitable to individuals and shareholders under the incentive plans. |
The Committee has discretion to adjust the extent to which an APP award is settled, or LTIP or RSU award vests if it considers such extent would otherwise not be appropriate.
The discretions that can be applied in the case of leavers in respect of the APP, LTIP and RSUs are set out in the section ‘Policy on payment for loss of office’ on page 172.
The discretions that can be applied in respect of the APP, LTIP and RSUs in the event of corporate transactions, such as a takeover or merger, include the ability to determine:
| – | the period for which awards may be pro-rated; |
| – | whether awards are payable as cash or shares; |
| – | the vesting date for APP; |
| – | the application of performance conditions and the extent to which those performance conditions have been met; |
| – | in the event that a transaction involves the exchange of IHG PLC shares for shares in another company, whether existing share awards may be replaced by a new award granted on such terms and over such shares or other types of securities as appropriate; and |
| – | any such action as it may think appropriate if other events happen which may have an effect on awards. |
In addition, in the event of any variation in the share capital of the Company, a demerger, special dividend or distribution or any other transaction which will materially affect the value of shares, the Committee may make an adjustment to the number or class of shares subject to awards. Any exercises of discretion by the Committee will be fully disclosed and explained in the relevant year’s Annual Report on Directors’ Remuneration.
Service contracts and notice periods for Executive Directors
The Committee’s policy is for all Executive Directors to have service contracts with a notice period of 12 months from the Company and a notice period of six months for the employee, unless, on an exceptional basis to complete an external recruitment successfully, a longer initial notice period reducing to 12 months is used. This is in accordance with the UK Corporate Governance Code.
All Executive Directors’ appointments and subsequent re-appointments to the Board are subject to election and annual re-election by shareholders at the AGM.
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Details of current Executive Directors’ contracts (available upon request from the Company Secretary’s office):
| Executive Directors |
Date of original appointment to the Board |
Notice period |
||
| Michael Glover |
20 March 2023 |
12 months |
||
| Elie Maalouf |
1 January 2018 |
12 months |
||
Dilution of Company shares
Our DAP rules provide that issuance of new shares or re-issued treasury shares, when aggregated with all other share schemes, must not exceed 10% of issued share capital in any rolling 10-year period. The total number of shares issued in connection with this 10% under any discretionary employee share plans (including the DAP) must not exceed 5% of the ordinary share capital, unless shareholder approval is obtained to amend this limit.
Non-executive directorships of other companies
The Group recognises that its Executive Directors may be invited to become Non-Executive Directors of other companies and that such duties can broaden their experience and knowledge and benefit the Group. IHG therefore permits its Executive Directors 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 and as long as this is not, in the reasonable opinion of the Board, likely to lead to a conflict of interest. Any fees from such appointments may be retained by the individual Executive Director.
Remuneration Policy for Non-Executive Directors
The policy for Non-Executive Directors, set out below, will apply for three years from the date of the 2025 AGM.
|
|
The policy for Non-Executive Directors is available to view at www.ihgplc.com/investors under Corporate Governance in the Committees section. |
If the policy is proposed to be revised within that time frame, it will be presented to be voted upon by shareholders.
| Fees and benefits | 100% cash | No change in policy | ||
| Link to strategy | – To attract Non-Executive Directors who have a broad range of skills and experience that add value to our business and help oversee and drive our strategy. |
|||
| – Recognises the value of the role and the individual’s skills, performance and experience. |
||||
| Operation | – Non-Executive Directors’ fees and benefits are set by the Chair of the Board and Executive Directors; the Chair’s fees are set by the Committee. |
|||
| – Fees are normally reviewed annually and fixed for 12 months from 1 January. |
||||
| – Consideration is given to business performance, current remuneration competitiveness and average salary increases for the wider IHG employee population. |
||||
| – Benefits include travel and accommodation in connection with attendance at Board and Committee meetings. The Company may meet any tax liabilities that may arise on such expenses. |
||||
| – Non-Executive Directors are not eligible to participate in IHG incentive or pension plans. |
||||
| – A base fee is determined for the Non-Executive Director role and additional supplemental amounts applied for additional responsibilities such as Committee membership and Chairing roles. |
||||
| Maximum opportunity | – While there is no maximum, fee increases will take into account the circumstances of the business, increases in remuneration across the Group and relevant market practice, other than where there is a change in role or responsibility or another need arises to reassess the competitiveness of fee level that warrants either a lesser or a more significant increase. Any such change will be fully explained. |
|||
| – IHG pays the cost of providing benefits as required. |
||||
| Performance framework | – Non-Executive Directors are not eligible to participate in any performance-related incentive plans. |
|||
Non-Executive Directors have letters of appointment, which are available upon request from the Company Secretary’s office.
Deanna Oppenheimer, appointed Non-Executive Chair on 1 September 2022, is subject to 12 months’ notice. Other Non-Executive Directors are not subject to notice periods.
All Non-Executive Directors’ appointments and subsequent re-appointments are subject to election and annual re-election by shareholders at the AGM.
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| 176 | IHG | Annual Report and Form 20-F 2024 | ||||||
Statement of compliance
Our Statement of compliance summarises how the Group has applied the principles
of the 2018 UK Corporate Governance Code (available at frc.org.uk/library/standards-
codes-policy/corporate-governance/uk-corporate-governance-code/ under UK
Corporate Governance Code) as published in July 2018 (the Code) and comments
on compliance with the Code’s provisions.
This should be read in conjunction with the Strategic Report on pages 3 to 110, and Governance, including the Directors’ Remuneration Report, on pages 138 to 175, as a whole.
The Board considers that the Group has complied in all material respects with the Code’s provisions for the year ended 31 December 2024.
| 1. | Board Leadership and Company Purpose |
| A. | The role of the Board |
The Board continues to lead the Group’s strategic direction and long-term objectives. Further responsibilities of the Board are set out on page 122.
The Board met eight times during 2024 and all Directors continue to act in what they consider to be the best interests of the Company, consistent with their statutory duties. Further details of 2024 Board meetings, including information on matters discussed and decisions taken by the Board, are set out on pages 123 to 125; attendance information is on page 118; and skills and experience and biographical information is on pages 114 to 117.
A description of IHG’s business model is set out on pages 22 to 27. An assessment of the principal risks facing the Group is included on pages 46 to 51.
Potential conflicts of interest are reviewed annually and powers of authorisation are exercised in accordance with the Companies Act and the Company’s Articles of Association.
During the year, if any Director has unresolved concerns about the operation of the Board or the management of the Company, these would be recorded in the minutes of the meeting.
| B. | The Company’s purpose, values and strategy |
Our purpose is to provide True Hospitality for Good. A description of our culture, including an overview of our values and information on how the Board ensures alignment between our purpose, values and strategy and our culture, is included on pages 77 to 80. A summary of the Board’s activities in relation to the Voice of the Employee is included on page 135. Information on the Group’s approach to rewarding its workforce is contained on pages 53 and 142 and 143.
| C. | Resources |
The Board delegates oversight of the allocation of day-to-day resources to management (principally through the Executive Committee).
Information on the Group’s key performance indicators, including the measures used to monitor them, is included on pages 38 to 41.
A summary of the procedures for identifying and discussing emerging risks is set out on pages 44 and 45.
| D. | Shareholders and stakeholders |
The Board engaged actively throughout 2024 with shareholders and other stakeholders. The Chair held a number of meetings with shareholders to discuss the role of the Board and other general governance issues, following which the Chair ensured that their views were communicated to the Board as a whole.
Information on the Board’s consideration of and engagement with other stakeholders, including employees, suppliers, hotel owners and guests, is included on pages 42 and 43.
| E. | Workforce policies and practices |
The Board has overarching responsibility for the Group’s workforce policies and practices and delegates day-to-day responsibility to the CEO and Chief Human Resources Officer to ensure that they are consistent with the Company’s values and support its long-term success.
Employees are able to report matters of concern confidentially through our Confidential Disclosure Channel. The Board routinely reviews reports generated from the disclosures and ensures that arrangements are in place for investigation and follow-up action as appropriate.
| 2. | Division of Responsibilities |
| F. | The Chair |
Deanna Oppenheimer leads the operation and governance of the Board and its Committees. The Chair has been in post since September 2022 and was independent on appointment.
| G. | Board composition |
The size and composition of the Board and its Committees are kept under review by the Nomination Committee to ensure the appropriate combination of Executive and Non-Executive Directors. Details of the composition of the Board and Committees are available on pages 114 to 118.
At least half of the Board, excluding the Chair, are Independent Non-Executive Directors.
| H. | Non-Executives |
Non-Executive Director terms of appointment outline IHG’s time commitment expectations required to fulfil their role.
The commitments of each Director are included in the Directors’ biographical details on pages 114 to 117. Details of Non-Executive Director appointment terms are set out on page 154.
The time each Non-Executive Director dedicates to IHG is reviewed annually as part of the performance evaluation of Directors (see page 127). Graham Allan, the Senior Independent Non-Executive Director (SID), led the evaluations in 2024 and was satisfied that the Non-Executive Directors’ other duties and time commitments do not conflict with those as Directors.
The SID provides a sounding board for the Chair and serves as an intermediary for the other Directors and shareholders. Graham also led the annual performance review of the Chair (see page 127).
After each Board meeting, Non-Executive Directors and the Chair meet without Executive Directors being present.
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| I. | Policies, processes, information and resources |
The Chair and Company Secretary ensure that the Board and its Committees have the necessary policies and processes in place and that they receive timely, accurate and clear information. The Board and its Committees also have access to the Company Secretary, independent advice and other necessary resources, at the Company’s expense. They receive the administrative and logistical support of a full-time executive assistant.
| 3. | Composition, Succession and Evaluation |
| J. | Appointments |
Appointments to the Board are led by the Nomination Committee in accordance with its Terms of Reference (available on our website at ihgplc.com/investors under Corporate governance).
The Nomination Committee also supports the Board in succession planning for the Board and senior management. Further details of the role of the Nomination Committee and what it did in 2024 are in the Nomination Committee Report on pages 136 and 137.
The overall process of appointment and removal of Directors is overseen by the Board as a whole.
All of the Directors retire and seek election or re-election at each AGM.
| K. | Skills |
Details of the skills, experience and biographical information of the Board are set out on pages 114 to 117.
The Chair and Company Secretary ensure that new Directors receive a full induction, and that all Directors continually update their skills and have the requisite knowledge and familiarity with the Group to fulfil their role (see page 126).
The length of service of Non-Executive Directors is reviewed regularly.
| L. | Annual evaluation |
The Board undertakes either an internal or external annual Board effectiveness evaluation. In 2024, the Board undertook an internal evaluation. Details of the process and results of the evaluation are included on page 127.
Performance evaluations of Directors, including the Chair, are also carried out on an annual basis. Directors’ biographies are set out on pages 114 to 117, and details of performance evaluations carried out in 2024 are on page 127.
| 4. | Audit, Risk and Internal Control |
| M. | Audit functions |
The Audit Committee is comprised entirely of Independent Non-Executive Directors (see page 118 for membership details).
Byron Grote, the Audit Committee’s Chair, has recent and relevant financial experience, and the Committee as a whole has competence relevant to the sector in which we operate. Details of the Committee’s role, responsibilities and activities are set out on pages 128 to 133.
The Audit Committee reviewed the effectiveness of the Group’s Internal Audit function and also assessed PricewaterhouseCoopers LLP’s performance during 2024, including its independence, effectiveness and objectivity. Details of these reviews are set out in the Audit Committee Report on pages 128 to 131.
| N. | Assessment of the Company’s position and prospects |
The Statement of Directors’ Responsibilities (including the Board’s statement confirming that it considers that the Annual Report and Form 20-F, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s position, performance, business model and strategy) is set out on page 179.
The status of IHG as a going concern is set out in the Directors’ Report on page 279. An explanation of the Group’s performance, business model, strategy and the risks and uncertainties relating to IHG’s prospects, including the viability of the Group, is set out in the Strategic Report on pages 3 to 110.
| O. | Risk management |
The Board determines the nature and extent of the principal risks the organisation is willing to take to achieve its strategic objectives. The Board completed an assessment of the principal and emerging risks facing the Group during the year, including those risks that would threaten the Group’s business model, future performance, solvency or liquidity and reputation (see pages 46 to 51 for further details of the principal risks). The Board and Audit Committee monitor the Group’s risk management and internal controls systems and conduct an annual review of their effectiveness. Throughout the year, the Board has directly, and through delegated authority to the Executive Committee and the Audit Committee, overseen and reviewed all material controls, including financial, operational and compliance controls. See pages 44 to 51 and 128 to 131.
| 5. | Remuneration |
| P. | Remuneration policies and practices |
The Remuneration Committee is responsible for developing policy on executive remuneration and determining remuneration packages of Directors and senior management. The Directors’ Remuneration Report is set out on pages 138 to 175. Details of the Remuneration Committee’s focus areas during 2024 are set out on page 154 and its membership details are on pages 118 and 154.
| Q. | Procedure for developing policy on executive remuneration |
Details of how the Directors’ Remuneration Policy (DR Policy) was implemented in 2024 are set out on pages 144 to 156. The DR Policy was reviewed during 2024. Details of how it was developed are set out on pages 159 to 166.
During 2024, no individual Director was involved in deciding his or her own remuneration outcome.
| R. | Independent judgement and discretion |
The Remuneration Committee has formal discretions in place in relation to outcomes under the Deferred Award Plan rules, and these are disclosed as part of the DR Policy. When determining outcomes under incentive plans, the Committee considers whether it is appropriate to adjust outcomes under these discretions, taking account of the Group’s performance, relative performance against competitors and other relevant factors. Information on the Remuneration Committee’s consideration of the use of discretion during 2024 is set out on pages 144 to 158.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 179 | |||||||||||
Statement of Directors’ Responsibilities
Financial Statements
and accounting records
The Directors are required to prepare the Annual Report and Form 20-F and the Financial Statements for the Company and the Group at the end of each financial year in accordance with applicable law and regulations. Under company law, directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and the profit or loss of the Group for that period. The Directors have prepared the Consolidated Financial Statements in accordance with UK-adopted international accounting standards and International Financial Reporting Standards (‘IFRSs’) issued by the International Accounting Standards Board (‘IASB’). The Company Financial Statements have been prepared in accordance with UK accounting standards, comprising Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (‘FRS 101’), and applicable law.
In preparing these Financial Statements, IHG Directors are required to:
| – | select suitable accounting policies and apply them consistently; |
| – | make judgements and accounting estimates that are reasonable; |
| – | state whether the Consolidated Financial Statements have been prepared in accordance with UK-adopted international accounting standards; |
| – | state for the Company Financial Statements whether applicable UK accounting standards, comprising FRS 101, have been followed; and |
| – | prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business. |
The Directors have responsibility for ensuring that the Company and the Group keep adequate accounting records sufficient to show and explain the Company’s and the Group’s transactions, and which disclose with reasonable accuracy the financial position of the Company and the Group to enable them to ensure that the Financial Statements and the Directors’ Remuneration Report comply with the Companies Act 2006.
The Directors are also responsible for the system of internal control, for safeguarding the assets of the Company and the Group, and taking reasonable steps to prevent and detect fraud and other irregularities.
Disclosure Guidance and Transparency Rules
The Board confirms that to the best of its knowledge:
| – | The Consolidated Financial Statements have been prepared in accordance with UK-adopted international accounting standards, and IFRSs as issued by the IASB, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group taken as a whole; |
| – | The Company Financial Statements have been prepared in accordance with UK accounting standards, comprising FRS 101, and give a true and fair view of the assets, liabilities and financial position of the Company; and |
| – | The Annual Report, including the Strategic Report, includes a fair review of the development and performance of the business and the position of the Company and the Group taken as a whole, together with a description of the principal risks and uncertainties that it faces. |
UK Corporate Governance Code
Having taken advice from the Audit Committee, the Board considers that this Annual Report and Form 20-F, taken as a whole, is fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company’s and the Group’s position and performance, business model and strategy.
Disclosure of information to Auditor
The Directors who held office as at the date of approval of this report confirm that they have taken steps to make themselves aware of relevant audit information (as defined by Section 418(3) of the Companies Act 2006). None of the Directors are aware of any relevant audit information that has not been disclosed to the Company’s and Group’s Auditor.
Management’s report on internal control over financial reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Group, as defined in Rule 13a–15(f) and 15d–15(f) under the Securities Exchange Act of 1934 as 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 IFRSs.
The Group’s internal control over financial reporting includes policies and procedures that:
| – | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the Group’s transactions and dispositions of assets; |
| – | are designed to provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Consolidated Financial Statements in accordance with UK-adopted international accounting standards and IFRSs as issued by the IASB, and that |
| receipts and expenditure are being made only in accordance with authorisation of management and the Directors of the Company; and |
| – | provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of the Group’s assets that could have a material effect on the Consolidated Financial Statements. |
Any internal control framework has inherent limitations and 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 the degree of compliance with the policies or procedures may deteriorate.
Management has undertaken an assessment of the effectiveness of the Group’s internal control over financial reporting at 31 December 2024 based on criteria established in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).
Based on this assessment, management has concluded that as at 31 December 2024 the Group’s internal control over financial reporting was effective.
During the period covered by this document there were no changes in the Group’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect the effectiveness of the internal controls over financial reporting.
The Group’s internal control over financial reporting at 31 December 2024, together with the Group’s Consolidated Financial Statements, were audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm. Their auditor’s report can be found on page 187.
For and on behalf of the Board
Elie Maalouf
Chief Executive Officer
17 February 2025
Michael Glover
Chief Financial Officer
17 February 2025
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Independent Auditor’s US Report
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of InterContinental Hotels Group PLC
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying Group statements of financial position of InterContinental Hotels Group PLC and its subsidiaries (the “Group”) as of
31 December 2024 and 2023 and the related Group income statements and Group statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended 31 December 2024, including the accounting policies, the related notes and Schedule 1: condensed parent company financial information, as of 31 December 2024 and 2023 and for each of the three years in the period ended 31 December 2024, appearing on pages 304 to 307 (collectively referred to as the “Financial Statements”). We also have audited the Group’s internal control over financial reporting as of 31 December 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the Financial Statements referred to above present fairly, in all material respects, the financial position of the Group as of 31 December 2024 and 31 December 2023, and the results of its operations and its cash flows for each of the three years in the period ended 31 December 2024 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and UK-adopted International Accounting Standards. Also in our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Group’s management is responsible for these Financial Statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management’s report on internal control over financial reporting on page 179. Our responsibility is to express opinions on the Financial Statements and on the Group’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the Financial Statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the Financial Statements included performing procedures to assess the risks of material misstatement of the Financial Statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the Financial Statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Financial Statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’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 company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) 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 company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’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.
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Independent Auditor’s US Report continued
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the Financial Statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the Financial Statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the Financial Statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Breakage assumption used to estimate IHG One Rewards loyalty programme deferred revenue
As described in the Estimates section of the Accounting policies and in Note 3 to the Financial Statements, deferred revenue relating to the IHG One Rewards loyalty programme was $1,653m as of 31 December 2024. The loyalty programme, IHG One Rewards, enables members to earn points during each qualifying stay at an IHG branded hotel and through other partnerships and programmes. Members are able to consume those points at a later date for free or reduced accommodation or other benefits. The Group recognises deferred revenue in an amount that reflects the Group’s unsatisfied performance obligations, valued at the stand-alone selling price of the future benefit to the member. The amount of revenue recognised and deferred is impacted by the estimate of breakage (points that will never be consumed). On an annual basis, the Group engages an external actuary who uses statistical formulae to assist in the estimate of
breakage. If future member behaviour deviates significantly from expectations, breakage estimates could increase or decrease.
The principal considerations for our determination that performing procedures relating to the breakage assumption used to estimate IHG One Rewards loyalty programme deferred revenue is a critical audit matter are (i) the significant judgement and estimation by management when projecting members’ future consumption activity; (ii) a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating management’s breakage assumption; and (iii) the audit effort involved the use of professionals with specialised skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the Financial Statements. These procedures included testing the effectiveness of controls relating to management’s determination of the breakage assumption. These procedures also included, among others, (i) testing the completeness and accuracy of the data used by management’s specialist in deriving the breakage assumption; (ii) assessing the competence and objectivity of management’s specialist; (iii) involving professionals with specialized skill and knowledge to assist in evaluating the reasonableness of management’s estimate by developing an independent estimate of a reasonably possible range for deferred revenue based on independently determined breakage assumptions; (iv) comparing the deferred revenue balance with our independently calculated range; and (v) assessing the appropriateness of the related disclosures including sensitivity analysis in the Financial Statements.
Allocation of revenue and expenses to the System Fund
As described in the System Fund and other co-brand revenues section of the Accounting policies, and Note 31 to the Financial Statements, System Fund revenues and expenses were $1,611m and $1,694m, respectively, as of
31 December 2024. The Group operates a System Fund (the ‘Fund’) to collect and administer cash assessments from hotel owners for specified purposes of use including marketing, reservations, certain hotel services and the Group’s loyalty programme, IHG One Rewards. The Fund is not managed to generate a surplus or deficit for IHG over the longer term, but is managed for the benefit of the IHG System with the objective of driving revenues for the hotels in the System. Services are provided by the Fund and are funded by assessment fees and costs are incurred and allocated to the Fund in accordance with the principles agreed with the IHG Owners Association and ensuring appropriate consistency of application. The Group has entered into a new agreement with its current issuing partner to continue providing co-branded IHG One Rewards credit cards in the US, impacting the recognition of fees within the System Fund. Judgement is required in estimating stand-alone selling prices of performance obligations associated with the new co-branded credit card agreement. From 1 January 2024, as agreed with the IHG Owners Association, a portion of revenue relating to the consumption of certain IHG One Rewards points sold is reported within fee business revenue, with the remaining amount reported within System Fund revenues.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 189 | |||||||||||
The principal considerations for our determination that performing procedures relating to accounting for System Fund and reimbursable revenues and expenses is a critical audit matter are (i) significant judgement by management when developing the Group’s internal policies in order to apply the principles agreed with the IHG Owners Association to expenses incurred and a high degree of auditor judgement, subjectivity, and effort in performing procedures and assessing the consistency of management’s allocation of expenses to the System Fund in line with the agreed principles; (ii) significant judgement by management when estimating stand-alone selling prices associated with the new co-branded credit card agreement and a high degree of auditor judgement, subjectivity, and effort in performing procedures related to the determination of stand-alone selling prices of performance obligations associated with the new co-branded credit card agreement; (iii) significant judgement by management when estimating the IHG One Rewards deferred revenue balance incorporating the impact of the change agreed with the IHG Owners Association and a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions incorporating the change agreed with the IHG Owners Association related to reporting of revenue associated with certain IHG One Rewards points; and (iv) the audit effort involved the use of professionals with specialised skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the Financial Statements. These procedures included testing the effectiveness of controls relating to the allocation of expenses to the System Fund, the estimation of stand-alone selling prices of performance obligations associated with the new co-branded credit card agreement and the changes agreed with the IHG Owners Association during the year. These procedures also included, among others, (i) understanding and assessing the internal policies that the Group has put in place in order to consistently apply the principles agreed with the IHG Owners Association to expenses incurred; (ii) testing a sample of expenses that had been allocated to the System Fund to assess whether they were in compliance with the Group’s internal policies and consistent with historical practice; (iii) testing management’s process for determining the stand-alone selling prices of performance obligations associated with the new co-branded credit card agreement, involving professionals with specialised skill and knowledge to assist in evaluating the appropriateness of the methodology and the reasonableness of the assumptions used by management and testing the completeness and accuracy of the underlying data used in the model; (iv) involving professionals with specialised skill and knowledge to assist in evaluating the reasonableness of management’s loyalty deferred revenue estimate by developing an independent estimate, incorporating the impact of the changes agreed
with the IHG Owners Association, of a reasonably possible range for deferred revenue based on independently determined breakage assumptions and comparing management’s deferred revenue balance with our independently calculated range; and (v) evaluating the reasonableness of a sample of journal entries transferring expenses to or revenues from the System Fund.
/s/PricewaterhouseCoopers LLP
Birmingham, United Kingdom
17 February 2025
We have served as the Group’s auditor since 2021.
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1 90
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
2024 |
2023 |
2022 |
||||||||||||||||||||||||
For the year ended 31 December 2024 |
Note |
$m |
$m |
$m |
||||||||||||||||||||||
Revenue from fee business |
3 |
1,774 |
1,672 |
1,434 |
||||||||||||||||||||||
Revenue from owned, leased and managed lease hotels |
3 |
515 |
471 |
394 |
||||||||||||||||||||||
Revenue from insurance activities |
3, 20 |
23 |
21 |
15 |
||||||||||||||||||||||
System Fund and reimbursable revenues |
31 |
2,611 |
2,460 |
2,049 |
||||||||||||||||||||||
Total revenue |
2 |
4,923 |
4,624 |
3,892 |
||||||||||||||||||||||
Cost of sales |
(745 |
) |
(742 |
) |
(648 |
) |
||||||||||||||||||||
System Fund and reimbursable expenses |
31 |
(2,694 |
) |
(2,441 |
) |
(2,154 |
) |
|||||||||||||||||||
Administrative expenses |
(359 |
) |
(338 |
) |
(353 |
) |
||||||||||||||||||||
Insurance expenses |
20 |
(29 |
) |
(23 |
) |
(11 |
) |
|||||||||||||||||||
Share of profits/(losses) of associates and joint ventures |
10 |
31 |
(59 |
) |
||||||||||||||||||||||
Other operating income |
10 |
21 |
29 |
|||||||||||||||||||||||
Depreciation and amortisation |
2 |
(65 |
) |
(67 |
) |
(68 |
) |
|||||||||||||||||||
Impairment (loss)/reversal on financial assets |
(10 |
) |
1 |
(5 |
) |
|||||||||||||||||||||
Other net impairment reversals/(charges) |
– |
– |
5 |
|||||||||||||||||||||||
Operating profit |
2 |
1,041 |
1,066 |
628 |
||||||||||||||||||||||
Operating profit analysed as: |
||||||||||||||||||||||||||
Operating profit before System Fund, reimbursables and exceptional items |
1,124 |
1,019 |
828 |
|||||||||||||||||||||||
System Fund and reimbursable result |
(83 |
) |
19 |
(105 |
) |
|||||||||||||||||||||
Operating exceptional items |
6 |
– |
28 |
(95 |
) |
|||||||||||||||||||||
1,041 |
1,066 |
628 |
||||||||||||||||||||||||
Financial income |
7 |
63 |
39 |
22 |
||||||||||||||||||||||
Financial expenses |
7 |
(203 |
) |
(91 |
) |
(118 |
) |
|||||||||||||||||||
Fair value (losses)/gains on contingent purchase consideration |
24 |
(4 |
) |
(4 |
) |
8 |
||||||||||||||||||||
Profit before tax |
897 |
1,010 |
540 |
|||||||||||||||||||||||
Tax |
8 |
(269 |
) |
(260 |
) |
(164 |
) |
|||||||||||||||||||
Profit for the year |
628 |
750 |
376 |
|||||||||||||||||||||||
Attributable to: |
||||||||||||||||||||||||||
Equity holders of the parent |
628 |
750 |
375 |
|||||||||||||||||||||||
Non-controlling interest |
– |
– |
1 |
|||||||||||||||||||||||
628 |
750 |
376 |
||||||||||||||||||||||||
Earnings per ordinary share |
10 |
|||||||||||||||||||||||||
Basic |
389.6¢ |
443.8¢ |
207.2¢ |
|||||||||||||||||||||||
Diluted |
385.3¢ |
441.2¢ |
206.0¢ |
|||||||||||||||||||||||
|
|
Accounting policies and notes on pages
197
to
256
form an integral part of these Group Financial Statements
.
|
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
191 |
|||||||||||
2024 |
2023 |
2022 |
||||||||||||||||||
For the year ended 31 December 2024 |
$m |
$m |
$m |
|||||||||||||||||
Profit for the year |
628 |
750 |
376 |
|||||||||||||||||
|
Other comprehensive income /(loss) |
||||||||||||||||||||
Items that may be subsequently reclassified to profit or loss: |
||||||||||||||||||||
|
(Losses)/gains on cash flow hedges, including related tax charge of $11m
(2023: $nil, 2022: $2m credit)
|
(124 |
) |
(30 |
) |
35 |
|||||||||||||||
(Losses)/gains on net investment hedges |
(7 |
) |
15 |
(6 |
) |
|||||||||||||||
Costs of hedging |
(11 |
) |
– |
3 |
||||||||||||||||
Hedging losses/(gains) reclassified to financial expenses |
165 |
28 |
(43 |
) |
||||||||||||||||
|
Exchange gains/(losses) on retranslation of foreign operations,
including related tax charge of $2m (2023: $4m charge, 2022: $5m credit)
|
4 |
(137 |
) |
187 |
||||||||||||||||
27 |
(124 |
) |
176 |
|||||||||||||||||
Items that will not be reclassified to profit or loss: |
||||||||||||||||||||
|
Gains/(losses) on equity instruments classified as fair value through
other comprehensive income, including related tax of $nil
(2023: $1m charge, 2022: $2m credit)
|
2 |
(3 |
) |
1 |
||||||||||||||||
|
Re-measurement gains/(losses) on defined benefit plans,including related tax of $nil (2023: $nil, 2022: $6m charge)
|
4 |
(2 |
) |
15 |
||||||||||||||||
6 |
(5 |
) |
16 |
|||||||||||||||||
Total other comprehensive income/(loss) for the year |
33 |
(129 |
) |
192 |
||||||||||||||||
Total comprehensive income for the year |
661 |
621 |
568 |
|||||||||||||||||
Attributable to: |
||||||||||||||||||||
Equity holders of the parent |
661 |
621 |
568 |
|||||||||||||||||
Non-controlling interest |
– |
– |
– |
|||||||||||||||||
661 |
621 |
568 |
||||||||||||||||||
|
|
Accounting policies and notes on pages
197
to
256
form an integral part of these Group Financial Statements
.
|
19 2
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Equity share capital |
Capital redemption reserve |
Shares held by employee share trusts |
Other reserves |
Fair value reserve |
Cash flow hedge reserves |
Currency translation reserve |
Retained earnings |
IHG share- holders’ equity |
Non- controlling interest |
Total equity |
||||||||||||||||||||||||||||||||||||
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
||||||||||||||||||||||||||||||||||||
At 1 January 2024 |
141 |
14 |
(35 |
) |
(2,863 |
) |
23 |
(2 |
) |
376 |
396 |
(1,950 |
) |
4 |
(1,946 |
) |
||||||||||||||||||||||||||||||
Profit for the year |
– |
– |
– |
– |
– |
– |
– |
628 |
628 |
– |
628 |
|||||||||||||||||||||||||||||||||||
Other comprehensive income |
||||||||||||||||||||||||||||||||||||||||||||||
Items that may be subsequently reclassified to profit or loss: |
||||||||||||||||||||||||||||||||||||||||||||||
Losses on cash flow hedges |
– |
– |
– |
– |
– |
(124 |
) |
– |
– |
(124 |
) |
– |
(124 |
) |
||||||||||||||||||||||||||||||||
Losses on net investment hedges |
– |
– |
– |
– |
– |
– |
(7 |
) |
– |
(7 |
) |
– |
(7 |
) |
||||||||||||||||||||||||||||||||
Costs of hedging |
– |
– |
– |
– |
– |
(11 |
) |
– |
– |
(11 |
) |
– |
(11 |
) |
||||||||||||||||||||||||||||||||
Hedging losses reclassified to financial expenses |
– |
– |
– |
– |
– |
165 |
– |
– |
165 |
– |
165 |
|||||||||||||||||||||||||||||||||||
Exchange gains on retranslation of foreign operations |
– |
– |
– |
– |
– |
– |
4 |
– |
4 |
– |
4 |
|||||||||||||||||||||||||||||||||||
– |
– |
– |
– |
– |
30 |
(3 |
) |
– |
27 |
– |
27 |
|||||||||||||||||||||||||||||||||||
Items that will not be reclassified to profit or loss: |
||||||||||||||||||||||||||||||||||||||||||||||
Gains on equity instruments classified as fair value through other comprehensive income |
– |
– |
– |
– |
2 |
– |
– |
– |
2 |
– |
2 |
|||||||||||||||||||||||||||||||||||
Re-measurement gains on defined benefit plans |
– |
– |
– |
– |
– |
– |
– |
4 |
4 |
– |
4 |
|||||||||||||||||||||||||||||||||||
– |
– |
– |
– |
2 |
– |
– |
4 |
6 |
– |
6 |
||||||||||||||||||||||||||||||||||||
Total other comprehensive income for the year |
– |
– |
– |
– |
2 |
30 |
(3 |
) |
4 |
33 |
– |
33 |
||||||||||||||||||||||||||||||||||
Total comprehensive income for the year |
– |
– |
– |
– |
2 |
30 |
(3 |
) |
632 |
661 |
– |
661 |
||||||||||||||||||||||||||||||||||
Repurchase of shares, including taxes and transaction costs |
(2 |
) |
2 |
– |
– |
– |
– |
– |
(812 |
) |
(812 |
) |
– |
(812 |
) |
|||||||||||||||||||||||||||||||
Purchase of own shares by employee share trusts |
– |
– |
(27 |
) |
– |
– |
– |
– |
– |
(27 |
) |
– |
(27 |
) |
||||||||||||||||||||||||||||||||
Transfer of treasury shares to employee share trusts |
– |
– |
(33 |
) |
– |
– |
– |
– |
33 |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Release of own shares by employee share trusts |
– |
– |
31 |
– |
– |
– |
– |
(31 |
) |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Equity-settled share-based cost (note 27) |
– |
– |
– |
– |
– |
– |
– |
60 |
60 |
– |
60 |
|||||||||||||||||||||||||||||||||||
Tax related to share schemes |
– |
– |
– |
– |
– |
– |
– |
15 |
15 |
– |
15 |
|||||||||||||||||||||||||||||||||||
Equity dividends paid (note 9) |
– |
– |
– |
– |
– |
– |
– |
(259 |
) |
(259 |
) |
– |
(259 |
) |
||||||||||||||||||||||||||||||||
Exchange adjustments |
(2 |
) |
– |
1 |
1 |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
At 31 December 2024 |
137 |
16 |
(63 |
) |
(2,862 |
) |
25 |
28 |
373 |
34 |
(2,312 |
) |
4 |
(2,308 |
) |
|||||||||||||||||||||||||||||||
|
|
Accounting policies and notes on pages
197
to
256
form an integral part of these Group Financial Statements
.
|
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
19 3
|
|||||||||||
| Equity share capital |
Capital
redemption
reserve |
Shares
held by
employee share trusts
|
Other
reserves
|
Fair
value reserve
|
Cash
flow hedge reserves
|
Currency
translation
reserve |
Retained
earnings
|
IHG
share- holders’
equity |
Non-
controlling
interest |
Total equity |
||||||||||||||||||||||||||||||||||||
| $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | ||||||||||||||||||||||||||||||||||||
At 1 January 2023 |
137 | 10 | (37 | ) | (2,856 | ) | 26 | – | 498 | 607 | (1,615 | ) | 7 | (1,608 | ) | |||||||||||||||||||||||||||||||
Profit for the year |
– | – | – | – | – | – | – | 750 | 750 | – | 750 | |||||||||||||||||||||||||||||||||||
Other comprehensive loss |
||||||||||||||||||||||||||||||||||||||||||||||
| Items that may be subsequently reclassified to profit or loss: | ||||||||||||||||||||||||||||||||||||||||||||||
Losses on cash flow hedges |
– | – | – | – | – | (30 | ) | – | – | (30 | ) | – | (30 | ) | ||||||||||||||||||||||||||||||||
Gains on net investment hedges |
– | – | – | – | – | – | 15 | – | 15 | – | 15 | |||||||||||||||||||||||||||||||||||
Hedging losses reclassified to financial expenses |
– | – | – | – | – | 28 | – | – | 28 | – | 28 | |||||||||||||||||||||||||||||||||||
Exchange losses on retranslation of foreign operations |
– | – | – | – | – | – | (137 | ) | – | (137 | ) | – | (137 | ) | ||||||||||||||||||||||||||||||||
| – | – | – | – | – | (2 | ) | (122 | ) | – | (124 | ) | – | (124 | ) | ||||||||||||||||||||||||||||||||
| Items that will not be reclassified to profit or loss: | ||||||||||||||||||||||||||||||||||||||||||||||
Losses on equity instruments classified as fair value through other comprehensive income |
– | – | – | – | (3 | ) | – | – | – | (3 | ) | – | (3 | ) | ||||||||||||||||||||||||||||||||
Re-measurement losses on defined benefit plans |
– | – | – | – | – | – | – | (2 | ) | (2 | ) | – | (2 | ) | ||||||||||||||||||||||||||||||||
| – | – | – | – | (3 | ) | – | – | (2 | ) | (5 | ) | – | (5 | ) | ||||||||||||||||||||||||||||||||
Total other comprehensive loss for the year |
– | – | – | – | (3 | ) | (2 | ) | (122 | ) | (2 | ) | (129 | ) | – | (129 | ) | |||||||||||||||||||||||||||||
Total comprehensive income for the year |
– | – | – | – | (3 | ) | (2 | ) | (122 | ) | 748 | 621 | – | 621 | ||||||||||||||||||||||||||||||||
| Repurchase of shares, including taxes and transaction costs | (3 | ) | 3 | – | – | – | – | – | (765 | ) | (765 | ) | – | (765 | ) | |||||||||||||||||||||||||||||||
| Purchase of own shares by employee share trusts | – | – | (8 | ) | – | – | – | – | – | (8 | ) | – | (8 | ) | ||||||||||||||||||||||||||||||||
| Transfer of treasury shares to employee share trusts | – | – | (21 | ) | – | – | – | – | 21 | – | – | – | ||||||||||||||||||||||||||||||||||
| Release of own shares by employee share trusts | – | – | 32 | – | – | – | – | (32 | ) | – | – | – | ||||||||||||||||||||||||||||||||||
| Equity-settled share-based cost (note 27) | – | – | – | – | – | – | – | 51 | 51 | – | 51 | |||||||||||||||||||||||||||||||||||
| Tax related to share schemes | – | – | – | – | – | – | – | 11 | 11 | – | 11 | |||||||||||||||||||||||||||||||||||
| Equity dividends paid (note 9) | – | – | – | – | – | – | – | (245 | ) | (245 | ) | (3 | ) | (248 | ) | |||||||||||||||||||||||||||||||
| Exchange adjustments | 7 | 1 | (1 | ) | (7 | ) | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||
At 31 December 2023 |
141 | 14 | (35 | ) | (2,863 | ) | 23 | (2 | ) | 376 | 396 | (1,950 | ) | 4 | (1,946 | ) | ||||||||||||||||||||||||||||||
|
|
Accounting policies and notes on pages
197
to
256
form an integral part of these Group Financial Statements
.
|
19 4
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Group statement of changes in equity |
||||
| Equity share capital |
Capital redemption reserve |
Shares held by employee share trusts |
Other reserves |
Fair value reserve |
Cash flow hedge reserves |
Currency translation reserve |
Retained earnings |
IHG share- holders’ equity |
Non- controlling interest |
Total equity |
||||||||||||||||||||||||||||||||||||
| $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | $m | ||||||||||||||||||||||||||||||||||||
At 1 January 2022 |
154 | 10 | (22 | ) | (2,873 | ) | 25 | 5 | 316 | 904 | (1,481 | ) | 7 | (1,474 | ) | |||||||||||||||||||||||||||||||
Profit for the year |
– | – | – | – | – | – | – | 375 | 375 | 1 | 376 | |||||||||||||||||||||||||||||||||||
Other comprehensive income |
||||||||||||||||||||||||||||||||||||||||||||||
| Items that may be subsequently reclassified to profit or loss: | ||||||||||||||||||||||||||||||||||||||||||||||
| Gains on cash flow hedges |
– | – | – | – | – | 35 | – | – | 35 | – | 35 | |||||||||||||||||||||||||||||||||||
| Losses on net investment hedges |
– | – | – | – | – | – | (6 | ) | – | (6 | ) | – | (6 | ) | ||||||||||||||||||||||||||||||||
| Costs of hedging |
– | – | – | – | – | 3 | – | – | 3 | – | 3 | |||||||||||||||||||||||||||||||||||
| Hedging gains reclassified to financial expenses |
– | – | – | – | – | (43 | ) | – | – | (43 | ) | – | (43 | ) | ||||||||||||||||||||||||||||||||
| Exchange gains on retranslation of foreign operations |
– | – | – | – | – | – | 188 | – | 188 | (1 | ) | 187 | ||||||||||||||||||||||||||||||||||
| – | – | – | – | – | (5 | ) | 182 | – | 177 | (1 | ) | 176 | ||||||||||||||||||||||||||||||||||
| Items that will not be reclassified to profit or loss: | ||||||||||||||||||||||||||||||||||||||||||||||
| Gains on equity instruments classified as fair value through other comprehensive income |
– | – | – | – | 1 | – | – | – | 1 | – | 1 | |||||||||||||||||||||||||||||||||||
| Re-measurement gains on defined benefit plans |
– | – | – | – | – | – | – | 15 | 15 | – | 15 | |||||||||||||||||||||||||||||||||||
| – | – | – | – | 1 | – | – | 15 | 16 | – | 16 | ||||||||||||||||||||||||||||||||||||
Total other comprehensive income for the year |
– | – | – | – | 1 | (5 | ) | 182 | 15 | 193 | (1 | ) | 192 | |||||||||||||||||||||||||||||||||
Total comprehensive income for the year |
– | – | – | – | 1 | (5 | ) | 182 | 390 | 568 | – | 568 | ||||||||||||||||||||||||||||||||||
| Repurchase of shares, including taxes and transaction costs | (1 | ) | 1 | – | – | – | – | – | (513 | ) | (513 | ) | – | (513 | ) | |||||||||||||||||||||||||||||||
| Purchase of own shares by employee share trusts | – | – | (1 | ) | – | – | – | – | – | (1 | ) | – | (1 | ) | ||||||||||||||||||||||||||||||||
| Transfer of treasury shares to employee share trusts | – | – | (26 | ) | – | – | – | – | 26 | – | – | – | ||||||||||||||||||||||||||||||||||
| Release of own shares by employee share trusts | – | – | 12 | – | – | – | – | (12 | ) | – | – | – | ||||||||||||||||||||||||||||||||||
| Equity-settled share-based cost (note |
– | – | – | – | – | – | – | 44 | 44 | – | 44 | |||||||||||||||||||||||||||||||||||
| Tax related to share schemes | – | – | – | – | – | – | – | 1 | 1 | – | 1 | |||||||||||||||||||||||||||||||||||
| Equity dividends paid (note 9) | – | – | – | – | – | – | – | (233 | ) | (233 | ) | – | (233 | ) | ||||||||||||||||||||||||||||||||
| Exchange adjustments | (16 | ) | (1 | ) | – | 17 | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||
At 31 December 2022 |
137 | 10 | (37 | ) | (2,856 | ) | 26 | – | 498 | 607 | (1,615 | ) | 7 | (1,608 | ) | |||||||||||||||||||||||||||||||
|
|
Accounting policies and notes on pages
197
to
256
form an integral part of these Group Financial Statements
.
|
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
19 5
|
|||||||||||
2024 |
2023 |
|||||||||||||||||
31 December 2024 |
Note |
$m |
$m |
|||||||||||||||
ASSETS |
||||||||||||||||||
Goodwill and other intangible assets |
11 |
1,042 |
1,099 |
|||||||||||||||
Property, plant and equipment |
12 |
146 |
153 |
|||||||||||||||
Right-of-use |
13 |
276 |
273 |
|||||||||||||||
Investment in associates and joint ventures |
14 |
51 |
48 |
|||||||||||||||
Retirement benefit assets |
26 |
3 |
3 |
|||||||||||||||
Other financial assets |
15 |
212 |
185 |
|||||||||||||||
Derivative financial instruments |
23 |
4 |
20 |
|||||||||||||||
Deferred compensation plan investments |
286 |
250 |
||||||||||||||||
Non-current other receivables |
16 |
35 |
13 |
|||||||||||||||
Deferred tax assets |
8 |
122 |
134 |
|||||||||||||||
Contract costs |
3 |
90 |
82 |
|||||||||||||||
Contract assets |
3 |
612 |
424 |
|||||||||||||||
Total non-current assets |
2,879 |
2,684 |
||||||||||||||||
Inventories |
4 |
5 |
||||||||||||||||
Trade and other receivables |
16 |
785 |
740 |
|||||||||||||||
Current tax receivable |
22 |
15 |
||||||||||||||||
Other financial assets |
15 |
7 |
7 |
|||||||||||||||
Cash and cash equivalents |
17 |
1,008 |
1,322 |
|||||||||||||||
Contract costs |
3 |
5 |
5 |
|||||||||||||||
Contract assets |
3 |
38 |
35 |
|||||||||||||||
Total current assets |
1,869 |
2,129 |
||||||||||||||||
Total assets |
4,748 |
4,813 |
||||||||||||||||
LIABILITIES |
||||||||||||||||||
Loans and other borrowings |
21 |
(398 |
) |
(599 |
) |
|||||||||||||
Lease liabilities |
13 |
(26 |
) |
(30 |
) |
|||||||||||||
Derivative financial instruments |
23 |
– |
(25 |
) |
||||||||||||||
Trade and other payables |
18 |
(650 |
) |
(711 |
) |
|||||||||||||
Deferred revenue |
3 |
(766 |
) |
(752 |
) |
|||||||||||||
Provisions |
19 |
(22 |
) |
(10 |
) |
|||||||||||||
Insurance liabilities |
20 |
(14 |
) |
(12 |
) |
|||||||||||||
Current tax payable |
(52 |
) |
(51 |
) |
||||||||||||||
Total current liabilities |
(1,928 |
) |
(2,190 |
) |
||||||||||||||
Loans and other borrowings |
21 |
(2,876 |
) |
(2,567 |
) |
|||||||||||||
Lease liabilities |
13 |
(388 |
) |
(396 |
) |
|||||||||||||
Derivative financial instruments |
23 |
(78 |
) |
– |
||||||||||||||
Retirement benefit obligations |
26 |
(68 |
) |
(66 |
) |
|||||||||||||
Deferred compensation plan liabilities |
(286 |
) |
(250 |
) |
||||||||||||||
Trade and other payables |
18 |
(78 |
) |
(75 |
) |
|||||||||||||
Deferred revenue |
3 |
(1,294 |
) |
(1,096 |
) |
|||||||||||||
Provisions |
19 |
(17 |
) |
(26 |
) |
|||||||||||||
Insurance liabilities |
20 |
(25 |
) |
(25 |
) |
|||||||||||||
Deferred tax liabilities |
8 |
(18 |
) |
(68 |
) |
|||||||||||||
Total non-current liabilities |
(5,128 |
) |
(4,569 |
) |
||||||||||||||
Total liabilities |
(7,056 |
) |
(6,759 |
) |
||||||||||||||
Net liabilities |
(2,308 |
) |
(1,946 |
) |
||||||||||||||
EQUITY |
||||||||||||||||||
IHG shareholders’ equity |
(2,312 |
) |
(1,950 |
) |
||||||||||||||
Non-controlling interest |
4 |
4 |
||||||||||||||||
Total equity |
(2,308 |
) |
(1,946 |
) |
||||||||||||||
|
|
Accounting policies and notes on pages
197
to
256
form an integral part of these Group Financial Statements
.
|
19 6
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
2024 |
2023 |
2022 |
||||||||||||||||||||||||
For the year ended 31 December 2024 |
Note |
$m |
$m |
$m |
||||||||||||||||||||||
Profit for the year |
628 |
750 |
376 |
|||||||||||||||||||||||
Adjustments reconciling profit for the year to cash flow from operations |
25 |
521 |
469 |
585 |
||||||||||||||||||||||
Cash flow from operations |
1,149 |
1,219 |
961 |
|||||||||||||||||||||||
Interest paid |
(170 |
) |
(119 |
) |
(126 |
) |
||||||||||||||||||||
Interest received |
57 |
36 |
22 |
|||||||||||||||||||||||
Deferred purchase consideration paid |
24 |
(3 |
) |
– |
– |
|||||||||||||||||||||
Tax paid |
8 |
(309 |
) |
(243 |
) |
(211 |
) |
|||||||||||||||||||
Net cash from operating activities |
724 |
893 |
646 |
|||||||||||||||||||||||
Cash flow from investing activities |
||||||||||||||||||||||||||
Purchase of property, plant and equipment |
(29 |
) |
(28 |
) |
(54 |
) |
||||||||||||||||||||
Purchase of intangible assets |
(49 |
) |
(54 |
) |
(45 |
) |
||||||||||||||||||||
Investment in associates and joint ventures |
(6 |
) |
(3 |
) |
(1 |
) |
||||||||||||||||||||
Investment in other financial assets |
(32 |
) |
(60 |
) |
– |
|||||||||||||||||||||
Deferred purchase consideration paid |
24 |
(10 |
) |
– |
– |
|||||||||||||||||||||
Disposal of property, plant and equipment |
9 |
– |
3 |
|||||||||||||||||||||||
Repayments of other financial assets |
11 |
8 |
13 |
|||||||||||||||||||||||
Finance lease receipts |
4 |
– |
– |
|||||||||||||||||||||||
Other investing cash flows |
3 |
– |
6 |
|||||||||||||||||||||||
Net cash from investing activities |
(99 |
) |
(137 |
) |
(78 |
) |
||||||||||||||||||||
Cash flow from financing activities |
||||||||||||||||||||||||||
|
Repurchase of shares, including
taxes and transaction costs
|
28 |
(804 |
) |
(790 |
) |
(482 |
) |
|||||||||||||||||||
Purchase of own shares by employee share trusts |
(27 |
) |
(8 |
) |
(1 |
) |
||||||||||||||||||||
Dividends paid to shareholders |
9 |
(259 |
) |
(245 |
) |
(233 |
) |
|||||||||||||||||||
Dividend paid to non-controlling interest |
– |
(3 |
) |
– |
||||||||||||||||||||||
Issue of long-term bonds, including effect of currency swaps |
22 |
834 |
657 |
– |
||||||||||||||||||||||
Repayment of long-term bonds |
22 |
(547 |
) |
– |
(209 |
) |
||||||||||||||||||||
Settlement of currency swaps |
22 |
(45 |
) |
– |
– |
|||||||||||||||||||||
Principal element of lease payments |
22 |
(46 |
) |
(28 |
) |
(36 |
) |
|||||||||||||||||||
Net cash from financing activities |
(894 |
) |
(417 |
) |
(961 |
) |
||||||||||||||||||||
Net movement in cash and cash equivalents in the year |
(269 |
) |
339 |
(393 |
) |
|||||||||||||||||||||
Cash and cash equivalents at beginning of the year |
17 |
1,278 |
921 |
1,391 |
||||||||||||||||||||||
Exchange rate effects |
(18 |
) |
18 |
(77 |
) |
|||||||||||||||||||||
Cash and cash equivalents at end of the year |
17 |
991 |
1,278 |
921 |
||||||||||||||||||||||
|
|
Accounting policies and notes on pages
197
to
256
form an integral part of these Group Financial Statements
.
|
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
19 7
|
|||||||||||
19 8
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Accounting policies |
||||
| – | power over an investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee); |
| – | exposure, or rights, to variable returns from its involvement with the investee; and |
| – | the ability to use its power over the investee to affect its returns. |
| – | The assets and liabilities of foreign operations of the Group’s subsidiaries with a functional currency other than US dollars 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 each month of the reporting period. The Group treats specific intercompany loan balances, which are not intended to be repaid in the foreseeable future, as part of its net investment. The exchange differences arising on retranslation are taken to the currency translation reserve; and |
| – | Exchange differences arising from the translation of instruments that are designated as a hedge against a net investment in a foreign operation are taken to the currency translation reserve. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
199 |
|||||||||||
200 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Accounting policies continued
|
||||
| a) | Arranging for the provision of future benefits to members who have earned points or free night certificates; |
| b) | Providing the co-brand partners with access to our loyalty programme and customer base, and rights to use our brands; and |
| c) | Marketing services. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
201 |
|||||||||||
20 2 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Accounting policies |
||||
| – | The ability and intention to complete the project; |
| – | That the completed software will generate probable future economic benefits; |
| – | The availability of adequate technical, financial and other resources to complete the project; and |
| – | The ability to measure the expenditure. |
| – | Buildings – over a maximum of 50 years; and |
| – | Fixtures, fittings and equipment – to 25 years. |
| – | Short-term lease payments, payments for leases of low-value assets and variable lease payments that are not included in the measurement of the lease liabilities are presented within cash flows from operating activities; |
| – | Payments for the interest element of recognised lease liabilities are included in interest paid within cash flows from operating activities; and |
| – | Payments for the principal element of recognised lease liabilities are presented within cash flows from financing activities. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
20 3
|
|||||||||||
| – | Receipts from operating leases are presented within cash flows from operating activities; and |
| – | Receipts of principal from finance leases are presented within cash flows from investing activities. |
20 4
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Accounting policies |
||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
20 5
|
|||||||||||
| – | Financial assets and liabilities measured at FVTPL; |
| – | Financial assets measured at FVOCI; and |
| – | Derivative financial instruments. |
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. | |
| – | strength of technical argument, impact of case law and clarity of legislation; |
| – | professional advice; |
| – | experience of interactions, and precedents set, with the particular taxing authority; and |
| – | agreements previously reached in other jurisdictions on comparable issues. |
20 6
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Accounting policies |
||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
20 7
|
|||||||||||
| – | 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. |
| – | Cash flow hedge reserve: the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss; and |
| – | Cost of hedging reserve: the gain or loss which is excluded from the designated hedging instrument relating to the foreign currency basis spread of currency swaps. |
| – | In the case of goodwill and brands, the carrying value is recovered in less than five years under the Base Case forecasts and is not susceptible to medium-term risks. |
| – | In the case of the InterContinental Boston, for which the lease expires in 2105, the last impairment test performed indicated headroom above recoverable value of approximately 25% of the asset value before the asset would be impaired. |
| – | In the case of other hotel assets (within property, plant and equipment, right-of-use |
| – | In the case of contract assets, the term of the management agreement and the significant headroom of fee income over the asset carrying value. |
| – | In the case of trade deposits and loans, the short-term repayment period of these assets. |
| – | The period of coverage of performance guarantees and owner loan guarantees, together with caps on the Group’s exposure. |
| – | In the case of the recoverability of the UK deferred tax asset, the impact of the potential downside risk on the Group’s forecasts (see disclosure on page 221 ). |
20 8
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Accounting policies |
||||
| – | IAS 1 – Classification of Liabilities as Current or Non-Current; |
| – | IAS 1 – Non-current Liabilities with Covenants; |
| – | IFRS 16 – Lease Liability in a Sale and Leaseback; and |
| – | IAS 7 and IFRS 7 – Supplier Finance Arrangements. |
| – | IAS 21 – Lack of Exchangeability |
| – | IFRS 7 and 9 – Amendments to the Classification and Measurement of Financial Instruments; |
| – | IFRS 7 and 9 – Contracts referencing Nature-dependent Electricity; and |
| – | Amendments arising from the IASB’s Annual Improvements Volume 11. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
20 9
|
|||||||||||
2024 |
2023 | 2022 | ||||||||||||||||||||||||||||||||
| $1 equivalent | Average |
Closing |
Average | Closing | Average | Closing | ||||||||||||||||||||||||||||
| Sterling | £0.78 |
£0.80 |
£0.80 | £0.78 | £0.81 | £0.83 | ||||||||||||||||||||||||||||
| Euro | €0.92 |
€0.96 |
€ 0.92 |
€ 0.90 |
€ 0.95 |
€ 0.94 |
||||||||||||||||||||||||||||
2024 |
2023 |
2022 |
||||||||||||||||||
Year ended 31 December |
$m |
$m |
$m |
|||||||||||||||||
Americas |
1,141 |
1,105 |
1,005 |
|||||||||||||||||
EMEAA |
748 |
677 |
552 |
|||||||||||||||||
Greater China |
161 |
161 |
87 |
|||||||||||||||||
Central |
262 |
221 |
199 |
|||||||||||||||||
Revenue from reportable segments |
2,312 |
2,164 |
1,843 |
|||||||||||||||||
System Fund and reimbursable revenues |
2,611 |
2,460 |
2,049 |
|||||||||||||||||
Total revenue |
4,923 |
|
4,624 |
3,892 |
||||||||||||||||
2024 |
2023 | 2022 | ||||||||||||||||||
| Year ended 31 December | $m |
$m | $m | |||||||||||||||||
| Americas | 828 |
815 | 761 | |||||||||||||||||
| EMEAA | 270 |
215 | 152 | |||||||||||||||||
| Greater China | 98 |
96 | 23 | |||||||||||||||||
| Central | (72 |
) |
(107 | ) | (108 | ) | ||||||||||||||
Operating profit from reportable segments |
1,124 |
1,019 | 828 | |||||||||||||||||
| System Fund and reimbursable result | (83 |
) |
19 | (105 | ) | |||||||||||||||
| Operating exceptional items (note 6 ) |
– |
28 | (95 | ) | ||||||||||||||||
Operating profit |
1,041 |
1,066 | 628 | |||||||||||||||||
| Net financial expenses | (140 |
) |
(52 | ) | (96 | ) | ||||||||||||||
| Fair value (losses)/gains on contingent purchase consideration | (4 |
) |
(4 | ) | 8 | |||||||||||||||
Profit before tax |
897 |
1,010 | 540 | |||||||||||||||||
| Tax | (269 |
) |
(260 | ) | (164 | ) | ||||||||||||||
Profit for the year |
628 |
750 | 376 | |||||||||||||||||
2 1 0 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
Americas |
EMEAA |
Greater China |
Central |
Group |
||||||||||||||||||
Year ended 31 December 2024 |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||
Depreciation and amortisation a
|
24 |
12 |
3 |
26 |
65 |
|||||||||||||||||
Contract assets deduction in revenue |
24 |
18 |
1 |
– |
43 |
|||||||||||||||||
Equity-settled share-based payments cost |
10 |
5 |
3 |
19 |
37 |
|||||||||||||||||
Share of profit of associates and joint ventures |
(4 |
) |
(6 |
) |
– |
– |
(10 |
) |
||||||||||||||
Americas |
EMEAA |
Greater
China
|
Central |
Group |
||||||||||||||||||
Year ended 31 December 2023 |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||
Depreciation and amortisation a
|
24 |
12 |
4 |
27 |
67 |
|||||||||||||||||
Contract assets deduction in revenue |
21 |
15 |
1 |
– |
37 |
|||||||||||||||||
Equity-settled share-based payments cost |
9 |
4 |
2 |
16 |
31 |
|||||||||||||||||
Share of profit of associates and joint ventures (excluding exceptional items) |
(5 |
) |
(8 |
) |
– |
– |
(13 |
) |
||||||||||||||
Americas |
EMEAA |
Greater
China
|
Central |
Group |
||||||||||||||||||
Year ended 31 December 2022 |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||
Depreciation and amortisation a
|
23 |
13 |
4 |
28 |
68 |
|||||||||||||||||
Contract assets deduction in revenue |
18 |
13 |
1 |
– |
32 |
|||||||||||||||||
Equity-settled share-based payments cost |
8 |
4 |
2 |
14 |
28 |
|||||||||||||||||
Share of profit of associates (excluding exceptional items) |
(1 |
) |
– |
– |
– |
(1 |
) |
|||||||||||||||
| a. | Includes $16m (2023: $17m, 2022: $15m) relating to cost of sales in owned, leased and managed lease hotels and $49m (2023: $50m, 2022: $53m) relating to other assets. A further $80m (2023: $83m, 2022: $86m) was recorded within System Fund and reimbursable expenses. |
2024 |
2023 | 2022 | ||||||||||||||||||
| Year ended 31 December | $m |
$m | $m | |||||||||||||||||
Revenue |
||||||||||||||||||||
| United Kingdom | 291 |
263 | 243 | |||||||||||||||||
| United States | 1,902 |
1,777 | 1,659 | |||||||||||||||||
| Rest of World | 1,119 |
1,020 | 773 | |||||||||||||||||
3,312 |
3,060 | 2,675 | ||||||||||||||||||
| System Fund revenues (note 31 ) |
1,611 |
1,564 | 1,217 | |||||||||||||||||
4,923 |
4,624 | 3,892 | ||||||||||||||||||
2024 |
2023 |
|||||||||||
31 December |
$m |
$m |
||||||||||
Non-current assets |
||||||||||||
United Kingdom |
104 |
100 |
||||||||||
United States |
1,370 |
1,332 |
||||||||||
Rest of World |
778 |
660 |
||||||||||
2,252 |
2,092 |
|||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
2 11
|
|||||||||||
Americas |
EMEAA |
Greater China |
Central |
Group |
||||||||||||||||||
| Year ended 31 December 2024 | $m |
$m |
$m |
$m |
$m |
|||||||||||||||||
| Franchise and base management fees | 958 |
277 |
122 |
– |
1,357 |
|||||||||||||||||
| Incentive management fees | 21 |
118 |
39 |
– |
178 |
|||||||||||||||||
| Central revenue | – |
– |
– |
239 |
239 |
|||||||||||||||||
| Revenue from fee business | 979 |
395 |
161 |
239 |
1,774 |
|||||||||||||||||
| Revenue from owned, leased and managed lease hotels | 162 |
353 |
– |
– |
515 |
|||||||||||||||||
| Revenue from insurance activities | – |
– |
– |
23 |
23 |
|||||||||||||||||
1,141 |
748 |
161 |
262 |
2,312 |
||||||||||||||||||
| System Fund revenues (note 31 ) |
1,611 |
|||||||||||||||||||||
| Reimbursable revenues (note 31 ) |
1,000 |
|||||||||||||||||||||
Total revenue |
4,923 |
|||||||||||||||||||||
Americas |
EMEAA |
Greater
China
|
Central |
Group |
||||||||||||||||||
Year ended 31 December 2023 |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||
Franchise and base management fees |
936 |
253 |
115 |
– |
1,304 |
|||||||||||||||||
Incentive management fees |
21 |
101 |
46 |
– |
168 |
|||||||||||||||||
Central revenue |
– |
– |
– |
200 |
200 |
|||||||||||||||||
Revenue from fee business |
957 |
354 |
161 |
200 |
1,672 |
|||||||||||||||||
Revenue from owned, leased and managed lease hotels |
148 |
323 |
– |
– |
471 |
|||||||||||||||||
Revenue from insurance activities |
– |
– |
– |
21 |
21 |
|||||||||||||||||
1,105 |
677 |
161 |
221 |
2,164 |
||||||||||||||||||
|
System Fund revenues (note
31
)
|
1,564 |
|||||||||||||||||||||
|
Reimbursable revenues (note
31
)
|
896 |
|||||||||||||||||||||
Total revenue |
4,624 |
|||||||||||||||||||||
Americas |
EMEAA |
Greater
China
|
Central |
Group |
||||||||||||||||||
Year ended 31 December 2022 |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||
Franchise and base management fees |
861 |
215 |
71 |
– |
1,147 |
|||||||||||||||||
Incentive management fees |
18 |
69 |
16 |
– |
103 |
|||||||||||||||||
Central revenue |
– |
– |
– |
184 |
184 |
|||||||||||||||||
Revenue from fee business |
879 |
284 |
87 |
184 |
1,434 |
|||||||||||||||||
Revenue from owned, leased and managed lease hotels |
126 |
268 |
– |
– |
394 |
|||||||||||||||||
Revenue from insurance activities |
– |
– |
– |
15 |
15 |
|||||||||||||||||
1,005 |
552 |
87 |
199 |
1,843 |
||||||||||||||||||
|
System Fund revenues (note
31
)
|
1,217 |
|||||||||||||||||||||
|
Reimbursable revenues (note
31
)
|
832 |
|||||||||||||||||||||
Total revenue |
3,892 |
|||||||||||||||||||||
| 31 December |
2024 $m |
2023
$m
|
||||||||||
| Trade receivables (note 16)
|
651 |
580 | ||||||||||
| Contract assets | 650 |
459 | ||||||||||
| Deferred revenue | (2,060 |
) |
(1,848 | ) | ||||||||
21 2
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
2024 $m |
2023 $m |
|||||||||||
| At 1 January | 459 |
367 | ||||||||||
| Additions | 237 |
129 | ||||||||||
| Recognised as a deduction to revenue | (43 |
) |
(37 | ) | ||||||||
| Impairment reversals (note 6 ) |
3 |
– | ||||||||||
| Repayments | – |
(7 | ) | |||||||||
| Exchange and other adjustments | (6 |
) |
7 | |||||||||
At 31 December |
650 |
459 | ||||||||||
| Analysed as: | ||||||||||||
Current |
38 |
35 | ||||||||||
Non-current |
612 |
424 | ||||||||||
650 |
459 | |||||||||||
| Loyalty programme $m |
Other co-brand fees
$m |
Application & re-licensing fees
$m |
Other
$m
|
Total
$m
|
||||||||||||||||||
| At 1 January 2023 | 1,411 | 33 | 167 | 113 | 1,724 | |||||||||||||||||
| Increase in deferred revenue | 672 | – | 27 | 63 | 762 | |||||||||||||||||
| Recognised as revenue | (554 | ) | (11 | ) | (23 | ) | (48 | ) | (636 | ) | ||||||||||||
| Exchange and other adjustments | – | – | – | (2 | ) | (2 | ) | |||||||||||||||
| At 31 December 2023 | 1,529 | 22 | 171 | 126 | 1,848 | |||||||||||||||||
| Increase in deferred revenue | 726 |
97 |
23 |
61 |
907 |
|||||||||||||||||
| Recognised as revenue | (602 |
) |
(8 |
) |
(23 |
) |
(58 |
) |
(691 |
) |
||||||||||||
| Exchange and other adjustments | – |
– |
– |
(4 |
) |
(4 |
) |
|||||||||||||||
At 31 December 2024 |
1,653 |
111 |
171 |
125 |
2,060 |
|||||||||||||||||
| Analysed as: | ||||||||||||||||||||||
Current |
661 |
12 |
23 |
70 |
766 |
|||||||||||||||||
Non-current |
992 |
99 |
148 |
55 |
1,294 |
|||||||||||||||||
1,653 |
111 |
171 |
125 |
2,060 |
||||||||||||||||||
| At 31 December 2023 analysed as: | ||||||||||||||||||||||
Current |
649 | 11 | 22 | 70 | 752 | |||||||||||||||||
Non-current |
880 | 11 | 149 | 56 | 1,096 | |||||||||||||||||
| 1,529 | 22 | 171 | 126 | 1,848 | ||||||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
21 3
|
|||||||||||
2024 |
2023 |
|||||||||||||||||||||||||||||
Loyalty and co-brand
|
Other |
Total |
Loyalty and co-brand
|
Other |
Total |
|||||||||||||||||||||||||
$m |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||||||||||
Less than one year |
673 |
93 |
766 |
660 |
92 |
752 |
||||||||||||||||||||||||
Between one and two years |
355 |
43 |
398 |
346 |
43 |
389 |
||||||||||||||||||||||||
Between two and three years |
214 |
30 |
244 |
195 |
32 |
227 |
||||||||||||||||||||||||
Between three and four years |
140 |
24 |
164 |
118 |
24 |
142 |
||||||||||||||||||||||||
Between four and five years |
95 |
22 |
117 |
73 |
20 |
93 |
||||||||||||||||||||||||
More than five years |
287 |
84 |
371 |
159 |
86 |
245 |
||||||||||||||||||||||||
1,764 |
296 |
2,060 |
|
1,551 |
297 |
1,848 |
||||||||||||||||||||||||
2024 $m |
2023 $m |
|||||||||||
| At 1 January | 87 |
80 | ||||||||||
| Costs incurred | 18 |
15 | ||||||||||
| Charged to income statement | (8 |
) |
(8 | ) | ||||||||
| Exchange and other adjustments | (2 |
) |
– | |||||||||
At 31 December |
95 |
87 | ||||||||||
| Analysed as: | ||||||||||||
| Current |
5 |
5 | ||||||||||
| Non-current |
90 |
82 | ||||||||||
95 |
87 | |||||||||||
| Staff costs | 2024 $m |
2023 a
$m |
2022 a
$m |
|||||||||||||||||
| Wages and salaries | 1,890 |
1,752 | 1,558 | |||||||||||||||||
| Social security costs | 159 |
143 | 117 | |||||||||||||||||
| Share-based payment costs (note 27) |
67 |
56 | 46 | |||||||||||||||||
| Pension and other post-retirement benefits: | ||||||||||||||||||||
| Defined benefit plans |
7 |
4 | 2 | |||||||||||||||||
| Defined contribution plans |
62 |
58 | 53 | |||||||||||||||||
2,185 |
2,013 | 1,776 | ||||||||||||||||||
| Analysed as: | ||||||||||||||||||||
| Costs borne by IHG b |
800 |
747 | 646 | |||||||||||||||||
| Costs borne by the System Fund or reimbursed |
1,385 |
1,266 | 1,130 | |||||||||||||||||
2,185 |
2,013 | 1,776 | ||||||||||||||||||
| a. | Re-presented to separate share-based payment costs. |
|
b . |
In 2022, included $1m classified as exceptional relating to the costs of ceasing operations in Russia. |
21 4
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
Monthly average number of employees, including part-time employees |
2024 |
2023 |
2022 |
|||||||||||||||||
Employees whose costs are borne by IHG: |
||||||||||||||||||||
| Americas |
1,612 |
1,578 |
1,548 |
|||||||||||||||||
| EMEAA |
3,635 |
3,642 |
3,638 |
|||||||||||||||||
| Greater China |
357 |
352 |
333 |
|||||||||||||||||
| Central |
1,783 |
1,720 |
1,528 |
|||||||||||||||||
7,387 |
7,292 |
7,047 |
||||||||||||||||||
Employees whose costs are borne by the System Fund or are reimbursed |
20,752 |
20,306 |
18,833 |
|||||||||||||||||
28,139 |
27,598 |
25,880 |
||||||||||||||||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Base salaries, fees, annual performance payments and benefits | 6.9 |
6.9 | 7.9 | |||||||||||||||||
|
|
More detailed information on the remuneration including pensions, share awards and shareholdings for each Director is shown in the Directors’ Remuneration Report on pages 144 and 152. In addition, amounts received or receivable under long-term incentive schemes are shown on page 144. |
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Audit of the Financial Statements | 7 |
7 | 6 | |||||||||||||||||
| Audit of subsidiaries | 3 |
3 | 2 | |||||||||||||||||
| Other assurance services a
|
1 |
1 | 1 | |||||||||||||||||
11 |
11 | 9 | ||||||||||||||||||
| Under SEC regulations analysed as: | ||||||||||||||||||||
| Audit |
10 |
10 | 8 | |||||||||||||||||
| Other audit-related |
1 |
1 | 1 | |||||||||||||||||
11 |
11 | 9 | ||||||||||||||||||
| a. | Other assurance services consists of IT assurance and audit of System Fund financial information. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
21 5
|
|||||||||||
| Note | 2024 $m |
2023 $m |
2022 $m |
|||||||||||||||||||||||||
| Administrative expenses: | ||||||||||||||||||||||||||||
| Costs of ceasing operations in Russia |
(a | ) | – |
– | (12 | ) | ||||||||||||||||||||||
| Commercial litigation and disputes |
(b | ) | (12 |
) |
– | (28 | ) | |||||||||||||||||||||
(12 |
) |
– | (40 | ) | ||||||||||||||||||||||||
| Share of profits/(losses) of associate | (c | ) | – |
18 | (60 | ) | ||||||||||||||||||||||
| Other operating income | (d | ) | – |
10 | – | |||||||||||||||||||||||
| Impairment reversal on financial assets | (e | ) | 6 |
– | – | |||||||||||||||||||||||
| Other net impairment reversals/(charges): | ||||||||||||||||||||||||||||
| Management agreements |
– reversal | 11 | – |
– | 12 | |||||||||||||||||||||||
| Property, plant and equipment |
– charge | 12 | – |
– | (10 | ) | ||||||||||||||||||||||
| – reversal | 12 | 3 |
– | 3 | ||||||||||||||||||||||||
| Right-of-use |
– charge | 12 | – |
– | (2 | ) | ||||||||||||||||||||||
| – reversal | 13 | – |
– | 2 | ||||||||||||||||||||||||
| Associates |
– reversal | 14 | – |
– | 2 | |||||||||||||||||||||||
| Contract assets |
– charge | ( f
|
) | – |
– | (5 | ) | |||||||||||||||||||||
| – reversal | ( f
|
) | 3 |
– | 3 | |||||||||||||||||||||||
6 |
– | 5 | ||||||||||||||||||||||||||
Operating exceptional items |
– |
28 | (95 | ) | ||||||||||||||||||||||||
| Tax on exceptional items | ( g
|
) | – |
(7 | ) | 26 | ||||||||||||||||||||||
Tax |
– |
(7 | ) | 26 | ||||||||||||||||||||||||
| Operating exceptional items analysed as: | ||||||||||||||||||||||||||||
| Americas |
4 |
27 | (46 | ) | ||||||||||||||||||||||||
| EMEAA |
(4 |
) |
1 | (49 | ) | |||||||||||||||||||||||
– |
28 | (95 | ) | |||||||||||||||||||||||||
|
|
The above items are defined by management as exceptional as further described on page 201.
|
21 6
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
2024 |
2023 |
2022 |
||||||||||||||||||||||||||||||||
| Current tax $m |
Deferred tax $m |
Current tax $m |
Deferred tax $m |
Current tax $m |
Deferred tax $m |
|||||||||||||||||||||||||||||
Costs of ceasing operations in Russia |
– |
– |
– |
– |
3 |
– |
||||||||||||||||||||||||||||
Commercial litigation and disputes |
– |
2 |
– |
– |
8 |
(2 |
) | |||||||||||||||||||||||||||
Share of (profits)/losses of associate |
– |
– |
– |
(4 |
) |
15 |
– |
|||||||||||||||||||||||||||
Other operating income |
– |
– |
(3 |
) |
– |
– |
– |
|||||||||||||||||||||||||||
Impairment reversal on financial assets |
– |
(1 |
) |
– |
– |
– |
– |
|||||||||||||||||||||||||||
Other net impairment (reversals)/charges |
– |
(1 |
) |
– |
– |
1 |
(5 |
) | ||||||||||||||||||||||||||
Adjustments in respect of prior years a
|
– |
– |
– |
– |
6 |
– |
||||||||||||||||||||||||||||
– |
– |
(3 |
) |
(4 |
) |
33 |
(7 |
) | ||||||||||||||||||||||||||
Total current and deferred tax |
– |
(7 |
) |
26 |
||||||||||||||||||||||||||||||
| a. | In 2022, related to the release of tax contingencies no longer needed; one of these was as a result of the closure of a tax audit of the 2014 US federal income tax return. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
21 7
|
|||||||||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
Financial income |
||||||||||||||||||||
| Financial income on deposits and money market funds |
48 |
33 | 17 | |||||||||||||||||
| Interest income on loans and other assets | 15 |
6 | 5 | |||||||||||||||||
63 |
39 | 22 | ||||||||||||||||||
Financial expenses |
||||||||||||||||||||
| Interest expense on external borrowings | 131 |
85 | 92 | |||||||||||||||||
| Interest expense on lease liabilities | 30 |
29 | 29 | |||||||||||||||||
| Unwind of discount on deferred purchase consideration | – |
1 | – | |||||||||||||||||
| Foreign exchange losses/(gains) | 25 |
(35 | ) | (10 | ) | |||||||||||||||
| Other charges | 17 |
11 | 7 | |||||||||||||||||
203 |
91 | 118 | ||||||||||||||||||
|
|
Net interest payable as calculated for bank covenants can be found on page 238.
|
| United Kingdom | Other jurisdictions | Total | ||||||||||||||||||||||||||||||||||||||||||
2024 $m |
2023 $m |
2022 $m |
2024 $m |
2023 $m |
2022 $m |
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||||||||||||||||||||
Current tax |
||||||||||||||||||||||||||||||||||||||||||||
| Current period a
|
24 |
16 | 6 | 292 |
245 | 177 | 316 |
261 | 183 | |||||||||||||||||||||||||||||||||||
| Adjustments in respect of prior periods | – |
– | (2 | ) | – |
12 | (5 | ) | – |
12 | (7 | ) | ||||||||||||||||||||||||||||||||
24 |
16 | 4 | 292 |
257 | 172 | 316 |
273 | 176 | ||||||||||||||||||||||||||||||||||||
Deferred tax |
||||||||||||||||||||||||||||||||||||||||||||
| Origination and reversal of temporary differences | 11 |
1 | (1 | ) | (56 |
) |
(21 | ) | (6 | ) | (45 |
) |
(20 | ) | (7 | ) | ||||||||||||||||||||||||||||
| Changes in tax rates and tax laws | – |
– | – | – |
2 | – | – |
2 | – | |||||||||||||||||||||||||||||||||||
| Adjustments to unprovided or unrecognised deferred tax b
|
– |
– | (2 | ) | – |
5 | – | – |
5 | (2 | ) | |||||||||||||||||||||||||||||||||
| Adjustments in respect of prior periods | (2 |
) |
1 | 2 | – |
(1 | ) | (5 | ) | (2 |
) |
– | (3 | ) | ||||||||||||||||||||||||||||||
9 |
2 | (1 | ) | (56 |
) |
(15 | ) | (11 | ) | (47 |
) |
(13 | ) | (12 | ) | |||||||||||||||||||||||||||||
Income tax charge for the year c
|
33 |
18 | 3 | 236 |
242 | 161 | 269 |
260 | 164 | |||||||||||||||||||||||||||||||||||
| a. | Includes $2m (2023: $nil, 2022: $nil) in respect of taxes arising under the Pillar Two framework. |
| b. | Represent ed a reassessment of the recovery of deferred taxes in line with the Group’s profit forecasts. |
| c. | ‘Other jurisdictions’ includes $169m (2023: $172m, 2022: $134m) in respect of US taxes. |
21 8
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
2024 % |
2023 % |
2022 % |
||||||||||||||||||
| Tax at UK blended rate | 25.0 |
23.5 | 19.0 | |||||||||||||||||
| Tax credits | (0.6 |
) |
(0.5 | ) | (0.1 | ) | ||||||||||||||
| System Fund a
|
1.2 |
(1.3 | ) | 3.1 | ||||||||||||||||
| Foreign exchange losses/(
gains
)
|
1.0 |
(1.0 | ) | (0.9 | ) | |||||||||||||||
| Other permanent differences b
|
(0.5 |
) |
0.9 | 0.5 | ||||||||||||||||
|
Non-recoverable foreign taxes |
2.4 |
1.3 | 3.5 | |||||||||||||||||
| Net effect of different rates of tax c
|
1.5 |
1.5 | 6.3 | |||||||||||||||||
| Effects of substantive enactment of UAE tax rates and laws d
|
– |
(0.9 | ) | – | ||||||||||||||||
| Effect of changes in other tax rates and laws | – |
0.2 | 0.1 | |||||||||||||||||
| Items on which deferred tax arose but where no deferred tax is recognised e
|
0.2 |
0.2 | 1.2 | |||||||||||||||||
| Effect of adjustments to unprovided or unrecognised deferred taxes f
|
– |
0.5 | (0.4 | ) | ||||||||||||||||
| Adjustment to tax charge in respect of prior periods g
|
(0.2 |
) |
1.3 | (1.9 | ) | |||||||||||||||
30.0 |
25.7 | 30.4 | ||||||||||||||||||
| a. | The System Fund is, in general, not subject to taxation. |
| b. | Includes (1.0) %pts %pts %pts |
| c. | Includes 1.2 %pts %pts %pts |
| d. | During 2023, law implementing a new corporate income tax regime was substantively enacted in the UAE. This resulted in the recognition of a deferred tax asset of $9m in the UAE. Absent further law change, this benefit is not likely to reoccur. |
| e. | Predominantly in respect of losses arising in the year. |
| f. | Adjustments relating to estimated recoverable deferred tax assets. In 2023, also included 0.7 %pts |
| g. | Relates to the finalisation of tax returns, activity from tax authorities such as tax audits and the reassessment of provisions for uncertain tax positions. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
219 |
|||||||||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
China a
|
11 |
5 |
10 |
|||||||||||||||||
Singapore a
|
7 |
4 |
1 |
|||||||||||||||||
United Kingdom |
10 |
8 |
3 |
|||||||||||||||||
United States |
220 |
171 |
165 |
|||||||||||||||||
Other jurisdictions |
23 |
18 |
10 |
|||||||||||||||||
271 |
206 |
189 |
||||||||||||||||||
Taxes withheld at source |
38 |
37 |
22 |
|||||||||||||||||
Tax paid per cash flow |
309 |
243 |
211 |
|||||||||||||||||
| a. | Tax payments are typically based upon the previous year’s profits. |
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
Current tax charge in the Group income statement |
316 |
273 |
176 |
|||||||||||||||||
Current tax credit in the Group statement of comprehensive income |
(3 |
) |
(6 |
) |
(2 |
) |
||||||||||||||
Current tax credit taken directly to equity |
(6 |
) |
(5 |
) |
– |
|||||||||||||||
Total current tax charge |
307 |
262 |
174 |
|||||||||||||||||
Movements to tax contingencies a
|
(4 |
) |
(2 |
) |
10 |
|||||||||||||||
Timing differences of cash tax paid and foreign exchange differences |
6 |
(17 |
) |
27 |
||||||||||||||||
Tax paid per cash flow |
309 |
243 |
211 |
|||||||||||||||||
| a. | Tax contingency movements are included within the current tax charge but do not impact cash tax paid in the year. Settlements of tax contingencies are included within cash tax paid in the year but not recorded in the current year tax charge. |
2 20
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
| |
Property, plant, equipment and software |
Application fees |
|
Deferred gains on loan notes |
c |
Associates |
Losses |
d |
|
Deferred compensation and employee benefits a
|
Deferred revenue a,b
|
Research and development a
|
|
Intangible assets excluding software |
|
Other short-term temporary differences |
a,e |
Total |
||||||||||||||||||||||||||||
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
$m |
||||||||||||||||||||||||||||||||||||
| At 1 January 2023 | (53 | ) | 41 | (34 | ) | (59 | ) | 79 | 84 | – | 8 | (40 | ) | 22 | 48 | |||||||||||||||||||||||||||||||
| Group income statement | 22 | 1 | – | (1 | ) | – | 4 | – | 7 | (9 | ) | (11 | ) | 13 | ||||||||||||||||||||||||||||||||
| Group statement of comprehensive income | – | – | – | – | (6 | ) | – | – | – | – | (5 | ) | (11 | ) | ||||||||||||||||||||||||||||||||
| Group statement of changes in equity | – | – | – | – | – | 6 | – | – | – | – | 6 | |||||||||||||||||||||||||||||||||||
| Exchange and other adjustments | 1 | – | – | – | 3 | 1 | – | – | 3 | 2 | 10 | |||||||||||||||||||||||||||||||||||
| At 31 December 2023 | (30 | ) | 42 | (34 | ) | (60 | ) | 76 | 95 | – | 15 | (46 | ) | 8 | 66 | |||||||||||||||||||||||||||||||
| Group income statement | 21 |
– |
– |
1 |
(7 |
) |
9 |
30 |
18 |
(14 |
) |
(11 |
) |
47 |
||||||||||||||||||||||||||||||||
| Group statement of comprehensive income | – |
– |
– |
– |
(3 |
) |
– |
– |
– |
– |
(13 |
) |
(16 |
) |
||||||||||||||||||||||||||||||||
| Group statement of changes in equity | – |
– |
– |
– |
– |
9 |
– |
– |
– |
– |
9 |
|||||||||||||||||||||||||||||||||||
| Exchange and other adjustments | – |
– |
– |
– |
(1 |
) |
– |
– |
– |
– |
(1 |
) |
(2 |
) |
||||||||||||||||||||||||||||||||
At 31 December 2024 |
(9 |
) |
42 |
(34 |
) |
(59 |
) |
65 |
113 |
30 |
33 |
(60 |
) |
(17 |
) |
104 |
||||||||||||||||||||||||||||||
| a. | The above table has been re-presented in order to separately disclose the deferred tax on ‘Deferred revenue’ and ‘Research and development’ (both previously disclosed in ‘Other short-term temporary differences’), to aggregate deferred tax on ‘Deferred compensation’ with ‘Employee benefits’ (previously both disclosed separately), and to present deferred tax on ‘Expected credit losses on trade receivables’ within ‘Other short-term temporary differences’ (previously disclosed separately). |
| b. | The movements in 2024 and the closing balance arise as a result of the revised agreement with the IHG Owners Association (see note 3) and deferred revenue in respect of co-branding agreements. |
| c. | Becomes due in 2025 unless prevailing law at that time allows further deferral. |
| d. | Wholly in respect of revenue losses. |
| e. | Primarily in respect of contract costs, right-of-use |
2024 $m |
2023 $m |
|||||||||||
Deferred tax assets |
122 |
134 |
||||||||||
Deferred tax liabilities |
(18 |
) |
(68 |
) |
||||||||
104 |
66 |
|||||||||||
Analysed as: |
||||||||||||
United Arab Emirates |
12 |
9 |
||||||||||
United Kingdom |
99 |
113 |
||||||||||
United States |
– |
(53 |
) |
|||||||||
Other |
(7 |
) |
(3 |
) |
||||||||
104 |
66 |
|||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
2 21
|
|||||||||||
Gross |
Unrecognised deferred tax |
|||||||||||||||||||||
2024 $m |
2023 $m |
2024 $m |
2023 $m |
|||||||||||||||||||
Revenue losses |
432 |
450 |
75 |
79 |
||||||||||||||||||
Capital losses |
580 |
580 |
146 |
146 |
||||||||||||||||||
1,012 |
1,030 |
221 |
225 |
|||||||||||||||||||
Tax credits |
46 |
32 |
46 |
32 |
||||||||||||||||||
Other a
|
22 |
16 |
7 |
5 |
||||||||||||||||||
1,080 |
1,078 |
274 |
262 |
|||||||||||||||||||
| a. | Primarily relates to costs incurred for which tax relief has not been obtained. |
Gross |
Unrecognised deferred tax |
|||||||||||||||||||||
Expiry date |
2024 $m |
2023
$m
|
2024 $m |
2023
$m
|
||||||||||||||||||
2024 |
– |
6 |
– |
1 |
||||||||||||||||||
2025 |
11 |
11 |
2 |
2 |
||||||||||||||||||
2026 |
7 |
7 |
1 |
1 |
||||||||||||||||||
2027 |
7 |
7 |
1 |
1 |
||||||||||||||||||
2028 |
– |
6 |
– |
1 |
||||||||||||||||||
2029 |
10 |
10 |
10 |
10 |
||||||||||||||||||
After 2031 |
36 |
22 |
36 |
22 |
||||||||||||||||||
22 2
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
2024 |
2023 | 2022 | ||||||||||||||||||||||||||||||||
| Paid during the year | cents per share |
$m |
cents per share |
$m | cents per share |
$m | ||||||||||||||||||||||||||||
| Final (declared for previous year) | 104.0 |
172 |
94.5 | 166 | 85.9 | 154 | ||||||||||||||||||||||||||||
| Interim | 53.2 |
87 |
48.3 | 79 | 43.9 | 79 | ||||||||||||||||||||||||||||
157.2 |
259 |
142.8 | 245 | 129.8 | 233 | |||||||||||||||||||||||||||||
| Basic earnings per ordinary share | 2024 |
2023 | 2022 | |||||||||||||||||
| Profit available for equity holders ($m) | 628 |
750 | 375 | |||||||||||||||||
| Basic weighted average number of ordinary shares (millions) | 161.2 |
169.0 | 181.0 | |||||||||||||||||
Basic earnings per ordinary share (cents) |
389.6 |
443.8 | 207.2 | |||||||||||||||||
Diluted earnings per ordinary share |
||||||||||||||||||||
| Profit available for equity holders ($m) | 628 |
750 | 375 | |||||||||||||||||
| Diluted weighted average number of ordinary shares (millions) | 163.0 |
170.0 | 182.0 | |||||||||||||||||
Diluted earnings per ordinary share (cents) |
385.3 |
441.2 | 206.0 | |||||||||||||||||
| Basic and diluted share denominators are calculated as follows: | ||||||||||||||||||||
|
2024 millions |
2023
millions
|
2022
millions
|
||||||||||||||||||
| Weighted average number of ordinary shares in issue | 168.6 |
177.0 | 187.0 | |||||||||||||||||
| Weighted average number of treasury shares a
|
(7.4 |
) |
(8.0 | ) | (6.0 | ) |
||||||||||||||
Basic weighted average number of ordinary shares |
161.2 |
169.0 | 181.0 | |||||||||||||||||
| Dilutive potential ordinary shares | 1.8 |
1.0 | 1.0 | |||||||||||||||||
Diluted weighted average number of ordinary shares |
163.0 |
170.0 | 182.0 | |||||||||||||||||
| a. | Includes other shares that do not receive dividends. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
22 3
|
|||||||||||
|
Goodwill
$m
|
Brands
$m
|
Software
$m
|
Management
agreements
$m
|
Other
intangibles
$m
|
Total
$m
|
|||||||||||||||||||||
Cost |
||||||||||||||||||||||||||
| At 1 January 2023 | 513 | 439 | 825 | 122 | 26 | 1,925 | ||||||||||||||||||||
| Additions | – | – | 52 | – | 1 | 53 | ||||||||||||||||||||
| Fully amortised assets written off | – | – | (52 | ) | – | (3 | ) | (55 | ) | |||||||||||||||||
| Disposals | – | – | (1 | ) | – | – | (1 | ) | ||||||||||||||||||
| Exchange and other adjustments | 3 | – | 1 | – | – | 4 | ||||||||||||||||||||
| At 31 December 2023 | 516 | 439 | 825 | 122 | 24 | 1,926 | ||||||||||||||||||||
| Additions | – |
– |
48 |
– |
1 |
49 |
||||||||||||||||||||
| Fully amortised assets written off | – |
– |
(49 |
) |
– |
(1 |
) |
(50 |
) |
|||||||||||||||||
| Disposals | – |
– |
(4 |
) |
– |
– |
(4 |
) |
||||||||||||||||||
| Exchange and other adjustments | (5 |
) |
– |
– |
– |
– |
(5 |
) |
||||||||||||||||||
At 31 December 2024 |
511 |
439 |
820 |
122 |
24 |
1,916 |
||||||||||||||||||||
Amortisation and impairment |
||||||||||||||||||||||||||
| At 1 January 2023 | (178 | ) | – | (486 | ) | (101 | ) | (16 | ) | (781 | ) | |||||||||||||||
| Provided | – | – | (18 | ) | (1 | ) | (2 | ) | (21 | ) | ||||||||||||||||
| System Fund expense | – | – | (76 | ) | – | (1 | ) | (77 | ) | |||||||||||||||||
| Fully amortised assets written off | – | – | 52 | – | 3 | 55 | ||||||||||||||||||||
| Disposals | – | – | 1 | – | – | 1 | ||||||||||||||||||||
| Exchange and other adjustments | (2 | ) | – | (1 | ) | (1 | ) | – | (4 | ) | ||||||||||||||||
At 31 December 2023 |
(180 | ) | – | (528 | ) | (103 | ) | (16 | ) | (827 | ) | |||||||||||||||
| Provided | – |
– |
(17 |
) |
(1 |
) |
(1 |
) |
(19 |
) |
||||||||||||||||
| System Fund expense | – |
– |
(77 |
) |
– |
(1 |
) |
(78 |
) |
|||||||||||||||||
| Impairment charge | – |
– |
(2 |
) |
– |
– |
(2 |
) |
||||||||||||||||||
| System Fund impairment charge | – |
– |
(3 |
) |
– |
– |
(3 |
) |
||||||||||||||||||
| Fully amortised assets written off | – |
– |
49 |
– |
1 |
50 |
||||||||||||||||||||
| Disposals | – |
– |
4 |
– |
– |
4 |
||||||||||||||||||||
| Exchange and other adjustments | – |
– |
1 |
– |
– |
1 |
||||||||||||||||||||
At 31 December 2024 |
(180 |
) |
– |
(573 |
) |
(104 |
) |
(17 |
) |
(874 |
) |
|||||||||||||||
Net book value |
||||||||||||||||||||||||||
At 31 December 2024 |
331 |
439 |
247 |
18 |
7 |
1,042 |
||||||||||||||||||||
| At 31 December 2023 | 336 | 439 | 297 | 19 | 8 | 1,099 | ||||||||||||||||||||
| At 1 January 2023 | 335 | 439 | 339 | 21 | 10 | 1,144 | ||||||||||||||||||||
22 4
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
|
At 1 January
2023
$m
|
Exchange
adjustments
$m
|
At 31 December
2023
$m
|
Exchange adjustments $m |
At 31 December 2024 $m |
Analysed as: |
|||||||||||||||||||||||||||
|
Goodwill $m |
Brands $m |
|||||||||||||||||||||||||||||||
| Americas (group of CGUs) | 419 | – | 419 | – |
419 |
132 |
287 |
|||||||||||||||||||||||||
| EMEAA (group of CGUs) | 331 | 1 | 332 | (5 |
) |
327 |
191 |
136 |
||||||||||||||||||||||||
| Greater China | 24 | – | 24 | – |
24 |
8 |
16 |
|||||||||||||||||||||||||
| 774 | 1 | 775 | (5 |
) |
770 |
331 |
439 |
|||||||||||||||||||||||||
2024 |
2023 |
|||||||||||||||||||
|
Terminal growth rate % |
Pre-tax
discount rate % |
Terminal
growth rate
%
|
Pre-tax
discount rate %
|
|||||||||||||||||
Americas |
2.1 |
11.6 |
1.6 |
13.0 |
||||||||||||||||
EMEAA |
2.5 |
13.6 |
2.4 |
15.1 |
||||||||||||||||
Greater China |
2.5 |
10.5 |
2.5 |
12.1 |
||||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
22 5
|
|||||||||||
|
Land and
buildings $m
|
Fixtures,
fittings and equipment $m
|
Total
$m
|
||||||||||||
Cost |
||||||||||||||
| At 1 January 2023 | 112 | 292 | 404 | |||||||||||
| Additions | 1 | 20 | 21 | |||||||||||
| Fully depreciated assets written off | – | (15 | ) | (15 | ) | |||||||||
| Disposals | (2 | ) | (3 | ) | (5 | ) | ||||||||
| Exchange and other adjustments | – | 6 | 6 | |||||||||||
| At 31 December 2023 | 111 | 300 | 411 | |||||||||||
| Additions | – |
27 |
27 |
|||||||||||
| Fully depreciated assets written off | (3 |
) |
(27 |
) |
(30 |
) |
||||||||
| Disposals | (8 |
) |
(8 |
) |
(16 |
) |
||||||||
| Exchange and other adjustments | (1 |
) |
(4 |
) |
(5 |
) |
||||||||
At 31 December 2024 |
99 |
288 |
387 |
|||||||||||
Depreciation and impairment |
||||||||||||||
| At 1 January 2023 | (51 | ) | (196 | ) | (247 | ) | ||||||||
| Provided | (6 | ) | (18 | ) | (24 | ) | ||||||||
| System Fund expense | – | (4 | ) | (4 | ) | |||||||||
| Fully depreciated assets written off | – | 15 | 15 | |||||||||||
| Disposals | 2 | 3 | 5 | |||||||||||
| Exchange and other adjustments | 1 | (4 | ) | (3 | ) | |||||||||
| At 31 December 2023 | (54 | ) | (204 | ) | (258 | ) | ||||||||
| Provided | (3 |
) |
(21 |
) |
(24 |
) |
||||||||
| System Fund expense | – |
(4 |
) |
(4 |
) |
|||||||||
| Impairment reversal | – |
3 |
3 |
|||||||||||
| Fully depreciated assets written off | 3 |
27 |
30 |
|||||||||||
| Disposals | – |
8 |
8 |
|||||||||||
| Exchange and other adjustments | 1 |
3 |
4 |
|||||||||||
At 31 December 2024 |
(53 |
) |
(188 |
) |
(241 |
) |
||||||||
Net book value |
||||||||||||||
At 31 December 2024 |
46 |
100 |
146 |
|||||||||||
| At 31 December 2023 | 57 | 96 | 153 | |||||||||||
| At 1 January 2023 | 61 | 96 | 157 | |||||||||||
22 6
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
|
Land and
buildings $m
|
Investment
property
$m
|
Other
$m
|
Total
$m
|
|||||||||||||||
Cost |
||||||||||||||||||
| At 1 January 2023 | 571 | 50 | 2 | 623 | ||||||||||||||
| Additions and other re-measurements
|
15 | – | 2 | 17 | ||||||||||||||
| Transfers to investment property | (2 | ) | 2 | – | – | |||||||||||||
| Terminations | (51 | ) | – | (1 | ) | (52 | ) | |||||||||||
| Exchange and other adjustments | 1 | – | – | 1 | ||||||||||||||
| At 31 December 2023 | 534 | 52 | 3 | 589 | ||||||||||||||
| Additions and other re-measurements
|
28 |
– |
5 |
33 |
||||||||||||||
| Transfers to finance lease receivable | (13 |
) |
(14 |
) |
(4 |
) |
(31 |
) |
||||||||||
| Terminations | (11 |
) |
– |
(1 |
) |
(12 |
) |
|||||||||||
| Exchange and other adjustments | (5 |
) |
– |
– |
(5 |
) |
||||||||||||
At 31 December 2024 |
533 |
38 |
3 |
574 |
||||||||||||||
Depreciation and impairment |
||||||||||||||||||
| At 1 January 2023 | (294 | ) | (47 | ) | (2 | ) | (343 | ) | ||||||||||
| Provided | (22 | ) | – | – | (22 | ) | ||||||||||||
| System Fund expense | (2 | ) | – | – | (2 | ) | ||||||||||||
| Transfers to investment property | 2 | (2 | ) | – | – | |||||||||||||
| Terminations | 51 | – | 1 | 52 | ||||||||||||||
| Exchange and other adjustments | (1 | ) | – | – | (1 | ) | ||||||||||||
| At 31 December 2023 | (266 | ) | (49 | ) | (1 | ) | (316 | ) | ||||||||||
| Provided | (21 |
) |
– |
(1 |
) |
(22 |
) |
|||||||||||
| System Fund expense | 2 |
– |
– |
2 |
||||||||||||||
| Transfers to finance lease receivable | 8 |
13 |
– |
21 |
||||||||||||||
| Terminations | 11 |
– |
1 |
12 |
||||||||||||||
| Exchange and other adjustments | 5 |
– |
– |
5 |
||||||||||||||
At 31 December 2024 |
(261 |
) |
(36 |
) |
(1 |
) |
(298 |
) |
||||||||||
Net book value |
||||||||||||||||||
At 31 December 2024 |
272 |
2 |
2 |
276 |
||||||||||||||
| At 31 December 2023 | 268 | 3 | 2 | 273 | ||||||||||||||
| At 1 January 2023 | 277 | 3 | – | 280 | ||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
22 7
|
|||||||||||
2024 |
2023 |
|||||||||||
Currency |
$m |
$m |
||||||||||
US dollars |
357 |
357 |
||||||||||
Sterling |
31 |
32 |
||||||||||
Euros |
3 |
4 |
||||||||||
Other |
23 |
33 |
||||||||||
414 |
426 |
|||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
Analysed as: |
||||||||||||
| Current |
26 |
30 |
||||||||||
| Non-current |
388 |
396 |
||||||||||
414 |
426 |
| ||||||||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Depreciation of right-of-use |
22 |
22 | 25 | |||||||||||||||||
| System Fund depreciation of right-of-use |
(2 |
) |
2 | 3 | ||||||||||||||||
| Expense relating to variable lease payments | 77 |
62 | 47 | |||||||||||||||||
| Expense relating to short-term leases and low-value assets |
1 |
2 | 1 | |||||||||||||||||
| Income from operating subleases | (3 |
) |
(2 | ) | (1 | ) | ||||||||||||||
Recognised in operating profit |
95 |
86 | 75 | |||||||||||||||||
| Interest on lease liabilities | 30 |
29 | 29 | |||||||||||||||||
Total recognised in the Group income statement |
125 |
115 | 104 | |||||||||||||||||
22 8
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
| 2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Operating activities | 108 |
92 | 72 | |||||||||||||||||
| Investing activities | (4 |
) |
– | (6 | ) | |||||||||||||||
| Financing activities | 46 |
28 | 36 | |||||||||||||||||
Net cash paid |
150 |
120 | 102 | |||||||||||||||||
2024 $m |
2023 $m |
|||||||||||
Cost |
||||||||||||
| At 1 January | 101 |
89 | ||||||||||
Additions |
6 |
3 | ||||||||||
| Share of profits a
|
10 |
13 | ||||||||||
| System Fund share of losses | (2 |
) |
(3 | ) | ||||||||
| Dividends and distributions | (7 |
) |
(1 | ) | ||||||||
At 31 December |
108 |
101 | ||||||||||
Impairment |
||||||||||||
| At 1 January | (53 |
) |
(53 | ) | ||||||||
| Impairment charge | (4 |
) |
– | |||||||||
At 31 December |
(57 |
) |
(53 | ) | ||||||||
Net book value |
51 |
48 | ||||||||||
| Analysed as: | ||||||||||||
| Barclay associate |
7 |
3 | ||||||||||
| Other associates |
39 |
43 | ||||||||||
| Joint ventures |
5 |
2 | ||||||||||
51 |
48 | |||||||||||
| a. | In 2023 and 2022, the total share of profits/(losses) from associates and joint ventures in the Group income statement included $18m gain and $18m loss, respectively, due to the liability recognised in 2022 and its subsequent reversal (see note 6 ). In 2022, $42m was included within exceptional items in addition to the $18m. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
22 9
|
|||||||||||
2024 $m |
2023 $m |
|||||||||||
Non-current assets |
449 |
462 |
||||||||||
Current assets |
112 |
86 |
||||||||||
Current liabilities |
(21 |
) |
(23 |
) | ||||||||
Non-current liabilities |
(236 |
) |
(256 |
) | ||||||||
Net assets |
304 |
269 |
||||||||||
Group’s share of reported net assets at 19.9% |
60 |
53 |
||||||||||
Adjustments to reflect impairment, capitalised costs and additional rights and obligations under the shareholder agreement |
(11 |
) |
(8 |
) | ||||||||
|
Effect of specially allocated expenses (note
6
)
|
(42 |
) |
(42 |
) | ||||||||
Carrying amount |
7 |
3 |
||||||||||
| 2024 $m |
2023 $m |
|||||||||||
Revenue |
130 |
131 |
||||||||||
Profit from continuing operations and total comprehensive income for the year |
15 |
15 |
||||||||||
Group’s share of profit for the year a
|
4 |
3 |
||||||||||
| a. | Includes specially allocated expenses and the cost of funding owner returns. |
2024 $m |
|
2023 $m |
||||||||||
| Equity securities | 97 |
102 | ||||||||||
| Restricted funds: | ||||||||||||
| Ring-fenced amounts to satisfy insurance claims: |
||||||||||||
| Cash |
1 |
2 | ||||||||||
| Money market funds |
10 |
14 | ||||||||||
| A ccounts pledged as security |
31 |
32 | ||||||||||
| Other |
1 |
2 | ||||||||||
43 |
50 | |||||||||||
| Trade deposits and loans | 79 |
40 | ||||||||||
219 |
192 | |||||||||||
| Analysed as: | ||||||||||||
| Current |
7 |
7 | ||||||||||
| Non-current |
212 |
185 | ||||||||||
219 |
192 | |||||||||||
2 30
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
2024 |
2023 |
|||||||||||||||||||||
Fair value |
Dividend income |
Fair value |
Dividend income |
|||||||||||||||||||
$m |
$m |
$m |
$m |
|||||||||||||||||||
Investment in entity which owns: |
||||||||||||||||||||||
| InterContinental The Willard Washington DC |
27 |
1 |
27 |
1 |
||||||||||||||||||
| InterContinental Grand Stanford Hong Kong |
36 |
– |
37 |
– |
||||||||||||||||||
| 2024 $m |
2023 $m |
|||||||||||
Current |
||||||||||||
| Trade receivables | 651 |
580 | ||||||||||
| Other receivables | 41 |
68 | ||||||||||
| Prepayments | 93 |
92 | ||||||||||
785 |
740 | |||||||||||
Non-current |
||||||||||||
| Finance lease receivables | 12 |
6 | ||||||||||
| Other receivables | 5 |
3 | ||||||||||
| Prepayments | 18 |
4 | ||||||||||
35 |
13 | |||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
2 31
|
|||||||||||
2024 |
2023 |
|||||||||||||||||||||||||||||
Gross $m |
Credit loss allowance $m |
Net $m |
Gross $m |
Credit loss
allowance $m
|
Net
$m
|
|||||||||||||||||||||||||
Not past due |
384 |
– |
384 |
354 |
(1 |
) |
353 |
|||||||||||||||||||||||
Past due 1 to 30 days |
90 |
(4 |
) |
86 |
88 |
(5 |
) |
83 |
||||||||||||||||||||||
Past due 31 to 90 days |
80 |
(5 |
) |
75 |
69 |
(6 |
) |
63 |
||||||||||||||||||||||
Past due 91 to 180 days |
53 |
(8 |
) |
45 |
51 |
(8 |
) |
43 |
||||||||||||||||||||||
Past due 181 to 360 days |
66 |
(19 |
) |
47 |
38 |
(11 |
) |
27 |
||||||||||||||||||||||
Past due more than 361 days |
98 |
(84 |
) |
14 |
86 |
(75 |
) |
11 |
||||||||||||||||||||||
771 |
(120 |
) |
651 |
|
686 |
(106 |
) |
580 |
||||||||||||||||||||||
Movement in the allowance for expected credit losses |
2024 $m |
2023 $m |
||||||||||
At 1 January |
(106 |
) |
(117 |
) |
||||||||
Impairment (loss)/reversal |
(16 |
) |
1 |
|||||||||
System Fund impairment loss |
(9 |
) |
– |
|||||||||
Amounts written off |
8 |
9 |
||||||||||
Exchange and other adjustments |
3 |
1 |
||||||||||
At 31 December |
(120 |
) |
(106 |
) |
||||||||
|
2024 $m |
2023
$m
|
|||||||||||
| Cash at bank and in hand | 142 |
179 | ||||||||||
| Short-term deposits | 411 |
632 | ||||||||||
| Money market funds | 415 |
375 | ||||||||||
| Repurchase agreements | 40 |
136 | ||||||||||
Cash and cash equivalents as recorded in the Group statement of financial position |
1,008 |
1,322 | ||||||||||
| Bank overdrafts | (17 |
) |
(44 | ) | ||||||||
Cash and cash equivalents as recorded in the Group statement of cash flows |
991 |
1,278 | ||||||||||
23 2
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
|
2024 $m |
2023
$m
|
|||||||||||
| Countries with restrictions on repatriation | 2 |
30 | ||||||||||
| Capital expenditure under lease agreements | 15 |
14 | ||||||||||
| Other restrictions | 5 |
12 | ||||||||||
22 |
56 | |||||||||||
|
2024 $m |
2023 $m |
|||||||||||
Current |
||||||||||||
| Trade payables | 111 |
127 | ||||||||||
| Other tax and social security payables | 61 |
47 | ||||||||||
| Other payables | 116 |
135 | ||||||||||
| Deferred purchase consideration | – |
13 | ||||||||||
| Accruals | 362 |
389 | ||||||||||
650 |
711 | |||||||||||
Non-current |
||||||||||||
| Other payables | 5 |
6 | ||||||||||
| Contingent purchase consideration (note 24 ) |
73 |
69 | ||||||||||
78 |
75 | |||||||||||
|
Commercial
litigation and disputes $m
|
Self
insurance reserves $m
|
Dilapidations
and other $m
|
Total $m |
|||||||||||||||
| At 31 December 2023 | 7 | 14 | 15 | 36 | ||||||||||||||
| Provided | 10 |
4 |
4 |
18 |
||||||||||||||
| Utilised | – |
(9 |
) |
– |
(9 |
) |
||||||||||||
| Released | (3 |
) |
– |
(2 |
) |
(5 |
) |
|||||||||||
| Exchange and other adjustments | – |
– |
(1 |
) |
(1 |
) |
||||||||||||
At 31 December 2024 |
14 |
9 |
16 |
39 |
||||||||||||||
| Analysed as: | ||||||||||||||||||
Current |
13 |
3 |
6 |
22 |
||||||||||||||
Non-current |
1 |
6 |
10 |
17 |
||||||||||||||
14 |
9 |
16 |
39 |
|||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
23 3
|
|||||||||||
2024 $m |
2023 $m |
|||||||||||
| At 1 January | 37 |
32 | ||||||||||
| Insurance expenses | 28 |
21 | ||||||||||
| Claims and other amounts paid | (23 |
) |
(15 | ) | ||||||||
| Impact of discounting and other changes | (3 |
) |
(1 | ) | ||||||||
At 31 December |
39 |
37 | ||||||||||
| Analysed as: | ||||||||||||
| Current |
14 |
12 | ||||||||||
| Non-current |
25 |
25 | ||||||||||
39 |
37 | |||||||||||
| Incurred but not reported claims a
|
18 |
20 | ||||||||||
| Reported but not settled claims | 21 |
17 | ||||||||||
39 |
37 | |||||||||||
| a. | Includes unallocated loss expenses. |
2024 $m |
2023 $m |
|||||||||||
Revenue from insurance activities |
23 |
21 |
||||||||||
Insurance expenses (inclusive of overhead costs) |
(29 |
) |
(23 |
) | ||||||||
Insurance result |
(6 |
) |
(2 |
) | ||||||||
23 4
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
| Maturity date |
Discount at issue % |
2024 $m |
2023 $m |
|||||||||||||
Current |
||||||||||||||||
| Bank overdrafts (note 17 ) |
n/a | n/a | 17 |
44 | ||||||||||||
|
€ 500m 1.625% bonds 2024 |
8 October 2024 | 0.437 | – |
555 | ||||||||||||
| £300m 3.75% bonds 2025 | 14 August 2025 | 0.986 | 381 |
– | ||||||||||||
398 |
599 | |||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current |
||||||||||||||||
| £300m 3.75% bonds 2025 | 14 August 2025 | 0.986 | – |
387 | ||||||||||||
| £350m 2.125% bonds 2026 | 24 August 2026 | 0.550 | 441 |
449 | ||||||||||||
|
€ 500m 2.125% bonds 2027 |
15 May 2027 | 0.470 | 526 |
559 | ||||||||||||
| £400m 3.375% bonds 2028 | 8 October 2028 | 1.034 | 502 |
509 | ||||||||||||
|
€ 600m 4.375% bonds 2029 |
28 November 2029 | 0.098 | 623 |
663 | ||||||||||||
|
€ 750m 3.625% bonds 2031 |
27 September 2031 | 0.116 | 784 |
– | ||||||||||||
2,876 |
2,567 | |||||||||||||||
Total loans and other borrowings |
3,274 |
3,166 | ||||||||||||||
| Denominated in the following currencies: | ||||||||||||||||
| Sterling |
1,324 |
1,345 | ||||||||||||||
| US dollars |
16 |
44 | ||||||||||||||
| Euros |
1,933 |
1,777 | ||||||||||||||
| Other |
1 |
– | ||||||||||||||
3,274 |
|
|
3,166 | |||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
23 5
|
|||||||||||
|
2024 $m |
2023
$m
|
|||||||||||||
| Cash and cash equivalents | 1,008 |
1,322 | ||||||||||||
| Loans and other borrowings | – current | (398 |
) |
(599 | ) | |||||||||
| – non-current
|
(2,876 |
) |
(2,567 | ) | ||||||||||
| Lease liabilities | – current | (26 |
) |
(30 | ) | |||||||||
| – non-current
|
(388 |
) |
(396 | ) | ||||||||||
| Principal amounts payable on maturity of derivative financial instruments (note 23 ) |
(102 |
) |
(2 | ) | ||||||||||
Net debt |
(2,782 |
) |
(2,272 | ) | ||||||||||
Movement in net debt |
2024 $m |
2023
$m
|
||||||||||
Net (decrease)/increase in cash and cash equivalents, net of overdrafts |
(269 |
) |
339 |
|||||||||
Add back financing cash flows in respect of other components of net debt: |
||||||||||||
Principal element of lease payments |
46 |
28 |
||||||||||
Issue of long-term bonds |
(834 |
) |
(657 |
) |
||||||||
Repayment of long-term bonds |
547 |
– |
||||||||||
Settlement of currency swaps |
45 |
– |
||||||||||
(196 |
) |
(629 |
) |
|||||||||
Increase in net debt arising from cash flows |
(465 |
) |
(290 |
) |
||||||||
Other movements: |
||||||||||||
Lease liabilities |
(36 |
) |
(25 |
) |
||||||||
Increase in accrued interest |
(6 |
) |
(2 |
) |
||||||||
Exchange and other adjustments |
(3 |
) |
(104 |
) |
||||||||
(45 |
) |
(131 |
) |
|||||||||
Increase in net debt |
(510 |
) |
(421 |
) |
||||||||
Net debt at beginning of the year |
(2,272 |
) |
(1,851 |
) |
||||||||
Net debt at end of the year |
(2,782 |
) |
(2,272 |
) |
||||||||
|
|
Net debt as calculated for bank covenants can be found on page 238.
|
236 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
|
|
At 1 January 2024 $m |
|
|
Financing cash flows $m |
|
|
Exchange adjustments $m |
|
Other $m |
a,b |
|
At 31 December 2024 $m |
|
|||||||||
Lease liabilities |
426 |
(46 |
) |
(2 |
) |
36 |
414 |
|||||||||||||||
Bonds |
3,122 |
287 |
(157 |
) |
5 |
3,257 |
||||||||||||||||
3,548 |
241 |
(159 |
) |
41 |
3,671 |
|||||||||||||||||
Currency swaps |
20 |
(45 |
) |
– |
103 |
78 |
||||||||||||||||
Currency forwards |
(15 |
) |
– |
– |
11 |
(4 |
) |
|||||||||||||||
3,553 |
196 |
(159 |
) |
155 |
3,745 |
|||||||||||||||||
|
|
At 1 January 2023 $m |
|
|
Financing cash flows $m |
|
|
Exchange adjustments $m |
|
Other $m |
a,b |
|
At 31 December 2023 $m |
|
|||||||||
Lease liabilities |
427 |
(28 |
) |
2 |
25 |
426 |
||||||||||||||||
Bonds |
2,341 |
657 |
123 |
1 |
3,122 |
|||||||||||||||||
2,768 |
629 |
125 |
26 |
3,548 |
||||||||||||||||||
Currency swaps |
4 |
– |
– |
16 |
20 |
|||||||||||||||||
Currency forwards |
– |
– |
– |
(15 |
) |
(15 |
) |
|||||||||||||||
2,772 |
629 |
125 |
27 |
3,553 |
||||||||||||||||||
| a. | The non-cash increase in lease liabilities principally arises from additions and other re-measurements. |
| b. | The change in value of currency swaps represents fair value movements and additions. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
237 |
|||||||||||
Derivatives |
2024 $m |
2023
$m
|
||||||||||
Currency swaps |
(78 |
) |
(20 |
) |
||||||||
Currency forwards |
4 |
15 |
||||||||||
(74 |
) |
(5 |
) |
|||||||||
Analysed as: |
||||||||||||
Non-current assets |
4 |
20 |
||||||||||
Current liabilities |
– |
(25 |
) |
|||||||||
Non-current liabilities |
(78 |
) |
– |
|||||||||
(74 |
) |
(5 |
) |
|||||||||
Date of designation |
Hedge
type
|
Pay
leg
|
Interest
rate
|
Receive
leg
|
Interest
rate
|
Maturity |
Risk |
Hedged item |
||||||||||
November 2018 |
Cash flow |
£436m |
3.5% |
€ 500m |
2.125% |
May 2027 |
Foreign exchange |
€500m 2.125% bonds 2027 | ||||||||||
October 2020 |
Cash flow |
£454m |
2.7% |
€ 500m |
1.625% |
October 2024 |
Foreign exchange |
€500m 1.625% bonds 2024 | ||||||||||
November 2023 |
Cash flow |
$657m |
6.0% |
€ 600m |
4.375% |
November 2029 |
Foreign exchange |
€600m 4.375% bonds 2029 | ||||||||||
September 2024 |
Cash flow |
$834m |
4.9% |
€ 750m |
3.625% |
September 2031 |
Foreign exchange |
€750m 3.625% bonds 2031 | ||||||||||
October 2023 |
Net investment |
$425m |
n/a |
£344m |
n/a |
October 2028 |
Spot foreign exchange |
Net assets of specified subsidiaries with US dollar foreign currency |
||||||||||
23 8 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||||||||
(Decrease)/increase in profit before tax |
||||||||||||||||||||||||||
Sterling: US dollar exchange rate |
$0.05 fall |
(38 |
) |
(14 |
) |
(3 |
) |
|||||||||||||||||||
Euro: US dollar exchange rate |
$0.05 fall |
(7 |
) |
(3 |
) |
– |
||||||||||||||||||||
US dollar interest rates |
1% increase |
4 |
2 |
4 |
||||||||||||||||||||||
Sterling interest rates |
1% increase |
3 |
9 |
4 |
||||||||||||||||||||||
Decrease/(increase) in net liabilities |
||||||||||||||||||||||||||
Sterling: US dollar exchange rate |
$0.05 fall |
3 |
(12 |
) |
27 |
|||||||||||||||||||||
Euro: US dollar exchange rate |
$0.05 fall |
25 |
49 |
50 |
||||||||||||||||||||||
Sterling: euro exchange rate |
€ 0.05 fall |
31 |
64 |
60 |
||||||||||||||||||||||
31 December 2024 |
a |
|||||
Covenant test levels for RCF |
||||||
Leverage |
< 4.0x
|
|||||
Interest cover |
>3.5x |
|||||
2024 |
2023 |
2022 |
||||||||||||||||||
Covenant measures |
||||||||||||||||||||
Covenant EBITDA ($m) |
1,195 |
1,086 |
896 |
|||||||||||||||||
Covenant net debt ($m) |
2,804 |
2,328 |
1,898 |
|||||||||||||||||
Covenant interest payable ($m) |
123 |
88 |
109 |
|||||||||||||||||
Leverage |
2.35 |
2.14 |
2.12 |
|||||||||||||||||
Interest cover |
9.72 |
12.34 |
8.22 |
|||||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
23 9 |
|||||||||||
|
Less than 1 year |
Between 1 and 2 years |
Between 2 and 5 years |
More than 5 years |
Total |
||||||||||||||||||
31 December 2024 |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||
Non-derivative financial liabilities: |
||||||||||||||||||||||
Bank overdrafts |
17 |
– |
– |
– |
17 |
|||||||||||||||||
Bonds |
482 |
531 |
1,859 |
837 |
3,709 |
|||||||||||||||||
Lease liabilities |
52 |
50 |
139 |
3,125 |
3,366 |
|||||||||||||||||
Trade and other payables (excluding deferred and contingent purchase consideration) |
589 |
1 |
1 |
3 |
594 |
|||||||||||||||||
Contingent purchase consideration |
– |
39 |
42 |
– |
81 |
|||||||||||||||||
Financial guarantee contracts |
31 |
– |
– |
– |
31 |
|||||||||||||||||
Derivative financial instruments: |
||||||||||||||||||||||
Currency swaps hedging bonds inflows |
(66 |
) |
(66 |
) |
(1,324 |
) |
(837 |
) |
(2,293 |
) |
||||||||||||
Currency swaps hedging bonds outflows |
101 |
100 |
1,457 |
916 |
2,574 |
|||||||||||||||||
Forward currency contract inflows |
– |
– |
(431 |
) |
– |
(431 |
) |
|||||||||||||||
Forward currency contract outflows |
– |
– |
425 |
– |
425 |
|||||||||||||||||
|
Less than
1 year
|
Between
1 and 2
years
|
Between
2 and 5
years
|
More than
5 years
|
Total |
||||||||||||||||||
31 December 2023 |
$m |
$m |
$m |
$m |
$m |
|||||||||||||||||
Non-derivative financial liabilities: |
||||||||||||||||||||||
Bank overdrafts |
44 |
– |
– |
– |
44 |
|||||||||||||||||
Bonds |
644 |
464 |
1,681 |
694 |
3,483 |
|||||||||||||||||
Lease liabilities |
57 |
52 |
130 |
3,164 |
3,403 |
|||||||||||||||||
Trade and other payables (excluding deferred and contingent purchase consideration) |
651 |
1 |
3 |
2 |
657 |
|||||||||||||||||
Deferred and contingent purchase consideration |
13 |
– |
81 |
– |
94 |
|||||||||||||||||
Financial guarantee contracts |
50 |
– |
– |
– |
50 |
|||||||||||||||||
Derivative financial instruments: |
||||||||||||||||||||||
Currency swaps hedging bonds inflows |
(604 |
) |
(41 |
) |
(664 |
) |
(694 |
) |
(2,003 |
) |
||||||||||||
Currency swaps hedging bonds outflows |
653 |
59 |
704 |
696 |
2,112 |
|||||||||||||||||
Forward currency contract inflows |
– |
– |
(438 |
) |
– |
(438 |
) |
|||||||||||||||
Forward currency contract outflows |
– |
– |
425 |
– |
425 |
|||||||||||||||||
240 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
31 December 2024 |
AAA $m |
AA+ $m |
AA $m |
AA- $m |
A+ $m |
A $m |
A- $m |
BBB+ and below $m |
Total $m |
|||||||||||||||||||||||||||||
Short-term deposits |
– |
– |
– |
41 |
107 |
249 |
– |
14 |
411 |
|||||||||||||||||||||||||||||
Money market funds |
415 |
– |
– |
– |
– |
– |
– |
– |
415 |
|||||||||||||||||||||||||||||
Repurchase agreement collateral |
26 |
9 |
2 |
3 |
– |
– |
– |
– |
40 |
|||||||||||||||||||||||||||||
31 December 2023 |
AAA
$m
|
AA+
$m
|
AA
$m
|
AA-
$m
|
A+
$m
|
A
$m
|
A-
$m
|
BBB+ and
below
$m
|
Total
$m
|
|||||||||||||||||||||||||||||
Short-term deposits |
– |
– |
– |
129 |
147 |
258 |
77 |
21 |
632 |
|||||||||||||||||||||||||||||
Money market funds |
375 |
– |
– |
– |
– |
– |
– |
– |
375 |
|||||||||||||||||||||||||||||
Repurchase agreement collateral |
110 |
6 |
– |
20 |
– |
– |
– |
– |
136 |
|||||||||||||||||||||||||||||
2024 |
2023 |
|||||||||||||||||||||||||||||||||||||||
|
Hierarchy
of fair value
measurement
|
|
Fair value $m |
a |
|
Amortised cost $m |
|
|
Not categorised as a financial instrument $m |
|
|
Total $m |
|
|
Fair
value $m |
a |
|
Amortised
cost $m |
|
|
Not
categorised as a financial instrument $m |
|
|
Total
$m |
|
||||||||||||||||
Financial assets |
||||||||||||||||||||||||||||||||||||||||
Other financial assets |
1,3 b
|
169 |
50 |
– |
219 |
124 |
68 |
– |
192 |
|||||||||||||||||||||||||||||||
Cash and cash equivalents |
1 |
415 |
593 |
– |
1,008 |
375 |
947 |
– |
1,322 |
|||||||||||||||||||||||||||||||
Derivative financial instruments |
2 |
4 |
– |
– |
4 |
20 |
– |
– |
20 |
|||||||||||||||||||||||||||||||
Deferred compensation plan investments |
1 |
286 |
– |
– |
286 |
250 |
– |
– |
250 |
|||||||||||||||||||||||||||||||
Trade and other receivables |
– |
– |
697 |
123 |
820 |
– |
651 |
102 |
753 |
|||||||||||||||||||||||||||||||
Financial liabilities |
||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments |
2 |
(78 |
) |
– |
– |
(78 |
) |
(25 |
) |
– |
– |
(25 |
) |
|||||||||||||||||||||||||||
Deferred compensation plan liabilities |
1 |
(286 |
) |
– |
– |
(286 |
) |
(250 |
) |
– |
– |
(250 |
) |
|||||||||||||||||||||||||||
Loans and other borrowings |
– |
– |
(3,274 |
) |
– |
(3,274 |
) |
– |
(3,166 |
) |
– |
(3,166 |
) |
|||||||||||||||||||||||||||
Trade and other payables |
3 |
(73 |
) |
(594 |
) |
(61 |
) |
(728 |
) |
(69 |
) |
(670 |
) |
(47 |
) |
(786 |
) |
|||||||||||||||||||||||
| a. | With the exception of equity securities of $89m (2023: $87m) measured at fair value through other comprehensive income, all are measured at fair value through profit or loss. Of those, the financial assets related to the deferred compensation plan investments were designated as such upon initial recognition. |
| b. | Of those measured at fair value, $43m (2023: $14m) are Level 1 and $126m (2023: $110m) are Level 3. |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
241 |
|||||||||||
2024 |
2023 |
|||||||||||||||||||||||||
Hierarchy of fair value |
Carrying value |
Fair value |
Carrying value |
Fair value |
||||||||||||||||||||||
measurement |
$m |
$m |
$m |
$m |
||||||||||||||||||||||
€ 500m 1.625% bonds 2024 |
1 |
– |
– |
555 |
545 |
|||||||||||||||||||||
£300m 3.75% bonds 2025 |
1 |
381 |
373 |
387 |
373 |
|||||||||||||||||||||
£350m 2.125% bonds 2026 |
1 |
441 |
418 |
449 |
416 |
|||||||||||||||||||||
€ 500m 2.125% bonds 2027 |
1 |
526 |
513 |
559 |
535 |
|||||||||||||||||||||
£400m 3.375% bonds 2028 |
1 |
502 |
471 |
509 |
476 |
|||||||||||||||||||||
€ 600m 4.375% bonds 2029 |
1 |
623 |
658 |
663 |
689 |
|||||||||||||||||||||
€ 750m 3.625% bonds 2031 |
1 |
784 |
786 |
– |
– |
|||||||||||||||||||||
24 2
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
|
Other
financial
assets
$m
|
Other
payables
$m
|
Contingent
purchase
consideration
$m
|
||||||||||||
| At 1 January 2023 | 103 | (18 | ) | (65 | ) | |||||||||
| Valuation losses recognised in other comprehensive income | (2 | ) | – | – | ||||||||||
| Additions | 8 | – | – | |||||||||||
| Unrealised changes in fair value a
|
– | 18 | (4 | ) | ||||||||||
| Exchange and other adjustments | 1 | – | – | |||||||||||
| At 31 December 2023 | 110 | – | (69 | ) | ||||||||||
| Additions | 20 |
– |
– |
|||||||||||
| Unrealised changes in fair value | – |
– |
(4 |
) |
||||||||||
| Repayments and disposals | (4 |
) |
– |
– |
||||||||||
At 31 December 2024 |
126 |
– |
(73 |
) |
||||||||||
| a. | The change in the fair value of other payables was recognised within share of profits/(losses) from associates and joint ventures in the Group income statement and was presented as an exceptional item (see note 6). |
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
24 3
|
|||||||||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
Profit for the year |
628 |
750 | 376 | |||||||||||||||||
| Adjustments for: | ||||||||||||||||||||
| Net financial expenses | 140 |
52 | 96 | |||||||||||||||||
| Fair value losses/(gains) on contingent purchase consideration | 4 |
4 | (8 | ) | ||||||||||||||||
| Income tax charge | 269 |
260 | 164 | |||||||||||||||||
| Operating profit adjustments: | ||||||||||||||||||||
| Impairment loss/ (reversal) on financial assets |
10 |
(1 | ) | 5 | ||||||||||||||||
| Other net impairment (reversals)/charges |
– |
– | (5 | ) | ||||||||||||||||
| Other operating exceptional items |
12 |
(28 | ) | 100 | ||||||||||||||||
| Depreciation and amortisation |
65 |
67 | 68 | |||||||||||||||||
87 |
38 | 168 | ||||||||||||||||||
| Contract assets deduction in revenue |
43 |
37 | 32 | |||||||||||||||||
| Share-based payments cost |
44 |
36 | 30 | |||||||||||||||||
| Share of profits of associates and joint ventures (before exceptional items) |
(10 |
) |
(13 | ) | (1 | ) | ||||||||||||||
77 |
60 | 61 | ||||||||||||||||||
| System Fund adjustments: | ||||||||||||||||||||
| Depreciation and amortisation |
80 |
83 | 86 | |||||||||||||||||
| Impairment loss on financial assets |
9 |
– | 7 | |||||||||||||||||
| Other impairment charges |
3 |
– | – | |||||||||||||||||
| Share-based payments cost |
23 |
20 | 16 | |||||||||||||||||
| Share of losses of associates |
2 |
3 | 1 | |||||||||||||||||
117 |
106 | 110 | ||||||||||||||||||
| Working capital and other adjustments: | ||||||||||||||||||||
| Increase in deferred revenue |
214 |
123 | 108 | |||||||||||||||||
| Increase in trade and other receivables |
(106 |
) |
(70 | ) | (132 | ) | ||||||||||||||
| (Decrease)/increase in trade and other payables |
(45 |
) |
31 | 121 | ||||||||||||||||
| Other adjustments |
(7 |
) |
(5 | ) | 4 | |||||||||||||||
56 |
79 | 101 | ||||||||||||||||||
| Cash flows relating to exceptional items | 8 |
(29 | ) | (43 | ) | |||||||||||||||
| Contract acquisition costs, net of repayments | (237 |
) |
(101 | ) | (64 | ) | ||||||||||||||
Total adjustments |
521 |
469 | 585 | |||||||||||||||||
Cash flow from operations |
1,149 |
1,219 | 961 | |||||||||||||||||
24 4
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
24 5
|
|||||||||||
|
2024 $m |
2023
$m
|
2022
$m
|
||||||||||||||||||
| At 1 January | 66 |
66 | 92 | |||||||||||||||||
Recognised in profit or loss |
||||||||||||||||||||
| Interest expense | 5 |
3 | 2 | |||||||||||||||||
5 |
3 | 2 | ||||||||||||||||||
Recognised in other comprehensive income |
||||||||||||||||||||
| Actuarial (gain)/ loss arising from changes in: |
||||||||||||||||||||
Demographic assumptions |
– |
(1 | ) | (1 | ) | |||||||||||||||
Financial assumptions |
(3 |
) |
2 | (22 | ) | |||||||||||||||
Experience adjustments |
(1 |
) |
1 | 2 | ||||||||||||||||
|
Re-measurement (gain)/ loss |
(4 |
) |
2 | (21 | ) | |||||||||||||||
| Exchange and other adjustments | 7 |
– | (2 | ) | ||||||||||||||||
3 |
2 | (23 | ) | |||||||||||||||||
Other |
||||||||||||||||||||
| Group contributions | (6 |
) |
(5 | ) | (5 | ) | ||||||||||||||
(6 |
) |
(5 | ) | (5 | ) | |||||||||||||||
At 31 December |
68 |
66 | 66 | |||||||||||||||||
| Comprising: | ||||||||||||||||||||
UK plan |
17 |
19 | 18 | |||||||||||||||||
US plans |
31 |
34 | 35 | |||||||||||||||||
US post-retirement plan |
13 |
13 | 13 | |||||||||||||||||
Other post-employment benefit plans |
7 |
– | – | |||||||||||||||||
68 |
66 | 66 | ||||||||||||||||||
|
2024 % |
2023
%
|
2022
%
|
||||||||||||||||||
UK plan only: |
||||||||||||||||||||
Pension increases |
3.2 |
3.1 |
3.2 |
|||||||||||||||||
Inflation rate |
3.2 |
3.1 |
3.2 |
|||||||||||||||||
Discount rate: |
||||||||||||||||||||
UK plan |
5.6 |
4.8 |
5.0 |
|||||||||||||||||
US plans |
5.3 |
4.7 |
4.9 |
|||||||||||||||||
US post-retirement plan |
5.3 |
4.7 |
4.9 |
|||||||||||||||||
US healthcare cost trend rate assumed for the next year: |
||||||||||||||||||||
Pre-65 (ultimate rate reached in 2035 ) |
8.6 |
7.8 |
6.9 |
|||||||||||||||||
Post-65 (ultimate rate reached in 2035 ) |
9.7 |
8.6 |
7.3 |
|||||||||||||||||
Ultimate rate that the cost rate trends to |
4.5 |
4.5 |
4.5 |
|||||||||||||||||
24 6
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
UK |
US |
|||||||||||||||||||||||||||||||
|
2024 years |
2023
years
|
2022
years
|
2024 years |
2023
years
|
2022
years
|
|||||||||||||||||||||||||||
Current pensioners at 65 a – male |
23 |
23 |
24 |
22 |
22 |
22 |
||||||||||||||||||||||||||
– female |
25 |
25 |
26 |
23 |
23 |
23 |
||||||||||||||||||||||||||
Future pensioners at 65 b – male |
23 |
23 |
25 |
23 |
23 |
23 |
||||||||||||||||||||||||||
– female |
25 |
25 |
27 |
25 |
25 |
25 |
||||||||||||||||||||||||||
| a. | Relates to assumptions based on longevity following retirement at the end of the reporting period. |
| b. | Relates to assumptions based on longevity relating to an employee retiring in 2044 . |
|
2024 $m |
2023
$m
|
|||||||||||||
Discount rate |
1% decrease |
5 |
6 |
|||||||||||
1% increase |
(5 |
) |
(6 |
) |
||||||||||
Inflation rate |
0.25% decrease |
(1 |
) |
(1 |
) |
|||||||||
0.25% increase |
– |
1 |
||||||||||||
Mortality rate |
One-year increase |
2 |
3 |
|||||||||||
Healthcare costs trend rate |
1% decrease |
(1 |
) |
(1 |
) |
|||||||||
1% increase |
1 |
1 |
||||||||||||
|
2024 $m |
2023
$m
|
|||||||||||||
| Within one year | 5 |
5 | ||||||||||||
| Between one and five years | 20 |
21 | ||||||||||||
| More than five years | 81 |
86 | ||||||||||||
106 |
112 | |||||||||||||
|
2024 years |
2023
years
|
|||||||||||||
| UK plan | 12.0 |
13.0 | ||||||||||||
| US plans | 7.1 |
7.5 | ||||||||||||
| US post-retirement plan | 7.4 |
8.0 | ||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
24 7
|
|||||||||||
|
|
More detailed information on the performance measures for awards to Executive Directors is shown in the Directors’ Remuneration Report on pages 144 to 149. |
| 2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
Equity-settled |
||||||||||||||||||||
| Operating profit before System Fund, reimbursables and exceptional items | 37 |
31 | 28 | |||||||||||||||||
| System Fund | 23 |
20 | 16 | |||||||||||||||||
60 |
51 | 44 | ||||||||||||||||||
Cash-settled |
||||||||||||||||||||
| Operating profit before System Fund, reimbursables and exceptional items | 7 |
5 | 2 | |||||||||||||||||
67 |
56 | 46 | ||||||||||||||||||
24 8
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
APP |
LTIP |
|||||||||||||||||||||||||||||||||||||||||||
Binomial valuation model |
Monte Carlo Simulation, Binomial and Finnerty valuation models |
|||||||||||||||||||||||||||||||||||||||||||
Option pricing models and assumptions |
2024 |
2023 |
2022 |
2024 |
2023 |
2022 |
||||||||||||||||||||||||||||||||||||||
Weighted average share price (pence) |
8,481.8 |
5,571.7 |
5,018.3 |
7,940.0 |
5,318.0 |
4,875.0 |
||||||||||||||||||||||||||||||||||||||
Expected dividend yield |
2.12% |
2.52% to 2.77% |
2.29% to 2.67% |
|||||||||||||||||||||||||||||||||||||||||
Risk-free interest rate |
4.20% |
3.85% |
1.29% |
|||||||||||||||||||||||||||||||||||||||||
Volatility a
|
26% |
29% to 30% |
35% to 45% |
|||||||||||||||||||||||||||||||||||||||||
Term (years) |
2.2 |
2.3 |
1.7 |
3.0 |
3.0 |
3.0 |
||||||||||||||||||||||||||||||||||||||
| a. | 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. |
APP/DAP |
LTIP/DAP |
|||||||||||||||||||
Number of share awards (thousands) |
Deferred shares/ one-off awards |
Performance-related
awards/LTI |
Restricted stock units |
|||||||||||||||||
Outstanding at 1 January 2022 |
348 |
872 |
1,350 |
|||||||||||||||||
Granted |
236 |
323 |
706 |
|||||||||||||||||
Vested |
(254 |
) |
(23 |
) |
(391 |
) | ||||||||||||||
Lapsed or cancelled |
(9 |
) |
(239 |
) |
(90 |
) | ||||||||||||||
Outstanding at 31 December 2022 |
321 |
933 |
1,575 |
|||||||||||||||||
Granted |
214 |
329 |
683 |
|||||||||||||||||
Vested |
(186 |
) |
(180 |
) |
(533 |
) | ||||||||||||||
Lapsed or cancelled |
(17 |
) |
(246 |
) |
(63 |
) | ||||||||||||||
Outstanding at 31 December 2023 |
332 |
836 |
1,662 |
|||||||||||||||||
Granted |
104 |
279 |
495 |
|||||||||||||||||
Vested |
(44 |
) |
(136 |
) |
(402 |
) | ||||||||||||||
Lapsed or cancelled |
(6 |
) |
(148 |
) |
(106 |
) | ||||||||||||||
Outstanding at 31 December 2024 |
386 |
831 |
1,649 |
|||||||||||||||||
Fair value of awards granted during the year (cents) |
||||||||||||||||||||
2024 |
10,837.6 |
5,812.6 |
10,302.3 |
|||||||||||||||||
2023 |
6,926.4 |
3,169.7 |
6,351.0 |
|||||||||||||||||
2022 |
6,180.2 |
3,770.0 |
5,656.4 |
|||||||||||||||||
Weighted average remaining contract life (years) |
||||||||||||||||||||
At 31 December 2024 |
0.9 |
1.1 |
1.1 |
|||||||||||||||||
At 31 December 2023 |
1.5 |
1.3 |
1.3 |
|||||||||||||||||
At 31 December 2022 |
1.0 |
1.1 |
1.2 |
|||||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
24 9
|
|||||||||||
| Allotted, called up and fully paid | Number of shares millions |
Nominal value $m |
Share premium $m |
Equity share capital $m |
||||||||||||||||||||||||
| At 1 January 2022 (ordinary shares of 20 340 /399 p each) |
187 | 53 | 101 | 154 | ||||||||||||||||||||||||
| Repurchased and cancelled under share repurchase programme | (4 | ) | (1 | ) | – | (1 | ) | |||||||||||||||||||||
| Exchange adjustments | – | (6 | ) | (10 | ) | (16 | ) | |||||||||||||||||||||
| At 31 December 2022 (ordinary shares of 20 340 /399 p each) |
183 | 46 | 91 | 137 | ||||||||||||||||||||||||
| Repurchased and cancelled under share repurchase programme | (11 | ) | (3 | ) | – | (3 | ) | |||||||||||||||||||||
| Exchange adjustments | – | 3 | 4 | 7 | ||||||||||||||||||||||||
| At 31 December 2023 (ordinary shares of 20 340 /399 p each) |
172 | 46 | 95 | 141 | ||||||||||||||||||||||||
| Repurchased and cancelled under share repurchase programme | (7 |
) |
(2 |
) |
– |
(2 |
) |
|||||||||||||||||||||
| Exchange adjustments | – |
(1 |
) |
(1 |
) |
(2 |
) |
|||||||||||||||||||||
At 31 December 2024 (ordinary shares of 20 340 /399 p each) |
165 |
43 |
94 |
137 |
||||||||||||||||||||||||
| Number of shares millions |
Carrying value $m |
Market value $m |
||||||||||||||||||
31 December 2024 |
1.2 |
63.0 |
144.9 |
|||||||||||||||||
| 31 December 2023 | 0.8 | 35.0 | 73.6 | |||||||||||||||||
| 31 December 2022 | 1.1 | 37.0 | 62.8 | |||||||||||||||||
2 50
|
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
|
Number of
shares millions
|
Nominal
value $m
|
|||||||||||
| At 1 January 2022 | 3.7 | 1.0 | ||||||||||
| Transferred to employee share trusts | (0.7 | ) | (0.2 | ) | ||||||||
| Repurchased under share repurchase programme | 4.5 | 1.1 | ||||||||||
| At 31 December 2022 | 7.5 | 1.9 | ||||||||||
| Transferred to employee share trusts | (0.5 | ) | (0.1 | ) | ||||||||
| Exchange adjustments | – | 0.1 | ||||||||||
| At 31 December 2023 | 7.0 | 1.9 | ||||||||||
| Transferred to employee share trusts | (0.8 |
) |
(0.2 |
) |
||||||||
| Exchange adjustments | – |
(0.1 |
) |
|||||||||
At 31 December 2024 |
6.2 |
1.6 |
||||||||||
|
Cash flow
hedge reserve $m
|
Cost of
hedging reserve $m
|
Total $m |
||||||||||||||||||
| At 1 January 2022 | 16 | (11 | ) | 5 | ||||||||||||||||
| Costs of hedging deferred and recognised in other comprehensive income | – | 3 | 3 | |||||||||||||||||
| Change in fair value of currency swaps recognised in other comprehensive income | 33 | – | 33 | |||||||||||||||||
| Reclassified from other comprehensive income to profit or loss – included in financial expenses | (43 | ) | – | (43 | ) | |||||||||||||||
| Deferred tax | 2 | – | 2 | |||||||||||||||||
| At 31 December 2022 | 8 | (8 | ) | – | ||||||||||||||||
| Change in fair value of currency swaps recognised in other comprehensive income | (30 | ) | – | (30 | ) | |||||||||||||||
| Reclassified from other comprehensive income to profit or loss – included in financial expenses | 28 | – | 28 | |||||||||||||||||
| At 31 December 2023 | 6 | (8 | ) | (2 | ) | |||||||||||||||
| Costs of hedging deferred and recognised in other comprehensive income | – |
(11 |
) |
(11 |
) |
|||||||||||||||
| Change in fair value of currency swaps recognised in other comprehensive income | (113 |
) |
– |
(113 |
) |
|||||||||||||||
| Reclassified from other comprehensive income to profit or loss – included in financial expenses | 165 |
– |
165 |
|||||||||||||||||
Deferred tax |
(11 |
) |
– |
(11 |
) |
|||||||||||||||
At 31 December 2024 |
47 |
(19 |
) |
28 |
||||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
251 |
|||||||||||
| Total compensation | 2024 $m |
2023 $m |
2022 $m |
|||||||||||||||||
| Short-term employment benefits | 20.1 |
18.6 | 18.7 | |||||||||||||||||
| Contributions to defined contribution pension plans | 0.4 |
0.5 | 0.5 | |||||||||||||||||
| Equity compensation benefits a
|
16.4 |
15.8 | 13.4 | |||||||||||||||||
36.9 |
34.9 | 32.6 | ||||||||||||||||||
| a. | As measured in accordance with IFRS 2 ‘Share-based Payment’. |
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Fee revenue | 12 |
11 | 9 | |||||||||||||||||
| Amounts receivable (net) | 41 |
19 | 10 | |||||||||||||||||
| Amounts payable | – |
(10 | ) | – | ||||||||||||||||
25 2 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| System Fund revenues | 1,611 |
1,564 | 1,217 | |||||||||||||||||
| Reimbursable revenues | 1,000 |
896 | 832 | |||||||||||||||||
System Fund and reimbursable revenues |
2,611 |
2,460 | 2,049 | |||||||||||||||||
| System Fund expenses | (1,694 |
) |
(1,545 | ) | (1,322 | ) | ||||||||||||||
| Reimbursable expenses | (1,000 |
) |
(896 | ) | (832 | ) | ||||||||||||||
System Fund and reimbursable expenses |
(2,694 |
) |
(2,441 | ) | (2,154 | ) | ||||||||||||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Loyalty programme revenues, net of the cost of point redemptions | 355 |
379 | 228 | |||||||||||||||||
| Marketing, reservation and other hotel fees | 1,256 |
1,185 | 989 | |||||||||||||||||
2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Marketing | 520 |
498 | 408 | |||||||||||||||||
| Staff costs | 436 |
399 | 341 | |||||||||||||||||
| Depreciation and amortisation | 80 |
83 | 86 | |||||||||||||||||
| Impairment loss on trade receivables (note 16) | 9 |
– | 7 | |||||||||||||||||
| Other net impairment charges (note 11) | 3 |
– | – | |||||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
25 3 |
|||||||||||
25 4 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements
|
||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
25 5 |
|||||||||||
| a) | Directly owned by InterContinental Hotels Group PLC |
| b) |
| c) |
| d) |
| e) | 1 ⁄4 vote ordinary shares and ordinary shares |
| f) | Ordinary shares, 5% cumulative preference shares and 7% cumulative preference shares |
| g) |
| h) | Accounted for as associates and joint ventures due to IHG’s decision-making rights contained in the partnership agreement |
| i) | Accounted for as an other financial asset due to IHG being unable to exercise significant influence over the financial and operating policy decisions of the entity |
| j) | Minority interest relates to one or more individual shareholders who are employed or were previously employed by the entity |
| (k) | Three Ravinia Drive, Suite 100, Atlanta, GA 30346, USA |
| (l) | 251 Little Falls Drive, Suite 400, Wilmington, New Castle County, DE19808, USA |
| (m) | Clarendon House, 2 Church Street, Hamilton HM11, Bermuda |
| (n) | 1 Windsor Dials, Arthur Road, Windsor, Berkshire, SL4 1RS, UK |
| (o) | 333 Bay Street, Suite 400, Toronto M5H 2R2, Ontario, Canada |
| (p) | Kingsfordweg 151, 1043 GR Amsterdam, The Netherlands |
| (q) | Room No. 23, Floor 16, Saigon Tower Building, 29 Le Duan Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam |
| (r) | The Corporation Trust Centre, 1209 Orange Street, Wilmington, DE 19801, USA |
| (s) | c/o BDO LLP, 5 Temple Square, Liverpool, L2 5RH, UK |
| (t) | Building 4, No 13 Xiao Gang Zhong Ma Road, Zhuhai District, Guangzhou, Guangdong, P.R. China |
| (u) | Building 7229, Al Aqeeq District, Riyadh 13519, Saudi Arabia |
| (v) | Flemming House, Wickhams Cay, P.O. Box 662, Road Town, Tortola VG1110, British Virgin Islands |
| (w) | c/o Premier Corporate Services Limited, 3B, MA. Maadheli, Majeedhee Magu, Male, Republic of Maldives |
| (x) | 31–33 rue Mogador, 75009 Paris, France |
| (y) | Bucharest, 2nd District, 2 Gara Herăstrău Street, 2nd floor, module 33, Romania |
| (z) | J E Irausquin Boulevard 93, 1Eagle/ Paardenbaai, Oranjestad West, Aruba |
| (aa) | Level 11, 20 Bond Street, Sydney NSW 2000, Australia |
| (ab) | Ontario # 1050, Col. Providencia, Guadalajara, Jalisco CP44630, Mexico |
| (ac) | Administrative unit no. 8, the ground floor of the building F1, El Emdad and El Tamween Street, Nasr City, Cairo, the Arab Republic of Egypt |
| (ad) | Rond-Point Robert Schuman 11, 1040 Brussels, Belgium |
| (ae) | QBC 4 – Am Belvedere 4, 1100, Vienna, Austria |
| (af) | Avenida da Republica, no 52 – 9, 1069 – 211, Lisbon, Portugal |
| (ag) | Room 60, Section 11 Floor 3 Premises I, Building 1, House 125, Varshavskoye shosse Str, Vn.Ter.G. Municipal District Severnoye Chertanovo, Moscow City, 117587, Russia |
| (ah) | No. 84, Pan Haliain Street, Unit #1, Level 8, Uniteam Marine Office Building, Sanchuang Township, Yangon, Myanmar |
| (ai) | 230 Victoria Street, #13-00 Bugis Junction Towers, 188024, Singapore |
| (aj) | 57, 9th Floor, Park Ventures Ecoplex, Unit 902–904, Wireless Road, Limpini, Pathum Wan Bangkok 103330, Thailand |
| (ak) | Alameda Jau 536, Suite 3S-B, 01420-000 São Paulo, Brazil |
| (al) | Avenida Cordoba 1547, piso 8, oficina A, 1055 Buenos Aires, Argentina |
| (am) | The Phoenix Centre, George Street, Belleville St. Michael, Barbados |
| (an) | Level 10, 55 Shortland Street, Auckland Central, Auckland 1010, New Zealand |
| (ao) | 1, Murtala Muhammed Drive, Ikoyi, Lagos, Nigeria |
| (ap) | Central Office Park Unit 4, 257 Jean Avenue, Centurion 0157, South Africa |
| (aq) | 11th Floor, Building No. 10, Tower C, DLF Phase-II, DLF Cyber City, Gurgaon, Haryana-122002, India |
| (ar) | 20th Floor, Toranomon Kotoshira Tower, 2–8, Toranomon 1-chom, Minato-ku, 105-0001, Tokyo, Japan |
| (as) | Venture Corporate Services (Mauritius) Ltd, Level 3, Tower 1, Nexteracom Towers, Cybercity, Ebene, Mauritius |
| (at) | 1103 Budapest, Köér utca 2/A. C. ép., Hungary |
| (au) | Budapester Str. 2, 10787 Berlin, Germany |
| (av) | Grevgatan 15, 11453 Stockholm, Sweden |
| (aw) | Alameda Jau 536, Suite 3S-E, 01420-000 São Paulo, Brazil |
| (ax) | 1980 Pérodeau Street, Vaudreuil-Dorion, J7V 8P7, Quebec, Canada |
| (ay) | 168 Robinson Road, #16–01 SIF Building, 068899, Singapore |
| (az) | 361 San Francisco Street Penthouse, San Juan, PR 00901, Puerto Rico |
| (ba) | Hotel Tamanaco Inter-Continental, Final Av. Ppal, Mercedes, Caracas, Venezuela |
| (bb) | 22/F Citigroup Tower, No. 33 Huayanshiqiao Road, Lujiazui, Pudong New Area, 200120, Shanghai, P.R. China |
| (bc) | Alameda Jau 536, Suite 3S-C, 01420-000 São Paulo, Brazil |
| (bd) | Alameda Jau 536, Suite 3S-D, 01420-000 São Paulo, Brazil |
| (be) | Viale Monte Nero n.84, 20135 Milano, Italy |
| (bf) | Thurn-und-Taxis-Platz |
| (bg) | Juris Tax Services Ltd. Level 12, NeX Teracom Tower II, Ebene, Mauritius |
| (bh) | Menara Imperium 22nd Floor, Suite D, JI. HR. Rasuna Said Kav.1, Guntur Sub-district, Setiabudi District, South Jakarta 12980, Indonesia |
| (bi) | Primmer Piper Eggleston & Cramer PC, 30 Main St., Suite 500, P.O. Box 1489, Burlington, VT 05402-1489, USA |
| (bj) | Calle 49, Sur 45 A 300, Oficina 1102, 055422 Envigado, Antioquia, Colombia |
| (bk) | 10 Kings Lane, Roseau, Dominica |
| (bl) | No. 56 Moo 5, Tambol Koh Yao Noi, Amphur Ko Yao, Pang-nga Province 82160, Thailand |
| (bm) | Room 311, Building 1, No. 6 East Wen Hua Yuan Road, Beijing Economy and Technology Development Zone, Beijing, P.R. China |
25 6 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Notes to the Group Financial Statements |
||||
| (bn) | Room N306, 3rd Floor, Building 6, Binhai Financial Street, No. 52 West Xincheng Road, Tianjin Economy and Technology Development Zone, Tianjin, P.R. China |
| (bo) | Cesta v Mestni log 1, 1000 Ljubljana, Slovenia |
| (bp) | 37A Professor Fridtjof Nansen Street, 5th Floor, District Sredets, Sofia, 1142, Bulgaria |
| (bq) | C/o Holiday Inn & Suites, Cnr Waigani Drive & Wards Road, Port Moresby, National Capital District, Papua New Guinea |
| (br) | Suite 2201, Festival Tower, Dubai Festival City, Al Rebbat St., P.O. Box 58191, Dubai, United Arab Emirates |
| (bs) | Madinah Road, Jeddah, P.O Box 9456, Post Code 21413, Jeddah, Saudi Arabia |
| (bt) | Maples Corporate Services Ltd. – PO Box 309, Ugland House, Grand Cayman – KY-1104, Cayman Islands |
| (bu) | 971, 973 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand |
| (bv) | Room R316, 3rd Floor, Building 6, Binhai Financial Street, No. 52 West Xincheng Road, Tianjin Economy and Technology Development Zone, Tianjin, P.R. China |
| (bw) | 14th Floor, South China Building, 1–3 Wyndham Street, Hong Kong, SAR |
| (bx) | Maslak Mah. Eski Büyükdere Cad. Orjin Maslak İŞ, Merkezi Sitesi No: 27 IC KapiI No: 4 Sariyer/Istanbul, Turkey |
| (by) | Paseo de Recoletos 37 – 41, 28004 Madrid, Spain |
| (bz) | B-11515 Bhikaj Cama Place, New Delhi, South Delhi, 110066 India |
| (ca) | Carr Hospitality, LLC, 1455 Pennsylvania Avenue, NW, Suite 200, Washington, DC 20004, USA |
| (cb) | 84 Albert Street, Belize City, Belize, C.A. |
| (cc) | Krunska 73, 3rd floor, office no.3, Vračar, 11000 Belgrade, Serbia |
| (cd) | Moreno 809 2 Piso, C1091AAQ Buenos Aires, Argentina |
| (ce) | Bulevar Svetog Petra Cetinjskog 149 – 81000 Podgorica, Montenegro |
| (cf) | Bernard Monteagudo 201, 15076, Lima, Peru |
| (cg) | Avenida Ejercito Nacional Mexicano No. 769, Torre B Piso 8, Granada, Miguel Hidalgo, Ciudad de Mexico, CP 11520, Mexico |
| (ch) | Ground Floor, Al Kamel Law Building, Plot 52-b, Banks Area, Six of October City, Egypt |
| (ci) | Shop No. L3–6, Amity Building, No. 125 High Level Road, Maharagama, Colombo, Sri Lanka |
| (cj) | Units 3082, 30th Floor,aYeongdong-daero, Gangnam-gu, Seoul, Republic of Korea |
| (ck) | 291 Rue des Tovets, Courchével 1850, 73120, Courchével, France |
| (cl) | PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands |
| (cm) | 23/6 D, Anhaght Str., Yerevan, 0069, Armenia |
| (cn) | Generation Park Z – ul. Towarowa 28, 00-839 Warsaw, Poland |
| (co) | Suite 1, Ground Floor, The Financial Services Centre, Bishops Court Hill, St. Michael, BB14004, Barbados |
| (cp) | Brumby Centre, Lot 42, Jalan Muhibbah, 87000 Labuan F.T., Malaysia |
| (cq) | Blvd, Morazan, Centro Comercial El Dorado, 6th Floor, Tegucigalpa, Honduras |
| (cr) | ATS Services Limited, Capital Center, 9th Floor, 2–4 Arch, Makarios III Ave., 1065 Nicosia, Cyprus |
| (cs) | Max Henriquez Ureña N° 11, Ensanche Naco, Santo Domingo de Guzman, Distrito Nacional, Santo Domingo |
| (ct) | Harvard Business Services, Inc. 16192 Coastal Hwy, Lewes, Delaware 19958, USA |
| (cu) | Room 1928, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong |
Table of Contents
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 265 | |||||||||||
| Other financial information | 266 | |||||
| Directors’ Report | 276 | |||||
| Group information | 280 | |||||
| Shareholder information | 296 | |||||
| 304 | ||||||
| Exhibits | 308 | |||||
| Forward-looking statements | 309 | |||||
| Form 20-F cross-reference guide | 310 | |||||
| Glossary | 313 | |||||
| Useful information | 315 | |||||
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| 266 | IHG | Annual Report and Form 20-F 2024 | ||||||
Other Financial Information
Use of Non-GAAP measures
In addition to performance measures directly observable in the Group Financial Statements (IFRS measures), additional measures (described as Non-GAAP) are presented that are used internally by management as key measures to assess performance. Non-GAAP measures are either not defined under IFRS or are adjusted IFRS figures.
|
|
Further explanation in relation to these measures and their definitions can be found on pages 103 to 108. |
Revenue and operating profit Non-GAAP reconciliations
Highlights for the year ended 31 December 2024
Reportable segments
| Revenue | Operating profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
Change $m |
Change % |
2024 $m |
2023 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Per Group income statement | 4,923 | 4,624 | 299 | 6.5 | 1,041 | 1,066 | (25 | ) | (2.3 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| System Fund and reimbursables | (2,611 | ) | (2,460 | ) | (151 | ) | 6.1 | 83 | (19 | ) | 102 | NM | a | |||||||||||||||||||||||||||||||||||||||||||
| Operating exceptional items | – | – | – | – | – | (28 | ) | 28 | NM | a | ||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments | 2,312 | 2,164 | 148 | 6.8 | 1,124 | 1,019 | 105 | 10.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments analysed as: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fee business |
1,774 | 1,672 | 102 | 6.1 | 1,085 | 992 | 93 | 9.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Owned, leased and managed lease |
515 | 471 | 44 | 9.3 | 45 | 29 | 16 | 55.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Insurance activities |
23 | 21 | 2 | 9.5 | (6 | ) | (2 | ) | (4 | ) | 200.0 | |||||||||||||||||||||||||||||||||||||||||||||
| 2,312 | 2,164 | 148 | 6.8 | 1,124 | 1,019 | 105 | 10.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
Underlying revenue and underlying operating profit
| Revenue | Operating profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
Change $m |
Change % |
2024 $m |
2023 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments (see above) | 2,312 | 2,164 | 148 | 6.8 | 1,124 | 1,019 | 105 | 10.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Owned, leased and managed lease asset disposalsa | (8 | ) | (10 | ) | 2 | (20.0 | ) | 4 | 3 | 1 | 33.3 | |||||||||||||||||||||||||||||||||||||||||||||
| Currency impact | – | (7 | ) | 7 | NM | b | – | (12 | ) | 12 | NM | b | ||||||||||||||||||||||||||||||||||||||||||||
| Underlying revenue and underlying operating profit | 2,304 | 2,147 | 157 | 7.3 | 1,128 | 1,010 | 118 | 11.7 | ||||||||||||||||||||||||||||||||||||||||||||||||
| a. | The results of one Regent hotel are removed in 2024 (being the year of lease expiration) and in 2023 to determine the underlying growth. |
| b. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
Underlying fee revenue and underlying fee operating profit
| Revenue | Operating profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
Change $m |
Change % |
2024 $m |
2023 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments fee business (see above) | 1,774 | 1,672 | 102 | 6.1 | 1,085 | 992 | 93 | 9.4 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Currency impact | – | (9 | ) | 9 | NM | a | – | (11 | ) | 11 | NM | a | ||||||||||||||||||||||||||||||||||||||||||||
| Underlying fee revenue and underlying fee operating profit | 1,774 | 1,663 | 111 | 6.7 | 1,085 | 981 | 104 | 10.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 267 | |||||||||||
Revenue and operating profit Non-GAAP reconciliations continued
Americas
| Revenue | Operating profitb | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
Change $m |
Change % |
2024 $m |
2023 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Per Group financial statements, note 2 | 1,141 | 1,105 | 36 | 3.3 | 828 | 815 | 13 | 1.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments analysed asa: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fee business |
979 | 957 | 22 | 2.3 | 795 | 787 | 8 | 1.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Owned, leased and managed lease |
162 | 148 | 14 | 9.5 | 33 | 28 | 5 | 17.9 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 1,141 | 1,105 | 36 | 3.3 | 828 | 815 | 13 | 1.6 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments (see above) | 1,141 | 1,105 | 36 | 3.3 | 828 | 815 | 13 | 1.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Currency impact | – | (3 | ) | 3 | NM | c | – | (4 | ) | 4 | NM | c | ||||||||||||||||||||||||||||||||||||||||||||
| Underlying revenue and underlying operating profit | 1,141 | 1,102 | 39 | 3.5 | 828 | 811 | 17 | 2.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Revenues as included in the Group Financial Statements, note 3. |
| b. | Before exceptional items. |
| c. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
EMEAA
| Revenue | Operating profitb | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
Change $m |
Change % |
2024 $m |
2023 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Per Group financial statements, note 2 | 748 | 677 | 71 | 10.5 | 270 | 215 | 55 | 25.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments analysed asa: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fee business |
395 | 354 | 41 | 11.6 | 258 | 214 | 44 | 20.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Owned, leased and managed lease |
353 | 323 | 30 | 9.3 | 12 | 1 | 11 | 1,100.0 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 748 | 677 | 71 | 10.5 | 270 | 215 | 55 | 25.6 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments (see above) | 748 | 677 | 71 | 10.5 | 270 | 215 | 55 | 25.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Owned, leased and managed lease asset disposalsd | (8 | ) | (10 | ) | 2 | (20.0 | ) | 4 | 3 | 1 | 33.3 | |||||||||||||||||||||||||||||||||||||||||||||
| Currency impact | – | (3 | ) | 3 | NM | c | – | (5 | ) | 5 | NM | c | ||||||||||||||||||||||||||||||||||||||||||||
| Underlying revenue and underlying operating profit | 740 | 664 | 76 | 11.4 | 274 | 213 | 61 | 28.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Revenues as included in the Group Financial Statements, note 3. |
| b. | Before exceptional items. |
| c. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
| d. | The results of one Regent hotel are removed in 2024 (being the year of lease expiration) and in 2023 to determine the underlying growth. |
Table of Contents
| 268 | IHG | Annual Report and Form 20-F 2024 | ||||||
Other Financial Information continued
Revenue and operating profit Non-GAAP reconciliations continued
Greater China
| Revenue | Operating profitb | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 $m |
2023 $m |
Change $m |
Change % |
2024 $m |
2023 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Per Group financial statements, note 2 | 161 | 161 | – | – | 98 | 96 | 2 | 2.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments analysed asa: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fee business | 161 | 161 | – | – | 98 | 96 | 2 | 2.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments (see above) | 161 | 161 | – | – | 98 | 96 | 2 | 2.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Currency impact | – | (2 | ) | 2 | NM | c | – | (1 | ) | 1 | NM | c | ||||||||||||||||||||||||||||||||||||||||||||
| Underlying revenue and underlying operating profit | 161 | 159 | 2 | 1.3 | 98 | 95 | 3 | 3.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Revenues as included in the Group Financial Statements, note 3. |
| b. | Before exceptional items. |
| c. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
Highlights for the year ended 31 December 2023
Reportable segments
| Revenue | Operating profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 $m |
2022 $m |
Change $m |
Change % |
2023 $m |
2022 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Per Group income statement | 4,624 | 3,892 | 732 | 18.8 | 1,066 | 628 | 438 | 69.7 | ||||||||||||||||||||||||||||||||||||||||||||||||
| System Fund and reimbursables | (2,460 | ) | (2,049 | ) | (411 | ) | 20.1 | (19 | ) | 105 | (124 | ) | NM | a | ||||||||||||||||||||||||||||||||||||||||||
| Operating exceptional items | – | – | – | – | (28 | ) | 95 | (123 | ) | NM | a | |||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments | 2,164 | 1,843 | 321 | 17.4 | 1,019 | 828 | 191 | 23.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments analysed as: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fee business |
1,672 | 1,434 | 238 | 16.6 | 992 | 805 | 187 | 23.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Owned, leased and managed lease |
471 | 394 | 77 | 19.5 | 29 | 19 | 10 | 52.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Insurance activities |
21 | 15 | 6 | 40.0 | (2 | ) | 4 | (6 | ) | NM | a | |||||||||||||||||||||||||||||||||||||||||||||
| 2,164 | 1,843 | 321 | 17.4 | 1,019 | 828 | 191 | 23.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
Underlying revenue and underlying operating profit
| Revenue | Operating profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 $m |
2022 $m |
Change $m |
Change % |
2023 $m |
2022 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments (see above) | 2,164 | 1,843 | 321 | 17.4 | 1,019 | 828 | 191 | 23.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Significant liquidated damagesb | – | (7 | ) | 7 | NM | a | – | (7 | ) | 7 | NM | a | ||||||||||||||||||||||||||||||||||||||||||||
| Owned, leased and managed lease asset disposalsc | – | (19 | ) | 19 | NM | a | – | (2 | ) | 2 | NM | a | ||||||||||||||||||||||||||||||||||||||||||||
| Currency impact | – | – | – | – | – | (1 | ) | 1 | NM | a | ||||||||||||||||||||||||||||||||||||||||||||||
| Underlying revenue and underlying operating profit | 2,164 | 1,817 | 347 | 19.1 | 1,019 | 818 | 201 | 24.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
| b. | $7m recognised in 2022 reflects the significant liquidated damages related to one hotel in EMEAA. |
| c. | The results of three UK Portfolio hotels and one InterContinental Hotel have been removed in 2022 (being the year of lease expiration) to determine underlying growth. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 269 | |||||||||||
Revenue and operating profit Non-GAAP reconciliations continued
Underlying fee revenue and underlying fee operating profit
| Revenue | Operating profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 $m |
2022 $m |
Change $m |
Change % |
2023 $m |
2022 $m |
Change $m |
Change % |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Reportable segments fee business (see above) | 1,672 | 1,434 | 238 | 16.6 | 992 | 805 | 187 | 23.2 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Significant liquidated damagesa | – | (7 | ) | 7 | NM | b | – | (7 | ) | 7 | NM | b | ||||||||||||||||||||||||||||||||||||||||||||
| Currency impact | – | (4 | ) | 4 | NM | b | – | (2 | ) | 2 | NM | b | ||||||||||||||||||||||||||||||||||||||||||||
| Underlying fee revenue and underlying fee operating profit | 1,672 | 1,423 | 249 | 17.5 | 992 | 796 | 196 | 24.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
| a. | $7m recognised in 2022 reflects the significant liquidated damages related to one hotel in EMEAA. |
| b. | Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance in the prior period. |
Fee margin reconciliation
| 2024 $m |
2023 $m |
2022 $m |
||||||||||||
| Revenue | ||||||||||||||
| Reportable segments analysed as fee business (page 266) | 1,774 | 1,672 | 1,434 | |||||||||||
| Significant liquidated damagesa | – | – | (7) | |||||||||||
| 1,774 | 1,672 | 1,427 | ||||||||||||
| Operating profitb | ||||||||||||||
| Reportable segments analysed as fee business (page 266) | 1,085 | 992 | 805 | |||||||||||
| Significant liquidated damagesb | – | – | (7) | |||||||||||
| 1,085 | 992 | 798 | ||||||||||||
| Fee marginc | 61.2% | 59.3% | 55.9% | |||||||||||
| a. | $7m recognised in 2022 reflects the significant liquidated damages related to one hotel in EMEAA. |
| b. | Before exceptional items. |
| c. | Reported as a KPI on page 40. |
Fee margin is broken down by region as follows:
| Year ended 31 December 2024 | Americas | EMEAA | Greater China | Central | Total | |||||||||||||||||
| Revenue $m | ||||||||||||||||||||||
| Reportable segments analysed as fee business (pages 267 to 268) | 979 | 395 | 161 | 239 | 1,774 | |||||||||||||||||
| 979 | 395 | 161 | 239 | 1,774 | ||||||||||||||||||
| Operating profita | ||||||||||||||||||||||
| Reportable segments analysed as fee business (pages 267 to 268) | 795 | 258 | 98 | (66) | 1,085 | |||||||||||||||||
| 795 | 258 | 98 | (66) | 1,085 | ||||||||||||||||||
| Fee margin | 81.2% | 65.3% | 60.9% | (27.6)% | 61.2% | |||||||||||||||||
| a. | Before exceptional items. |
Table of Contents
| 270 | IHG | Annual Report and Form 20-F 2024 | ||||||
Other Financial Information continued
Fee margin reconciliation continued
| Year ended 31 December 2023 | Americas | EMEAA | Greater China | Central | Total | |||||||||||||||||||
| Revenue $m | ||||||||||||||||||||||||
| Reportable segments analysed as fee business (pages 267 to 268) | 957 | 354 | 161 | 200 | 1,672 | |||||||||||||||||||
| 957 | 354 | 161 | 200 | 1,672 | ||||||||||||||||||||
| Operating profita | ||||||||||||||||||||||||
| Reportable segments analysed as fee business (pages 267 to 268) | 787 | 214 | 96 | (105 | ) | 992 | ||||||||||||||||||
| 787 | 214 | 96 | (105 | ) | 992 | |||||||||||||||||||
| Fee margin | 82.2% | 60.5% | 59.6% | (52.5)% | 59.3% | |||||||||||||||||||
| Year ended 31 December 2022 | Americas | EMEAA | Greater China | Central | Total | |||||||||||||||||||
| Revenue $m | ||||||||||||||||||||||||
| Reportable segments analysed as fee business (see above) | 879 | 284 | 87 | 184 | 1,434 | |||||||||||||||||||
| Significant liquidated damages | – | (7 | ) | – | – | (7 | ) | |||||||||||||||||
| 879 | 277 | 87 | 184 | 1,427 | ||||||||||||||||||||
| Operating profita | ||||||||||||||||||||||||
| Reportable segments analysed as fee business (see above) | 741 | 153 | 23 | (112 | ) | 805 | ||||||||||||||||||
| Significant liquidated damages | – | (7 | ) | – | – | (7 | ) | |||||||||||||||||
| 741 | 146 | 23 | (112 | ) | 798 | |||||||||||||||||||
| Fee margin | 84.3% | 52.7% | 26.4% | (60.9)% | 55.9% | |||||||||||||||||||
| a. | Before exceptional items. |
Net and gross capital expenditure reconciliation
| 12 months ended 31 December | ||||||||||
| $m | 2024 $m |
2023 Re-presenteda $m |
||||||||
| Net cash from investing activities | (99 | ) | (137) | |||||||
| Adjusted for: | ||||||||||
| Contract acquisition costs, net of repayments |
(237 | ) | (101) | |||||||
| System Fund depreciation and amortisationb |
82 | 81 | ||||||||
| Payment of deferred purchase consideration |
10 | – | ||||||||
| (Repayments)/payments related to investments supporting the Group’s insurance activities |
(5 | ) | 11 | |||||||
| Finance lease receipts |
(4 | ) | – | |||||||
| Net capital expenditure | (253 | ) | (146) | |||||||
| Further adjusted for: | ||||||||||
| Disposals and repayments, including other financial assets |
(15 | ) | (8) | |||||||
| Repayment of contract acquisition costs |
– | (7) | ||||||||
| System Fund depreciation and amortisationb |
(82 | ) | (81) | |||||||
| Gross capital expenditure | (350 | ) | (242) | |||||||
| a. | Re-presented to reflect the updated definition of gross and net capital expenditure, see pages 107 and 108. |
| b. | Excludes depreciation on right-of-use assets. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 271 | |||||||||||
Net and gross capital expenditure reconciliation continued
| 12 months ended 31 December 2024 | |
12 months ended 31 December 2023 Re-presenteda |
|
|||||||||||||||||||||||||
| $m | Gross | Repaid | Net | Gross | Repaid | Net | ||||||||||||||||||||||
| Analysed as: | ||||||||||||||||||||||||||||
| Key money contract acquisition costs | (206 | ) | – | (206 | ) | (108 | ) | 7 | (101 | ) | ||||||||||||||||||
| Maintenance | (31 | ) | – | (31 | ) | (38 | ) | – | (38 | ) | ||||||||||||||||||
| Recyclable capital expenditure: | ||||||||||||||||||||||||||||
| Recyclable contract acquisition costs |
(31 | ) | – | (31 | ) | – | – | – | ||||||||||||||||||||
| Other recyclable investments |
(37 | ) | 15 | (22 | ) | (50 | ) | 8 | (42 | ) | ||||||||||||||||||
| Capital expenditure: System Fund investments | (45 | ) | 82 | 37 | (46 | ) | 81 | 35 | ||||||||||||||||||||
| Total capital expenditure | (350 | ) | 97 | (253 | ) | (242 | ) | 96 | (146 | ) | ||||||||||||||||||
| a. | Re-presented to reflect the updated definition of gross and net capital expenditure, see pages 107 and 108. |
Adjusted free cash flow reconciliation
| 12 months ended 31 December | ||||||||||||||||||||||||||||||||||||
| |
2024 $m |
|
|
2023 Re-presented $m |
b
|
|
2022 Re-presented $m |
b
|
|
2021 Re-presented $m |
b
|
|
2020 Re-presented $m |
b
|
||||||||||||||||||||||
| Net cash from operating activities | 724 | 893 | 646 | 636 | 137 | |||||||||||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||
| Purchase of shares by employee share trusts |
(27 | ) | (8 | ) | (1 | ) | – | – | ||||||||||||||||||||||||||||
| Gross maintenance capital expenditure |
(31 | ) | (38 | ) | (44 | ) | (33 | ) | (43 | ) | ||||||||||||||||||||||||||
| Cash flows relating to exceptional items |
(8 | ) | 29 | 43 | 12 | 87 | ||||||||||||||||||||||||||||||
| Principal element of lease payments |
(46 | ) | (28 | ) | (36 | ) | (32 | ) | (65 | ) | ||||||||||||||||||||||||||
| Deferred purchase consideration |
3 | – | – | – | – | |||||||||||||||||||||||||||||||
| Recyclable contract acquisition costs |
31 | – | – | – | – | |||||||||||||||||||||||||||||||
| Repayments/(payments) related to investments supporting the Group’s insurance activities |
5 | (11 | ) | 7 | 6 | 9 | ||||||||||||||||||||||||||||||
| Finance lease receipts |
4 | – | – | – | – | |||||||||||||||||||||||||||||||
| Adjusted free cash flowa | 655 | 837 | 615 | 589 | 125 | |||||||||||||||||||||||||||||||
| a. | Reported as a KPI on page 41. |
| b. | Re-presented to reflect the updated definition of adjusted free cash flow, see pages 107 and 108. |
Adjusted interest reconciliation
| 12 months ended 31 December | ||||||||||||||||||||
| 2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Net financial expenses | ||||||||||||||||||||
| Financial income | 63 | 39 | 22 | |||||||||||||||||
| Financial expenses | (203 | ) | (91 | ) | (118 | ) | ||||||||||||||
| (140 | ) | (52 | ) | (96 | ) | |||||||||||||||
| Adjusted for: | ||||||||||||||||||||
| Interest attributable to the System Fund |
(50 | ) | (44 | ) | (16 | ) | ||||||||||||||
| Foreign exchange losses/(gains) |
25 | (35 | ) | (10 | ) | |||||||||||||||
| (25 | ) | (79 | ) | (26 | ) | |||||||||||||||
| Adjusted interest | (165 | ) | (131 | ) | (122 | ) | ||||||||||||||
Table of Contents
| 272 | IHG | Annual Report and Form 20-F 2024 | ||||||
Other Financial Information continued
Adjusted tax and tax rate reconciliations
| 2024 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||
| Profit before tax $m |
Tax $m |
Rate % |
Profit before tax $m |
Tax $m |
Rate % |
Profit before tax $m |
Tax $m |
Rate % |
||||||||||||||||||||||||||||||||||||
| Group income statement | 897 | (269 | ) | 30.0 | 1,010 | (260 | ) | 25.7 | 540 | (164 | ) | 30.4 | ||||||||||||||||||||||||||||||||
| Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||||
| Operating exceptional items |
– | – | (28 | ) | 7 | 95 | (26 | ) | ||||||||||||||||||||||||||||||||||||
| Foreign exchange losses/(gains) |
25 | 3 | (35 | ) | (3 | ) | (10 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||
| System Fund |
83 | 4 | (19 | ) | 3 | 105 | – | |||||||||||||||||||||||||||||||||||||
| Interest attributable to the System Fund |
(50 | ) | – | (44 | ) | – | (16 | ) | – | |||||||||||||||||||||||||||||||||||
| Fair value losses/(gains) on contingent purchase consideration |
4 | – | 4 | – | (8 | ) | – | |||||||||||||||||||||||||||||||||||||
| 959 | (262 | ) | 27.3 | 888 | (253 | ) | 28.5 | 706 | (194 | ) | 27.5 | |||||||||||||||||||||||||||||||||
Adjusted earnings per ordinary share reconciliation
| 12 months ended 31 December | ||||||||||||||||||||
| 2024 $m |
2023 $m |
2022 $m |
||||||||||||||||||
| Profit available for equity holders | 628 | 750 | 375 | |||||||||||||||||
| Adjusting items: | ||||||||||||||||||||
| System Fund and reimbursable result |
83 | (19 | ) | 105 | ||||||||||||||||
| Interest attributable to the System Fund |
(50 | ) | (44 | ) | (16 | ) | ||||||||||||||
| Operating exceptional items |
– | (28 | ) | 95 | ||||||||||||||||
| Fair value losses/(gains) on contingent purchase consideration |
4 | 4 | (8 | ) | ||||||||||||||||
| Foreign exchange losses/(gains) |
25 | (35 | ) | (10 | ) | |||||||||||||||
| Tax attributable to the System Fund |
4 | 3 | – | |||||||||||||||||
| Tax on foreign exchange losses/(gains) |
3 | (3 | ) | (4 | ) | |||||||||||||||
| Tax on exceptional items |
– | 7 | (26 | ) | ||||||||||||||||
| Adjusted earnings | 697 | 635 | 511 | |||||||||||||||||
| Basic weighted average number of ordinary shares (millions) | 161.2 | 169.0 | 181.0 | |||||||||||||||||
| Adjusted earnings per ordinary share (cents) | 432.4 | 375.7 | 282.3 | |||||||||||||||||
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 273 | |||||||||||
Revenue per available room (RevPAR), average daily rate and occupancy
RevPAR is the primary metric used by management to track hotel performance across regions and brands. RevPAR is also a commonly used performance measure in the hotel industry. RevPAR comprises IHG system rooms revenue divided by the number of room nights available and can be mathematically derived from occupancy rate multiplied by average daily rate (ADR). Occupancy rate is rooms occupied by hotel guests expressed as a percentage of rooms that are available. ADR is rooms revenue divided by the number of room nights sold.
References to RevPAR, occupancy and ADR are presented on a comparable basis comprising groupings of hotels that have traded in both the current and prior year. The principal exclusions in deriving this measure are new hotels, hotels closed for major refurbishment and hotels sold in either of the two years. RevPAR and ADR are quoted at a constant US$ conversion rate, in order to allow a better understanding of the comparable year-on-year trading performance excluding distortions created by fluctuations in exchange rates.
The following tables present RevPAR statistics for the year ended 31 December 2024 and a comparison to 2023. Fee business and owned, leased and managed lease statistics are for comparable hotels and include only those hotels in the Group’s System at 31 December 2024 and franchised, managed, owned, leased or operated under a managed lease by the Group since 1 January 2023. The comparison with 2023 is at constant US$ exchange rates.
| Fee business |
Owned, leased and managed lease |
|||||||||||||||||||||||||||
| 2024 | Change vs 2023 |
2024 | Change vs 2023 |
|||||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||||
| InterContinental | ||||||||||||||||||||||||||||
| Occupancy | 67.7 | 2.3%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $244.99 | 4.2% | – | – | ||||||||||||||||||||||||
| RevPAR | $165.75 | 7.8% | – | – | ||||||||||||||||||||||||
| Kimpton | ||||||||||||||||||||||||||||
| Occupancy | 73.1 | 2.5%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $281.02 | (1.4)% | – | – | ||||||||||||||||||||||||
| RevPAR | $205.44 | 2.1% | – | – | ||||||||||||||||||||||||
| Hotel Indigo | ||||||||||||||||||||||||||||
| Occupancy | 68.6 | 1.3%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $189.11 | 1.2% | – | – | ||||||||||||||||||||||||
| RevPAR | $129.64 | 3.1% | – | – | ||||||||||||||||||||||||
| Crowne Plaza | ||||||||||||||||||||||||||||
| Occupancy | 62.4 | 0.8%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $150.15 | 3.2% | – | – | ||||||||||||||||||||||||
| RevPAR | $93.65 | 4.6% | – | – | ||||||||||||||||||||||||
| EVEN Hotels | ||||||||||||||||||||||||||||
| Occupancy | 71.0 | 3.9%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $161.54 | (0.3)% | – | – | ||||||||||||||||||||||||
| RevPAR | $114.63 | 5.6% | – | – | ||||||||||||||||||||||||
| Holiday Inn Express | ||||||||||||||||||||||||||||
| Occupancy | 69.6 | 0.0%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $132.99 | 1.6% | – | – | ||||||||||||||||||||||||
| RevPAR | $92.62 | 1.7% | – | – | ||||||||||||||||||||||||
| Holiday Inn | ||||||||||||||||||||||||||||
| Occupancy | 63.5 | 0.2%pts | 70.5 | 3.3%pts | ||||||||||||||||||||||||
| Average daily rate | $130.76 | 2.0% | $260.36 | 9.9% | ||||||||||||||||||||||||
| RevPAR | $82.97 | 2.3% | $183.55 | 15.3% | ||||||||||||||||||||||||
| avid hotels | ||||||||||||||||||||||||||||
| Occupancy | 66.0 | 2.7%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $106.13 | 0.0% | – | – | ||||||||||||||||||||||||
| RevPAR | $70.04 | 4.3% | – | – | ||||||||||||||||||||||||
Table of Contents
| 274 | IHG | Annual Report and Form 20-F 2024 | ||||||
Other Financial Information continued
RevPAR, average daily rate and occupancy continued
| Fee business |
Owned, leased and managed lease |
|||||||||||||||||||||||||||
| 2024 | Change vs 2023 |
2024 | Change vs 2023 |
|||||||||||||||||||||||||
| Staybridge Suites | ||||||||||||||||||||||||||||
| Occupancy | 76.5 | 0.3%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $135.81 | 2.2% | – | – | ||||||||||||||||||||||||
| RevPAR | $103.84 | 2.5% | – | – | ||||||||||||||||||||||||
| Candlewood Suites | ||||||||||||||||||||||||||||
| Occupancy | 73.3 | (0.7)%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $102.68 | 1.7% | – | – | ||||||||||||||||||||||||
| RevPAR | $75.26 | 0.7% | – | – | ||||||||||||||||||||||||
| EMEAA | ||||||||||||||||||||||||||||
| Six Senses | ||||||||||||||||||||||||||||
| Occupancy | 42.4 | 1.4%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $1,030.53 | 7.1% | – | – | ||||||||||||||||||||||||
| RevPAR | $437.02 | 10.7% | – | – | ||||||||||||||||||||||||
| InterContinental | ||||||||||||||||||||||||||||
| Occupancy | 66.5 | 2.3%pts | 67.5 | 8.0%pts | ||||||||||||||||||||||||
| Average daily rate | $247.77 | 4.2% | $300.32 | 7.8% | ||||||||||||||||||||||||
| RevPAR | $164.70 | 7.9% | $202.66 | 22.3% | ||||||||||||||||||||||||
| Kimpton | ||||||||||||||||||||||||||||
| Occupancy | 74.6 | 8.1%pts | 78.0 | 3.5%pts | ||||||||||||||||||||||||
| Average daily rate | $315.95 | 3.4% | $312.81 | 3.1% | ||||||||||||||||||||||||
| RevPAR | $235.66 | 16.0% | $244.00 | 7.9% | ||||||||||||||||||||||||
| Hotel Indigo | ||||||||||||||||||||||||||||
| Occupancy | 75.4 | 2.8%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $176.14 | 2.2% | – | – | ||||||||||||||||||||||||
| RevPAR | $132.77 | 6.1% | – | – | ||||||||||||||||||||||||
| voco | ||||||||||||||||||||||||||||
| Occupancy | 74.1 | 2.7%pts | 80.8 | 1.9%pts | ||||||||||||||||||||||||
| Average daily rate | $154.63 | 3.3% | $178.52 | 5.0% | ||||||||||||||||||||||||
| RevPAR | $114.61 | 7.3% | $144.30 | 7.5% | ||||||||||||||||||||||||
| Crowne Plaza | ||||||||||||||||||||||||||||
| Occupancy | 70.3 | 2.7%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $134.42 | 1.6% | – | – | ||||||||||||||||||||||||
| RevPAR | $94.55 | 5.6% | – | – | ||||||||||||||||||||||||
| Holiday Inn Express | ||||||||||||||||||||||||||||
| Occupancy | 77.3 | 2.1%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $103.47 | 2.1% | – | – | ||||||||||||||||||||||||
| RevPAR | $80.02 | 5.0% | – | – | ||||||||||||||||||||||||
| Holiday Inn | ||||||||||||||||||||||||||||
| Occupancy | 70.7 | 1.0%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $111.76 | 3.7% | – | – | ||||||||||||||||||||||||
| RevPAR | $79.02 | 5.3% | – | – | ||||||||||||||||||||||||
| Staybridge Suites | ||||||||||||||||||||||||||||
| Occupancy | 79.2 | 0.5%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $131.56 | 5.6% | – | – | ||||||||||||||||||||||||
| RevPAR | $104.18 | 6.3% | – | – | ||||||||||||||||||||||||
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 275 | |||||||||||
RevPAR, average daily rate and occupancy continued
| Fee business | Owned, leased and managed lease |
|||||||||||||||||||||||||||
| 2024 | Change vs 2023 |
2024 | Change vs 2023 |
|||||||||||||||||||||||||
| Greater China | ||||||||||||||||||||||||||||
| Regent | ||||||||||||||||||||||||||||
| Occupancy | 77.8 | 2.5%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $169.85 | 1.3% | – | – | ||||||||||||||||||||||||
| RevPAR | $132.10 | 4.7% | – | – | ||||||||||||||||||||||||
| InterContinental | ||||||||||||||||||||||||||||
| Occupancy | 65.8 | (0.5)%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $117.07 | (6.0)% | – | – | ||||||||||||||||||||||||
| RevPAR | $76.98 | (6.7)% | – | – | ||||||||||||||||||||||||
| Hotel Indigo | ||||||||||||||||||||||||||||
| Occupancy | 58.2 | 2.9%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $128.68 | (8.5)% | – | – | ||||||||||||||||||||||||
| RevPAR | $74.89 | (3.7)% | – | – | ||||||||||||||||||||||||
| HUALUXE | ||||||||||||||||||||||||||||
| Occupancy | 58.6 | 1.8%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $74.99 | (3.6)% | – | – | ||||||||||||||||||||||||
| RevPAR | $43.94 | (0.7)% | – | – | ||||||||||||||||||||||||
| Crowne Plaza | ||||||||||||||||||||||||||||
| Occupancy | 61.0 | 0.1%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $77.00 | (5.3)% | – | – | ||||||||||||||||||||||||
| RevPAR | $46.96 | (5.2)% | – | – | ||||||||||||||||||||||||
| Holiday Inn Express | ||||||||||||||||||||||||||||
| Occupancy | 58.9 | (1.1)%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $42.76 | (2.8)% | – | – | ||||||||||||||||||||||||
| RevPAR | $25.18 | (4.6)% | – | – | ||||||||||||||||||||||||
| Holiday Inn | ||||||||||||||||||||||||||||
| Occupancy | 57.5 | (0.6)%pts | – | – | ||||||||||||||||||||||||
| Average daily rate | $57.60 | (3.1)% | – | – | ||||||||||||||||||||||||
| RevPAR | $33.12 | (4.0)% | – | – | ||||||||||||||||||||||||
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| 276 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Report
This Directors’ Report includes the information required to be given in line with the Companies Act or, where provided elsewhere, an appropriate cross reference is given. The Governance Report approved by the Board is provided on pages 111 to 177 and incorporated by reference herein.
Subsidiaries, joint ventures and associated undertakings
The Group has over 350 subsidiaries, joint ventures, associates and related undertakings (including branches outside of the United Kingdom). A list of subsidiaries and associated undertakings disclosed in accordance with the Companies Act is provided at note 33 of the Group Financial Statements on pages 253 to 256.
Directors
The Directors may exercise all the powers of the Company, subject to the Articles of Association, legislation and regulation. This includes the ability to exercise the authority to allot or purchase the Company’s shares pursuant to authorities granted by shareholders at the Company’s AGM every year. Further details of the powers of the Company’s Directors can be found on page 291.
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For biographies of the current Directors see pages 114 to 117. |
Directors’ and Officers’ (D&O) liability insurance and existence of qualifying indemnity provisions
The Company maintains the Group’s D&O liability insurance policy, which covers Directors and Officers of the Company defending civil proceedings brought against them in their capacity as Directors or Officers of the Company (including those who served as Directors or Officers during the year). There were no indemnity provisions relating to the UK pension plan for the benefit of the Directors during 2024.
Articles of Association
|
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A summary is provided on pages 291 to 292. |
|
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The Company’s Articles of Association may only be amended by special resolution and are available on the Company’s website at ihgplc.com/investors under Corporate governance. |
Shares
Share capital
The Company’s issued share capital at 31 December 2024 consisted of 164,711,854 ordinary shares of 20 340⁄399 pence each, including 6,241,782 shares held in treasury, which constituted 3.79% of the total issued share capital (including treasury shares).
There are no special control rights or restrictions on share transfers or limitations on the holding of any class of shares.
During 2024, 765,000 shares were transferred from treasury to the employee share ownership trust.
As far as is known to management, IHG is not directly or indirectly owned or controlled by another company or by any government. The Board focuses on shareholder value creation. When it decides to return capital to shareholders, it considers all of its options, including share buybacks and special dividends.
Share issues and buybacks
In December 2024, we completed our $800m share buyback programme which was announced on 20 February 2024, and commenced on 23 February 2024. As part of the buyback, 7,544,912 shares were bought back and cancelled.
Further information on the transactions that took place this year can be found on page 302.
Dividends
| Dividends | Ordinary shares |
ADRs | ||||||||||
| Interim dividend |
||||||||||||
| An interim dividend was paid on 3 October 2024 to shareholders on the register at the close of business on 30 August 2024. | 40.8p | 53.2¢ | ||||||||||
| Final dividend |
||||||||||||
| Subject to approval at the 2025 AGM, a final dividend of 114.4¢ in respect of 2024 will be payable on 15 May 2025 to shareholders on the register at the close of business on 4 April 2025. | 114.4¢ | a | 114.4¢ | |||||||||
| a. | The sterling amount of the final dividend will be announced on 28 April 2025 using the average of the daily exchange rates for the three working days commencing 23 April 2025. |
Major institutional shareholders
As at 14 February 2025, being the last practicable date, the Company had been notified of the following significant holdings in its ordinary shares under section 5 of the UK Disclosure Guidance and Transparency Rules (DTRs).
| As at 14 February 2025 | As at 16 February 2024 | As at 17 February 2023 | ||||||||||||||||||||||||||||
| Shareholder | |
Ordinary shares/ADSs |
a |
% | a | |
Ordinary shares/ADSs |
a |
% | a | |
Ordinary shares/ADSs |
a |
% | a | |||||||||||||||
| BlackRock, Inc. | 10,190,311 | b | 6.14 | 10,190,311 | b | 6.14 | 11,247,319 | c | 6.12 | |||||||||||||||||||||
| Boron Investments B.V. | 8,280,000 | 5.01 | 8,280,000 | 5.01 | 6,890,000 | 3.77 | ||||||||||||||||||||||||
| FMR LLC | 8,078,031 | 5.01 | – | – | – | – | ||||||||||||||||||||||||
| The Capital Group Companies, Inc. | 8,980,505 | 5.12 | 8,980,505 | 5.12 | 8,980,505 | 5.12 | ||||||||||||||||||||||||
| Fiera Capital Corporationd | 6,933,553 | 4.38 | – | – | – | – | ||||||||||||||||||||||||
| PineStone Asset Management Inc. | 12,950,002 | 7.08 | 12,950,002 | 7.08 | – | – | ||||||||||||||||||||||||
| a. | The numbers of shares and percentages of voting rights are as set out in the relevant disclosures made in accordance with Rule 5 of the DTRs and do not necessarily reflect the impact of any share buyback programmes or any changes in shareholdings subsequent to the date of notification that are not notified to the Company under the DTRs. |
| b. | Total shown includes 1,913,249 qualifying financial instruments to which voting rights are attached. |
| c. | Total shown includes 2,080,427 qualifying financial instruments to which voting rights are attached. |
| d. | We have included details of Fiera Capital Corporation’s holding, as disclosed to us on 21 January 2025, however, it is the Company’s understanding that the holding of Fiera Capital Corporation is included within the overall holding of PineStone Asset Management Inc, as disclosed to us in September 2023. |
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 277 | |||||||||||
The Company’s major shareholders have the same voting rights as other shareholders. The Company does not know of any arrangements, the operation of which may result in a change in its control.
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For further details on shareholder profiles see page 303. |
The Companies (Miscellaneous Reporting) Regulations 2018
Set out below is our employee engagement statement and on page 278, our statement summarising how the Directors have had regard to the need to foster the Company’s business relationships with suppliers, customers and others.
|
|
Details of how the Directors have had regard to the matters set forth in Section 172(1)(a) to (f) of the Companies Act are provided on pages 124 and 125. |
Employee engagement statement
Our statement relates to IHG’s directly employed individuals and should be read in conjunction with our people section, Section 172 statement, Voice of the Employee and wider workforce remuneration and employee engagement disclosures on pages 124 to 125, 135 and 139.
During 2024, the main communication channels to provide information of concern to employees included weekly newsletters, virtual town halls, CEO and regional leadership calls, podcasts, blogs, email broadcasts, videos and business function team meetings.
Employees have been consulted and given opportunities to express their views and concerns through participation in the employee engagement survey, Voice of the Employee feedback sessions, Employee Resource Groups (ERGs), Colleague events (interactive sessions relating to IHG’s strategy and behaviours), quarterly performance, development and wellbeing meetings, team meetings and the Q&A session as part of the CEO quarterly business update call.
Each December, employees are invited to join the employee share plan. The plan is available to around 99% of our corporate employees below the senior/mid-management level (who receive LTIP and restricted stock units awards). Further details are on page 278.
Employees have been made aware of the financial and economic factors affecting the performance of the Company through quarterly business update calls with the CEO, as well as business function team meetings and other regional leadership calls.
The Chair and other Directors have engaged with employees through a number of means, including direct interactions, Voice of the Employee feedback sessions, Colleague events and a series of opportunities held during the year to meet Directors via video meetings or in person.
Details of how Directors have had regard to employee interests, and the effect of that regard, including principal decisions taken by IHG during the year can be found on pages 43 and 124 to 125.
Employee numbers
Having a predominantly franchised and managed business model means that many of those people who work at hotels operated under our brands are not our employees.
The average number of IHG employees, including part-time employees, during 2024 were as follows:
| – | 7,387 people worldwide (including those in our corporate offices, central reservations offices and owned, leased and managed leased hotels (excluding those in a category below)), whose costs were borne by the Group; and |
| – | 20,752 people who either worked directly on behalf of the System Fund and whose costs were borne by the System Fund, or as General Managers and (in the US predominantly) other hotel workers, who work in managed hotels, who have contracts or are directly employed by IHG and whose costs are borne by those hotel owners. |
Due to the nature of our business, there are many temporary, agency and contract workers at hotels operated under our brands who are not our employees. The number of temporary employees at corporate locations and owned, leased and managed hotels is not significant.
|
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See note 4 of the Group Financial Statements on pages 213 and 214. |
Employment of disabled persons
IHG continues to focus on providing an inclusive environment, in which employees are valued for who they are and what they bring to the Group, and in which talented individuals are retained through all levels of the organisation.
We look to appoint the most appropriate person for the job and are committed to providing equality of opportunity to all employees without discrimination. Every effort is made to ensure that applications for employment from disabled employees are fully and fairly considered and that disabled employees have equal opportunities to training, career development and promotion.
|
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See our people disclosures on pages 53 to 57. |
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Visit ihgplc.com/responsible-business for more information. |
2024 share awards and grants to employees
Our current policy is to settle awards or grants under the Company’s share plans with shares purchased in the market or from shares held in treasury; however, the Company continues to review this policy. The Company’s share plans incorporate limits on dilution which provide that commitments to issue new shares or re-issue treasury shares under executive plans should not exceed 5%, and under all plans should not exceed 10%, of the issued ordinary share capital of the Company (adjusted for share issuance and cancellation) in any 10-year period. During the financial year ended 31 December 2024, the Company transferred 765,000 treasury shares (0.46% of the total issued share capital) to satisfy obligations under its share plans.
The estimated maximum dilution from awards made under the Company’s share plans over the last 10 years is 4.41%.
As at 31 December 2024, there were no options outstanding. The Company has not utilised the authority given by shareholders at any of its AGMs to allot shares for cash without first offering such shares to existing shareholders.
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| 278 | IHG | Annual Report and Form 20-F 2024 | ||||||
Directors’ Report continued
Employee share ownership trust (ESOT)
IHG operates an ESOT for the benefit of employees and former employees. The ESOT receives treasury shares from the Company and purchases ordinary shares in the market and releases them to current and former employees in satisfaction of share awards. During 2024, the ESOT released 677,336 shares and at 31 December 2024, it held 911,015 ordinary shares in the Company. The ESOT adopts a prudent approach to purchasing shares, using funds provided by the Group, based on expectations of future requirements.
Certain shares that have been allocated to share plan participants under the Annual Performance Plan (APP) are held in a nominee account on behalf of those participants by Computershare Investors Plc (Nominee). As at 31 December 2024, the Nominee held 249,714 forfeitable shares as part of the APP. The shares held by the Nominee have been allocated to share plan participants on terms that entitle those participants to request or require the Nominee to exercise the voting rights relating to those shares. The Nominee exercises those votes in accordance with the directions of the participants. Shares that have not been allocated to share plan participants under such terms are held by the ESOT and although the trustee has the right to vote or abstain from exercising their voting rights in relation to those shares, it has a policy of not voting, which is in line with guidelines. The trustee also has the right to accept or reject any offer relating to the shares in any way it sees fit.
Unless otherwise requested by the Company, the trustee of the ESOT waives all ordinary dividends on the shares held in the ESOT, other than shares which have been allocated to participants on terms which entitle them to the benefit of dividends, except for such amount per share as shall, when multiplied by the number of shares held by it on the relevant date, equal one pence or less.
Colleague Share Plan
The Company’s employee share plan, known as the Colleague Share Plan, was first introduced in 2019 following approval by shareholders at the Company’s 2019 AGM.
In accordance with the Colleague Share Plan Rules, participants’ contributions are used to purchase shares on a monthly basis on behalf of the individuals (Purchased Shares) and held within the Nominee. At the end of the Plan Year, the participants receive a conditional right to receive one share (Matching Share) for every one Purchased Share that they have purchased. Provided the participants hold the Purchased Shares in the Nominee until the second anniversary of the end of the Plan Year, the conditional right to Matching Shares will vest.
In 2024, nearly 17 shares vested outside of the usual timetable due to deaths or good leavers, and in January 2025, 28,314 shares vested as part of the fourth Plan Year. As at 14 February 2025, the Nominee held 178,528 shares in relation to the Colleague Share Plan.
Code of Conduct
The Code of Conduct (Code) applies to all Directors, officers and employees and complies with the NYSE rules as set out in Section 406 of the US Sarbanes-Oxley Act 2002. Further details on our Code, including the Board’s oversight of the Code, are set out in the Strategic Report on page 78.
Business relationships with suppliers, customers and others
Our business relationships with our guests, hotel owners and suppliers are fundamental to our commercial success. During the year, the Board considered matters related to them and had regard to the impact of decisions on them as detailed in the key matters discussed by the Board on pages 124 to 125. These included strategic and operational matters relating to our brand portfolio, global sales strategy and operating regions.
The Board monitors relationships through a mixture of presentations, reports and direct engagement. The Responsible Business Committee specifically reviews responsible procurement processes, targets and the Supplier Code of Conduct.
Details of how relationships have been maintained during the year are set out in the key stakeholder engagement tables on pages 9, 42 and 43.
The Group is party to a technology agreement with Amadeus Hospitality Americas, Inc. (Amadeus), for the Guest Reservation System used by the Group. The initial term of 10 years will expire in 2028, and the Group has the right to extend this agreement for two additional periods of up to 10 years each on the same terms, conditions and pricing. The financial and performance obligations in this agreement are guaranteed by Amadeus IT Group S.A., the parent company of Amadeus.
Otherwise, there are no specific individual contracts or arrangements considered to be essential to the business of the Group as a whole.
Future business developments of the Group
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|
Details on these are set out in the Strategic Report on pages 20 to 21. |
Finance
Political donations
The Group made no political donations under the Companies Act during the year and proposes to maintain this policy in respect of such donations. Notwithstanding this policy, in accordance with US law, one of IHG’s US subsidiaries provides administrative support to an employee-operated Political Action Committee in the US (US PAC), which is funded by voluntary political donations from eligible employees. The US PAC is not controlled by IHG. All decisions regarding the amounts and recipients of contributions are directed by the Board of Directors of the US PAC, in accordance with its Charter and By-laws. In 2024, a total of US $18,100 was expended on political contributions by the US PAC.
Financial risk management
|
|
The Group’s financial risk management objectives and policies, including its use of financial instruments, are set out in note 23 to the Group Financial Statements on pages 236 to 240. |
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 279 | |||||||||||
Significant agreements and change of control provisions
The Group is a party to the following arrangements which could be terminated upon a change of control of the Company and which are considered significant in terms of their potential impact on the business of the Group as a whole:
| – | The $1.35 billion syndicated loan facility agreement dated 28 April 2022 and maturing in April 2029, under which a change of control of the Company would entitle each lender to cancel its commitment and declare all amounts due to it payable. |
| – | The 10-year £300 million bond issued by the Company on 14 August 2015, under which, if the bond’s credit rating was downgraded in connection with a change of control, the bond holders would have the option to require the Company to redeem or, at the Company’s option, repurchase the outstanding notes together with interest accrued. |
| – | The 10-year £350 million bond issued by the Company on 24 August 2016, under which, if the bond’s credit rating was downgraded in connection with a change of control, the bond holders would have the option to require the Company to redeem or, at the Company’s option, repurchase the outstanding notes together with interest accrued. |
| – | The 8.5-year €500 million bond issued by the Company on 15 November 2018, under which, if the bond’s credit rating was downgraded in connection with a change of control, the bond holders would have the option to require the Company to redeem or, |
| at the Company’s option, repurchase the outstanding notes together with interest accrued. |
| – | The eight-year £400 million bond issued by the Company on 8 October 2020, under which, if the bond’s credit rating was downgraded in connection with a change of control, the bond holders would have the option to require the Company to redeem or, at the Company’s option, repurchase the outstanding notes together with interest accrued. |
| – | The six-year €600 million bond issued by IHG Finance LLC on 28 November 2023, under which, if the bond’s credit rating was downgraded in connection with a change of control, the bond holders would have the option to require IHG Finance LLC to redeem or, at IHG Finance LLC’s option, repurchase the outstanding notes together with interest accrued. |
| – | The seven-year €750 million bond issued by IHG Finance LLC on 27 September 2024, under which, if the bond’s credit rating was downgraded in connection with a change of control, the bond holders would have the option to require IHG Finance LLC to redeem or, at IHG Finance LLC’s option, repurchase the outstanding notes together with interest accrued. |
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Further details on material contracts are set out on pages 293 and 294. |
Disclosure of information to Auditor
|
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For details, see page 179. |
Greenhouse gas (GHG) emissions and Streamlined Energy and Carbon Reporting (SECR)
|
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Disclosures in respect of GHGs and SECR requirements are included on pages 74 to 76. |
Going concern
An overview of the business activities of IHG, including a review of the key business risks that the Group faces, is given in the Strategic Report on pages 4 to 110 and in the Group information on pages 280 to 295.
As at 31 December 2024, the Group had total liquidity of $2,319m, comprising $1,350m of undrawn bank facilities and $969m of cash and cash equivalents (net of overdrafts and restricted cash).
There remains a wide range of possible planning scenarios over the going concern period. The scenarios considered and assessment made by the Directors in adopting the going concern basis for preparing these financial statements are included on page 197.
Based on the assessment completed, the Directors have a reasonable expectation that the Group has sufficient resources to continue operating until at least 30 June 2026, and there are no material uncertainties that may cast doubt on the Group’s going concern status.
Accordingly, they continue to adopt the going concern basis in preparing the Financial Statements.
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Please see the viability statement on pages 109 and 110. |
By order of the Board,
Nicolette Henfrey
Company Secretary
InterContinental Hotels Group PLC
Registered in England and Wales,
Company number 05134420
17 February 2025
Listing Rules – compliance with LR 6.6.4R
The below table sets out only those sections of LR 6.6.1R which are relevant. The remaining sections of LR 6.6.1R are not applicable.
| Section | Applicable sub-paragraph within LR 9.8.4C | Location | ||||||
| 3 | Details of long-term incentive schemes | Directors’ Remuneration Report, pages 138 to 166 | ||||||
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| 280 | IHG | Annual Report and Form 20-F 2024 | ||||||
Group information
History and developments
The Company was incorporated and registered in England and Wales with registered number 05134420 on
21 May 2004 as a limited company under the Companies Act 1985 with the name Hackremco (No. 2154) Limited. In 2004/05, as part of a scheme of arrangement to facilitate the return of capital to shareholders, the following structural changes were made to the Group: (i) on 24 March 2005, Hackremco (No. 2154) Limited changed its name to New InterContinental Hotels Group Limited; (ii) on 27 April 2005, New InterContinental Hotels Group Limited re-registered as a public limited company and changed its name to New InterContinental Hotels Group PLC; and (iii) on 27 June 2005, New InterContinental Hotels Group PLC changed its name to InterContinental Hotels Group PLC and became the holding company of the Group.
The Group, formerly known as Bass, and then 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 1988 Bass acquired Holiday Inn International and the remainder of the Holiday Inn brand in 1990. The InterContinental brand was acquired by Bass in 1998 and the Candlewood Suites brand was acquired by Six Continents in 2003.
On 15 April 2003, following shareholder and regulatory approval, Six Continents PLC separated into two new listed groups, InterContinental Hotels Group PLC, comprising the hotels and soft drinks businesses, and Mitchells & Butlers plc, comprising the 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 of Britvic (Britannia Soft Drinks Limited for the period up to 18 November 2005, and thereafter, Britannia SD Holdings Limited (renamed Britvic plc on 21 November 2005), which became the holding company of the Britvic Group on 18 November 2005), a manufacturer and distributor of soft drinks in the UK, in December 2005. The Group now continues as a stand-alone hotels business.
Recent acquisitions and divestitures
The Group made no acquisitions or disposals in 2024, 2023 or 2022.
Capital expenditure
| – | Gross capital expenditurea in 2024 totalled $350 million compared with $242 million in 2023 and $161 million in 2022, see page 270. |
| – | At 31 December 2024, capital committed (being contracts placed for expenditure on property, plant and equipment and intangible assets not provided for in the Group Financial Statements) totalled $8 million, see page 251. |
| a. | Definitions for Non-GAAP revenue and operating profit measures can be found on pages 103 to 108. Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 266 to 272. |
Risk factors
The Group is subject to a variety of inherent risks that may have an adverse impact on its business operations, financial condition, turnover, profits, brands and reputation. This section describes the main risks that could materially affect the Group’s business. The risks below are not the only ones that the Group faces. Some risks are not yet known to the Group and some risks that the Group does not currently believe to be material could later turn out to be material.
During 2024, the Group continued to face risks relating to macro external factors, including the impact of continuing inflationary pressures and challenges to labour availability in key markets, ongoing conflict in Ukraine and in the Middle East and elections and changes within governments. These factors contributed to additional political, economic and financial market developments and uncertainties, including global supply chain disruptions, continuing cybersecurity threat levels, the potential for additional tariffs and increases to the cost of borrowing due to rising interest rates.
Following the outbreak of the war in Ukraine, the Group ceased all operations in Russia due to the ongoing and increasing challenges of operating there and consistent with evolving UK, US and EU sanction regimes. The Group continues to monitor the impact of the war in relation to our two hotels in Ukraine, one of which is operating.
The Group’s strategy will require balancing of short-term execution and long-term goals, along with resilience in an environment of uncertainties relating to, for example, its ability to deliver innovation at scale and speed; how it uses, stores, secures and transfers data; owner preferences for and ability to invest in its brands; global and local supply chain efficiency and resiliency; and legal and regulatory complexity and litigation trends.
Several other factors will continue to remain important to the Group’s outlook, including those relating to operational resilience, such as the safety and security of hotel operations; guest preferences for branded hotel experiences and loyalty in a competitive industry where expectations continue to evolve; and its ability to attract and retain talent and capability where key aspects of the Group’s growth ambitions and operations are dependent on access to experience and knowledge.
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| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 281 | |||||||||||
The Group also faces emerging risks where the impact and likelihood are not yet fully understood or factors that may become significant in the medium- to long-term. This includes uncertainty linked to the rapidly evolving wider macroeconomic and geopolitical factors, including government policy and how this might impact travel patterns and business relationships, central bank policy and how this might impact development and financing costs of owners, rapid development of generative artificial intelligence technology, and the physical risks of climate change on the Group’s activities.
To enable focus on the material risk factors facing the Group, the detail below has been organised under headings corresponding to the ordering of the principal risks outlined earlier in this document.
|
|
The principal risks are on pages 46 to 51, the cautionary statements regarding forward-looking statements are on page 309 and financial and forward-looking information in note 8 on pages 217 to 221, and note 24 on pages 240 to 242. |
| 1. | Guest preferences or loyalty for branded hotel experiences and channels |
The Group is subject to a competitive and changing industry
The Group competes against other global hotel chains, local hotel companies and independent hotels to win the loyalty of guests, employees and owners. The competitive landscape also includes other types of businesses, both global and specific to certain markets, such as web-based booking channels (which include online travel agents and intermediaries), and alternative sources of accommodation, such as short-term lets of private property. Failure to compete effectively in traditional and emerging areas of the business could impact the Group’s market share, system size, profitability and relationships with owners and guests. The hospitality industry has previously experienced consolidation, and further such activity may result in such competitors having access to increased resources, capabilities or capacity and provide advantages from scale of revenues, marketing funds and/or cost structures.
The Group is reliant on the reputation of its existing brands and is exposed to inherent reputation risks
Any event that materially damages the reputation of one or more of the Group’s brands and/or fails to sustain the appeal of the Group’s brands to its customers and owners may have an adverse impact on the value of that brand and subsequent revenues from that brand or business. In particular, if the Group is unable to create consistent, valued and quality products and guest experiences across the franchised, managed, owned, leased and managed lease hotels or if the Group, its franchisees or business partners fail to act responsibly, this could result in an adverse impact on its brand reputation. In addition, the value of the Group’s brands could be influenced by a number of external factors outside the Group’s control, such as, but not limited to, changes in sentiments against global brands, changes in applicable regulations related to the hotel industry or to franchising, successful commoditisation of hotel brands by online travel agents and intermediaries, or changes in owners’ perceptions of the value of the Group.
The Group is exposed to inherent uncertainties associated with brand development and expansion
The Group has significantly expanded its brand portfolio, entered a number of new partnerships and also expanded co-branded credit card relationships to support the IHG Rewards programme. Since the rollout, integration and growth of these brands (including associated loyalty programmes) is dependent on market conditions, guest preference and owner investment, as well as continued cooperation with third parties, there are inherent risks that we will be unable to recover costs incurred in developing or acquiring the brands or any new programmes or products, or those brands, programmes, or products will not succeed as we intend. The Group’s ongoing agenda to deliver industry-leading net rooms growth creates risks relating to the transition of systems, new or changed operating models, services and processes, and may result in failures to improve commercial performance, leading to financial loss and undermining stakeholder confidence.
The Group is reliant on the ongoing appeal of our Loyalty programme
The Group faces an increasingly aggressive landscape as loyalty programmes offered by other hospitality companies, online travel platforms, and financial institutions become a key factor to guests’ and owners’ preference for the brand. To satisfy guest expectations, it will be necessary to expand loyalty reward personalisation and provide a range of offerings globally to support midscale to luxury brands. Exclusive partnerships will become increasingly important to deliver experiences that attract and retain new members. If we are unable to sustain a competitive and appealing loyalty programme our ability to attract, engage, and retain loyalty members may be compromised. This could negatively impact our overall operating results and financial condition, as well as the performance of related initiatives.
| 2. | Owner preferences for or ability to invest in our brands |
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 the franchising business and management 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 favourable as current arrangements; the Group may not be able to renew existing arrangements on similarly favourable terms, or at all.
There can be no assurance that the Group will be able to identify, retain or add franchisees to the IHG System, to secure management contracts or open hotels in our development pipeline. For example, the availability of suitable sites, market saturation, planning and other local regulations or the availability and affordability of finance, which has remained a challenge in 2024, may restrict the supply of suitable hotel development opportunities under franchise or management agreements and mean that not every hotel in our development pipeline may develop into a new hotel that enters our system.
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Group information continued
Risk factors continued
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 individual or masterbrand or system improvement initiatives. This could result in franchisees prematurely terminating contracts, which could lead to disputes, litigation, damages and other expenses and would adversely impact the overall IHG System size and the Group’s financial performance.
The Group is exposed to the risks of hotel industry overcapacity
The future operating results of the Group could be adversely affected by industry overcapacity (by number of rooms) and weak demand due, for example, to customer confidence in business and leisure travel, whether related to pandemics, war, or otherwise, the cyclical nature of the hotel industry, other differences between planning assumptions and actual operating conditions, cost-of-living pressures and changes in stakeholder expectations around environmental factors. These conditions could result in reductions in room rates and occupancy levels, which would adversely impact the financial performance of the Group.
| 3. | Talent and capability attraction or retention |
The Group requires the right people, skills and capability to manage growth and change
In order to remain competitive, the Group relies upon hiring and retaining highly skilled employees with particular expertise or leadership capability. The Group’s strategic business plans could be undermined by a failure to build and sustain a resilient corporate culture, failure to recruit or retain key personnel, unexpected loss of key senior employees, inadequate succession planning and incentive plans, or failure to invest in the development of key skills.
The Group must compete against other companies inside and outside the hospitality industry for suitably qualified or experienced employees, up to and including Executive Directors. Some of the markets in which the Group operates may experience economic growth and/ or low levels of unemployment, pay compression, and there may be attractive roles and competitive rewards available elsewhere which limit the ability to attract and retain talent.
Labour shortages could restrict our ability and the ability of franchisees to operate hotel properties or grow our business or could result in increased costs that could adversely affect results of operations. The Covid-19 pandemic negatively affected the labour market for employers. Staffing shortages in various parts of the world could hinder our ability to grow and expand our business. Some emerging markets may not have the required local expertise to operate a hotel, particularly for luxury and lifestyle brands, and may not be able to attract the right talent.
If we or our franchisees are unable to attract, retain, train, manage and engage skilled individuals, the ability to staff and operate the hotels that we manage, own or franchise could be diminished. This could reduce customer satisfaction and adversely affect the reputation of our brands. Labour costs may also increase, threatening the ability to operate hotels and our corporate support functions, achieve business growth targets or impact the profitability of our operations. Additionally, unless the Group maintains a sufficient infrastructure to enable knowledge and skills to be passed on, the Group risks losing accumulated knowledge if key employees leave.
Collective bargaining activity could disrupt operations, increase our labour costs or interfere with the ability of our management to focus on executing our business strategies
A significant number of the Group’s colleagues at its managed, owned, leased and managed lease hotels in the US, Canada, Mexico, Grand Cayman and Netherlands Antilles are covered by collective bargaining agreements and similar agreements. If relationships with those colleagues or the unions that represent them deteriorate, the properties we own, lease or manage could experience labour disruptions such as strikes, lockouts, boycotts and public demonstrations. In 2024
bargaining agreements in several major union markets expired and were renegotiated. In 2025 there will be labour activity in San Diego and some smaller markets.
Hotel sector union member participation continues to increase in key markets within the Americas region, which may require IHG to enter into new labour agreements as more employees become unionised in the future. Labour disputes, which are generally more likely when collective bargaining agreements are being renegotiated, could harm our relationship with our colleagues, result in increased regulatory inquiries and enforcement by governmental authorities and deter guests. Further, adverse publicity related to a labour dispute could harm our reputation and reduce customer demand for our services.
Labour regulation and the negotiation of new or existing collective bargaining agreements could lead to higher wage and benefit costs, changes in work rules that raise operating expenses, legal costs and limitations on our ability or the ability of our third-party property owners to take cost-saving measures during economic downturns. We do not have the ability to control the negotiations of collective bargaining agreements covering unionised labour employed by our third-party property owners and franchisees. Increased unionisation of our workforce, new labour legislation or changes in regulations could disrupt our operations, reduce our profitability or interfere with the ability of our management to focus on executing our business strategies.
| 4. | Data and information usage, storage, security and transfer |
The Group is exposed to cybersecurity and data privacy risks
The Group is increasingly dependent upon the collection, usage, retention, availability, integrity and confidentiality of information, including, but not limited to: guest, employee and owner credit card, financial and personal data, business performance, financial reporting and commercial development. The information is sometimes held in different formats, such as digital, paper, voice recordings and video, and could be stored in many places, including cloud-based storage and facilities managed by third-party service providers, in our managed hotels, and by our independently owned and operated hotels, that are all subject to the same or similar risks.
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Cyber breaches are increasingly becoming an unfortunate reality for most companies and risks relating to cybersecurity appear to be heightened in light of geopolitical conflicts. The threats towards the hospitality industry and the Group’s information are dynamic, and include cyber-attacks, fraudulent use, loss or misuse by employees and breaches of our vendors’ security arrangements, among others.
For example, in 2022, parts of the Group’s technology systems were subject to unauthorised activity, causing disruption to the Group’s booking channels and other applications. A putative class action suit was filed by a small group of hotel owners related to the incident. This claim was dismissed in its entirety in July 2024. This cybersecurity breach follows additional previous cybersecurity incidents of a different nature in 2016.
The legal and regulatory environment around data privacy and requirements set out by the payment card industry surrounding information security across the many jurisdictions in which the Group operates are constantly evolving (such as the EU GDPR, China cybersecurity law, and US State privacy laws).
If the Group fails to protect information and ensure relevant controls are in place to enable the acceptable use and release of information through the appropriate channels in a timely and accurate manner, IHG System performance, guest experience and the reputation of the Group may be adversely affected. This could lead to revenue losses, fines, penalties, litigation and other additional costs.
We are required to comply with marketing and advertising laws relating to our direct marketing practices, including email marketing, online advertising, including in our use of generative artificial intelligence, and postal mailings. Further restrictions to the content or interpretations of these laws could adversely impact our current and planned activities and the effectiveness or viability of our marketing strategies to maintain, extend and acquire relationships with customers, and impact the amount and timing of our sales of certain products.
|
|
For information of incidents and ongoing legal proceedings relating to cybersecurity, data privacy and trade practices, see pages 251 and 295. |
The Group is exposed to intellectual property risks
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 changes in controls, laws and effectiveness of enforcement globally, particularly in jurisdictions that may not have developed levels of protection for corporate assets, such as intellectual property, trade secret, know-how and customer information and records. 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 and compete currently or in the future. Third-party claims that we infringe their intellectual property could lead to disputes, litigation, damages and other expenses.
| 5. | Ethical and social expectations |
The Group’s reputation and the value of its brands are influenced by the perception of various stakeholders of the Group
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 guests, owners, suppliers and communities in which the Group operates. The social and environmental impacts of its business are under increasing scrutiny, and the Group is exposed to the risk of damage to its reputation if it fails to (or fails to influence its business partners to) undertake responsible practices and engage in ethical behaviour, or fails to comply with relevant regulatory requirements.
| 6. | Legal, regulatory and contractual complexity or litigation exposures |
The Group is required to comply with existing and changing regulations and act in accordance with societal expectations across numerous countries, territories and jurisdictions
Government regulations affect countless aspects of the Group’s business, including corporate governance, health and safety, the environment, social responsibility, bribery and corruption, employment law and diversity, franchise laws and regulation, disability access,
competition/anti-trust and marketing practices, 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 Group’s strategy, including the markets the Group operates in, brand protection, and use or transmittal of personal data and use of artificial intelligence. If the Group fails to comply with existing or changing regulations, the Group may be subject to fines, prosecution, loss of licence to operate or reputational damage.
Companies that operate franchise systems may be subject to liabilities and claims relating to the franchisor/franchisee relationship, such as for allegedly being a ‘joint employer’ with a franchisee. Changes in laws or regulations relating to this relationship could result in a determination that we are a joint employer with our franchisees or that our franchisees are part of one unified system subject to joint and several liability. Such a determination could subject us to liability for employment-related and other liabilities of our franchisees and could cause us to incur other costs that have a material adverse effect on our results of operations and profit.
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 claims made by many parties, including but not limited to: guests, customers, joint venture partners, suppliers, employees, regulatory authorities, franchisees and/or the owners of the hotels it manages. Claims filed may include requests for punitive damages as well as compensatory damages. Unfavourable outcomes of claims or proceedings could have a material adverse 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. (See also legal proceedings on page 295.)
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Group information continued
Risk factors continued
Domestic and international environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities
The Group is exposed to certain compliance costs and potential liabilities under various foreign and US federal, state and local environmental, health and safety laws and regulations. These laws and regulations govern actions and reporting requirements relating to matters including air emissions, the use, storage and disposal of hazardous and toxic substances, and wastewater disposal. The Group’s failure to comply with such laws, including any required permits or licences, could result in substantial fines or possible revocation of our authority to conduct some of our operations.
We could also be liable under such laws for the costs of investigation, removal or remediation of hazardous or toxic substances at our currently or formerly franchised, managed, owned, leased or managed lease hotels or at third-party locations in connection with our waste disposal operations, regardless of whether or not we knew of, or caused, the presence or release of such substances. The Group may also be required to remediate such substances or remove, abate or manage asbestos, mould, radon gas, lead or other hazardous conditions at our properties. The presence or release of such toxic or hazardous substances could result in third-party claims for personal injury, property or natural resource damages, business interruption or other losses. Such claims and the need to investigate, remediate or otherwise address hazardous, toxic or unsafe conditions could adversely affect the Group’s operations, the value of any affected property, or our ability to sell, lease or assign our rights in any such property, or could otherwise harm our business or reputation. Environmental, health and safety requirements are increasingly stringent, and our costs may increase as a result.
The Group’s financial performance may be affected by changes in tax laws
Many factors will affect the Group’s future tax rate, the key ones being legislative developments, future profitability of underlying subsidiaries and tax uncertainties. Tax liabilities or refunds may also 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. The Group continues to monitor external tax proposals, most notably in the US where the new government is reviewing retaliatory options against perceived aggressive tax behaviours by other territories against the US. Further information is included in note 8 to the Group Financial Statements on pages 217 to 221.
| 7. | Supply chain efficiency and resilience (including corporate and hotel products and services) |
The Group is dependent upon a wide range of external stakeholders and business partners
The Group relies on the performance, behaviours and reputation of a wide range of business partners and external stakeholders, including, but not limited to, owners, contractors, lenders, suppliers, outsourced providers, vendors, joint-venture partners, online travel agents, third-party intermediaries and other business partners which may have different ethical values, interests and priorities. Further, the number and complexity of interdependencies with stakeholders is evolving. Breakdowns in relationships, contractual disputes, deterioration of the financial health of our partners, poor vendor performance, sub-standard control procedures, business continuity arrangements, insolvency, stakeholder behaviours or adverse reputations, which may be outside of the Group’s control, could adversely impact on the Group’s performance and competitiveness, delivery of projects, guest experiences or the reputation of the Group or its brands.
| 8. | Operational resilience to incidents or disruption or control breakdown (including geopolitical, safety and security, cybersecurity, fraud and health-related) |
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 organised crime, fraud,
employee dishonesty, cyber crime, pandemics or contagious diseases, 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 that, if managed poorly, could further expose the Group and its brands to significant reputational damage.
The Group is reliant upon the resilience of its reservation system and other key technology platforms and is exposed to risks that could disrupt their operation and/or integrity
The value of the Group is partly derived from the ability to drive reservations through its reservation system and technology platforms which are highly integrated with other processes and systems and linked to multiple sales channels, including the Group’s own websites, in-house and third-party managed call centres, hotels, third-party intermediaries and travel agents.
The scope and complexity of our technology infrastructure, including increasing reliance on third-party suppliers to support and protect our systems and information, as well as rapidly evolving cyber threats, means that we are inherently vulnerable to physical damage, failures, disruptions, denial of service, phishing or other malware attacks, ransomware, cyber terrorism and fraud, as well as human error, negligence and wilful misuse. These risks may be heightened when these capabilities are provided offshore or in cloud-based environments. Our franchisees and suppliers are also inherently vulnerable to the same risks.
Lack of resilience and operational availability of these systems provided by the Group or third-party technology providers and inability or difficulty in updating existing or implementing new functionality could lead to prolonged service disruption. This might result in significant business interruption, impact the guest booking experience, lead to loss of or theft of data, and subsequently adversely impact Group revenues, incur financial costs to remediate or investigate, lead to regulatory and/or contractual enforcement actions or lawsuits, or damage the Group’s reputation and relationships with hotel owners.
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The Group is exposed to political and economic developments
The Group is exposed to political, economic and financial market developments, such as recession, inflation and availability and/or cost of credit (due to rising interest rates) and currency fluctuations that could lower revenues and reduce income. The outlook for 2025 may worsen due to continued unrest and continued conflict in Ukraine and the Middle East, increased geopolitical and trade tensions between US and China and other geopolitical tensions globally; potential disruptions in the US economy; uncertain central bank policies; the impact of fluctuating commodity prices (including oil) on economies dependent on such exports; and barriers to global trade, including unforeseeable changes in regulations, imposition of tariffs or embargoes and other trade restrictions or controls. The interconnected nature of economies suggests any of these events, or other events, could trigger a recession that reduces leisure and business travel as demand for our services is closely associated with the performance of the general economy and is sensitive to business and personal discretionary spending levels. Decreased global or regional demand for hospitality products and services can be especially pronounced during economic downturns or low levels of economic growth, and the hospitality industry may fail to keep pace with overall economic improvement. Such declines in demand for our products and services could adversely affect room rates and/or occupancy levels and other income-generating activities.
Specifically, the Group is most exposed to the impact of political and economic risk factors in relation to the change of administration within the US market, and to Greater China. The owners or potential owners of hotels franchised or managed by the Group face similar risks that could adversely impact their solvency and the Group’s ability to secure and retain franchise or management agreements. Accordingly, the Group is particularly susceptible to adverse changes in these economies, as well as changes in their currencies. In addition to trading conditions, the economic outlook also affects the financial health of current and potential owners and their ability to access capital, which could impact existing operations, timely payment of IHG fees and the health of the pipeline.
The Group is exposed to continued disruption and consequences from the war in Ukraine
The Group continues to monitor the impact of the war in relation to our two hotels in Ukraine, both of which are operating. The Group has ceased all operations in Russia. Although these operations were not material to consolidated financial results, the Group continues to face uncertainty relating to the broader consequences of this conflict on global macroeconomic conditions. These uncertainties include the potential for governments to impose additional sanctions or other economic or military measures. Further expansion or escalation of military confrontations or related geopolitical tensions, including increased restrictions on global trade, could also result in, among other things, depressed or restricted travel demand, declines in consumer confidence and economic growth, an increased likelihood of cyber attacks or information technology disruption, supply chain disruptions, increases in inflation rates, changes to foreign currency exchange rates, constraints, volatility or disruption in financial markets, the decreased availability of raw materials, supplies, freight and labour, and uncertainty about economic and global stability.
The Group is also exposed to disruption and consequences from the conflict in the Middle East
The Group continues to face some disruption relating to the broader consequences of the Middle East conflict on neighbouring countries and on wider global macroeconomic uncertainty, including supply chain disruption through the region. Further expansion or escalation of military confrontations or related geopolitical tensions could also result in similar factors to those listed above relating to the war in Ukraine.
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 profile of the business. However, the Group’s claims experience and wider external 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 carried by the Group, our owners or other partners for damage, other potential losses or liabilities to third parties involving properties that we own, manage or franchise could expose the Group to large claims or could result in the loss of capital invested in properties.
The Group is exposed to risks related to executing and realising benefits from strategic transactions, including acquisitions and restructuring
The Group may seek to make strategic transactions, including acquisitions, divestments or investments in the future. The Group may not be able to identify opportunities or complete transactions on commercially reasonable terms, or at all, and may not realise the anticipated benefits from such transactions. Strategic transactions come with inherent valuation, financial and commercial risks, and regulatory and insider information risks during the execution of the transactions. The Group may also continue to make organisational adjustments to support delivery of our growth ambitions, including the integration of acquisitions into the Group’s operating processes and systems. This creates inherent risks of complexity and that any changes made could be unsustainable or that we are unable to achieve the return envisaged through reinvestment. In addition, the Group may face unforeseen costs and liabilities, diversion of management attention, as well as longer-term integration and operational risks, which could result in a failure to realise benefits, financial losses, lower employee morale and loss of talent.
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 grow through activities that do not involve significant amounts of its own capital, the Group does require capital to fund some development opportunities, technological innovations and strategic acquisitions; and to maintain and improve owned, leased and managed lease hotels. The Group is reliant upon having financial strength and access to capital markets and other borrowing facilities to meet these expected capital requirements.
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Group information continued
Risk factors continued
The Group’s $1,350m revolving credit facility (RCF) is only available if the financial covenants in the facility are complied with. Non-compliance with covenants could result in the Group’s lenders demanding repayment of the funds advanced and any undrawn facilities could be unavailable. In addition, if the RCF was drawn and repayment was demanded, it would trigger a repayment of the bond debt. If the Group’s financial performance does not meet market expectations, it may not be able to refinance existing bond and bank facilities on terms considered favourable.
The Group currently has a senior unsecured long-term credit rating of BBB from S&P and a Baa2 rating from Moody’s. In the event of the S&P rating being downgraded below BBB- (a downgrade of two levels) there would be an additional step-up coupon of 1.25% payable on the bonds maturing between 2025 and 2029. In the event of the Moody’s rating being downgraded below Baa3 (a downgrade of two levels), there would be an additional step-up coupon of 1.25% payable on the bonds maturing in 2029. The bonds maturing in 2031 do not have a step-up coupon.
The Group’s operations are dependent on maintaining sufficient liquidity to meet all foreseeable medium-term requirements and provide headroom against unforeseen obligations
Cash and cash equivalents are held in short-term deposits, money market funds and repurchase agreements with short maturities. Most of the Group’s funds are held in the UK or US, although $2 million (2023: $30 million) is held in countries where repatriation is restricted as a result of foreign exchange regulations. Medium and long-term borrowing requirements are met through the bonds and RCF. Short-term borrowing requirements may be met from drawings under uncommitted overdrafts and RCF.
The Group is exposed to an impairment of the carrying value of our brands, goodwill or other tangible and intangible assets negatively affecting our consolidated operating results
Significant amounts of goodwill, intangible assets, right-of-use assets, property, plant and equipment, investments and contract assets are recognised on the Group balance sheet. We review the value of our goodwill and indefinite-lived intangible assets
for impairment annually (or whenever events or circumstances indicate impairment may have occurred).
Changes to estimated values can result from political, economic and financial market developments or other shifts in the business climate, the competitive environment, the perceived reputation of our brands (by guests or owners), or changes in interest rates, operating cash flows, market capitalisation, credit risk of owners or developments in the legal or regulatory environment. Because of the significance of our goodwill and other non-current assets, we have incurred and may incur future impairment charges on these assets which could have a material adverse effect on our financial results. Due to significant challenges and uncertainty in the data associated with both risks and opportunities, the Group is not yet able to fully quantify the potential financial impacts of climate change. The Group continues to refine its workplan to enable quantification in the future and is focused on ensuring the identified risks and opportunities are integrated into our business strategy.
The Group is exposed to fluctuations in exchange rates, currency devaluations or restructurings and to interest rate risk in relation to its borrowings
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 liabilities and interest cover. The most significant exposures of the Group are in currencies that are freely convertible. The Group’s reported debt has an exposure to borrowings held in pounds sterling (including €500 million euro bonds which have been swapped into sterling using currency swaps). Conducting business in currencies other than US dollars exposes us to fluctuations in exchange rates, currency devaluations, or restructurings. This could potentially lower our reported revenues, increase our costs, reduce our profits or disrupt our operations. Exposure to these factors is linked to the pace of our growth in territories outside the US and, if the proportion of our revenues grows, this may increase the potential sensitivity to currency movements having an adverse impact on our results. The Group is also exposed to interest rate risk in relation to its fixed and floating rate borrowings and interest rates may be higher on new or replacement borrowings compared to existing interest rates.
All of the current bond debt ($3,257m) is at fixed rates. The Group may use interest rate swaps to manage the interest rate exposure.
The Group could be affected by credit risk on treasury transactions and loans to owners
The Group uses long-term credit ratings from S&P, Moody’s and Fitch Ratings as a basis for setting its counterparty limits. In order to manage the Group’s credit risk exposure, the treasury function sets counterparty exposure limits using metrics including credit ratings, the relative placing of credit default swap pricings, tier 1 capital and share price volatility of the relevant counterparty. The Group trades only with recognised, 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, including loans to owners, 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. Further information is included in note 15 to the Group Financial Statements.
| 9. | Our ability to deliver technological or digital performance or innovation (at scale, speed, etc.) |
The Group is exposed to inherent risks in relation to changing technology and systems
As the use of the internet, artificial intelligence, mobile and data technology grows, and new and disruptive technology solutions are developed, customer needs and expectations evolve at pace. The Group may find that its evolving technology capability is not sufficient and may have to make substantial additional investments in new technologies or systems to remain competitive. Failure to keep pace with developments in technologies or systems, and also with regulatory, risk and ethical considerations of how these developments are used, for example in relation to cross-border transfers of data, may put the Group at a competitive disadvantage. Generative artificial intelligence is an emerging technology that the Group expects will create uncertainty for the travel and hospitality sector and society in general.
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The primary impacts are considered to be in relation to how guests will find and interact with hotels, how colleagues will work and talent and capability attraction or retention (among others).
In addition, the technologies or systems that the Group chooses to deploy may not be commercially successful or the technology or system strategy may not be sufficiently aligned with the needs of the business. Any such failure could adversely affect guest experiences, and the Group may lose customers, fail to attract new customers, impact our appeal to owners, incur substantial costs or face other losses. This could further impact the Group’s reputation in regards to innovation.
(See also ‘4. Data and information usage, storage, security and transfer’.)
The Group’s integration of AI technologies into our processes and systems may introduce various operational, compliance and reputational risks
If the Group fails to keep pace with the capabilities provided by emerging AI technologies, it could weaken the Group’s competitive position and negatively impact its financial results. The use of AI, particularly generative AI, may lead to new liabilities, increased regulatory scrutiny and potential cybersecurity incidents involving personal data, all of which could harm our reputation and operations. Additionally, challenges in managing AI applications could result in inaccuracies, biases and legal and ethical concerns. As AI evolves, the Group may face increased costs related to compliance with emerging regulations, necessitating significant resources to ensure ethical implementation and mitigate unintended consequences.
The Group is exposed to competition from online travel agents and intermediaries
A proportion of the Group’s bookings originate from large multinational, regional and local online travel agents and intermediaries with which the Group has contractual arrangements and to which it pays commissions. These platforms offer a wide range of products, often across multiple brands, have growing booking and review capabilities, and may create the perception that they offer the lowest prices. Some of these online travel
agents and intermediaries have strong marketing budgets and aim to create brand awareness and brand loyalty among consumers, which may impact the Group’s profitability, undermine the Group’s own booking channels and value to its hotel owners.
| 10. | The impact of climate-related physical and transition risks |
The Group is exposed to the risk of events or stakeholder expectations that adversely impact domestic or international travel, including climate change
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 and pandemics or threats thereof, travel-related accidents or industrial action, natural or man-made disasters, or other local factors impacting specific countries, cities or individual hotels, as well as increased transportation and fuel costs.
Additionally, the Group may be impacted by increasing stakeholder and societal expectations and attitudes in relation to factors contributing to climate change including overtravel and overtourism, and those linked directly to hotels including waste, water, energy, or impact on local communities. A decrease in the demand for business and/or leisure hotel rooms as a result of such events or attitudinal and demand shifts may have an adverse impact on the Group’s operations or growth prospects and financial results. In addition, inadequate planning, preparation, response or recovery in relation to a major incident or crisis may cause loss of life, prevent operational continuity, or result in financial loss, and consequently impact the value of our brands and/or the reputation of the Group.
The Group is exposed to climate change and sustainability risks
The Group is subject to both physical risks, such as extreme weather events and rising sea levels, and transition risks related to changing consumer preferences and evolving regulations on greenhouse gas emissions and sustainability. Furthermore, shifts in consumer travel preferences due to sustainability concerns, along with increased energy costs and insurance
premiums for our hotels, could negatively impact our operations. Collectively, these factors may lead to higher operating costs, reduced demand, and operational disruptions, adversely affecting our profitability and growth.
The Group is exposed to risks relating to our commitments in relation to Climate Change
In line with our commitment to reduce our energy use and carbon emissions in line with climate science, the Group has implemented a 2030 science-based target to reduce absolute scope 1, 2, and scope 3 greenhouse gas emissions from fuel and energy-related activities and franchises by 46% by 2030 from a 2019 base year. This ambition requires significant transformation across IHG, hotel owners and supply chain partners, including investment in physical assets and operational procedures. It is also dependent on government financial incentives, the decarbonisation of electricity grids and hotel owners having access to scalable, cost-effective renewable energy, as well as new operational behaviours and mindset shifts, including from guests, to adapt to low-energy products and services. Despite its ongoing efforts, the Group is not on track to meet its 2030 target. The Group remains dedicated to the actions it is taking to assist hotel owners in reducing carbon emissions and while its programmes will require time to scale, the actions being taken today will improve operational efficiency of IHG hotels and prepare for accelerated decarbonisation once market factors are more favourable.
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Annual Report and Form 20-F 2024 |
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Group information |
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| – | Engagement with leaders from other IHG business functions, including to identify and assess cybersecurity threats, and to act as point of contact for escalation of issues and incidents. |
| – | User awareness and colleague engagement, including communications to corporate and hotel teams on changing threats and phishing simulation exercises to raise risk awareness. |
| – | Maintenance of information risk management processes including a risk register and standard contract language. |
| – | Risk assessment of third parties based on access to IHG systems, data, and operational reliance using a combination of manual procedures, for example, completion of security questionnaires, and independent cyber risk scoring. Critical rated third parties are reviewed annually. |
| – | Security compliance to coordinate required tracking of compliance for applicable regulations and standards, including remediation of any regulatory and audit findings. |
| – | Security engineering and architecture to define, implement and maintain standards for the secure use of core technology platforms and solutions, including new technology solutions and potential business partners and acquisitions. |
| – | Assessment of the security of individual business applications and platforms, including good security hygiene within coding. |
| – | Vulnerability management for all technical components of infrastructure and core application platforms. |
| – | Identity and access management for global platforms and solutions, including privileged access management, and loyalty account members. |
| – | Cyber threat intelligence relationships with worldwide law enforcement and intelligence sharing organisations, profiling likely threat actors and methods, and providing insight on threat levels. |
| – | Security operations monitoring, triaging alerts to facilitate response and action within agreed service level agreements. |
| – | Cyber incident response using agreed and practised playbooks for security events, coordinating with external incident response groups and wider IHG crisis protocols, and deploying tabletop exercises to simulate scenarios and identify potential gaps in response. |
| – | Center of Excellence project management, continuous process improvement, tracking of key performance metrics, change management, and communications to internal, executive and external stakeholder groups. |
Strategic |
Group Financial |
Parent Company |
Additional |
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Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
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28 9 |
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For more information about our risks, please refer to pages 46 to 51 and pages 280 to 287. |
Number of shares held outright |
APP deferred share awards |
LTIP/DAP share awards (unvested) |
Total number of shares held |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Committee member |
14 Feb 2025 |
31 Dec 2024 |
31 Dec 2023 |
14 Feb 2025 |
31 Dec 2024 |
31 Dec 2023 |
14 Feb 2025 |
31 Dec 2024 |
31 Dec 2023 |
14 Feb 2025 |
31 Dec 2024 |
31 Dec 2023 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elie Maalouf |
109,462 |
109,462 |
99,265 |
32,921 |
32,921 |
24,833 |
208,149 |
208,149 |
157,908 |
350,532 |
350,532 |
282,006 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Glover |
15,675 |
15,675 |
13,307 |
8,064 |
8,064 |
3,247 |
78,497 |
78,497 |
47,152 |
102,236 |
102,236 |
63,706 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jolyon Bulley |
52,164 |
52,164 |
52,164 |
22,045 |
22,045 |
17,034 |
74,938 |
74,938 |
62,472 |
149,147 |
149,147 |
131,670 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yasmin Diamond |
5,683 |
5,683 |
5,043 |
14,568 |
14,568 |
11,151 |
36,299 |
36,299 |
36,929 |
56,550 |
56,550 |
53,123 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nicolette Henfrey |
15,361 |
15,361 |
11,351 |
16,623 |
16,623 |
12,545 |
42,700 |
42,700 |
42,232 |
74,684 |
74,684 |
66,128 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wayne Hoare |
17,546 |
17,546 |
12,172 |
20,601 |
20,601 |
16,207 |
51,343 |
51,343 |
53,487 |
89,490 |
89,490 |
81,866 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kenneth Macpherson |
24,060 |
24,060 |
24,060 |
20,093 |
20,093 |
15,808 |
50,072 |
50,072 |
52,167 |
94,225 |
94,225 |
92,035 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Heather Balsley |
1,555 |
1,555 |
– |
4,666 |
4,666 |
3,174 |
38,437 |
38,437 |
34,544 |
44,658 |
44,658 |
37,718 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jolie Fleming |
0 |
0 |
n/a |
3,288 |
3,288 |
n/a |
23,701 |
23,701 |
n/a |
26,989 |
26,989 |
n/a |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel Aylmer |
8 |
8 |
n/a |
6,483 |
6,483 |
n/a |
17,870 |
17,870 |
n/a |
24,361 |
24,361 |
n/a |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |
Visit ihgplc.com/investors |
Table of Contents
| 290 | IHG | Annual Report and Form 20-F 2024 | ||||||
Group information continued
Description of securities other than equity securities
Fees and charges payable to a depositary
| Category (as defined by SEC) |
Depositary actions | Associated fee | ||
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| 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 splits, rights, mergers.
– 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) | ||
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| Receiving or distributing dividends | Distribution of stock dividends | $5 for each 100 ADSs (or portion thereof) | ||
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| Distribution of cash | $0.05 or less per ADS (or portion thereof) | |||
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| 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 for each 100 ADSs (or portion thereof) | ||
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| Withdrawing an underlying security | Acceptance of ADRs surrendered for withdrawal of deposited securities | $5 for each 100 ADSs (or portion thereof) | ||
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| Transferring, splitting or grouping receipts | Transfers, combining or grouping of depositary receipts | $1.50 per ADS | ||
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| General depositary services, particularly those charged on an annual basis | Other services performed by the depositary in administering the ADRs | $0.05 per ADS (or portion thereof) not more than once each calendar year and payable at the sole discretion of the ADR Depositary by billing ADR holders or by deducting such charge from one or more cash dividends or other cash distributions | ||
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| Expenses of the depositary | Expenses incurred on behalf of ADR holders in connection with:
– Compliance with foreign exchange control regulations or any law or regulation relating to foreign investment.
– The ADR Depositary’s or its custodian’s compliance with applicable laws, rules or regulations.
– Stock transfer or other taxes and other governmental charges.
– Cable, telex, facsimile transmission or delivery.
– Transfer or registration fees in connection with the deposit and withdrawal of deposited securities.
– Expenses of the ADR 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 the ADR Depositary or its agents. |
Expenses payable at the sole discretion of the ADR Depositary by billing ADR holders or by deducting charges from one or more cash dividends or other cash distributions are $20 per transaction | ||
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Fees and charges payable by a depositary
J.P. Morgan Chase Bank N.A. (the ADR Depositary) is the depositary for IHG’s ADR programme. The ADR Depositary’s principal executive office is at: J.P. Morgan Depositary Receipts, 390 Madison Avenue, New York, NY 10017. The ADR Depositary has agreed to reimburse certain reasonable Company expenses related to the Company’s ADR programme and incurred by the Company in connection with the ADR programme. The Company received $422,107 (of which $209,577 related to 2023 and $212,530 related to 2024) from the ADR Depositary during the year ended 31 December 2024 in respect of legal, accounting and other fees incurred in connection with the preparation of the Annual Report and Form 20-F, ongoing SEC compliance and listing requirements and investor relations programmes.
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 291 | |||||||||||
Articles of Association
The Company’s Articles of Association (the Articles) were first adopted with effect from 27 June 2005, were most recently amended at the AGM held on
3 May 2024 and are available on the Company’s website at ihgplc.com/ investors under Corporate governance. The following summarises material rights of holders of the Company’s ordinary shares under the material provisions of the Articles and English law. This summary is qualified in its entirety by reference to the Companies Act and the Articles.
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 05134420. The Articles do not restrict its objects or purposes.
Directors
Under the Articles, a Director may have an interest in certain matters (‘Permitted Interest’) without the prior approval of the Board, provided they have declared the nature and extent of such Permitted Interest at a meeting of the Directors or in the manner set out in Section 184 or Section 185 of the Companies Act.
Any matter in which a Director has a material interest, and which does not comprise a Permitted Interest, must be authorised by the Board in accordance with the procedure and requirements contained in the Articles. In particular, this includes the requirement that a Director may not vote on a resolution to authorise a matter in which they are interested, nor may they count in the quorum of the meeting at which such business is transacted.
Further, a Director may not vote in respect of any proposal in which they, or any person connected with them, has any material interest other than by virtue of their interests in securities of, or otherwise in or through, the Company, nor may they count in the quorum of the meeting at which such business is transacted. This is subject to certain exceptions, including in relation to proposals: (a) indemnifying them 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 they will be interested as an underwriter; (d) concerning another body corporate in which the Director is beneficially interested in less than one per cent 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 have authority under the Articles to set their own remuneration (provided certain criteria are met). While an agreement to award remuneration to a Director is an arrangement with the Company that comprises a Permitted Interest (and therefore does not require authorisation by the Board in that respect), it is nevertheless a matter that would be expected to give rise to a conflict of interest between the Director concerned and the Company, and such conflict must be authorised by a resolution of the Board. The Director that is interested in such a matter may neither vote on the resolution to authorise such conflict, nor count in the quorum of the meeting at which it was passed. Furthermore, as noted above, the interested Director is not permitted to vote in respect of any proposal in which they have any material interest (except in respect of the limited exceptions outlined above) nor may they count in the quorum of the meeting at which such business is transacted.
As such, a Director has no power, in the absence of an independent quorum, to vote on compensation to themselves, but may vote on a resolution (and may count in the quorum of the meeting at which it was passed) to award compensation to Directors provided those arrangements do not confer a benefit solely on them.
The Directors are empowered to exercise all the powers of the Company to borrow money, subject to any limitation in the Articles (currently $5 billion), unless sanctioned by an ordinary resolution of the Company.
Under the Articles, there are no age limit requirements relating to a person’s qualification to hold office as a Director of the Company.
Directors are not required to hold any shares of the Company by way of qualification.
The Articles require annual retirement and re-election of all Directors at the AGM.
Rights attaching to shares
Dividend rights and rights to share in the Company’s profits
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 UK and by the Companies Act. No dividend will bear interest as against the Company.
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 declare and pay to shareholders such interim dividends as appear to them to be justified by the Company’s financial position. If authorised 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).
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| 292 | IHG | Annual Report and Form 20-F 2024 | ||||||
Group information continued
Articles of Association continued
Any dividend unclaimed by a member (or by a person entitled by virtue of transmission on death or bankruptcy or otherwise by operation of law) after six years from the date the dividend was declared, or became due for payment, will be forfeited and will revert to the Company.
Voting rights
The holders of ordinary shares are entitled, in respect of their holdings of such shares, to receive notice of general meetings and to attend, speak and vote at such meetings in accordance with the Articles.
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. Resolutions put to the members at electronic general meetings shall be voted on by a poll, which poll votes may be cast by such electronic means as the Board in its sole discretion deems appropriate for the purposes of the meeting.
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 Chair 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 and on which there have been paid up sums in the aggregate at least equal to 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 two 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 the Auditor, the increase of share capital or the grant of authority to allot shares; and |
| – | a special resolution, which includes resolutions amending the Articles, 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 present and entitled to vote at a meeting at which there is a quorum.
Special resolutions require the affirmative vote of not less than three-quarters of the persons present and entitled to vote at a meeting at which there is a quorum.
AGMs 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 or to allow for shareholders to attend and participate in shareholder meetings by electronic means.
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-quarters 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 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 that class.
Rights in a winding-up
Except as the Company’s shareholders have agreed or may otherwise agree, upon the Company’s winding up, the balance of assets available for distribution is to be distributed among the holders of ordinary shares according to the amounts paid up on the shares held by them:
| – | 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. |
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 Articles 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.
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 293 | |||||||||||
Working Time
Regulations 1998
In the UK, many employees of Group companies are covered by the Working Time Regulations, which came into force on 1 October 1998. These regulations implemented the EU 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. The Working Time Regulations continue to apply in the UK following the UK’s exit from the EU as retained EU law under the European Union (Withdrawal) Act 2018, as amended.
In the UK, there is in place a national minimum wage under the National Minimum Wage Act 1998, as amended. At 31 December 2024, the minimum wage for individuals aged 18 to 20 was £8.60 per hour and for those aged 21 or over was £11.44 per hour in each case, excluding apprentices aged under 18 years or, otherwise, in the first year of their apprenticeships.
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.
None 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.
Material contracts
The following contracts have been entered into otherwise than in the course of ordinary business by members of the Group: (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) that contain provisions under which any Group member has any obligation or entitlement that 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.
Syndicated Facility
In April 2022, the Company, together with Six Continents Limited and InterContinental Hotels Limited (as borrowers and guarantors), signed a five-year $1.35 billion bank facility agreement (Syndicated Facility) with Bank of America Europe Designated Activity Company, Bank of China Limited, London Branch, Barclays Bank PLC, BNP Paribas, London Branch, Commerzbank Aktiengesellschaft, London Branch, DBS Bank Ltd, London Branch, Mizuho Bank, Ltd., MUFG Bank, Ltd., Standard Chartered Bank, Truist Securities, Inc., Unicredit Bank AG, U.S. Bank National Association and Wells Fargo Bank, N.A., London Branch all acting as lenders, mandated lead arrangers and joint bookrunners, and MUFG Bank, Ltd. as facility agent.
During 2023, IHG Finance LLC, a Group company, acceded to the Syndicated Facility agreement as an additional guarantor and the Syndicated Facility agreement was amended to ensure that the implementation of IFRS 16 ‘Leases’ was accurately reflected in the agreement’s terms. The Company has also exercised its ability to extend the term of the Syndicated Facility by two additional periods of 12 months, taking its term to April 2029.
The interest margin payable on borrowings under the Syndicated Facility is linked to the long-term credit rating assigned to the senior unsecured and unsubordinated debt of the Company. The margin can vary between the applicable reference rate + 0.50% and the applicable reference rate + 1.00% depending on the credit rating. The Syndicated Facility was undrawn as at 31 December 2024.
£4 billion Euro Medium Term Note programme
In 2024, the Group updated its Euro Medium Term Note programme (EMTN Programme) and issued a tranche of €750 million 3.625% notes due 27 September 2031 (2024 Issuance).
On 19 September 2024, an amended and restated trust deed (Trust Deed) was executed by the Company and IHG Finance LLC (IHGFL) as issuers (Issuers); the Company, IHGFL, Six Continents Limited and InterContinental Hotels Limited as guarantors (Guarantors) and U.S. Bank Trustees Limited as trustee (Trustee), pursuant to which the trust deed dated 27 November 2009, as
supplemented by six supplemental trust deeds dated 7 July 2011, 9 November 2012, 16 June 2015, 11 August 2016, 14 September 2020 and 21 September 2023 originally between the Company as issuer, Six Continents Limited and InterContinental Hotels Limited as guarantors and HSBC Corporate Trustee Company (UK) Limited as trustee relating to the Programme, was amended and restated. Under the Trust Deed, the Issuers may issue notes (Notes) unconditionally and irrevocably guaranteed by the Guarantors, up to a maximum nominal amount from time to time outstanding of £4 billion (or its equivalent in other currencies). Notes are to be issued in series (each a Series) in bearer or registered form. Each Series may comprise one or more tranches (each a Tranche) issued on different issue dates. A Tranche of Notes may be issued on the terms and conditions set out in a base prospectus as amended and/or supplemented by a document setting out the final terms (Final Terms) of such Tranche or in a separate prospectus specific to such Tranche.
Under the Trust Deed, each of the Issuers and the Guarantors has given certain customary covenants in favour of the Trustee.
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| 294 | IHG | Annual Report and Form 20-F 2024 | ||||||
Group information continued
Material contracts continued
The Final Terms issued under the 2024 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 (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.
On 19 September 2024, the Issuers and the Guarantors entered into an amended and restated agency agreement (Agency Agreement) with Elavon Financial Services DAC, UK Branch as principal paying agent, Elavon Financial Services DAC as transfer agent and registrar and the Trustee, pursuant to which the Issuers and the Guarantors appointed paying agents and calculation agents in connection with the EMTN Programme and the Notes.
Under the Agency Agreement, each of the Issuers and the Guarantors has given a customary indemnity in favour of the paying agents and the calculation agents.
On 19 September 2024, the Issuers and the Guarantors entered into an amended and restated dealer agreement (Dealer Agreement) with Barclays Bank PLC as arranger and Bank of China Limited, London Branch, Barclays Bank PLC, Commerzbank Aktiengesellschaft, Merrill Lynch International, MUFG Securities EMEA plc, Truist Securities, Inc. and Wells Fargo Securities International Limited as dealers (Dealers), pursuant to which the Dealers were appointed in connection with the EMTN Programme and the Notes.
Under the Dealer Agreement, each of the Issuer and the Guarantors has given customary warranties and indemnities in favour of the Dealers.
Exchange controls and
restrictions on payment
of dividends
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 capital or the payment of dividends on the ordinary shares or the ADSs, economic sanctions which may be in force in the UK from time to time impose 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.
Other than economic sanctions which may be in force in the UK from time to time, 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 or the ADSs. In addition, the Articles 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 licence or franchise from any US governmental agency held by Six Continents Hotels, Inc. or any subsidiary thereof.
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 295 | |||||||||||
Legal proceedings
Group companies have extensive operations in the UK, as well as internationally, and are involved in a number of legal claims and proceedings incidental to those operations. These legal claims and proceedings are in various stages and include disputes related to specific hotels where the potential materiality is not yet known. It is the Company’s view that such proceedings, either individually or in the aggregate, have not in the recent past and are not likely to have a significant effect on the Group’s financial position or profitability.
Notwithstanding the above, the Company notes the matters set out below, which are ongoing. Litigation is inherently unpredictable and, as at 14 February 2025, unless stated otherwise, the outcome of these matters cannot be reasonably determined.
A claim was filed on 26 June 2017 against Inter-Continental Hotels Corporation, InterContinental Hotels Group Resources, Inc., and InterContinental Hotels Group (Canada), Inc. seeking class action status and alleging breach of fiduciary duty, negligence, breach of confidence, intrusion upon seclusion, breach of contract, breach of privacy legislation, and unjust enrichment regarding an alleged data breach.
The claim was amended in March 2018 to name Six Continents Hotels, Inc. as the sole defendant. The claimant alleges that security failures allowed customers’ financial information to be compromised. As of 14 February 2025, the likelihood of a favourable or unfavourable result cannot be reasonably determined, and it is not possible to determine whether any loss is likely or to estimate the amount of any loss.
Seven claims were filed in March 2022 against Holiday Hospitality Franchising LLC, Six Continents Hotels, Inc., and the IHG Owner’s Association, seeking class action status on behalf of the Group’s franchisees. Following dismissal of two claims and consolidation of the remaining, an amended claim was filed against Holiday Hospitality Franchising LLC and Six Continents Hotels, Inc., alleging claims for breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, declaratory judgement, violation of the Sherman Act and demand for accounting. The claims allege that the Group, as franchisor, is engaged in unlawful business practices relating to numerous programmes, products and requirements which are purportedly part of the Group’s franchise system. The Court dismissed the majority of the claims, and the remaining claims allege breach of contract and deceptive trade practices. The Court ruled in IHG’s favour on the remaining claims and the matter is on appeal. As of 14 February 2025, the likelihood of a favourable or unfavourable result cannot be reasonably determined and it is not possible to determine whether any loss is likely or to estimate the amount of any loss.
A claim was filed on 15 September 2022 against Holiday Hospitality Franchising LLC, Six Continents Hotels, Inc., and IHG Technology Solutions, Inc. seeking class action status and damages for alleged claims for breach of contract, deceptive trade practices under state law, negligence and unjust enrichment. The allegations relate to the criminal, unauthorised access into the Group’s systems. On 31 July 2024, the Court dismissed the claims with prejudice, and no appeal was filed. Accordingly, the matter has been resolved.
An arbitration was filed on 11 December 2022, alleging that Holiday Inns Middle East Limited breached its contractual obligations by causing delay in relation to the opening of a hotel. The claim seeks monetary damages for various alleged losses. As of 14 February 2025, the likelihood of a favourable or unfavourable result cannot be reasonably determined.
Six Continents Hotels, Inc. is a party to two lawsuits seeking class action status that were filed in February and March 2024 against Six Continents Hotels, Inc. and other hotel companies as well as revenue management software providers. The lawsuits allege that the defendants violated antitrust laws by exchanging proprietary, current, and forward-looking information causing consumers to pay higher room rates. Motions to dismiss have been filed in both actions. As of 14 February 2025, the likelihood of a favourable or unfavourable result cannot be reasonably determined, and it is not possible to determine whether any loss is likely or to estimate the amount of any loss.
Table of Contents
| 296 | IHG | Annual Report and Form 20-F 2024 | ||||||
Shareholder information
Taxation
This section provides a summary of material US federal income tax and UK tax consequences to US holders, described 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 all of the tax considerations that may be relevant to any particular US holder, such as the provisions of the Internal Revenue Code of 1986, as amended (IR Code) known as the Medicare Contribution tax or tax consequences to US 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 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 any minimum tax; |
| – | tax-exempt organisations; |
| – | 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; and |
| – | persons who, directly or indirectly, own ordinary shares or ADSs representing 10% or more of the Company’s voting power or value. |
This section does not generally deal with the position of a US holder who is 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 person who, for US federal income tax purposes, is a beneficial owner of ordinary shares or ADSs and is: (i) a citizen or individual resident of the US; (ii) a corporation, or other entity taxable as a corporation, created or organised in or under the laws of the US, any state therein or the District of Columbia; (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 US persons are authorised to control all substantial decisions of the trust.
This section is based on the IR 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 ADR 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. For UK tax purposes, 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 ADSs, and ADSs for ordinary shares, will not be subject to US federal income tax or UK taxation on capital gains, although UK stamp duty or stamp duty reserve tax (SDRT) may arise as described below.
Investors should consult their own tax advisers regarding the US federal, state and local, the UK and other tax consequences of owning and disposing of ordinary shares or ADSs in their particular circumstances.
The following disclosures assume that the Company is not, and will not become, a passive foreign investment company (PFIC), except as described below.
Taxation of dividends
UK 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.
US federal income taxation
A US holder is generally 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 ordinary 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, it is expected that amounts distributed will be reported to the Internal Revenue Service (IRS) as dividends.
Subject to applicable limitations, 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 ordinary shares or ADSs will constitute qualified dividend income. Non-corporate US holders should consult their own tax advisers to determine whether they are subject to any special rules that limit their ability to be taxed at these preferential rates.
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 297 | |||||||||||
Dividends must be included in income when the US holder, in the case of shares, or the ADR 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 certain other US corporations. For foreign tax credit limitation purposes, dividends will generally be income from sources outside the US.
The amount of any dividend paid in pounds sterling 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 that date, a US holder should not be required to recognise 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 from sources within the US.
Taxation of capital gains
UK taxation
A US holder who is not 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, realised 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 in the UK or has become temporarily treated as non-resident for UK tax purposes for a period of not more than five years 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 treated as resident in the UK at the time of the sale or other disposal.
US federal income taxation
A US holder who sells or otherwise disposes of ordinary shares or ADSs will recognise a capital gain or loss for US federal income tax purposes equal to the difference between the amount realised and its tax basis in the ordinary shares or ADSs, each determined in US dollars. Such capital gain or loss will be a long-term capital gain or loss where the US holder has a holding period greater than one year. Losses may also be treated as long-term capital losses to the extent of certain ‘extraordinary dividends’ that qualified for the preferential tax rates on qualified dividend income described above. The capital gain or loss will generally be income or loss from sources within the US for foreign tax credit limitation purposes. The deductibility of capital losses is subject to limitations.
PFIC rules
Based on the manner in which the Group operates its business and estimates of the value of its assets (which estimates are based, in part, on the market value of the Company’s ADSs) the Company believes that it was not a PFIC for US federal income tax purposes for its 2024 taxable year. However, the Company’s PFIC status is an annual factual determination and thus may be subject to change. If the Company were a PFIC for any taxable year during which a US holder owned ordinary shares or ADSs, gain realised 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 realised such gain rateably over the holding period for the ordinary shares or ADSs and, to the extent allocated to the taxable year of the sale or other disposition 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 individuals or corporations, as applicable) for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. In addition, similar rules would apply to any ‘excess distribution’ received on the ordinary shares or ADSs (generally, the excess of distributions 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). The preferential rates for qualified dividend income described above would not apply if the Company were a PFIC for the taxable year of the distribution or the preceding taxable year.
Certain elections may be available (including a mark-to-market election) to US holders that would result in alternative treatments of the ordinary shares or ADSs. If the Company were a PFIC for any taxable year in which a US holder held ordinary shares or ADSs, a US holder would generally be required to file IRS Form 8621 with their annual US federal income tax returns, subject to certain exceptions.
Additional tax considerations
UK inheritance tax
An individual who is neither domiciled nor deemed domiciled in the UK 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 deposit holders, or by the situs of the underlying share which the ADS represents, but HMRC may take the view that the ADSs, as well as the ordinary shares, are or represent UK-situs assets.
However, an individual who is domiciled in the US (for the purposes of the Estate and Gift Tax Convention (the 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 US and was not a UK national. If no relief is given under the Convention, inheritance tax may be charged on death and also on the amount by which the value of an individual’s estate is reduced as a result of any transfer made by way of gift or other undervalue transfer, broadly within seven years of death, and in certain other circumstances.
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| 298 | IHG | Annual Report and Form 20-F 2024 | ||||||
Shareholder information continued
Taxation continued
Where the ordinary shares or ADSs are subject to both UK inheritance tax and to US federal gift or estate tax, the 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.
The above discussion reflects current UK tax law. The Finance Bill currently proceeding through the UK Parliament contains provisions affecting UK inheritance tax from 6 April 2025 (which, broadly, provide for the repeal of the concepts of domicile and deemed domicile and their replacement with a long-term residence-based approach). US Holders who may be impacted by these changes should consult with their tax advisers as necessary.
UK stamp duty and SDRT
Neither stamp duty nor Stamp Duty Reserve Tax (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 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 transferred to a person (or a nominee or agent 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. However, such transfers will not attract stamp duty or SDRT where they satisfy the conditions of an exemption, including exemptions which can apply to certain capital raising or qualifying listing arrangements.
Specific professional advice should be sought before paying a 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 or 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.
Any UK stamp duty or SDRT imposed upon transfers of ADSs or ordinary shares will not be creditable for US federal income tax purposes. US Holders should consult their tax advisers regarding whether any such UK stamp duty or SDRT may be deductible or reduce the amount of gain (or increase the amount of loss) recognised upon a sale or other disposition of the ADSs or ordinary shares.
US backup withholding and information reporting
Payments of dividends and sales 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 (but may be required to establish their exempt status). 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 furnished in a timely manner to the IRS. US holders should consult their tax advisers as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.
Certain US holders who are individuals (and certain specified entities), may be required to report information relating to their ownership of non-US securities unless the securities are held in accounts at financial institutions (in which case the accounts may be reportable if maintained by non-US financial institutions). US holders should consult their tax advisers regarding any reporting obligations they may have with respect to the Company’s ordinary shares or ADSs.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 299 | |||||||||||
Disclosure controls
and procedures
As of 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 Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Group’s disclosure controls and procedures (as defined in Rules 13a–15(e) and 15d–15(e) of the Securities Exchange Act 1934).
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 1934 is recorded, processed, summarised and reported within the specified periods. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Group’s disclosure controls and procedures were effective.
Insider trading policy
The Company has in place a code of practice for dealing in the Company’s securities, which is designed to ensure that the Company’s Directors, Executive Committee members and certain of the Group’s employees comply with applicable insider trading laws, rules and regulations and related regulatory obligations.
A copy of the code of practice is included as Exhibit 11.1 to this Annual Report and Form 20-F.
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| 300 | IHG | Annual Report and Form 20-F 2024 | ||||||
Shareholder information continued
Summary of significant
corporate governance
differences from
NYSE listing standards
The Group’s statement of compliance with the principles and provisions specified in the UK Corporate Governance Code issued in July 2018 by the Financial Reporting Council (the Code) is set out on pages 176 and 177.
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. Listed companies are required to state how they have applied the Code’s principles, and the provisions operate on a ‘comply or explain’ basis, where any areas of non-compliance should be disclosed 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.
Independent Directors
The Code’s principles recommend that at least half the Board, excluding the Chair, should consist of independent non-executive directors. As at 17 February 2025, the Board consisted of the Chair, independent at the time of her appointment, two Executive Directors and seven independent Non-Executive Directors. NYSE listing rules applicable to US companies state that companies must have a majority of independent directors. The NYSE has set out six bright line tests for director independence. The Board’s judgement 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.
Chair and Chief Executive Officer
The Code recommends that the Chair and Chief Executive Officer 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 Chair and Chief Executive Officer were, as at 17 February 2025 and throughout 2024, 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 NYSE requires US companies to have audit, remuneration and nominating/corporate governance committees composed entirely of independent directors, as defined under the NYSE rules. The Company’s Nomination, Audit and Remuneration Committees consist entirely of Non-Executive Directors who are independent under the standards of the Code, which may not necessarily be the same as the NYSE independence standards. The nominating/governance committee is responsible for identifying individuals qualified to become Board members and to recommend to the Board a set of corporate governance principles. As the Company is subject to the Code, the Company’s Nomination Committee is responsible for nominating, for approval by the Board, candidates for appointment to the Board, including recommending suitable candidates for the role of Senior Independent Non-Executive Director. The Company’s Nomination Committee consists of the Chair and independent Non-Executive Directors.
The Chair of the Company is not a member of the Audit Committee. As set out on page 128, 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 criterion under US rules for an ‘audit committee financial expert’.
Non-Executive Director meetings
NYSE rules require that 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 Code recommends: (i) the Board Chair to hold meetings with the Non-Executive Directors without the Executive Directors present; and (ii) the Non-Executive Directors to meet at least annually without the Chair present to appraise the Chair’s performance. The Company’s Non-Executive Directors have met frequently without Executive Directors being present, and intend to continue this practice, after 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 Conduct
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. As set out on pages 78 to 79, IHG’s Code of Conduct is applicable to all Directors, officers and employees, and is available on the Company’s website at ihgplc.com/
investors/corporate-governance/
code-of-conduct. No waivers have been granted under the Code of Conduct.
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 Officer 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.
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| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 301 | |||||||||||
Return of funds
Since March 2003, the Group has returned over £8 billion of funds to shareholders by way of special dividends, capital returns and share repurchase programmes.
| Return of funds programme | Timing | Total return | Returned to date | |||
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| £501m special dividenda | Paid in December 2004 | £501m | £501m | |||
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| £250m share buyback | Completed in 2004 | £250m | £250m | |||
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| £996m capital returna | Paid in July 2005 | £996m | £996m | |||
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| £250m share buyback | Completed in 2006 | £250m | £250m | |||
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| £497m special dividenda | Paid in June 2006 | £497m | £497m | |||
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| £250m share buyback | Completed in 2007 | £250m | £250m | |||
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| £709m special dividenda | Paid in June 2007 | £709m | £709m | |||
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| £150m share buyback | N/Ab | £150m | £120m | |||
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| $500m special dividendac | Paid in October 2012 | £315md | £315me | |||
| ($500m) | ($505m) | |||||
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| $500m share buyback | Completed in 2014 | £315md | £315m | |||
| ($500m) | ($500m)f | |||||
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| $350m special dividend | Paid in October 2013 | £229mg | £228m | |||
| ($350m) | ($355m)h | |||||
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| $750m special dividenda | Paid in July 2014 | £447mi | £446m | |||
| ($750m) | ($763m)j | |||||
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| $1,500m special dividenda | Paid in May 2016 | £1,038mk | £1,038m | |||
| ($1,500m) | ($1,500m) | |||||
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| $400m special dividenda | Paid in May 2017 | £309ml | £310m | |||
| ($400m) | ($404m) | |||||
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| $500m special dividenda | Paid in January 2019 | £389mm | £388m | |||
| ($500m) | ($510m) | |||||
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| $500m share buyback | Completed in January 2023 | £432m | £432m | |||
| ($496m) | ($496m) | |||||
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| $750m share buyback | Completed in December 2023 | £595m | £595m | |||
| ($746m) | ($746m) | |||||
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| $ 800m share buyback | Completed in December 2024 | £622m | £622m | |||
| ($792m) | ($792m) | |||||
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| Total | £8,294m | £8,262m | ||||
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| a. | Accompanied by a share consolidation. |
| b. | This programme was superseded by the share buyback programme announced on 7 August 2012. |
| c. | IHG changed the reporting currency of its Consolidated Financial Statements from sterling to US dollars effective from the Half-Year Results as at 30 June 2008. |
| d. | The dividend was first determined in US dollars and converted to sterling immediately before announcement at the rate of $1=£0.63, as set out in the circular detailing the special dividend and share buyback programme published on 14 September 2012. |
| e. | Sterling dividend translated at $1=£0.624. |
| f. | Translated into US dollars at the average rates of exchange for the relevant years (2014 $1=£0.61; 2013 $1=£0.64; 2012 $1 = £0.63). |
| g. | The dividend was first determined in US dollars and converted to sterling immediately before announcement at the rate of $1=£0.65, as announced in the Half-Year Results to 30 June 2013. |
| h. | Sterling dividend translated at $1=£0.644. |
| i. | The dividend was first determined in US dollars and converted to sterling immediately before announcement at the rate translated at $1=£0.597. |
| j. | Sterling dividend translated at $1=£0.5845. |
| k. | The dividend was first determined in US dollars and converted to sterling at the rate of $1 = £0.6923, as announced on 12 May 2016. |
| l. | The dividend was first determined in US dollars and converted to sterling at the rate of $1 = £0.7724, as announced on 11 May 2017. |
| m. | The dividend was first determined in US dollars and converted to sterling at the rate of £1 = $1.2860, as announced on 17 January 2019. |
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Shareholder information continued
Purchases of equity securities by the Company and affiliated purchaser
The Group’s $800m share buyback programme was announced on 20 February 2024 and completed on 27 December 2024. As at 31 December 2024, 7,544,912 shares had been repurchased at an average price of £82.41 per share (approximately £622m).
| Total number of shares (or units) purchased |
Average price paid per share (or unit) (£) |
Total number of shares (or units) purchased as part of publicly announced plans or programmes |
Maximum number of shares (or units) that may be purchased under the plans or programmes |
|||||||||||||||||||||||||||||
| Month 1 (no purchases this month) | – | – | – | 17,515,456a | ||||||||||||||||||||||||||||
| Month 2 | 600,716 | 85.8571 | 600,716 | 17,515,456a | ||||||||||||||||||||||||||||
| Month 3 | 423,035 | 82.9681 | 423,035 | 17,515,456a | ||||||||||||||||||||||||||||
| Month 4 | 1,263,484 | 78.9089 | 1,263,484 | 17,515,456a | ||||||||||||||||||||||||||||
| Month 5 | 888,432 | 78.4774 | 888,432 | 16,427,423b | ||||||||||||||||||||||||||||
| Month 6 | 485,549 | 81.0127 | 485,549 | 16,427,423b | ||||||||||||||||||||||||||||
| Month 7 | 801,607 | 81.3033 | 801,607 | 16,427,423b | ||||||||||||||||||||||||||||
| Month 8 | 1,058,693 | 73.5652 | 1,058,693 | 16,427,423b | ||||||||||||||||||||||||||||
| Month 9 | 442,368 | 77.8577 | 442,368 | 16,427,423b | ||||||||||||||||||||||||||||
| Month 10 | 442,363 | 85.0328 | 442,363 | 16,427,423b | ||||||||||||||||||||||||||||
| Month 11 | 421,338 | 94.4764 | 421,338 | 16,427,423b | ||||||||||||||||||||||||||||
| Month 12 | 717,327 | 99.5701 | 717,327 | 16,427,423b | ||||||||||||||||||||||||||||
| a. | Reflects the resolution passed at the Company’s AGM held on 5 May 2023. |
| b. | Reflects the resolution passed at the Company’s AGM held on 3 May 2024. |
Dividend history
The table below sets forth the amounts of ordinary dividends on each ordinary share and special dividends, in respect of each financial year indicated.
| Interim dividend | Final dividend | Total dividend | Special dividend | |||||||||||||||||||||||||||||||||||||||||||||
| pence | cents | pence | cents | pence | cents | pence | cents | |||||||||||||||||||||||||||||||||||||||||
| 2024 | 40.8 | 53.2 | N/A | a | 114.4 | N/A | a | 167.6 | – | – | ||||||||||||||||||||||||||||||||||||||
| 2023 | 38.7 | 48.3 | 83.9 | 104 | 122.6 | 152.3 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2022 | 37.8 | 43.9 | 76.08 | 94.5 | 113.88 | 138.4 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2021 | – | – | 67.50 | 85.9 | 67.50 | 85.9 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2020 | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 32.0 | 39.9 | – | b | – | b | 32.0 | 39.9 | – | – | ||||||||||||||||||||||||||||||||||||||
| 2018 | 27.7 | 36.3 | 60.4 | 78.1 | 88.1 | 114.4 | 203.8 | ce | 262.1 | ce | ||||||||||||||||||||||||||||||||||||||
| 2017 | 24.4 | 33.0 | 50.2 | 71.0 | 74.6 | 104.0 | 156.4 | c | 202.5 | c | ||||||||||||||||||||||||||||||||||||||
| 2016 | 22.6 | 30.0 | 49.4 | 64.0 | 72.0 | 94.0 | 438.2 | c | 632.9 | c | ||||||||||||||||||||||||||||||||||||||
| 2015 | 17.7 | 27.5 | 40.3 | 57.5 | 58.0 | 85.0 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2014 | 14.8 | 25.0 | 33.8 | 52.0 | 48.6 | 77.0 | 174.9 | c | 293.0 | c | ||||||||||||||||||||||||||||||||||||||
| 2013 | 15.1 | 23.0 | 28.1 | 47.0 | 43.2 | 70.0 | 87.1 | 133.0 | ||||||||||||||||||||||||||||||||||||||||
| 2012 | 13.5 | 21.0 | 27.7 | 43.0 | 41.2 | 64.0 | 108.4 | c | 172.0 | c | ||||||||||||||||||||||||||||||||||||||
| 2011 | 9.8 | 16.0 | 24.7 | 39.0 | 34.5 | 55.0 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2010 | 8.0 | 12.8 | 22.0 | 35.2 | 30.0 | 48.0 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2009 | 7.3 | 12.2 | 18.7 | 29.2 | 26.0 | 41.4 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2008d | 6.4 | 12.2 | 20.2 | 29.2 | 26.6 | 41.4 | – | – | ||||||||||||||||||||||||||||||||||||||||
| 2007 | 5.7 | 11.5 | 14.9 | 29.2 | 20.6 | 40.7 | 200 | c | – | |||||||||||||||||||||||||||||||||||||||
| 2006 | 5.1 | 9.6 | 13.3 | 25.9 | 18.4 | 35.5 | 118 | c | – | |||||||||||||||||||||||||||||||||||||||
| a. | The sterling amount of the final dividend will be announced on 28 April 2025 using the average of the daily exchange rates for the three working days commencing 23 April 2025. |
| b. | The Board withdrew its recommendation of a final dividend in respect of 2019 of 85.9¢ per share. |
| c. | Accompanied by a share consolidation. |
| d. | IHG changed the reporting currency of its Consolidated Financial Statements from sterling to US dollars effective from the Half-Year Results as at 30 June 2008. Starting with the interim dividend for 2008, all dividends have first been determined in US dollars and converted into sterling prior to payment. |
| e. | This special dividend was announced on 19 October 2018 and paid on 29 January 2019. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 303 | |||||||||||
Shareholder profiles
Shareholder profile by type as at 31 December 2024
| Category of shareholder | Number of shareholders |
Percentage of total shareholders |
Number of ordinary shares |
Percentage of issued share capital |
||||||||||||||||||||||||
| Private individuals | 26,336 | 94.85 | 6,352,942 | 3.86 | ||||||||||||||||||||||||
| Nominee companies | 1,090 | 3.93 | 125,406,539 | 76.09 | ||||||||||||||||||||||||
| Limited and public limited companies | 179 | 0.64 | 17,609,847 | 10.69 | ||||||||||||||||||||||||
| Other corporate bodies | 154 | 0.55 | 15,322,374 | 9.30 | ||||||||||||||||||||||||
| Banks and unknown | 8 | 0.03 | 96,339 | 0.06 | ||||||||||||||||||||||||
| Total | 27,767 | 100 | 164,788,041 | 100 | ||||||||||||||||||||||||
Shareholder profile by size as at 31 December 2024
| Range of shareholdings | Number of shareholders |
Percentage of total shareholders |
Number of ordinary shares |
Percentage of issued share capital |
||||||||||||||||||||||||
| 1–199 | 19,372 | 69.77 | 1,116,596 | 0.68 | ||||||||||||||||||||||||
| 200–499 | 4,606 | 16.59 | 1,439,999 | 0.87 | ||||||||||||||||||||||||
| 500–999 | 1,837 | 6.62 | 1,268,144 | 0.77 | ||||||||||||||||||||||||
| 1,000–4,999 | 1,275 | 4.59 | 2,505,467 | 1.52 | ||||||||||||||||||||||||
| 5,000–9,999 | 162 | 0.58 | 1,132,597 | 0.69 | ||||||||||||||||||||||||
| 10,000–49,999 | 274 | 0.99 | 6,388,604 | 3.88 | ||||||||||||||||||||||||
| 50, 000–99,999 | 78 | 0.28 | 5,616,776 | 3.41 | ||||||||||||||||||||||||
| 100,000–499,999 | 117 | 0.42 | 24,204,509 | 14.69 | ||||||||||||||||||||||||
| 500,000–999,999 | 20 | 0.07 | 13,851,597 | 8.41 | ||||||||||||||||||||||||
| 1,000,000 and above | 26 | 0.09 | 107,263,752 | 65.09 | ||||||||||||||||||||||||
| Total | 27,767 | 100 | 164,788,041 | 100 | ||||||||||||||||||||||||
Shareholder profile by geographical location as at 31 December 2024
| Country/Jurisdiction | Percentage of issued share capital |
|||||
| UK | 33.2% | |||||
| Rest of Europe | 18.0% | |||||
| North America (inc. ADRs) | 46.6% | |||||
| Rest of world | 2.2% | |||||
| Total | 100% | |||||
The geographical profile presented is based on an analysis of shareholders (by manager) of 10,000 shares or above where geographical ownership is known. This analysis only captures 93% of total issued share capital. Therefore, the known percentage distributions have been multiplied by 100/93 to achieve the figures shown in the table above.
As of 14 February 2025, 13,371,894 ADRs equivalent to 13,371,894 ordinary shares, or approximately 8.4% of the total issued share capital, were outstanding and were held by 388 holders. Since certain ordinary shares are registered in the names of nominees, the number of shareholders on record may not be representative of the number of beneficial owners.
As of 14 February 2025, there were a total of 27,628 recorded holders of ordinary shares, of whom 220 had registered addresses in the US and held a total of 263,607 ordinary shares (0.16% of the total issued share capital).
Table of Contents
30 4 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
For the year ended 31 December 2024 |
2024 $m |
2023
$m
|
2022
$m
|
|||||||||||||
Administrative expenses |
(2 |
) |
(2 |
) |
(2 |
) |
||||||||||
Operating loss |
(2 |
) |
(2 |
) |
(2 |
) |
||||||||||
Dividend income from subsidiary undertaking |
762 |
1,877 |
858 |
|||||||||||||
Financial income |
30 |
30 |
4 |
|||||||||||||
Financial expenses |
(81 |
) |
(77 |
) |
(85 |
) |
||||||||||
Profit before tax |
709 |
1,828 |
775 |
|||||||||||||
Tax |
16 |
16 |
21 |
|||||||||||||
Profit for the year |
725 |
1,844 |
796 |
|||||||||||||
Other comprehensive income |
||||||||||||||||
Items that may be subsequently reclassified to profit or loss: |
||||||||||||||||
(Losses)/gains on cash flow hedges, including related tax charge of $2m (2023: $1m charge; 2022: $2m credit) |
(51 |
) |
(36 |
) |
36 |
|||||||||||
Costs of hedging |
1 |
2 |
3 |
|||||||||||||
Hedging losses/(gains) reclassified to financial expenses |
57 |
35 |
(43 |
) |
||||||||||||
Exchange (losses)/gains on translation |
(38 |
) |
119 |
(110 |
) |
|||||||||||
Total other comprehensive (loss)/income for the year |
(31 |
) |
120 |
(114 |
) |
|||||||||||
Total comprehensive income for the year |
694 |
1,964 |
682 |
|||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
305 |
|||||||||||
| 31 December 2024 |
2024 $m |
2023
$m
|
||||||||||
ASSETS |
||||||||||||
| Investments in subsidiary undertakings | 4,077 |
4,113 | ||||||||||
| Derivative financial instruments | – |
1 | ||||||||||
| Deferred tax assets | 53 |
55 | ||||||||||
Total non-current assets |
4,130 |
4,169 | ||||||||||
| Amounts due from related parties | 193 |
1,107 | ||||||||||
| Other receivables | 16 |
9 | ||||||||||
Total current assets |
209 |
1,116 | ||||||||||
Total assets |
4,339 |
5,285 | ||||||||||
LIABILITIES |
||||||||||||
| Loans and other borrowings | (381 |
) |
(555 | ) | ||||||||
| Amounts due to related parties | (1 |
) |
– | |||||||||
| Derivative financial instruments | – |
(26 | ) | |||||||||
Total current liabilities |
(382 |
) |
(581 | ) | ||||||||
| Loans and other borrowings | (1,469 |
) |
(1,904 | ) | ||||||||
|
Non-current payables |
(2 |
) |
– | |||||||||
| Derivative financial instruments | (14 |
) |
– | |||||||||
Total non-current liabilities |
(1,485 |
) |
(1,904 | ) | ||||||||
Total liabilities |
(1,867 |
) |
(2,485 | ) | ||||||||
Net assets |
2,472 |
2,800 | ||||||||||
EQUITY |
||||||||||||
| Called up share capital | 43 |
46 | ||||||||||
| Share premium account | 94 |
95 | ||||||||||
Currency translation reserve |
(250 |
) |
(212 |
) |
||||||||
| Other reserves | 759 |
707 |
||||||||||
| Retained earnings | 1,826 |
2,164 |
||||||||||
Total equity |
2,472 |
2,800 | ||||||||||
306 |
IHG |
Annual Report and Form 20-F 2024 |
||||||
Schedule 1: Condensed Parent Company financial information |
||||
| For the year ended 31 December 2024 |
2024 $m |
2023
$m
|
2022
$m
|
|||||||||||||||||
Profit for the year |
725 |
1,844 | 796 | |||||||||||||||||
| Adjustments for: | ||||||||||||||||||||
Administrative expenses funded by subsidiaries |
2 |
2 |
2 |
|||||||||||||||||
Net financial expenses |
51 |
47 | 81 | |||||||||||||||||
Dividend income from subsidiary undertaking |
(762 |
) |
(1,877 | ) | (858 | ) | ||||||||||||||
Income tax credit |
(16 |
) |
(16 | ) | (21 | ) | ||||||||||||||
Total adjustments |
(725 |
) |
(1,844 | ) | (796 | ) | ||||||||||||||
Changes in amounts due from related parties: operating activities |
7 |
9 |
10 |
|||||||||||||||||
Cash flow from operations |
7 |
9 | 10 | |||||||||||||||||
Interest received |
30 |
29 |
4 |
|||||||||||||||||
| Interest paid | (84 |
) |
(74 |
) |
(80 |
) |
||||||||||||||
Net cash from operating activities |
(47 |
) |
(36 |
) |
(66 |
) |
||||||||||||||
Cash flow from investing activities |
||||||||||||||||||||
Dividend received from subsidiary undertaking |
762 |
1,877 |
858 |
|||||||||||||||||
Changes in amounts due from related parties: investing activities |
930 |
(824 |
) |
132 |
||||||||||||||||
Net cash from investing activities |
1,692 |
1,053 |
990 |
|||||||||||||||||
Cash flow from financing activities |
||||||||||||||||||||
Repurchase of shares, including taxes and transaction costs |
(804 |
) |
(790 |
) |
(482 |
) |
||||||||||||||
| Dividends paid to shareholders | (259 |
) |
(245 |
) |
(233 |
) |
||||||||||||||
| Repayment of long-term bonds | (547 |
) |
– |
(209 |
) |
|||||||||||||||
Settlement of currency swaps |
(45 |
) |
– |
– |
||||||||||||||||
Changes in amounts due from related parties: financing activities |
10 |
18 |
– |
|||||||||||||||||
Net cash from financing activities |
(1,645 |
) |
(1,017 |
) |
(924 |
) |
||||||||||||||
Net movement in cash and cash equivalents in the year |
– |
– |
– |
|||||||||||||||||
| Cash and cash equivalents at beginning of the year | – |
– |
– |
|||||||||||||||||
| Exchange rate effects | – |
– |
– |
|||||||||||||||||
Cash and cash equivalents at end of the year |
– |
– |
– |
|||||||||||||||||
Strategic |
Group Financial |
Parent Company |
Additional |
|||||||||||||||
Report |
Governance |
Statements |
Financial Statements |
Information |
Annual Report and Form 20-F 2024 |
IHG |
307 |
|||||||||||
Company name |
Company number |
|||||
Asia Pacific Holdings Limited |
03941780 |
|||||
Hotel InterContinental London (Holdings) Limited |
06451128 |
|||||
IHC May Fair Hotel Limited |
02323039 |
|||||
IHC Overseas (U.K.) Limited |
02322038 |
|||||
IHG PS Nominees Limited |
07092523 |
|||||
InterContinental (PB) 1 |
06724223 |
|||||
InterContinental (PB) 3 Limited |
06947603 |
|||||
SC Leisure Group Limited |
00658907 |
|||||
Six Continents Holdings Limited |
03211009 |
|||||
Six Continents Hotels International Limited |
00722401 |
|||||
Six Continents Investments Limited |
00694156 |
|||||
Six Continents Overseas Holdings Limited |
02661055 |
|||||
| Description |
Maturity
date
|
2024 $m |
2023
$m
|
2022
$m
|
||||||||||||||||||
|
€ 600m 4.375% bonds 2029 |
28 November 2029 | 623 |
663 | – | ||||||||||||||||||
|
€ 750m 3.625% bonds 2031 |
27 September 2031 | 784 |
– | – | ||||||||||||||||||
1,407 |
663 | – | ||||||||||||||||||||
Description |
Maturity
date
|
2025 $m |
2026 $m |
2027 $m |
2028 $m |
|||||||||||||||
| £300m 3.75% bonds 2025 | 14 August 2025 | 376 |
– |
– |
– |
|||||||||||||||
| £350m 2.125% bonds 2026 | 24 August 2026 | – |
439 |
– |
– |
|||||||||||||||
|
€ 500m 2.125% bonds 2027 |
15 May 2027 | – |
– |
521 |
– |
|||||||||||||||
| £400m 3.375% bonds 2028 | 8 October 2028 | – |
– |
– |
502 |
|||||||||||||||
376 |
439 |
521 |
502 |
|||||||||||||||||
Table of Contents
| 308 | IHG | Annual Report and Form 20-F 2024 | ||||||
Exhibits
The following exhibits are filed as part of this Annual Report on Form 20-F with the SEC, and are publicly available through the SEC’s website.
|
|
Visit sec.gov and search InterContinental Hotels Group PLC under Company Filings. |
| a. | Incorporated by reference. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 309 | |||||||||||
Forward-looking statements
The Annual Report and Form 20-F 2024 contains certain forward-looking statements as defined under US legislation (Section 21E of the Securities Exchange Act of 1934) with respect to the financial condition, results of operations and business of the Group and certain plans and objectives of the Board of Directors of InterContinental Hotels Group PLC with respect thereto. Such statements include, but are not limited to, statements made in the Chair’s statement, the Chief Executive Officer’s review and the Strategic Report. 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 the 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.
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 Group’s exposure to a competitive and changing industry; the Group’s reliance on the reputation of its existing brands and exposure to inherent reputation risks; the Group’s exposure to inherent uncertainties associated with brand development and expansion; the Group’s reliance on the ongoing appeal of its loyalty programme; the
Group’s exposure to a variety of risks related to identifying, securing and retaining franchise and management agreements; the Group’s exposure to the risks of hotel industry overcapacity; the Group’s requirement to have the right people, skills and capability to manage growth and change; the risk that the Group’s collective bargaining activity could disrupt operations, increase labour costs or interfere with the ability of management to focus on executing business strategies; the Group’s exposure to cybersecurity and data privacy risks; the Group’s exposure to intellectual property risks; the risk that the Group’s reputation and the value of its brands are influenced by the perception of various stakeholders of the Group; the Group’s requirements to comply with existing and changing regulations and act in accordance with societal expectations across numerous countries, territories and jurisdictions; the Group’s exposure to the risk of litigation; the potential for domestic and international environmental laws and regulations to cause the Group to incur substantial costs or subject the Group to potential liabilities; the Group’s financial performance being affected by changes in tax laws; the Group’s dependence on a wide range of external stakeholders and business partners; the Group’s exposure to a variety of risks associated with safety, security and crisis management; the Group’s reliance on the resilience of its reservation system and other key technology platforms and the exposure to risks that could disrupt their operation and/or integrity; the Group’s exposure to political and economic developments; the Group’s exposure to continued disruption and consequences from the war in Ukraine; the Group’s exposure to disruption and consequences from the conflict in the Middle East; the potential for the Group to face difficulties
insuring its business; the Group’s exposure to risks related to executing and realising benefits from strategic transactions, including acquisitions and restructuring; the Group’s exposure to a variety of risks associated with its financial stability and ability to borrow and satisfy debt covenants; the dependence of the Group’s operations on maintaining sufficient liquidity to meet all foreseeable medium-term requirements and provide headroom against unforeseen obligations; the Group’s exposure to an impairment of the carrying value of its brands, goodwill or other tangible and intangible assets negatively affecting its consolidated operating results; the Group’s exposure to fluctuations in exchange rates, currency devaluations or restructurings and to interest rate risk in relation to its borrowings; the potential for the Group to be affected by credit risk on treasury transactions and loans to owners; the Group’s exposure to inherent risks in relation to changing technology and systems; the various operational, compliance and reputational risks that the Group’s integration of AI technologies into its processes and systems may introduce; the Group’s exposure to competition from online travel agents and intermediaries; the Group’s exposure to the risk of events or stakeholder expectations that adversely impact domestic or international travel, including climate change; the Group’s exposure to climate change and sustainability risks; and the Group’s exposure to risks relating to its commitments in relation to climate change.
The main factors that could affect the business and financial results are described in the Strategic Report of the Annual Report and Form 20-F 2024.
Table of Contents
| 310 | IHG | Annual Report and Form 20-F 2024 | ||||||
Form 20-F cross-reference guide
The table below references information in this document that will be included in the Company’s Annual Report on Form 20-F for 2024 filed with the SEC.
| Item | Form 20-F caption | Location in this document | Page | |||
|
|
|
|
|
|||
| 1 | Identity of Directors, senior management and advisers | Not applicable | – | |||
|
|
|
|
|
|||
| 2 | Offer statistics and expected timetable | Not applicable | – | |||
|
|
|
|
|
|||
| 3 | Key information | |||||
|
|
|
|
||||
| 3A – Selected financial data | Shareholder information: Dividend history | 302 | ||||
|
|
|
|
||||
| 3B – Capitalisation and indebtedness | Not applicable | – | ||||
|
|
|
|
||||
| 3C – Reason for the offer and use of proceeds | Not applicable | – | ||||
|
|
|
|
||||
| 3D – Risk factors | Group information: Risk factors | 280–287 | ||||
|
|
|
|
|
|||
| 4 | Information on the Company | |||||
|
|
|
|
||||
| 4A – History and development of the Company | Group information: History and developments | 280 | ||||
|
|
|
|||||
| Shareholder information: Return of funds | 301 | |||||
|
|
|
|||||
| Useful information: Contacts | 317 | |||||
|
|
|
|
||||
| 4B – Business overview | Strategic Report | 4–110 | ||||
|
|
|
|||||
| Group information: Working Time Regulations 1998 | 293 | |||||
|
|
|
|||||
| Group Information: Risk factors | 280–287 | |||||
|
|
|
|||||
| Directors’ Report: Business relationships with suppliers, customers and others | 278 | |||||
|
|
|
|
||||
| 4C – Organisational structure | Strategic Report: Our Culture | 77–80 | ||||
|
|
|
|||||
| Group Financial Statements: Note 33 – Group companies | 253–256 | |||||
|
|
|
|||||
| Group Information: History and developments | 280 | |||||
|
|
|
|
||||
| 4D – Property, plant and equipment | Strategic Report: Key performance indicators | 38–41 | ||||
|
|
|
|||||
| Strategic Report: Greenhouse gas (GHG) emissions | 74–76 | |||||
|
|
|
|||||
| Group Financial Statements: Note 12 – Property, plant and equipment | 225–226 | |||||
|
|
|
|
|
|||
| 4A | Unresolved staff comments | None | – | |||
|
|
|
|
|
|||
| 5 | Operating and financial review and prospects | |||||
|
|
|
|
||||
| 5A – Operating results | Strategic Report: Key performance indicators | 38–41 | ||||
|
|
|
|||||
| Strategic Report: Performance | 81–108 | |||||
|
|
|
|||||
| Group Financial Statements: Accounting policies | 197–208 | |||||
|
|
|
|||||
| Group Financial Statements: New accounting standards | 208 | |||||
|
|
|
|||||
| Viability statement | 109–110 | |||||
|
|
|
|
||||
| 5B – Liquidity and capital resources | Strategic Report: Our Business Model – Capital allocation and dividend policy | 24–25 | ||||
|
|
|
|||||
| Viability statement | 109–110 | |||||
|
|
|
|||||
| Strategic Report: Performance – Sources of liquidity | 86 | |||||
|
|
|
|||||
| Group Financial Statements: Note 17 – Cash and cash equivalents | 231–232 | |||||
|
|
|
|||||
| Group Financial Statements: Note 21 – Loans and other borrowings | 234 | |||||
|
|
|
|||||
| Group Financial Statements: Note 23 – Financial risk management and derivative financial instruments | 236–240 | |||||
|
|
|
|||||
| Group Financial Statements: Note 24 – Classification and measurement of financial instruments | 240–242 | |||||
|
|
|
|||||
| Group Financial Statements: Note 25 – Reconciliation of (loss)/profit for the year to cash flow from operations before contract acquisition costs | 243 | |||||
|
|
|
|||||
| Additional Information: Forward-looking statements | 309 | |||||
|
|
|
|
||||
| 5C – Research and development; | Not applicable | – | ||||
| intellectual property | ||||||
|
|
|
|
||||
| 5D – Trend information | Strategic Report: Performance | 81–108 | ||||
|
|
|
|||||
| Strategic Report: Trends shaping our industry | 20–21 | |||||
|
|
|
|
||||
| 5E – Critical accounting estimates | Group Financial Statements: Critical accounting policies | 197, 260 | ||||
|
|
|
|
||||
| Non-GAAP financial measures | Strategic Report: Performance | 81–108 | ||||
|
|
|
|||||
| Other financial information | 266–275 | |||||
|
|
|
|||||
| Group Financial Statements: Note 6 – Exceptional items | 215–216 | |||||
|
|
|
|||||
| Group Financial Statements: Note 10 – Earnings per ordinary share | 222 | |||||
|
|
|
|||||
| Group Financial Statements: Note 22 – Net debt | 235–236 | |||||
|
|
|
|
|
|||
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 311 | |||||||||||
| Item | Form 20-F caption | Location in this document | Page | |||
|
|
|
|
|
|||
| 6 | Directors, senior management and employees | |||||
|
|
|
|
||||
| 6A – Directors and senior management | Governance: Our Board of Directors and Our Executive Committee | 114–121 | ||||
|
|
|
|
||||
| 6B – Compensation | Directors’ Remuneration Report | 138–166 | ||||
|
|
|
|||||
| Directors’ Remuneration Policy | 167–175 | |||||
|
|
|
|||||
| Group Financial Statements: Note 26 – Retirement benefits | 244–246 | |||||
|
|
|
|||||
| Group Financial Statements: Note 30 – Related party disclosures | 251 | |||||
|
|
|
|||||
| Group Financial Statements: Note 27 – Share-based payments | 247–248 | |||||
|
|
|
|
||||
| 6C – Board practices | Governance structure and Board activities | 122–127 | ||||
|
|
|
|||||
| Executive Directors’ benefits upon termination of office | 289 | |||||
|
|
|
|
||||
| 6D – Employees | Group Financial Statements: Note 4 – Staff costs and Directors’ remuneration | 213–214 | ||||
|
|
|
|||||
| Group information: Working Time Regulations 1998 | 293 | |||||
|
|
|
|||||
| Directors’ Report: Employees and Code of Conduct | 277–278 | |||||
|
|
|
|
||||
| 6E – Share ownership | Directors’ Remuneration Report: Annual Report on Directors’ remuneration – Scheme interests awarded during 2024 | 147–148 | ||||
|
|
|
|||||
| Directors’ Remuneration Report: Annual Report on Directors’ remuneration – Shares and awards held by Executive Directors at 31 December 2024: number of shares | 149 | |||||
|
|
|
|||||
| Group Financial Statements: Note 27 – Share-based payments | 247–248 | |||||
|
|
|
|||||
| Group information: Directors’ and Executive Committee members’ shareholdings | 289 | |||||
|
|
|
|
||||
| 6F – Disclosure of a registrant’s action to recover erroneously awarded compensation |
Not applicable | – | ||||
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| 7 | Major shareholders and related party transactions | |||||
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| 7A – Major shareholders | Directors’ Report: Major institutional shareholders | 276–277 | ||||
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| Shareholder information: Shareholder profiles | 303 | |||||
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| 7B – Related party transactions | Group Financial Statements: Note 14 – Investment in associates and joint ventures | 228–229 | ||||
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| Group Financial Statements: Note 30 – Related party disclosures | 251 | |||||
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| 7C – Interests of experts and counsel | Not applicable | – | ||||
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| 8 | Financial Information | |||||
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| 8A – Consolidated statements and other financial information |
Directors’ Report: Dividends | 276 | ||||
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| Group Financial Statements | 190–196 | |||||
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| Group information: Legal proceedings | 295 | |||||
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| Other financial information | 266–275 | |||||
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| 8B – Significant changes | Group Financial Statements: Note 32 – Events after the reporting period | 252 | ||||
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| 9 | The offer and listing | |||||
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| 9A – Offer and listing details | Useful information: Trading markets | 315 | ||||
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| 9B – Plan of distribution | Not applicable | – | ||||
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| 9C – Markets | Useful information: Trading markets | 315 | ||||
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| 9D – Selling shareholders | Not applicable | – | ||||
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| 9E – Dilution | Not applicable | – | ||||
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| 9F – Expenses of the issue | Not applicable | – | ||||
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Table of Contents
| 312 | IHG | Annual Report and Form 20-F 2024 | ||||||
Form 20-F cross-reference guide continued
| Item | Form 20-F caption | Location in this document | Page | |||
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| 10 | Additional information | |||||
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| 10A – Share capital | Not applicable | – | ||||
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| 10B – Memorandum and articles of association | Group information: Articles of Association | 291–292 | ||||
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| Group information: Rights attaching to shares | 291–292 | |||||
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| 10C – Material contracts | Group information: Material contracts | 293–294 | ||||
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| 10D – Exchange controls | Group information: Exchange controls and restrictions on payment of dividends | 294 | ||||
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| 10E – Taxation | Shareholder information: Taxation | 296–298 | ||||
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| 10F – Dividends and paying agents | Not applicable | – | ||||
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| 10G – Statement by experts | Not applicable | – | ||||
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| 10H – Documents on display | Useful information: Investor information – Documents on display | 315 | ||||
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||||
| 10I – Subsidiary information | Not applicable | – | ||||
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| 11 | Quantitative and qualitative disclosures about market risk | Group Financial Statements: Note 23 – Financial risk management and derivative financial instruments | 236–240 | |||
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| 12 | Description of securities other than equity securities | |||||
|
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||||
| 12A – Debt securities | Not applicable | – | ||||
|
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|
||||
| 12B – Warrants and rights | Not applicable | – | ||||
|
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|
||||
| 12C – Other securities | Not applicable | – | ||||
|
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|
||||
| 12D – American depositary shares | Group information: Description of securities other than equity securities | 290 | ||||
|
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|||||
| Additional Information: Investor Information | 315 | |||||
|
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|||||
| Additional Information: Contacts | 317 | |||||
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| 13 | Defaults, dividend arrearages and delinquencies | Not applicable | – | |||
|
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|
|||
| 14 | Material modifications to the rights of security holders and use of proceeds | Not applicable | – | |||
|
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|
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| 15 | Controls and Procedures | Shareholder information: Disclosure controls and procedures | 299 | |||
|
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|||||
| Statement of Directors’ Responsibilities: Management’s report on internal control over financial reporting | 179 | |||||
|
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|
|||||
| Independent Auditor’s US Report | 187–189 | |||||
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|
|||
| 16 | 16A – Audit committee financial expert | Governance: Audit Committee Report | 128–133 | |||
|
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|||||
| Shareholder information: Summary of significant corporate governance differences from NYSE listing standards – Committees | 300 | |||||
|
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|
||||
| 16B – Code of ethics | Directors’ Report: Code of Conduct | 278 | ||||
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|||||
| Strategic Report: Our culture | 77–80 | |||||
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|||||
| Shareholder information: Summary of significant corporate governance differences from NYSE listing standards | 300 | |||||
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|
||||
| 16C – Principal accountant fees and services | Governance: Audit Committee Report – External auditor | 131 | ||||
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| Governance: Audit Committee Report – Non-audit services | 130 | |||||
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|||||
| Group Financial Statements: Note 5 – Auditor’s remuneration | 214 | |||||
|
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|
||||
| 16D – Exemptions from the listing standards for audit committees |
Not applicable | – | ||||
|
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|
||||
| 16E – Purchase of equity securities by the issuer and affiliated purchasers |
Shareholder information: Purchases of equity securities by the Company and affiliated purchasers | 302 | ||||
|
|
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|
||||
| 16F – Change in registrant’s certifying accountant | Not applicable | – | ||||
|
|
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|
||||
| 16G – Corporate Governance | Shareholder information: Summary of significant corporate governance differences from NYSE listing standards | 300 | ||||
|
|
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|
||||
| 16H – Mine safety disclosure | Not applicable | – | ||||
|
|
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|
||||
| 16I – Disclosure regarding foreign jurisdictions that prevent inspections |
Not applicable | – | ||||
|
|
|
|
||||
| 16J – Insider trading policies | Additional Information: Insider trading policy | 299 | ||||
|
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|
||||
| 16K – Cybersecurity | Additional Information: Cybersecurity | 288–289 | ||||
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|
|||
| 17 | Financial statements | Not applicable | – | |||
|
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|||
| 18 | Financial statements | Group Financial Statements | 190–256 | |||
| Schedule 1: Parent Company condensed financial information | 304–307 | |||||
|
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|||
| 19 | Exhibits | Additional Information: Exhibits | 308 | |||
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|
|||
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 313 | |||||||||||
Glossary
ADR
an American Depositary Receipt, being a receipt evidencing title to an ADS.
ADR Depositary
J.P. Morgan Chase Bank N.A.
ADS
an American Depositary Share as evidenced by an ADR, being a registered negotiable security, listed on the New York Stock Exchange, representing one ordinary share of 20 340/399 pence each of the Company.
AGM
Annual General Meeting.
APP
Annual Performance Plan.
Average daily rate
rooms revenue divided by the number of room nights sold.
Capital expenditure
purchases of property, plant and equipment, intangible assets, associate and joint venture investments, and other financial assets, plus contract acquisition costs (key money).
Captive
the Group’s captive insurance company, SCH Insurance Company.
Code
IHG’s Code of Conduct.
Colleague
individuals who work at IHG corporate offices, reservation centres, managed, owned, leased, managed lease and franchised hotels collectively.
Companies Act
the UK Companies Act 2006, as amended from time to time.
Company or Parent Company
InterContinental Hotels Group PLC.
Comparable RevPAR
a comparison for a grouping of hotels that have traded in all months in financial years being compared. Principally excludes new hotels, hotels closed for major refurbishment and hotels sold in either of the two years.
Compound Annual Growth Rate (CAGR)
growth over a period of years expressed as the constant rate of growth that would produce the same growth if compounded annually.
Constant currency
a prior-year value translated using the current year’s average exchange rates.
Currency swap
an exchange of a deposit and a borrowing, each denominated in a different currency, for an agreed period of time.
DAP
Deferred Award Plan.
Deferred Compensation Plan or DCP
a US plan that allows for the additional provision for retirement within a dedicated trust, either through employee deferral of salary with matching company contributions, deferral of APP earnings or through direct company contribution.
Derivatives
financial instruments used to reduce risk, the price of which is derived from an underlying asset, index or rate.
EMEAA
Europe, Middle East, Asia and Africa (excludes Greater China).
Employee engagement survey
our employee engagement survey, known as the Colleague HeartBeat, completed by IHG employees or colleagues employed at owned, leased or managed leased hotels and managed hotels.
Enterprise contribution to revenue
the percentage of room revenue booked through IHG managed channels and sources: direct via our websites, apps and call centres; through our interfaces with Global Distribution Systems (GDS) and agreements with Online Travel Agencies (OTAs); other distribution partners directly connected to our reservation system; and Global Sales Office business or IHG One Rewards members that book directly at a hotel.
Ethnically and racially diverse
includes ethnic/racial minorities as per government guidance in the US and UK (such as Black, Asian, mixed heritage and Hispanic (Latino for US)), including local leaders in markets such as Asia and the Middle East because they have historically been and continue to be under-represented in the most senior levels of business.
ERG
employee resource group.
Executive officers
defined by the SEC as the president, any vice president in charge of a principal business unit, division or
function (such as sales, administration or finance), any officer who performs a policy making function, or any other person who performs similar policy making functions.
Fee business
IHG’s franchised and managed businesses combined.
FERA
Fuel and energy related emissions.
Franchised hotels
hotels operated under an IHG brand license by a franchisee. IHG receives a fixed percentage of rooms revenue and neither owns, leases nor operates the property.
Franchisee
an owner who uses a brand under licence from IHG.
FRC
UK Financial Reporting Council.
Group or IHG
the Company and its subsidiaries.
Guest Love
IHG’s guest satisfaction measurement tool used to measure brand preference and guest satisfaction.
Guest Reservation System or GRS
our global electronic guest reservation system.
Hedging
the reduction of risk, normally in relation to foreign currency or interest rate movements, by making offsetting commitments.
Hotel revenue
revenue from all revenue-generating activity undertaken by managed, owned, leased and managed lease hotels, including room nights, food and beverage sales.
IASB
International Accounting Standards Board.
IFRS
International Financial Reporting Standards as issued by the IASB and adopted under UK law.
IHG PLC
InterContinental Hotels Group PLC.
International Sustainability Standards Board (ISSB)
formed by the IFRS to create sustainability-related disclosure standards that provide investors with consistent and comparable information about companies’ sustainability-related risks and opportunities.
Table of Contents
| 314 | IHG | Annual Report and Form 20-F 2024 | ||||||
Glossary continued
Journey to Tomorrow
IHG’s responsible business plan to create positive change by 2030.
Liquidated damages
payments received in respect of the early termination of franchise and management agreements.
Listing Rules
regulations subject to the oversight of the Financial Conduct Authority, which set out the obligations of UK listed companies.
Lives Improved
Lives improved is defined as a direct beneficiary under the Business for Societal Impact (B4SI) framework, a recognised standard for measuring corporate community impact. The cumulative lives improved figure is the sum of the annual totals since 2021.
LTIP
Long Term Incentive Plan.
Managed hotels
hotels operated by IHG under a management agreement on behalf of the hotel owner. IHG generates revenue through a fixed percentage of the total hotel revenue and a proportion of hotel profit, and neither leases nor owns the property.
Managed lease
properties which are held through a lease but with the same characteristics as management agreements.
Management agreement
a contract to operate a hotel on behalf of the hotel owner.
Market capitalisation
the value attributed to a listed company by multiplying its share price by the number of shares in issue.
Net rooms supply
net total number of IHG System hotel rooms.
NYSE
New York Stock Exchange.
Occupancy rate
rooms occupied by hotel guests, expressed as a percentage of rooms that are available.
Ordinary share
ordinary shares of 20 340/399 pence each in the Company.
Owned, leased and
managed lease hotels
hotels operated by IHG where IHG is, or effectively acts as, the owner, with responsibility for assets, employees and running costs. The entire revenue and profit of the hotels are recorded in IHG’s financial statements.
Owner
the owner of a hotel property.
Pipeline
hotels/rooms due to enter the IHG System at a future date. A hotel enters the pipeline once a contract has been signed and appropriate fees paid.
% pts
a percentage point is the unit for the arithmetic difference of two percentages.
Reimbursable revenues
reimbursements from managed and franchised hotels for costs incurred by IHG, for example the cost of IHG employees working in managed hotels. The related revenues and costs are presented gross in the Group income statement and there is no impact to profit.
Revenue management
the employment of pricing and segment strategies to optimise the revenue generated from the sale of room nights.
RevPAR or Revenue per available room
rooms revenue divided by the number of room nights that are available (can be mathematically derived from occupancy rate multiplied by average daily rate).
Revolving Credit Facility or RCF
the Group’s syndicated bank revolving credit facility.
Room count
number of rooms franchised, managed, owned, leased or managed lease by IHG.
Rooms revenue
revenue generated from the sale of room nights.
Royalties
fees, based on rooms revenue, that a franchisee pays to the Group.
Science-based targets (SBTs)
measurable, actionable and time-bound carbon reduction targets, based on the best available science and in line with the scale of reductions required to keep global warming below 2°C or 1.5°C from pre-industrial levels.
Science Based Targets initiative (SBTi)
helps businesses commit to and meet SBTs by independently assessing and approving any targets that are set.
SEC
US Securities and Exchange Commission.
Subsidiary
a company over which the Group exercises control.
System
hotels/rooms operating under franchise and management agreements together with IHG owned, leased and managed lease hotels/rooms, globally (the IHG System) or on a regional basis, as the context requires.
System Fund or Fund
The System Fund, including associated funds, comprises assessment fees and contributions collected from hotels within the IHG System which fund hotel services and activities that drive revenue to our hotels including marketing, the IHG One Rewards loyalty programme and our distribution channels, as well as fees collected from hotels for programmes relating to certain hotel services.
Task Force on Climate-related
Financial Disclosures (TCFD)
created by the Financial Stability Board to improve and increase reporting of climate-related financial information and to help inform investors and others about the risks they face related to climate change.
Total Shareholder Return or TSR
the theoretical growth in value of a shareholding over a period, by reference to the beginning and ending share price, and assuming that dividends, including special dividends, are reinvested to purchase additional units of the equity.
UK Corporate Governance Code
a Code issued in 2018 by the Financial Reporting Council in the UK, which guides best practice for the governance of listed companies.
Working capital
the sum of inventories, receivables and payables of a trading nature, excluding financing and taxation items.
|
|
For the definitions of our Key performance measures (including Non-GAAP measures) see pages 103 to 108. |
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 315 | |||||||||||
Useful information
Investor information
Website and electronic
communication
As part of IHG’s commitment to reduce the cost and environmental impact of producing and distributing printed documents in large quantities, this Annual Report and Form 20-F 2024 has been made available to shareholders through our website at ihgplc.com/investors under Annual Report. Shareholders may electronically appoint a proxy to vote on their behalf at the 2025 AGM. Shareholders who hold their shares through CREST may appoint proxies through the CREST electronic proxy appointment service, by using the procedures described in the CREST Manual.
Shareholder hotel discount
IHG offers discounted hotel stays (subject to availability) for registered shareholders only, through a controlled-access website. This is not available to shareholders who hold shares through nominee companies, ISAs or ADRs. For further details please contact the Company Secretary’s office (see page 317).
Responsible Business Report
In line with our commitment to responsible business practices, this year we have produced a Responsible Business Report showcasing our approach to responsible business and progress against our Responsible Business Targets.
|
|
Visit ihgplc.com/responsible-business for further information. |
Modern Slavery Statement
In accordance with the UK Modern Slavery Act 2015, we have produced a Modern Slavery Statement.
|
|
Visit ihgplc.com/reporting for further information. |
Registrar
For information on a range of shareholder services, including enquiries concerning individual shareholdings, notification of a shareholder’s change of address and amalgamation of shareholder accounts (in order to avoid duplicate mailing of shareholder communications), shareholders should contact the Company’s Registrar, Equiniti, on +44 (0) 371 384 2030a.
Dividend services
Dividend Reinvestment Plan (DRIP)
The Company offers a DRIP for shareholders to purchase additional IHG shares with their cash dividends. For further information about the DRIP, please contact our Registrar helpline on +44 (0) 371 384 2030a.
|
|
Visit shareview.co.uk/info/drip for a DRIP application form and information booklet. |
Bank mandate
We encourage shareholders to have their dividends paid directly into their UK bank or building society accounts, to ensure efficient payment and clearance of funds on the payment date. For further information, please contact our Registrar (see page 317).
Overseas payment service
It is also possible for shareholders to have their dividends paid directly to their bank accounts in a local currency. Charges are payable for this service.
|
|
Visit shareview.co.uk/info/ops for further information. |
Out-of-date/unclaimed dividends
If you think that you have out-of-date dividend cheques or unclaimed dividend payments, please contact our Registrar (see page 317).
Individual Savings Account (ISA)
Equiniti offers a Stocks and Shares ISA that can invest in IHG shares.
For further information, please contact Equiniti on +44 (0) 371 384 2030a.
Share-dealing services
Equiniti offers the following share-dealing facilities.
Postal dealing
+44 (0) 371 384 2030
from the UK and overseasa
Telephone dealing
For more information,
call +44 (0) 371 384 2030a
Internet dealing
Visit shareview.co.uk for more information.
Changes to the base cost of IHG shares
Details of all the changes to the base cost of IHG shares held from April 2004 to January 2019, for UK Capital Gains Tax purposes, may be found on our website at ihgplc.com/investors under Shareholder centre in the Tax information section.
Shareholder security
Many companies have become aware that their shareholders have received unsolicited telephone calls or correspondence concerning investment matters. These are typically from ‘brokers’ who target UK shareholders, offering to sell them what often turn out to be worthless or high-risk shares in US or UK investments. These operations are commonly known as ‘boiler rooms’. More detailed information on this or similar activity can be found at fca.org.uk/consumers on the Financial Conduct Authority website.
Details of any share dealing facilities that the Company endorses will be included in Company mailings.
Trading markets
The principal trading market for the Company’s ordinary shares is the London Stock Exchange (LSE). The ordinary shares are also listed on the NYSE, trading in the form of ADSs evidenced by ADRs. Each ADS represents one ordinary share. The Company has a sponsored ADR facility with J.P. Morgan Chase Bank, N.A., as ADR Depositary.
American Depositary Receipts (ADRs)
The Company’s shares are listed on the NYSE in the form of American Depositary Shares, evidenced by ADRs and traded under the symbol ‘IHG’. Each ADR represents one ordinary share. All enquiries regarding ADR holder accounts and payment of dividends should be directed to J.P. Morgan Chase Bank, N.A., our ADR Depositary bank (contact details shown on page 317).
Documents on display
Documents referred to in this Annual Report and Form 20-F that are filed with the SEC can be found at the SEC’s public reference room located at 100 F Street, NE Washington, DC 20549. For further information and copy charges please call the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically and the Company’s SEC filings since 22 May 2002 are also publicly available through the SEC’s website at sec.gov Copies of the Company’s Articles of Association can be obtained via the website at ihgplc.com/investors under Corporate governance or from the Company’s registered office on request.
| a. | Lines are open from 08:30 to 17:30 Monday to Friday, excluding UK public holidays. |
Table of Contents
| 316 | IHG | Annual Report and Form 20-F 2024 | ||||||
| Useful information continued | ||||
Financial calendar – Dividends
| 2024 | ||||
| 2024 Interim dividend | ||||
| Ex-dividend date – Ordinary shares | 29 August | |||
| Ex-dividend date – ADRs | 30 August | |||
| Record date | 30 August | |||
| Payment date | 3 October | |||
| 2025 | ||||
| 2024 Final dividend of 114.4¢ per ordinary sharea |
|
|||
| Ex-dividend date – Ordinary shares | 3 April | |||
| Ex-dividend date – ADRs | 4 April | |||
| Record date | 4 April | |||
| Payment date | 15 May | |||
| a. | The sterling amount of the final dividend will be announced on 28 April 2025 using the average of the daily exchange rates for the three working days commencing 23 April 2025. |
Financial calendar – Other dates
| 2024 | ||||
| Financial year end | 31 December | |||
| 2025 | ||||
| Announcement of Preliminary Results for 2024 | 18 February | |||
| Announcement of 2025 First Quarter Trading Update | 8 May | |||
| Annual General Meeting | 8 May | |||
| Announcement of Half-Year Results for 2025 | 7 August | |||
| Announcement of 2025 Third Quarter Trading Update | 23 October | |||
| Financial year end | 31 December | |||
| 2026 | ||||
| Announcement of Preliminary Results for 2025 | February | |||
Table of Contents
| Strategic | Group Financial | Parent Company | Additional | |||||||||||||||
| Report | Governance | Statements | Financial Statements | Information | Annual Report and Form 20-F 2024 | IHG | 317 | |||||||||||
Contacts
Registered office
IHG Hotels & Resorts,
1 Windsor Dials,
Arthur Road,
Windsor, SL4 1RS,
United Kingdom
Telephone:
+44 (0) 1753 972 000
ihgplc.com
For general information about the Group’s business, please contact the Corporate Affairs department at the above address. For all other enquiries, please contact the Company Secretary’s office at the above address.
Registrar
Equiniti, Aspect House,
Spencer Road, Lancing,
West Sussex, BN99 6DA,
United Kingdom
Telephone:
+44 (0) 345 607 6838
shareview.co.uk
ADR Depositary
Shareowner Services,
PO Box 64504
St. Paul, MN 55164-0504
United States of America
Telephone:
+1 800 990 1135 (US Calls) (Toll-free)
+1 651 453 2128 (non- US Calls)
Enquiries: shareowneronline.com/ informational/contact-us/
Auditor
PricewaterhouseCoopers LLP
Investment bankers
BofA Securities
Goldman Sachs
Solicitors
Freshfields Bruckhaus Deringer LLP
Stockbrokers
BofA Securities
IHG® One Rewards
If you wish to enquire about, or join,
IHG Rewards, visit ihg.com/onerewards
or telephone:
+800 2222 7172b
(Austria, Belgium, Denmark,
Finland, France, Germany, Hungary,
Ireland, Israel, Italy, Luxembourg,
Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland and UK)
+44 1950 499004c
(all other countries/regions
in Europe and Africa)
1 888 211 9874
(US and Canada)
001 800 272 9273c
(Mexico)
+1 801 975 3013c (Spanish)
(Central and South America)
+1 801 975 3063c (English)
(Central and South America)
+973 6 500 9 296a
(Middle East)
+800 2222 7172b
(Australia, Japan, Korea, Malaysia,
New Zealand, Philippines,
Singapore and Thailand)
800 830 1128a or 021 20334848a
(Mainland China)
800 965 222
(China Hong Kong)
0800 728
(China Macau)
00801 863 366
(China Taiwan)
+632 8857 8788c
(all other countries/regions
in Asia Pacific)
| + | Denotes international access code. 00 or 011 in most countries. |
| a. | Toll charges apply. |
| b. | Universal international freephone number. |
| c. | International calling rates may apply. |
Table of Contents
| 318 | IHG | Annual Report and Form 20-F 2024 | ||||||
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| Printed by Park Communications, a Carbon Neutral Company, on FSC® certified paper.
Park works to the EMAS standard and its Environmental Management System is certified to ISO 14001.
This publication has been manufactured using 100% offshore wind electricity sourced from UK wind.
100% of the inks used are vegetable oil based, 95% of press chemicals are recycled for further use and, on average 99% of any waste associated with this production will be recycled and the remaining 1% used to generate energy.
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Table of Contents
Table of Contents
InterContinental Hotels Group PLC 1 Windsor Dials Arthur Road Windsor Berkshire SL4 1RS Switchboard +44 (0) 1753 972000 Make a booking at ihg.com
Table of Contents
SIGNATURE
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 Form 20-F on its behalf.
| INTERCONTINENTAL HOTELS GROUP PLC (Registrant) |
||
| By: | /s/ Michael Glover |
|
| Name: | Michael Glover |
|
| Title: | Chief Financial Officer | |
| Date: | February 27, 2025 | |
Exhibit 1
No. 5134420
The Companies Act 2006
Company Limited by Shares
INTERCONTINENTAL HOTELS GROUP PLC
ARTICLES OF ASSOCIATION
Adopted with effect from 7 May 2020
The Articles of Association were first adopted with effect from 27 June 2005 pursuant to a Special Resolution of the Company passed on 15 June 2005 and have been amended by Special Resolutions of the Company passed on 1 June 2007 with immediate effect, 30 May 2008 with effect from 1 October 2008, 29 May 2009 with effect from 1 October 2009, on 28 May 2010 with effect from 9 June 2010, on 4 May 2018 with immediate effect, on 7 May 2020 with immediate effect, and on 3 May 2024 with immediate effect.
Contents
| Article No. | Page No. | |||||||
| Preliminary |
1-2 | 1-5 | ||||||
| Ordinary and Redeemable Shares |
3-4 | 5-6 | ||||||
| Variation of Rights |
5-8 | 6-7 | ||||||
| Shares |
9-13 | 7-9 | ||||||
| Evidence of Title to Securities |
14 | 9 | ||||||
| Share Certificates |
15-19 | 9-10 | ||||||
| Calls on Shares |
20-25 | 10-11 | ||||||
| Forfeiture and Lien |
26-33 | 12-13 | ||||||
| Transfer of Shares |
34-39 | 13-16 | ||||||
| Transmission of Shares |
40-42 | 16 | ||||||
| Untraced Shareholders |
43-44 | 17 | ||||||
| General Meetings |
45-46 | 17-18 | ||||||
| Notice of General Meetings |
47-49 | 18-19 | ||||||
| Overflow of General Meetings |
50-52 | 20 | ||||||
| Proceedings at General Meetings |
53-63 | 20-23 | ||||||
| Votes of Members |
64-69 | 23-26 | ||||||
| Proxies |
70-76 | 26-28 | ||||||
| Corporations Acting by Representatives |
77 | 29 | ||||||
| Directors |
78-85 | 29-30 | ||||||
| Appointment and Retirement of Directors |
86-92 | 30-32 | ||||||
| Alternate Directors |
93-96 | 32-33 | ||||||
| Meetings and Proceedings of Directors |
97-108 | 33-40 | ||||||
| Borrowing Powers |
109-110 | 40 | ||||||
| General Powers of Directors |
111-117 | 41-42 | ||||||
| President |
118 | 42 | ||||||
| Departmental, Divisional or Local Directors |
119 | 42 | ||||||
| Secretary |
120 | 42 | ||||||
| The Seal |
121-123 | 43 | ||||||
| Record Date |
124 | 43 | ||||||
| Authentication of Documents |
125 | 43-44 | ||||||
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| Article No. | Page No. | |||||||
| Reserves |
126 | 44 | ||||||
| Dividends |
127-139 | 44-47 | ||||||
| Capitalisation of Profits and Shares |
140-141 | 47-50 | ||||||
| Minutes |
142 | 50 | ||||||
| Accounts |
143-144 | 50 | ||||||
| Auditors |
145-146 | 51 | ||||||
| Communications with Members |
147-153 | 51-53 | ||||||
| Winding up |
154-155 | 54 | ||||||
| Directors’ liabilities |
156-158 | 54-56 | ||||||
| Overriding Provisions |
159 | 56-59 | ||||||
ii
The Companies Act 2006
COMPANY LIMITED BY SHARES
Articles of Association
Adopted by Special Resolution passed on 7 May 20201 of
INTERCONTINENTAL HOTELS GROUP PLC2
(the “Company”)
Preliminary
| 1 | The regulations in Table A in The Companies (Tables A to F) Regulations 1985 and in any Table A applicable to the Company under any former enactment relating to companies shall not apply to the Company. |
| 2 | In these Articles (if not inconsistent with the subject or context) the words and expressions set out below shall have the following meanings: |
“Auditors” means the auditors for the time being of the Company.
“Company Communications Provisions” shall have the same meaning as in the Companies Acts.
“in writing” means written or produced by any substitute for writing (including anything in electronic form) or partly one and partly another.
“London Stock Exchange” means London Stock Exchange plc. “month” means calendar month.
“Office” means the registered office of the Company for the time being.
“Operator” means CRESTCo Limited or such other person as may for the time being be approved by H.M. Treasury as Operator under the Regulations.
| 1 | The Articles of Association were first adopted with effect from 27 June 2005, pursuant to a Special Resolution of the Company passed on 15 June 2005, and have been amended by Special Resolutions of the Company passed on 1 June 2007 with immediate effect, 30 May 2008 with effect from 1 October 2008, on 29 May 2009 with effect from 1 October 2009, on 28 May 2010 with effect from 9 June 2010, on 4 May 2018 with immediate effect, on 7 May 2020 with immediate effect, and on 3 May 2024 with immediate effect. |
| 2 | The Company was incorporated as Hackremco (No. 2154) Limited on 21 May 2004. On 24 March 2005 the name of the Company was changed to New InterContinental Hotels Group Limited. On 27 April 2005, the Company re-registered as a public limited company and its name was changed to New InterContinental Hotels Group PLC with effect from that date. With effect from 27 June 2005, the name of the Company was changed to InterContinental Hotels Group PLC. |
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“Operator-instruction” means a properly authenticated dematerialised instruction attributable to the Operator.
“paid” means paid or credited as paid.
“participating security” means a security, title to units of which is permitted by the Operator to be transferred by means of a relevant system.
“present” means for the purposes of physical meetings, present in person or, for the purposes of electronic meetings, present by electronic means.
“Register” means the register of members of the Company.
“Regulations” means the Uncertificated Securities Regulations 2001 including any modification or re-enactment of them for the time being in force.
“relevant system” means a computer-based system, and procedures, which enable title to units of a security to be evidenced and transferred without a written instrument pursuant to the Regulations.
“Seal” means the Common Seal of the Company.
“Securities Seal” means the official seal kept by the Company for sealing securities issued by the Company, or for sealing documents creating or evidencing securities so issued, as permitted by the Companies Acts.
“Statutes” means the Companies Acts, the Regulations and every other enactment (to the extent the same is in force) concerning companies and affecting the Company.
“these Articles” means these Articles of Association as from time to time altered. “Transfer Office” means the place where the Register is situated for the time being. “United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.
“UK Listing Authority” means the Financial Conduct Authority in its capacity as competent authority for official listing under Part VI of the Financial Services and Markets Act 2000.
“year” means calendar year.
The expression “address” includes any number or address (including in the use of any Uncertificated Proxy Instruction permitted under Article 71, an identification number of a participant in the relevant system) used for the purposes of sending or receiving notices, documents or information by electronic means and/or by means of a website.
The expression “Companies Acts” shall have the meaning given thereto by Section 2 of the Companies Act 2006 but shall only extend to provisions which are in force at the relevant date.
The expressions “hard copy form”, “electronic form” and “electronic means” shall have the same respective meanings as in the Company Communications Provisions.
The expressions “debenture” and “debenture holder” shall respectively include “debenture stock” and “debenture stockholder”.
The expression “Director” shall include all the directors of the Company.
The expression “Group” in relation to moneys borrowed means the Company and its subsidiary undertakings for the time being.
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The expression “moneys borrowed” shall be deemed to include (to the extent that the same would not otherwise fall to be taken into account):
| (i) | the principal amount of any debentures, as defined in Section 738 of the Companies Act 2006 and any fixed premium payable on final repayment thereof save to the extent that such amounts otherwise fall to be included as moneys borrowed; |
| (ii) | the principal amount raised by the acceptance of bills by the Company or any subsidiary (not being acceptance of trade bills for the purchase of goods in the ordinary course of business) or by any bank or accepting house under any acceptance credit opened on behalf of the Company or any subsidiary; |
| (iii) | the nominal amount of any share capital and the principal amount of any other debentures or other borrowed moneys (together with any fixed premium payable on final redemption or repayment) the redemption or repayment of which is guaranteed (or is the subject of an indemnity granted) by the Company or a subsidiary, save to the extent that the amount guaranteed otherwise falls to be included as moneys borrowed; |
| (iv) | the nominal amount of any paid-up share capital, except ordinary share capital, of a subsidiary which is not for the time being beneficially owned by the Company or a subsidiary; |
| (v) | the aggregate amount owing by any member of the Group under leases (as determined in accordance with any then current International Financial Reporting Standard or otherwise in accordance with United Kingdom generally accepted accounting principles but excluding leaseholds of immovable property); |
| (vi) | the principal amount of any book debts of any member of the Group which have been sold or agreed to be sold, to the extent that any member of the Group is for the time being liable to indemnify or reimburse the purchaser in respect of any non- payment in respect of such book debts; and |
| (vii) | any part of the purchase price of any movable or immovable assets acquired by any member of the Group, the payment of which is deferred beyond the date of completion of the conveyance, assignment or transfer of the legal estate to such assets or, if no such conveyance, assignment or transfer is to take place within six months after the date on which the contract for such purchase is entered into or (if later) becomes unconditional, beyond that date; |
but shall be deemed not to include:
| (viii) | a proportion of the moneys borrowed by any partly owned subsidiary otherwise than from the Company or a subsidiary equal to the proportion of its ordinary share capital not directly or indirectly attributable to the Company; |
| (ix) | amounts borrowed and falling to be taken into account as moneys borrowed pending their application for the purpose of repaying the whole or any part of the other moneys borrowed provided that they are so applied within six months of being so borrowed; |
| (x) | amounts borrowed by the Company or any subsidiary to finance any contract for the sale of goods in respect of which any part of the price receivable is guaranteed by the Export Credit Guarantee Department of the Board of Trade or any institution carrying on similar business to the extent of that part of the contract price |
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| guaranteed notwithstanding that such amount is secured by a pledge or charge on the interest in such contract or the underlying goods or bills of exchange or the negotiable instruments drawn or made in connection therewith or the interest in any letters of credit issued or guarantee or indemnity or security held in relation thereto; |
| (xi) | all sums (whether or not carrying interest) deposited with the Company or with any subsidiary by tenants or managers of premises owned by any such company by way of earnest or security for the performance by such tenants or managers of their obligations or by loan clubs or by similar associations; |
and so that:
| (xii) | no amount shall be taken into account more than once in the same calculation but subject thereto (i) to (xii) above shall be read cumulatively; |
| (xiii) | moneys borrowed shall be offset by cash and cash equivalence as determined in accordance with any then current International Financial Reporting Standards or otherwise in accordance with United Kingdom generally accepted accounting principles; and |
| (xiv) | in determining the amount of any debentures or other moneys borrowed or of any share capital for the purpose of this paragraph there shall be taken into account the nominal or principal amount thereof (or, in the case of partly-paid debentures or shares, the amount for the time being paid up thereon) together with any fixed or minimum premium payable on final redemption or repayment provided that if moneys are borrowed or shares are issued on terms that they may be repayable or redeemable (or that any member of the Group may be required to purchase them) earlier than their final maturity date (whether by exercise of an option on the part of the issuer or the creditor (or a trustee for the creditor) or the shareholder, by reason of a default or for any other reason) at a premium or discount to their nominal or principal amount then there shall be taken into account the amount (or the greater or greatest of two or more alternative amounts) which would, if those circumstances occurred, be payable on such repayment, redemption or purchase at the date as at which the calculation is being made. |
The expression “electronic facilities” shall include, without limitation, website addresses and conference call systems, and references to persons attending meetings by electronic means, means attendance at electronic General Meetings via the electronic facilities stated in the notice of such meeting.
The reference to a person’s “participation” in the business of any General Meeting, includes without limitation and as relevant the right (including, in the case of a corporation, through a duly appointed representative) to speak, vote, be represented by a proxy and have access in hard copy or electronic form to all documents which are required by the Statutes or these articles to be made available at the meeting and participate and participating shall be construed accordingly.
The expression “meeting” means a meeting convened and held in any manner permitted by these articles, including without limitation a General Meeting of the Company at which some or all persons entitled to be present attend and participate by means of electronic facility or facilities, and such persons shall be deemed to present at that meeting for all purposes of the Statutes and these articles and attend and participate, attending and participating and attendance and participation shall be construed accordingly.
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The expression “officer” shall include a Director, manager and the Secretary, but shall not include an auditor.
The expressions “recognised clearing house” and “recognised investment exchange” shall mean any clearing house or investment exchange (as the case may be) granted recognition under the Financial Services and Markets Act 2000.
The expression “Secretary” shall include any person appointed by the Directors to perform any of the duties of the Secretary including, but not limited to, a joint, assistant or deputy Secretary.
The expression “shareholders’ meeting” shall include both a General Meeting and a meeting of the holders of any class of shares of the Company. The expression “General Meeting” shall include any general meeting of the Company, including any general meeting held as the Company’s annual general meeting in accordance with Section 336 of the Companies Act 2006 (“Annual General Meeting”).
All such provisions of these Articles as are applicable to paid-up shares shall apply to stock, and the words “share” and “shareholder” shall be construed accordingly.
Except where the context otherwise requires, any reference to issued shares of any class (whether of the Company or of any other company) shall not include any shares of that class held as treasury shares.
Words denoting the singular shall include the plural and vice versa. Words denoting the masculine shall include the feminine. Words denoting persons shall include bodies corporate and unincorporated associations.
References to any statute or statutory provision shall be construed as relating to any statutory modification or re-enactment thereof for the time being in force (whether coming into force before or after the adoption of these Articles).
Except as provided above any words or expressions defined in the Companies Acts or the Regulations shall (if not inconsistent with the subject or context) bear the same meanings in these Articles.
A Special Resolution shall be effective for any purpose for which an Ordinary Resolution is expressed to be required under any provision of these Articles.
References herein to a share (or to a holding of shares) being in uncertificated form or in certificated form are references, respectively, to that share being an uncertificated unit of a security or a certificated unit of a security for the purposes of the Regulations.
Ordinary and Redeemable Shares
| 3 | Ordinary Shares |
The Ordinary Shares will have attached thereto the rights and privileges and be subject to the limitations and restrictions specified in this Article 3.
| 3.1 | Income |
Subject to the rights attached to any other share or class of share, the holders of Ordinary Shares shall be entitled to be paid any profits of the Company available for distribution and determined to be paid by the Directors rateably according to the amounts paid up on such shares.
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| 3.2 | Capital |
On a return of capital on winding up or otherwise (except on redemption in accordance with the terms of issue of any share, or purchase by the Company of any share or on a capitalisation issue and subject to the rights of any other class of shares that may be issued) after paying such sums as may be due in priority to holders of any other class of shares in the capital of the Company, any further such amount shall be paid to the holders of the Ordinary Shares rateably according to the amounts paid up or credited as paid up in respect of each Ordinary Share.
| 3.3 | Voting at General Meetings |
The holders of Ordinary Shares shall be entitled, in respect of their holdings of such shares, to receive notice of General Meetings and to attend, speak and vote at such meetings in accordance with these Articles.
| 4 | Redeemable Shares |
The Company may issue shares which are to be redeemed, or liable to be redeemed at the option of the Company or the holder, and the directors may determine the terms, conditions and manner of redemption of any such shares.
Variation of Rights
| 5 | Manner of variation of rights |
| 5.1 | Whenever the share capital of the Company is divided into different classes of shares, the special rights attached to any class may, subject to the provisions of the Statutes, be varied or abrogated either with the consent in writing of the holders of three-quarters in nominal value of the issued shares of the class or with the sanction of a Special Resolution passed at a separate General Meeting of the holders of the shares of the class (but not otherwise) and may be so varied or abrogated either whilst the Company is a going concern or during or in contemplation of a winding up. |
| 5.2 | To every such separate General Meeting all the provisions of these Articles relating to General Meetings of the Company and to the proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall be two persons at least holding or representing by proxy at least one-third in nominal value of the issued shares of the class (but so that at any adjourned meeting any holder of shares of the class present in person or by proxy shall be a quorum) and that any holder of shares of the class present in person or by proxy may demand a poll and that every such holder shall on a poll have one vote for every share of the class held by him or her but not otherwise. |
| 5.3 | The foregoing provisions of this Article shall apply to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class the special rights whereof are to be varied. |
| 6 | Matters not constituting variation of rights |
The special rights attached to any class of shares having preferential rights shall not unless otherwise expressly provided by the terms of issue thereof be deemed to be varied by the creation or issue of further shares ranking as regards participation in the profits or assets of the Company in some or all respects pari passu therewith but in no respect in priority thereto or by the purchase or redemption by the Company of any of its own shares.
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| 7 | Proceeds of consolidation and subdivision |
Whenever as a result of a consolidation or subdivision of shares any members would become entitled to fractions of a share, the Directors may, on behalf of those members, sell the shares representing the fractions for the best price reasonably obtainable to any person (including, subject to the provisions of the Statutes, the Company) and distribute the net proceeds of sale in due proportion among those members, and the Directors may authorise some person to transfer the shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale. So far as the Statutes allow, the Directors may treat shares of a member in certificated form and in uncertificated form as separate holdings in giving effect to subdivisions and/or consolidations and may cause any shares arising on consolidation or subdivision and representing fractional entitlements to be entered in the Register as shares in certificated form where this is desirable to facilitate the sale thereof.
| 8 | Reduction of capital |
Holders of shares of the Company allotted and issued pursuant to the scheme of arrangement (the “Scheme”) under section 425 of the Companies Act 1985 dated 3 May 2005 between the company formerly known as “InterContinental Hotels Group PLC” (with registered number 4551528) and the holders of its Scheme Shares (as defined in the Scheme) shall be bound by any Special Resolution to reduce or approve the reduction of the capital of the Company in any way duly passed at any General Meeting prior to the Scheme becoming effective.
Shares
| 9 | Shares and special rights |
Without prejudice to any special rights previously conferred on the holders of any shares or class of shares for the time being issued, any share in the Company may be issued with such preferred, deferred or other special rights, or subject to such restrictions, whether as regards dividend, return of capital, voting or otherwise, as the Company may from time to time by Ordinary Resolution determine (or, in the absence of any such determination, as the Directors may determine) and subject to the provisions of the Statutes the Company may issue any shares which are, or at the option of the Company or the holder are liable, to be redeemed. All new shares shall be subject to the provisions of the Statutes and of these Articles with reference to allotment, payment of calls, lien, transfer, transmission, forfeiture and otherwise.
| 10 | Directors’ power to allot securities and to sell treasury shares |
| 10.1 | Subject to the provisions of the Statutes relating to authority, pre-emption rights and otherwise and of any resolution of the Company in General Meeting passed pursuant thereto, all shares shall be at the disposal of the Directors and they may allot (with or without conferring a right of renunciation), grant rights to subscribe for, or convert any security into, grant options over or otherwise dispose of them to such persons, at such times and on such terms as they think proper. |
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| 10.2 | The Directors shall be generally and unconditionally authorised pursuant to, and in accordance with, Section 551 of the Companies Act 2006 to exercise for each Allotment Period all the powers of the Company to allot shares in the Company or to grant rights to subscribe for, or convert any security into, shares of the Company up to a maximum aggregate nominal amount equal to the Section 551 Amount. |
| 10.3 | During each Allotment Period the Directors shall be empowered to allot equity securities wholly for cash pursuant to and within the terms of any authority in Article 10.2 above and to sell treasury shares wholly for cash: |
10.3.1 in connection with a rights issue; and
10.3.2 otherwise than in connection with a rights issue, up to an aggregate nominal amount equal to the Section 561 Amount,
as if Section 561(1) of the Companies Act 2006 did not apply to any such allotment or sale.
| 10.4 | By such authority and power the Directors may, during the Allotment Period, make offers or agreements which would or might require shares in the Company to be allotted or rights to subscribe for, or convert any security into, shares to be granted after the expiry of such period. The Directors may allot shares or grant rights to subscribe for, or convert any security into, shares in pursuance of that offer or agreement as if the authority or power pursuant to which that offer or agreement was made had not expired. |
| 10.5 | For the purposes of this Article 10: |
| 10.5.1 | “Allotment Period” means the period ending on the date of the next Annual General Meeting of the Company or on 1 July 2011, whichever is the earlier, or any other period (not exceeding five years on any occasion) for which the authority conferred by this Article 10 is renewed by Resolution of the Company in General Meeting stating the Section 551 Amount for such period; |
| 10.5.2 | “rights issue” means an offer of equity securities open for acceptance for a period fixed by the Directors to (i) holders (other than the Company) of Ordinary Shares on the Register on a record date fixed by the Directors in proportion to their respective holdings (for which purpose holdings in certificated and uncertificated form may be treated as separate holdings); and (ii) other persons so entitled by virtue of the rights attaching to any other equity securities held by them, but subject in both cases to such exclusions or other arrangements which the Directors consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory or other matter whatsoever; |
| 10.5.3 | “Section 551 Amount” shall, without prejudice to any other authority given to the Directors, for any Allotment Period be stated in the relevant Resolution renewing the authority conferred by Article 10.2 above for such period or any increased amount fixed by Resolution of the Company; |
| 10.5.4 | “Section 561 Amount” shall for any Allotment Period be that stated in the relevant Special Resolution renewing the power conferred by Article 10.3 above for such period or any increased amount fixed by Special Resolution of the Company; and |
| 10.5.5 | the nominal amount of any shares in the Company or rights to subscribe for, or convert any security into, shares of the Company shall be taken to be, in the case of rights to subscribe for or to convert any securities into shares of the Company, the nominal amount of such shares which may be allotted pursuant to such rights. |
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| 11 | Commission on issue of shares |
The Company may exercise the powers of paying commissions conferred by the Statutes to the full extent thereby permitted. The Company may also on any issue of shares pay such brokerage as may be lawful.
| 12 | Renunciation of allotment |
The Directors may at any time after the allotment of any share but before any person has been entered in the Register as the holder:
| 12.1 | recognise a renunciation thereof by the allottee in favour of some other person and may accord to any allottee of a share a right to effect such renunciation; and/or |
| 12.2 | allow the rights represented thereby to be one or more participating securities, |
in each case upon and subject to such terms and conditions as the Directors may think fit to impose.
| 13 | Trust etc. interests not recognised |
Except as required by law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or compelled in any way to recognise any equitable, contingent, future or partial interest in any share, any interest in any fractional part of a share or (except only as by these Articles or by law otherwise provided) any other right in respect of any share, except an absolute right to the entirety thereof in the registered holder.
Evidence of Title to Securities
| 14 | Nothing in these Articles shall require title to any securities of the Company to be evidenced or transferred by a written instrument, the regulations from time to time made under the Statutes so permitting. The Directors shall have power to implement any arrangements which they may think fit for such evidencing and transfer which accord with those regulations. |
Share Certificates
| 15 | Issue of share certificate |
Every share certificate shall be executed by the Company in such manner as the Directors may decide (which may include use of the Seal or the Securities Seal (or, in the case of shares on a branch register, an official seal for use in the relevant territory) and/or manual or facsimile signatures by one or more Directors) and shall specify the number and class of shares to which it relates and the amount paid up thereon. No certificate shall be issued representing shares of more than one class. No certificate shall normally be issued in respect of shares held by a recognised clearing house or a nominee of a recognised clearing house or of a recognised investment exchange.
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| 16 | Joint holder |
In the case of a share held jointly by several persons in certificated form the Company shall not be bound to issue more than one certificate therefor and delivery of a certificate to one of the joint holders shall be sufficient delivery to all.
| 17 | Timing of issue of share certificate |
Any person (except a person to whom the Company is not required by law to issue a certificate) whose name is entered in the Register in respect of any shares in certificated form of any one class upon the issue or transfer to him or her thereof shall be entitled without payment to a certificate therefor (in the case of issue) within one month (or such longer period as the terms of issue shall provide) after allotment or (in the case of a transfer of fully-paid shares) within 14 days after lodgement of a transfer or (in the case of a transfer of partly-paid shares) within two months after lodgement of a transfer.
| 18 | Balance certificate |
Where some only of the shares comprised in a share certificate are transferred, the old certificate shall be cancelled and, to the extent that the balance is to be held in certificated form, a new certificate for the balance of such shares issued in lieu without charge.
| 19 | Replacement of share certificates |
| 19.1 | Any two or more certificates representing shares of any one class held by any member may at his or her request be cancelled and a single new certificate for such shares issued in lieu without charge. |
| 19.2 | If any member shall surrender for cancellation a share certificate representing shares held by him or her and request the Company to issue in lieu two or more share certificates representing such shares in such proportions as he or she may specify, the Directors may, if they think fit, comply with such request. |
| 19.3 | If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same shares may be issued to the holder upon request subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of any exceptional out-of-pocket expenses of the Company in connection with the request as the Directors may think fit. |
| 19.4 | In the case of shares held jointly by several persons any such request may be made by any one of the joint holders. |
Calls on Shares
| 20 | Power to make calls |
The Directors may from time to time make calls upon the members in respect of any moneys unpaid on their shares (whether on account of the nominal value of the shares or, when permitted, by way of premium) but subject always to the terms of allotment of such shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed and may be made payable by instalments.
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| 21 | Liability for calls |
Each member shall (subject to being given at least 14 days’ notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified, the amount called on his or her shares. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof. A call may be wholly or partly revoked or postponed as the Directors may determine. The liability of members of the Company is limited to the amount, if any, unpaid on the shares in the Company held by them.
| 22 | Interest on overdue amounts |
If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at such rate (not exceeding 3 per cent per annum above the base rate for the time being of Barclays Bank PLC on the date on which payments are made to the Company) as the Directors determine but the Directors shall be at liberty in any case or cases to waive payment of such interest wholly or in part.
| 23 | Other sums due on shares |
Any sum (whether on account of the nominal value of the share or by way of premium) which by the terms of allotment of a share becomes payable upon allotment or at any fixed date shall for all the purposes of these Articles be deemed to be a call duly made and payable on the date on which by the terms of allotment the same becomes payable. In case of non-payment all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.
| 24 | Power to differentiate between holders |
The Directors may on the allotment of shares differentiate between the holders as to the amount of calls to be paid and the times of payment.
| 25 | Payment of calls in advance |
The Directors may if they think fit receive from any member willing to advance the same all or any part of the moneys (whether on account of the nominal value of the shares or by way of premium) uncalled and unpaid upon the shares held by him or her and such payment in advance of calls shall extinguish pro tanto the liability upon the shares in respect of which it is made and upon the money so received (until and to the extent that the same would but for such advance become payable) the Company may pay interest at such rate (not exceeding 3 per cent per annum above the base rate for the time being of Barclays Bank PLC on the date on which payments are made to the Company) as the member paying such sum and the Directors may agree.
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Forfeiture and Lien
| 26 | Notice on failure to pay a call |
| 26.1 | If a member fails to pay in full any call or instalment of a call on or before the due date for payment thereof, the Directors may at any time thereafter serve a notice on him or her requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued thereon and any expenses incurred by the Company by reason of such non-payment. |
| 26.2 | The notice shall name a further day (not being less than seven days from the date of service of the notice) on or before which and the place where the payment required by the notice is to be made, and shall state that in the event of non-payment in accordance therewith the shares on which the call has been made will be liable to be forfeited. |
| 27 | Forfeiture for non-compliance |
If the requirements of any such notice as aforesaid are not complied with, any share in respect of which such notice has been given may at any time thereafter, before payment of all calls and interest and expenses due in respect thereof has been made, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited share and not actually paid before forfeiture. The Directors may accept a surrender of any share liable to be forfeited hereunder.
| 28 | Disposal of forfeited share |
A share so forfeited or surrendered shall become the property of the Company and may be sold, re-allotted or otherwise disposed of either to the person who was before such forfeiture or surrender the holder thereof or entitled thereto or to any other person upon such terms and in such manner as the Directors shall think fit and at any time before a sale, re-allotment or disposal the forfeiture or surrender may be cancelled on such terms as the Directors think fit. The Directors may, if necessary, authorise some person to transfer a forfeited or surrendered share to any such other person as aforesaid.
| 29 | Holder to remain liable despite forfeiture |
A person whose shares have been forfeited or surrendered shall cease to be a member in respect of the shares and shall, in the case of shares held in certificated form, surrender to the Company for cancellation the certificate for such shares. Such person shall nevertheless remain liable to pay to the Company all moneys which at the date of forfeiture or surrender were presently payable by him or her to the Company in respect of the shares with interest thereon at 3 per cent per annum above the base rate for the time being of Barclays Bank PLC on the date on which payments are made to the Company (or such lower rate as the Directors may determine) from the date of forfeiture or surrender until payment. The Directors may at their absolute discretion enforce payment without any allowance for the value of the shares at the time of forfeiture or surrender or for any consideration received on their disposal. They may also waive payment in whole or in part.
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| 30 | Lien on partly-paid shares |
The Company shall have a first and paramount lien on every share (not being a fully-paid share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such share and the Directors may waive any lien which has arisen and may resolve that any share shall for some limited period be exempt wholly or partially from the provisions of this Article.
| 31 | Sale of shares subject to lien |
The Company may sell in such manner as the Directors think fit any share on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of 14 days after a notice in writing demanding payment of the sum presently payable and giving notice of intention to sell the share in default of payment shall have been given to the holder for the time being of the share or the person entitled thereto by reason of his or her death or bankruptcy or otherwise by operation of law.
| 32 | Proceeds of sale of shares subject to lien |
The net proceeds of such sale after payment of the costs of such sale shall be applied in or towards payment or satisfaction of the amount in respect whereof the lien exists so far as the same is then payable and any residue shall, upon surrender (in the case of shares held in certificated form) to the Company for cancellation of the certificate for the shares sold and subject to a like lien for sums not presently payable as existed upon the shares prior to the sale, be paid to the person entitled to the shares at the time of the sale. For the purpose of giving effect to any such sale the Directors may authorise some person to transfer the shares sold to, or in accordance with the directions of, the purchaser.
| 33 | Evidence of forfeiture |
A statutory declaration that the declarant is a Director or the Secretary and that a share has been duly forfeited or surrendered or sold to satisfy a lien of the Company on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. Such declaration shall (subject to the relevant share transfer being made, if the same be required) constitute a good title to the share. The person to whom the share is sold, re-allotted or disposed of shall not be bound to see to the application of the consideration (if any). The title of such person to the share shall not be affected by any irregularity or invalidity in the proceedings relating to the forfeiture, surrender, sale, re-allotment or disposal of the share.
Transfer of Shares
| 34 | Form of transfer |
| 34.1 | Subject to the provisions of Article 14, all transfers of shares which are in certificated form may be effected by transfer in writing in any usual or common form or in any other form acceptable to the Directors and may be under hand only. The instrument of transfer shall be signed by or on behalf of the transferor and (except in the case of fully-paid shares) by or on behalf of the transferee. The transferor shall remain the holder of the shares concerned until the name of the transferee is entered in the Register in respect thereof. |
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| 34.2 | All transfers of shares which are in uncertificated form may, unless the Regulations otherwise provide, be effected by means of a relevant system. |
| 35 | Right to refuse registration |
| 35.1 | The Directors may decline to recognise any instrument of transfer relating to shares in certificated form unless: |
| 35.1.1 | the instrument of transfer is in respect of only one class of share; |
| 35.1.2 | is lodged (duly stamped if required) at the Transfer Office accompanied by the relevant share certificate(s); and |
| 35.1.3 | when lodged it is accompanied by such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer or, if the instrument of transfer is executed by some other person on his behalf, the authority of that person to do so. Provided that, where any such shares are admitted to the official list maintained by the UK Listing Authority, such discretion may not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis. In the case of a transfer of shares in certificated form by a recognised clearing house or a nominee of a recognised clearing house or of a recognised investment exchange the lodgement of share certificates will only be necessary if and to the extent that certificates have been issued in respect of the shares in question. |
| 35.2 | The Directors may, in the case of shares in certificated form, in their absolute discretion refuse to register any transfer of shares (not being fully-paid shares) provided that, where any such shares are admitted to the official list maintained by the UK Listing Authority, such discretion may not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis. |
| 35.3 | The Directors may also refuse to register an allotment or transfer of shares (whether fully- paid or not) in favour of more than four persons jointly. |
| 35.4 | If the Directors refuse to register an allotment or transfer of shares they shall as soon as is practicable and in any event within two months after the date on which: |
| 35.4.1 | the letter of allotment or instrument of transfer was lodged with the Company (in the case of shares held in certificated form); or |
| 35.4.2 | the Operator-instruction was received by the Company (in the case of shares held in uncertificated form), |
send to the allottee or transferee notice of the refusal giving reasons for the refusal.
| 36 | Instruments of transfer |
All instruments of transfer which are registered may be retained by the Company.
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| 37 | No fee on registration |
No fee will be charged by the Company in respect of the registration of any transfer or any document relating to or affecting the title to any shares or otherwise for making any entry in the Register affecting the title to any shares.
| 38 | Destruction of documents |
| 38.1 | Subject to compliance with the rules (as defined in the Regulations) applicable to shares of the Company in uncertificated form, the Company shall be entitled to destroy: |
| 38.1.1 | all instruments of transfer or other documents (whether in hard copy or electronic form) which have been registered or on the basis of which registration was made at any time after the expiration of six years from the date of registration thereof; |
| 38.1.2 | all dividend mandates and notifications of change of address at any time after the expiration of two years from the date of recording thereof; |
| 38.1.3 | all share certificates which have been cancelled at any time after the expiration of one year from the date of the cancellation thereof. |
| 38.2 | It shall conclusively be presumed in favour of the Company that: |
| 38.2.1 | every entry in the Register purporting to have been made on the basis of an instrument of transfer or other document so destroyed or deleted was duly and properly made; |
| 38.2.2 | every instrument of transfer so destroyed or deleted was a valid and effective instrument duly and properly registered; |
| 38.2.3 | every share certificate so destroyed was a valid and effective certificate duly and properly cancelled; and |
| 38.2.4 | every other document hereinbefore mentioned so destroyed or deleted was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company. |
| 38.3 | For the purposes of this Article: |
| 38.3.1 | the foregoing provisions shall apply only to the destruction or deletion of a document in good faith and without notice of any claim (regardless of the parties thereto) to which the document might be relevant; |
| 38.3.2 | nothing herein contained shall be construed as imposing upon the Company any liability in respect of the destruction or deletion of any such document earlier than as aforesaid or in any other circumstances which would not attach to the Company in the absence of this Article; |
| 38.3.3 | any document referred to above may, subject to the Statutes, be destroyed before the end of the relevant period so long as a copy of such document (whether made electronically, by microfilm, by digital imaging or by any other means) has been made and is retained until the end of the relevant period; and |
| 38.3.4 | references herein to the destruction or deletion of any document include references to the disposal thereof in any manner. |
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| 39 | Further provisions on shares in uncertificated form |
| 39.1 | Subject to the Statutes and the rules (as defined in the Regulations), and apart from any class of wholly dematerialised security, the Directors may determine that any class of shares may be held in uncertificated form and that title to such shares may be transferred by means of a relevant system or that shares of any class should cease to be held and transferred as aforesaid. |
| 39.2 | The provisions of these Articles shall not apply to shares of any class which are in uncertificated form to the extent that such Articles are inconsistent with: |
| 39.2.1 | the holding of shares of that class in uncertificated form; |
| 39.2.2 | the transfer of title to shares of that class by means of a relevant system; or |
| 39.2.3 | any provision of the Regulations. |
Transmission of Shares
| 40 | Persons entitled on death |
In case of the death of a member, the survivors or survivor where the deceased was a joint holder, and the executors or administrators of the deceased where he or she was a sole or only surviving holder, shall be the only persons recognised by the Company as having any title to his or her interest in the shares, but nothing in this Article shall release the estate of a deceased member (whether sole or joint) from any liability in respect of any share held by him or her.
| 41 | Election by persons entitled by transmission |
Any person becoming entitled to a share in consequence of the death or bankruptcy of a member or otherwise by operation of law may (subject as hereinafter provided) upon supplying to the Company such evidence as the Directors may reasonably require to show his or her title to the share either be registered himself or herself as holder of the share upon giving to the Company notice in writing to that effect or transfer such share to some other person. All the limitations, restrictions and provisions of these Articles relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the notice or transfer were a transfer made by the member registered as the holder of any such share.
| 42 | Rights of persons entitled by transmission |
Save as otherwise provided by or in accordance with these Articles, a person becoming entitled to a share in consequence of the death or bankruptcy of a member or otherwise by operation of law (upon supplying to the Company such evidence as the Directors may reasonably require to show his or her title to the share) shall be entitled to the same dividends and other advantages as those to which he or she would be entitled if he or she were the registered holder of the share except that he or she shall not be entitled in respect thereof (except with the authority of the Directors) to exercise any right conferred by membership in relation to shareholders’ meetings until he or she shall have been registered as a member in respect of the share.
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Untraced Shareholders
| 43 | Untraced shareholders |
The Company shall be entitled to sell at the best price reasonably obtainable at the time of sale the shares of a member or the shares to which a person is entitled by virtue of transmission on death or bankruptcy or otherwise by operation of law if and provided that:
| 43.1 | during the period of six years prior to the date of engagement of a professional asset reunification company referred to in Article 43.2 below no communication has been received by the Company from the member or the person entitled by transmission and no cheque previously sent by the Company through the post in a pre-paid letter addressed to the member or to the person entitled by transmission to the shares at his address on the Register or the last known address given by the member or the person entitled by transmission to which cheques were to be sent when the member or the person entitled by transmission may have been entitled to receive payments from the Company by cheque has been cashed and at least three dividends in respect of the shares in question have become payable and no dividend in respect of those shares has been claimed; |
| 43.2 | the Company shall on expiry of the said period of six years engage a professional asset reunification company in the area in which the address referred to in Article 43.1 above is located giving notice of its intention to sell the said shares; and |
| 43.3 | during the said period of six years and the period of three months following the engagement of said professional asset reunification company the Company shall have received no communication from such member or person. |
| 44 | Executor and proceeds |
To give effect to any such sale the Company may appoint any person to transfer, as transferor, the said shares and such transfer shall be as effective as if it had been carried out by the registered holder of or person entitled by transmission to such shares and the title of the transferee shall not be affected by any irregularity or invalidity in the proceedings relating thereto. The net proceeds of sale shall be forfeited and will belong to the Company which shall not be liable in any respect, nor be required to account to, the former member or other person previously entitled as aforesaid for an amount equal to such proceeds. The Company shall be entitled to use or invest the net proceeds of such sale for the Company’s benefit in any matter as the Directors may from time to time think fit.
General Meetings
| 45 | Annual General Meetings |
An Annual General Meeting shall be held in each period of six months beginning with the day following the Company’s accounting reference date, at such place, date and time as may be determined by the Directors.
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| 46 | Convening of General Meetings |
| 46.1 | The Board shall determine in relation to each General Meeting the means of attendance at and participation in the meeting, including whether the persons entitled to attend and participate in the General Meeting shall be enabled to do so by simultaneous attendance and participation at a physical place anywhere in the world determined by it, or by means of electronic facility or facilities determined by it, or partly in one way and partly in another. |
| 46.2 | The Board may convene a General Meeting other than an Annual General Meeting whenever it thinks fit. If there are insufficient directors in the United Kingdom to call a General Meeting any Director of the Company may call a General Meeting, but where no director is willing or able to do so any two members of the Company may summon a meeting for the purpose of appointing one or more directors. |
| 46.3 | Nothing in these articles prevents a General Meeting being held both physically and electronically. |
| 46.4 | The Directors may whenever they think fit, and shall on requisition in accordance with the Statutes, proceed to convene a General Meeting. |
Notice of General Meetings
| 47 | Notice of General Meetings |
| 47.1 | An Annual General Meeting shall be called by notice of at least 21 days. |
| 47.2 | The period of notice shall in either case be exclusive of the day on which it is served or deemed to be served and of the day on which the meeting is to be held. |
| 47.3 | Notice shall be given to all members other than such as are not under the provisions of these Articles entitled to receive such notices from the Company. The Company may determine that only those persons entered on the Register at the close of business on a day determined by the Company, such day being no more than 21 days before the day that notice of the meeting is sent, shall be entitled to receive such a notice. |
| 47.4 | A General Meeting, notwithstanding that it has been called by a shorter notice than that specified above, shall be deemed to have been duly called if it is so agreed: |
| 47.4.1 | in the case of an Annual General Meeting by all the members entitled to attend and vote thereat; and |
| 47.4.2 | in the case of any other General Meeting by a majority in number of the members having a right to attend and vote thereat, being a majority together holding not less than 95 per cent in nominal value of the shares giving that right. |
| 48 | Contents of notice of General Meetings |
| 48.1 | Every notice calling a General Meeting shall include all such information as required by the Statutes and shall specify: |
| 48.1.1 | whether the General Meeting is an Annual General Meeting; |
| 48.1.2 | whether the meeting shall be a physical or electronic General Meeting; |
| 48.1.3 | for physical General Meetings, the time, date and place of the meeting; |
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| 48.1.4 | for General Meetings to be held wholly or partly by means of electronic facility, the time, date and electronic facility for the meeting, which electronic facility may vary from time to time and from meeting to meeting as the Board, in its sole discretion sees fit; |
| 48.1.5 | the general nature of the business to be dealt with; and |
| 48.1.6 | in the case of a General Meeting to pass a Special Resolution, the intention to propose such resolution as a Special Resolution. |
| 48.2 | The Board may resolve to enable persons entitled to attend and participate in a General Meeting to do so (wholly or in part) by simultaneous attendance and participation by means of an electronic facility or facilities and determine the means, or all different means, of attendance and participation used in relation to a General Meeting. The members present personally or by proxy by means of an electronic facility or facilities shall be counted in the quorum for, and entitled to participate in, the General Meeting in question. That meeting shall be duly constituted and its proceedings valid if the chair of the meeting is satisfied that adequate facilities are available throughout the meeting to ensure that members attending the meeting by all means (including by means of electronic facility or facilities) are able to: |
| 48.2.1 | participate in the business for which the meeting has been convened; |
| 48.2.2 | hear all persons who speak at the meeting; and |
| 48.2.3 | be heard by all other persons present at the meeting. |
In relation to electronic General Meetings, the right of a member to participate in the business of any General Meeting shall include without limitation the right to speak, vote on a poll, be represented by a proxy and have access (including electronic access) to all documents which are required by the Statutes or these articles to be made available at the meeting.
| 49 | Postponement of General Meeting |
If, after the sending of the notice of a General Meeting but before the meeting is held, or after the adjournment of a General Meeting but before the adjourned meeting is held (whether or not notice of the adjourned meeting is required), the Board, in its absolute discretion, considers that it is impracticable or unreasonable for a reason beyond its control to hold a General meeting on the date or at the time or place specified in the notice calling the General Meeting and/or by means of the electronic facility or facilities specified in the notice, it may postpone the General Meeting to another date and/or time and it may chance the place (or in the case of a General Meeting to be held at the Principal Place and one or more Satellite Meeting Places, to such other places) and/or electronic facility or facilities. If such a decision is made, the Board may then change the place and/or the electronic facility or facilities and/or postpone the date and/or time again it considers that it is reasonable to do so. No new notice of the General Meeting need be sent but the Board shall, if practicable, advertise the date and time of the General Meeting, and the means of attendance and participation (including any place and/or electronic facility or facilities) for the General Meeting, in at least two newspapers having a national circulation and shall make arrangements for notices of the change of date, time, place of and/or electronic facility or facilities for the postponed meeting appear at the original time and at the original place and/or on the original electronic facility or facilities. If a General Meeting is postponed in accordance with this Article, the appointment of a proxy will be valid if it is delivered and received as required by these Articles not less than 48 hours before the time appointed for holding the postponed meeting. When calculating the 48 hour period mentioned in this Article, the Directors can decide not to take account of any part of a day that is not a working day.
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Overflow of General Meetings
| 50 | The Board may, notwithstanding that the notice of any General Meeting may specify the place of the meeting (the “Principal Place”), at which the chair of the meeting shall preside, make arrangements for simultaneous attendance and participation at other places (“Satellite Meeting Places”) by members and proxies entitled to attend the General Meeting but unable to do so at the Principal Place. |
| 51 | Such arrangements for simultaneous attendance at the meeting may include arrangements regarding the level of attendance as aforesaid at the Satellite Meeting Places provided that they shall operate so that any members and proxies excluded from attendance at the Principal Place are able to attend at one or more of the Satellite Meeting Places. For the purpose of all other provisions of these Articles any such meeting shall be treated as being held and taking place at the Principal Place. |
| 52 | The Board may, for the purpose of facilitating the organisation and administration of any General Meeting to which such arrangements apply, from time to time make arrangements, whether involving the issue of tickets (on a basis intended to afford all members and proxies entitled to attend the meeting an equal opportunity of being admitted to the Principal Place) or the imposition of some random means of selection or otherwise as it shall in its absolute discretion consider to be appropriate, and may from time to time vary any such arrangements or make new arrangements in their place and the entitlement of any member or proxy to attend a General Meeting at the Principal Place shall be subject to the arrangements as may be for the time being in force whether stated in the notice of meeting to apply to that meeting or notified to the members concerned subsequent to the provision of the notice of the meeting. |
Proceedings at General Meetings
| 53 | Chair |
The Chair of the Directors, failing whom a Deputy Chair, failing whom any Director present and willing to act and, if more than one, chosen by the Directors present at the meetings shall preside as chair at a General Meeting. If neither the Chair of the Directors, the Deputy Chair nor such other Director are present within five minutes after the time appointed for holding the meeting and willing to act as chair, the Directors present shall choose one of their number or, if no Director be present or if all the Directors present decline to take the chair, a member may be elected to be the chair by a resolution of the Company passed at the meeting.
| 54 | Quorum |
No business other than the appointment of a chair shall be transacted at any General Meeting unless a quorum is present at the time when the meeting proceeds to business. Two members present in person or by proxy and entitled to vote shall be a quorum for all purposes.
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| 55 | Lack of quorum |
If within five minutes from the time appointed for a General Meeting (or such longer interval as the chair of the meeting may think fit to allow) a quorum is not present, or if during the meeting a quorum ceases to be present, the meeting shall be adjourned, unless convened on the requisition of members in which case it shall be dissolved. If adjourned in such circumstances and there is no business to be dealt with at the adjourned meeting the general nature of which was not stated in the notice of the original meeting, it shall stand adjourned to such other day, which must be at least 10 days after the original meeting, and such other means of attendance and participation, and at such time and place as may have been specified for the purpose in the notice convening the meeting or (if not so specified) as the chair of the meeting may determine.
| 56 | Adjournment |
The chair of any General Meeting at which a quorum is present may with the consent of the meeting (and shall if so directed by the meeting) adjourn the meeting from time to time (or sine die) and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. Where a meeting is adjourned sine die, the time and place for the adjourned meeting shall be fixed by the Directors. When a meeting is adjourned for 30 days or more or sine die, not less than seven days’ notice of the adjourned meeting shall be given in like manner as in the case of the original meeting. In addition (and without prejudice to the chair’s power to adjourn a meeting conferred by Article 55), the chair may adjourn the meeting without such consent, if it appears to him or her that it would facilitate the conduct of the business of the meeting to do so, or the electronic facility by which members are enabled to attend and participate in the General Meeting has become inadequate for the purposes referred to in Article 48.
| 57 | Notice of adjourned meeting |
Save as hereinbefore expressly provided and as long as in accordance with the Statutes, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.
| 58 | Accommodation of members, and security arrangements at General meetings |
| 58.1 | The Board and, at any General Meeting, the chair may, for the purpose of ensuring the safety of those attending at any place specified for the holding of a General meeting and ensuring the security of the meeting, from time to time make such arrangements as it considers to be appropriate and may from time to time vary any such arrangements or make new arrangements therefor, including without limitation, requirements for evidence of identity to be produced by those attending the General Meeting, the searching of personal property and the restriction of items that may be taken into the General Meeting place. The Board and, at any General Meeting, the chair are entitled to refuse entry to a person who refuses to comply with these arrangements, requirements or restrictions. Any decision made under this Article 58.1 shall be final and the entitlement of any member or proxy to attend a General Meeting at such place shall be subject to any such arrangements as may be for the time being approved by the Board and, at any General Meeting, the chair. |
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| 58.2 | If a General Meeting is held partly by means of an electronic facility or facilities pursuant to Article 48, the Board and, at any General Meeting, the chair may make any arrangement and impose any requirement or restriction that is: |
| 58.2.1 | necessary to ensure the identification of those taking part by means of such electronic facility or facilities and the security of the electronic communication; and |
| 58.2.2 | in its or his or her view, proportionate to the achievement of those objectives. |
| 59 | Amendments to resolutions |
If an amendment shall be proposed to any resolution under consideration but shall in good faith be ruled out of order by the chair of the meeting the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. In the case of a resolution duly proposed as a Special Resolution, no amendment thereto (other than a mere clerical amendment to correct a patent error) may in any event be considered or voted upon.
| 60 | Polls |
At any General Meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before, or on the declaration of the result of, the show of hands) demanded by:
| 60.1 | the chair of the meeting; |
| 60.2 | (except on the election of the chair of the meeting or on a question of adjournment) not less than five members present in person or by proxy and entitled to vote; |
| 60.3 | a member or members present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or |
| 60.4 | a member or members present in person or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right. |
| 61 | Demand for poll |
A demand for a poll may, before the poll is taken, be withdrawn only with the approval of the chair of the meeting. A demand so withdrawn shall not be taken to have invalidated the result of a show of hands declared before the demand was made. Unless a poll is taken a declaration by the chair that a resolution has been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the minute book, shall be conclusive evidence of that fact without proof of the number or proportion of the votes recorded for or against such resolution. If a poll is demanded, it shall be taken in such manner (including by use of ballot, voting papers, tickets, electronic means, or any combination thereof) as the chair of the meeting may direct, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The chair of the meeting may (and if so directed by the meeting shall) appoint scrutineers (who need not be members) and may adjourn the meeting to some place and time fixed by him or her for the purpose of declaring the result of the poll.
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The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. All resolutions put to the members at electronic General Meetings shall be voted on by a poll, which poll votes may be cast by such electronic means as the board in its sole discretion deems appropriate for the purposes of the meeting.
| 62 | Voting on a poll |
On a poll votes may be given either personally or by proxy and a person entitled to more than one vote need not use all his or her votes or cast all the votes he or she uses in the same way.
| 63 | Timing of poll |
A poll demanded on the choice of a chair or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either immediately or at such subsequent time (not being more than 30 days from the date of the meeting) and place as the chair may direct. No notice need be given of a poll not taken immediately. The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the question on which the poll has been demanded.
Votes of Members
| 64 | Votes attaching to shares |
| 64.1 | Subject to Article 68 and to any special rights or restrictions as to voting attached by or in accordance with these Articles to any class of shares: |
| 64.1.1 | on a show of hands every member who is present in person and every proxy present who has been duly appointed by a member entitled to vote on the resolution shall have one vote, unless the proxy has been appointed by more than one member and has been instructed by one or more of those members to vote for the resolution and by one or more of those members to vote against the resolution, in which case the proxy shall have one vote for and one vote against the resolution; and |
| 64.1.2 | on a poll every member who is present in person or by proxy shall have one vote for every share of which he or she is the holder. |
| 64.2 | The Company will determine that only those persons entered on the Register no more than 48 hours before the commencement of the General Meeting or adjourned meeting shall be entitled to vote at such meeting of the Company. In calculating this, the Directors shall determine that no account shall be taken of any part of any day that is not a working day (within the meaning of Section 1173 of the Companies Act 2006). |
| 65 | Votes of joint holders |
In the case of joint holders of a share the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the share.
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| 66 | Voting by guardian |
Where in England or elsewhere a guardian, receiver or other person (by whatever name called) has been appointed by any Court claiming jurisdiction in that behalf to exercise powers with respect to the property or affairs of any member on the ground (however formulated) of mental disorder, the Directors may in their absolute discretion, upon or subject to production of such evidence of the appointment as the Directors may require, permit such guardian, receiver or other person on behalf of such member to vote in person or by proxy at any shareholders’ meeting or to exercise any other right conferred by membership in relation to shareholders’ meetings.
| 67 | Restrictions on voting if holding unpaid shares |
No member shall, unless the Directors otherwise determine, be entitled in respect of any share held by him or her to vote either personally or by proxy at a shareholders’ meeting or to exercise any other right conferred by membership in relation to shareholders’ meetings if any call or other sum presently payable by him or her to the Company in respect of that share remains unpaid.
| 68 | Restrictions on voting in particular circumstances |
| 68.1 | If any member, or any other person appearing to be interested in shares (within the meaning of Part 22 of the Companies Act 2006) held by such member, has been duly served with a notice under Section 793 of the Companies Act 2006 and is in default for a period of 14 days from the date of service in supplying to the Company the information thereby required, then (unless the Directors otherwise determine) in respect of: |
| 68.1.1 | the shares comprising the shareholding account in the Register which comprises or includes the shares in relation to which the default occurred (all or the relevant number as appropriate of such shares being the “default shares”, which expression shall include any further shares which are issued in respect of such shares after the date of the notice under Section 793 of the Companies Act 2006); and |
| 68.1.2 | any other shares held by the member, |
the member shall (for so long as the default continues) not, nor shall any transferee to whom any of such shares are transferred (other than pursuant to an approved transfer or pursuant to Article 68.2.2 below) be entitled to attend or vote either personally or by proxy at a shareholders’ meeting or to exercise any other right conferred by membership in relation to shareholders’ meetings.
| 68.2 | Where the default shares represent at least 0.25 per cent of the issued shares of the class in question, the Directors may in their absolute discretion by notice (a “direction notice”) to such member direct that: |
| 68.2.1 | any dividend or part thereof or other money which would otherwise be payable in respect of the default shares shall be retained by the Company without any liability to pay interest thereon when such dividend or other money is finally paid to the member and the member shall not be entitled to elect to receive shares in lieu of dividend; and/or |
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| 68.2.2 | no transfer of any of the shares held by such member shall be registered unless the transfer is an approved transfer or: |
| (i) | the member is not himself or herself in default as regards supplying the information required; and |
| (ii) | the transfer is of part only of the member’s holding and, when presented for registration, is accompanied by a certificate by the member in a form satisfactory to the Directors to the effect that after due and careful enquiry the member is satisfied that none of the shares the subject of the transfer are default shares, |
provided that, in the case of shares in uncertificated form, the Directors may only exercise their discretion not to register a transfer if permitted to do so by the Regulations.
Any direction notice may treat shares of a member in certificated and uncertificated form as separate holdings and either apply only to the former or to the latter or make different provision for the former and the latter.
Upon the giving of a direction notice its terms shall apply accordingly.
| 68.3 | The Company shall send to each other person appearing to be interested in the shares which are the subject of any direction notice a copy of the notice, but the failure or omission by the Company to do so shall not invalidate such notice. |
| 68.4 |
| 68.4.1 | Save as herein provided any direction notice shall have effect in accordance with its terms for so long as the default in respect of which the direction notice was issued continues and shall cease to have effect thereafter upon the Directors so determining (such determination to be made within a period of one week of the default being duly remedied, with written notice thereof being given forthwith to the member). |
| 68.4.2 | Any direction notice shall cease to have effect in relation to any shares which are transferred by such member by means of an approved transfer or in accordance with Article 68.2.2 above. |
| 68.5 | For the purposes of this Article: |
| 68.5.1 | a person shall be treated as appearing to be interested in any shares if the member holding such shares has been served with a notice under the said Section 793 and either (a) the member has named such person as being so interested or (b) (after taking into account the response of the member to the said notice and any other relevant information) the Company knows or has reasonable cause to believe that the person in question is or may be interested in the shares; and |
| 68.5.2 | a transfer of shares is an approved transfer if: |
| (i) | it is a transfer of shares to an offeror by way or in pursuance of acceptance of a takeover offer (as defined in Section 974 of the Companies Act 2006); or |
| (ii) | the Directors are satisfied that the transfer is made pursuant to a bona fide sale of the whole of the beneficial ownership of the shares to a party unconnected with the member or with any person appearing to be interested in such shares including any such sale made through a recognised investment exchange or through a stock exchange outside the United Kingdom on which the Company’s shares are normally traded. For the purposes of this sub-paragraph any associate (as that term is defined in Section 435 of the Insolvency Act 1986) shall be included amongst the persons who are connected with the member or any person appearing to be interested in such shares. |
| 68.6 | The provisions of this Article are in addition and without prejudice to the provisions of the Companies Acts. |
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| 69 | Validity and result of vote |
| 69.1 | No objection shall be raised as to the qualification of any voter or the admissibility of any vote except at the meeting or adjourned meeting at which the vote is tendered. Every vote not disallowed at such meeting shall be valid for all purposes. Any such objection shall be referred to the chair of the meeting, whose decision shall be final and conclusive. |
| 69.2 | On a vote on a resolution at a meeting on a show of hands, a declaration by the Chair that the resolution: |
| 69.2.1 | has or has not been passed; or |
| 69.2.2 | has been passed with a particular majority, |
is conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. An entry in respect of such a declaration in the minutes of the meeting recorded in accordance with the Companies Acts is also conclusive evidence of that fact without such proof. This Article does not have effect if a poll is demanded in respect of the resolution (and the demand is not subsequently withdrawn).
Proxies
| 70 | Appointment of proxies |
| 70.1 | A member is entitled to appoint a proxy or (subject to Article 71) proxies to exercise all or any of his or her rights to attend and to speak and vote at a meeting of the Company. |
| 70.2 | A proxy need not be a member of the Company. |
| 71 | Multiple proxies |
A member may appoint more than one proxy in relation to a meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him or her.
| 72 | Form of proxy |
The appointment of a proxy must be in writing in any usual or common form or in any other form which the Directors may approve and:
| 72.1 | in the case of an individual must either be signed by the appointor or his or her attorney or authenticated in accordance with Article 153; and |
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| 72.2 | in the case of a corporation must be either given under its common seal or be signed on its behalf by an attorney or a duly authorised officer of the corporation or authenticated in accordance with Article 153. |
Any signature on or authentication of such appointment need not be witnessed. Where an appointment of a proxy is signed or authenticated in accordance with Article 153 on behalf of the appointor by an attorney, the power of attorney or a copy thereof certified notarially or in some other way approved by the Directors must (failing previous registration with the Company) be submitted to the Company, failing which the appointment may be treated as invalid.
| 73 | Deposit of form of proxy |
| 73.1 | The appointment of a proxy (together with any supporting documentation required under Article 72) must be received at the address or one of the addresses (if any) specified for that purpose in, or by way of note to, or in any document accompanying, the notice convening the meeting (or if no address is so specified, at the Transfer Office): |
| 73.1.1 | in the case of a meeting or adjourned meeting, not less than 48 hours before the commencement of the meeting or adjourned meeting to which it relates; |
| 73.1.2 | in the case of a poll taken following the conclusion of a meeting or adjourned meeting, but not more than 48 hours after the poll was demanded, not less than 48 hours before the commencement of the meeting or adjourned meeting at which the poll was demanded; and |
| 73.1.3 | in the case of a poll taken more than 48 hours after it was demanded, not less than 24 hours before the time appointed for the taking of the poll; |
and in default shall not be treated as valid.
| 73.2 | The Directors may at their discretion determine that, in calculating the periods mentioned in Article 73.1, no account shall be taken of any part of any day that is not a working day (within the meaning of Section 1173 of the Companies Act 2006). |
| 73.3 | Without limiting the foregoing, in relation to any shares in uncertificated form the Directors may permit a proxy to be appointed by electronic means and/or by means of a website in the form of an Uncertificated Proxy Instruction (that is, a properly authenticated dematerialised instruction, and/or other instruction or notification, sent by means of a relevant system to such participant in that system acting on behalf of the Company as the Directors may prescribe, in such form and subject to such terms and conditions as may from time to time be prescribed by the Directors (subject always to the facilities and requirements of the relevant system)); and may permit any supplement to, or amendment or revocation of, any such Uncertificated Proxy Instruction to be made by a further Uncertificated Proxy Instruction. The Directors may in addition prescribe the method of determining the time at which any such instruction or notification is to be treated as received by the Company. The Directors may treat any such instruction or notification purporting or expressed to be sent on behalf of a holder of a share as sufficient evidence of the authority of the person sending the instruction to send it on behalf of that holder. |
| 73.4 | The appointment of a proxy shall, unless the contrary is stated thereon, be as valid for any adjournment of a meeting as it is for the meeting to which it relates. An appointment relating to more than one meeting (including any adjournment of any such meeting) having once been delivered in accordance with this Article 73 for the purposes of any such meeting does not need to be delivered again for the purposes of any subsequent meeting to which it relates. |
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| 74 | Differing proxy appointments |
When two or more valid but differing proxy appointments are delivered in respect of the same share for use at the same meeting, the one which is last delivered (regardless of its date or the date of its execution (if relevant)) shall be treated as replacing and revoking the others as regards that share and if the Company is unable to determine which was last delivered none of them shall be treated as valid in respect of that share.
| 75 | Rights of proxy |
| 75.1 | A proxy shall have the right to exercise all or any of the rights of his or her appointor, or (where more than one proxy is appointed) all or any of the rights attached to the shares in respect of which he or she is appointed the proxy to attend, and to speak and vote, at a meeting of the Company. |
| 75.2 | Unless his or her appointment provides otherwise, a proxy may vote or abstain at his or her discretion on any matter coming before the meeting on which proxies are entitled to vote. The Company is under no obligation to check whether a proxy is voting in accordance with his or her appointor’s instructions and regardless of whether or not they are followed such vote cast shall not be invalid. |
| 76 | Termination of proxy’s authority |
| 76.1 | Neither the death or insanity of a member who has appointed a proxy, nor the revocation or termination by a member of the appointment of a proxy (or of the authority under which the appointment was made), shall invalidate the proxy or the exercise of any of the rights of the proxy thereunder, unless notice of such death, insanity, revocation or termination shall have been received by the Company in accordance with Article 76.2. |
| 76.2 | Any such notice of death, insanity, revocation or termination must be received at the address or one of the addresses (if any) specified for receipt of proxies in, or by way of note to, or in any document accompanying, the notice convening the meeting to which the appointment of the proxy relates (or if no address is so specified, at the Transfer Office): |
| 76.2.1 | in the case of a meeting or adjourned meeting, not less than 24 hours before the commencement of the meeting or adjourned meeting to which the proxy appointment relates; |
| 76.2.2 | in the case of a poll taken following the conclusion of a meeting or adjourned meeting, but not more than 48 hours after it was demanded, not less than 24 hours before the commencement of the meeting or adjourned meeting at which the poll was demanded; or |
| 76.2.3 | in the case of a poll taken more than 48 hours after it was demanded, not less than 24 hours before the time appointed for the taking of the poll. |
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Corporations Acting by Representatives
| 77 | Subject to the Statutes, any corporation which is a member of the Company may by resolution of its directors or other governing body authorise a person or persons to act as its representative or representatives at any shareholders’ meeting. |
Directors
| 78 | Number of Directors |
Subject as hereinafter provided the Directors shall not be less than five nor more than 18 in number. The Company may by Ordinary Resolution from time to time vary the minimum number and/or maximum number of Directors.
| 79 | Share qualification |
A Director shall not be required to hold any shares of the Company by way of qualification. A Director who is not a member of the Company shall nevertheless be entitled to receive notice of, attend and speak at shareholders’ meetings.
| 80 | Directors’ fees |
Each of the Directors, other than those who hold executive office or are employees of the Company or any subsidiary, shall be paid a fee (which shall accrue from day to day) at such rate as may from time to time be determined by the Directors, provided that the aggregate of all such fees shall not in respect of any year exceed £2,000,000 or such other sum as shall be determined by Ordinary Resolution of the Company.
| 81 | Other remuneration of Directors |
Any Director who holds any executive office (which includes, for the purpose of Articles 80 and 81, the office of Chair, Deputy Chair or Vice Chair whether or not such office is held in an executive capacity), or who serves on any committee of the Directors, or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such extra remuneration by way of salary, commission or otherwise or may receive such other benefits as the Directors may determine.
| 82 | Directors’ expenses |
The Directors may repay to any Director all such reasonable expenses as he or she may incur in attending and returning from meetings of the Directors or of any committee of the Directors or shareholders’ meetings or otherwise in connection with the business of the Company.
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| 83 | Directors’ pensions and other benefits |
The Directors shall have power to pay and agree to pay gratuities, pensions or other retirement, superannuation, death or disability benefits to (or to any person in respect of) any Director or ex-Director of the Company or any of its subsidiaries and for the purpose of providing any such gratuities, pensions or other benefits to contribute to any scheme or fund or to pay premiums.
| 84 | Appointment of executive Directors |
| 84.1 | The Directors may from time to time appoint one or more of their body to be the holder of any executive office (including, where considered appropriate, the office of Chair, Deputy Chair, Vice Chair or Group Chief Executive) on such terms and for such period as they may (subject to the provisions of the Statutes) determine and, without prejudice to the terms of any contract entered into in any particular case, may at any time revoke or vary the terms of any such appointment. |
| 84.2 | The appointment of any Director to the office of Chair, Deputy Chair, Vice Chair or Group Chief Executive or Managing or Joint Managing or Deputy or Assistant Managing Director shall automatically determine if he or she ceases to be a Director but without prejudice to any claim for damages for breach of any contract of service between him or her and the Company. |
| 84.3 | The appointment of any Director to any other executive office shall not automatically determine if he or she ceases from any cause to be a Director, unless the contract or resolution under which he or she holds office shall expressly state otherwise, in which event such determination shall be without prejudice to any claim for damages for breach of any contract of service between him or her and the Company. |
| 85 | Powers of executive Directors |
The Directors may entrust to and confer upon any Director holding any executive office any of the powers exercisable by them as Directors upon such terms and conditions and with such restrictions as they think fit, and either collaterally with or to the exclusion of their own powers, and may from time to time revoke, withdraw, alter or vary all or any of such powers.
Appointment and Retirement of Directors
| 86 | Election or appointment of additional director |
The Company may by Ordinary Resolution elect any person to be a Director either to fill a casual vacancy or as an additional Director. Without prejudice thereto the Directors shall have power at any time so to do, but so that the total number of Directors shall not thereby exceed the maximum number (if any) fixed by or in accordance with these Articles. Any person so appointed by the Directors shall retire at the next Annual General Meeting and shall then be eligible for election.
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| 87 | Vacation of office |
The office of a Director shall be vacated in any of the following events, namely:
| 87.1 | if he or she shall become prohibited by law from acting as a Director; |
| 87.2 | if he or she shall resign by writing under his or her hand left at the Office or if he or she shall in writing offer to resign and the Directors shall resolve to accept such offer; |
| 87.3 | if he or she shall have a bankruptcy order made against him or her or shall compound with his or her creditors generally or shall apply to the Court for an interim order under Section 253 of the Insolvency Act 1986 in connection with a voluntary arrangement under that act; |
| 87.4 | if he or she shall be absent from meetings of the Directors for three months without leave and the Directors shall resolve that his or her office be vacated; or |
| 87.5 | if a notice in writing is served upon him or her, signed by at least 75 per cent of his or her co-Directors for the time being, to the effect that his or her office as Director shall on receipt (or deemed receipt) of such notice ipso facto be vacated, but so that if he or she holds an appointment to an executive office which thereby automatically determines such removal shall be deemed an act of the Company and shall have effect without prejudice to any claim for damages for breach of any contract of service between him or her and the Company. |
| 88 | Retirement of Directors |
| 88.1 | At every Annual General Meeting all the directors at the date of the notice convening the Annual General Meeting shall retire from office. A retiring director shall be eligible for re- election. |
| 89 | Re-election of retiring Director |
The Company at the meeting at which a Director retires under any provision of these Articles may by Ordinary Resolution fill the office being vacated by electing thereto the retiring Director (if eligible for re-election) or some other person eligible for election. In the absence of such a resolution the retiring Director shall nevertheless be deemed to have been re-elected except in any of the following cases:
| 89.1 | where at such meeting it is expressly resolved not to fill such office or a resolution for the re-election of such Director is put to the meeting and lost; |
| 89.2 | where such Director is ineligible for re-election or has given notice in writing to the Company that he or she is unwilling to be re-elected; or |
| 89.3 | where a resolution to elect such Director is void by reason of contravention of the next following Article. |
The retirement shall not have effect until the conclusion of the meeting except where a resolution is passed to elect some other person in the place of the retiring Director or a resolution for his or her re-election is put to the meeting and lost and accordingly a retiring Director who is re-elected or deemed to have been re-elected will continue in office without a break.
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| 90 | Election of two or more Directors |
A resolution for the election of two or more persons as Directors by a single resolution shall not be moved at any General Meeting unless a resolution that it shall be so moved has first been agreed to by the meeting without any vote being given against it. Any resolution moved in contravention of this provision shall be void.
| 91 | Nomination of Directors for election |
No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any General Meeting unless not less than seven nor more than forty-two days (inclusive of the date on which the notice is given) before the date appointed for the meeting there shall have been lodged at the Office:
| 91.1 | notice in writing signed or authenticated in accordance with Article 153 by some member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his or her intention to propose such person for election; and |
| 91.2 | notice in writing signed or authenticated in accordance with Article 153 by the person to be proposed of his or her willingness to be elected. |
| 92 | Power to remove a Director |
The Company may, in accordance with and subject to the provisions of the Statutes, by Ordinary Resolution of which special notice has been given remove any Director from office (notwithstanding any provision of these Articles or of any agreement between the Company and such Director, but without prejudice to any claim he or she may have for damages for breach of any such agreement) and elect another person in place of a Director so removed from office.
Alternate Directors
| 93 | Any Director may at any time by writing under his or her hand and deposited at the Office, or delivered at a meeting of the Directors, appoint any person (including another Director) to be his or her alternate Director and may in like manner at any time terminate such appointment. Such appointment, unless previously approved by the Directors or unless the appointee is another Director, shall have effect only upon and subject to being so approved. |
| 94 | The appointment of an alternate Director shall determine on the happening of any event which if he or she were a Director would cause him or her to vacate such office or if his or her appointor ceases to be a Director, otherwise than by retirement at a General Meeting at which he or she is re-elected. |
| 95 | An alternate Director shall be entitled to receive notices of meetings of the Directors and shall be entitled to attend and vote as a Director at any such meeting at which the Director appointing him or her is not personally present and generally at such meeting to perform all functions of his or her appointor as a Director and for the purposes of the proceedings at |
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| such meeting the provisions of these Articles shall apply as if he or she (instead of his or her appointor) were a Director. If he or she shall be himself or herself a Director or shall attend any such meeting as an alternate for more than one Director, his or her voting rights shall be cumulative but he or she shall not be counted more than once for the purposes of the quorum. If his or her appointor is for the time being absent from the United Kingdom or temporarily unable to act through ill health or disability his or her signature to any resolution in writing of the Directors shall be as effective as the signature of his or her appointor. To such extent as the Directors may from time to time determine in relation to any committees of the Directors the foregoing provisions of this Article shall also apply mutatis mutandis to any meeting of any such committee of which his or her appointor is a member. An alternate Director shall not (save as aforesaid) have power to act as a Director, nor shall he or she be deemed to be the agent of his or her appointor. |
| 96 | An alternate Director shall be entitled to contract and be interested in and benefit from contracts or arrangements or transactions and to be repaid expenses and to be indemnified to the same extent mutatis mutandis as if he or she were a Director but he or she shall not be entitled to receive from the Company in respect of his or her appointment as alternate Director any remuneration except only such part (if any) of the remuneration otherwise payable to his or her appointor as such appointor may by notice in writing to the Company from time to time direct. |
Meetings and Proceedings of Directors
| 97 | Governing of meetings of Directors |
| 97.1 | Subject to the provisions of these Articles the Directors may meet together for the despatch of business, adjourn and otherwise regulate their proceedings as they think fit. At any time any Director may, and the Secretary at the request of a Director shall, call a meeting of the Directors. Any Director may waive notice of any meeting and any such waiver may be retroactive. |
| 97.2 | A notice of a meeting of directors convened in accordance with Article 97.1, or a copy of the text of any written resolution proposed to be passed in accordance with Article 107, (each a “Communication”) shall be provided to each Director personally, by word of mouth, by notice in writing or by electronic means (in the case of a written notice or a notice sent by electronic means, sent to him or her at his or her last known address or such other address as may be notified to the Secretary from time to time), and each Director shall, on appointment, be taken to have agreed to the giving of notices in any such manner. Any such Communication may be delivered by hand or sent by courier, fax, electronic mail or pre-paid first-class post. If sent by fax or electronic mail such Communication shall conclusively be deemed to have been given or served at the time of despatch. If sent by post or courier such Communication shall conclusively be deemed to have been received 24 hours from the time of posting or despatch, in the case of inland mail and couriers in the United Kingdom, or 48 hours from the time of posting or despatch in the case of international mail and couriers. |
| 97.3 | A Communication shall be deemed duly served under Article 97.2 if sent to the address, fax number or electronic mail address last provided by each Director to the Secretary. The non-receipt by any Director of any Communication served in accordance with the provisions of this Article 97 shall not invalidate any meeting of directors, or any written resolution signed in accordance with Article 107, to which the Communication relates if such meeting or resolution is otherwise held or signed in accordance with the provisions of these Articles. |
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| 98 | Quorum |
The quorum necessary for the transaction of business of the Directors may be fixed from time to time by the Directors and unless so fixed at any other number shall be three. A meeting of the Directors at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors. For the purposes of these Articles any Director who is able (directly or by telephonic or other communication equipment) to speak and be heard by each of the other Directors present or deemed to be present at any meeting of the Directors, shall be deemed to be present in person at such meeting and shall be entitled to vote or be counted in the quorum accordingly. Such meeting shall be deemed to take place where the largest group of those participating is assembled, or, if there is no such group, where the chair of the meeting then is, and the word “meeting” shall be construed accordingly.
| 99 | Casting vote |
Questions arising at any meeting of the Directors shall be determined by a majority of votes. In the case of an equality of votes, the chair of the meeting shall have a second or casting vote.
| 100 | Authorisation of Directors’ interests |
| 100.1 | For the purposes of Section 175 of the Companies Act 2006, the Directors shall have the power to authorise any matter which would or might otherwise constitute or give rise to a breach of the duty of a Director under that Section to avoid a situation in which he or she has, or can have, a direct or indirect interest3 that conflicts, or possibly may conflict, with the interests of the Company. |
| 100.2 | Authorisation of a matter under this Article shall be effective only if: |
| 100.2.1 | the matter in question shall have been proposed in writing for consideration by the Directors, or in such other manner as the Directors may determine; |
| 100.2.2 | any requirement as to the quorum at the meeting of the Directors at which the matter is considered is met without counting the Director in question and any other interested Director (together the “Interested Directors”); and |
| 100.2.3 | the matter was agreed to without the Interested Directors voting or would have been agreed to if the votes of the Interested Directors had not been counted. |
| 3 | Neither the duty in Section 175(1), nor the authorisation procedure under Section 175(5), applies to a conflict of interest arising in relation to a transaction or arrangement with the Company. The disclosure and approval provisions of Articles 100 and 101 are intended to deal with such conflicts. |
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| 100.3 | Any authorisation of a matter under this Article shall extend to any actual or potential conflict of interest which may reasonably be expected to arise out of the matter so authorised. |
| 100.4 | Any authorisation of a matter under this Article shall be subject to such conditions or limitations as the Directors may determine, whether at the time such authorisation is given or subsequently. and may be terminated by the Directors at any time. A Director shall comply with any obligations imposed on him or her by the Directors pursuant to any such authorisation. |
| 100.5 | A Director shall not, save as otherwise agreed by him or her, be accountable to the Company for any benefit which he or she (or a person connected with him or her) derives from any matter authorised by the Directors under this Article and any contract, transaction or arrangement relating thereto shall not be liable to be avoided on the grounds of any such benefit. |
| 101 | Directors’ Permitted Interests |
| 101.1 | Subject to compliance with Article 101.2, a Director, notwithstanding his or her office, may have an interest of the following kind: |
| 101.1.1 | where a Director (or a person connected with him or her) is a director or other officer of, or employed by, or otherwise interested (including by the holding of shares) in any Relevant Company; |
| 101.1.2 | where a Director (or a person connected with him or her) is a party to, or otherwise interested in, any contract, transaction or arrangement with a Relevant Company, or in which the Company is otherwise interested; |
| 101.1.3 | where the Director (or a person connected with him or her) acts (or any firm of which he or she is a partner, employee or member acts) in a professional capacity for any Relevant Company (other than as Auditor) whether or not he or she or it is remunerated therefore; |
| 101.1.4 | an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest; |
| 101.1.5 | an interest, or a transaction or arrangement giving rise to an interest, of which the Director is not aware; or |
| 101.1.6 | any other interest authorised by Ordinary Resolution. |
No authorisation under Article 100 shall be necessary in respect of any such interest.
| 101.2 | The Director shall declare the nature and extent of any interest permitted under Article 101.1, and not falling with Article 101.3, at a meeting of the Directors or in the manner set out in Section 184 or 185 of the Companies Act 2006. |
| 101.3 | No declaration of an interest shall be required by a Director in relation to an interest: |
| 101.3.1 | falling within Article 101.1.4 or 101.1.5; |
| 101.3.2 | if, or to the extent that, the other Directors are already aware of such interest (and for this purpose the other Directors are treated as aware of anything of which they ought reasonably to be aware); or |
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| 101.1.1. | if, or to the extent that, it concerns the terms of his or her service contract (as defined in Section 227 of the Companies Act 2006) that have been or are to be considered by a meeting of the Directors, or by a committee of Directors appointed for the purpose under these Articles. |
| 101.4 | A Director shall not, save as otherwise agreed by him or her, be accountable to the Company for any benefit which he or she (or a person connected with him or her) derives from any such contract, transaction or arrangement or from any such office or employment or from any interest in any Relevant Company or for such remuneration, each as referred to in Article 99.1, and no such contract, transaction or arrangement shall be liable to be avoided on the grounds of any such interest or benefit. |
| 101.5 | For the purposes of this Article, “Relevant Company” shall mean: |
| (a) | the Company; |
| (b) | a subsidiary undertaking of the Company; |
| (c) | any holding company of the Company or a subsidiary undertaking of any such holding company; |
| (d) | any body corporate promoted by the Company; or |
| (e) | any body corporate in which the Company is otherwise interested. |
| 102 | Restrictions on quorum and voting |
| 102.1 | Save as provided in this Article, and whether or not the interest is one which is authorised pursuant to Article 100 or permitted under Article 101, a Director shall not be entitled to vote on any resolution in respect of any contract, transaction or arrangement, or any other proposal, in which he or she (or a person connected with him or her) is interested. Any vote of a Director in respect of a matter where he or she is not entitled to vote shall be disregarded. |
| 102.2 | A Director shall not be counted in the quorum for a meeting of the Directors in relation to any resolution on which he or she is not entitled to vote. |
| 102.3 | Subject to the provisions of the Statutes, a Director shall (in the absence of some other interest than is set out below) be entitled to vote, and be counted in the quorum, in respect of any resolution concerning any contract, transaction or arrangement, or any other proposal: |
| 102.3.1 | in which he or she has an interest of which he or she is not aware; |
| 102.3.2 | in which he or she has an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest; |
| 102.3.3 | in which he or she has an interest only by virtue of interests in shares, debentures or other securities of the Company, or by reason of any other interest in or through the Company; |
| 102.3.4 | which involves the giving of any security, guarantee or indemnity to the Director or any other person in respect of (i) money lent or obligations incurred by him or her or by any other person at the request of or for the benefit of the Company or any of its subsidiary undertakings; or (ii) a debt or other obligation of the Company or any of its subsidiary undertakings for which he or she himself or herself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security; |
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| 102.3.5 | concerning an offer of shares or debentures or other securities of or by the Company or any of its subsidiary undertakings (i) in which offer he or she is or may be entitled to participate as a holder of securities; or (ii) in the underwriting or sub- underwriting of which he or she is to participate; |
| 102.3.6 | concerning any other body corporate in which he or she is interested, directly or indirectly and whether as an officer, shareholder, creditor, employee or otherwise, provided that he or she (together with persons connected with him or her) is not the holder of, or beneficially interested in, one per cent or more of the issued equity share capital of any class of such body corporate or of the voting rights available to members of the relevant body corporate; |
| 102.3.7 | relating to an arrangement for the benefit of the employees or former employees of the Company or any of its subsidiary undertakings which does not award him or her any privilege or benefit not generally awarded to the employees or former employees to whom such arrangement relates; |
| 102.3.8 | concerning the purchase or maintenance by the Company of insurance for any liability for the benefit of Directors or for the benefit of persons who include Directors; |
| 102.3.9 | concerning the giving of indemnities in favour of Directors; |
| 102.3.10 | concerning the funding of expenditure by any Director or Directors on (i) defending criminal, civil or regulatory proceedings or actions against him or her or them; (ii) in connection with an application to the court for relief; or (iii) defending him or her or them in any regulatory investigations; |
| 102.3.11 | concerning the doing of anything to enable any Director or Directors to avoid incurring expenditure as described in Article 102.3.10; and |
| 102.3.12 | in respect of which his or her interest, or the interest of Directors generally, has been authorised by Ordinary Resolution. |
| 102.4 | Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors to offices or employments with the Company (or any body corporate in which the Company is interested), the proposals may be divided and considered in relation to each Director separately. In such case, each of the Directors concerned (if not debarred from voting under Article 102.3.6) shall be entitled to vote, and be counted in the quorum, in respect of each resolution except that concerning his or her own appointment or the fixing or variation of the terms thereof. |
| 102.5 | If a question arises at any time as to whether any interest of a Director prevents him or her from voting, or being counted in the quorum, under this Article, and such question is not resolved by his or her voluntarily agreeing to abstain from voting, such question shall be referred to the chair of the meeting and his or her ruling in relation to any Director other than himself or herself shall be final and conclusive, except in a case where the nature or extent of the interest of such Director has not been fairly disclosed. If any such question shall arise in respect of the chair of the meeting, the question shall be decided by resolution of the Directors and the resolution shall be conclusive except in a case where the nature or extent of the interest of the chair of the meeting (so far as it is known to him or her) has not been fairly disclosed to the Directors. |
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| 103 | Confidential information |
| 103.1 | Subject to Article 103.2, if a Director, otherwise than by virtue of his or her position as Director, receives information in respect of which he or she owes a duty of confidentiality to a person other than the Company, he or she shall not be required: |
| 103.1.1 | to disclose such information to the Company or to the Directors, or to any Director, officer or employee of the Company; or |
| 103.1.2 | otherwise use or apply such confidential information for the purpose of or in connection with the performance of his or her duties as a Director. |
| 103.2 | Where such duty of confidentiality arises out of a situation in which the Director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company, Article 103.1 shall apply only if the conflict arises out of a matter which has been authorised under Article 100 above or falls within Article 101 above. |
| 103.3 | This Article is without prejudice to any equitable principle or rule of law which may excuse or release the Director from disclosing information, in circumstances where disclosure may otherwise be required under this Article. |
| 104 | Directors’ interests - general |
| 104.1 | For the purposes of Articles 100 to 104: |
| 104.1.1 | an interest of a person who is connected with a Director shall be treated as an interest of the Director; and |
| 104.1.2 | Section 252 of the Companies Act 2006 shall determine whether a person is connected with a Director. |
| 104.2 | Where a Director has an interest which can reasonably be regarded as likely to give rise to a conflict of interest, the Director shall if so requested by the Directors take such additional steps as may be necessary or desirable for the purpose of managing such conflict of interest, including compliance with any procedures laid down from time to time by the Directors for the purpose of managing conflicts of interest generally and/or any specific procedures approved by the Directors for the purpose of or in connection with the situation or matter in question, including without limitation: |
| 104.2.1 | absenting him or herself from any meetings of the Directors at which the relevant situation or matter falls to be considered; and |
| 104.2.2 | not reviewing documents or information made available to the Directors generally in relation to such situation or matter and/or arranging for such documents or information to be reviewed by a professional adviser to ascertain the extent to which it might be appropriate for him or her to have access to such documents or information. |
| 104.3 | The Company may by Ordinary Resolution ratify any contract, transaction or arrangement, or other proposal, not properly authorised by reason of a contravention of any provisions of Articles 100 to 104. |
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| 105 | Number of Directors below minimum |
The continuing Directors may act notwithstanding any vacancies, but if and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with these Articles the continuing Directors or Director may act for the purpose of filling such vacancies or of summoning General Meetings, but not for any other purpose. If there be no Directors or Director able or willing to act, then any two members may summon a General Meeting for the purpose of appointing Directors.
| 106 | Chair |
| 106.1 | The Directors may elect from their number a Chair, a Deputy Chair and/or a Vice Chair (or two or more Deputy Chairs and/or Vice Chairs) and determine the period for which each is to hold office. If no Chair, Deputy Chair or Vice Chair shall have been appointed or if at any meeting of the Directors no Chair, Deputy Chair or Vice Chair shall be present within five minutes after the time appointed for holding the meeting, the Directors present may choose one of their number to be chair of the meeting. |
| 106.2 | If at any time there is more than one Deputy Chair and/or Vice Chair the right in the absence of the Chair to preside at a meeting of the Directors or of the Company shall be determined as between the Deputy Chairs and/or Vice Chairs present (if more than one) by seniority in length of appointment or otherwise as resolved by the Directors. |
| 107 | Directors’ written resolutions |
| 107.1 | A Directors’ written resolution is adopted when 70 per cent of the Directors entitled to vote on such resolution have: |
| 107.1.1 | signed one or more copies of it, or |
| 107.1.2 | otherwise indicated their agreement to it in writing. |
| 107.2 | A Directors’ written resolution is not adopted if the number of Directors who have signed it is less than the quorum for Directors’ meetings. |
| 107.3 | Once a Directors’ written resolution has been adopted, it must be treated as if it had been a resolution passed at a Directors’ meeting in accordance with the Articles. |
| 108 | Appointment and constitution of committees |
| 108.1 | The Directors may delegate any of their powers or discretions (including without prejudice to the generality of the foregoing all powers and discretions whose exercise involves or may involve the payment of remuneration to or the conferring of any other benefit on all or any of the Directors) to committees. Any such committee shall, unless the Directors otherwise resolve, have power to sub-delegate to sub-committees any of the powers or discretions delegated to it. Any such committee or sub-committee shall consist of one or more Directors and (if thought fit) one or more other named person or persons to be co- opted as hereinafter provided. Insofar as any such power or discretion is delegated to a committee or sub-committee, any reference in these Articles to the exercise by the Directors of the power or discretion so delegated shall be read and construed as if it were a reference to the exercise hereof by such committee or sub-committee. Any committee or sub-committee so formed shall in the exercise of the powers so delegated conform to any regulations which may from |
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| time to time be imposed by the Directors. Any such regulations may provide for or authorise the co-option to the committee or sub-committee of persons other than Directors and may provide for members who are not Directors to have voting rights as members of the committee or sub-committee. |
| 108.2 | The meetings and proceedings of any such committee or sub-committee consisting of two or more persons shall be governed mutatis mutandis by the provisions of these Articles regulating the meetings and proceedings of the Directors, so far as the same are not superseded by any regulations made by the Directors under the last preceding Article. |
| 108.3 | All acts done by any meeting of Directors, or of any such committee or sub-committee, or by any person acting as a member of any such committee or sub-committee, shall as regards all persons dealing in good faith with the Company, notwithstanding that there was some defect in the appointment of any Director or any of the persons acting as aforesaid, or that any such persons were disqualified or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director or member of the committee or sub-committee and had been entitled to vote. |
Borrowing Powers
| 109 | Borrowing powers |
Subject to the restrictions in Article 110 (Borrowing Restrictions) and to the provisions of the Statutes, the Directors may exercise all the powers of the Company to borrow money, and to mortgage or charge its undertaking, property (present and future) and uncalled capital or any part or parts thereof and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.
| 110 | Borrowing restrictions |
| 110.1 | The Directors shall restrict the borrowings of the Company and exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary companies (if any) so as to secure (so far, as regards subsidiaries, as by such exercise they can secure) that the aggregate amount for the time being remaining outstanding of all moneys borrowed by the Group and for the time being owing to persons outside the Group shall not at any time without the previous sanction of an Ordinary Resolution of the Company exceed US$5,000,000,000. |
| 110.2 | No person dealing with the Company or any of its subsidiaries shall by reason of the foregoing provision be concerned to see or enquire whether the said limit is observed and no debt incurred or security given in excess of such limit shall be invalid or ineffectual unless the lender or the recipient of the security had, at the time when the debt was incurred or security given, express notice that the said limit had been or would thereby be exceeded. |
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General Powers of Directors
| 111 | General powers |
The business and affairs of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not by the Statutes or by these Articles required to be exercised by the Company in General Meeting subject nevertheless to any regulations of these Articles, to the provisions of the Statutes and to such regulations, whether or not consistent with these Articles, as may be prescribed by Special Resolution of the Company, but no regulation so made by the Company shall invalidate any prior act of the Directors which would have been valid if such regulation had not been made. The general powers given by this Article shall not be limited or restricted by any special authority or power given to the Directors by any other Article.
| 112 | Name |
The Company may change its name by resolution of the board.
| 113 | Local boards |
The Directors may establish any local boards or agencies for managing any of the affairs of the Company, either in the United Kingdom or elsewhere, and may appoint any persons to be members of such local boards, or any managers or agents, and may fix their remuneration, and may delegate to any local board, manager or agent any of the powers, authorities and discretions vested in the Directors, with power to sub-delegate, and may authorise the members of any local boards, or any of them, to fill any vacancies therein, and to act notwithstanding vacancies, and any such appointment or delegation may be made upon such terms and subject to such conditions as the Directors may think fit, and the Directors may remove any person so appointed, and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.
| 114 | Appointment of attorney |
The Directors may from time to time and at any time by power of attorney or otherwise appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such appointment may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him or her.
| 115 | Register of members in territories |
Subject to and to the extent permitted by the Statutes, the Company, or the Directors on behalf of the Company, may cause to be kept in any territory a branch register of members resident in such territory, and the Directors may make and vary such regulations as they may think fit respecting the keeping of any such register.
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| 116 | Signature on cheques etc. |
All cheques, promissory notes, drafts, bills of exchange, and other negotiable or transferable instruments, and all receipts for moneys paid to the Company, shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such manner as the Directors shall from time to time by resolution determine.
| 117 | Provision for employees on cessation of business |
The Directors may decide to make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiaries (other than a Director or former director or shadow director) in connection with the cessation or transfer to any person of the whole or part of the undertaking of the Company or that subsidiary.
President
| 118 | The Directors may from time to time elect a President of the Company and may determine the period for which he or she shall hold office. Such President may be either honorary or paid such remuneration as the Directors in their discretion shall think fit, and need not be a Director but shall, if not a Director, be entitled to receive notice of and attend and speak, but not to vote, at meetings of the Board of Directors only if so invited by the Directors. The President (unless he or she is a Director) shall not be an officer of the Company for the purposes of the Companies Acts. |
Departmental, Divisional or Local Directors
| 119 | The Directors may from time to time appoint any person to be a Departmental, Divisional or Local Director and define, limit or restrict his or her powers and duties and determine his or her remuneration and the designation of his or her office and may at any time remove any such person from such office. A Departmental, Divisional or Local Director (notwithstanding that the designation of his or her office may include the word “Director”) shall not by virtue of such office be or have power in any respect to act as a Director of the Company nor be entitled to receive notice of or attend or vote at meetings of the Directors nor be deemed to be a Director for any of the purposes of these presents. |
Secretary
| 120 | The Secretary shall be appointed by the Directors on such terms and for such period as they may think fit. Any Secretary so appointed may at any time be removed from office by the Directors, but without prejudice to any claim for damages for breach of any contract of service between him or her and the Company. If thought fit two or more persons may be appointed as Joint Secretaries. The Directors may also appoint from time to time on such terms as they may think fit one or more Deputy and/or Assistant Secretaries. |
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The Seal
| 121 | The Directors shall provide for the safe custody of the Seal and any Securities Seal and neither shall be used without the authority of the Directors or of a committee authorised by the Directors in that behalf. The Securities Seal shall be used only for sealing securities issued by the Company and documents creating or evidencing securities so issued. Every instrument to which the Seal or the Securities Seal shall be affixed (other than a certificate for or evidencing shares, debentures or other securities (including options) issued by the Company) shall be signed autographically by one Director and the Secretary or Deputy or Assistant Secretary or by two Directors, or by a Director or other person authorised for the purpose by the Directors in the presence of the witness. |
| 122 | Where the Statutes so permit, any instrument signed by one Director and the Secretary or by two Directors or by a Director in the presence of a witness who attests the signature and expressed to be executed by the Company shall have the same effect as if executed under the Seal, provided that no instrument shall be so signed which makes it clear on its face that it is intended to have effect as a deed without the authority of the Directors or of a committee authorised by the Directors in that behalf. |
| 123 | The Company may exercise the powers conferred by the Statutes with regard to having an official seal for use abroad and such powers shall be vested in the Directors. |
Record Date
| 124 | Notwithstanding any other provision of these Articles but subject always to the Statutes the Company or the Directors may by resolution specify any date (the “record date”) as the date at the close of business (or such other time as the Directors may determine) on which persons registered as the holders of shares or other securities shall be entitled to receipt of any dividend, distribution, interest, allotment, issue, notice, information, document or circular and such record date may be on or at any time before the date on which the same is paid or made or (in the case of any dividend, distribution, interest, allotment or issue) at any time after the same is recommended, resolved, declared or announced but without prejudice to the rights inter se in respect of the same of transferors and transferees of any such shares or other securities. |
Authentication of Documents
| 125 | Any Director or the Secretary or any person appointed by the Directors for the purpose shall have power to authenticate any documents affecting the constitution of the Company and any resolution passed at a shareholders’ meeting or at a meeting of the Directors or any committee, and any books, records, documents and accounts relating to the business of the Company, and to certify copies thereof or extracts therefrom as true copies or extracts; and where any books, records, documents or accounts are elsewhere than at the Office the local manager or other officer of the Company having the custody thereof shall be deemed to be |
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a person appointed by the Directors as aforesaid. A document purporting to be a copy of any such resolution, or an extract from the minutes of any such meeting which is certified as aforesaid shall be conclusive evidence in favour of all persons dealing with the Company upon the faith thereof that such resolution has been duly passed or, as the case may be, that any minute so extracted is a true and accurate record of proceedings at a duly constituted meeting.
Reserves
| 126 | The Directors may from time to time set aside out of the profits of the Company and carry to reserve such sums as they think proper which, at the discretion of the Directors, shall be applicable for any purpose to which the profits of the Company may properly be applied and pending such application may either be employed in the business of the Company or be invested. The Directors may divide the reserve into such special funds as they think fit and may consolidate into one fund any special funds or any parts of any special funds into which the reserve may have been divided. The Directors may also without placing the same to reserve carry forward any profits. In carrying sums to reserve and in applying the same the Directors shall comply with the provisions of the Statutes. |
Dividends
| 127 | Final dividends |
The Company may by Ordinary Resolution declare dividends but no such dividend shall exceed the amount recommended by the Directors.
| 128 | Fixed and interim dividends |
If and so far as in the opinion of the Directors the profits of the Company justify such payments, the Directors may pay the fixed dividends on any class of shares carrying a fixed dividend expressed to be payable on fixed dates on the half-yearly or other dates prescribed for the payment thereof and may also from time to time pay interim dividends on shares of any class of such amounts and on such dates and in respect of such periods as they think fit. Provided the Directors act in good faith they shall not incur any liability to the holders of any shares for any loss they may suffer by the lawful payment, on any other class of shares having rights ranking after or pari passu with those shares, of any such fixed or interim dividend as aforesaid.
| 129 | Ranking of shares for dividends |
Unless and to the extent that the rights attached to any shares or the terms of issue thereof otherwise provide, all dividends shall (as regards any shares not fully paid throughout the period in respect of which the dividend is paid) be apportioned and paid pro rata according to the amounts paid on the shares during any portion or portions of the period in respect of which the dividend is paid. For the purposes of this Article no amount paid on a share in advance of calls shall be treated as paid on the share.
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| 130 | No dividend except out of profits |
No dividend shall be paid otherwise than out of profits available for distribution under the provisions of the Statutes.
| 131 | Treatment of dividend |
Subject to the provisions of the Statutes, where any asset, business or property is bought by the Company as from a past date the profits and losses thereof as from such date may at the discretion of the Directors in whole or in part be carried to revenue account and treated for all purposes as profits or losses of the Company. Subject as aforesaid, if any shares or securities are purchased cum dividend or interest, such dividend or interest may at the discretion of the Directors be treated as revenue, and it shall not be obligatory to capitalise the same or any part thereof.
| 132 | No interest on dividends |
No dividend or other moneys payable on or in respect of a share shall bear interest as against the Company.
| 133 | Retention of dividends |
| 133.1 | The Directors may retain any dividend or other moneys payable on or in respect of a share on which the Company has a Iien and may apply the same in or towards satisfaction of the moneys payable to the Company in respect of that share. |
| 133.2 | The Directors may retain the dividends payable upon shares: |
| 133.2.1 | in respect of which any person is entitled to become a member under the provisions as to the transmission of shares contained in these Articles, until such person shall become a member in respect of such shares; or |
| 133.2.2 | which any person is under those provisions entitled to transfer, until such person shall transfer the same. |
| 134 | Waiver of dividends |
The waiver in whole or in part of any dividend on any share by any document (whether or not executed as a Deed) shall be effective only if such waiver is in writing (whether or not executed as a deed), signed or authenticated in accordance with Article 153 by the shareholder (or the person entitled to the share in consequence of the death or bankruptcy of the holder or otherwise by operation of law) and delivered to the Company and if or to the extent that the same is accepted as such or acted upon by the Company.
| 135 | Unclaimed dividends |
The payment by the Directors of any unclaimed dividend or other moneys payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof, no interest shall be payable in respect of the same and the Company shall not be required to account for any money earned on the net proceeds, which may be employed in the business of the Company or invested in such investments (other than shares of the Company or its holding company if any) as the Directors may from time to time think fit.
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Any dividend unclaimed after a period of six years from the date of declaration of such dividend shall be forfeited and shall revert to the Company.
| 136 | Distribution in specie |
The Company may upon the recommendation of the Directors by Ordinary Resolution 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) and the Directors shall give effect to such resolution. Where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional certificates, may fix the value for distribution of such specific assets or any part thereof, may determine that cash payments shall be made to any members upon the footing of the value so fixed in order to adjust the rights of members and may vest any assets in trustees.
| 137 | Manner of payment of dividends |
| 137.1 | Any dividend or other moneys payable on or in respect of a share shall be paid to the member or to such other person as the member (or, in the case of joint holders of a share, all of them) may in writing direct in accordance with the following options, save that the Board shall be entitled (at its sole discretion) to remove any of the following payment method options provided that it has given reasonable prior written notice to all members of the removal of any such payment method option. Members may direct that such dividend or other moneys are to be paid to them (i) by cheque sent by post to the payee or, where there is more than one payee, to any one of them, or (ii) by electronic inter-bank transfer to such account as the payee or payees shall in writing direct, or (iii) (if so authorised by the holder of shares in uncertificated form) using the facilities of a relevant system (subject to the facilities and requirements of the relevant system), or (iv) by such other method of payment proposed in writing by the Board as the member (or, in the case of joint holders of a share, all of them) may agree to. Every such payment shall be sent at the risk of the person or persons entitled to the money represented thereby, and payment of a cheque by the banker upon whom it is drawn, and any transfer or payment within (ii), (iii) or (iv) above, shall be a good discharge to the Company. |
| 137.2 | Should the Board remove any of the payment method options in accordance with Article 137.1 above, all members who had previously elected such payment method shall be required to provide updated written directions to the Company at least 30 business days before the next payment of a dividend or other moneys is due to be made by the Company, specifying which alternative payment method they have elected for such payment and future payments. Should any member fail to provide such written directions (including, in the case of joint holders of a share, where not all joint holders provide such written directions), the Board shall be entitled (at its sole discretion) to elect any of the remaining payment method options for such payment and future payments to such member(s). |
| 137.3 | Subject to the provisions of these Articles and to the rights attaching to any shares, any dividend or other moneys payable on or in respect of a share may be paid in such currency as the Directors may determine, using such exchange rate for currency conversions as the Directors may select. |
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| 137.4 | The Company may cease to send any cheque or order by post for any dividend on any shares which is normally paid in that manner if in respect of at least two consecutive dividends payable on those shares the cheque or order has been returned undelivered or remains uncashed but, subject to the provisions of these Articles, shall recommence sending cheques or orders in respect of the dividends payable on those shares if the holder or person entitled by transmission claims the arrears of dividend and does not instruct the Company to pay future dividends in some other way. |
| 138 | Joint holders |
If two or more persons are registered as joint holders of any share, or are entitled jointly to a share in consequence of the death or bankruptcy of the holder or otherwise by operation of law, any one of them may give effectual receipts for any dividend or other moneys payable or property distributable on or in respect of the share.
| 139 | Record date for dividends |
Any resolution for the declaration or payment of a dividend on shares of any class, whether a resolution of the Company in General Meeting or a resolution of the Directors, may specify that the same shall be payable to the persons registered as the holders of such shares at the close of business on a particular date, notwithstanding that it may be a date prior to that on which the resolution is passed, and thereupon the dividend shall be payable to them in accordance with their respective holdings so registered, but without prejudice to the rights inter se in respect of such dividend of transferors and transferees of any such shares.
Capitalisation of Profits and Shares
| 140 | The Directors may, with the sanction of an Ordinary Resolution of the Company, capitalise any sum standing to the credit of any of the Company’s reserve accounts (including any share premium account, capital redemption reserve or other undistributable reserve) or any sum standing to the credit of profit and loss account by appropriating such sum to the holders of Ordinary Shares on the Register at the close of business on the date of the Resolution (or such other date as may be specified therein or determined as therein provided) in proportion to their then holdings of Ordinary Shares and applying such sum on their behalf in paying up in full Ordinary Shares (or, subject to any special rights previously conferred on any shares or class of shares for the time being issued) for allotment and distribution credited as fully paid up to and amongst them as bonus shares in the proportion aforesaid. The Directors may do all acts and things considered necessary or expedient to give effect to any such capitalisation with full power to the Directors to make such provisions as they think fit for any fractional entitlements which would arise on the basis aforesaid (including provisions whereby fractional entitlements are disregarded or the benefit thereof accrues to the Company rather than to the members concerned). The Directors may authorise any person to enter on behalf of all the members interested into an agreement with the Company providing for any such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned. |
| 141 | Scrip dividends |
| 141.1 | Subject as hereinafter provided, the Directors may offer to ordinary shareholders the right to receive, in lieu of dividend (or part thereof), an allotment of new Ordinary Shares credited as fully paid. |
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| 141.2 | The Directors shall not make such an offer unless so authorised by an Ordinary Resolution passed at any General Meeting, which authority may extend to dividends declared or paid prior to the Annual General Meeting of the Company occurring thereafter, but no further provided that this Article shall, without the need for any further Ordinary Resolution, authorise the Directors to offer rights of election in respect of any dividend declared or proposed after the date of the adoption of these Articles and at or prior to the Annual General Meeting which is held in the fifth year after the Ordinary Resolution is passed. |
| 141.3 | The Directors may either offer such rights of election in respect of the next dividend (or part thereof) proposed to be paid; or may offer such rights of election in respect of that dividend and all subsequent dividends, until such time as the election is revoked; or may allow shareholders to make an election in either form. |
| 141.4 | The basis of allotment on each occasion shall be determined by the Directors so that, as nearly as may be considered convenient, the value of the Ordinary Shares to be allotted in lieu of any amount of dividend shall equal such amount. For such purpose the value of an Ordinary Share shall be either (i) the average of the closing price of an Ordinary Share on the London Stock Exchange, as derived from the Daily Official List, on each of the first five business days on which the Ordinary Shares are quoted “ex” the relevant dividend; or (ii) established in such other manner as may be determined by the Directors. |
| 141.5 | If the Directors determine to offer such right of election on any occasion they shall give notice in writing to the ordinary shareholders of such right and shall issue forms of election and shall specify the procedures to be followed in order to exercise such right provided that they need not give such notice to a shareholder who has previously made, and has not revoked, an earlier election to receive Ordinary Shares in lieu of all future dividends, but instead shall send him or her a reminder that he or she has made such an election, indicating how that election may be revoked in time for the next dividend proposed to be paid. |
| 141.6 | On each occasion the dividend (or that part of the dividend in respect of which a right of election has been accorded) shall not be payable on Ordinary Shares in respect whereof the share election has been duly exercised and has not been revoked (the “elected Ordinary Shares”), and in lieu thereof additional shares (but not any fraction of a share) shall be allotted to the holders of the elected Ordinary Shares on the basis of allotment determined as aforesaid. For such purpose the Directors shall capitalise, out of such of the sums standing to the credit of reserves (including any share premium account or capital redemption reserve) or profit and loss account as the Directors may determine, a sum equal to the aggregate nominal amount of the additional Ordinary Shares to be allotted on that occasion on such basis and shall apply the same in paying up in full the appropriate number of Ordinary Shares for allotment and distribution to and amongst the holders of the elected Ordinary Shares on such basis. |
| 141.7 | The additional Ordinary Shares so allotted on any occasion shall rank pari passu in all respects with the fully-paid Ordinary Shares then in issue save only as regards participation in the relevant dividend. |
| 141.8 | Article 140 shall apply (mutatis mutandis) to any capitalisation made pursuant to this Article. |
| 141.9 | No fraction of an Ordinary Share shall be allotted. The Directors may make such provision as they think fit for any fractional entitlements including, without limitation, provision whereby, in whole or in part, the benefit thereof accrues to the Company and/or fractional entitlements are accrued and/or retained and in either case accumulated on behalf of any ordinary shareholder. |
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| 141.10 | The Directors may on any occasion determine that rights of election shall not be made available to any ordinary shareholders with registered addresses in any territory where in the absence of a registration statement or other special formalities the circulation of an offer of rights of election would or might be unlawful, and in such event the provisions aforesaid shall be read and construed subject to such determination. |
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| 141.11 | In relation to any particular proposed dividend the Directors may in their absolute discretion decide (i) that shareholders shall not be entitled to make any election in respect thereof and that any election previously made shall not extend to such dividend or (ii) at any time prior to the allotment of the Ordinary Shares which would otherwise be allotted in lieu thereof, that all elections to take shares in lieu of such dividend shall be treated as not applying to that dividend, and if so the dividend shall be paid in cash as if no elections had been made in respect of it. |
Minutes
| 142 | The Directors shall cause Minutes to be made in books to be provided for the purpose: |
| 142.1 | of all appointments of officers made by the Directors; |
| 142.2 | of the names of the Directors present at each meeting of Directors and of any committee of Directors; and |
| 142.3 | of all resolutions and proceedings at all meetings of the Company and of any class of members of the Company and of the Directors and of committees of Directors. |
Accounts
| 143 | Accounting records |
Accounting records sufficient to show and explain the Company’s transactions and otherwise complying with the Statutes shall be kept at the Office, or at such other place as the Directors think fit, and shall always be open to inspection by the officers of the Company. Subject as aforesaid no member of the Company or other person shall have any right of inspecting any account or book or document of the Company except as conferred by statute or ordered by a Court of competent jurisdiction or authorised by the Directors.
| 144 | Copies of accounts for members |
| 144.1 | Subject as provided in Article 144.2, a copy of the Company’s annual accounts and reports which are to be laid before a General Meeting of the Company (including every document required by law to be comprised therein or attached or annexed thereto) shall not less than 21 days before the date of the meeting be sent to every member of, and every holder of debentures of, the Company and to every other person who is entitled to receive notices of General Meetings from the Company under the provisions of the Statutes or of these Articles. |
| 144.2 | Article 144.1 shall not require a copy of these documents to be sent to any member to whom a strategic report with supplementary material is sent in accordance with the Statutes and provided further that this Article shall not require a copy of these documents to be sent to more than one of joint holders nor to any person of whose postal address the Company is not aware, but any member or holder of debentures to whom a copy of these documents has not been sent shall be entitled to receive a copy free of charge on application at the Office. |
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Auditors
| 145 | Validity of Auditor’s acts |
Subject to the provisions of the Statutes, all acts done by any person acting as an Auditor shall, as regards all persons dealing in good faith with the Company, be valid, notwithstanding that there was some defect in his or her appointment or that he or she was at the time of his or her appointment not qualified for appointment or subsequently became disqualified.
| 146 | Auditor’s rights to attend General Meetings |
An Auditor shall be entitled to attend any General Meeting and to receive all notices of and other communications relating to any General Meeting which any member is entitled to receive and to be heard at any General Meeting on any part of the business of the meeting which concerns him or her as Auditor.
Communications with Members
| 147 | Service of notices etc. |
| 147.1 | Any notice to be given to or by any person pursuant to these Articles shall be in writing, except that notice calling a meeting of the Directors may be given as provided for in Article 97. |
| 147.2 | The Company may, subject to and in accordance with the Companies Acts and these Articles, send or supply all types of notices, documents or information to members by electronic means, including by making such notices, documents or information available on a website. |
| 147.3 | The Company Communications Provisions have effect for the purposes of any provision of the Companies Acts or these Articles that authorises or requires notices, documents or information to be sent or supplied by or to the Company. |
| 147.4 | Any notice, document or information (including a share certificate) which is sent or supplied by the Company in hard copy form or in electronic form but to be delivered other than by electronic means and/or by means of a website and which is sent by pre-paid post and properly addressed shall be deemed to have been received by the intended recipient at the expiration of 24 hours (or, where second class mail is employed, 48 hours) after the time it was posted, and in proving such receipt it shall be sufficient to show that such notice, document or information was properly addressed, pre-paid and posted. |
| 147.5 | Any notice, document or information which is sent or supplied by the Company by electronic means and/or by means of a website shall be deemed to have been received by the intended recipient at 9 a.m. on the day following that on which it was transmitted, and in proving such receipt it shall be sufficient to show that such notice, document or information was properly addressed. |
| 147.6 | Any notice, document or information which is sent or supplied by the Company by means of a website shall be deemed to have been received when the material was first made available on the website or, if later, when the recipient received (or is deemed to have received) notice of the fact that the material was available on the website. |
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| 147.7 | The accidental failure to send, or the non-receipt by any person entitled to, any notice of, or other document or information relating to, any meeting or other proceeding shall not invalidate the relevant meeting or proceeding. |
| 147.8 | A member shall not be entitled to receive any document or information that is required or authorised to be sent or supplied to the member by the Company by a provision of the Statutes or pursuant to these Articles or to any other rules or regulations to which the Company may be subject if documents or information sent or supplied to that member by post have been returned undelivered to the Company: |
| 147.8.1 | on at least two separate occasions; or |
| 147.8.2 | on one occasion and reasonable enquiries have failed to establish that member’s address. |
| 147.9 | The provisions of this Article shall have effect in place of the Company Communications Provisions relating to deemed delivery of notices, documents or information. |
| 148 | Joint holders |
| 148.1 | Anything which needs to be agreed or specified by the joint holders of a share shall for all purposes be taken to be agreed or specified by all the joint holders where it has been agreed or specified by the joint holder whose name stands first in the Register in respect of the share. |
| 148.2 | Any notice, document or information which is authorised or required to be sent or supplied to joint holders of a share may be sent or supplied to the joint holder whose name stands first in the Register in respect of the share, to the exclusion of the other joint holders. |
| 148.3 | The provisions of this Article shall have effect in place of the Company Communications Provisions regarding joint holders of shares. |
| 149 | Deceased and bankrupt members |
| 149.1 | A person who claims to be entitled to a share in consequence of the death or bankruptcy of a member or otherwise by operation of law shall supply to the Company: |
| 149.1.1 | such evidence as the Directors may reasonably require to show his or her title to the share; and |
| 149.1.2 | an address to which notices may be sent or supplied to such person, |
whereupon he or she shall be entitled to have sent or supplied to him or her at such address any notice, document or information to which the said member would have been entitled, and in so sending or supplying the relevant notice, document or information such notice, document or information shall for all purposes be deemed as sufficiently sent or supplied to all persons interested (whether jointly with or as claiming through or under him or her) in the share.
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| 149.2 | Save as provided by Article 149.1, any notice, document or information sent or supplied to the address of any member pursuant to these Articles shall, notwithstanding that such member be then dead or bankrupt or in liquidation, and whether or not the Company has notice of his or her death or bankruptcy or liquidation, be deemed to have been duly sent or supplied in respect of any share registered in the name of such member as sole or first- named joint holder. |
| 149.3 | The provisions of this Article shall have effect in place of the Company Communications Provisions regarding the death or bankruptcy or a holder of shares in the Company. |
| 150 | Overseas members |
Subject to the Statutes, the Company shall not be required to send notices, documents or information to a member who (having no registered address within the United Kingdom) has not supplied to the Company an address within the United Kingdom for the service of notices. If on three consecutive occasions notices have been sent through the post to any member at his or her registered address or his or her address for the service of notices but have been returned undelivered, such member shall not thereafter be entitled to receive notices from the Company until he or she shall have communicated with the Company and supplied in writing to the Transfer Office a new registered address within the United Kingdom for the service of notices.
| 151 | Suspension of postal services |
If at any time by reason of the suspension or curtailment of postal services within the United Kingdom the Company is unable to give notice by post in hard copy form of a shareholders’ meeting, such notice shall be deemed to have been given to all members entitled to receive such notice in hard copy form if such notice is advertised on the same date in at least two national daily newspapers with appropriate circulation and such notice shall be deemed to have been given on the day when the advertisement appears (or first appears). In any such case, the Company shall (i) make such notice available on its website from the date of such advertisement until the conclusion of the meeting or any adjournment thereof and (ii) send confirmatory copies of the notice by post to such members if at least seven days prior to the meeting the posting of notices again becomes practicable.
| 152 | Statutory provisions as to notices |
Nothing in any of Articles 147-152 inclusive shall affect any provision of the Statutes that requires or permits any particular notice, document or information be sent or supplied in any particular manner.
| 153 | Signature or authentication of documents sent by electronic means |
Where these Articles require a notice or other document to be signed or authenticated by a member or other person then any notice or other document sent or supplied in electronic form is sufficiently authenticated in any manner authorised by the Company Communications Provisions or in such other manner approved by the Directors. The Directors may designate mechanisms for validating any such notice or other document, and any such notice or other document not so validated by use of such mechanisms shall be deemed not to have been received by the Company.
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Winding up
| 154 | Directors’ powers to petition |
The Directors shall have power in the name and on behalf of the Company to present a petition to the Court for the Company to be wound up.
| 155 | Distribution of assets in specie |
If the Company shall be wound up (whether the liquidation is voluntary, under supervision, or by the Court) the Liquidator may, with the authority of a Special Resolution, divide among the members in specie or kind the whole or any part of the assets of the Company and whether or not the assets shall consist of property of one kind or shall consist of properties of different kinds, and may for such purpose set such value as he or she deems fair upon any one or more class or classes of property and may determine how such division shall be carried out as between the members or different classes of members. The Liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the Liquidator with the like authority shall think fit, and the liquidation of the Company may be closed and the Company dissolved but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.
Directors’ liabilities
| 156 | Indemnity |
| 156.1 | Subject to the provisions of, and so far as may be permitted by and consistent with, the Statutes and rules made by the UK Listing Authority, every Director and officer of the Company and of each of the Associated Companies of the Company shall be indemnified by the Company out of its own funds against: |
| 156.1.1 | any liability incurred by or attaching to him or her in connection with any negligence, default, breach of duty or breach of trust by him or her in relation to the Company or any Associated Company of the Company in the actual or purported execution and/or discharge of his or her duties and/or the exercise or purported exercise of his or her powers other than: |
| (i) | any liability to the Company or any Associated Company; and |
| (ii) | any liability of the kind referred to in Section 234(3) of the Companies Act 2006; and |
| 156.1.2 | any other liability incurred by or attaching to him or her in the actual or purported execution and/or discharge of his or her duties and/or the exercise or purported exercise of his or her powers and/or otherwise in relation to or in connection with his or her duties, powers or office. |
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Such indemnity shall extend to liabilities arising after a person ceases to be a Director or an officer of the Company in respect of acts or omissions while he or she was a Director or an officer if such acts or omissions would have been indemnified had the relevant person remained a Director or officer, as the case may be.
| 156.2 | Subject to the Companies Acts and rules made by the UK Listing Authority the Company may indemnify a Director of the Company and any Associated Company of the Company if it is the trustee of an occupational pension scheme (within the meaning of Section 235(6) of the Companies Act 2006). |
| 156.3 | Where a Director or officer is indemnified against any liability in accordance with this Article 156 such indemnity shall extend to all costs, charges, losses, expenses and liabilities incurred by him or her in relation thereto. |
| 156.4 | In this Article 156 “Associated Company” shall have the meaning given thereto by Section 256 of the Companies Act 2006. |
| 157 | Insurance |
| 157.1 | Without prejudice to Article 156 above, the Directors shall have power to purchase and maintain insurance for or for the benefit of: |
| 157.1.1 | any person who is or was at any time a Director or officer of any Relevant Company (as defined in Article 157.2 below); or |
| 157.1.2 | any person who is or was at any time a trustee of any pension fund or employees’ share scheme in which employees of any Relevant Company are interested, |
including (without prejudice to the generality of the foregoing) insurance against any liability incurred by or attaching to him or her in respect of any act or omission in the actual or purported execution and/or discharge of his or her duties and/or in the exercise or purported exercise of his or her powers and/or otherwise in relation to his or her duties, powers or offices in relation to any Relevant Company, or any such pension fund or employees’ share scheme (and all costs, charges, losses, expenses and liabilities incurred by him or her in relation thereto).
| 157.2 | For the purpose of Article 157.1 above, “Relevant Company” shall mean: |
| 157.2.1 | the Company; |
| 157.2.2 | any holding company of the Company; |
| 157.2.3 | any other body, whether or not incorporated, in which the Company or such holding company or any of the predecessors of the Company or of such holding company has or had any interest whether direct or indirect or which is in any way allied to or associated with the Company; |
| 157.2.4 | any subsidiary undertaking of the Company or of such other body. |
| 158 | Defence expenditure |
| 158.1 | Subject to the provisions of and so far as may be permitted by the Statutes and rules made by the UK Listing Authority, the Company: |
| 158.1.1 | may provide any current or former Director or officer of the Company or any Associated Company of the Company with funds to meet expenditure incurred or to be incurred by him or her in: |
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| (i) | defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by him or her in relation to the Company or an Associated Company of the Company; or |
| (ii) | in connection with any application for relief under the provisions mentioned in Section 205(5) of the Companies Act 2006; and |
| 158.1.2 | may do anything to enable any such Director or officer to avoid incurring such expenditure. |
| 158.2 | The terms set out in Section 205(2) of the Companies Act 2006 shall apply to any provision of funds or other things done under Article 158.1 provided that, for the purpose of this Article 158.2, references to “director” in Section 205(2) of the Companies Act 2006 shall be deemed to include references to a former Director or a current or former officer of the Company or an Associated Company of the Company. |
| 158.3 | Subject to the provisions of and so far as may be permitted by the Statutes and rules made by the UK Listing Authority, the Company: |
| (a) | may provide a Director or officer of the Company or any Associated Company of the Company with funds to meet expenditure incurred or to be incurred by him or her in defending himself or herself in an investigation by a regulatory authority or against action proposed to be taken by a regulatory authority in connection with any alleged negligence, default, breach of duty or breach of trust by him or her in relation to the Company or any Associated Company of the Company; and |
| (b) | may do anything to enable any such Director or officer to avoid incurring such expenditure. |
| 158.4 | In this Article 158 “Associated Company” shall have the meaning given thereto by Section 256 of the Companies Act 2006. |
Overriding Provisions
| 159 | Overriding provisions |
| 159.1 | If and for so long as the Company shall hold any class of security of Six Continents Hotels Inc. the provisions of this Article shall apply and to the extent of any inconsistency shall have overriding effect as against all other provisions of these Articles. |
| 159.2 | For the purposes of this Article the words and expressions set out below shall bear the meanings set opposite them respectively: |
“Disqualified Person” means any holder of any class of shares of the Company whose holding of such shares, either individually or when taken together with the holding of any class of shares of the Company by any other holders, may result, in the opinion of the Directors, in the loss, or the failure to secure the reinstatement, of any licence or franchise from any United States’ governmental agency held by Six Continents Hotels Inc. or any subsidiary thereof to conduct any portion of the business of Six Continents Hotels Inc. or any subsidiary thereof.
“Relevant Shares” means shares of the Company comprised in the interest or holding of a Disqualified Person.
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“Required Disposal” means the sale and transfer of Relevant Shares or of interests therein in such manner as may be required to cause such shares to cease to be Relevant Shares.
| 159.3 |
| 159.3.1 | The Directors may at any time serve a notice upon any member requiring him or her to furnish the Directors with information (in the case of (ii) below, to the extent that such paragraph applies to any person other than the member so far as such information lies within the knowledge of such member), supported by a declaration and by such other evidence (if any) in support as the Directors may require, for the purpose of determining: |
| (i) | whether such member is a party to an agreement or arrangement (whether legalIy enforceable or not) whereby any of the shares held by him or her are to be voted in accordance with some other person’s instructions (whether given by that other person directly or through any other person); or |
| (ii) | whether such member and/or any other person who has an interest in any shares held by such member is a Disqualified Person. |
If such information and evidence is not furnished within a reasonable period (not being less than 14 days) from the date of service of such notice or the information and evidence provided is, in the opinion of the Directors, unsatisfactory for the purposes of so determining, the Directors may serve upon such member a further notice calling upon him or her, within 14 days after the service of such further notice, to furnish the Directors with such information and evidence or further information and evidence as shall (in their opinion) enable them so to determine.
| 159.3.2 | Any person holding any share of the Company shall notify the Directors forthwith in writing if he or she, or to his or her knowledge any person controlling or beneficially owning or otherwise having an interest in such share, is likely to be or become a Disqualified Person. |
| 159.3.3 | The Directors may assume without enquiry that a person is not or will not become a Disqualified Person unless the information obtained by them above or a notification under this Article 159.3 indicates to the contrary or the Directors have reason to believe otherwise; in these circumstances the Directors shall use all reasonable endeavours to discover whether the person concerned is a Disqualified Person. |
| 159.4 |
| 159.4.1 | If any person becomes or is determined in accordance with Article 159.3.3 above to be a Disqualified Person the Directors shall serve a written notice (a “Disposal Notice”) on all those who (to the knowledge of the Directors) have interests in, and, if different, on the holder or holders of, the Relevant Shares. The Disposal Notice shall refer to the voting restrictions as set out in Article 159.6 below and shall call for a Required Disposal to be made and for reasonable evidence that such Required Disposal shall have been effected to be supplied to the Company within 21 days from the date of such notice or such other period as the Directors may consider reasonable and which they may extend. The Directors may withdraw a Disposal Notice (whether before or after the expiration of the period referred to) if it appears to them that there is no Disqualified Person in relation to the shares concerned. |
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| 159.4.2 | If a Disposal Notice served under Article 159.4.1 above is not complied with to the satisfaction of the Directors and has not been withdrawn, the Directors shall, so far as they are able, sell the shares comprised in such Disposal Notice, at the best price reasonably obtainable in all the circumstances and shall give written notice of such disposal to those persons on whom the Disposal Notice was served. Except as hereinafter provided such a sale shall be completed as soon as reasonably practicable after expiry of the Disposal Notice as may in the opinion of the Directors be consistent with obtaining the best price reasonably obtainable and in any event within 30 days of expiry of such notice provided that such a sale shall be postponed during the period when dealings by the Directors in the Company’s shares are not permitted either by law or by Regulations of the London Stock Exchange but any sale postponed as aforesaid shall be completed within 30 days after expiry of the period of such suspension and provided further that neither the Company nor the Director shall be liable to any holder or any person having an interest in any share or other person for failing to obtain the best price so long as the Directors act in good faith within the period specified above. |
| 159.4.3 | For the purpose of effecting any Required Disposal, the Directors may authorise in writing an officer or employee of the Company to execute any necessary transfer on behalf of any holder and may issue a new certificate to the purchaser. The net proceeds of such disposal shall be received by the Company, whose receipt shall be a good discharge for the purchase money, and shall be paid (without any interest being payable thereon) to the former holder upon surrender by him or her of the certificate in respect of the shares sold and formerly held by him or her. |
| 159.5 |
| 159.5.1 | The Directors shall not be obliged to serve any notice under the foregoing provisions of this Article upon any person if they do not know his or her identity or his or her address and the absence of service of such a notice in such circumstances as aforesaid and any accidental error in, or failure to give any notice to any person upon whom notice is required to be served under the foregoing provisions shall not prevent the implementation of or invalidate any procedure thereunder. |
| 159.5.2 | Any notice to be served under this Article upon a person who is not a member shall be deemed validly served if sent through the post to that person at the address, if any, at which the Directors believe him or her to be resident or carrying on business. Any such notice shall be deemed served on the day following any day on which it was put in the post and, in proving service, it shall be sufficient to prove that the notice was properly addressed, stamped and put in the post. |
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| 159.5.3 | Any determination of the Directors under the foregoing provision of this Article shall be final and conclusive, but without prejudice to the power of the Directors subsequently to vary or revoke such determination. |
| 159.6 |
| 159.6.1 | If in accordance with Article 159.3 above the Directors shall have assumed that any person is not a Disqualified Person, the exercise by that person and/or, if shares owned or controlled by such person are held by another person or by other persons, by such other person or persons shall not be challenged or invalidated by any subsequent determination by the Directors that such person is a Disqualified Person. |
| 159.6.2 | If any person becomes or is determined by the Directors to be a Disqualified Person the Directors shall serve written notice on such person and, if different, on the holder or holders of the shares owned or controlled by such person to the effect that he or she has been determined to be a Disqualified Person. |
| 159.6.3 | With effect from the expiration of such period as the Directors shall specify in the notice under Article 159.6.2 above (not being longer than 30 days from the date of service of such notice) the said person and, if different, the holder or holders of the shares owned or controlled by such person (to the extent that such holder or holders is/are not able to prove to the satisfaction of the Directors that shares registered in his or her/their name(s) are not owned or controlled by such person) shall not be entitled to receive notice of, or to attend or vote at, any General Meeting of the Company or any meeting of the holders of any class of shares. |
| 159.6.4 | Any member who has pursuant to Article 159.3.1 above been served with a further notice by the Directors requiring him or her to furnish the Directors with information and evidence or further information or evidence within 14 days after the service of such further notice shall not, with effect from the expiration of such period and until information or evidence is furnished to the satisfaction of the Directors, be entitled to receive notice of, or to attend or vote at, any General Meeting of the Company or meeting of the holders of any class of shares other than in respect of such of the shares held by such member as are shares in respect of which it shall have been established to the satisfaction of the Directors that they are not shares in which a Disqualified Person has an interest or shares in respect of which the Directors may require a disposal pursuant to the provisions of Article 159.4 above. |
| 159.7 | No person shall be capable of being appointed or continuing as a Director if, in the opinion of the Directors, his or her directorship of the Company may result in the loss, or the failure to secure the reinstatement, of any licence or franchise from any United States governmental agency held by Six Continents Hotels Inc. or any subsidiary thereof to conduct any portion of the business of Six Continents Hotels Inc. or any subsidiary thereof. |
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Index
| Article No. | Page No. | |||||||
| Accounts |
143-144 | 50 | ||||||
| Auditors |
145-146 | 51 | ||||||
| Authentication of Documents |
125 | 43-44 | ||||||
| Borrowing Powers |
109-110 | 40 | ||||||
| Capitalisation of Profits and Shares |
140-141 | 47-50 | ||||||
| Communications with Members |
147-153 | 51-53 | ||||||
| Corporations Acting by Representatives |
77 | 29 | ||||||
| Directors |
78-85 | 29-30 | ||||||
| Alternate |
93-96 | 32-33 | ||||||
| Appointment and Retirement of |
86-92 | 30-32 | ||||||
| Departmental, Divisional or Local |
119 | 42 | ||||||
| General Powers of |
111-117 | 41-42 | ||||||
| Meetings and Proceedings of |
97-108 | 33-40 | ||||||
| Directors’ liabilities |
156-158 | 54-56 | ||||||
| Dividends |
127-139 | 44-47 | ||||||
| Evidence of Title to Securities |
14 | 9 | ||||||
| Forfeiture and Lien |
26-33 | 12-13 | ||||||
| General Meetings |
45-46 | 17-18 | ||||||
| Notice of |
47-49 | 18-19 | ||||||
| Overflow of |
50-52 | 20 | ||||||
| Proceedings at |
53-63 | 20-23 | ||||||
| Minutes |
142 | 50 | ||||||
| Ordinary and Redeemable Shares |
3-4 | 5-6 | ||||||
| Overriding Provisions |
159 | 56-59 | ||||||
| Preliminary |
1-2 | 1-5 | ||||||
| President |
118 | 42 | ||||||
| Proceeds of consolidation and subdivision |
7 | 7 | ||||||
| Proxies |
70-76 | 26-28 | ||||||
| Record Date |
124 | 43 | ||||||
| Reduction of capital |
8 | 7 | ||||||
| Reserves |
126 | 44 | ||||||
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| Article No. | Page No. | |||||||
| The Seal |
121-123 | 43 | ||||||
| Secretary |
120 | 42 | ||||||
| Share Certificates |
15-19 | 9-10 | ||||||
| Shares |
9-13 | 7-9 | ||||||
| Calls on |
20-25 | 10-11 | ||||||
| Transfer of |
34-39 | 13-16 | ||||||
| Transmission of |
40-42 | 16 | ||||||
| Untraced Shareholders |
43-44 | 17 | ||||||
| Variation of Rights |
5-8 | 6-7 | ||||||
| Votes of Members |
64-69 | 23-26 | ||||||
| Winding Up |
154-155 | 54 | ||||||
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Exhibit 2(d)
DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
As of December 31, 2024, InterContinental Hotels Group PLC (the “Company” or “IHG”) had the following series of securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker symbol |
Name of each exchange on which registered |
||
| American Depositary Shares | IHG | New York Stock Exchange | ||
| Ordinary Shares of 20340⁄399 pence each | IHG | 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. |
Capitalized terms used but not defined herein have the meanings given to them in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2024.
ORDINARY SHARES
The following is a summary of the material terms of the ordinary shares of nominal value of 20340⁄399, as set forth in our Articles of Association and the material provisions of U.K. law. This description is a summary and does not purport to be complete. You are encouraged to read our Articles of Association, which are filed as an exhibit to the Group’s Annual Report on Form 20-F for the fiscal year ended December 31, 2024.
Share Capital
The Company’s issued share capital at December 31, 2024 consisted of 164,711,854 ordinary shares of 20340⁄399 pence each, including 6,241,782 shares held in treasury, which constituted 3. 79% of the total issued share capital (including treasury shares). There are no special control rights or restrictions on share transfers or limitations on the holding of any class of shares.
During 2024, 765,000 shares were transferred from treasury to the employee share ownership trust.
As far as is known to management, IHG is not directly or indirectly owned or controlled by another company or by any government. The Board focuses on shareholder value-creation. When it decides to return capital to shareholders, it considers all of its options, including share buybacks and special dividends.
Trading Markets
The principal trading market for the Company’s ordinary shares is the London Stock Exchange (LSE). The ordinary shares are also listed on the NYSE, trading in the form of ADSs evidenced by ADRs. Each ADS represents one ordinary share. The Company has a sponsored ADR facility with J.P. Morgan Chase Bank, N.A. as ADR Depositary.
Rights Attaching to Ordinary Shares
Dividend Rights and Rights to Share in the Company’s Profits The Company’s Board of Directors may declare and pay to shareholders such interim dividends as appear to them to be justified by the Company’s financial position.
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 UK and by the Companies Act. No dividend will bear interest as against the Company.
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.
If authorised 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 by a member (or by a person entitled by virtue of transmission on death or bankruptcy or otherwise by operation of law) after six years from the date the dividend was declared, or became due for payment, will be forfeited and will revert to the Company.
Voting Rights
The holders of ordinary shares are entitled, in respect of their holdings of such shares, to receive notice of general meetings and to attend, speak and vote at such meetings in accordance with the Articles.
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. Resolutions put to the members at electronic general meetings shall be voted on by a poll, which poll votes may be cast by such electronic means as the Board in its sole discretion deems appropriate for the purposes of the meeting.
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 Chair 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 and on which there have been paid up sums in the aggregate at least equal to 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 two 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 the Auditor, the increase of share capital or the grant of authority to allot shares. |
| • | A special resolution, which includes resolutions amending the Articles, 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 present and entitled to vote at a meeting at which there is a quorum.
Special resolutions require the affirmative vote of not less than three quarters of the persons present and entitled to vote at a meeting at which there is a quorum.
AGMs 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 also allow for shareholders to attend and participate in shareholder meetings by electronic means.
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-quarters 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 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 that class.
Rights in a Winding-Up
Except as the Company’s shareholders have agreed or may otherwise agree, upon the Company’s winding up, the balance of assets available for distribution is to be distributed among the holders of ordinary shares according to the amounts paid up on the shares held by them:
| • | 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. |
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 Articles on the right of non-residents or foreign persons to hold or vote the Company’s ordinary shares, other than the limitations that would generally apply to all of the Company’s shareholders.
Exchange controls and restrictions on payment of dividends
Other than economic sanctions which may be in force in the UK from time to time, there are no restrictions under the Articles or under English law that limit the right of non-resident or foreign owners to hold or vote the ordinary shares or the ADSs. In addition, the Articles 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 licence or franchise from any US governmental agency held by Six Continents Hotels, Inc. or any subsidiary thereof.
Share Awards and Grants to Employees
Our current policy is to settle awards or grants under the Company’s share plans with shares purchased in the market or from shares held in treasury; however, the Company continues to review this policy. The Company’s share plans incorporate limits on dilution which provide that commitments to issue new shares or re-issue treasury shares under executive plans should not exceed 5%, and under all plans should not exceed 10%, of the issued ordinary share capital of the Company (adjusted for share issuance and cancellation) in any 10-year period.
As at December 31, 2024, no options were outstanding. The Company has not utilised the authority given by shareholders at any of its AGMs to allot shares for cash without first offering such shares to existing shareholders.
Employee Share Ownership Trust (ESOT)
IHG operates an ESOT for the benefit of employees and former employees. The ESOT receives treasury shares from the Company and purchases ordinary shares in the market and releases them to current and former employees in satisfaction of share awards.
Certain shares that have been allocated to share plan participants under the Annual Performance Plan (APP) are held in a nominee account on behalf of those participants by Computershare Investors Plc (Nominee). The shares held by the Nominee have been allocated to share plan participants on terms that entitle those participants to request or require the Nominee to exercise the voting rights relating to those shares. The Nominee shall exercise those votes in accordance with the directions of the participants. Shares that have not been allocated to share plan participants under such terms continue to be held by the ESOT and the trustee may vote or abstain from exercising their voting rights in relation to those shares, or accept or reject any offer relating to the shares, in any way it sees fit.
As at 31 December 2024, the Nominee held 249,714 ordinary shares in the Company, in the form of unvested share plan awards, allocated to APP participants.
Unless otherwise requested by the Company, the trustee of the ESOT waives all ordinary dividends on the shares held in the ESOT, other than shares which have been allocated to participants on terms which entitle them to the benefit of dividends, except for such amount per share as shall, when multiplied by the number of shares held by it on the relevant date, equal one pence or less.
AMERICAN DEPOSITARY SHARES
The following is a summary of the general terms and provisions of the Second Amended and Restated Deposit Agreement (the “Deposit Agreement”) under which the Depositary will deliver the American Depositary Shares (“ADSs”). The Deposit Agreement is among us, J.P. Morgan Chase Bank, N.A., as Depositary, and all registered holders and beneficial owners from time to time of ADSs issued under it. This summary does not purport to be complete. You should read the Amended and Restated Deposit Agreement, which we have filed with the SEC as an exhibit to the Form F-6 filed on November 4, 2021. You may also read the Deposit Agreement at the corporate trust offices of J.P. Morgan Chase Bank, N.A. The principal executive office of the Depositary and its corporate trust office is currently located at J.P. Morgan Depositary Receipts, 383 Madison Avenue, Floor 11, New York, NY 10179, United States.
American Depositary Shares
The Company’s ordinary shares are listed on the NYSE in the form of ADSs, evidenced by American Depositary Receipts (“ADRs”) and traded under the symbol ‘IHG’. Each ADR represents one ordinary share.
Voting Rights
The Deposit Agreement has granted certain indirect rights to vote to the ADR holders. ADR holders may not attend the Company’s general meetings in person. ADR holders exercise their voting rights by instructing the Depositary to exercise the voting rights attached to the registered ordinary shares underlying the ADRs. The Depositary exercises the voting rights for registered ordinary shares underlying ADRs for which no voting instructions have been given by providing a discretionary proxy to an uninstructed independent designee pursuant to paragraph 12 of the form of ADR. The same voting restrictions apply to ADR holders as to those holding ordinary shares of the Company (i.e., the application of the United Kingdom Disclosure and Transparency Rules with regard to the notification to the Company of certain interests in the Company).
As soon as practicable after receipt from the Company of notice of any meeting or solicitation of consents or proxies of holders of ordinary shares or other deposited securities, the Depositary will distribute to holders a notice stating (a) such information as is contained in such notice and any solicitation materials, (b) that each holder on the record date set by the Depositary therefor will, subject to any provisions of United Kingdom law, be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the deposited securities represented by the ADSs evidenced by such holder’s ADRs and (c) the manner in which such instructions may be given, including instructions to give a discretionary proxy to a person designated by the Company. Upon actual receipt by the ADR department of the Depositary of instructions of a holder on such record date in the manner and on or before the time established by the Depositary for such purpose, the Depositary will endeavor insofar as practicable and permitted under the provisions of or governing deposited securities to vote or cause to be voted the deposited securities represented by the ADSs evidenced by such holder’s ADRs in accordance with such instructions.
The Depositary will not itself exercise any voting discretion in respect of any deposited securities. To the extent such instructions are not so received by the Depositary from any holder, the Depositary shall deem such holder to have so instructed the Depositary to give a discretionary proxy to a person designated by the Company and the Depositary shall endeavor insofar as practicable and permitted under the provisions of or governing deposited securities to give a discretionary proxy to a person designated by the Company to vote the deposited securities represented by the ADSs evidenced by such holder’s ADRs as to which such instructions are so given, provided that no such instruction shall be deemed given and no discretionary proxy shall be given with respect to any matter (a) as to which the Company informs the Depositary (and the Company agrees to provide such information promptly in writing) that (i) the Company does not wish such proxy given, (ii) substantial opposition exists or (iii) materially affects the rights of holders of ordinary shares and (b) unless, with respect to such meeting, the Depositary has been provided with an opinion of counsel to the Company, in form and substance satisfactory to the Depositary, to the effect that (i) the granting of such discretionary proxy does not subject the Depositary to any reporting obligations in the United Kingdom, (ii) the granting of such proxy will not result in a violation of United Kingdom law, rule, regulation or permit, (iii) the voting arrangement and deemed instruction as contemplated herein will be given effect under United Kingdom law, and (iv) the granting of such discretionary proxy will not under any circumstances result in the ordinary shares represented by the ADSs being treated as assets of the Depositary under United Kingdom law. The Depositary may, but is not obligated to, require a certification by the Company as to the non-existence of the circumstances described in (a)(ii) and (a)(iii) above and shall incur no liability in connection with any matter related to such deemed instruction or the failure to provide such deemed instruction.
Share Dividends and Other Distributions
Subject to paragraphs 4 and 5 of the form ADR, to the extent practicable, the Depositary will distribute to each ADR holder entitled thereto on the record date set by the Depositary therefor at such ADR holder’s address shown on the ADR Register, in proportion to the number of deposited securities (on which the following distributions on deposited securities are received by the custodian) represented by ADSs evidenced by such holder’s ADRs:
(a) Cash: Any US dollars available to the Depositary resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof authorized in paragraph 10 (“Cash”) of the form of ADR, on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain holders, and (iii) deduction of the Depositary’s and/or its agents’ fees and expenses in (1) converting any foreign currency to US dollars by sale or in such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or US dollars to the US by such means as the Depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner.
(b) Shares. (i) Additional ADRs evidencing whole ADSs representing any ordinary shares available to the Depositary resulting from a dividend or free distribution on deposited securities consisting of ordinary shares (a “Share Distribution”) and (ii) US dollars available to it resulting from the net proceeds of sales of ordinary shares received in a Share Distribution, which ordinary shares would give rise to fractional ADSs if additional ADRs were issued therefor, as in the case of Cash.
(c) Rights. (i) Warrants or other instruments in the discretion of the Depositary representing rights to acquire additional ADRs in respect of any rights to subscribe for additional ordinary shares or rights of any nature available to the Depositary as a result of a distribution on deposited securities (“Rights”), to the extent that the Company timely furnishes to the Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Company has no obligation to so furnish such evidence), or (ii) to the extent the Company does not so furnish such evidence and sales of Rights are practicable, any US dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Company does not so furnish such evidence and such sales cannot practicably be accomplished by reason of the non-transferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse).
(d) Other Distributions. (i) Securities or property available to the Depositary resulting from any distribution on deposited securities other than Cash, Share Distributions and Rights (“Other Distributions”), by any means that the Depositary may deem equitable and practicable, or (ii) to the extent the Depositary deems distribution of such securities or property not to be equitable and practicable, any US dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash.
The Depositary will distribute US dollars by checks drawn on a bank in the US for whole dollars and cents (any fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices), pursuant to paragraph 10 of the form of ADR.
Deposit, Withdrawal and Cancellation
Subject to paragraphs 4 and 5 of the form of ADR, upon surrender of (i) a certificated ADR in form satisfactory to the Depositary at the transfer office or (ii) proper instructions and documentation in the case of a Direct Registration ADR, the holder hereof is entitled to delivery, or to the extent in dematerialized form from, the custodian’s office of the deposited securities at the time represented by the ADSs evidenced by this ADR. At the request, risk and expense of the holder, the Depositary may deliver such deposited securities at such other place as may have been requested by the holder. Notwithstanding any other provision of the deposit agreement or this ADR, the withdrawal of deposited securities may be restricted only for the reasons set forth in General Instruction I.A.(1) of Form F-6 (as such instructions may be amended from time to time) under the Securities Act of 1933.
Reclassification, Recapitalizations and Mergers
If the Company takes certain actions that affect the deposited securities, including (i) any change in par value, split-up, consolidation, cancellation or other reclassification of deposited securities, (ii) any Share Distribution or Other Distribution not distributed to holders or (iii) any cash, securities or property available to the Depositary in respect of the Deposited Securities from any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the company, then the Depositary may choose to:
| (a) | amend the applicable ADRs; |
| (b) | distribute additional or amended ADRs; and |
| (c) | distribute cash, securities or property on the record date set by the Depositary to reflect the transaction. |
Amendment and Termination
The ADRs and the Deposit Agreement may be amended by the Company and the Depositary, provided that any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise prejudice any substantial existing right of holders, shall become effective 30 days after notice of such amendment shall have been given to the holders. Every holder of an ADR at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such ADR, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby.
The Depositary may, and shall at the written direction of the Company, terminate the Deposit Agreement and this ADR by mailing notice of such termination to the holders at least 30 days prior to the date fixed in such notice for such termination, subject to the provisions of paragraph 17 of the form ADR. After the date so fixed for termination, the Depositary and its agents will perform no further acts under the Deposit Agreement and this ADR, except to receive and hold (or sell) distributions on deposited securities and deliver deposited securities being withdrawn. As soon as practicable after the expiration of six months from the date so fixed for termination, the Depositary shall sell the deposited securities and shall thereafter (as long as it may lawfully do so) hold in a segregated account the net proceeds of such sales, together with any other cash then held by it under the Deposit Agreement, without liability for interest, in trust for the pro rata benefit of the holders of ADRs not theretofore surrendered. After making such sale, the Depositary shall be discharged from all obligations in respect of the Deposit Agreement and this ADR, except for its obligations to the Company under Section 16 of the Deposit Agreement and to account for such net proceeds and other cash. After the date so fixed for termination, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary and its agents.
Limitation on Obligations and Liability to ADR Holders
The Depositary, the Company, their agents and each of them shall: (a) incur no liability (i) if any present or future law, rule, fiat, order or decree of the United States, the United Kingdom or any other country, or of any governmental or regulatory authority or any securities exchange or market or automated quotation system, the provisions of or governing any deposited securities, any present or future provision of the Company’s charter, any act of God, war, terrorism, nationalization or other circumstance beyond its control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act which the Deposit Agreement or this ADR provides shall be done or performed by it or them (including, without limitation, voting pursuant to paragraph 12 of the form ADR), or (ii) by reason of any exercise or failure to exercise any discretion given it in the Deposit Agreement or the ADR (including, without limitation, any failure to determine that any distribution or action maybe lawful or reasonably practicable); (b) assume no liability except to perform its obligations to the extent they are specifically set forth in this ADR and the Deposit Agreement without gross negligence or willful misconduct; (c) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR; (d) in the case of the Company and its agents hereunder be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required; or (d) not be liable for any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting shares for deposit, any holder, or any other person believed by it to be competent to give such advice or information.
The Depositary, its agents and the Company may rely and shall be protected in acting upon any written notice, request, direction, instruction or document believed by them to be genuine and to have been signed, presented or given by the proper party or parties. The Depositary shall be under no obligation to inform holders or any other holders of an interest in any ADSs about the requirements of English law, rules or regulations or any changes therein or thereto. The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the deposited securities, for the manner in which any such vote is cast or for the effect of any such vote. The Depositary and its agents may own and deal in any class of securities of the Company and its affiliates and in ADRs. The Company has agreed to indemnify the Depositary and its agents under certain circumstances and the Depositary and its agents have agreed to indemnify the Company under certain circumstances. No disclaimer of liability under the Securities Act is intended by any provision hereof.
Books of Depositary
The Depositary will keep books at its principal office for the registration and transfer of ADRs, which will be open for your inspection at all reasonable times. Such inspection shall be for the purpose of communicating with holders in the interest of the business of the Company or a matter relating to the Deposit Agreement.
Exhibit 4(a)(i)
TRUST DEED
EXECUTION VERSION
19 September 2024
INTERCONTINENTAL HOTELS GROUP PLC
and
IHG FINANCE LLC
(together, the Issuers)
and
INTERCONTINENTAL HOTELS GROUP PLC
and
IHG FINANCE LLC
and
SIX CONTINENTS LIMITED
and
INTERCONTINENTAL HOTELS LIMITED
(together, the Guarantors)
and
U.S. BANK TRUSTEES LIMITED
(the Trustee)
AMENDED AND RESTATED TRUST DEED
relating to a £4,000,000,000
EURO MEDIUM TERM NOTE PROGRAMME
Freshfields Bruckhaus Deringer LLP
100 Bishopsgate
London EC2P 2SR
CONTENTS
| CLAUSE | PAGE | |||||
| 1. | DEFINITIONS AND INTERPRETATION |
2 | ||||
| 2. | AMOUNT AND ISSUE OF THE NOTES | 12 | ||||
| 3. | COVENANT TO REPAY | 13 | ||||
| 4. | GUARANTEE | 16 | ||||
| 5. | THE NOTES | 18 | ||||
| 6. | CANCELLATION OF NOTES AND RECORDS | 20 | ||||
| 7. | COVENANT TO COMPLY WITH THE TRUST DEED | 21 | ||||
| 8. | COVENANTS BY THE ISSUERS AND THE GUARANTORS | 22 | ||||
| 9. | AMENDMENTS AND SUBSTITUTION | 28 | ||||
| 10. | BREACH | 32 | ||||
| 11. | ENFORCEMENT | 32 | ||||
| 12. | APPLICATION OF MONEYS | 33 | ||||
| 13. | TERMS OF APPOINTMENT | 37 | ||||
| 14. | COSTS AND EXPENSES | 44 | ||||
| 15. | APPOINTMENT AND RETIREMENT | 48 | ||||
| 16. | NOTICES | 49 | ||||
| 17. | LAW AND JURISDICTION | 51 | ||||
| 18. | SEVERABILITY | 52 | ||||
| 19. | CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 | 52 | ||||
| 20. | COUNTERPARTS | 52 | ||||
| SCHEDULE 1 TERMS AND CONDITIONS OF THE NOTES | 53 | |||||
| SCHEDULE 2 FORM OF GLOBAL NOTES | 128 | |||||
| SCHEDULE 3 FORM OF GLOBAL REGISTERED NOTE CERTIFICATES | 191 | |||||
| SCHEDULE 4 PROVISIONS FOR MEETINGS OF NOTEHOLDERS | 217 | |||||
Page I
THIS AMENDED AND RESTATED TRUST DEED is made on 19 September 2024 (this Trust Deed)
BETWEEN
| (1) | INTERCONTINENTAL HOTELS GROUP PLC (the Parent) as an issuer and as a guarantor in respect of issuances by IHG Finance LLC; |
| (2) | IHG FINANCE LLC as an issuer (together with the Parent in its capacity as an issuer, each an Issuer and together the Issuers) and as a guarantor in respect of Notes issued by the Parent; |
| (3) | SIX CONTINENTS LIMITED as a guarantor; |
| (4) | INTERCONTINENTAL HOTELS LIMITED as a guarantor (together with (i) the Parent in its capacity as guarantor in respect of issuances by IHG Finance LLC, (ii) IHG Finance LLC in its capacity as guarantor in respect of Notes issued by the Parent and (iii) Six Continents Limited, each a Guarantor and together, the Guarantors); and |
| (5) | U.S. BANK TRUSTEES 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 Parent, IHG Finance LLC, Six Continents Limited and InterContinental Hotels Limited and HSBC Corporate Trustee Company (UK) Limited are party to a trust deed dated 27 November 2009, as supplemented by the first supplemental trust deed dated 7 July 2011, and as amended and restated by the amended and restated trust deed dated 9 November 2012, the amended and restated trust deed dated 16 June 2015, the amended and restated trust deed dated 11 August 2016, the amended and restated trust deed dated 14 September 2020, and the amended and restated trust deed dated 21 September 2023 (pursuant to which U.S. Bank Trustees Limited acts as Trustee for any Notes issued from 21 September 2023 onwards) as supplemented by the global supplemental trust deed dated 12 October 2023 (the Principal Trust Deed) relating to the Euro Medium Term Note Programme established by the Parent, Six Continents Limited and InterContinental Hotels Limited, pursuant to which, the Issuers may issue from time to time Notes as set out herein (the Programme). The Parent, 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 £4,000,000,000 (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.
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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 amended and restated agency agreement dated 19 September 2024 (as further amended, modified, restated and supplemented from time to time) between the Issuers, the Guarantors, the Trustee, Elavon Financial Services DAC and Elavon Financial Services DAC, UK Branch appointing the initial Paying Agent, the Registrar, the Calculation Agent and the Transfer Agent in relation to such Series and any other agreement for the time being in force appointing Successor paying agents, a Successor registrar, a Successor calculation agent or Successor transfer agents 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 Registrar, the Calculation Agent, the Transfer 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 Relevant 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 in relation to each Issuer and each Guarantor, any person who (a) is a Director of such Issuer or, as the case may be, such 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);
Bearer Note means a Note issued in bearer form;
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; Change of Control has the meaning given to such term in Condition 2(a) (Interpretation - Definitions);
2
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;
Clearstream means Clearstream Banking SA;
the Code means the U.S. Internal Revenue Code of 1986;
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:
| (a) | in relation to the Bearer Notes of any Series, the terms and conditions to be endorsed on, or incorporated by reference in, the Bearer Notes of any such 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 Relevant Issuer, the Principal Paying Agent, the Trustee and the relevant Dealer(s) as modified and supplemented by the Final Terms(s) applicable to such Series, as any of the same may from time to time be modified in accordance with this Trust Deed and any reference in this Trust Deed to a particular numbered Condition shall be construed in relation to the Bearer Notes of such Series accordingly; and |
| (b) | in relation to the Registered Notes of any Series, the terms and conditions to be endorsed on, or incorporated by reference in, the Note Certificates in respect of such Series, in the form set out in Schedule 1 or in such other form, having regard to the terms of the relevant Series, as may be agreed between the Relevant Issuer, the Registrar, the Trustee and the relevant Dealer(s) as modified and supplemented by the Final Terms applicable to such Series, as any of the same may from time to time be modified in accordance with the provisions of this Trust Deed and any reference in this Trust Deed to a particular numbered Condition shall be construed in relation to the Registered Notes of such Series accordingly; |
Couponholder means the holder of a Coupon;
3
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 Relevant Issuer and the Trustee from time to time; Coupons means any bearer interest coupons appertaining to the Bearer Notes of any Series in or substantially in the form set out in Part D of Schedule 2, in the case of Notes issued by the Parent and Part I of Schedule 2, in the case of Notes issued by IHG Finance LLC, 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, Coupons and Talons) and, where the context so permits, the Talons appertaining to the Definitive Notes of such Series;
Dealer Agreement means the agreement between the Issuers, the Guarantors 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 Issuers or the Relevant Issuer (as the case may be) may appoint as a Dealer and notice of whose appointment has been given to the Principal Paying Agent and the Trustee by the Issuers or the Relevant Issuer (as the case may be) 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 Issuers or the Relevant Issuer (as the case may be) 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 Relevant Issuer has agreed the issue and purchase of such Note;
Definitive Notes means Bearer Notes in definitive form issued or, as the case may be, required to be issued by the Relevant Issuer in accordance with the provisions of the Dealer Agreement or any other agreement between the Relevant Issuer and the relevant Dealer(s), the Agency Agreement and this Trust Deed in exchange for a Temporary Global Note or part thereof or a Permanent Global Note (all as indicated in the relevant Final Terms), such Bearer Notes in definitive form being in the form or substantially in the form set out in Part C of Schedule 2, in the case of Notes issued by the Parent and Part H of Schedule 2, in the case of Notes issued by IHG Finance LLC;
Director means any Director of an 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 and a securities note;
Euroclear means Euroclear Bank SA/NV;
Event of Default means any one of the circumstances described in Condition 12 (Events of Default) (but, in the case of Conditions 12(b), (d) and (f) to (i) inclusive, only if the Trustee shall have certified in writing that such event is in its opinion materially prejudicial to the interests of the Noteholders); FATCA means Sections 1471 through 1474 of the Code (including any regulations thereunder or official interpretation thereof), intergovernmental agreements between the United States and other jurisdictions facilitating the implementation thereof, and any law implementing any such intergovernmental agreement;
Extraordinary Resolution has the meaning set out in Schedule 4 (Provisions for Meetings of Noteholders);
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FATCA Information has the meaning given to it in Clause 8(ff);
FATCA Withholding means any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to FATCA;
Final Terms has the meaning ascribed to it in the Dealer Agreement;
Fitch means Fitch Ratings Ltd or any successor;
Fixed Rate Note means a Note on which interest is calculated at a fixed rate payable in arrear on a fixed date or dates in each year and on redemption or on such other dates as may be agreed between the Relevant Issuer, the Relevant 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 Relevant Issuer, the Relevant 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;
Global Registered Note Certificate means, in relation to any Series of Registered Notes, any Global Registered Note Certificate issued or to be issued pursuant to Clause 5.2 (Global Registered Note Certificates) in or substantially in the form set out in Part A of Schedule 3, in the case of Notes issued by the Parent, or Part F of Schedule 3, in the case of Notes issued by IHG Finance LLC;
Individual Note Certificate means, in relation to any Series of Registered Notes, any Individual Note Certificate representing a Noteholder’s entire holding of Notes, in or substantially in the form set out in Part B of Schedule 3, in the case of Notes issued by the Parent, or Part D of Schedule 3, in the case of Notes issued by IHG Finance LLC;
ICSDs means Clearstream 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 Relevant Issuer, the Relevant Guarantors and the relevant Dealer(s); 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;
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;
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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 Limited or any successor;
New Safekeeping Structure means a structure where a Global Registered Note Certificate which is registered in the name of a Common Safekeeper (or its nominee) for Euroclear and/or Clearstream and/or any other relevant clearing system and the Global Registered Note Certificate will be deposited on or about the issue date with the Common Safekeeper for Euroclear and/or Clearstream;
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;
Note Certificate means, in relation to any Series, any Global Registered Note Certificate or Individual Note Certificate and includes any replacement Note Certificate issued pursuant to Condition 14 (Replacement of Notes, Coupons and Talons);
Noteholder and (in relation to a Note) holder means, in the case of a Bearer Note, the bearer of a Note, or, in the case of a Registered Note, a person in whose name a Note is registered in the Register (or in the case of joint holders, the first named thereof), save that, for so long as the Notes of any Series are represented by a Global Note or Global Registered Note Certificate, each person who has for the time being a particular principal amount of such Notes credited to his securities account in the records of Clearstream or Euroclear shall be deemed to be the Noteholder in respect of the principal amount of such Notes for all purposes hereof other than for the purpose of payments in respect thereof, the right to which shall be vested, as against the Relevant Issuer and the Trustee, solely in the bearer, in the case of a Bearer Note, or registered holder, in the case of a Registered Note, of such Global Note or Global Registered Note Certificate, as applicable, in accordance with and subject to the terms of this Trust Deed and such Global Note or Global Registered Note Certificate;
Notes means the notes of each Series constituted in relation to or by this Trust Deed which shall, in the case of Bearer Notes, be in or substantially in the form set out in Schedule 2 and, in the case of Registered Notes, be represented by a Note Certificate in or substantially in the form set out in Schedule 3 and, for the time being outstanding or, as the case may be, a specific number thereof and includes any replacement Notes of such Series issued pursuant to Condition 14 (Replacement of Notes, Coupons and Talons) and (except for the purposes of Clauses 5.1 (Global Notes), 5.2 (Global Registered Note Certificate) and 5.4 (Signature)) each Global Note or Global Registered Note Certificate in respect of such Series for so long as it has not been exchanged in accordance with the terms thereof;
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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 the Conditions and 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(k) (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) | in the case of Bearer Notes only: |
| (i) | 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 |
| (ii) | (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, passing an Extraordinary Resolution (as defined in Schedule 4 (Provisions for Meetings of Noteholders) in writing or passing an Extraordinary Resolution by way of electronic consents given through the relevant clearing systems as envisaged by Schedule 4 (Provisions for Meetings of Noteholders); |
| (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), 16 (Meetings of Noteholders; Modification and Waiver) and 17 (Enforcement) and Schedule 4 (Provisions for Meetings of Noteholders); |
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| (iii) | any discretion, power or authority, whether contained in this Trust Deed or provided by law, which the Trustee is required to exercise in or by reference to the interests of the holders of the Notes of any Series or any of them; and |
| (iv) | the determination by the Trustee whether any event, circumstance, matter or timing is, in its opinion, materially prejudicial to the interests of the holders of the Notes of any Series; |
those Notes (if any) of the relevant Series which are for the time being held by any person (including but not limited to the Relevant Issuer, any Relevant Guarantor or any Subsidiary) for the benefit of the Relevant Issuer, any Relevant Guarantor or any Subsidiary of the Parent shall (unless and until ceasing to be so held) be deemed not to remain outstanding;
Parent means InterContinental Hotels Group PLC;
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 Schedule 2 in the case of Notes issued by the Parent, or Part G of Schedule 2 in the case of Notes issued by IHG Finance LLC;
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; Registrar means, in relation to the Registered Notes of any Series, the institution at its Specified Office initially appointed as registrar in relation to such Notes pursuant to the relative Agency Agreement and/or, if applicable, any successor registrar in relation to such Notes at its Specified Office;
Put Option has the meaning given to such term in Condition 9(f) (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(g) (Redemption and Purchase – Change of Control Redemption), includes any Additional Rating Agency;
Register means the register maintained by the Registrar at its Specified Office;
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Registered Note means a Note issued in registered form;
Relevant Date has the meaning ascribed to it in Condition 2(a) (Interpretation - Definitions);
Relevant Guarantor means:
| (a) | in respect of Notes issued by the Parent, Six Continents Limited, InterContinental Hotels Limited and IHG Finance LLC; and |
| (b) | in respect of Notes issued by IHG Finance LLC, the Parent, Six Continents Limited and InterContinental Hotels Limited; |
Relevant Issuer means, in relation to any Tranche of Notes, whichever of the Parent or IHG Finance LLC as is specified as the issuer of such Notes in the relevant Final Terms, as the case may be;
Reserved Matter has the meaning set out in paragraph 1 of Schedule 4 (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 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 has the meaning given in 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 Parent 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 Agents, such other or further person as may from time to time be appointed pursuant to the Agency Agreement as an 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 |
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| (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 S&P Global Ratings UK Limited or any successor;
Talonholder means the holder of a Talon;
Talons means any bearer talons appertaining to the Bearer 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 Schedule 2 in the case of Notes issued by the Parent, or Part F of Schedule 2 in the case of Notes issued by IHG Finance LLC;
this Trust Deed means this Trust Deed and the Schedules (as from time to time modified in accordance with the provisions contained herein) and (unless the context requires otherwise) includes any deed or other document executed in accordance with the provisions hereof (as from time to time modified as aforesaid) and expressed to be supplemental hereto;
Tranche means all Notes of the same Series with the same Issue Date and Interest Commencement Date;
Transfer Agents means, in relation to the Notes of any Series, the institution(s) at their respective Specified Offices initially appointed pursuant to the Agency Agreement and/or, if applicable, any Successor transfer agents in relation to such Series at their respective Specified Offices;
Trustee Acts means both the Trustee Act 1925 and the Trustee Act 2000 of England and Wales;
Written Resolution has the meaning set out in Schedule 4 (Provisions for Meetings of 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, amendment or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such modification, amendment or re-enactment; |
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| (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: any reference to 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 shall, wherever the context so admits (but not in the case of any Notes in NGN form), be deemed to include references to any additional or alternative clearing system approved by the Relevant 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) | Coupons: in the case of any Notes which are Zero Coupon Notes or Registered Notes, references to Coupons and Couponholders in this Trust Deed are not applicable to such Notes; |
| (j) | 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; |
| (k) | 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); |
| (l) | 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; |
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| (m) | 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 |
| (n) | Proceedings: all references in these presents to taking proceedings against the Relevant Issuer and/or the Relevant Guarantors shall be deemed to include references to proving in the winding up of the Relevant Issuer and/or any Relevant 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. In the event of an inconsistency between this Trust Deed and the Conditions, this Trust Deed shall prevail.
| 1.4 | Headings |
The headings and sub-headings are for ease of reference only and shall not affect the construction of this Trust Deed.
| 1.5 | The Schedules |
The schedules are part of this Trust Deed and shall have effect accordingly.
| 1.6 | Written Notices/Approvals |
Any reference to a written notice or approval being given by the Trustee shall, for the avoidance of doubt, be deemed to include such notice being given by email.
| 2. | AMOUNT AND ISSUE OF THE NOTES |
| 2.1 | Amount of the Notes |
The Notes will be issued in Series in an aggregate nominal amount from time to time outstanding not exceeding the Authorised Amount and, for the purpose of determining such aggregate nominal amount, Clause 4.1.14 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 Relevant 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. |
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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, in the case of Bearer Notes, or the Note Certificate, in the case of Registered Notes, 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 Issuers (failing whom the Guarantors) 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 |
Each Relevant Issuer covenants with the Trustee that it shall, as and when the Notes of any Series or any of them become due to be redeemed or any principal on the Notes of any Series or any of them becomes due to be repaid in accordance with the Conditions, unconditionally pay or procure to be paid to or to the order of the Trustee in immediately available freely transferable funds in the relevant currency the principal amount of the Notes of such Series or any of them becoming due for payment on that date and shall (subject to the provisions of the Conditions and except in the case of Zero Coupon Notes), until all such payments (both before and after judgment or other order of a court of competent jurisdiction) are duly made, unconditionally pay or procure to be paid to or to the order of the Trustee as aforesaid on the dates provided for in the Conditions interest (which shall accrue from day to day) on the principal amount (or such other amount as may be specified in the Final Terms) of the Notes or any of them of such Series outstanding from time to time as set out in the Conditions (subject to Clause 3.3 (Interest on Floating Rate Notes following Event of Default)) provided that:
| (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 or the Registrar, as the case may be, in the manner provided in the Agency Agreement shall satisfy pro tanto, to the extent of such payment, the relevant covenant by the Issuers 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; |
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| (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 or Couponholders (as the case may be) in accordance with the Conditions that the full amount has been received by the Principal Paying Agent or the Registrar, as the case may be, or the Trustee except, in the case of payment to the Principal Paying Agent or the Registrar, as the case may be, 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 or (if so provided for in the Conditions) the relevant Note Certificate (as the case may be) interest shall accrue on the whole or such part of such principal amount (except in the case of Zero Coupon Notes, to which the provision of Condition 8 (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 or (if so provided for in the Conditions) the relevant Note Certificate (as the case may be) such payment is in fact made. |
The Trustee will hold the benefit of this covenant and the other covenants in this Trust Deed on trust for the Noteholders and Couponholders in accordance with their respective interests.
| 3.2 | Following an Event of Default |
At any time after any Event of Default or Potential Event of Default shall have occurred or the Notes of all or any Series shall otherwise have become due and repayable or the Trustee shall have received any money which it proposes to pay under Clause 12 (Application of Moneys) to the relevant Noteholders and/or Couponholders, the Trustee may:
| (a) | by notice in writing to the Relevant Issuer, the Relevant 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 |
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| 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, Coupons and Note Certificates and all sums, documents and records held by them in respect of Notes, Coupons and Note Certificates on behalf of the Trustee; and/or |
| (ii) | to deliver up all Notes, Coupons and Note Certificates and all sums, documents and records held by them in respect of Notes, Coupons and Note Certificates 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 Relevant Issuer and the Relevant Guarantors require each of them to make all subsequent payments in respect of Notes, Coupons and Note Certificates 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 such Issuer and the Guarantors) Clause 12.3 (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.
| 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.
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| 4. | GUARANTEE |
4.1 (i) In respect of Notes issued by the Parent, Six Continents Limited, InterContinental Hotels Limited and IHG Finance LLC; and (ii) in respect of Notes issued by IHG Finance LLC, the Parent, Six Continents Limited and InterContinental Hotels Limited, 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 Relevant 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 Relevant Issuer under this Trust Deed; and |
| (b) | the due and punctual performance and observance by the Relevant Issuer of each of the other provisions of this Trust Deed on the Relevant Issuer’s part to be performed or observed. |
4.2 If the Relevant Issuer fails for any reason whatsoever punctually to pay any such principal, premium, interest or other amount, the Relevant Guarantors shall cause each and every such payment to be made as if the Relevant Guarantors instead of the Relevant Issuer were expressed to be the primary obligor under this Trust Deed and not merely as surety (but without affecting the nature of the Relevant 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 Relevant 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 Relevant 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 Relevant Guarantors and this guarantee shall continue to apply as if such payment had at all times remained owing by the Relevant Issuer and the Relevant 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 Relevant Issuer and/or the Relevant 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 Relevant Issuer or other persons entitled through the Relevant Issuer.
4.4 Each of the Relevant 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 Relevant Issuer of, or of any defence or counter-claim whatsoever available to the Relevant Issuer in relation to, its obligations under this Trust Deed, whether or not any action has been taken to enforce the same or any judgment obtained against the Relevant Issuer, whether or not any of the other provisions of this Trust Deed have been modified, whether or not any time, indulgence, waiver, authorisation or consent has been granted to the Relevant 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 Relevant Issuer, any of the Noteholders or Couponholders or the Trustee, whether or not the Relevant Issuer has been dissolved, liquidated, merged, consolidated, bankrupted or has changed its status, functions, control or ownership, whether or not the Relevant 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.
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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 Relevant 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 Relevant Issuer and may from time to time make any arrangement or compromise with the Relevant Guarantors in relation to this guarantee which the Trustee may consider expedient in the interests of the Noteholders.
4.6 The Relevant Guarantors waive diligence, presentment, demand of payment, filing of claims with a court in the event of dissolution, liquidation, merger or bankruptcy of the Relevant Issuer, any right to require a proceeding first against the Relevant 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 Relevant 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 Relevant Guarantors or otherwise.
4.7 If any moneys shall become payable by the Relevant Guarantors under this guarantee the Relevant 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 Relevant Guarantors by the Relevant Issuer, claim payment thereof or exercise any other right or remedy. |
(including in either case claiming the benefit of any security or right of set-off or, on the liquidation of the Relevant Issuer, proving in competition with the Trustee).
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If, notwithstanding the foregoing, upon the bankruptcy, insolvency or liquidation of the Relevant Issuer, any payment or distribution of assets of the Relevant Issuer of any kind or character, whether in cash, property or securities, shall be received by the Relevant 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 Relevant 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 Relevant 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 Relevant Guarantors shall not be entitled to the benefit of the same; and |
| (b) | hold in a suspense account any moneys received from the Relevant Guarantors or an account of the Relevant Guarantors’ liability under this guarantee, without liability to pay interest on those moneys. |
| 5. | THE NOTES |
| 5.1 | Global Notes |
| (a) | The Bearer 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 Definitive Notes 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 Definitive Notes. |
| (c) | 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 in accordance with the provisions of the Dealer Agreement or to another appropriate depositary in accordance with any other agreement between the Relevant Issuer and the relevant Dealer(s) and, in each case, the Agency Agreement. |
| 5.2 | Global Registered Note Certificates |
| (a) | The Registered Notes of each Tranche will initially be evidenced by a Global Registered Note Certificate. |
| (b) | Interests in the Global Registered Note Certificate shall be exchangeable, in accordance with their terms, for Individual Note Certificates. |
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| 5.3 | Definitive Notes |
Definitive Notes will be security printed in accordance with applicable legal and stock exchange requirements substantially in the form set out in Part C of Schedule 2 in the case of Notes issued by the Parent or Part H of Schedule 2 in the case of Notes issued by IHG Finance LLC. Any Coupons and Talons will also be security printed in accordance with the same requirements and will be attached to the Definitive Notes at the time of issue. Definitive Notes will be endorsed with the Conditions and shall have endorsed thereon or attached thereto a copy of the relevant Final Terms (or the relevant provisions thereof).
| 5.4 | Individual Note Certificates |
Individual Note Certificates will be security printed in accordance with applicable legal and stock exchange requirements substantially in the form set out in Part B of Schedule 3, in the case of Notes issued by the Parent, or Part D of Schedule 3, in the case of Notes issued by IHG Finance LLC. Individual Note Certificates will be endorsed with the Conditions.
| 5.5 | Signature |
The Global Notes, the Definitive Notes and the Note Certificates will be signed electronically or manually by a duly authorised person designated by the Relevant Issuer and will be authenticated electronically or manually by or on behalf of the Principal Paying Agent (in the case of Global Notes and Definitive Notes) or the Registrar (in the case of Note Certificates) and if applicable, will be effectuated electronically or manually by or on behalf of the Common Safekeeper. The Relevant Issuer may use the electronic 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, Definitive Note or Note Certificate they are no longer so authorised. Global Notes, Definitive Notes or Note Certificates so executed, duly authenticated and, if applicable, duly effectuated will be binding and valid obligations of the Relevant Issuer.
| 5.6 | Entitlement to treat holder as owner |
The Relevant Issuer, the Relevant Guarantors, the Trustee and any Agent may deem and treat the holder of any Note or 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 Relevant Issuer or any Relevant 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 save as otherwise herein provided in relation to any Global Note or Global Registered Note Certificate and, except as ordered by a court of competent jurisdiction or as required by applicable law, the Relevant Issuer, the Guarantors, the Trustee and any 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.
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| 5.7 | Further Notes |
The Relevant 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 Relevant Issuer shall procure that all Notes issued by it which are (a) redeemed or (b) purchased by or on behalf of the Relevant Issuer, a Relevant 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 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 Relevant 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 Definitive Notes; |
| (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 Definitive Notes and, in the case of Definitive Notes, 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 Definitive Notes 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 Definitive Notes bearing interest at a fixed rate which have been redeemed or surrendered and replaced and the serial numbers of the Definitive Notes to which such missing unmatured Coupons appertained; and |
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| (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 Relevant 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 Relevant Issuer shall procure (a) that the Principal Paying Agent or the Registrar, as the case may be, 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 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 or the Registrar, as the case may be, 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 Issuers 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 Issuers, 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 Relevant Issuer and each Relevant 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.
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| 8. | COVENANTS BY THE ISSUERS AND THE GUARANTORS |
So long as any of the Notes remains outstanding, the Issuers and the Guarantors will each:
| (a) | Books of account: at all times keep and (in the case of the Parent only) 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 Relevant Issuer or, as the case may be, the Relevant Guarantor to be prepared (if required by applicable law) 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 Relevant 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 Parent; |
| (b) | Event of Default: give notice in writing to the Trustee forthwith of the coming into existence of any security interest which would require any security to be given to the Notes pursuant to Condition 5 (Negative Pledge) or of the occurrence of any Event of Default, Potential Event of Default, Change of Control or Change of Control Put Event and without waiting for the Trustee to take any further action; |
| (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 the Parent’s 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 Relevant 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 Relevant 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 Relevant 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 Parent’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 |
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| contractual obligation should be issued) to the Parents’ members or holders of debentures or its creditors (or any class of them) 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 or collection 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 the Relevant Issuer and the Relevant Guarantors: send to the Trustee forthwith upon being so requested in writing by the Trustee a certificate of the Relevant 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 Relevant Issuer, the Relevant Guarantor or any Subsidiary; |
| (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 five business days in London prior to the date of publication (unless a shorter period is agreed between the Relevant Issuer and the Trustee), 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 unless so expressed, not to constitute approval of such notice for the purpose of Section 21 of the Financial Services and Markets Act 2000) provided that such approval shall not be required in respect of notices required to be published by applicable laws and regulations, and, upon publication of any notice to Noteholders, send to the Trustee a copy of such notice; |
| (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); |
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| (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 Relevant 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) or 9(c) (Redemption and Purchase – Redemption at the option of the relevant Issuer (Issuer Call Option)) and prior to the Relevant 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, procure that the Registrar maintains the Register and notify the Trustee immediately if it becomes aware of any material breach or failure by an Agent in relation to the Notes or Coupons and at all times maintain 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 Relevant Issuer or any Relevant Guarantor shall become subject generally to the taxing jurisdiction of any territory or any political sub-division thereof or any authority therein or thereof having power to tax other than or in addition to the Relevant Jurisdiction(s), 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 of (or, as the case may be, the addition to) the references therein to the Relevant Jurisdiction with 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 Relevant 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 certified by two Authorised Signatories of the |
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| Relevant Issuer 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 Relevant Issuer and the Relevant 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 each 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; |
| (r) | Notification of amendment to agreements: notify the Trustee of any amendment to the Dealer Agreement, and any amendment(s) to or waiver(s) of the terms of this Trust Deed and the Agency Agreement; |
| (s) | Auditor’s certificates: cause to be prepared and certified by the Auditors in respect of each financial accounting period accounts in such form as will comply with all relevant legal and accounting requirements and all requirements for the time being of the relevant stock exchange; |
| (t) | Further documents: at all times execute and do all such further documents, acts and things as may be necessary at any time or times in the reasonable opinion of the Trustee to give effect to this Trust Deed; |
| (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 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 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 or Registrar, as the case may be, no such termination shall take effect until a new Calculation Agent, Principal Paying Agent or Registrar (as the case may be) has been appointed on terms previously approved in writing by the Trustee; |
| (v) | Subsidiaries: in respect of the Parent only, procure its Subsidiaries to comply with all applicable provisions of Condition 9 (Redemption and Purchase); |
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| (w) | Documents available for inspection: use reasonable endeavours to procure that each 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 Issuers and the Guarantors (if available); |
| (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 Parent addressed to the Trustee (with a form and content satisfactory to the Trustee) listing those Subsidiaries of the Parent 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 Parent 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 any Subsidiary of the Parent which thereby becomes a Material Subsidiary, a certificate by two Authorised Signatories of the Parent 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 Relevant Issuer, the Relevant Guarantors or any other Subsidiary of the Parent; |
| (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 (as the case may be) issue(s) any record, certificate or other document requested by the Trustee as soon as practicable after such request; |
| (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; |
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| (ff) | FATCA Information: to the extent it is legally permissible to do so to take commercially reasonable efforts to provide upon request by the Trustee to the Trustee, and consents to the collection and processing by the Trustee of, any authorisations, waivers, forms, documentation and other information relating to its status and required to be collected or reported by the Trustee under FATCA (FATCA Information). The Trustee shall treat such forms, documentation or other information relating to or provided by an Issuer as confidential, but the Issuers consent, solely to the extent required for or in connection with the Trustee’s compliance with FATCA, to the disclosure, transfer and reporting of such FATCA Information to any relevant government or taxing authority, any member of the Trustee’s Group, any sub-contractors, agents, service providers or associates of the Trustee’s Group, and a member of the Trustee’s Group, including transfers to jurisdictions which do not have strict data protection or similar laws. The Issuers agree to inform the Trustee promptly in writing if there are any changes to the FATCA Information supplied to the Trustee from time to time; |
| (gg) | FATCA Withholding: use commercially reasonable efforts to provide to the Trustee, upon reasonable request by the Trustee, with information necessary and required for the Trustee to determine whether it is required by applicable law to make any FATCA Withholding from a payment it makes under this Agreement; |
| (hh) | Information Reporting & Sharing: within ten business days of a written request by the Trustee, supply to the Trustee such forms, documentation and other information relating to the Issuers or the Guarantors, as applicable, their operations, or any Notes as the Trustee reasonably requests for the purposes of the Trustee’s compliance with applicable law and shall notify the Trustee reasonably promptly in the event that either the Issuers or the Guarantors become aware that any of the forms, documentation or other information provided is (or becomes) inaccurate in any material respect; provided, however, that the Issuers and/or the Guarantors, as applicable, shall not be required to provide any forms, documentation or other information pursuant to this clause to the extent that: (i) any such form, documentation or other information (or the information required to be provided on such form or documentation) is not reasonably available and cannot be obtained by using reasonable efforts; or (ii) doing so would or might in the reasonable opinion of the Issuers or the Guarantors, as applicable, constitute a breach of any: (a) applicable law; (b) fiduciary duty; or (c) duty of confidentiality; |
| (ii) | Benchmark Amendment certificate and Benchmark Replacement Conforming Changes certificate: no later than notifying the Trustee, pursuant to Condition 7(i)(a)(iv) (Benchmark Amendments) or Condition 7(i)(b)(ii) (Benchmark Replacement Conforming Changes), as applicable, the Relevant Issuer shall deliver to the Trustee a certificate (on which the Trustee shall be entitled to rely on without further enquiry or liability) signed by two Authorised Signatories of the Relevant Issuer: |
| (i) | confirming (x) that a Benchmark Event or a Benchmark Transition Event (as applicable) has occurred, (y) the Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread or, as the case may be, the Benchmark Replacement and (z) the specific terms of the Benchmark Amendments or Benchmark Replacement Conforming Changes (if any), as applicable, in each case as determined in accordance with the provisions of Condition 7(i) (Benchmark Discontinuation); |
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| (ii) | certifying that the Benchmark Amendments or the Benchmark Replacement Conforming Changes, as applicable, are necessary to ensure the proper operation of (as applicable) (A) such Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread or (B) such Benchmark Replacement; and |
| (iii) | certifying that (i) the Relevant Issuer has duly consulted with an Independent Adviser with respect to each of the matters above or, if that is not the case, (ii) explaining, in reasonable detail, why the relevant Issuer has not done so. |
| 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 any 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 Relevant Issuer shall cause such authorisation, waiver or determination to be notified to the Noteholders as soon as practicable thereafter in accordance with the Conditions; provided that the Trustee shall not exercise any powers conferred upon it by this Clause in contravention of any express direction by an Extraordinary Resolution or of a request in writing made by the holders of not less than 20 per cent. in aggregate principal amount of the Notes then outstanding (but so that no such direction or request shall affect any authorisation, waiver or determination previously given or made) or so as to authorise or waive any such breach or proposed breach relating to any of the matters the subject of the Reserved Matters as specified and defined in Schedule 4 (Provisions for Meetings of Noteholders).
| 9.2 | Modifications |
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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 Issuers 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 4 (Provisions for Meetings of Noteholders) or any provision of this Trust Deed referred to in that specification), the Conditions, the Agency Agreement 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, the Conditions, the Agency Agreement 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. Any such modification shall be binding on the Noteholders and the Couponholders and, unless the Trustee otherwise agrees, the Relevant Issuer shall cause such modification to be notified to the Noteholders as soon as practicable thereafter in accordance with Condition 18 (Notices).
In addition, the Trustee shall agree to vary or amend the Conditions, this Trust Deed and/or the Agency Agreement to give effect to certain amendments without the requirement for the consent or approval of Noteholders of the relevant Notes of Coupons on the basis set out in Condition 7(i) (Benchmark Discontinuation) provided however it shall not be obliged to concur with the Relevant Issuer in respect of any Benchmark Amendments (as defined in the Conditions) which, in its reasonable opinion, would have the effect of (i) exposing it to any liabilities against which it has not been indemnified and/or prefunded and/or secured to its satisfaction or (ii) imposing more onerous obligations upon it or expose it to any additional duties, responsibilities or liabilities or reduce or amend the protective provisions in this Trust Deed, the Conditions and/or the Agency Agreement. For the avoidance of doubt, none of the Trustee, the Paying Agents or the Calculation Agent will be responsible for determining whether or not a Benchmark Event has occurred.
| 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 Relevant Issuer (or of any previous substitute under this Clause) of a Relevant Guarantor or its successor in business or any Subsidiary of the Parent (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 a 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 Relevant Issuer or, as the case may be, as the guarantor in place of the relevant Guarantor (or of any previous substitute under this Clause); |
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| (ii) | the Relevant Issuer, the Relevant 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 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 Relevant Issuer as provided in (1) above, by the Relevant Issuer and each of the Relevant Guarantors or, if one of the Relevant Guarantors or its successor in business has become the Substituted Obligor, by the Relevant Issuer and the remaining Relevant Guarantors 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 Relevant Issuer and/or, as the case may be, the Relevant Guarantors or the relevant Guarantor (or such previous substitute as aforesaid) and (ii) the Relevant Issuer and/or, as the case may be, the Relevant 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 Relevant 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 relevant Issuer’s Territory of references to the Substituted Territory and in such event the Trust Deed and Notes and Coupons will be interpreted accordingly; |
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| (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: |
| (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 Relevant Issuer or any Relevant 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 Relevant 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 Relevant 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; |
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| (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 Relevant 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 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 Relevant 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 Agency Agreement, 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, the Agency Agreement, in the Notes and Coupons to the Relevant 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 Issuers or the Guarantors with any such terms and conditions as are referred to in Clauses 8 (Covenants by the Issuers and the Guarantors) and 9 (Amendments and Substitution) shall constitute a default by the Issuers 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 |
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The Trustee may at any time, at its discretion and without further notice, institute such proceedings against the Relevant Issuer or any Relevant Guarantor 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 Coupons and no Noteholder or Couponholder shall be entitled to proceed directly against the Relevant Issuer and/or any Relevant Guarantor unless the Trustee, having become bound so to proceed, fails, or is unable, to do so within 60 days and such failure or inability is continuing.
| 11.2 | Evidence of default |
Proof that:
| (a) | as regards any specified Note the Relevant 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 Relevant 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 or any specified Registered Note the Relevant Issuer has made default in paying any interest due in respect of such Coupon or Registered Note shall (unless the contrary be proved) be sufficient evidence that the Relevant Issuer has made the like default as regards all other Coupons or Registered Notes in respect of which a corresponding payment is then due; and |
| (c) | as regards any Talon, the Relevant 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 Relevant Issuer has made the like default as regards all other Talons which are then available for exchange, |
and for the purposes of sub-clauses 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 Relevant Issuer or, as the case may be, any Relevant Guarantor (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 Relevant Issuer or, as the case may be, any Relevant Guarantor 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 (Deposits)):
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| (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 due and unpaid in respect of the Notes of the relevant Series and all principal moneys due on or in respect of the Notes of that Series provided that 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 Relevant Issuer (without prejudice to, or liability in respect of, any question as to how such payments shall be dealt with as between the Relevant Issuer and the Relevant 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 | Deposits |
| (a) | No provision of these presents shall (a) confer on the Trustee any right to exercise any investment discretion in relation to the assets subject to the trust constituted by these presents and, to the extent permitted by law, Section 3 of the Trustee Act 2000 shall not apply to the duties of the Trustee in relation to the trusts constituted by these presents and (b) require the Trustee to do anything which may cause the Trustee to be considered a sponsor of a covered fund under Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any regulations promulgated thereunder. |
| (b) | The Trustee may deposit moneys in respect of the Notes in its name in an account at such bank or other financial institution and in such currency as the Trustee may, in its absolute discretion, think fit in light of the cash needs of the transaction and not for purposes of generating income. If that bank or financial institution is the Trustee or a subsidiary, holding or associated company of the Trustee, the Trustee need only account for an amount of interest equal to the amount of interest which would, at then current rates, be payable by it on such a deposit to an independent customer. The Trustee is not responsible for any loss occasioned by placing money on deposit and has no duty to obtain the best return. |
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| (c) | The Trustee may at its discretion accumulate such moneys until the accumulations, together with any other funds for the time being under the control of the Trustee and available for such purpose, amount to at least ten per cent. of the principal amount of the relevant Notes then outstanding and then such accumulations and funds (after deduction of, or provision for, any applicable taxes) shall be applied under Clause 12.1 (Application of moneys). For the avoidance of doubt, the Trustee shall in no circumstances, have any discretion to invest any moneys referred to in this Clause 12.2(b) in any investments or other assets. |
| (d) | The parties acknowledge and agree that in the event that any deposits in respect of the Notes are held by a bank or a financial institution in the name of the Trustee and the interest rate in respect of certain currencies is a negative value such that the application thereof would result in amounts being debited from funds held by such bank or financial institution, the Trustee shall not be liable to make up any shortfall or be liable for any loss. The Trustee may at its discretion accumulate such deposits and the resulting interest and other income derived thereon. The accumulated deposits shall be applied under Clause 12.1 (Application of moneys). |
| 12.3 | 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 Relevant Issuer, any Relevant 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 Relevant Issuer, the Relevant Guarantor or the Trustee (as the case may be).
| 12.4 | Production of Notes, Coupons and Notes Certificates |
Upon any payment under Clause 12.3 (Payment to Noteholders and Couponholders) of principal or interest, the Note, Coupon or Note Certificate 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:
| (a) | in respect of a Bearer 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 Bearer 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; and |
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| (b) | in respect of a Registered Note, (a) in the case of part payment, require the Registrar to make a notation in the Register of the amount and date of payment (and in the case of a Registered Note held under the New Safekeeping Structure, 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 the relevant Note Certificate to be surrendered or shall cancel or procure the same to be cancelled and shall certify or procure the certification of such cancellation. |
| 12.5 | Holders of Bearer Notes 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 holder of Bearer Notes is the holder of all Coupons and Talons appertaining to each Bearer Note of which they are the holder.
| 12.6 | 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.
Nothing in this Trust Deed shall require the Trustee to assume an obligation of an Issuer arising under any provision of the listing, prospectus, disclosure or transparency rules (or equivalent rules of any other competent authority besides the Financial Conduct Authority).
| 12.7 | Investment |
Moneys held by the Trustee may at its election be placed on deposit into an account bearing a market rate interest (and for the avoidance of doubt, the Trustee shall not be required to obtain best rates, be responsible for any loss occasioned by such deposit or exercise any other form of investment discretion with respect to such deposits) in the name or under the control of the Trustee at such bank or other financial institution and in such currency as the Trustee may think fit in light of the cash needs of the transaction and not for purposes of generating income. If such moneys are placed on deposit with a bank or financial institution which is a subsidiary, holding company, affiliate or associated company of the Trustee, it need only account for an amount of interest equal to the standard amount of interest payable by it on a deposit to an independent customer.
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| 13. | TERMS OF APPOINTMENT |
By way of supplement to the Trustee Acts, it is expressly declared as follows:
| 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 (whether addressed to the Trustee or not) obtained from any lawyer, banker, valuer, surveyor, broker, auctioneer, accountant or other expert (whether obtained by the Trustee, the Relevant Issuer, any Relevant 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 or email 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 Relevant Issuer or any Relevant 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 Relevant 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 Directors in respect of a Subsidiary: a certificate of any two Authorised Signatories of the Parent addressed to the Trustee that in their opinion a Subsidiary of the Parent is or is not or was or was not at any particular time throughout a specified period a Material Subsidiary may be relied upon by the Trustee without further enquiry or evidence and, if relied upon by the Trustee, shall, in the absence of manifest error, be conclusive and binding on all parties; |
| (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 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 |
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| 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 EasyWay system or Clearstream’s Xact Web Portal) 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 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 such Noteholder 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 Issuers, 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 Relevant Issuer or a Relevant Guarantor: in the absence of actual knowledge or express notice to the contrary, the Trustee may assume without enquiry (other than requesting a certificate of the Relevant Issuer or any Relevant Guarantor under sub-clause 8(f) (Notes held by the Relevant Issuer and the Relevant Guarantors), that no Notes are for the time being held by or for the benefit of the Relevant Issuer, any Relevant Guarantor or any relevant Subsidiary; |
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| (j) | Forged Notes: the Trustee shall not be liable to any Issuer, any Guarantor or any Noteholder or Couponholder by reason of having accepted as valid or not having rejected any Bearer Note or Coupon as such and subsequently found to be forged or not authentic; |
| (k) | Entry on the Register: the Trustee shall not be liable to the Issuers, the Guarantors or any Noteholder by reason of having accepted as valid or not having rejected any entry on the Register later found to be forged or not authentic and can assume for all purposes in relation hereto that any entry on the Register is correct; |
| (l) | 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 each of the Relevant Issuer and each Relevant 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; |
| (m) | 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; |
| (n) | 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; |
| (o) | 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; |
| (p) | 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; |
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| (q) | 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 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; |
| (r) | FATCA Withholding: the Trustee shall be entitled to deduct FATCA Withholding and shall have no obligation to gross-up any payment hereunder or to pay any additional amount as a result of such FATCA Withholding; and |
| (s) | 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 an Issuer or a 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 such Issuer, such Guarantor, 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; |
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| (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, 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 Relevant Issuer, the Relevant Guarantors, the Noteholders and the Couponholders; |
| (f) | Application of proceeds: the Trustee shall not be responsible for the receipt or application by the Relevant Issuer of the proceeds of the issue of the Notes, the exchange of any Temporary Global Note for any Permanent Global Note or Definitive Notes, the exchange of any Permanent Global Note for Definitive Notes, the exchange of any Global Registered Note Certificate for Individual Note Certificates or the delivery of any Note, Coupon or Note Certificate 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; |
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| (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 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 Relevant Issuer, the Relevant 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 Relevant Issuer or any Relevant 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. |
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| 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 such person or such person’s firm on matters arising in connection with the trusts of this Trust Deed and also such person’s properly incurred charges in addition to disbursements for all other work and business done and all time spent by such person or such person’s 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; |
| (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 Issuers 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 any Issuer, any Guarantor or any Subsidiary, or any person or body corporate directly or indirectly associated with any Issuer, any Guarantor, or any Subsidiary, or from accepting the trusteeship of any other debenture stock, debentures or securities of any Issuer or any Subsidiary, any Guarantor or any person or body corporate directly or indirectly associated with any Issuer or any Subsidiary, and neither the Trustee nor any such director or officer shall be accountable to the Noteholders, the Couponholders, any Issuer, any Guarantor or any Subsidiary, or any person or body corporate directly or indirectly associated with any 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 their 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) | Subject to Section 750 of the Companies Act 2006, if applicable, 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 its own gross negligence, wilful misconduct or fraud. |
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| (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 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 Issuers (or Relevant Issuer, as the case may be) 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 Issuers 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, Note Certificate 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 Relevant Issuer or any Relevant Guarantor to undertake duties which the Trustee and the Relevant Issuer or such Relevant 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 Relevant Issuer shall pay to the Trustee such additional remuneration as shall be agreed between them. |
| (c) | Value added tax: The Issuers (or Relevant Issuer, as the case may be) 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 Issuers (or Relevant Issuer, as the case may be) failing to agree: |
| (i) | (in a case to which sub-clause 14.1(a) (Normal remuneration) applies) upon the amount of the remuneration; or |
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| (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 an investment bank or other appropriate person (acting as an expert and not as an arbitrator) selected by the Trustee and approved by the Issuers (or Relevant Issuer, as the case may be) or, failing such approval, nominated (on the application of the Trustee) by the President for the time being of The Law Society of England and Wales (the expenses involved in such nomination and the fees of such investment bank or other appropriate person being payable by the Issuers (or Relevant Issuer, as the case may be)) and the determination of any such investment bank or other appropriate person shall be final and binding upon the Trustee and the Relevant Issuer.
| (e) | Expenses: The Issuers (or Relevant Issuer, as the case may be) 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 Relevant Issuer shall indemnify the Trustee and every Appointee and keep it or them indemnified against all Liabilities to which it or he may be or become subject or which may be properly incurred by it or them 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 Issuers 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 Issuers (or Relevant Issuer, as the case may be) 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 The Bank of England 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; |
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| (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. |
| (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 Issuers (or Relevant Issuer, as the case may be) 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 on behalf of any Relevant Jurisdiction, unless such withholding or deduction is required by law. In that event, the Issuers (or Relevant Issuer, as the case may be) 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 Issuers (or Relevant Issuer, as the case may be) 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 Issuers (or Relevant Issuer, as the case may be) in any other jurisdiction and if for the purpose of any such proceedings this Trust Deed or any Note or any Note Certificate is taken into any such jurisdiction and any stamp duties or other duties or taxes become payable thereon in any such jurisdiction, the Issuers (or Relevant Issuer, as the case may be) 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 Issuers and the Guarantors under or in connection with this Trust Deed, the Notes and the Coupons including damages; |
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| (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 Relevant Issuer or any Relevant Guarantor or otherwise) by the Trustee or any Noteholder or Couponholder in respect of any sum expressed to be due to it from the Relevant Issuer or any Relevant Guarantor will only discharge the Relevant Issuer or such Relevant 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); |
| (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 Relevant Issuer and the Relevant Guarantor will indemnify the Trustee or any Noteholder or Couponholder against any Liability sustained by it as a result. In any event, the Relevant Issuer and the Relevant Guarantor will indemnify the recipient against the cost of making any such purchase; and |
| (d) | Deficiency: 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 Relevant Issuer or, as the case may be, the Relevant 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 Issuers or any Guarantor or their liquidator or liquidators.
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| 15. | APPOINTMENT AND RETIREMENT |
| 15.1 | Appointment of Trustees |
The power of appointing new trustees of this Trust Deed shall be vested in the Issuers 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 Issuers 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.
| 15.2 | Co-trustees |
Notwithstanding the provisions of Clause 15.1 (Appointment of Trustees), the Trustee may, upon giving prior notice to the Issuers and the Guarantors but without the consent of the Issuers 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; |
| (b) | 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 |
| (c) | 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 |
Each of the Issuers and the Guarantors 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.
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| 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 Issuers 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 Issuers hereby covenant that in the event of the only trustee hereof which is a trust corporation giving notice under this Clause they shall use their reasonable endeavours to procure a new trustee, being a trust corporation, to be appointed and if the Issuers have 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.
| 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 or email) and shall be sent as follows:
| (a) | Issuers: if to the Parent, to it at: |
| Address: | InterContinental Hotels Group PLC | |
| 1 Windsor Dials | ||
| Arthur Road | ||
| Windsor |
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| Berkshire |
||
| England |
||
| SL4 1RS |
||
| Email address: | ihgtreasuryfo@ihg.com and ihgtreasurybo@ihg.com | |
| Attention: | The General Counsel and Company Secretary | |
| (b) | Issuers: if to IHG Finance LLC, to them c/o the Parent |
| (c) | Guarantors: if to the Guarantors, to them c/o the Parent |
| (d) | Trustee: if to the Trustee, to it at: |
| Address: | U.S. Bank Trustees Limited | |
| 125 Old Broad Street Fifth Floor London EC2N 1AR |
||
| Email address: | CDRM@usbank.com | |
| Attention: | Relationship Management | |
| Phone: | +44 207 330 2369 | |
| 16.2 | Effectiveness |
Every notice or other communication sent in accordance with Clause 16.1 (Addresses for Notices) shall be effective as follows:
| (a) | Letter: if sent by letter, it shall be deemed to have been delivered 7 days after the time of despatch; and |
| (b) | Email: if sent by email, it shall be deemed to have been delivered when received, |
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 |
None of the Trustee, the Issuers or the Guarantors 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).
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| 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 |
Subject to Clause 17.4 below, 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 and each party submits to the exclusive jurisdiction of the English courts.
| 17.3 | Appropriate forum |
The Issuers and the Guarantors each 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.
| 17.4 | Rights of the Trustee to take proceedings outside England |
Clause 17.4 is for the benefit of the Trustee, the Noteholders and the Couponholders only. To the extent allowed by law, the Trustee, the Noteholders and the Couponholders may in respect of any Dispute or Disputes, take (i) proceedings in any other court with jurisdiction; and (ii) concurrent proceedings in any number of jurisdictions.
| 17.5 | Process Agent |
IHG Finance LLC irrevocably and unconditionally appoints the Parent at its registered office for the time being, which is 1 Windsor Dials, Arthur Road, Windsor, Berkshire, England, SL4 1RS at the date of this Trust Deed, as its agent for service of process in any proceedings before the English courts in relation to any Dispute and the Parent accepts such appointment. IHG Finance LLC undertakes that in the event of the Parent ceasing so to act it will immediately appoint such other person with a registered office in England as its agent for service of process in respect of any Dispute in England. IHG Finance LLC agrees that failure by a process agent to notify it of any process will not invalidate service. Nothing in this paragraph shall affect the right of any other party to serve process in any other manner permitted by law.
| 17.6 | Waiver of Trial by Jury |
WITHOUT PREJUDICE TO SUBCLAUSE 17.2, EACH OF THE ISSUERS AND THE GUARANTORS WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A BENCH TRIAL.
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| 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.
| 20. | COUNTERPARTS |
This Trust Deed may be executed in any number of counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF this Trust Deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the date first before written.
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SCHEDULE 1
TERMS AND CONDITIONS OF THE NOTES
The following is the text of the terms and conditions which, as completed by the relevant Final Terms, will be endorsed on each Note in definitive form issued under the Programme. The terms and conditions applicable to any Note in global form will differ from those terms and conditions which would apply to the Note were it in definitive form to the extent described under “Summary of Provisions Relating to the Notes while in Global Form” below.
| 1. | Introduction |
| (a) | Programme |
InterContinental Hotels Group PLC (the “Parent”) and IHG Finance LLC (together with the Parent in its capacity as issuer, the “Issuers” and each an “Issuer”) have established a Euro Medium Term Note Programme (the “Programme”) for the issuance of up to £4,000,000,000 in aggregate principal amount of notes (the “Notes”) unconditionally and irrevocably guaranteed by (i) Six Continents Limited (“Six Continents”); (ii) InterContinental Hotels Limited (“InterContinental”); (iii) in respect of Notes issued by IHG Finance LLC, the Parent; and (iv) in respect of Notes issued by the Parent, IHG Finance LLC (in its capacity as guarantor in respect of Notes issued by the Parent and together with Six Continents, InterContinental and the Parent in its capacity as guarantor of Notes issued by IHG Finance LLC, each a “Guarantor” and together, the “Guarantors”).
References herein to the relevant Issuer shall be references to whichever of the Parent and IHG Finance LLC is specified as the Issuer in the relevant Final Terms (as defined below).
| (b) | Final Terms |
Notes issued under the Programme are issued in series (each a “Series”) and each Series may comprise one or more tranches (each a “Tranche”) of Notes. Each Tranche is the subject of final terms (the “Final Terms”) which completes these terms and conditions (the “Conditions”). The terms and conditions applicable to any particular Tranche of Notes are these Conditions as completed by the relevant Final Terms. In the event of any inconsistency between these Conditions and the relevant Final Terms, the relevant Final Terms shall prevail.
| (c) | Trust Deed |
The Notes are constituted by, have the benefit of and are in all respects subject to an amended and restated trust deed dated 19 September 2024 (as amended, restated and/or supplemented from time to time, the “Trust Deed”) between the Issuers, the Guarantors and U.S. Bank Trustees Limited (the “Trustee”, which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as trustee for the Noteholders (as defined below).
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| (d) | Agency Agreement |
The Notes are the subject of an amended and restated agency agreement dated 19 September 2024 (as amended, restated and/or supplemented from time to time, the “Agency Agreement”) between the Issuers, the Guarantors, Elavon Financial Services DAC (a Designated Activity Company registered in Ireland with the Companies Registration Office, registered number 418442, with its registered office at Block F1, Cherrywood Business Park, Cherrywood, Dublin 18, Ireland D18 W2X7, acting through its UK Branch from its establishment at 125 Old Broad Street, Fifth Floor, London EC2N 1AR (registered with the Registrar of Companies for England and Wales under Registration No. BR020005) under the trade name U.S. Bank Global Corporate Trust. Authorised and regulated by the Central Bank of Ireland. Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority) as principal paying agent (the “Principal Paying Agent”, which expression shall include any successor to Elavon Financial Services DAC, acting through its UK Branch in its capacity as such, and includes any successor principal paying agent appointed from time to time in connection with the Notes) and Elavon Financial Services DAC as registrar (the “Registrar”, which expression includes any successor registrar appointed from time to time in connection with the Notes), the paying agent named therein (together with the Principal Paying Agent, the “Paying Agents”, which expression includes any successor or additional paying agents appointed from time to time in connection with the Notes), the transfer agent named therein (together with the Registrar, the “Transfer Agents”, which expression includes any successor or additional transfer agents appointed from time to time in connection with the Notes) and the Trustee. In these Conditions references to the “Agents” are to the Paying Agents and the Transfer Agents and any reference to an Agent is to any one of them.
| (e) | Guarantees |
Each of the Guarantors has in the Trust Deed given an unconditional and irrevocable guarantee (in the case of the Parent, in respect of Notes issued by IHG Finance LLC and, in the case of IHG Finance LLC in respect of Notes issued by the Parent) (each a “Guarantee” and together, the “Guarantees”) on a joint and several basis for the due payment of all sums expressed to be payable by the relevant Issuer under the Trust Deed, the Notes and the Coupons so that, (i) in respect of Notes issued by the Parent, Six Continents, InterContinental and IHG Finance LLC are the relevant Guarantors providing the Guarantee; and (ii) in respect of issuances by IHG Finance LLC, the Parent, Six Continents and InterContinental are the relevant Guarantors providing the Guarantee. References herein to the relevant Guarantors and the Guarantees shall be construed accordingly.
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| (f) | The Notes |
The Notes may be issued in bearer form (“Bearer Notes”), or in registered form (“Registered Notes”), as specified in the relevant Final Terms. All subsequent references in these Conditions to “Notes” are to the Notes which are the subject of the relevant Final Terms. Copies of the relevant Final Terms are available for viewing during normal business hours and copies may be obtained from the Specified Office(s) of the Paying Agent(s), the initial Specified Office of the Principal Paying Agent being set out at the end of these Conditions. If the Notes are to be admitted to trading on the main market of the London Stock Exchange, the relevant Final Terms will be published on the website of the London Stock Exchange through a regulatory information service.
| (g) | Summaries |
Certain provisions of these Conditions are summaries of the Trust Deed and the Agency Agreement and are subject to their detailed provisions. The Noteholders (as defined below) and the holders of the related interest coupons, if any, (the “Coupon holders” and the “Coupons”, respectively) are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement applicable to them. Copies of the Trust Deed and the Agency Agreement are available to Noteholders upon request to the Trustee or the Principal Paying Agent therefor and provision of proof of holding and identity (in form satisfactory to the Trustee or the Principal Paying Agent, as the case may be).
| 2. | Interpretation |
| (a) | Definitions |
In these Conditions the following expressions have the following meanings:
“Accrual Yield” has the meaning given in the relevant Final Terms;
“Additional Business Centre(s)” means the city or cities specified as such in the relevant Final Terms;
“Additional Financial Centre(s)” means the city or cities specified as such in the relevant Final Terms;
“Additional Rating Agency” means Fitch;
“Authorised Signatory” has the meaning given to it in the Trust Deed;
“Broken Amount” has the meaning given in the relevant Final Terms;
“Business Day” means:
| (a) | in relation to any sum payable in euro, a TARGET Settlement Day and a day on which commercial banks and foreign exchange markets settle payments generally in each (if any) Additional Business Centre; and |
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| (b) | in relation to any sum payable in a currency other than euro, a day on which commercial banks and foreign exchange markets settle payments generally in London, in the Principal Financial Centre of the relevant currency and in each (if any) Additional Business Centre; |
“Business Day Convention”, in relation to any particular date, has the meaning given in the relevant Final Terms and, if so specified in the relevant Final Terms, may have different meanings in relation to different dates and, in this context, the following expressions shall have the following meanings:
| (a) | “Following Business Day Convention” means that the relevant date shall be postponed to the first following day that is a Business Day; |
| (b) | “Modified Following Business Day Convention” or “Modified Business Day Convention” means that the relevant date shall be postponed to the first following day that is a Business Day unless that day falls in the next calendar month in which case that date will be the first preceding day that is a Business Day, save in respect of Notes for which the Reference Rate is SOFR, for which the final Interest Payment Date will not be postponed and interest on that payment will not accrue during the period from and after the scheduled final Interest Payment Date; |
| (c) | “Preceding Business Day Convention” means that the relevant date shall be brought forward to the first preceding day that is a Business Day; |
| (d) | “FRN Convention”, “Floating Rate Convention” or “Eurodollar Convention” means that each relevant date shall be the date which numerically corresponds to the preceding such date in the calendar month which is the number of months specified in the relevant Final Terms as the Specified Period after the calendar month in which the preceding such date occurred, provided, however, that: |
| (i) | if there is no such numerically corresponding day in the calendar month in which any such date should occur, then such date will be the last day which is a Business Day in that calendar month; |
| (ii) | if any such date would otherwise fall on a day which is not a Business Day, then such date will be the first following day which is a Business Day unless that day falls in the next calendar month, in which case it will be the first preceding day which is a Business Day; and |
| (iii) | if the preceding such date occurred on the last day in a calendar month which was a Business Day, then all subsequent such dates will be the last day which is a Business Day in the calendar month which is the specified number of months after the calendar month in which the preceding such date occurred; and |
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| (e) | “No Adjustment” means that the relevant date shall not be adjusted in accordance with any Business Day Convention; |
“Calculation Agent” means the Principal Paying Agent or such other Person specified in the relevant Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) and/or such other amount(s) as may be specified in the relevant Final Terms;
“Calculation Amount” has the meaning given in the relevant Final Terms;
a “Change of Control” will be deemed to have occurred if:
| (a) | any person or any persons acting in concert (as defined in the City Code on Takeovers and Mergers), other than a holding company (as defined in Section 1159 of the Companies Act 2006) whose shareholders are or are to be substantially similar to the pre-existing shareholders of the Parent, shall become interested (within the meaning of Part 22 of the Companies Act 2006) in (A) more than 50 per cent. of the issued or allotted ordinary share capital of the Parent or (B) shares in the capital of the Parent carrying more than 50 per cent. of the voting rights normally exercisable at a general meeting of the Parent; or |
| (b) | any person or any persons acting in concert (as defined in the City Code on Takeovers and Mergers), other than a holding company (as defined in Section 1159 of the Companies Act 2006) whose shareholders are or are to be substantially similar to the pre-existing shareholders of any direct or indirect holding company of the Parent, shall become interested (within the meaning of Part 22 of the Companies Act 2006) in (A) more than 50 per cent. of the issued or allotted ordinary share capital of any direct or indirect holding company of the Parent or (B) shares in the capital of any direct or indirect holding company of the Parent carrying more than 50 per cent. of the voting rights normally exercisable at a general meeting of any such direct or indirect holding company of the Parent; |
“Change of Control Optional Redemption Amount” means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
“Change of Control Optional Redemption Date” has the meaning given in the relevant Final Terms;
“Change of Control Period” means the period commencing on the Relevant Announcement Date and ending 90 days after the Change of Control (or such longer period for which the Notes are under consideration (such consideration having been announced publicly within the period ending 90 days after the Change of Control) for rating review or, as the case may be, rating by a Rating Agency, such period not to exceed 60 days after the public announcement of such consideration); a “Change of Control Put Event” will be deemed to occur if a Change of Control has occurred and:
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| (a) | on the Relevant Announcement Date, the Notes carry from any Rating Agency: |
| (i) | an investment grade credit rating (Baa3/BBB-, or equivalent, or better), and such rating from any Rating Agency is, within the Change of Control Period, either downgraded to a Non-Investment Grade Rating or withdrawn and is not, within the Change of Control Period, subsequently (in the case of a downgrade) upgraded or (in the case of a withdrawal) reinstated to an investment grade credit rating by such Rating Agency; or |
| (ii) | a Non-Investment Grade Rating and such rating from any Rating Agency is, within the Change of Control Period, either downgraded by one or more notches (by way of example, Ba1 to Ba2 being one notch) or withdrawn and is not, within the Change of Control Period, subsequently (in the case of a downgrade) upgraded or (in the case of a withdrawal) reinstated to its earlier credit rating or better by such Rating Agency; or |
| (iii) | no credit rating and a Negative Rating Event also occurs within the Change of Control Period, provided that if, at the time of the occurrence of the Change of Control, the Notes carry a credit rating from more than one Rating Agency, at least one of which is investment grade, then subparagraph (i) will apply; and |
| (b) | in making any decision to downgrade or withdraw a credit rating pursuant to paragraphs (i) and (ii) above or not to award a credit rating of at least investment grade as described in paragraph (ii) of the definition of “Negative Rating Event”, the relevant Rating Agency announces publicly or confirms in writing to the Parent or the Trustee that such decision(s) resulted, in whole or in part, from the occurrence of the Change of Control or the Relevant Potential Change of Control Announcement; |
“Change of Control Put Event Notice” means the notice to be given pursuant to Condition 9(g) (Change of Control redemption) by the Parent or, as the case may be, the Trustee to the Noteholders in accordance with Condition 18 (Notices) specifying the nature of the Change of Control Put Event and the procedure for exercising the Change of Control Put Option;
“Change of Control Put Option” means the option of the Noteholders exercisable pursuant to Condition 9(g) (Change of Control redemption);
“Change of Control Put Period” means the period of 45 days after a Change of Control Put Event Notice is given; “Consolidated Gross Assets” means the consolidated current assets plus consolidated non-current assets of the Group, as set out in the most recent audited consolidated financial statements of the Group;
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“Consolidated Revenue” means total revenue less system fund revenue and reimbursement of costs, as set out in the most recent audited consolidated financial statements of the Group;
“Coupon Sheet” means, in respect of a Note, a coupon sheet relating to the Note;
“Day Count Fraction” means, in respect of the calculation of an amount for any period of time (whether or not constituting an Interest Period or an Interest Accrual Period) (the “Calculation Period”) such day count fraction as may be specified in these Conditions or the relevant Final Terms and:
| (a) | if “Actual/Actual (ICMA)” is so specified, means: |
| (i) | where the Calculation Period is equal to or shorter than the Regular Period during which the Calculation Period ends, the actual number of days in such Calculation Period divided by the product of (A) the number of days in such Regular Period and (B) the number of Regular Periods in any calendar year; or |
| (ii) | where the Calculation Period is longer than one Regular Period, the sum of: |
| I. | the actual number of days in such Calculation Period falling in the Regular Period in which the Calculation Period begins divided by the product of (I) the actual number of days in such Regular Period and (II) the number of Regular Periods in any calendar year; and |
| II. | the actual number of days in such Calculation Period falling in the next Regular Period divided by the product of (I) the actual number of days in such Regular Period and (II) the number of Regular Periods in any calendar year; |
| (b) | if “Actual/Actual (ISDA)” or “Actual/Actual” is so specified, means the actual number of days in the Calculation Period divided by 365 (or, if any portion of the Calculation Period falls in a leap year, the sum of (I) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (II) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365); |
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| (c) | if “Actual/365 (Fixed)” is so specified, means the actual number of days in the Calculation Period divided by 365; |
| (d) | if “Actual/365 (Sterling)” is so specified, means the actual number of days in the Calculation Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366; |
| (e) | if “Actual/360” is so specified, means the actual number of days in the Calculation Period divided by 360; |
| (f) | if “30/360, 360/360” or “Bond Basis” is so specified, means the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: |
| Day Count Fraction = | [360×(Y2 -Y1)] + [30 ×(M2 - M1)] + (D2-D1) | |||||
| 360 |
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless such number is 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
| (g) | if “30E/360” or “Eurobond Basis” is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: |
| Day Count Fraction = | [360×(Y2 -Y1)] + [30 ×(M2 - M1)] + (D2-D1) | |||||
| 360 |
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where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D2 will be 30; and
| (h) | if “30E/360 (ISDA)” is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: |
| Day Count Fraction = | [360×(Y2 -Y1)] + [30 ×(M2 - M1)] + (D2-D1) | |||||
| 360 |
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and “D2” is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30,
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provided, however, that in each such case the number of days in the Calculation Period is calculated from and including the first day of the Calculation Period to but excluding the last day of the Calculation Period;
“Early Redemption Amount (Tax)” means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
“Early Termination Amount” means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
“EURIBOR” means, in respect of any specified currency and any specified period, the interest rate benchmark known as the Euro zone interbank offered rate which is calculated and published by a designated distributor (currently Thomson Reuters) in accordance with the requirements from time to time of the European Money Markets Institute (or any other person which takes over the administration of that rate) based on estimated interbank borrowing rates for a number of designated currencies and maturities which are provided, in respect of each such currency, by a panel of contributor banks (details of historic EURIBOR rates can be obtained from the designated distributor);
“Extraordinary Resolution” has the meaning given in the Trust Deed;
“Final Redemption Amount” means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
“First Interest Payment Date” means the date specified in the relevant Final Terms;
“Fitch” means Fitch Ratings Ltd. or any successor;
“Fixed Coupon Amount” has the meaning given in the relevant Final Terms;
“Floating Rate Note” means a Note bearing interest on a floating rate basis;
“Group” means the Parent and its Subsidiaries for the time being;
“Gross Redemption Yield” on the Notes and on the Reference Stock will be expressed as a percentage and will be calculated by the Calculation Agent on the basis as published by the Treasury Publisher on an annual compounding basis rounded up (if necessary) to three decimal places, 0.0005 being rounded up, or on such other basis as the Trustee may in its sole discretion approve;
“Guarantee” and “Guarantees” have the meaning stated in Condition 1(e); “Guarantor” and “Guarantors” have the meaning stated in Condition 1(a);
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“Holder”, in the case of Bearer Notes, has the meaning given in Condition 3(b) (Form, Denomination, Title and Transfer – Title to Bearer Notes) and, in the case of Registered Notes, has the meaning given in Condition 3(d) (Form, Denomination, Title and Transfer – Title to Registered Notes);
“Indebtedness” means any indebtedness (whether being principal, premium, interest or other amounts) for or in respect of any notes, bonds, debentures, debenture stock, loan stock or other securities or any borrowed money or any liability under or in respect of any acceptance or acceptance credit;
“Interest Amount” means, in relation to a Note and an Interest Period, the amount of interest payable in respect of that Note for that Interest Period;
“Interest Commencement Date” means the Issue Date of the Notes or such other date as may be specified as the Interest Commencement Date in the relevant Final Terms;
“Interest Determination Date” has the meaning given in the relevant Final Terms;
“Interest Payment Date” means the First Interest Payment Date and any other date or dates specified as such in, or determined in accordance with the provisions of, the relevant Final Terms and, if a Business Day Convention is specified in the relevant Final Terms:
| (a) | as the same may be adjusted in accordance with the relevant Business Day Convention; or |
| (b) | if the Business Day Convention is the FRN Convention, Floating Rate Convention or Eurodollar Convention and an interval of a number of calendar months or other period is specified in the relevant Final Terms as being the Specified Period, each of such dates as may occur in accordance with the FRN Convention, Floating Rate Convention or Eurodollar Convention at such Specified Period of calendar months following the Interest Commencement Date (in the case of the first Interest Payment Date) or the previous Interest Payment Date (in any other case); |
“Interest Period” means each period beginning on (and including) the Interest Commencement Date or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date (or, if the Notes are redeemed on any earlier date, the relevant redemption date);
“Issue Date” has the meaning given in the relevant Final Terms;
“Investment Grade” means, in the case of a credit rating assigned by Moody’s, Baa3 or higher and, in the case of a credit rating assigned by S&P, BBB- or higher or the equivalent credit rating assigned by Substitute Rating Agency, if applicable; “Make Whole Amount” means, in respect of any Note, the higher of:
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| (a) | its principal amount; or |
| (b) | an amount equal to the product of the Calculation Amount and the price, expressed as a percentage (rounded to three decimal places, 0.0005 being rounded up), at which the Gross Redemption Yield on the Note, if it were to be purchased at such price on the third dealing day prior to the date of publication of the notice of redemption, would be equal to the sum of the Make Whole Premium (expressed as a percentage) and the Gross Redemption Yield on such dealing day of the Reference Treasury or, if such stock is no longer in issue, of such other government stock issued by the central government of such sovereign country that issued the Reference Treasury as the Calculation Agent, with the advice of three leading brokers operating in the Reference Treasury market and/or the Reference Treasury market makers or such other three persons operating in the Reference Treasury market as the Calculation Agent may approve, shall determine to be appropriate (the “Reference Stock”) on the basis of the middle market price of the Reference Stock prevailing at 11.00 a.m. on such dealing day as determined by the Calculation Agent; |
“Make Whole Premium” has the meaning given in the relevant Final Terms;
“Margin” has the meaning given in the relevant Final Terms;
“Material Subsidiary” means, at any time, any Subsidiary of the Parent:
| (a) | whose gross assets represent ten per cent. or more of Consolidated Gross Assets or whose revenue represents five per cent. or more of Consolidated Revenue, in each case, as calculated by reference to the latest financial statements of such Subsidiary and the latest audited consolidated financial statements of the Group adjusted in such manner as the Parent may determine (which determination shall be conclusive in the absence of manifest error) (i) to reflect the gross assets and Revenue of any person which has become or ceased to be a member of the Group since the end of the financial year to which the latest audited consolidated financial statements of the Group relate and (ii) so that for the purposes of this definition, the gross assets of the relevant Subsidiary shall be calculated on the same basis as Consolidated Gross Assets are calculated and/or, as the case may be, revenue of the relevant Subsidiary shall be calculated on the same basis as Consolidated Revenue is calculated (but, in each case, relating only to the relevant Subsidiary) and making such adjustments and eliminations as are required to show the same as the contribution of the relevant Subsidiary to Consolidated Gross Assets and/or, as the case may be, Consolidated Revenue, including all fee revenue arising from contracts held by that subsidiary before taking account of any fees passed through to other Group companies under intercompany agreements; or |
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| (b) | to which is transferred all or substantially all of the business, undertaking or assets of a Subsidiary which immediately prior to such transfer is a Material Subsidiary, whereupon the transferor Subsidiary shall cease to be a Material Subsidiary and the transferee Subsidiary shall become a Material Subsidiary under this sub-paragraph (b) upon the completion of such transfer. |
A certificate of any two Authorised Signatories of the Parent addressed to the Trustee that in their opinion a Subsidiary of the Parent is or is not or was or was not at any particular time throughout a specified period a Material Subsidiary may be relied upon by the Trustee without further enquiry or evidence and, if relied upon by the Trustee, shall, in the absence of manifest error, be conclusive and binding on all parties;
“Maturity Date” has the meaning given in the relevant Final Terms;
“Maximum Redemption Amount” has the meaning given in the relevant Final Terms;
“Minimum Redemption Amount” has the meaning given in the relevant Final Terms;
“Moody’s” means Moody’s Investors Service Limited or any successor;
a “Negative Rating Event” shall be deemed to have occurred if at such time as there is no rating assigned to the Notes by a Rating Agency (i) the Parent does not, either prior to, or not later than 21 days after, the occurrence of the Change of Control seek, and thereafter throughout the Change of Control Period use all reasonable endeavours to obtain, a rating of the Notes, or any other unsecured and unsubordinated debt of the Parent or (ii) if the Parent does so seek and use such endeavours, it is unable to obtain such a rating of at least investment grade by the end of the Change of Control Period;
“Non-Investment Grade Rating” means a non-investment grade credit rating (Ba1/BB+, or equivalent, or worse);
“Noteholder”, in the case of Bearer Notes, has the meaning given in Condition 3(b) (Form, Denomination, Title and Transfer – Title to Bearer Notes) and, in the case of Registered Notes, has the meaning given in Condition 3(d) (Form, Denomination, Title and Transfer – Title to Registered Notes);
“Official List” means the official list of the United Kingdom Financial Conduct Authority;
“Optional Redemption Amount (Call)” means, in respect of any Note, its principal amount or, if specified in the relevant Final Terms, the Make Whole Amount; “Optional Redemption Amount (Put)” means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
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“Optional Redemption Date (Call)” has the meaning given in the relevant Final Terms;
“Optional Redemption Date (Put)” has the meaning given in the relevant Final Terms;
“Participating Member State” means a Member State of the European Communities which adopts the euro as its lawful currency in accordance with the Treaty;
“Paying Agents” means the Principal Paying Agent and any substitute or additional paying agents appointed in accordance with the Agency Agreement and a “Paying Agent” means any of them;
“Payment Business Day” means:
| (a) | if the currency of payment is euro, any day which is: |
| (i) | a day on which banks in the relevant place of presentation are open for presentation and payment of bearer debt securities and for dealings in foreign currencies; and |
| (ii) | in the case of payment by transfer to an account, a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre(s); or |
| (b) | if the currency of payment is not euro, any day which is: |
| (i) | a day on which banks in the relevant place of presentation are open for presentation and payment of bearer debt securities and for dealings in foreign currencies; and |
| (ii) | in the case of payment by transfer to an account, a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre(s); |
“Person” means any individual, company, corporation, firm, partnership, joint venture, association, organisation, state or agency of a state or other entity, whether or not having separate legal personality;
“Principal Financial Centre” means, in relation to any currency, the principal financial centre for that currency, PROVIDED, HOWEVER, THAT:
| (a) | in relation to euro, it means the principal financial centre of such Participating Member State of the European Communities as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; and |
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| (b) | in relation to Australian dollars, it means either Sydney or Melbourne and, in relation to New Zealand dollars, it means either Wellington or Auckland; in each case as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; |
“Put Option Notice” means a notice which must be delivered to a Paying Agent by any Noteholder wanting to exercise a right to redeem a Note at the option of the Noteholder pursuant to Condition 9(f) (Redemption at the option of Noteholders);
“Put Option Receipt” means a receipt issued by a Paying Agent to a depositing Noteholder upon deposit of a Note with such Paying Agent by any Noteholder wanting to exercise a right to redeem a Note at the option of the Noteholder;
“Rate of Interest” means the rate or rates (expressed as a percentage per annum) of interest payable in respect of the Notes specified in the relevant Final Terms or calculated or determined in accordance with the provisions of these Conditions and/or the relevant Final Terms;
“Rating Agency” means Moody’s and S&P or any of their respective successors or any Substitute Rating Agency and, for the purposes of Condition 9(g) (Change of Control redemption), includes the Additional Rating Agency;
“Redemption Amount” means, as appropriate, the Final Redemption Amount, the Early Redemption Amount (Tax), the Optional Redemption Amount (Call), the Residual Call Early Redemption Amount, the Optional Redemption Amount (Put), the Change of Control Optional Redemption Amount, the Early Termination Amount or such other amount in the nature of a redemption amount as may be specified in the relevant Final Terms;
“Reference Price” has the meaning given in the relevant Final Terms;
“Reference Rate” has the meaning given in the relevant Final Terms;
“Reference Treasury” has the meaning given in the relevant Final Terms;
“Regular Period” means:
| (a) | in the case of Notes where interest is scheduled to be paid only by means of regular payments, each period from and including the Interest Commencement Date to but excluding the first Interest Payment Date and each successive period from and including one Interest Payment Date to but excluding the next Interest Payment Date; |
| (b) | in the case of Notes where, apart from the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where “Regular Date” means the day and month (but not the year) on which any Interest Payment Date falls; and |
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| (c) | in the case of Notes where, apart from one Interest Period other than the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where “Regular Date” means the day and month (but not the year) on which any Interest Payment Date falls other than the Interest Payment Date falling at the end of the irregular Interest Period; |
“Relevant Announcement Date” means the date that is the earlier of (a) the date of the first public announcement of the relevant Change of Control and (b) the date of the earliest Relevant Potential Change of Control Announcement (if any);
“Relevant Date” means, in relation to any payment, whichever is the later of (a) the date on which the payment in question first becomes due and (b) if the full amount payable has not been received in the Principal Financial Centre of the currency of payment by the Principal Paying Agent or the Trustee on or prior to such due date, the date on which (the full amount having been so received) notice to that effect has been given to the Noteholders;
“Relevant Indebtedness” means (a) any present or future indebtedness (whether being principal, premium, interest or other amounts) for or in respect of any notes, bonds, debentures, debenture stock, loan stock or other securities which have an initial stated maturity of not less than one year and which are or are of a type which is customarily quoted, listed or ordinarily dealt in on any stock exchange, over-the-counter or other securities market, and (b) any guarantee or indemnity in respect of any such indebtedness;
“Relevant Jurisdiction” means the United Kingdom and the United States;
“Relevant Period” means:
| (a) | each financial year of the Parent; and |
| (b) | each period beginning on the first day of the second half of a financial year of the Parent and ending on the last day of the first half of its next financial year; |
“Relevant Potential Change of Control Announcement” means any public announcement or statement by or on behalf of the Parent, any actual or potential bidder or any adviser acting on behalf of any actual or potential bidder relating to any potential Change of Control where within 180 days following the date of such announcement or statement, a Change of Control occurs; “Relevant Screen Page” means the page, section or other part of a particular information service (including, without limitation, Reuters) specified as the Relevant Screen Page in the relevant Final Terms, or such other page, section or other part as may replace it on that information service or such other information service, in each case, as may be nominated by the Person providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to the Reference Rate;
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“Reserved Matter” means any proposal:
| (a) | to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes or to alter the method of calculating the amount of any payment in respect of the Notes on redemption or maturity or the date for any such payment; |
| (b) | to effect the exchange, conversion or substitution of the Notes for, or the conversion of the Notes into, shares, bonds or other obligations or securities of the relevant Issuer or any other person or body corporate formed or to be formed (other than as permitted under Clause 7.3 of the Trust Deed); |
| (c) | to change the currency in which amounts due in respect of the Notes are payable; |
| (d) | to change the quorum required at any meeting of Noteholders or the majority required to pass an Extraordinary Resolution; or |
| (e) | to amend this definition; |
“Residual Call Early Redemption Amount” has the meaning given in the relevant Final Terms;
“S&P” means S&P Global Ratings UK Limited or any successor;
“Security” means a mortgage, pledge, lien, hypothecation, security interest or other charge or encumbrance entered into for the purpose of securing any obligation of any person;
“Security Interest” means any mortgage, charge, pledge, lien or other security interest including, without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction;
“Specified Currency” has the meaning given in the relevant Final Terms;
“Specified Denomination(s)” has the meaning given in the relevant Final Terms;
“Specified Office” has the meaning given in the Agency Agreement;
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“Specified Period” has the meaning given in the relevant Final Terms; “Step Down Rating Change” means the first public announcement after a Step Up Rating Change by both Rating Agencies of an increase in, or as the case may be the reinstatement of, the credit rating of the Parent’s senior unsecured long-term debt with the result that, following such public announcement(s), both Rating Agencies rate the Parent’s senior unsecured long-term debt as Investment Grade, provided that, for the purposes of this definition, where:
| (i) | both Rating Agencies do not make the public announcements on the same date, the Step Down Rating Change shall be deemed to occur on the date of the later public announcement; and |
| (ii) | a Rating Agency had not downgraded the Notes below Investment Grade, then written confirmation from such Rating Agency that the then current rating assigned to the Notes is Investment Grade shall be deemed to be a public announcement, made on the date of such confirmation, that the credit rating assigned to the Notes by such Rating Agency is Investment Grade. |
For the avoidance of doubt, any further increases in the credit rating of the Parent’s senior unsecured long-term debt by the Rating Agencies above Investment Grade shall not constitute a Step Down Rating Change;
“Step Up Rating Change” means the first public announcement by any Rating Agency of a decrease in the credit rating of the Parent’s senior unsecured long-term debt to below Investment Grade. For the avoidance of doubt, any further decrease in the credit rating of the Parent’s senior unsecured long-term debt by the relevant Rating Agency or both Rating Agencies, as the case may be, below Investment Grade shall not constitute a Step Up Rating Change;
“Step Up/Step Down Margin” has the meaning given in the relevant Final Terms;
“Subsidiary” means any company where the Parent:
| (a) | holds a majority of the voting rights in the company; or |
| (b) | is a member of the company and has the right to appoint or remove a majority of its board of directors; or |
| (c) | is a member of the company and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it, |
or if the company is a subsidiary of a company that is itself a subsidiary of the Parent;
“Substitute Rating Agency” means any rating agency of international standing substituted for the Rating Agency by the Parent from time to time with the prior written approval of the Trustee, such approval not to be unreasonably withheld or delayed, or any successor of such rating agency;
“T2” means the Trans-European Automated Real-Time Gross Settlement Express Transfer System or any successor or replacement for that system; “Talon” means a talon for further Coupons;
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“TARGET Settlement Day” means any day on which T2 is open for the settlement of payments in euro;
“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure by the relevant Issuer to pay or any delay in paying by the relevant Issuer any of the same);
“Treasury Publisher” has the meaning given in the relevant Final Terms;
“Treaty” means the Treaty on the functioning of the European Union, as amended;
“Wholly-Owned Subsidiary” means any Person in which the Parent, and/or one or more of its Wholly-Owned Subsidiaries, controls, directly or indirectly, all of the stock with ordinary voting power to elect the board of directors of that Person; and
“Zero Coupon Note” means a Note specified as such in the relevant Final Terms.
| (b) | Interpretation |
In these Conditions:
| (i) | if the Notes are Zero Coupon Notes or are Registered Notes, references to Coupons and Couponholders are not applicable; |
| (ii) | if Talons are specified in the relevant Final Terms as being attached to the Notes at the time of issue, references to Coupons shall be deemed to include references to Talons; |
| (iii) | if Talons are not specified in the relevant Final Terms as being attached to the Notes at the time of issue, references to Talons are not applicable; |
| (iv) | any reference to principal shall be deemed to include the Redemption Amount, any additional amounts in respect of principal which may be payable under Condition 11 (Taxation), any premium payable in respect of a Note and any other amount in the nature of principal payable pursuant to these Conditions; |
| (v) | any reference to interest shall be deemed to include any additional amounts in respect of interest which may be payable under Condition 11 (Taxation) and any other amount in the nature of interest payable pursuant to these Conditions; |
| (vi) | references to Notes being “outstanding” shall be construed in accordance with the Trust Deed; |
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| (vii) | if an expression is stated in Condition 2(a) (Definitions) to have the meaning given in the relevant Final Terms, but the relevant Final Terms gives no such meaning or specifies that such expression is “not applicable” then such expression is not applicable to the Notes; |
| (viii) | any reference to the Agency Agreement or the Trust Deed shall be construed as a reference to the Agency Agreement or the Trust Deed, as the case may be, as amended and/or supplemented up to and including the Issue Date of the Notes; and |
| (ix) | any reference in these Conditions to any legislation or provision of any legislation (whether primary legislation or regulations or other subsidiary legislation made pursuant to primary legislation) shall be construed as a reference to such legislation or provision as the same may have been, or may from time to time be, amended or re-enacted. |
| 3. | Form, Denomination, Title and Transfer |
| (a) | Bearer Notes: Bearer Notes are in bearer form in the Specified Denomination(s) with Coupons and, if specified in the relevant Final Terms, Talons attached at the time of issue. In the case of a Series of Bearer Notes with more than one Specified Denomination, Bearer Notes of one Specified Denomination will not be exchangeable for Bearer Notes of another Specified Denomination and Bearer Notes may not be exchanged for Registered Notes and vice versa. |
| (b) | Title to Bearer Notes: Title to the Bearer Notes and the Coupons will pass by delivery. In the case of Bearer Notes, “Holder” means the holder of such Bearer Note and “Noteholder” and “Couponholder” shall be construed accordingly). |
| (c) | Registered Notes: Registered Notes are in the Specified Denomination(s), which may include a minimum denomination specified in the relevant Final Terms and higher integral multiples of a smaller amount specified in the relevant Final Terms. |
| (d) | Title to Registered Notes: The Registrar will maintain the register in accordance with the provisions of the Agency Agreement. A certificate (each, a “Note Certificate”) will be issued to each Holder of Registered Notes in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. In the case of Registered Notes, “Holder” means the person in whose name such Registered Note is for the time being registered in the Register (or, in the case of a joint holding, the first named thereof) and “Noteholder” shall be construed accordingly. |
| (e) | Ownership: The Holder of any Note or Coupon shall (except as otherwise required by law) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any other interest therein, any writing thereon or, in the case of Registered Notes, on the Note Certificate relating thereto (other than the endorsed form of transfer) or any notice of any previous loss or theft thereof) and no Person shall be liable for so treating such Holder accordingly. No person shall have any right to enforce any term or condition of any Note under the Contracts (Rights of Third Parties) Act 1999. |
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| (f) | Transfers of Registered Notes: Subject to paragraphs 3(i) (Closed periods), 3(j) (Regulations concerning transfers and registration) and 3(j) (Registration of transfer upon partial redemption) below, a Registered Note may be transferred upon surrender of the relevant Note Certificate, with the endorsed form of transfer duly completed, at the Specified Office of the Registrar or any Transfer Agent, together with such evidence as the Registrar or (as the case may be) such Transfer Agent may reasonably require to prove the title of the transferor and the authority of the individuals who have executed the form of transfer; provided, however, that a Registered Note may not be transferred unless the principal amount of Registered Notes transferred and (where not all of the Registered Notes held by a Holder are being transferred) the principal amount of the balance of Registered Notes not transferred are Specified Denominations. Where not all the Registered Notes represented by the surrendered Note Certificate are the subject of the transfer, a new Note Certificate in respect of the balance of the Registered Notes will be issued to the transferor. |
| (g) | Registration and delivery of Note Certificates: Within five business days of the surrender of a Note Certificate in accordance with paragraph (f) (Transfers of Registered Notes) above (or such longer period as may be required to comply with any applicable fiscal or other laws or regulations), the Registrar will register the transfer in question and deliver a new Note Certificate of a like principal amount to the Registered Notes transferred to each relevant Holder at its Specified Office or (as the case may be) the Specified Office of any Transfer Agent or (at the request and risk of any such relevant Holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant Holder. In this paragraph, “business day” means a day on which commercial banks are open for general business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Transfer Agent has its Specified Office. |
| (h) | No charge: The transfer of a Registered Note will be effected without charge by or on behalf of the relevant Issuer or the Registrar or any Transfer Agent but against such indemnity as the Registrar or (as the case may be) such Transfer Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. |
| (i) | Closed periods: Noteholders may not require transfers to be registered during the period of 15 days ending on the due date for any payment of principal or interest in respect of the Registered Notes. |
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| (j) | Regulations concerning transfers and registration: All transfers of Registered Notes and entries on the Register are subject to the detailed regulations concerning the transfer of Registered Notes scheduled to the Agency Agreement. The regulations may be changed by the relevant Issuer with the prior written approval of the Registrar. A copy of the current regulations will be mailed (free of charge) by the Registrar to any Noteholder who requests in writing a copy of such regulations. |
| (k) | Registration of transfer upon partial redemption: In the event of a partial redemption of Registered Notes under Condition 9 (Redemption and Purchase), the relevant Issuer shall not be required to register the transfer of any Registered Note, or part of a Registered Note, called for partial redemption. |
| 4. | Status of the Notes and Guarantees |
The Notes and Coupons constitute direct, general, unsubordinated and unconditional obligations of the relevant Issuer which will at all times rank pari passu among themselves and at least pari passu with all other present and future unsecured obligations of the relevant Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.
The obligations of the relevant Guarantors under the relevant Guarantees constitute direct, general, unsubordinated and unconditional obligations of the relevant Guarantors which will at all times rank pari passu with all other present and future unsecured obligations of the relevant Guarantors, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.
| 5. | Negative Pledge |
So long as any of the Notes remains outstanding neither the relevant Issuer nor any relevant Guarantor nor any Material Subsidiary will create or have outstanding any Security Interest upon, or with respect to, any of the present or future business, undertaking, assets or revenues (including any uncalled capital) of such Issuer or any such Guarantor or any Material Subsidiary to secure any Relevant Indebtedness, unless the relevant Issuer or, as the case may be, such Guarantor or such Material Subsidiary, in the case of the creation of a Security Interest, before or at the same time and, in any other case, promptly, takes any and all action necessary to ensure that:
| (a) | all amounts payable by it under the Notes, the Coupons and the Trust Deed are secured by the Security Interest equally and rateably with the Relevant Indebtedness to the satisfaction of the Trustee; or |
| (b) | such other Security Interest or other arrangement (whether or not it includes the giving of a Security Interest) is provided either (i) as the Trustee in its absolute discretion deems not materially less beneficial to the interest of the Noteholders or (ii) as is approved by an Extraordinary Resolution (which is defined in the Trust Deed as a resolution duly passed by a majority of not less than three-quarters of the votes cast thereon at a meeting of the Noteholders or by a resolution in writing signed by or on behalf of the holders of not less than three quarters of the nominal amount of the Notes) of the Noteholders. |
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| 6. | Fixed Rate Note Provisions |
| (a) | Application |
This Condition 6 is applicable to the Notes only if the Fixed Rate Note provisions are specified in the relevant Final Terms as being applicable.
| (b) | Accrual of interest |
The Notes bear interest from (and including) the Interest Commencement Date at the Rate of Interest payable in arrear on each Interest Payment Date, subject as provided in Condition 10(1) (Payments – Bearer Notes) or Condition 10(2) (Payments – Registered Notes). Each Note will cease to bear interest from the due date for final redemption unless, upon due presentation, payment of the Redemption Amount is improperly withheld or refused, in which case it will continue to bear interest in accordance with this Condition 6 (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Principal Paying Agent or the Registrar, as the case may be, has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment).
| (c) | Fixed Coupon Amount |
Except as provided in the relevant Final Terms, the amount of interest payable in respect of each Note for any Interest Period shall be the relevant Fixed Coupon Amount and, if the Notes are in more than one Specified Denomination, shall be the relevant Fixed Coupon Amount in respect of the relevant Specified Denomination. Payments of interest on any Interest Payment Date will, if so specified in the relevant Final Terms, amount to the Broken Amount so specified.
| (d) | Calculation of interest amount |
The amount of interest payable in respect of each Note for any period for which a Fixed Coupon Amount or Broken Amount is not specified shall be calculated by applying the Rate of Interest to:
| (i) | in the case of Notes which are Registered Notes, the aggregate outstanding nominal amount of such Registered Notes; or |
| (ii) | in the case of Notes which are Bearer Notes, the Calculation Amount, |
and, in each case, multiplying the product by the relevant Day Count Fraction, rounding the resulting figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards or otherwise in accordance with applicable market convention). For this purpose a “sub-unit” means, in the case of any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, in the case of euro, means one cent.
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Where the Specified Denomination of a Note which is a Bearer Note is a multiple of the Calculation Amount, the amount of interest payable in respect of such Note shall be the product of the amount (determined in the manner provided above) for the Calculation Amount and the amount by which the Calculation Amount is multiplied to reach the Specified Denomination, without any further rounding.
| (e) | Step Up/Step Down provisions |
| (i) | If the Step Up/Step Down provisions are specified in the relevant Final Terms as being applicable, the Rate of Interest payable on the Notes will be subject to adjustment from time to time in the event of a Step Up Rating Change or a Step Down Rating Change, as the case may be, in accordance with the provisions of this Condition 6(e). |
| (ii) | From and including the first Interest Payment Date following the date of a Step Up Rating Change, if any, the Rate of Interest payable on the Notes shall, subject to any adjustment pursuant to a Step Down Rating Change, be increased by the Step Up/Step Down Margin. |
| (iii) | Furthermore, in the event of a Step Down Rating Change following a Step Up Rating Change, with effect from and including the first Interest Payment Date following the date of such Step Down Rating Change, the Rate of Interest payable on the Notes shall be decreased by the Step Up/Step Down Margin. |
| (iv) | The Parent shall use all reasonable efforts to maintain a credit rating for its senior unsecured long-term debt from both Rating Agencies (and if an additional rating agency is appointed to rate the Parent’s senior unsecured long-term debt, such additional rating agency). If, notwithstanding such reasonable efforts, any Rating Agency fails to or ceases to assign a credit rating to the Parent’s senior unsecured long-term debt, the Parent shall use all reasonable efforts to obtain a credit rating of its senior unsecured long-term debt from a Substitute Rating Agency, and references in this Condition 6(e) to the Rating Agencies, or the credit ratings thereof, shall be to such Substitute Rating Agency and, as the case may be, the equivalent credit ratings thereof. Notwithstanding anything else in this Condition 6(e), if there is at any time no current rating by a Rating Agency for a period of 90 consecutive days, the Rate of Interest accruing to the Notes, with effect from and including the first Interest Payment Date immediately following such period of 90 consecutive days shall be as though a Step Up Rating Change had occurred unless such a rating is obtained on or prior to such Interest Payment Date. For the avoidance of doubt, the provisions of this sub-paragraph (iv) remain subject in all cases to the provisions relating to the Step Down Rating Change set out in sub-paragraphs (ii) and (iii) above. |
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| (v) | The Parent will cause the occurrence of a Step Up Rating Change or a Step Down Rating Change to be notified to the Trustee and the Principal Paying Agent and notice thereof to be published in accordance with Condition 18 (Notices) as soon as possible after the occurrence of the Step Up Rating Change or the Step Down Rating Change (whichever the case may be) but in no event later than the fifth Business Day thereafter. |
| (vi) | The Step Up Rating Change may occur only once during the term of the Notes. |
| (vii) | The Trustee is under no obligation to ascertain whether a change in the rating assigned to the Notes by a Rating Agency or any Substitute Rating Agency has occurred or whether there has been a failure or a ceasing by a Rating Agency or any Substitute Rating Agency to assign a credit rating to the Parent’s senior unsecured long-term debt and until it shall have actual knowledge or express notice pursuant to the Trust Deed to the contrary, the Trustee may assume that no such change to the credit rating assigned to the Notes has occurred or no such failure or ceasing by a Rating Agency or any Substitute Rating Agency has occurred. |
| (viii) | If the rating designations employed by either Rating Agency are changed from those which are described in the definition of “Investment Grade” or if a rating is procured from a Substitute Rating Agency, the Parent shall determine, with the agreement of the Trustee (not to be unreasonably withheld or delayed), the rating designations of the relevant Rating Agency or such Substitute Rating Agency (as appropriate) as are most equivalent to the prior rating designations of the relevant Rating Agency or the Rating Agencies, as the case may be, and this Condition 6(e) shall be construed accordingly. |
| 7. | Floating Rate Note Provisions |
| (a) | Application |
This Condition 7 is applicable to the Notes only if the Floating Rate Note provisions are specified in the relevant Final Terms as being applicable.
| (b) | Accrual of Interest |
The Notes bear interest from (and including) the Interest Commencement Date at the Rate of Interest payable in arrear on each Interest Payment Date, subject as provided in Condition 10(1) (Payments – Bearer Notes) or Condition 10(2) (Payments – Registered Notes). Each Note will cease to bear interest from the due date for final redemption unless, upon due presentation, payment of the Redemption Amount is improperly withheld or refused, in which case it will continue to bear interest in accordance with this Condition 7 (as well after as before judgment) until whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is seven days after the Principal Paying Agent or the Registrar, as the case may be, has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment).
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| (c) | Rate of Interest |
The Rate of Interest payable from time to time in respect of the Notes will be determined in the manner specified in the relevant Final Terms.
(i) Screen Rate Determination – Term Rate
This Condition 7(c)(i) applies where the relevant Final Terms specifies “Term Rate” to be ‘Applicable’.
| (A) | The Rate of Interest for each Interest Period will, subject to Condition 7(i) and as provided below, be either: |
| I. | the offered quotation (if there is only one quotation on the Relevant Screen Page); or |
| II. | the arithmetic mean (rounded upwards if necessary to the nearest 0.0001 per cent.) of the offered quotations, |
(expressed as a percentage rate per annum) for the Reference Rate (being EURIBOR) which appears or appear, as the case may be, on the Relevant Screen Page (or such replacement page on that service which displays the information) at 11.00 a.m. (Brussels time (the “Specified Time”) on the Interest Determination Date in question plus or minus (as indicated in the relevant Final Terms) the Margin (if any), all as determined by the Calculation Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Calculation Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations.
| (B) | If the Relevant Screen Page is not available or if sub-paragraph (A)(I) above applies and no such offered quotation appears on the Relevant Screen Page or if sub-paragraph (A)(II) above applies and fewer than three such offered quotations appear on the Relevant Screen Page, in each case as at the time specified above, the relevant Issuer, or an agent appointed by it, shall, if applicable, request each of the Reference Banks to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate as at approximately the Specified Time on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Rate of Interest for such Interest Period shall be the arithmetic mean (rounded as provided above) of such |
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| offered quotations (excluding, if four or more of the Reference Banks provide the Calculation Agent with such quotations and the offered quotations of all such Reference Banks are not the same, the highest and lowest quotations and, if the highest quotation and/or the lowest quotation applies in respect of more than one such Reference Bank, excluding such highest and/or lowest quotation in respect of one such Reference Bank) plus or minus (as indicated in the relevant Final Terms) the Margin (if any), all as determined by the Calculation Agent. |
| (C) | If on any Interest Determination Date only one or none of the Reference Banks provides the Calculation Agent with such an offered quotation as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Calculation Agent determines as being either: |
| (i) | the arithmetic mean (rounded as provided above) of the rates, as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, which such banks were offered, at approximately the Specified Time on the relevant Interest Determination Date (or if such date is not a Business Day, on the immediately preceding Business Day), deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in the Euro-zone inter-bank market plus or minus (as indicated in the relevant Final Terms) the Margin (if any); or |
| (ii) | in the event that the Calculation Agent can determine no such arithmetic mean, the lowest lending rate for lending amounts in the Specified Currency for a period equal to that which would have been used for the Reference Rate at which at approximately the Specified Time on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the relevant Issuer suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in the Euro-zone inter-bank market, plus or minus (as indicated in the relevant Final Terms) the Margin (if any), |
provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions, the Rate of Interest shall be:
| I. | that determined as at the last preceding Interest Determination Date on which the Rate of Interest was so determined (though substituting, where a different Margin, Maximum Rate of Interest and/or Minimum Rate of Interest is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin, Maximum Rate of Interest and/or Minimum Rate of Interest (as the case may be) relating to |
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| the relevant Interest Period in place of the Margin, Maximum Rate of Interest and/or Minimum Rate of Interest (as applicable) relating to that last preceding Interest Period) or; |
| II. | if there is no such preceding Interest Determination Date, the initial Rate of Interest (but substituting, where a different Margin, Maximum Rate of Interest and/or Minimum Rate of Interest is/are to be applied to the relevant Interest Period from that which applied to the initial Interest Period, the Margin, Maximum Rate of Interest and/or Minimum Rate of Interest (as the case may be) relating to the relevant Interest Period in place of the Margin, Maximum Rate of Interest and/or Minimum Rate of Interest (as applicable) relating to that initial Interest Period) or, in the case of Notes with an Interest Basis that converts from a Fixed Rate to a Floating Rate, the Fixed Rate of Interest applicable to such Notes immediately prior to conversion of the Interest Basis. |
“Reference Banks” means, in the context of Condition 7(c)(i)(A)(II), those banks whose offered rates were used to determine the offered quotation referred to in such Condition when such offered quotation last appeared on the Relevant Screen Page and, in the context of Condition 7(c)(i)(A)(II), those banks whose offered quotations last appeared on the Relevant Screen Page when no fewer than three such offered quotations appeared.
| (ii) | Screen Rate Determination – Overnight Rate – Compounded Daily SONIA – Non-Index Determination |
This Condition 7(c)(ii) applies where the relevant Final Terms specifies: (1) “Overnight Rate” to be ‘Applicable’; (2) “Compounded Daily SONIA” as the Reference Rate; and (3) “Index Determination” to be ‘Not Applicable’.
| (A) | The Rate of Interest for an Interest Accrual Period will, subject to Condition 7(i) and as provided below, be Compounded Daily SONIA with respect to such Interest Accrual Period plus or minus (as indicated in the relevant Final Terms) the applicable Margin (if any), all as determined by the Calculation Agent. |
“Compounded Daily SONIA” means, with respect to an Interest Accrual Period, the rate of return of a daily compound interest investment (with the daily Sterling overnight reference rate as reference rate for the calculation of interest) as calculated by the Calculation Agent as at the relevant Interest Determination Date in accordance with the following formula (and the resulting percentage will be rounded if necessary to the nearest fifth decimal place, with 0.000005 being rounded upwards):
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|
where:
| d | is the number of calendar days in: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the relevant Interest Accrual Period; or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the relevant Observation Period; |
| D | is the number specified as such in the relevant Final Terms (or, if no such number is specified, 365); |
| do | means: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the number of London Banking Days in the relevant Interest Accrual Period; or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the number of London Banking Days in the relevant Observation Period; |
| i | is a series of whole numbers from one to “do”, each representing the relevant London Banking Day in chronological order from, and including, the first London Banking Day to, and including, the last London Banking Day, in: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the relevant Interest Accrual Period; or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the relevant Observation Period; |
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“London Banking Day means any day on which commercial banks are open for general business (including dealing in foreign exchange and foreign currency deposits) in London;
| ni | for any London Banking Day “i”, means the number of calendar days from (and including) such London Banking Day “i” up to (but excluding) the following London Banking Day; |
Observation Period means the period from (and including) the date falling “p” London Banking Days prior to the first day of the relevant Interest Accrual Period to (but excluding) the date falling “p” London Banking Days prior to (A) (in the case of an Interest Period) the Interest Payment Date for such Interest Period or (B) (in the case of any other Interest Accrual Period) the date on which the relevant payment of interest falls due;
| p | means: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the number of London Banking Days specified as the “Lag Period” in the relevant Final Terms (or, if no such number is so specified, five London Banking Days); or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the number of London Banking Days specified as the “Observation Shift Period” in the relevant Final Terms (or, if no such number is specified, five London Banking Days); |
the SONIA reference rate, in respect of any London Banking Day (LBDx), is a reference rate equal to the daily Sterling Overnight Index Average (SONIA) rate for such LBDx as provided by the administrator of SONIA to authorised distributors and as then published on the Relevant Screen Page (or, if the Relevant Screen Page is unavailable, as otherwise published by such authorised distributors) on the London Banking Day immediately following LBDx; and
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| SONIAi | means the SONIA reference rate for: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the London Banking Day falling “p” London Banking Days prior to the relevant London Banking Day “i”; or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the relevant London Banking Day “i”. |
| (B) | Subject to Condition 7(i), if, where any Rate of Interest is to be calculated pursuant to Condition 7(c)(ii)(A) above, in respect of any London Banking Day on which an applicable SONIA reference rate is required to be determined, such SONIA reference rate is not made available on the Relevant Screen Page or has not otherwise been published by the relevant authorised distributors, then the SONIA reference rate in respect of such London Banking Day shall be the rate determined by the Calculation Agent as: |
| I. | the sum of (i) the Bank of England’s Bank Rate (the “Bank Rate”) prevailing at 5.00 p.m. (London time) (or, if earlier, close of business) on such London Banking Day; and (ii) the mean of the spread of the SONIA reference rate to the Bank Rate over the previous five London Banking Days in respect of which a SONIA reference rate has been published, excluding the highest spread (or, if there is more than one highest spread, one only of those highest spreads) and lowest spread (or, if there is more than one lowest spread, one only of those lowest spreads); or |
| II. | if the Bank Rate under (I)(i) above is not available at the relevant time, either (A) the SONIA reference rate published on the Relevant Screen Page (or otherwise published by the relevant authorised distributors) for the first preceding London Banking Day in respect of which the SONIA reference rate was published on the Relevant Screen Page (or otherwise published by the relevant authorised distributors) or (B) if this is more recent, the latest rate determined under (I) above, |
and, in each case, references to “SONIA reference rate” in Condition 7(c)(ii)(A) above shall be construed accordingly.
| (C) | In the event that the Rate of Interest cannot be determined in accordance with the foregoing provisions of this Condition 7(c)(ii), and without prejudice to Condition 7(i), the Rate of Interest shall be: |
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| (i) | that determined as at the last preceding Interest Determination Date on which the Rate of Interest was so determined (though substituting, where a different Margin, Maximum Rate of Interest and/or Minimum Rate of Interest is to be applied to the relevant Interest Accrual Period from that which applied to the last preceding Interest Accrual Period, the Margin, Maximum Rate of Interest and/or Minimum Rate of Interest (as the case may be) relating to the relevant Interest Accrual Period, in place of the Margin, Maximum Rate of Interest and/or Minimum Rate of Interest (as applicable) relating to that last preceding Interest Accrual Period); or |
| (ii) | if there is no such preceding Interest Determination Date, the initial Rate of Interest which would have been applicable to such Series of Notes for the first scheduled Interest Period had the Notes been in issue for a period equal in duration to the first scheduled Interest Period but ending on (and excluding) the Interest Commencement Date (applying the Margin and, if applicable, any Maximum Rate of Interest and/or Minimum Rate of Interest, applicable to the first scheduled Interest Period), |
in each case as determined by the Calculation Agent.
| (iii) | Screen Rate Determination – Overnight Rate – Compounded Daily SONIA – Index Determination |
This Condition 7(c)(iii) applies where the relevant Final Terms specifies: (1) “Overnight Rate” to be ‘Applicable’; (2) “Compounded Daily SONIA” as the Reference Rate; and (3) “Index Determination” to be ‘Applicable’.
| (A) | The Rate of Interest for an Interest Accrual Period will, subject to Condition 7(i) and as provided below, be the Compounded Daily SONIA Rate with respect to such Interest Accrual Period plus or minus (as indicated in the relevant Final Terms) the applicable Margin (if any), all as determined by the Calculation Agent. |
“Compounded Daily SONIA Rate” means, with respect to an Interest Accrual Period, the rate of return of a daily compound interest investment (with the daily Sterling overnight reference rate as reference rate for the calculation of interest) (expressed as a percentage and rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) determined by the Calculation Agent by reference to the screen rate or index for compounded daily SONIA rates administered by the administrator of the SONIA reference rate that is published or displayed on the Relevant Screen Page specified in the relevant Final Terms or, if no such page is so specified or if such page is unavailable at the relevant time, as otherwise published or displayed by such administrator or other information service from time to time on the relevant Interest Determination Date (the “SONIA Compounded Index”), and in accordance with the following formula:
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|
where:
| d | is the number of calendar days from (and including) the day in relation to which SONIA Compounded IndexStart is determined to (but excluding) the day in relation to which SONIA Compounded IndexEnd is determined; |
London Banking Day means any day on which commercial banks are open for general business (including dealing in foreign exchange and foreign currency deposits) in London;
Relevant Number is the number specified as such in the relevant Final Terms (or, if no such number is specified, five);
SONIA Compounded IndexStart means, with respect to an Interest Accrual Period, the SONIA Compounded Index determined in relation to the day falling the Relevant Number of London Banking Days prior to the first day of such Interest Accrual Period; and
SONIA Compounded IndexEnd means, with respect to an Interest Accrual Period, the SONIA Compounded Index determined in relation to the day falling the Relevant Number of London Banking Days prior to (A) the Interest Payment Date for such Interest Accrual Period, or (B) such other date on which the relevant payment of interest falls due (but which by its definition or the operation of the relevant provisions is excluded from such Interest Accrual Period).
| (B) | If the relevant SONIA Compounded Index is not published or displayed by the administrator of the SONIA reference rate or other information service by 5.00 p.m. (London time) (or, if later, by the time falling one hour after the customary or scheduled time for publication thereof in accordance with the then-prevailing operational procedures of the administrator of the SONIA reference rate or of such other information service, as the case may be) on the relevant Interest Determination Date, the Compounded Daily SONIA Rate for the applicable Interest Accrual Period for which the SONIA Compounded Index is not available shall be “Compounded Daily SONIA” determined in accordance with Condition 7(c)(ii) above as if “Index Determination” were specified in the relevant Final Terms as being ‘Not Applicable’, and for these purposes: (i) the “Observation Method” shall be deemed to be “Observation Shift” and (ii) the “Observation Shift Period” shall be deemed to be equal to the Relevant Number of London Banking Days, |
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as if those alternative elections had been made in the relevant Final Terms.
| (iv) | Screen Rate Determination – Overnight Rate – SOFR – Non-Index Determination |
This Condition 7(c)(iv) applies where the relevant Final Terms specifies: (1) “Overnight Rate” to be ‘Applicable’; (2) “Compounded Daily SOFR” as the Reference Rate; and (3) “Index Determination” to be ‘Not Applicable’.
Where the relevant Final Terms specifies the Reference Rate to be “Compounded Daily SOFR”, the provisions of paragraph (A) below of this Condition 7(c)(iv) apply.
| (A) | Compounded Daily SOFR |
The Rate of Interest for an Interest Accrual Period will, subject to Condition 7(i) and as provided below, be Compounded Daily SOFR with respect to such Interest Accrual Period plus or minus (as indicated in the relevant Final Terms) the applicable Margin (if any), all as determined by the Calculation Agent.
“Compounded Daily SOFR” means, with respect to an Interest Accrual Period, the rate of return of a daily compound interest investment (with the daily U.S. dollars secured overnight financing rate as reference rate for the calculation of interest) as calculated by the Calculation Agent as at the relevant Interest Determination Date in accordance with the following formula (and the resulting percentage will be rounded if necessary to the nearest fifth decimal place, with 0.000005 being rounded upwards):
|
where:
| d | is the number of calendar days in: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the relevant Interest Accrual Period; or |
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| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the relevant Observation Period; |
| D | is the number specified as such in the relevant Final Terms (or, if no such number is specified, 360); |
| do | means: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the number of U.S. Government Securities Business Days in the relevant Interest Accrual Period; or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the number of U.S. Government Securities Business Days in the relevant Observation Period; |
| i | is a series of whole numbers from one to “do”, each representing the relevant U.S. Government Securities Business Day in chronological order from, and including, the first U.S. Government Securities Business Day in: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the relevant Interest Accrual Period; or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the relevant Observation Period; |
New York Fed’s Website means the website of the Federal Reserve Bank of New York (or a successor administrator of SOFR) or any successor source;
| ni | for any U.S. Government Securities Business Day “i”, means the number of calendar days from (and including) such U.S. Government Securities Business Day “i” up to (but excluding) the following U.S. Government Securities Business Day; |
Observation Period means the period from (and including) the date falling “p” U.S. Government Securities Business Days prior to the first day of the relevant Interest Accrual Period to (but excluding) the date falling “p” U.S. Government Securities Business Days prior to (A) (in the case of an Interest Period) the Interest Payment Date for such Interest Period or (B) (in the case of any other Interest Accrual Period) the date on which the relevant payment of interest falls due;
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| p | means: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the number of U.S. Government Securities Business Days specified as the “Lag Period” in the relevant Final Terms (or, if no such number is so specified, five U.S. Government Securities Business Days); or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the number of U.S. Government Securities Business Days specified as the “Observation Shift Period” in the relevant Final Terms (or, if no such number is specified, five U.S. Government Securities Business Days); |
Reference Day means each U.S. Government Securities Business Day in the relevant Interest Accrual Period;
SOFR in respect of any U.S. Government Securities Business Day (USBDx), is a reference rate equal to the daily secured overnight financing rate as provided by the Federal Reserve Bank of New York, as the administrator of such rate (or any successor administrator of such rate) on the New York Fed’s Website, in each case at or around 3.00 p.m. (New York City time) on the U.S. Government Securities Business Day immediately following such USBDx;
| SOFRi | means the SOFR for: |
| (i) | where “Lag” is specified as the Observation Method in the relevant Final Terms, the U.S. Government Securities Business Day falling “p” U.S. Government Securities Business Days prior to the relevant U.S. Government Securities Business Day “i”; or |
| (ii) | where “Observation Shift” is specified as the Observation Method in the relevant Final Terms, the relevant U.S. Government Securities Business Day “i”; and |
| U.S. | Government Securities Business Day means any day except for a Saturday, Sunday or a day on which the Securities Industry and |
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Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
| (B) | SOFR Unavailable |
Subject to Condition 7(i), if, where any Rate of Interest is to be calculated pursuant to this Condition 7(c)(iv), in respect of any U.S. Government Securities Business Day in respect of which an applicable SOFR is required to be determined, such SOFR is not available, such SOFR shall be the SOFR for the first preceding U.S. Government Securities Business Day in respect of which the SOFR was published on the New York Fed’s Website.
In the event that the Rate of Interest cannot be determined in accordance with the foregoing provisions of this Condition 7(c)(iv) but without prejudice to Condition 7(i), the Rate of Interest shall be calculated in accordance, mutatis mutandis, with the provisions of Condition 7(c)(ii).
| (v) | Screen Rate Determination – Overnight Rate – SOFR – Index Determination |
This Condition 7(c)(v) applies where the relevant Final Terms specifies: (1) “Overnight Rate” to be ‘Applicable’; (2) “Compounded Daily SOFR” as the Reference Rate; and (2) “Index Determination” to be ‘Applicable’.
| (A) | The Rate of Interest for an Interest Accrual Period will, subject to Condition 7(i) and as provided below, be the Compounded SOFR with respect to such Interest Accrual Period plus or minus (as indicated in the relevant Final Terms) the applicable Margin (if any), all as determined by the Calculation Agent. |
“Compounded SOFR” means, with respect to an Interest Accrual Period, the rate (expressed as a percentage and rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) determined by the Calculation Agent in accordance with the following formula:
|
where:
| dc | is the number of calendar days from (and including) the day in relation to which SOFR IndexStart is determined to (but excluding) the day in relation to which SOFR IndexEnd is determined; |
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Relevant Number is the number specified as such in the relevant Final Terms (or, if no such number is specified, five);
SOFR means the daily secured overnight financing rate as provided by the SOFR Administrator on the SOFR Administrator’s Website;
SOFR Administrator means the Federal Reserve Bank of New York (or a successor administrator of SOFR);
SOFR Administrator’s Website means the website of the SOFR Administrator, or any successor source;
SOFR Index, with respect to any U.S. Government Securities Business Day, means the SOFR index value as published by the SOFR Administrator as such index appears on the SOFR Administrator’s Website at or around 3.00 p.m. (New York time) on such U.S. Government Securities Business Day (the SOFR Determination Time);
SOFR IndexStart, with respect to an Interest Accrual Period, is the SOFR Index value for the day which is the Relevant Number of U.S. Government Securities Business Days preceding the first day of such Interest Accrual Period;
SOFR IndexEnd, with respect to an Interest Accrual Period, is the SOFR Index value for the day which is the Relevant Number of U.S. Government Securities Business Days preceding (A) the Interest Payment Date for such Interest Accrual Period, or (B) such other date on which the relevant payment of interest falls due (but which by its definition or the operation of the relevant provisions is excluded from such Interest Accrual Period); and
U.S. Government Securities Business Day means any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
| (B) | If, as at any relevant SOFR Determination Time, the relevant SOFR Index is not published or displayed on the SOFR Administrator’s Website by the SOFR Administrator, the Compounded SOFR for the applicable Interest Accrual Period for which the relevant SOFR Index is not available shall be “Compounded Daily SOFR” determined in accordance with Condition 7(c)(iv) above as if “Index Determination” were specified in the relevant Final Terms as being ‘Not Applicable’, |
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and for these purposes: (i) the “Observation Method” shall be deemed to be “Observation Shift” and (ii) the “Observation Shift Period” shall be deemed to be equal to the Relevant Number of U.S. Government Securities Business Days, as if such alternative elections had been made in the relevant Final Terms.
| (vi) | Interest Accrual Period |
As used herein, an “Interest Accrual Period” means (i) each Interest Period and (ii) any other period (if any) in respect of which interest is to be calculated, being the period from (and including) the first day of such period to (but excluding) the day on which the relevant payment of interest falls due (which, if the Notes become due and payable in accordance with Condition 12 (Events of Default), shall be the date on which the Notes become due and payable).
| (vii) | Determination of Rate of Interest following acceleration |
If the Notes become due and payable in accordance with Condition 12 (Events of Default), then:
| (A) | if the relevant Final Terms specifies “Overnight Rate” to be ‘Applicable’, the final Rate of Interest shall be calculated for the Interest Accrual Period to (but excluding) the date on which the Notes become so due and payable; and |
| (B) | in all other cases, the Rate of Interest applicable to the Notes from time to time shall continue to be calculated in accordance with Clause 2.1 of the Trust Deed, |
and (in either case) such Rate of Interest shall continue to apply to the Notes for so long as interest continues to accrue thereon as provided in Condition 7(j) and the Trust Deed.
| (d) | Minimum and/or Maximum Rate of Interest |
If the relevant Final Terms specifies a Minimum Rate of Interest for any Interest Period and if, but for this Condition 7(d), the Rate of Interest determined for such Interest Period (or any Interest Accrual Period falling within such Interest Period) would be less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period (or such Interest Accrual Period falling within such Interest Period) shall be equal to such Minimum Rate of Interest.
If the relevant Final Terms specifies a Maximum Rate of Interest for any Interest Period and if, but for this Condition 7(d), the Rate of Interest for such Interest Period (or any Interest Accrual Period falling within such Interest Period) would be greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period (or such Interest Accrual Period falling within such Interest Period) shall be equal to such Maximum Rate of Interest.
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| (e) | Determination of Rate of Interest and calculation of Interest Amount |
The Calculation Agent will, at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest Period (or other Interest Accrual Period).
The Calculation Agent will calculate the Interest Amount for the relevant Interest Period (or other Interest Accrual Period). Each Interest Amount shall be calculated by applying the Rate of Interest for such Interest Period (or other Interest Accrual Period) to:
| (A) | in the case of Registered Notes, the aggregate outstanding nominal amount of such Registered Notes; or |
| (B) | in the case of Bearer Notes, the Calculation Amount; |
and, in each case, multiplying such sum by the Day Count Fraction, rounding resultant figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards or otherwise in accordance with applicable market convention).
Where the Specified Denomination of a Note which is a Bearer Note is a multiple of the Calculation Amount, the amount of interest payable in respect of such Note shall be the product of the amount (determined in the manner provided above) for the Calculation Amount and the amount by which the Calculation Amount is multiplied to reach the Specified Denomination, without any further rounding.
| (f) | Linear Interpolation |
Where Linear Interpolation is specified as “Applicable” in respect of an Interest Period in the relevant Final Terms, the Rate of Interest for such Interest Period shall be calculated by the Calculation Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate, which shall be determined as if the Designated Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which rates are available next longer than the length of the relevant Interest Period; provided however that if there is no rate available for the period of time next shorter or, as the case may be, next longer, then the Calculation Agent shall determine such rate at such time and by reference to such sources as it determines appropriate for the purposes of the calculation of the Rate of Interest.
“Designated Maturity” means the period of time designated in the Reference Rate.
| (g) | Notification of Rate of Interest and Interest Amounts |
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| (A) | Except where the relevant Final Terms specifies “Overnight Rate” to be ‘Applicable’, the Calculation Agent will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Trustee and to any listing authority, stock exchange and/or quotation system to which the Notes have then been admitted to listing, trading and/or quotation (by no later than the first day of each Interest Period) and notice thereof to be published in accordance with Condition 18 (Notices) as soon as possible after their determination but in no event later than the fourth Business Day (as defined in Condition 7(b) above) thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. Any such amendment or alternative arrangements will promptly be notified to each listing authority, stock exchange and/or quotation system to which the Notes have then been admitted to listing, trading and/or quotation and to the Noteholders in accordance with Condition 18 (Notices). |
| (B) | Where the relevant Final Terms specifies “Overnight Rate” to be ‘Applicable’, the Calculation Agent will cause the Rate of Interest and each Interest Amount for each Interest Accrual Period and the relevant Interest Payment Date to be notified to the Trustee and to any listing authority, stock exchange and/or quotation system to which the Notes have then been admitted to listing, trading and/or quotation (by no later than the first day of each Interest Period) and notice thereof to be published in accordance with Condition 18 (Notices) as soon as possible after their determination but in no event later than the second Business Day thereafter. Each Rate of Interest, Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of the relevant Interest Accrual Period. Any such amendment or alternative arrangements will promptly be notified to each listing authority, stock exchange and/or quotation system to which the Notes have then been admitted to listing, trading and/or quotation and to the Noteholders in accordance with Condition 18 (Notices). |
| (h) | Certificates to be final |
All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 7, by the Calculation Agent, shall (in the absence of manifest error) be binding on the relevant Issuer, the relevant Guarantors, the Agent, the Calculation Agent, the Trustee, the other Paying Agents and all Noteholders and Couponholders and (in the absence of wilful default or bad faith) no liability to the relevant Issuer, the Noteholders or the Couponholders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.
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| (i) | Benchmark Discontinuation |
| (a) | Benchmark Replacement |
This Condition 7(i)(a) applies to Notes other than where the relevant Final Terms specifies “Compounded Daily SOFR” as the Reference Rate.
If the relevant Issuer, in consultation with the Calculation Agent, determines that a Benchmark Event has occurred in relation to an Original Reference Rate at any time when the Conditions provide for any Rate of Interest (or any component part thereof) to be determined by reference to such Original Reference Rate, then the following provisions shall apply.
| (i) | Independent Adviser |
The relevant Issuer shall use reasonable endeavours to appoint an Independent Adviser to determine a Successor Rate, failing which an Alternative Rate (in accordance with Condition 7(i)(a)(ii)) and, in either case, the applicable Adjustment Spread (in accordance with Condition 7(i)(a)(iii)) and any Benchmark Amendments (in accordance with Condition 7(i)(a)(iv)) no later than 5 Business Days prior to the Interest Determination Date relating to the next succeeding Interest Period (the “IA Determination Cut-off Date”) for purposes of determining the Rate of Interest (or a relevant component part thereof) applicable to the Notes for all future Interest Periods (subject to the subsequent operation of this Condition 7(i)(a)).
If, the Issuer is unable to appoint an Independent Adviser, or the Independent Adviser appointed by it fails to determine a Successor Rate or, failing which, an Alternative Rate or, in either case, an applicable Adjustment Spread, prior to the IA Determination Cut-off Date, the provisions of Condition 7(i)(f) below shall apply.
| (ii) | Successor Rate or Alternative Rate |
If the Independent Adviser determines in good faith that:
| (A) | there is a Successor Rate, then such Successor Rate shall (as adjusted by the applicable Adjustment Spread determined as provided in Condition 7(i)(a)(iii)) subsequently be used in place of the Original Reference Rate to determine the relevant Rate(s) of Interest (or the relevant component part(s) thereof) for all relevant future payments of interest on the Notes (subject to the further operation of this Condition 7(i)); or |
| (B) | there is no Successor Rate but that there is an Alternative Rate, then such Alternative Rate shall (as adjusted by the applicable Adjustment Spread determined as provided in Condition 7(i)(a)(iii)) subsequently be used in place of the Original Reference Rate to determine the relevant Rate(s) of Interest (or the relevant component part(s) thereof) for all relevant future payments of interest on the Notes (subject to the further operation of this Condition 7(i)). |
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| (iii) | Adjustment Spread |
If a Successor Rate or Alternative Rate is determined in accordance with the foregoing provisions, the Independent Adviser will determine in good faith the Adjustment Spread (which may be expressed as a specified quantum of, or a formula or methodology for determining, such Adjustment Spread) to be applied to the Successor Rate or the Alternative Rate (as the case may be) for each subsequent determination of a relevant Rate of Interest (or a relevant component part thereof) by reference to such Successor Rate or Alternative Rate (as applicable).
| (iv) | Benchmark Amendments |
If any Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread is determined in accordance with this Condition 7(i) and the Independent Adviser determines in good faith (A) that amendments to the Terms and Conditions of the Notes, the Trust Deed and/or the Agency Agreement (including, without limitation, amendments to the definitions of Day Count Fraction, Business Days or Relevant Screen Page) are necessary to ensure the proper operation (having regard to prevailing market practice, if any) of such Successor Rate, Alternative Rate and (in either case) the applicable Adjustment Spread (such amendments, the “Benchmark Amendments”) and (B) the terms of the Benchmark Amendments, then the relevant Issuer shall, subject to giving notice thereof in accordance with Condition 7(i)(a)(c), without any requirement for the consent or approval of Noteholders or Couponholders, vary the Terms and Conditions of the Notes, the Trust Deed and/or the Agency Agreement to give effect to such Benchmark Amendments with effect from the date specified in such notice.
At the request of the relevant Issuer, but subject to receipt by the Trustee of a certificate signed by two Authorised Signatories of the relevant Issuer pursuant to Condition 7(i)(c), the Trustee shall (at the relevant Issuer’s expense), without any requirement for the consent or approval of the Noteholders or Couponholders, be obliged to concur with the relevant Issuer in effecting any Benchmark Amendments (including, inter alia, by the execution of a deed or agreement supplemental to or amending the Trust Deed and/or the Agency Agreement (as applicable)) and the Trustee shall not be liable to any party for any consequences thereof, provided that the Trustee shall not be obliged so to concur if in the sole opinion of the Trustee doing so would impose more onerous obligations upon it or expose it to any additional duties, responsibilities or liabilities or reduce or amend rights and/or the protective provisions afforded to the Trustee in the Terms and Conditions of the Notes, the Trust Deed and/or the Agency Agreement (including, for the avoidance of doubt, any supplemental trust deed and/or agency agreement) in any way.
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In connection with any such variation in accordance with this Condition 7(i), the relevant Issuer shall comply with the rules of any stock exchange on which the Notes are for the time being listed or admitted to trading.
| (v) | Definitions |
As used in this Condition 7(i)(a):
“Adjustment Spread” means either a spread (which may be positive, negative or zero), or the formula or methodology for calculating a spread, in either case, which the Independent Adviser acting in good faith determines is required to be applied to the Successor Rate or the Alternative Rate (as the case may be)and is the spread, formula or methodology which:
| (A) | in the case of a Successor Rate, is formally recommended, or formally provided as an option for parties to adopt, in relation to the replacement of the Original Reference Rate with the Successor Rate by any Relevant Nominating Body; or |
| (B) | (if no such recommendation has been made or option provided, or in the case of an Alternative Rate, the Independent Adviser acting in good faith, determines is recognised or acknowledged as being in customary market usage (or reflects an industry-accepted rate, formula or methodology) in the international debt capital market transactions which reference the Original Reference Rate, where such rate has been replaced by the Sucessor Rate or the Alternative Rate (as the case may be); or |
| (C) | (if no such customary market usage is recognised or acknowledged) the Independent Adviser acting in good faith determines is recognised or acknowledged as being the industry standard for over-the-counter derivative transactions which reference the Original Reference Rate, where such rate has been replaced by the Successor Rate or the Alternative Rate (as the case may be); or |
| (D) | (if no such industry standard is recognised or acknowledged) the Independent Adviser acting in good faith determines to be appropriate to reduce or eliminate, to the extent reasonably practicable in the circumstances, any economic prejudice or benefit (as the case may be) to Noteholders and Couponholders as a result of the replacement of the Original Reference Rate with the Successor Rate or the Alternative Rate (as the case may be); |
“Alternative Rate” means an alternative benchmark or screen rate which the Independent Adviser acting in good faith determines in accordance with this Condition 7(i)(a) has replaced the Original Reference Rate in customary market usage, or is an industry-accepted rate, in the international debt capital markets for the purposes of determining rates of interest (or the relevant component part thereof) for a commensurate interest period and in the same Specified Currency as the Notes or, if the Independent Adviser determines there is no such rate, such other rate as the Independent Adviser acting in good faith determines is most comparable to the Original Reference Rate;
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“Benchmark Event” means, with respect to an Original Reference Rate, any one or more of the following:
| (A) | the Original Reference Rate ceasing to exist, be permanently administered or be published (in the latter case, for a period of at least 5 Business Days); |
| (B) | the later of (i) the making of a public statement by the administrator or an insolvency official with jurisdiction over the administrator of the Original Reference Rate that it will, on or before a specified date, cease publishing the Original Reference Rate permanently or indefinitely (in circumstances where no successor administrator has been appointed that will continue publication of the Original Reference Rate) and (ii) the date falling six months prior to the date specified in (B)(i); |
| (C) | the making of a public statement by the supervisor of the administrator of the Original Reference Rate that the Original Reference Rate has been permanently or indefinitely discontinued; |
| (D) | the later of (i) the making of a public statement by the supervisor of the administrator of the Original Reference Rate that the Original Reference Rate will, on or before a specified date, be permanently or indefinitely discontinued and (ii) the date falling six months prior to the date specified in (D)(i) above; |
| (E) | the later of (i) the making of a public statement by the supervisor of the administrator of the Original Reference Rate that means the Original Reference Rate will be prohibited from being used or that its use will be subject to restrictions or adverse consequences, in each case on or before a specified date and (ii) the date falling six months prior to the date specified in (E)(i); |
| (F) | it has or will prior to the next Interest Determination Date become unlawful for the relevant Issuer, the Calculation Agent, any Paying Agent or other party to calculate any payments due to be made to any Noteholder or Couponholder using the Original Reference Rate (including, without limitation, under the Regulation (EU) 2016/1011 as that Regulation applies in the European Union and/or as it applies in the United Kingdom in the form retained as domestic law in the United Kingdom under the European Union (Withdrawal) Act 2018, as amended, if applicable); or |
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| (G) | the making of a public statement by the supervisor of the administrator of such Original Reference Rate announcing that such Original Reference Rate is no longer representative or may no longer be used; or |
| (H) | the later of (i) the making of a public statement by the supervisor of the administrator of the Original Reference Rate announcing that such Original Reference Rate will, on or before a specified date, no longer be representative or may no longer be used and (ii) the date falling six months prior to the date specified in (H)(i) above, |
“Independent Adviser” means an independent financial institution of international repute or an independent financial adviser of recognised standing with the appropriate expertise appointed by the relevant Issuer at its own expense with prior notification to the Trustee. For the avoidance of doubt, an Independent Adviser appointed pursuant to this Condition 7(i)(a) shall act in good faith as an expert and (in the absence of bad faith or fraud) shall have no liability whatsoever to the Issuer, the Paying Agents, the Noteholders or the Couponholders for any determination made by it pursuant to this Condition 7(i)(a);
“Original Reference Rate” means the originally-specified Reference Rate or, where a Successor Rate or an Alternative Rate has been determined pursuant to Condition 7(i)(a), such Successor Rate or Alternative Rate, as applicable, used to determine the Rate of Interest (or any component part thereof) on the Notes;
“Relevant Nominating Body” means, in respect of a Reference Rate:
| (A) | the central bank for the currency to which the Reference Rate relates, or any central bank or other supervisory authority which is responsible for supervising the administrator of the Reference Rate; or |
| (B) | any working group or committee sponsored by, chaired or co-chaired by or constituted at the request of (i) the central bank for the currency to which the Reference Rate relates, (ii) any central bank or other supervisory authority which is responsible for supervising the administrator of the Reference Rate, (iii) a group of the aforementioned central banks or other supervisory authorities or (iv) the Financial Stability Board or any part thereof; and |
“Successor Rate” means a successor to or replacement of the Original Reference Rate which is formally recommended, or formally provided as an option for the parties to adopt by any Relevant Nominating Body.
| (b) | Benchmark Transition |
This Condition 7(i)(b) applies to Notes where the relevant Final Terms specifies “Compounded Daily SOFR” as the Reference Rate.
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If the relevant Issuer, in consultation with the Calculation Agent determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred in relation to an Original Reference Rate at any time when the Conditions provide for any Rate of Interest (or any component part thereof) to be determined by reference to such Original Reference Rate, then the following provisions shall apply.
| (i) | Independent Adviser |
The relevant Issuer shall use reasonable endeavours to appoint and consult with an Independent Adviser, as soon as reasonably practicable, with a view to the relevant Issuer determining the Benchmark Replacement which will replace such Original Reference Rate for all purposes relating to the Notes in respect of all determinations on such date and for all determinations on all subsequent dates (subject to any subsequent application of this Condition 7(i)(b) with respect to such Benchmark Replacement) and any Benchmark Replacement Conforming Changes.
Any Benchmark Replacement so determined by the relevant Issuer shall have effect for any subsequent determination of any relevant Rate of Interest (subject to any further application of this Condition 7(i)(b) with respect to such Benchmark Replacement), subject, if any associated Benchmark Replacement Conforming Changes are required in connection therewith, to such Benchmark Replacement Conforming Changes becoming effective in accordance with the following provisions.
If, notwithstanding the relevant Issuer’s reasonable endeavours, the relevant Issuer is unable to appoint and consult with an Independent Adviser in accordance with the foregoing paragraph, the provisions of Condition 7(i)(f) below shall apply.
| (ii) | Benchmark Replacement Conforming Changes |
If the relevant Issuer, following consultation with the Independent Adviser (if appointed), considers it is necessary to make Benchmark Replacement Conforming Changes, the relevant Issuer shall, in consultation with the Independent Adviser (if appointed), determine the terms of such Benchmark Replacement Conforming Changes, and shall, subject to giving notice in accordance with Condition 7(i)(c) below (but without any requirement for the consent or approval of Noteholders), vary these Conditions, the Trust Deed and/or the Agency Agreement to give effect to such Benchmark Replacement Conforming Changes with effect from the date specified in such notice.
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At the request of the relevant Issuer, but subject to receipt by the Trustee of a certificate signed by two Authorised Signatories of the relevant Issuer pursuant to Condition 7(i)(c), the Trustee shall (at the expense of the relevant Issuer), without any requirement for the consent or approval of the Noteholders, be obliged to concur with the relevant Issuer in effecting any Benchmark Replacement Conforming Changes (including, inter alia, by the execution of a deed or an agreement supplemental to or amending the Trust Deed and/or the Agency Agreement (as applicable)) and the Trustee shall not be liable to any party for any consequences thereof, provided that the Trustee shall not be obliged so to concur if in the sole opinion of the Trustee doing so would impose more onerous obligations upon it or expose it to any additional duties, responsibilities or liabilities or reduce or amend rights and/or the protective provisions afforded to the Trustee in these Conditions, the Trust Deed or the Agency Agreement (including, for the avoidance of doubt, any supplemental trust deed and/or agency agreement) in any way.
In connection with any such variation in accordance with this Condition 7(i)(b), the relevant Issuer shall comply with the rules of any stock exchange on which the Notes are for the time being listed or admitted to trading.
| (iii) | Definitions |
As used in this Condition 7(i)(b):
“Benchmark Replacement” means the first alternative set forth in the order below that can be determined by the relevant Issuer as of the Benchmark Replacement Date:
| (i) | the sum of: (a) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the Original Reference Rate for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment; |
| (ii) | the sum of: (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment; or |
| (iii) | the sum of: (a) the alternate rate of interest that has been selected by the relevant Issuer as the replacement for the Original Reference Rate for the applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest as a replacement for the then-current benchmark for U.S. dollar-denominated floating rate notes at such time and (b) the Benchmark Replacement Adjustment; |
“Benchmark Replacement Adjustment” means the first alternative set forth in the order below that can be determined by the relevant Issuer as of the Benchmark Replacement Date:
| (i) | the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement; |
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| (ii) | if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, the ISDA Fallback Adjustment; or |
| (iii) | the spread adjustment (which may be a positive or negative value or zero) that has been selected by the relevant Issuer giving due consideration to any industry-accepted spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated floating rate notes at such time; |
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to any Interest Period, Interest Accrual Period, the timing and frequency of determining rates and making payments of interest, rounding of amounts or tenors, and other administrative matters) that the relevant Issuer (in consultation with the Independent Adviser, if appointed) decides may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent with market practice (or, if the relevant Issuer decides that adoption of any portion of such market practice is not administratively feasible or if the relevant Issuer determines that no market practice for use of the Benchmark Replacement exists, in such other manner as the relevant Issuer (in consultation with the Independent Adviser, if appointed) determines is reasonably necessary);
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the Original Reference Rate (including the daily published component used in the calculation thereof):
| (i) | in the case of clause (i) or (ii) of the definition of “Benchmark Transition Event”, the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the Original Reference Rate permanently or indefinitely ceases to provide the Original Reference Rate (or such component); or |
| (ii) | in the case of clause (iii) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein. |
For the avoidance of doubt, if the event that gives rise to the Benchmark Replacement Date occurs on the same day as, but earlier than (where the Rate of Interest is to be determined pursuant to Condition 7(i)(b)) the Specified Time or (in any other case) the customary or scheduled time for publication of the relevant reference rate in accordance with the then-prevailing operational procedures of the administrator of such reference rate or, as the case may be, of the other relevant information service publishing such reference rate, on, the relevant Interest Determination Date, the Benchmark Replacement Date will be deemed to have occurred prior to such time for such determination; “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the Original Reference Rate (including the daily published component used in the calculation thereof):
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| (i) | a public statement or publication of information by or on behalf of the administrator of the Original Reference Rate (or such component) announcing that such administrator has ceased or will cease to provide the Original Reference Rate (or such component), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Original Reference Rate (or such component); or |
| (ii) | a public statement or publication of information by the regulatory supervisor for the administrator of the Original Reference Rate (or such component), the central bank for the currency of the Original Reference Rate (or such component), an insolvency official with jurisdiction over the administrator for the Original Reference Rate (or such component), a resolution authority with jurisdiction over the administrator for the Original Reference Rate (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for the Original Reference Rate, which states that the administrator of the Original Reference Rate (or such component) has ceased or will cease to provide the Original Reference Rate (or such component) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Original Reference Rate (or such component); or |
| (iii) | a public statement or publication of information by the regulatory supervisor for the administrator of the Original Reference Rate announcing that the Original Reference Rate is no longer representative; |
“Corresponding Tenor” means, with respect to a Benchmark Replacement, a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the Original Reference Rate;
“Independent Adviser” means an independent financial institution of international repute or an independent adviser of recognised standing with appropriate expertise appointed by the relevant Issuer at its own expense with prior notice to the Trustee;
“ISDA Definitions” means the latest version of the 2021 ISDA Interest Rate Derivatives Definitions as amended and updated as at the date of issue of the first Tranche of the Notes of the relevant Series as published by the International Swaps and Derivatives Association, Inc.; “ISDA Fallback Adjustment” means the spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Original Reference Rate;
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“ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Original Reference Rate for the applicable tenor excluding the applicable ISDA Fallback Adjustment;
“Original Reference Rate” means the benchmark or screen rate (as applicable) originally specified for the purpose of determining the relevant Rate of Interest (or any relevant component part(s) thereof) on the Notes (provided that if, following one or more Benchmark Transition Events, such originally specified benchmark or screen rate (or any benchmark used in any Benchmark Replacement which has replaced it (the “Replacement Benchmark”)) has been replaced by a (or a further) Replacement Benchmark and a Benchmark Transition Event subsequently occurs in respect of such Replacement Benchmark, the term “Original Reference Rate” shall be deemed to include any such Replacement Benchmark);
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto; and
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
| (c) | Notices, etc. |
The relevant Issuer shall notify the Trustee, the Principal Paying Agent, the Calculation Agent (if different from the Principal Paying Agent), the Paying Agents and, in accordance with Condition 18 (Notices), the Noteholders, promptly of any Successor Rate, Alternative Rate, Adjustment Spread and/or Benchmark Replacement, and the specific terms of any Benchmark Amendments or Benchmark Replacement Conforming Changes (as applicable), determined under this Condition 7(i). Such notice shall be irrevocable and shall specify the effective date of the Benchmark Amendments or Benchmark Replacement Conforming Changes (as applicable), if any.
No later than notifying the Trustee of the same, the relevant Issuer shall deliver to the Trustee a certificate signed by two Authorised Signatories:
| (i) | confirming (x) that a Benchmark Event or a Benchmark Transition Event (as applicable) has occurred, (y) the Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread or, as the case may be, the Benchmark Replacement and (z) the specific terms of the Benchmark Amendments or Benchmark Replacement Conforming Changes (if any), as applicable, in each case as determined in accordance with the provisions of this Condition 7(i); |
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| (ii) | certifying that the Benchmark Amendments or Benchmark Replacement Conforming Changes (as applicable) are necessary to ensure the proper operation of (as applicable) (A) such Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread or (B) such Benchmark Replacement; and |
| (iii) | certifying that (i) the relevant Issuer has duly consulted with an Independent Adviser with respect to each of the matters above or, if that is not the case, (ii) explaining, in reasonable detail, why the relevant Issuer has not done so. |
The Trustee shall be entitled to rely on such certificate (without inquiry and without liability to any person) as sufficient evidence thereof. The Successor Rate, Alternative Rate, Benchmark Replacement, Adjustment Spread, Benchmark Amendments and/or Benchmark Replacement Conforming Changes (if any), as applicable, specified in such certificate will (in the absence of manifest error in the determination thereof and without prejudice to the Trustee’s ability to rely on such certificate as aforesaid) be binding on the relevant Issuer, the Trustee, the Agent, the Calculation Agent, the Paying Agents and the Noteholders and Couponholders.
| (d) | Survival of Original Reference Rate |
Without prejudice to the relevant Issuer’s obligations under the provisions of this Condition 7(i), the Original Reference Rate and the fallback provisions provided for in Condition 7 will continue to apply unless and until the Calculation Agent has been notified, in accordance with Condition 7(i)(c), of (as the case may be):
| (i) | the Successor Rate or the Alternative Rate (as the case may be), and (in either case) the Adjustment Spread and Benchmark Amendments (if any) determined in accordance with Condition 7(i)(a); or |
| (ii) | the Benchmark Replacement and Benchmark Replacement Conforming Changes (if any) determined in accordance with Condition 7(i)(b). |
| (e) | Restriction on Independent Adviser and Issuer liability |
An Independent Adviser appointed pursuant to this Condition 7(i) shall act in good faith.
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In the absence of bad faith or fraud, neither the relevant Issuer nor any Independent Adviser shall have any liability whatsoever to the Trustee, the Paying Agents, the Agent, the Calculation Agent or the Noteholders or Couponholders for any determination made by the relevant Issuer or the Independent Adviser or (in the case of the Independent Adviser) for any advice given to the relevant Issuer in connection with any determination made by the relevant Issuer pursuant to this Condition 7(i).
| (f) | Fallbacks |
If, following the occurrence of:
| (i) | a Benchmark Event; or |
| (ii) | a Benchmark Transition Event (and its related Benchmark Replacement Date), |
in respect of the Original Reference Rate, on the immediately following Interest Determination Date:
| (A) | (in the case of (i) above) no Successor Rate or Alternative Rate (as applicable) is determined pursuant to Condition 7(i)(a) or (as the case may be) a Successor Rate or Alternative Rate (as applicable) is determined, but no Adjustment Spread is determined pursuant to Condition 7(i)(a); or |
| (B) | (in the case of (ii) above) no Benchmark Replacement is determined in accordance with Condition 7(i)(b), |
then the original benchmark or screen rate (as applicable) will continue to apply for the purposes of determining such Rate of Interest on such Interest Determination Date, with the effect that the fallback provisions provided in Condition 7(c) will continue to apply to such determination.
In such circumstances, the relevant Issuer will be entitled (but not obliged), at any time thereafter, to elect to re-apply the provisions of this Condition 7(i), mutatis mutandis, on one or more occasions until:
| (x) | (in the case of (i) above) a Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread and any Benchmark Amendments; or |
| (y) | (in the case of (ii) above) the Benchmark Replacement and any Benchmark Replacement Conforming Changes, |
have been determined and notified in accordance with this Condition (i) (and, until such determination and notification (if any), the fallback provisions provided in Condition 7(c) will continue to apply).
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The relevant Issuer’s intention is that, in circumstances where the relevant Issuer has been unable to determine (as applicable) (i) a Successor Rate or Alternative Rate (as applicable) and (in either case) the Adjustment Spread or (ii) the Benchmark Replacement pursuant this Condition 7(i), it will elect to re-apply such provisions if and when, in its sole determination, there have been such subsequent developments (whether in applicable law, market practice or otherwise) as would enable the relevant Issuer successfully to apply such provisions and determine (as applicable) (a) a Successor Rate or Alternative Rate (as applicable) and (in either case) the applicable Adjustment Spread and the applicable Benchmark Amendments (if any) or (b) the Benchmark Replacement and the applicable Benchmark Replacement Conforming Changes (if any).
| (ii) | Preparation in anticipation of a Benchmark Event or a Benchmark Transition Event |
If the relevant Issuer anticipates that a Benchmark Event or a Benchmark Transition Event, as applicable, will or may occur, nothing in these Conditions shall prevent the relevant Issuer (in its sole discretion) from taking, prior to the occurrence of such Benchmark Event or a Benchmark Transition Event, such actions as it considers expedient in order to prepare for applying the provisions of this Condition 7(i) (including, without limitation, appointing and consulting with an Independent Adviser, and seeking to identify any Successor Rate, Alternative Rate, Adjustment Spread, Benchmark Amendments, Benchmark Replacement and/or Benchmark Replacement Conforming Changes, as applicable), provided that no Successor Rate, Alternative Rate, Adjustment Spread, Benchmark Amendments, Benchmark Replacement and/or Benchmark Replacement Conforming Changes will take effect until the relevant Benchmark Event, or the relevant Benchmark Transition Event and its related Benchmark Replacement Date, as applicable, has occurred.
| 8. | Zero Coupon Note Provisions |
| (a) | Application |
This Condition 8 is applicable to the Notes only if the Zero Coupon Note provisions are specified in the relevant Final Terms as being applicable.
| (b) | Late payment on Zero Coupon Notes |
If the Redemption Amount payable in respect of any Zero Coupon Note is improperly withheld or refused, the Redemption Amount shall thereafter be an amount equal to the sum of:
| (i) | the Reference Price; and |
| (ii) | the product of the Accrual Yield (compounded annually) being applied to the Reference Price on the basis of the relevant Day Count Fraction from (and including) the Issue Date to (but excluding) whichever is the earlier of (A) the day on which all sums due in respect of such Note up |
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| to that day are received by or on behalf of the relevant Noteholder and (B) the day which is seven days after the Principal Paying Agent or, as the case may be, the Trustee has notified the Noteholders that it has received all sums due in respect of the Notes up to such seventh day (except to the extent that there is any subsequent default in payment). |
| 9. | Redemption and Purchase |
| (a) | Scheduled redemption |
Unless previously redeemed or purchased and cancelled in accordance with Condition 9(k) (Cancellation), the Notes will be redeemed at their Final Redemption Amount on the Maturity Date, subject as provided in Condition 10(1) (Payments – Bearer Notes) or Condition 10(2) (Payments – Registered Notes).
| (b) | Redemption for tax reasons |
The Notes may be redeemed at the option of the relevant Issuer in whole, but not in part:
| (i) | at any time (if the Floating Rate Note provisions are not specified in the relevant Final Terms as being applicable); or |
| (ii) | on any Interest Payment Date (if the Floating Rate Note provisions are specified in the relevant Final Terms as being applicable), |
on giving not less than 30 nor more than 60 days’ notice to the Noteholders in accordance with Condition 18 (Notices) (which notice shall be irrevocable), at their Early Redemption Amount (Tax), together with interest accrued (if any) to the date fixed for redemption, if:
| (A) | as a result of any change in, or amendment to, the tax laws or regulations of the Relevant Jurisdiction(s) or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective on or after the date of issue of the first Tranche of the Notes on the next Interest Payment Date either (i) the relevant Issuer would be obliged to pay additional amounts as provided or referred to in Condition 11 (Taxation) or (ii) each relevant Guarantor would be unable for reasons outside its control to procure payment by the relevant Issuer and in making payment itself would be required to pay such additional amounts; and |
| (B) | such obligation cannot be avoided by the relevant Issuer or, as the case may be, each of the relevant Guarantors taking reasonable measures available to it, |
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PROVIDED, HOWEVER, THAT no such notice of redemption shall be given earlier than:
| (I) | where the Notes may be redeemed at any time, 90 days prior to the earliest date on which the relevant Issuer or, as the case may be, the relevant Guarantor would be obliged to pay such additional amounts if a payment in respect of the Notes were then due; or |
| (II) | where the Notes may be redeemed only on an Interest Payment Date, 60 days prior to the Interest Payment Date occurring immediately before the earliest date on which the relevant Issuer or, as the case may be, the relevant Guarantor would be obliged to pay such additional amounts if a payment in respect of the Notes were then due. |
Prior to the publication of any notice of redemption pursuant to this paragraph, the relevant Issuer shall deliver to the Trustee (i), if the Trustee so requests, an opinion of independent legal advisers of recognised standing to the effect that the relevant Issuer or, as the case may be, a relevant Guarantor has or will become obliged to pay such additional amounts as a result of such change or amendment and (ii) a certificate signed by two Authorised Signatories of the relevant Issuer or, as the case may be, each of the relevant Guarantors, as the case may be, stating that the obligation referred to in (A) above cannot be avoided by the relevant Issuer or, as the case may be, each of the relevant Guarantors taking reasonable measures available to it and the Trustee shall be entitled to accept such certificate as sufficient evidence of the satisfaction of the condition precedent set out in (B) above in which event it shall be conclusive and binding on the Noteholders and Couponholders. Upon the expiry of any such notice as is referred to in this Condition 9(b), the relevant Issuer shall be bound to redeem the Notes in accordance with this Condition 9(b).
| (c) | Redemption at the option of the relevant Issuer (Issuer Call Option) |
If Issuer Call Option is specified in the relevant Final Terms as being applicable, the Notes may be redeemed at the option of the relevant Issuer in whole or, if so specified in the relevant Final Terms, in part on any Optional Redemption Date (Call) at the relevant Optional Redemption Amount (Call) on the relevant Issuer giving not less than 30 nor more than 60 days’ notice (or such other period of notice as is specified in the relevant Final Terms as being applicable) to the Noteholders and the Trustee (which notice shall be irrevocable and shall oblige the relevant Issuer to redeem the Notes or, as the case may be, the Notes specified in such notice on the relevant Optional Redemption Date (Call) at the Optional Redemption Amount (Call) plus accrued interest (if any) to such date).
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| (d) | Redemption at the option of the relevant Issuer where Issuer Maturity Par Call Option or Issuer Residual Call Option is specified |
The Notes may be redeemed at the option of the relevant Issuer in whole, but not in part:
| i) | if Issuer Maturity Par Call Option is specified in the relevant Final Terms as being applicable, at any time during the period commencing on (and including) the day that is 90 days (or such other number of days as is specified in the relevant Final Terms) prior to the Maturity Date to (but excluding) the Maturity Date, at the Final Redemption Amount specified in the relevant Final Terms, plus accrued interest (if any) to the date fixed for redemption, upon the relevant Issuer having given not less than 30 nor more than 60 days’ notice (or such other period of notice as is specified in the relevant Final Terms as being applicable) to the Noteholders and the Trustee (which notice shall be irrevocable and shall specify the date fixed for redemption); or |
| ii) | if Issuer Residual Call Option is specified in the relevant Final Terms as being applicable and, at any time, the outstanding aggregate nominal amount of the Notes is 20 per cent. or less of the aggregate nominal amount of the Series issued, at any time (if the Floating Rate Note provisions are not specified in the relevant Final Terms as being applicable)) or on any Interest Payment Date (if the Floating Rate Note provisions are specified in the relevant Final Terms as being applicable), at the Residual Call Early Redemption Amount, plus accrued interest (if any) to the date fixed for redemption, upon the relevant Issuer having given not less than 30 nor more than 60 days’ notice (or such other period of notice as is specified in the relevant Final Terms as being applicable) to the Noteholders and the Trustee (which notice shall be irrevocable and shall specify the date fixed for redemption). |
| (e) | Partial redemption |
If the Notes are to be redeemed in part only on any date in accordance with Condition 9(c) (Redemption at the option of the relevant Issuer (Issuer Call Option)), in the case of Bearer Notes, the Notes to be redeemed shall be selected by the drawing of lots in such place and in such manner as the Trustee approves, subject to compliance with applicable law, the rules of each competent authority, stock exchange and/or quotation system (if any) by which the Notes have then been admitted to listing, trading and/or quotation and the notice to Noteholders referred to in Condition 9(c) (Redemption at the option of the relevant Issuer (Issuer Call Option)) shall specify the serial numbers of the Notes so to be redeemed (which will be published by the relevant Issuer in accordance with Condition 18 (Notices) not less than 15 days prior to the date fixed for redemption), and, in the case of Registered Notes, each Note shall be redeemed in part in the proportion which the aggregate principal amount of the outstanding Notes to be redeemed on the relevant Optional Redemption Date (Call) bears to the aggregate principal amount of outstanding Notes on such date. If any Maximum Redemption Amount or Minimum Redemption Amount is specified in the relevant Final Terms, then the Optional Redemption Amount (Call) shall in no event be greater than the maximum or be less than the minimum so specified.
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| (f) | Redemption at the option of Noteholders |
If Put Option is specified in the relevant Final Terms as being applicable, the relevant Issuer shall, at the option of the Holder of any Note redeem such Note on the Optional Redemption Date (Put) specified in the relevant Put Option Notice at the relevant Optional Redemption Amount (Put) together with interest (if any) accrued to such date. In order to exercise the option contained in this Condition 9(f), the Holder of a Note must, not less than 30 nor more than 60 days before the relevant Optional Redemption Date (Put) (or such other period(s) as may be specified in the relevant Final Terms), deposit with any Paying Agent (in the case of Bearer Notes) or the Registrar or any Transfer Agent (in the case of Registered Notes) (i) a duly completed Put Option Notice in the form obtainable from any Paying Agent, the Registrar or any Transfer Agent, as the case may and (ii) such Note together with, in the case of Bearer Notes, all unmatured Coupons relating thereto. The Paying Agent, the Registrar or any Transfer Agent, as the case may be, with which such Note and/or Put Option Notice is so deposited shall deliver a duly completed Put Option Receipt to the depositing Noteholder. In the case of Registered Notes, the Holder must specify in the Put Option Notice the nominal amount of Notes to be redeemed and, if less than the full nominal amount of the Registered Notes so surrendered is to be redeemed, an address to which a new Note Certificate in respect of the balance of such Registered Notes is to be sent subject to and in accordance with the provisions of Condition 3(f) (Form, Denomination, Title and Transfer – Transfers of Registered Notes).
If the Note is in definitive form and held through Euroclear or Clearstream, to exercise the right to require redemption or, as the case may be, purchase of a Note under this Condition 9(f) the holder of the Note must, not less than 30 nor more than 60 days before the relevant Optional Redemption Date (Put), give notice to the Principal Paying Agent of such exercise in accordance with the standard procedures of Euroclear and Clearstream (which may include notice being given on their instruction by Euroclear or Clearstream or any common depositary for them to the Principal Paying Agent by electronic means) in a form acceptable to Euroclear and Clearstream from time to time.
Any Put Option Notice or other notice given by a Holder of any Note pursuant to this Condition 7.5 (Redemption at the option of the Noteholders (Investor Put)) shall be irrevocable except where, prior to the due date of redemption, an Event of Default has occurred and the Trustee has declared the Notes to be due and payable pursuant to Condition 12 (Events of Default), in which event such Holder, at its option, may elect by notice to the relevant Issuer to withdraw the notice given pursuant to this Condition 9(f) (Redemption at the option of Noteholders) and instead to declare such Note forthwith due and payable pursuant to Condition 12 (Events of Default).
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| (g) | Change of Control redemption |
If Change of Control Put Option is specified in the relevant Final Terms as being applicable and a Change of Control Put Event occurs, the Holder of any Note will have the option (unless prior to the giving of the relevant Change of Control Put Event Notice the relevant Issuer has given notice of redemption under Condition 9(b) (Redemption for tax reasons) or 9(c) (Redemption at the option of the relevant Issuer), if applicable) to require the relevant Issuer to redeem or, at the relevant Issuer’s option, purchase (or procure the purchase of) that Note on the Change of Control Optional Redemption Date at its Change of Control Optional Redemption Amount together with interest accrued to (but excluding) the Change of Control Optional Redemption Date.
Promptly upon, and in any event within 14 days after, the relevant Issuer becoming aware that a Change of Control Put Event has occurred the relevant Issuer shall, and at any time upon the Trustee becoming similarly so aware the Trustee may, and if so requested by the holders of at least one-quarter in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution of the Noteholders, shall, (subject in each case to the Trustee being indemnified, secured and/or prefunded to its satisfaction) give the Change of Control Put Event Notice to the Noteholders.
To exercise the Change of Control Put Option, the Holder of the Note must deposit with any Paying Agent (in the case of a Bearer Note) or the Registrar or any Transfer Agent (in the case of Registered Notes) within the Change of Control Put Period (i) a duly signed and completed notice of exercise in the form obtainable from any Paying Agent, the Registrar or any Transfer Agent, as the case may be (a “Change of Control Put Exercise Notice”) and (ii) such Note together with, in the case of Bearer Notes, all unmatured Coupons relating thereto. The Paying Agent the Registrar, as the case may be, with which such Note and/or Change of Control Put Exercise Notice is so deposited shall deliver a duly completed Change of Control Put Event Receipt to the depositing Noteholder. No Note, Coupon or Certificate so deposited and option so exercised may be withdrawn (except as provided in the Agency Agreement) without the prior consent of the relevant Issuer.
Any Change of Control Put Exercise Notice, once given, shall be irrevocable except where prior to the Change of Control Optional Redemption Date an Event of Default shall have occurred and the Trustee shall have accelerated the Notes, in which event such holder, at its option, may elect by notice to the Parent to withdraw the Change of Control Put Exercise Notice and instead to treat its Notes as being forthwith due and payable pursuant to Condition 12 (Events of Default).
If 80 per cent. or more in principal amount of the Notes then outstanding on the date on which the Change of Control Put Exercise Notice is given have been redeemed or purchased pursuant to this Condition 9(g), the relevant Issuer may, on giving not less than 30 nor more than 60 days’ notice to the Noteholders (such notice being given within 30 days after the Change of Control Optional Redemption Date), redeem or purchase (or procure the purchase of), at its option, all but not some only of the remaining outstanding Notes at their principal amount, together with interest accrued to (but excluding) the date fixed for such redemption or purchase.
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If the rating designations employed by any Rating Agency are changed from those which are described in paragraph (ii) of the definition of “Change of Control Put Event”, or if a rating is procured from a Substitute Rating Agency, the relevant Issuer shall determine, with the agreement of the Trustee, the rating designations of such Rating Agency or such Substitute Rating Agency (as appropriate) as are most equivalent to the prior rating designations of the relevant Rating Agency and this Condition 9(g) shall be construed accordingly.
The Trustee is under no obligation to ascertain whether a Change of Control Put Event or Change of Control or any event which could lead to the occurrence of or could constitute a Change of Control Put Event or Change of Control has occurred, or to seek any confirmation from any Rating Agency pursuant to the definition of Negative Rating Event below, and, until it shall have actual knowledge or notice pursuant to the Trust Deed to the contrary, the Trustee may assume that no Change of Control Put Event or Change of Control or other such event has occurred.
| (h) | No other redemption |
The relevant Issuer shall not be entitled to redeem the Notes otherwise than as provided in Conditions 9(a) (Scheduled redemption) to 9(g) (Change of control redemption) above.
| (i) | Early redemption of Zero Coupon Notes |
Unless otherwise specified in the relevant Final Terms, the Redemption Amount payable on redemption of a Zero Coupon Note at any time before the Maturity Date shall be an amount equal to the sum of:
| (i) | the Reference Price; and |
| (ii) | the product of the Accrual Yield (compounded annually) being applied to the Reference Price from (and including) the Issue Date to (but excluding) the date fixed for redemption or (as the case may be) the date upon which the Note becomes due and payable. |
Where such calculation is to be made for a period which is not a whole number of years, the calculation in respect of the period of less than a full year shall be made on the basis of such Day Count Fraction as may be specified in the Final Terms for the purposes of this Condition 9(i) or, if none is so specified, a Day Count Fraction of 30E/360.
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| (j) | Purchase |
The relevant Issuer, each relevant Guarantor, the Parent or any Subsidiary may at any time purchase Notes in the open market or otherwise and at any price, PROVIDED THAT all unmatured Coupons are purchased therewith.
| (k) | Cancellation |
All Notes so redeemed or purchased by the relevant Issuer, each relevant Guarantor, the Parent or any Subsidiary and any unmatured Coupons attached to or surrendered with them shall be cancelled and may not be reissued or resold.
| 10. | Payments – |
| (1) | Bearer Notes |
This Condition 10(1) is only applicable to Bearer Notes.
| (a) | Principal |
Payments of principal shall be made only against presentation and (PROVIDED THAT payment is made in full) surrender of Bearer Notes at the Specified Office of any Paying Agent outside the United States by cheque drawn in the currency in which the payment is due on, or by transfer to an account denominated in that currency (or, if that currency is euro, any other account to which euro may be credited or transferred) and maintained by the payee with, a bank in the Principal Financial Centre of that currency (in the case of a sterling cheque, a town clearing branch of a bank in the City of London).
| (b) | Interest |
Payments of interest shall, subject to Condition 10(1)(h) (Payments other than in respect of matured Coupons), be made only against presentation and (PROVIDED THAT payment is made in full) surrender of the appropriate Coupons at the Specified Office of any Paying Agent outside the United States in the manner described in Condition 10(1)(a) (Principal).
| (c) | Payments in New York City |
Payments of principal or interest may be made at the Specified Office of a Paying Agent in New York City if (i) the relevant Issuer has appointed Paying Agents outside the United States with the reasonable expectation that such Paying Agents will be able to make payment of the full amount of the interest on the Notes in the currency in which the payment is due when due, (ii) payment of the full amount of such interest at the offices of all such Paying Agents is illegal or effectively precluded by exchange controls or other similar restrictions and (iii) payment is permitted by applicable United States law.
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| (d) | Payments subject to fiscal laws |
All payments in respect of the Bearer Notes are subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 11 (Taxation) and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or any law implementing an intergovernmental approach thereto.
No commissions or expenses shall be charged to the Noteholders or Couponholders in respect of such payments.
| (e) | Deductions for unmatured Coupons |
If the relevant Final Terms specify that the Fixed Rate Note provisions are applicable and a Bearer Note is presented without all unmatured Coupons relating thereto:
| (i) | if the aggregate amount of the missing Coupons is less than or equal to the amount of principal due for payment, a sum equal to the aggregate amount of the missing Coupons will be deducted from the amount of principal due for payment; PROVIDED HOWEVER, THAT if the gross amount available for payment is less than the amount of principal due for payment, the sum deducted will be that proportion of the aggregate amount of such missing Coupons which the gross amount actually available for payment bears to the amount of principal due for payment; |
| (ii) | if the aggregate amount of the missing Coupons is greater than the amount of principal due for payment: |
| (A) | so many of such missing Coupons shall become void (in inverse order of maturity) as will result in the aggregate amount of the remainder of such missing Coupons (the “Relevant Coupons”) being equal to the amount of principal due for payment; PROVIDED HOWEVER, THAT where this sub-paragraph would otherwise require a fraction of a missing Coupon to become void, such missing Coupon shall become void in its entirety; and |
| (B) | a sum equal to the aggregate amount of the Relevant Coupons (or, if less, the amount of principal due for payment) will be deducted from the amount of principal due for payment; PROVIDED, HOWEVER, THAT, if the gross amount available for payment is less than the amount of principal due for payment, the sum deducted will be that proportion of the aggregate amount of the Relevant Coupons (or, as the case may be, the amount of principal due for payment) which the gross amount actually available for payment bears to the amount of principal due for payment. |
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Each sum of principal so deducted shall be paid in the manner provided in Condition 10(a) (Principal) against presentation and (PROVIDED THAT payment is made in full) surrender of the relevant missing Coupons.
| (f) | Unmatured Coupons void |
If the relevant Final Terms specifies that this Condition 10(f) is applicable or that the Floating Rate Note provisions are applicable, on the due date for final redemption of any Note or early redemption in whole of such Note pursuant to Condition 9(b) (Redemption for tax reasons), Condition 9(f) (Redemption at the option of Noteholders), Condition 9(c) (Redemption at the option of the relevant Issuer (Issuer Call Option)) or Condition 12 (Events of Default), all unmatured Coupons relating thereto (whether or not still attached) shall become void and no payment will be made in respect thereof.
| (g) | Payments on business days |
If the due date for payment of any amount in respect of any Bearer Note or Coupon is not a Payment Business Day in the place of presentation, the Holder shall not be entitled to payment in such place of the amount due until the next succeeding Payment Business Day in such place and shall not be entitled to any further interest or other payment in respect of any such delay.
| (h) | Payments other than in respect of matured Coupons |
Payments of interest other than in respect of matured Coupons shall be made only against presentation of the relevant Bearer Notes at the Specified Office of any Paying Agent outside the United States (or in New York City if permitted by Condition 10(1)(c) (Payments in New York City) above).
| (i) | Partial payments |
If a Paying Agent makes a partial payment in respect of any Bearer Note or Coupon presented to it for payment, such Paying Agent will endorse thereon a statement indicating the amount and date of such payment.
| (j) | Exchange of Talons |
On or after the maturity date of the final Coupon which is (or was at the time of issue) part of a Coupon Sheet relating to the Bearer Notes, the Talon forming part of such Coupon Sheet may be exchanged at the Specified Office of the Principal Paying Agent for a further Coupon Sheet (including, if appropriate, a further Talon but excluding any Coupons in respect of which claims have already become void pursuant to Condition 13 (Prescription)). Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to such Note shall become void and no Coupon will be delivered in respect of such Talon.
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| (2) | Registered Notes |
This Condition 10(2) is only applicable to Registered Notes.
| (a) | Principal |
Payments of principal shall be made by cheque drawn in the currency in which the payment is due drawn on, or, upon application by a Holder of a Registered Note to the Specified Office of the Principal Paying Agent not later than the fifteenth day before the due date for any such payment, by transfer to an account denominated in that currency (or, if that currency is euro, any other account to which euro may be credited or transferred) and maintained by the payee with, a bank in the Principal Financial Centre of that currency (in the case of a sterling cheque, a town clearing branch of a bank in the City of London) and (in the case of redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of any Paying Agent.
| (b) | Interest |
Payments of interest shall be made by cheque drawn in the currency in which the payment is due drawn on, or, upon application by a Holder of a Registered Note to the Specified Office of the Principal Paying Agent not later than the fifteenth day before the due date for any such payment, by transfer to an account denominated in that currency (or, if that currency is euro, any other account to which euro may be credited or transferred) and maintained by the payee with, a bank in the Principal Financial Centre of that currency (in the case of a sterling cheque, a town clearing branch of a bank in the City of London) and (in the case of interest payable on redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of any Paying Agent.
| (c) | Payments subject to fiscal laws |
All payments in respect of the Registered Notes are subject in all cases to (i) any applicable fiscal or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 11 (Taxation) and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or any law implementing an intergovernmental approach thereto. No commissions or expenses shall be charged to the Noteholders in respect of such payments.
| (d) | Payments on business days |
Where payment is to be made by transfer to an account, payment instructions (for value the due date, or, if the due date is not a Payment Business Day, for value the next succeeding Payment Business Day) will be initiated and, where payment is to be made by cheque, the cheque will be mailed (i) (in the case of payments of principal and interest payable on redemption) on the later of the due date for payment and the day on which the relevant Note Certificate is surrendered (or, in the case of part payment only, endorsed) at the Specified Office of a Paying Agent and (ii) (in the case of payments of interest payable other than on redemption) on the Payment Business Day immediately preceding the due date for payment.
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A Holder of a Registered Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from (A) the due date for a payment not being a Payment Business Day or (B) a cheque mailed in accordance with this Condition 10(2)(d) arriving after the due date for payment or being lost in the mail.
| (e) | Partial payments |
If a Paying Agent makes a partial payment in respect of any Registered Note, the relevant Issuer shall procure that the amount and date of such payment are noted on the Register and, in the case of partial payment upon presentation of a Note Certificate, that a statement indicating the amount and the date of such payment is endorsed on the relevant Note Certificate.
| (f) | Record date |
Each payment in respect of a Registered Note will be made to the person shown as the Holder in the Register at the opening of business in the place of the Registrar’s Specified Office on the fifteenth day before the due date for such payment (the “Record Date”). Where payment in respect of a Registered Note is to be made by cheque, the cheque will be mailed to the address shown as the address of the Holder in the Register at the opening of business on the relevant Record Date.
| 11. | Taxation |
| (a) | Gross up |
All payments of principal and interest in respect of the Notes and the Coupons by or on behalf of the relevant Issuer or any relevant Guarantor shall be made free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of any Relevant Jurisdiction or any political subdivision therein or any authority therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments, or governmental charges is required by law. In that event, the relevant Issuer or, as the case may be, such relevant Guarantor, shall pay such additional amounts as will result in receipt by the Noteholders and the Couponholders after such withholding or deduction of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable in respect of any Note or Coupon:
| (i) | presented for payment by or on behalf of a Holder which is liable to such taxes, duties, assessments or governmental charges in respect of such Note or Coupon by reason of its having some connection with the jurisdiction by which such taxes, duties, assessments or charges have been imposed, levied, collected, withheld or assessed other than the mere holding of the Note or Coupon; |
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| (ii) | presented for payment more than 30 days after the Relevant Date except to the extent that the Holder of such Note or Coupon would have been entitled to such additional amounts on presenting such Note or Coupon for payment on the last day of such period of 30 days; or |
| (iii) | where such withholding or deduction is required pursuant to an agreement described in section 1471(b) of the Code, or is otherwise imposed pursuant to sections 1471 through 1474 of the Code and any regulations, agreements or undertakings thereunder or official interpretations thereof or other law implementing an intergovernmental approach thereto; or |
| (iv) | in the case of Notes issued by IHG Finance LLC, presented for payment by or on behalf of (i) any 10 per cent. shareholder of IHG Finance LLC within the meaning of Section 871(h)(3)(B) of the Code, (ii) any controlled foreign corporation related to IHG Finance LLC within the meaning of Section 864(d)(4) of the Code or (iii) any bank whose acquisition of Notes constitutes an extension of credit pursuant to a loan agreement entered into in the ordinary course of its business, or (iv) any tax, assessment or governmental charge that would not have been imposed or withheld but for the failure of the holder, if required, to comply with certification, identification or information reporting or any other requirements under United States income tax laws and regulations, without regard to any tax treaty, with respect to the payment, concerning the nationality, residence, identity or connection with the United States of the holder or a beneficial owner of such Note or Coupon, if such compliance is required by United States income tax laws and regulations, without regard to any tax treaty, as a precondition to relief or exemption from such tax, assessment or governmental charge, including, failure of the holder or of the beneficial owner of such Note or Coupon, to provide a valid U.S. IRS Form W-8 (or successor form) or other documentation as permitted by official IRS guidance. |
| (b) | Taxing jurisdiction |
If the relevant Issuer or any relevant Guarantor becomes subject at any time to any taxing jurisdiction other than the Relevant Jurisdiction(s), references in these Conditions to the Relevant Jurisdiction(s) shall be construed as references to the Relevant Jurisdiction(s) and/or such other jurisdiction.
| 12. | Events of Default |
If any of the following events occurs and is continuing then the Trustee may at its discretion and shall, if so requested in writing by the holders of at least one fifth of the aggregate principal amount of the outstanding Notes, or if so directed by an Extraordinary Resolution (subject to the Trustee having been indemnified and/or provided with security and/or prefunded by the Noteholders to its satisfaction) by written notice to the relevant Issuer, declare the Notes to be immediately due and payable, whereupon they shall become immediately due and payable at their Early Termination Amount together with accrued interest (if any) without further action or formality:
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| (a) | Non-payment |
the relevant Issuer or any relevant Guarantor fails to pay any amount of principal in respect of the Notes within ten days of the due date for payment thereof or any amount of interest in respect of the Notes within ten days of the due date for payment thereof; or
| (b) | Breach of other obligations |
the relevant Issuer or any relevant Guarantor does not comply with any of their other obligations under or in respect of the Notes or the Trust Deed and (except in any case where, in the opinion of the Trustee, such failure is incapable of remedy in which case no continuation or notice as is hereinafter provided will be required) such failure to comply continues unremedied for 30 days (or such longer period as the Trustee may permit) after written notice thereof has been delivered by the Trustee to the relevant Issuer or such relevant Guarantor, as the case may be; or
| (c) | Cross Default |
| (i) | any Indebtedness of the relevant Issuer or any relevant Guarantor or any Material Subsidiary becomes due and repayable prematurely by reason of an event of default (however described); |
| (ii) | the relevant Issuer or any relevant Guarantor or any Material Subsidiary fails to make any payment in respect of any Indebtedness on the due date for payment or, as the case may be, within any applicable grace period as originally provided; |
| (iii) | any security given by the relevant Issuer or any relevant Guarantor or any Material Subsidiary for any Indebtedness is enforced; or |
| (iv) | default is made by the relevant Issuer or any relevant Guarantor or any Material Subsidiary in making any payment due under any guarantee and/or indemnity given by it in relation to any Indebtedness of any other person, |
provided that (i) no event described in this Condition 12(c) shall constitute an Event of Default where the relevant Issuer or the relevant Guarantor or the relevant Material Subsidiary, as the case may be, satisfies the Trustee that it is contesting such Event of Default in good faith and by appropriate action and (ii) no event described in this Condition 12(c) shall constitute an Event of Default unless the Indebtedness or other relative liability, either alone or when aggregated with other Indebtedness and/or other liabilities relative to all (if any) other events described in this Condition 12(c) which have occurred and are continuing (excluding where the relevant Issuer and/or the relevant Guarantor and/or the relevant Material Subsidiary, as the case may be, has satisfied the Trustee that it is contesting such event in good faith and by appropriate action), amounts to at least U.S.$50,000,000 (or its equivalent in any other currency); or
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| (d) | Security enforced |
a secured party takes possession, or a receiver, manager or other similar officer is appointed, of all or substantially all of the undertaking, assets and revenues of the relevant Issuer, a relevant Guarantor or any Material Subsidiary; or
| (e) | Creditor’s process |
any expropriation, attachment, sequestration, distress or execution affects any asset or assets of the relevant Issuer, any relevant Guarantor or a Material Subsidiary having an aggregate value of and in respect of indebtedness aggregating at least U.S.$50,000,000 (or its equivalent in any other currency or currencies) and is not discharged within 30 days; or
| (f) | Insolvency etc. |
(i) the relevant Issuer, any relevant Guarantor or any Material Subsidiary becomes insolvent or is unable to pay its debts as they fall due; (ii) an administrator or liquidator of the relevant Issuer, any relevant Guarantor or any Material Subsidiary of all or substantially all of the undertaking, assets and revenues of the relevant Issuer, such relevant Guarantor or such Material Subsidiary is appointed (otherwise than for the purposes of or pursuant to an amalgamation, reorganisation or restructuring whilst solvent on terms previously approved in writing by the Trustee or by an Extraordinary Resolution); or (iii) the relevant Issuer, any relevant Guarantor or any Material Subsidiary makes a general assignment or an arrangement or composition with or for the benefit of its creditors generally or declares a moratorium in respect of any of its Indebtedness given by it; or (iv) a person presents a petition for the winding up, liquidation, dissolution, administration or suspension of payments of the relevant Issuer, any relevant Guarantor or any Material Subsidiary (excluding where the relevant Issuer, such relevant Guarantor or such Material Subsidiary has satisfied the Trustee that it is contesting such petition in good faith and by appropriate action); or
| (g) | Winding up etc. |
an order is made or an effective resolution is passed for the winding up, liquidation or dissolution of the relevant Issuer, any relevant Guarantor or any Material Subsidiary (otherwise than for the purposes of or pursuant to an amalgamation, reorganisation or restructuring whilst solvent on terms previously approved in writing by the Trustee or by an Extraordinary Resolution); or any action, condition or thing at any time required to be taken, fulfilled or done in order (i) to enable the relevant Issuer or the relevant Guarantors lawfully to enter into, exercise their respective rights and perform and comply with their respective obligations under and in respect of the Notes, the Coupons and the Trust Deed, (ii) to ensure that those obligations are legal, valid, binding and enforceable and (iii) to make the Notes, the Coupons and the Trust Deed admissible in evidence in the courts of England is not taken, fulfilled or done; or
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| (h) | Failure to take action etc. |
| (i) | Cessation of business etc. |
the relevant Issuer, any relevant Guarantor or any Material Subsidiary ceases or threatens to cease to carry on all or substantially all of its business, save for (i) the purposes of or pursuant to an amalgamation, reorganisation or restructuring neither involving nor arising out of the insolvency of the relevant Issuer or, as the case may be, such relevant Guarantor or Material Subsidiary, (ii) any transfer of assets by the relevant Issuer, any relevant Guarantor or any Material Subsidiary to any other member of the Group, (iii) any transfer of assets by the relevant Issuer, any relevant Guarantor or any Material Subsidiary to a third party or parties (whether associated or not) on an arm’s length basis, (iv) any transfer of assets by the relevant Issuer, any relevant Guarantor or any Material Subsidiary whereby the transferee is or immediately upon such transfer becomes a Material Subsidiary, or (v) any transfer of assets by the relevant Issuer, any relevant Guarantor or any Material Subsidiary the terms of which have been previously approved by the Trustee or by an Extraordinary Resolution of the Noteholders; or
| (j) | Guarantee etc. |
any relevant Guarantee ceases to be, or is claimed by a relevant Guarantor not to be, in full force and effect; or
| (k) | Guarantors etc. |
any relevant Guarantor or, where the relevant Issuer is IHG Finance LLC, the relevant Issuer ceases to be a Subsidiary controlled, directly or indirectly, by the Parent,
provided that, in the case of Conditions 12(b), (d) and (f) to (i) inclusive, the Trustee shall have certified in writing that such event is in its opinion materially prejudicial to the interests of the Noteholders.
| 13. | Prescription |
Claims for principal in respect of Bearer Notes shall become void unless the relevant Bearer Notes are presented for payment within ten years of the appropriate Relevant Date. Claims for interest in respect of Bearer Notes shall become void unless the relevant coupons are presented for payment within five years of the appropriate Relevant Date. Claims for principal and interest on redemption in respect of Registered Notes shall become void unless the relevant Note Certificates are surrendered for payment within ten years of the appropriate Relevant Date.
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| 14. | Replacement of Notes, Coupons and Talons |
If any Note, Note Certificate Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Principal Paying Agent, in the case of Bearer Notes, or the Registrar, in the case of Registered Notes, (and, if the Notes are then admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system which requires the appointment of a Paying Agent or Transfer Agent in any particular place, the Paying Agent or Transfer Agent having its Specified Office in the place required by such competent authority, stock exchange and/or quotation system), subject to all applicable laws and competent authority, stock exchange and/or quotation system requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the relevant Issuer and the relevant Guarantors may reasonably require. Mutilated or defaced Notes, Note Certificates, Coupons or Talons must be surrendered before replacements will be issued.
| 15. | Trustee and Agents |
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility, including provisions relieving it from any obligation to take proceedings to enforce repayment or take any other action under the Trust Deed unless indemnified and/or secured and/or prefunded to its satisfaction and to be paid its costs and expenses in priority to the claims of Noteholders. The Trust Deed also contains provisions pursuant to which the Trustee is entitled, inter alia, (i) to enter into business transactions with the relevant Issuer, the relevant Guarantors and/or any other Subsidiary of the Parent and/or any related entity thereof and to act as trustee for the holders of any other securities issued or guaranteed by or relating to the relevant Issuer, the relevant Guarantors or any other Subsidiary of the Parent, (ii) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of, or consequences for, the Noteholders or Couponholders, and (iii) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.
In the exercise of its powers and discretions under these Conditions and/or the Trust Deed, the Trustee will have regard to the interests of the Noteholders as a class and will not be responsible for any consequences for individual Holders of Notes, Coupons or Talons as a result of such Holders being connected in any way with a particular territory or taxing jurisdiction.
In acting under the Agency Agreement and in connection with the Notes and the Coupons, the Paying Agents and the Calculation Agent (if any) act solely as agents of the relevant Issuer or, following the occurrence of an Event of Default, the Trustee and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders or Couponholders.
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The Principal Paying Agent and its initial Specified Office is set out below. If any additional Paying Agent is appointed in connection with any Series, the name of such Paying Agent will be specified in Part B of the relevant Final Terms. The initial Calculation Agent (if any) is specified in the relevant Final Terms. The relevant Issuer reserves the right at any time, with the prior written consent of the Trustee, to vary or terminate the appointment of any Agent, Registrar or Calculation Agent and to appoint a successor registrar, principal paying agent, transfer agent or calculation agent and additional or successor paying agents; PROVIDED HOWEVER, THAT:
| (a) | the relevant Issuer shall at all times maintain a Principal Paying Agent and a Registrar; and |
| (b) | if a Calculation Agent is specified in the relevant Final Terms, the relevant Issuer shall at all times maintain a Calculation Agent; and |
| (c) | if and for so long as the Notes are admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system which requires the appointment of a Paying Agent (in the case of Bearer Notes) and/or a Transfer Agent (in the case of Registered Notes) in any particular place, the relevant Issuer shall maintain a Paying Agent and/or Transfer Agent, as applicable, having its Specified Office in the place required by such competent authority, stock exchange and/or quotation system. |
Notice of any appointment of, or change in, any of the Calculation Agent, Registrar, Agents or in their Specified Offices shall promptly be given to the Noteholders in accordance with Condition 18 (Notices).
| 16. | Meetings of Noteholders; Modification and Waiver |
| (a) | Meetings of Noteholders |
The Trust Deed contains provisions for convening meetings (which may be physical or virtual) of Noteholders to consider matters relating to the Notes, including the modification of any provision of these Conditions or the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the relevant Issuer and, if applicable, the relevant Guarantors (acting together) or the Trustee and shall be convened by the Trustee upon the request in writing of Noteholders holding not less than one-tenth of the aggregate principal amount of the outstanding Notes. The quorum at any meeting convened to vote on an Extraordinary Resolution will be one or more Persons holding or representing more than half of the aggregate principal amount of the outstanding Notes or, at any adjourned meeting, one or more Persons being or representing Noteholders whatever the principal amount of the Notes held or represented; PROVIDED HOWEVER, THAT Reserved Matters may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which one or more Persons holding or representing not less than three-quarters or, at any adjourned meeting, not less than one quarter of the aggregate principal amount of the outstanding Notes form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders and Couponholders, whether present or not. Noteholders may attend and vote at such meetings or vote by way of electronic consents through the relevant clearing system(s) (in a form satisfactory to the Trustee).
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Any such meeting of the Noteholders may be convened at a physical location, or such other method (which may include, without limitation, a conference call or video conference) as the Trustee may determine in accordance with the provisions of the Trust Deed.
In addition, a resolution in writing signed by or on behalf of at least 75 per cent. of the Noteholders who for the time being are entitled to receive notice of a meeting of Noteholders under the Trust Deed will take effect as if it were an Extraordinary Resolution. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.
| (b) | Modification and waiver |
The Trustee may agree, without the consent of the Noteholders or Couponholders, to (i) any modification to or of these Conditions, the Notes or the Trust Deed (other than in respect of a Reserved Matter) which is, in the opinion of the Trustee, proper to make if, in the opinion of the Trustee, such modification will not be materially prejudicial to the interests of Noteholders, (ii) any modification of these Conditions, the Notes or the Trust Deed that is of a formal, minor or technical nature or is made to correct a manifest error, and (iii) any waiver or authorisation of any breach or proposed breach, of any of the provisions of these Conditions, the Notes or the Trust Deed (other than a proposed breach or breach relating to the subject of a Reserved Matter) that is in the opinion of the Trustee not materially prejudicial to the interests of the Noteholders. Any such modification, authorisation or waiver shall be binding on the Noteholders and the Couponholders and, if the Trustee so requires, such modification, authorisation or waiver shall be notified to the Noteholders as soon as practicable in accordance with Condition 18 (Notices).
| (c) | Substitution |
The Trust Deed contains provisions permitting the Trustee to agree, without the consent of the Noteholders or the Couponholders, to the substitution of certain other entities in place of the relevant Issuer or any relevant Guarantor (or in either case any previously substituted company) as principal debtor or, as the case may be, guarantor under the Trust Deed in relation to the Notes and Coupons of any Series of Notes, subject to (i) the Notes being unconditionally and irrevocably guaranteed by such Issuer or, as the case may be, such relevant Guarantor, (ii) the Trustee being satisfied that such substitution is not materially prejudicial to the interests of Noteholders; and (iii) certain other conditions set out in the Trust Deed being complied with.
No Noteholder or Couponholder shall, in connection with any substitution, be entitled to claim any indemnification or payment in respect of any tax consequence thereof for such Noteholder or (as the case may be) Couponholder except to the extent provided for in Condition 11 (Taxation) (or any undertaking given in addition to or substitution for it pursuant to the provisions of the Trust Deed).
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| 17. | Enforcement |
The Trustee may, at any time, at its discretion and without further notice, institute such proceedings or take any other action against the relevant Issuer and/or any relevant Guarantor as it thinks fit to enforce any obligation, condition or provision binding on the relevant Issuer and/or the relevant Guarantors under these Conditions, the Notes or the Trust Deed, but shall not be bound to do so or to take any further action under or pursuant to the Trust Deed unless:
| (a) | it has been so directed by an Extraordinary Resolution or it has been so requested in writing by the holders of at least one fifth of the nominal amount of the Notes outstanding; and |
| (b) | it has been indemnified and/or secured and/or prefunded to its satisfaction. |
No Noteholder or Couponholder shall be entitled to institute proceedings directly against the relevant Issuer or a relevant Guarantor unless the Trustee, having become bound to proceed as aforesaid (i) fails to do so within 60 days of being bound so to proceed, or (ii) is unable for any reason to do so, and such failure or inability is continuing.
| 18. | Notices |
| (a) | Valid Notices – Bearer Notes |
Notices to the Holders of Bearer Notes shall be valid if published in a leading English language daily newspaper published in London (which is expected to be the Financial Times) or, if such publication is not practicable, in a leading English language daily newspaper having general circulation in Europe. Any such notice shall be deemed to have been given on the date of first publication (or if required to be published in more than one newspaper, on the first date on which publication shall have been made in all the required newspapers).
| (a) | Valid Notices – Registered Notes |
Notices to the Holders of Registered Notes will be sent to them by first class mail (or its equivalent) or (if posted to an overseas address) by airmail at their respective addresses on the Register. Any such notice shall be deemed to have been given on the fourth day after the date of mailing. In addition, notices to Noteholders will be published on the date of such mailing in a leading English language daily newspaper published in London (which is expected to be the Financial Times) or, if such publication is not practicable, in a leading English language daily newspaper having general circulation in Europe.
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| (c) | Other Methods |
Notwithstanding Condition 18(a) (Valid Notices – Bearer Notes) and Condition 18(b) (Valid Notices – Registered Notes), the Trustee may approve some other method of giving notice to the Noteholders if, in its opinion, that other method is reasonable having regard to market practice then prevailing and to the requirements of any stock exchange on which Notes are then listed and PROVIDED THAT notice of that other method is given to the Noteholders in the manner required by the Trustee.
| (d) | Couponholders |
Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the Noteholders.
| 19. | Rounding |
For the purposes of any calculations referred to in these Conditions (unless otherwise specified in these Conditions or the relevant Final Terms), (a) all percentages resulting from such calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with 0.000005 per cent., being rounded up to 0.00001 per cent.), (b) all United States dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one half cent being rounded up), (c) all Japanese Yen amounts used in or resulting from such calculations will be rounded downwards to the next lower whole Japanese Yen amount, and (d) all amounts denominated in any other currency used in or resulting from such calculations will be rounded to the nearest two decimal places in such currency, with 0.005 being rounded upwards.
| 20. | Further Issues |
The relevant Issuer may from time to time without the consent of the Noteholders or Couponholders create and issue further securities either having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding securities of any series (including the Notes) or upon such terms as the relevant Issuer may determine at the time of their issue. References in these Conditions to the Notes include (unless the context requires otherwise) any other securities issued pursuant to this Condition and forming a single series with the Notes. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of securities of other series where the Trustee so decides.
| 21. | Governing Law and Jurisdiction |
| (a) | Governing law |
The Notes and the Trust Deed, and any non-contractual obligations arising out of or in connection with the Notes and the Trust Deed, are governed by, and construed in accordance with, English law.
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| (b) | English courts |
Subject to Condition 21(d) below, the courts of England have exclusive jurisdiction to settle any dispute (a “Dispute”) arising out of or in connection with the Notes and the Trust Deed (including a dispute relating to the existence, validity or cancellation of the Notes or any non-contractual obligation arising out of or in connection with the Notes or the Trust Deed) or the consequences of their nullity and accordingly each of the relevant Issuer, each of the relevant Guarantors and the Trustee and any Noteholders or Couponholders in relation to any Dispute submits to the exclusive jurisdiction of the English courts.
| (c) | Appropriate forum |
The relevant Issuer and each of the relevant Guarantors 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.
| (d) | Rights of the Trustee and Noteholders to take proceedings outside England |
Condition 21(d) is for the benefit of the Trustee, the Noteholders and the Couponholders only. To the extent allowed by law, the Trustee, the Noteholders and the Couponholders may in respect of any Dispute or Disputes, take (i) proceedings in any other court with jurisdiction; and (ii) concurrent proceedings in any number of jurisdictions.
| (e) | Process agent |
IHG Finance LLC, to the extent it is the relevant Issuer or a relevant Guarantor, irrevocably appoints the Parent which is presently at 1 Windsor Dials, Arthur Road, Windsor, Berkshire, England, SL4 1RS as its agent for service of process in any proceedings before the English courts in relation to any Dispute and the Parent accepts such appointment. IHG Finance LLC undertakes that, in the event of the Parent ceasing so to act or ceasing to be registered in England, it will immediately appoint another person as its agent for service of process in England in respect of any Dispute in England. IHG Finance LLC agrees that failure by a process agent to notify it of any process will not invalidate service. Nothing in this paragraph shall affect the right of the Trustee or, failing the Trustee, any Noteholder, to serve process in any other manner permitted by law.
| (f) | Waiver of Trial by Jury |
WITHOUT PREJUDICE TO CONDITION 21(B), EACH OF THE RELEVANT ISSUER AND THE RELEVANT GUARANTORS WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A BENCH TRIAL.
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SCHEDULE 2
FORM OF GLOBAL NOTES
PART A
FORM OF TEMPORARY GLOBAL NOTE FOR INTERCONTINENTAL
HOTELS GROUP PLC
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]1
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
TEMPORARY GLOBAL NOTE
| 1. | INTRODUCTION |
| 1.1 | The Notes |
This Temporary Global Note is issued in respect of the notes (the Notes) of InterContinental Hotels Group PLC (the Issuer) and guaranteed by (i) Six Continents Limited, (ii) InterContinental Hotels Limited, and (iii) IHG Finance LLC (each a Guarantor and together, the Guarantors) described in the final terms (the Final Terms) or drawdown prospectus (the Drawdown Prospectus) or securities note (Securities Note) a copy of which is annexed hereto. If a Drawdown Prospectus or a Securities
| 1 | Legend to appear on every Note with a maturity of more than one year. |
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Note is annexed hereto, each reference in this Temporary Global Note to Final Terms shall be read and construed as a reference to the final terms of the Notes set out in such Drawdown Prospectus or Securities Note. The Notes:
| (a) | Trust Deed: (insofar as they are represented by this Temporary Global Note) are subject to and have the benefit of an amended and restated trust deed made on 19 September 2024 (as further amended, supplemented or restated from time to time, the Trust Deed) made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee (the Trustee, which expression shall include all persons for the time being the trustee or trustees appointed under the Trust Deed); and |
| (b) | Agency Agreement: are the subject of an amended and restated agency agreement dated 19 September 2024 (as further amended, supplemented or restated from time to time, the Agency Agreement) made between, inter alios, the Issuer, the Guarantors, the Trustee and Elavon Financial Services DAC, UK Branch as principal paying agent (the Principal Paying Agent, which expression includes any successor or additional principal paying agent appointed from time to time in connection with the Notes, and together with any additional or successor paying agents appointed from time to time in connection with the Notes, the Paying Agents). |
| 1.2 | Construction |
All references in this Temporary Global Note to an agreement, instrument or other document (including the Agency Agreement and the Trust Deed) shall be construed as a reference to that agreement, instrument or other document as the same may be amended, supplemented, replaced or novated from time to time provided that, in the case of any amendment, supplement, replacement or novation made after the date hereof, it is made in accordance with the Conditions and the Trust Deed. Headings and sub-headings are for ease of reference only and shall not affect the construction of this Temporary Global Note.
| 1.3 | References to Conditions |
Any reference herein to the Conditions is to the Conditions as defined in the Trust Deed, as supplemented, amended and/or replaced by the Final Terms and any reference to a numbered “Condition” is to the correspondingly numbered provision thereof. Words and expressions defined in Condition 2(a) (Interpretation - Definitions) shall have the same meanings when used in this Temporary Global Note.
| 2. | PROMISE TO PAY |
| 2.1 | Pay to bearer |
The Issuer, for value received, promises to pay to the bearer of this Temporary Global Note, in respect of each Note represented by this Temporary Global Note, on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions, the Redemption Amount or such lesser amount as is repayable upon any such redemption or repayment (or to pay such other amounts of principal on such dates as may be specified in the Final Terms), and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Temporary Global Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions; provided, however, that such interest shall be payable only:
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| (a) | Before the Exchange Date: in the case of interest falling due before the Exchange Date (as defined below), to the extent that a certificate or certificates issued by Euroclear Bank SA/NV (Euroclear) and/or Clearstream Banking S.A. (Clearstream and, together with Euroclear, the international central securities depositaries or ICSDs) and/or any other relevant clearing system dated not earlier than the date on which such interest falls due and in substantially the form set out in Schedule 3 (Form of Euroclear/Clearstream, Certification) hereto is/are delivered to the Specified Office of the Principal Paying Agent; or |
| (b) | Failure to exchange: in the case of interest falling due at any time, to the extent that the Issuer has failed to procure the exchange for a permanent global note of that portion of this Temporary Global Note in respect of which such interest has accrued. |
| 2.2 | NGN Principal Amount |
If the Final Terms specify that the New Global Note form is applicable, this Temporary Global Note shall be a “New Global Note” or “NGN” and the principal amount of Notes represented by this Temporary Global Note shall be the aggregate amount from time to time entered in the records of both ICSDs. The records of the ICSDs (which expression in this Temporary Global Note means the records that each ICSD 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)) shall be conclusive evidence of the principal amount of Notes represented by this Temporary Global Note and, for these purposes, a statement issued by an ICSD (which statement shall be made available to the bearer upon request) stating the principal amount of Notes represented by this Temporary Global Note at any time shall be conclusive evidence of the records of the ICSD at that time.
| 2.3 | CGN Principal Amount |
If the Final Terms specify that the New Global Note form is not applicable, this Temporary Global Note shall be a “Classic Global Note” or “CGN” and the principal amount of Notes represented by this Temporary Global Note shall be the amount stated in the Final Terms or, if lower, the principal amount most recently entered by or on behalf of the Issuer in the relevant column in Schedule 1 (Payments, Exchange and Cancellation of Notes).
| 3. | NEGOTIABILITY |
This Temporary Global Note is negotiable and, accordingly, title to this Temporary Global Note shall pass by delivery.
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| 4. | EXCHANGE |
| 4.1 | Permanent Global Note |
If the Final Terms specify the form of Notes as being “Temporary Global Note exchangeable for a Permanent Global Note”, then on or after the day following the expiry of 40 days after the date of issue of this Temporary Global Note (the Exchange Date), the Issuer shall procure (in the case of first exchange) the delivery of a Permanent Global Note (which expression has the meaning given in the Trust Deed) in accordance with the Agency Agreement to the bearer of this Temporary Global Note or (in the case of any subsequent exchange) an increase in the principal amount of the Permanent Global Note in accordance with its terms against:
| (a) | Presentation and surrender: presentation and (in the case of final exchange) surrender of this Temporary Global Note to or to the order of the Principal Paying Agent; and |
| (b) | Certification: receipt by the Principal Paying Agent of a certificate or certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system dated not earlier than the Exchange Date and in substantially the form set out in Schedule 3 (Form of Euroclear/Clearstream Certification) hereto. |
The principal amount of Notes represented by the Permanent Global Note shall be equal to the aggregate of the principal amounts specified in the certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system and received by the Principal Paying Agent; provided, however, that in no circumstances shall the principal amount of Notes represented by the Permanent Global Note exceed the initial principal amount of Notes represented by this Temporary Global Note.
| 4.2 | Definitive Notes; Not D Rules |
If the Final Terms specify the form of Notes as being “Temporary Global Note exchangeable for Definitive Notes” and also specifies that the C Rules are applicable or that neither the C Rules or the D Rules are applicable, then on or after the day following the expiry of 40 days after the date of issue of this Temporary Global Note (the Exchange Date), the Issuer shall procure the delivery of Definitive Notes (which expression has the meaning given in the Agency Agreement) in accordance with the Agency Agreement with Coupons and Talons (if so specified in the Final Terms) attached and in an aggregate principal amount equal to the principal amount of Notes represented by this Temporary Global Note to the bearer of this Temporary Global Note against presentation and surrender of this Temporary Global Note to or to the order of the Principal Paying Agent.
| 4.3 | Definitive Notes; D Rules |
If the Final Terms specify the form of Notes as being “Temporary Global Note exchangeable for Definitive Notes” and also specifies that the D Rules are applicable, then on or after the day following the expiry of 40 days after the date of issue of this Temporary Global Note (the Exchange Date), the Issuer shall procure the delivery of Definitive Notes (which expression has the meaning given in the Agency Agreement) in accordance with the Agency Agreement with Coupons and Talons (if so specified in the Final Terms) attached against:
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| (a) | Presentation and surrender: presentation and (in the case of final exchange) surrender of this Temporary Global Note to or to the order of the Principal Paying Agent; and |
| (b) | Certification: receipt by the Principal Paying Agent of a certificate or certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system dated not earlier than the Exchange Date and in substantially the form set out in Schedule 3 (Form of Euroclear/Clearstream Certification) hereto. |
The Definitive Notes so delivered from time to time shall be in an aggregate principal amount equal to the aggregate of the principal amounts specified in the certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system and received by the Principal Paying Agent; provided, however, that in no circumstances shall the aggregate principal amount of Definitive Notes so delivered exceed the initial principal amount of Notes represented by this Temporary Global Note.
| 5. | DELIVERY OF PERMANENT GLOBAL OR DEFINITIVE NOTES |
| 5.1 | Permanent Global Note |
Whenever any interest in this Temporary Global Note is to be exchanged for an interest in a Permanent Global Note, the Issuer shall procure (in the case of first exchange) the prompt delivery (free of charge to the bearer) of such Permanent Global Note, duly authenticated, to the bearer of this Temporary Global Note or (in the case of any subsequent exchange) an increase in the principal amount of Notes represented by such Permanent Global Note in accordance with its terms, in each case in an aggregate principal amount equal to the aggregate of the principal amounts specified in the certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system and received by the Principal Paying Agent against presentation and (in the case of final exchange) surrender of this Temporary Global Note to or to the order of the Principal Paying Agent within 7 days of the bearer requesting such exchange.
| 5.2 | Definitive Notes |
Whenever this Temporary Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the Final Terms), in an aggregate principal amount equal to the principal amount of Notes represented by this Temporary Global Note to the bearer of this Temporary Global Note against the surrender of this Temporary Global Note to or to the order of the Principal Paying Agent within 30 days of the bearer requesting such exchange.
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| 6. | WRITING DOWN |
On each occasion on which:
| 6.1 | Permanent Global Note: the Permanent Global Note is delivered or the principal amount of Notes represented thereby is increased in accordance with its terms in exchange for a further portion of this Temporary Global Note; or |
| 6.2 | Definitive Notes: Definitive Notes are delivered in exchange for this Temporary Global Note; or |
| 6.3 | Cancellation: Notes represented by this Temporary Global Note are to be cancelled in accordance with Condition 9(k) (Redemption and Purchase - Cancellation), |
the Issuer shall procure that:
| (a) | if the Final Terms specify that the New Global Note form is not applicable, (i) the principal amount of Notes represented by the Permanent Global Note, the principal amount of such increase or (as the case may be) the aggregate principal amount of such Notes and (ii) the remaining principal amount of Notes represented by this Temporary Global Note (which shall be the previous principal amount of Notes represented by this Temporary Global Note less the aggregate of the amounts referred to in (i) above) are entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of Notes represented by this Temporary Global Note shall for all purposes be as most recently so entered; and |
| (b) | if the Final Terms specify that the New Global Note form is applicable, details of the exchange or cancellation shall be entered pro rata in the records of the ICSDs. |
| 7. | PAYMENTS |
| 7.1 | Recording of Payments |
Upon any payment being made in respect of the Notes represented by this Temporary Global Note, the Issuer shall procure that:
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, details of such payment shall be entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto and, in the case of any payment of principal, the principal amount of the Notes represented by this Temporary Global Note shall be reduced by the principal amount so paid; and |
| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, details of such payment shall be entered pro rata in the records of the ICSDs and, in the case of any payment of principal, the principal amount of the Notes entered in the records of ICSDs and represented by this Temporary Global Note shall be reduced by the principal amount so paid. |
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| 7.2 | Discharge of Issuer’s obligations |
Payments due in respect of Notes for the time being represented by this Temporary Global Note shall be made to the bearer of this Temporary Global Note and each payment so made will discharge the Issuer’s obligations in respect thereof. Any failure to make the entries referred to above shall not affect such discharge.
| 7.3 | Payment Business Day |
If the currency of any payment made in respect of Notes represented by this Temporary Global Note is euro, the applicable Payment Business Day shall be any day which is a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or, if the currency of any payment made in respect of the Notes represented by this Temporary Global Note is not euro, the applicable Payment Business Day shall be any day which is a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre.
| 8. | CALCULATION OF INTEREST |
The calculation of any interest amount in respect of Notes represented by this Global Note will be calculated on the aggregate outstanding principal amount of the Notes represented by this Global Note and not by reference to the Calculation Amount.
| 9. | CONDITIONS APPLY |
Until this Temporary Global Note has been exchanged as provided herein or cancelled in accordance with the Agency Agreement, the bearer of this Temporary Global Note shall be subject to the Conditions and the Trust Deed and, subject as otherwise provided herein, shall be entitled to the same rights and benefits under the Conditions and the Trust Deed as if the bearer were the holder of Definitive Notes and any related Coupons and Talons in the smallest Specified Denomination and in an aggregate principal amount equal to the principal amount of the Notes represented by this Temporary Global Note.
| 10. | NOTICES |
Notwithstanding Condition 18 (Notices), while all the Notes are represented by this Temporary Global Note (or by this Temporary Global Note and the Permanent Global Note) and this Temporary Global Note is (or this Temporary Global Note and the Permanent Global Note are) deposited with a depositary or a common depositary for Euroclear and/or Clearstream and/or any other relevant clearing system or a Common Safekeeper (which expression has the meaning given in the Agency Agreement), notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream and/or any other relevant clearing system and, in any case, such notices shall be deemed to have been given to the Noteholders in accordance with the Condition 18 (Notices) on the date of delivery to Euroclear and/or Clearstream and/or any other relevant clearing system.
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| 11. | MEETINGS |
The holders of this Temporary Global Note shall, at any meeting of the Noteholders, be treated as having one vote in respect of each £1 in principal amount of the Notes represented by this Temporary Global Note.
| 12. | TRUSTEE’S POWERS |
In considering the interests of Noteholders while this Temporary Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by any such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Temporary Global Note and may consider such interests as if such accountholders were the holders of this Temporary Global Note.
| 13. | AUTHENTICATION |
This Temporary Global Note shall not be valid for any purpose until it has been authenticated by and on behalf of Elavon Financial Services DAC UK Branch as principal paying agent.
| 14. | EFFECTUATION |
If the Final Terms specify that the New Global Note form is applicable, this Temporary Global Note shall not be valid for any purpose until it has been effectuated for and on behalf of the entity appointed as common safekeeper by the ICSDs.
| 15. | GOVERNING LAW |
This Temporary Global Note and any non-contractual obligations arising out of or in connection with it are governed by English law.
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AS WITNESS the manual/electronic signature of a duly authorised person on behalf of the Issuer.
| INTERCONTINENTAL HOTELS | ) | |
| GROUP PLC | ) | |
| ) | ||
| By: | ||
| electronic or manual signature | ||
| (duly authorised) | ||
| ISSUED on the Issue Date | ||
| AUTHENTICATED by and on behalf of | ) |
|
| ELAVON FINANCIAL SERVICES DAC, | ) |
|
| UK BRANCH | ) |
|
| as principal paying agent without | ) |
|
| recourse, warranty or liability | ) |
|
| By: | ||
| electronic /manual signature | ||
| (duly authorised) | ||
| [EFFECTUATED for and on behalf of | ) | |
| [COMMON SAFEKEEPER] | ) | |
| as common safekeeper without recourse, | ) | |
| warranty or liability | ) | |
| By: | ||
| electronic/manual signature | ||
| (duly authorised) | ||
[Temporary Global Note for InterContinental Hotels Group PLC – Signature Page]
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SCHEDULE 12
TO THE TEMPORARY GLOBAL NOTE
Payments, Exchange and Cancellation of Notes
| Date of payment, delivery or cancellation |
Amount of interest then paid |
Principal amount of |
Aggregate principal |
Remaining principal |
Authorised Signature |
|||||
| 2 | Schedule 1 should only be completed where the Final Terms specify that the New Global Note form is not applicable. |
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SCHEDULE 2
TO THE TEMPORARY GLOBAL NOTE
Form of Accountholder’s Certification
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
[Aggregate principal amount of Series]
[Title of Notes]
This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (a) are owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source (United States persons), (b) are owned by United States person(s) that (i) are foreign branches of a United States financial institution (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv)) (financial institutions) purchasing for their own account or for resale, or (ii) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (i) or (ii), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the issuer or the issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (c) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a United States or foreign financial institution described in clause (c) (whether or not also described in clause (a) or (b)) this is to further certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(b)(3) of Regulation S under the Securities Act of 1933, as amended (the Act), then this is also to certify that, except as set forth below, the Securities are beneficially owned by (1) non-U.S. person(s) or (2) U.S. person(s) who purchased the Securities in transactions which did not require registration under the Act. As used in this paragraph the term U.S. person has the meaning given to it by Regulation S under the Act.
As used herein, United States means the United States of America (including the States and the District of Columbia); and its possessions include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
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We undertake to advise you promptly by electronic transmission on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
This certification excepts and does not relate to [currency] [amount] of such interest in the above Securities in respect of which we are not able to certify and as to which we understand exchange and delivery of definitive Securities (or, if relevant, exercise of any rights or collection of any interest) cannot be made until we do so certify.
We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings or official enquiries are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorise you to produce this certification to any interested party in such proceedings.
Dated: [ ]
| [name of account holder] | ||
| as, or as agent for, the beneficial owner(s) of the Securities to which this certificate relates. |
||
| By: |
|
|
| Authorised signatory | ||
139
SCHEDULE 3
TO THE TEMPORARY GLOBAL NOTE
FORM OF EUROCLEAR/CLEARSTREAM CERTIFICATION
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
[Aggregate principal amount of Series]
[Title of Notes]
This is to certify that, based solely on certifications we have received in writing, by electronic transmission from member organisations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our Member Organisations) substantially to the effect set forth in the temporary global note issued in respect of the securities, as of the date hereof, [currency] [amount] principal amount of the above-captioned Securities (a) is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source (United States persons), (b) is owned by United States persons that (i) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv)) (financial institutions) purchasing for their own account or for resale, or (ii) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (i) or (ii), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer or the Issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (c) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in clause (c) (whether or not also described in clause (a) or (b)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(b)(3) of Regulation S under the Securities Act of 1933, as amended (the Act), then this is also to certify with respect to the principal amount of Securities set forth above that, except as set forth below, we have received in writing, by electronic transmission, from our Member Organisations entitled to a portion of such principal amount, certifications with respect to such portion substantially to the effect set forth in the temporary global note issued in respect of the Securities.
140
We further certify (1) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the temporary global security excepted in such certifications and (2) that as of the date hereof we have not received any notification from any of our Member Organisations to the effect that the statements made by such Member Organisations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings or official enquiries are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorise you to produce this certification to any interested party in such proceedings.
| Dated: [ ] | ||
| Euroclear Bank SA/NV | ||
| or | ||
| Clearstream Banking S.A. | ||
| By: |
|
|
| Authorised signatory | ||
141
PART B
FORM OF PERMANENT GLOBAL NOTE FOR INTERCONTINENTAL
HOTELS GROUP PLC
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]3
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
PERMANENT GLOBAL NOTE
| 1. | INTRODUCTION |
| 1.1 | The Notes |
This Global Note is issued in respect of the notes (the Notes) of InterContinental Hotels Group PLC (the Issuer) and guaranteed by (i) Six Continents Limited, (ii) InterContinental Hotels Limited, and (iii) IHG Finance LLC (each a Guarantor and together, the Guarantors) described in the final terms (the Final Terms) or drawdown prospectus (Drawdown Prospectus) or securities note (Securities Note) a copy of which is annexed hereto. If a Drawdown Prospectus or a Securities Note is annexed hereto, each reference in this Global Note to “Final Terms” shall be read and construed as a reference to the final terms of the Notes set out in such Drawdown Prospectus or Securities Note. The Notes:
| 3 | Legend to appear on every Note with a maturity of more than one year. |
142
| (a) | Trust Deed: (insofar as they are represented by this Global Note) are subject to and have the benefit of an amended and restated trust deed made on 19 September 2024 (as further amended, supplemented or restated from time to time, the Trust Deed) made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee (the Trustee, which expression shall include all persons for the time being the trustee or trustees appointed under the Trust Deed); and |
| (b) | Agency Agreement: are the subject of an amended and restated agency agreement dated 19 September 2024 (as further amended, supplemented or restated from time to time) (the Agency Agreement) made between, inter alios, the Issuer, the Guarantors, the Trustee and Elavon Financial Services DAC, UK Branch as principal paying agent (the Principal Paying Agent, which expression includes any successor or additional principal paying agent appointed from time to time in connection with the Notes, and, together with any additional or successor paying agents appointed from time to time in connection with the Notes, the Paying Agents). |
| 1.2 | Construction |
All references in this Global Note to an agreement, instrument or other document (including the Agency Agreement and the Trust Deed) shall be construed as a reference to that agreement, instrument or other document as the same may be amended, supplemented, replaced or novated from time to time provided that, in the case of any amendment, supplement, replacement or novation made after the date hereof, it is made in accordance with the Conditions and the Trust Deed. Headings and sub-headings are for ease of reference only and shall not affect the construction of this Global Note.
| 1.3 | References to Conditions |
Any reference herein to the “Conditions” is to the Terms and Conditions of the Notes set out in Schedule 2 (Terms and Conditions of the Notes) hereto, as supplemented, amended and/or replaced by the Final Terms and any reference to a numbered “Condition” is to the correspondingly numbered provision thereof. Words and expressions defined in the Conditions shall have the same meanings when used in this Global Note.
| 2. | PROMISE TO PAY |
| 2.1 | Pay to bearer |
The Issuer, for value received, promises to pay to the bearer of this Global Note, in respect of each Note represented by this Global Note, on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions, the Redemption Amount or such lesser amount as is repayable upon any such redemption (or to repay such other amounts of principal on such dates as may be specified in the Final Terms and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Global Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
143
| 2.2 | NGN Principal Amount |
If the Final Terms specify that the New Global Note form is applicable, this Global Note shall be a “New Global Note” or “NGN” and the principal amount of Notes represented by this Global Note shall be the aggregate amount from time to time entered in the records of both ICSDs. The records of the ICSDs (which expression in this Global Note means the records that each ICSD 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)) shall be conclusive evidence of the principal amount of Notes represented by this Global Note and, for these purposes, a statement issued by an ICSD (which statement shall be made available to the bearer upon request) stating the principal amount of Notes represented by this Global Note at any time shall be conclusive evidence of the records of the ICSD at that time.
| 2.3 | CGN Principal Amount |
If the Final Terms specify that the New Global Note form is not applicable, this Global Note shall be a “Classic Global Note” or “CGN” and the principal amount of Notes represented by this Global Note shall be the amount stated in the Final Terms or, if lower, the principal amount most recently entered by or on behalf of the Issuer in the relevant column in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto.
| 3. | NEGOTIABILITY |
This Global Note is negotiable and, accordingly, title to this Global Note shall pass by delivery.
| 4. | EXCHANGE |
This Global Note will become exchangeable, in whole but not in part only and at the request of the bearer of this Global Note, for Definitive Notes (which expression has the meaning given in the Trust Deed) in accordance with the Agency Agreement:
| 4.1 | Upon notice: on the expiry of such period of notice as may be specified in the Final Terms; or |
| 4.2 | Upon demand: at any time, if so specified in the Final Terms; or |
| 4.3 | In limited circumstances: if the Final Terms specify “in the limited circumstances described in the Permanent Global Note”, then if either of the following events occurs: |
| (a) | Closure of clearing systems: Euroclear Bank SA/NV (Euroclear) or Clearstream Banking S.A. (Clearstream and, together with Euroclear, the international central securities depositaries or ICSDs) or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business and no successor clearing system approved by the Trustee is available; or |
144
| (b) | Event of Default: any of the circumstances described in Condition 12 (Events of Default) occurs; or |
| (c) | Adverse tax consequences: the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes represented by the Permanent Global Note in definitive form. |
| 5. | DELIVERY OF DEFINITIVE NOTES |
Whenever this Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the Final Terms), in an aggregate principal amount equal to the principal amount of Notes represented by this Global Note to the bearer of this Global Note against the surrender of this Global Note to or to the order of the Principal Paying Agent within 30 days of the bearer requesting such exchange.
| 6. | WRITING DOWN |
On each occasion on which:
| 6.1 | Payment of principal: a payment of principal is made in respect of this Global Note; |
| 6.2 | Definitive Notes: Definitive Notes are delivered; or |
| 6.3 | Cancellation: Notes represented by this Global Note are to be cancelled in accordance with Condition 9(k) (Redemption and Purchase - Cancellation), |
the Issuer shall procure that:
| (a) | if the Final Terms specify that the New Global Note Form is not applicable, (i) the amount of such payment and the aggregate principal amount of such Notes; and (ii) the remaining principal amount of Notes represented by this Global Note (which shall be the previous principal amount hereof less the aggregate of the amounts referred to in (i) above) are entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of Notes represented by this Global Note shall for all purposes be as most recently so entered; and |
| (b) | if the Final Terms specify that the New Global Note Form is applicable, details of the exchange or cancellation shall be entered pro rata in the records of the ISCDs. |
| 7. | WRITING UP |
| 7.1 | Initial Exchange |
If this Global Note was originally issued in exchange for part only of a temporary global note representing the Notes, then all references in this Global Note to the principal amount of Notes represented by this Global Note shall be construed as references to the principal amount of Notes represented by the part of the temporary global note in exchange for which this Global Note was originally issued which the Issuer shall procure:
145
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, is entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of Notes represented by this Global Note shall for all purposes be as most recently so entered; and |
| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, is entered by the ICSDs in their records. |
| 7.2 | Subsequent Exchange |
If at any subsequent time any further portion of such temporary global note is exchanged for an interest in this Global Note, the principal amount of Notes represented by this Global Note shall be increased by the amount of such further portion, and the Issuer shall procure that the principal amount of Notes represented by this Global Note (which shall be the previous principal amount of Notes represented by this Global Note plus the amount of such further portion) is:
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of this Global Note shall for all purposes be as most recently so entered; and |
| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, entered by the ICSDs in their records. |
| 8. | PAYMENTS |
| 8.1 | Recording of Payments |
Upon any payment being made in respect of the Notes represented by this Global Note, the Issuer shall procure that:
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, details of such payment shall be entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto and, in the case of any payment of principal, the principal amount of the Notes represented by this Global Note shall be reduced by the principal amount so paid; and |
| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, details of such payment shall be entered pro rata in the records of the ICSDs and, in the case of any payment of principal, the principal amount of the Notes entered in the records of ICSDs and represented by this Global Note shall be reduced by the principal amount so paid. |
146
8.2 Discharge of Issuer’s obligations
Payments due in respect of Notes for the time being represented by this Global Note shall be made to the bearer of this Global Note and each payment so made will discharge the Issuer’s obligations in respect thereof. Any failure to make the entries referred to above shall not affect such discharge.
8.3 Payment Business Day
If the currency of any payment made in respect of Notes represented by this Global Note is euro, the applicable Payment Business Day shall be any day which is a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or, if the currency of any payment made in respect of the Notes represented by this Global Note is not euro, the applicable Payment Business Day shall be any day which is a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre.
9. CALCULATION OF INTEREST
The calculation of any interest amount in respect of Notes represented by this Global Note will be calculated on the aggregate outstanding principal amount of the Notes represented by this Global Note and not by reference to the Calculation Amount.
10. CONDITIONS APPLY
Until this Global Note has been exchanged as provided herein or cancelled in accordance with the Agency Agreement, the bearer of this Global Note shall be subject to the Conditions and, subject as otherwise provided herein, shall be entitled to the same rights and benefits under the Conditions as if the bearer were the holder of Definitive Notes and any related Coupons and Talons in the smallest Specified Denomination and in an aggregate principal amount equal to the principal amount of Notes represented by this Global Note.
11. EXERCISE OF PUT OPTION OR CHANGE OF CONTROL PUT OPTION
For so long as all of the Notes are represented by one or both of the Global Notes and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, the option of the Noteholders provided for in Condition 9(f) (Redemption and Purchase - Redemption at the option of the Noteholders) or, as the case may be, the option of the Noteholders provided for in Condition 9(g) (Redemption and Purchase - Change of Control redemption) may be exercised by an accountholder giving notice to the Principal Paying Agent in accordance with the standard procedures of Euroclear and Clearstream (which may include notice being given on his instructions by Euroclear or Clearstream or any common depositary for them to the Principal Paying Agent by electronic means) of the principal amount of the Notes in respect of which such option is exercised and at the same time presenting or procuring the presentation of the relevant Global Note to the Principal Paying Agent for notation accordingly within the time limits set forth in the relevant Condition.
147
| 12. | EXERCISE OF CALL OPTION |
For so long as all of the Notes are represented by one or both of the temporary global note and this Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, no drawing of Notes will be required under Condition 9(e) (Redemption and Purchase - Partial redemption) in the event that the Issuer exercises its call option pursuant to Condition 9(c) (Redemption and Purchase - Redemption at the option of the Issuer (Issuer Call Option)) in respect of less than the aggregate principal amount of the Notes outstanding at such time. In such event, the standard procedures of Euroclear and/or Clearstream shall operate to determine which interests in the Global Note(s) are to be subject to such option.
| 13. | NOTICES |
Notwithstanding Condition 18 (Notices), while all the Notes are represented by this Global Note (or by this Global Note and a temporary global note) and this Global Note is (or this Global Note and the temporary global note are) deposited with a depositary or a common depositary for Euroclear and/or Clearstream and/or any other relevant clearing system or a Common Safekeeper (which expression has the meaning given in the Agency Agreement), notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream and/or any other relevant clearing system and, in any case, such notices shall be deemed to have been given to the Noteholders in accordance with Condition 18 (Notices) on the date of delivery to Euroclear and/or Clearstream and/or any other relevant clearing system.
Whilst any Notes held by a Noteholder are represented by a Global Note, notices to be given by such Noteholder may be given by such Noteholder to the Principal Paying Agent through Euroclear and/or Clearstream, as the case may be, in such a manner as the Principal Paying Agent and Euroclear and/or Clearstream, as the case may be, may approve for this purpose.
| 14. | MEETINGS |
The holders of this Global Note shall, at any meeting of the Noteholders, be treated as having one vote in respect of each £1 in principal amount of the Notes represented by this Global Note.
| 15. | TRUSTEE’S POWERS |
In considering the interests of Noteholders while this Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by any such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Global Note and may consider such interests as if such accountholders were the holders of this Global Note.
| 16. | AUTHENTICATION |
This Global Note shall not be valid for any purpose until it has been authenticated by and on behalf of Elavon Financial Services DAC, UK Branch as principal paying agent.
148
| 17. | EFFECTUATION |
If the Final Terms specify that the New Global Note form is applicable, this Permanent Global Note shall not be valid for any purpose until it has been effectuated for and on behalf of the entity appointed as Common Safekeeper (which expression has the meaning given in the Agency Agreement).
| 18. | GOVERNING LAW |
This Global Note, and any non-contractual obligations arising out of or in connection with it, are governed by English law.
149
AS WITNESS the manual/electronic signature of a duly authorised person on behalf of the Issuer.
| INTERCONTINENTAL HOTELS | ) | |||||||
| GROUP PLC | ) | |||||||
| By: |
|
|||||||
| electronic or manual signature | ||||||||
| (duly authorised) | ||||||||
| ISSUED on the Issue Date | ||||||||
| AUTHENTICATED for and on behalf of | ) |
|||||||
| ELAVON FINANCIAL SERVICES DAC, | ) |
|||||||
| UK BRANCH | ) |
|||||||
| as principal paying agent | ) |
|||||||
| without recourse, warranty or liability | ) |
|||||||
| By: |
|
|||||||
| electronic/manual signature | ||||||||
| (duly authorised) | ||||||||
| [EFFECTUATED for and on behalf of | ) |
|||||||
| [COMMON SAFEKEEPER] | ) |
|||||||
| as common safekeeper without recourse, | ) |
|||||||
| warranty or liability | ) |
|||||||
| By: |
|
|||||||
| electronic/manual signature | ||||||||
| (duly authorised) | ||||||||
[Permanent Global Note for InterContinental Hotels Group PLC – Signature Page]
150
SCHEDULE 14
TO THE PERMANENT GLOBAL NOTE
PAYMENTS, EXCHANGE AND CANCELLATION OF NOTES
| Date of payment, exchange, delivery or cancellation |
Amount of interest then paid |
Amount of principal then paid |
Principal amount of Temporary Global Note then exchanged |
Aggregate amount of Definitive Notes then delivered |
Aggregate amount of Notes then cancelled |
New principal amount of this Global Note |
Authorised signature |
| 4 | Schedule 1 should only be completed where the Final Terms specify that the New Global Note form is not applicable. |
151
SCHEDULE 2
TO THE PERMANENT GLOBAL NOTE
Terms and Conditions of the Notes
As set out in Schedule 1 to the Trust Deed
152
PART C
FORM OF DEFINITIVE NOTE FOR INTERCONTINENTAL HOTELS GROUP PLC
[On the face of the Note:]
[currency][denomination]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
This Note is one of a series of notes (the Notes) of InterContinental Hotels Group PLC (the Issuer) and guaranteed by (i) Six Continents Limited, (ii) InterContinental Hotels Limited, and (iii) IHG Finance LLC (each a Guarantor and together, the Guarantors) as described in the final terms (the Final Terms) or drawdown prospectus (Drawdown Prospectus) or securities note (Securities Note) a copy of the relevant particulars of which is endorsed on this Note. Any reference herein to the Conditions is to the Terms and Conditions of the Notes endorsed on this Note, as supplemented, amended and/or replaced by the Final Terms or Drawdown Prospectus or Securities Note and any reference to a numbered Condition is to the correspondingly numbered provision thereof. Words and expressions defined in Condition 2(a) (Interpretation – Definitions) shall have the same meanings when used in this Note.
153
This Note is issued subject to, and with the benefit of, the Conditions and an amended and restated trust deed (as further modified and/or supplemented and/or novated from time to time, the Trust Deed) dated 19 September 2024 and made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee for the holders of the Notes.
The Issuer, for value received, promises to pay to the bearer of this Note the Redemption Amount on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions (or to pay such other amounts of principal on such dates as may be specified in the Final Terms or Drawdown Prospectus or Securities Note), and to pay interest (if any) on the nominal amount of this Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
This Note shall not be valid for any purpose until it has been authenticated by and on behalf of Elavon Financial Services DAC, UK Branch as principal paying agent.
This Note, and any non-contractual obligations arising out of or in connection with it, are governed by English law.
154
AS WITNESS the electronic or manual signature of a duly authorised person on behalf of the Issuer.
| INTERCONTINENTAL HOTELS | ) | |||||||
| GROUP PLC | ) | |||||||
| ) |
||||||||
| By: |
|
|||||||
| electronic or manual signature | ||||||||
| (duly authorised) | ||||||||
| ISSUED on the Issue Date | ||||||||
| AUTHENTICATED by and on behalf of | ) |
|||||||
| ELAVON FINANCIAL SERVICES DAC, | ) |
|||||||
| UK BRANCH | ) |
|||||||
| as principal paying agent | ) |
|||||||
| without recourse, warranty or liability | ) |
|||||||
| By: |
|
|||||||
| electronic or manual signature | ||||||||
| (duly authorised) | ||||||||
[Definitive Note for InterContinental Hotels Group PLC – Signature Page]
155
[On the reverse of the Note:]
FINAL TERMS
The following is a copy of the relevant particulars of the Final Terms or Drawdown Prospectus or Securities Note.
TERMS AND CONDITIONS
[As set out in Schedule 1 to the Trust Deed]
[At the foot of the Terms and Conditions:]
PRINCIPAL PAYING AGENT
ELAVON FINANCIAL SERVICES DAC, UK BRANCH
125 Old Broad Street
Fifth Floor
London EC2N 1AR
156
PART D
FORM OF COUPON FOR INTERCONTINENTAL HOTELS GROUP PLC
[On the face of the Coupon:]
[For Fixed Rate Notes]
INTERCONTINENTAL HOTELS GROUP PLC
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
and
SIX CONTINENTS LIMITED
and
INTERCONTINENTAL HOTELS LIMITED
Coupon for [currency][amount of interest payment] due on [interest payment date].
Such amount is payable, subject to the terms and conditions (the Conditions) endorsed on the Note to which this Coupon relates (which are binding on the holder of this Coupon whether or not it is for the time being attached to such Note), against presentation and surrender of this Coupon at the specified office for the time being of any of the agents shown on the reverse of this Coupon (or any successor or additional agents appointed from time to time in accordance with the Conditions).
[For Floating Rate Notes]
INTERCONTINENTAL HOTELS GROUP PLC
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
and
SIX CONTINENTS LIMITED
and
INTERCONTINENTAL HOTELS LIMITED
This Coupon relates to a Note in the denomination of [currency] [amount].
Coupon for the amount of interest due on the Interest Payment Date falling in [month and year].
157
Such amount is payable, subject to the terms and conditions (the Conditions) endorsed on the Note to which this Coupon relates (which are binding on the holder of this Coupon whether or not it is for the time being attached to such Note), against presentation and surrender of this Coupon at the specified office for the time being of any of the agents shown on the reverse of this Coupon (or any successor or additional agents appointed from time to time in accordance with the Conditions).
The Note to which this Coupon relates may, in certain circumstances specified in the Conditions, fall due for redemption before the maturity date of this Coupon. In such event, this Coupon shall become void and no payment will be made in respect hereof.
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]5
[On the reverse of the Coupon:]
Principal Paying Agent: Elavon Financial Services DAC, UK Branch, 125 Old Broad Street, Fifth Floor, London EC2N 1AR
| 5 | Legend to appear on every Note with a maturity of more than one year. |
158
PART E
FORM OF TALON FOR INTERCONTINENTAL HOTELS GROUP PLC
[On the face of the Talon:]
INTERCONTINENTAL HOTELS GROUP PLC
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
and
SIX CONTINENTS LIMITED
and
INTERCONTINENTAL HOTELS LIMITED
Talon for further Coupons.
On or after the maturity date of the final Coupon which is (or was at the time of issue) part of the Coupon Sheet to which this Talon is (or was at the time of issue) attached, this Talon may be exchanged at the specified office for the time being of the principal paying agent shown on the reverse of this Talon (or any successor principal paying agent appointed from time to time in accordance with the terms and conditions (the Conditions) of the Notes to which this Talon relates) for a further Coupon Sheet (including a further Talon but excluding any Coupons in respect of which claims have already become void pursuant to the Conditions).
The Note to which this Talon relates may, in certain circumstances specified in the Conditions, fall due for redemption before the maturity date of such final Coupon. In such event, this Talon shall become void and no Coupon will be delivered in respect hereof.
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]6
[On the reverse of the Talon:]
Principal Paying Agent: Elavon Financial Services DAC, UK Branch, 125 Old Broad Street, Fifth Floor, London EC2N 1AR
| 6 | Legend to appear on every Note with a maturity of more than one year. |
159
PART F
FORM OF TEMPORARY GLOBAL NOTE FOR IHG FINANCE LLC
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]7
IHG Finance LLC
(formed in the State of Delaware with company number 7546892)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
TEMPORARY GLOBAL NOTE
| 1. | INTRODUCTION |
| 1.1 | The Notes |
This Temporary Global Note is issued in respect of the notes (the Notes) of IHG Finance LLC (the Issuer) and guaranteed by InterContinental Hotels Group PLC, Six Continents Limited and InterContinental Hotels Limited (each a Guarantor and together, the Guarantors) described in the final terms (the Final Terms) or drawdown prospectus (the Drawdown Prospectus) or securities note (Securities Note) a copy of which is annexed hereto. If a Drawdown Prospectus or a Securities Note is annexed hereto, each reference in this Temporary Global Note to “Final Terms” shall be read and construed as a reference to the final terms of the Notes set out in such Drawdown Prospectus or Securities Note. The Notes:
| (a) | Trust Deed: (insofar as they are represented by this Temporary Global Note) are subject to and have the benefit of an amended and restated trust deed made on |
| 19 September 2024 (as further amended, supplemented or restated from time to time, the Trust Deed) made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee (the Trustee, which expression shall include all persons for the time being the trustee or trustees appointed under the Trust Deed); and |
| 7 | Legend to appear on every Note with a maturity of more than one year. |
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| (b) | Agency Agreement: are the subject of an amended and restated agency agreement dated 19 September 2024 (as further amended, supplemented or restated from time to time, the Agency Agreement) made between, inter alios, the Issuer, the Guarantors, the Trustee and Elavon Financial Services DAC, UK Branch as principal paying agent (the Principal Paying Agent, which expression includes any successor or additional principal paying agent appointed from time to time in connection with the Notes, and together with any additional or successor paying agents appointed from time to time in connection with the Notes, the Paying Agents). |
| 1.2 | Construction |
All references in this Temporary Global Note to an agreement, instrument or other document (including the Agency Agreement and the Trust Deed) shall be construed as a reference to that agreement, instrument or other document as the same may be amended, supplemented, replaced or novated from time to time provided that, in the case of any amendment, supplement, replacement or novation made after the date hereof, it is made in accordance with the Conditions and the Trust Deed. Headings and sub-headings are for ease of reference only and shall not affect the construction of this Temporary Global Note.
| 1.3 | References to Conditions |
Any reference herein to the Conditions is to the Conditions as defined in the Trust Deed, as supplemented, amended and/or replaced by the Final Terms and any reference to a numbered Condition is to the correspondingly numbered provision thereof. Words and expressions defined in Condition 2(a) (Interpretation – Definitions) shall have the same meanings when used in this Temporary Global Note.
| 2. | PROMISE TO PAY |
| 2.1 | Pay to bearer |
The Issuer, for value received, promises to pay to the bearer of this Temporary Global Note, in respect of each Note represented by this Temporary Global Note, on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions, the Redemption Amount or such lesser amount as is repayable upon any such redemption or repayment (or to pay such other amounts of principal on such dates as may be specified in the Final Terms), and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Temporary Global Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions; provided, however, that such interest shall be payable only:
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| (a) | Before the Exchange Date: in the case of interest falling due before the Exchange Date (as defined below), to the extent that a certificate or certificates issued by Euroclear Bank SA/NV (Euroclear) and/or Clearstream Banking S.A. (Clearstream and, together with Euroclear, the international central securities depositaries or ICSDs) and/or any other relevant clearing system dated not earlier than the date on which such interest falls due and in substantially the form set out in Schedule 3 (Form of Euroclear/Clearstream, Certification) hereto is/are delivered to the Specified Office of the Principal Paying Agent; or |
| (b) | Failure to exchange: in the case of interest falling due at any time, to the extent that the Issuer has failed to procure the exchange for a permanent global note of that portion of this Temporary Global Note in respect of which such interest has accrued. |
| 2.2 | NGN Principal Amount |
If the Final Terms specify that the New Global Note form is applicable, this Temporary Global Note shall be a “New Global Note” or “NGN” and the principal amount of Notes represented by this Temporary Global Note shall be the aggregate amount from time to time entered in the records of both ICSDs. The records of the ICSDs (which expression in this Temporary Global Note means the records that each ICSD 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)) shall be conclusive evidence of the principal amount of Notes represented by this Temporary Global Note and, for these purposes, a statement issued by an ICSD (which statement shall be made available to the bearer upon request) stating the principal amount of Notes represented by this Temporary Global Note at any time shall be conclusive evidence of the records of the ICSD at that time.
| 2.3 | CGN Principal Amount |
If the Final Terms specify that the New Global Note form is not applicable, this Temporary Global Note shall be a “Classic Global Note” or “CGN” and the principal amount of Notes represented by this Temporary Global Note shall be the amount stated in the Final Terms or, if lower, the principal amount most recently entered by or on behalf of the Issuer in the relevant column in Schedule 1 (Payments, Exchange and Cancellation of Notes).
| 3. | NEGOTIABILITY |
This Temporary Global Note is negotiable and, accordingly, title to this Temporary Global Note shall pass by delivery.
| 4. | EXCHANGE |
| 4.1 | Permanent Global Note |
If the Final Terms specify the form of Notes as being “Temporary Global Note exchangeable for a Permanent Global Note”, then on or after the day following the expiry of 40 days after the date of issue of this Temporary Global Note (the Exchange Date), the Issuer shall procure (in the case of first exchange) the delivery of a Permanent Global Note (which expression has the meaning given in the Trust Deed) in accordance with the Agency Agreement to the bearer of this Temporary Global Note or (in the case of any subsequent exchange) an increase in the principal amount of the Permanent Global Note in accordance with its terms against:
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| (a) | Presentation and surrender: presentation and (in the case of final exchange) surrender of this Temporary Global Note to or to the order of the Principal Paying Agent; and |
| (b) | Certification: receipt by the Principal Paying Agent of a certificate or certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system dated not earlier than the Exchange Date and in substantially the form set out in Schedule 3 (Form of Euroclear/Clearstream Certification) hereto. |
The principal amount of Notes represented by the Permanent Global Note shall be equal to the aggregate of the principal amounts specified in the certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system and received by the Principal Paying Agent; provided, however, that in no circumstances shall the principal amount of Notes represented by the Permanent Global Note exceed the initial principal amount of Notes represented by this Temporary Global Note.
| 4.2 | Definitive Notes; Not D Rules |
If the Final Terms specify the form of Notes as being “Temporary Global Note exchangeable for Definitive Notes” and also specifies that the C Rules are applicable or that neither the C Rules or the D Rules are applicable, then on or after the day following the expiry of 40 days after the date of issue of this Temporary Global Note (the Exchange Date), the Issuer shall procure the delivery of Definitive Notes (which expression has the meaning given in the Agency Agreement) in accordance with the Agency Agreement with Coupons and Talons (if so specified in the Final Terms) attached and in an aggregate principal amount equal to the principal amount of Notes represented by this Temporary Global Note to the bearer of this Temporary Global Note against presentation and surrender of this Temporary Global Note to or to the order of the Principal Paying Agent.
| 4.3 | Definitive Notes; D Rules |
If the Final Terms specify the form of Notes as being “Temporary Global Note exchangeable for Definitive Notes” and also specifies that the D Rules are applicable, then on or after the day following the expiry of 40 days after the date of issue of this Temporary Global Note (the Exchange Date), the Issuer shall procure the delivery of Definitive Notes (which expression has the meaning given in the Agency Agreement) in accordance with the Agency Agreement with Coupons and Talons (if so specified in the Final Terms) attached against:
| (a) | Presentation and surrender: presentation and (in the case of final exchange) surrender of this Temporary Global Note to or to the order of the Principal Paying Agent; and |
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| (b) | Certification: receipt by the Principal Paying Agent of a certificate or certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system dated not earlier than the Exchange Date and in substantially the form set out in Schedule 3 (Form of Euroclear/Clearstream Certification) hereto. |
The Definitive Notes so delivered from time to time shall be in an aggregate principal amount equal to the aggregate of the principal amounts specified in the certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system and received by the Principal Paying Agent; provided, however, that in no circumstances shall the aggregate principal amount of Definitive Notes so delivered exceed the initial principal amount of Notes represented by this Temporary Global Note.
| 5. | DELIVERY OF PERMANENT GLOBAL OR DEFINITIVE NOTES |
| 5.1 | Permanent Global Note |
Whenever any interest in this Temporary Global Note is to be exchanged for an interest in a Permanent Global Note, the Issuer shall procure (in the case of first exchange) the prompt delivery (free of charge to the bearer) of such Permanent Global Note, duly authenticated, to the bearer of this Temporary Global Note or (in the case of any subsequent exchange) an increase in the principal amount of Notes represented by such Permanent Global Note in accordance with its terms, in each case in an aggregate principal amount equal to the aggregate of the principal amounts specified in the certificates issued by Euroclear and/or Clearstream and/or any other relevant clearing system and received by the Principal Paying Agent against presentation and (in the case of final exchange) surrender of this Temporary Global Note to or to the order of the Principal Paying Agent within 7 days of the bearer requesting such exchange.
| 5.2 | Definitive Notes |
Whenever this Temporary Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the Final Terms), in an aggregate principal amount equal to the principal amount of Notes represented by this Temporary Global Note to the bearer of this Temporary Global Note against the surrender of this Temporary Global Note to or to the order of the Principal Paying Agent within 30 days of the bearer requesting such exchange.
| 6. | WRITING DOWN |
On each occasion on which:
6.1 Permanent Global Note: the Permanent Global Note is delivered or the principal amount of Notes represented thereby is increased in accordance with its terms in exchange for a further portion of this Temporary Global Note; or
6.2 Definitive Notes: Definitive Notes are delivered in exchange for this Temporary Global Note; or 6.3 Cancellation: Notes represented by this Temporary Global Note are to be cancelled in accordance with Condition 9(k) (Redemption and Purchase – Cancellation),
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the Issuer shall procure that:
| (a) | if the Final Terms specify that the New Global Note form is not applicable, (i) the principal amount of Notes represented by the Permanent Global Note, the principal amount of such increase or (as the case may be) the aggregate principal amount of such Notes and (ii) the remaining principal amount of Notes represented by this Temporary Global Note (which shall be the previous principal amount of Notes represented by this Temporary Global Note less the aggregate of the amounts referred to in (i) above) are entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of Notes represented by this Temporary Global Note shall for all purposes be as most recently so entered; and |
| (b) | if the Final Terms specify that the New Global Note form is applicable, details of the exchange or cancellation shall be entered pro rata in the records of the ICSDs. |
| 7. | PAYMENTS |
| 7.1 | Recording of Payments |
Upon any payment being made in respect of the Notes represented by this Temporary Global Note, the Issuer shall procure that:
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, details of such payment shall be entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto and, in the case of any payment of principal, the principal amount of the Notes represented by this Temporary Global Note shall be reduced by the principal amount so paid; and |
| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, details of such payment shall be entered pro rata in the records of the ICSDs and, in the case of any payment of principal, the principal amount of the Notes entered in the records of ICSDs and represented by this Temporary Global Note shall be reduced by the principal amount so paid. |
| 7.2 | Discharge of Issuer’s obligations |
Payments due in respect of Notes for the time being represented by this Temporary Global Note shall be made to the bearer of this Temporary Global Note and each payment so made will discharge the Issuer’s obligations in respect thereof. Any failure to make the entries referred to above shall not affect such discharge.
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| 7.3 | Payment Business Day |
If the currency of any payment made in respect of Notes represented by this Temporary Global Note is euro, the applicable Payment Business Day shall be any day which is a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or, if the currency of any payment made in respect of the Notes represented by this Temporary Global Note is not euro, the applicable Payment Business Day shall be any day which is a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre.
| 8. | CALCULATION OF INTEREST |
The calculation of any interest amount in respect of Notes represented by this Global Note will be calculated on the aggregate outstanding principal amount of the Notes represented by this Global Note and not by reference to the Calculation Amount.
| 9. | CONDITIONS APPLY |
Until this Temporary Global Note has been exchanged as provided herein or cancelled in accordance with the Agency Agreement, the bearer of this Temporary Global Note shall be subject to the Conditions and the Trust Deed and, subject as otherwise provided herein, shall be entitled to the same rights and benefits under the Conditions and the Trust Deed as if the bearer were the holder of Definitive Notes and any related Coupons and Talons in the smallest Specified Denomination and in an aggregate principal amount equal to the principal amount of the Notes represented by this Temporary Global Note.
| 10. | NOTICES |
Notwithstanding Condition 18 (Notices), while all the Notes are represented by this Temporary Global Note (or by this Temporary Global Note and the Permanent Global Note) and this Temporary Global Note is (or this Temporary Global Note and the Permanent Global Note are) deposited with a depositary or a common depositary for Euroclear and/or Clearstream and/or any other relevant clearing system or a Common Safekeeper (which expression has the meaning given in the Agency Agreement), notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream and/or any other relevant clearing system and, in any case, such notices shall be deemed to have been given to the Noteholders in accordance with the Condition 18 (Notices) on the date of delivery to Euroclear and/or Clearstream and/or any other relevant clearing system.
| 11. | MEETINGS |
The holders of this Temporary Global Note shall, at any meeting of the Noteholders, be treated as having one vote in respect of each £1 in principal amount of the Notes represented by this Temporary Global Note.
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| 12. | TRUSTEE’S POWERS |
In considering the interests of Noteholders while this Temporary Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by any such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Temporary Global Note and may consider such interests as if such accountholders were the holders of this Temporary Global Note.
| 13. | AUTHENTICATION |
This Temporary Global Note shall not be valid for any purpose until it has been authenticated by and on behalf of Elavon Financial Services DAC, UK Branch as principal paying agent.
| 14. | EFFECTUATION |
If the Final Terms specify that the New Global Note form is applicable, this Temporary Global Note shall not be valid for any purpose until it has been effectuated for and on behalf of the entity appointed as common safekeeper by the ICSDs.
| 15. | GOVERNING LAW |
This Temporary Global Note and any non-contractual obligations arising out of or in connection with it are governed by English law.
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AS WITNESS the manual/electronic signature of a duly authorised person on behalf of the Issuer.
| IHG FINANCE LLC | ) |
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| ) |
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| By: |
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| electronic or manual signature |
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| (duly authorised) |
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| ISSUED on the Issue Date |
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| AUTHENTICATED by and on behalf of | ) |
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| ELAVON FINANCIAL SERVICES DAC, | ) |
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| UK BRANCH | ) |
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| as principal paying agent without | ) |
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| recourse, warranty or liability | ) |
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| By: |
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| electronic or manual signature |
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| (duly authorised) |
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| [EFFECTUATED for and on behalf of | ) | |
| [COMMON SAFEKEEPER] | ) | |
| as common safekeeper without recourse, | ) | |
| warranty or liability | ) | |
| By: |
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| electronic or manual signature |
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| (duly authorised) | ||
[Temporary Global Note for IHG Finance LLC – Signature Page]
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SCHEDULE 18
TO THE TEMPORARY GLOBAL NOTE
Payments, Exchange and Cancellation of Notes
| Date of payment, delivery or cancellation |
Amount of interest then paid |
Principal amount of |
Aggregate principal amount of Notes then cancelled |
Remaining principal amount of this Temporary Global Note |
Authorised Signature |
| 8 | Schedule 1 should only be completed where the Final Terms specify that the New Global Note form is not applicable. |
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SCHEDULE 2
TO THE TEMPORARY GLOBAL NOTE
Form of Accountholder’s Certification
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
[Aggregate principal amount of Series]
[Title of Notes]
This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (a) are owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source (United States persons), (b) are owned by United States person(s) that (i) are foreign branches of a United States financial institution (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv)) (financial institutions) purchasing for their own account or for resale, or (ii) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (i) or (ii), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the issuer or the issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (c) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a United States or foreign financial institution described in clause (c) (whether or not also described in clause (a) or (b)) this is to further certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(b)(3) of Regulation S under the Securities Act of 1933, as amended (the Act), then this is also to certify that, except as set forth below, the Securities are beneficially owned by (1) non-U.S. person(s) or (2) U.S. person(s) who purchased the Securities in transactions which did not require registration under the Act. As used in this paragraph the term U.S. person has the meaning given to it by Regulation S under the Act.
As used herein, United States means the United States of America (including the States and the District of Columbia); and its possessions include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by electronic transmission on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
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This certification excepts and does not relate to [currency] [amount] of such interest in the above Securities in respect of which we are not able to certify and as to which we understand exchange and delivery of definitive Securities (or, if relevant, exercise of any rights or collection of any interest) cannot be made until we do so certify.
We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings or official enquiries are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorise you to produce this certification to any interested party in such proceedings.
Dated: [ ]]
| [name of account holder] as, or as agent for, the beneficial owner(s) of the Securities to which this certificate relates. |
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| By: |
||
| Authorised signatory |
||
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SCHEDULE 3
TO THE TEMPORARY GLOBAL NOTE
FORM OF EUROCLEAR/CLEARSTREAM CERTIFICATION
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
[Aggregate principal amount of Series]
[Title of Notes]
This is to certify that, based solely on certifications we have received in writing, by electronic transmission from member organisations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our Member Organisations) substantially to the effect set forth in the temporary global note issued in respect of the securities, as of the date hereof, [currency] [amount] principal amount of the above-captioned Securities (a) is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source (United States persons), (b) is owned by United States persons that (i) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv)) (financial institutions) purchasing for their own account or for resale, or (ii) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (i) or (ii), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer or the Issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (c) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in clause (c) (whether or not also described in clause (a) or (b)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(b)(3) of Regulation S under the Securities Act of 1933, as amended (the Act), then this is also to certify with respect to the principal amount of Securities set forth above that, except as set forth below, we have received in writing, by electronic transmission, from our Member Organisations entitled to a portion of such principal amount, certifications with respect to such portion substantially to the effect set forth in the temporary global note issued in respect of the Securities.
We further certify (1) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the temporary global security excepted in such certifications and (2) that as of the date hereof we have not received any notification from any of our Member Organisations to the effect that the statements made by such Member Organisations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as of the date hereof.
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We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings or official enquiries are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorise you to produce this certification to any interested party in such proceedings.
Dated: [ ]]
| Euroclear Bank SA/NV
or
Clearstream Banking S.A. |
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| By: |
||
| Authorised signatory | ||
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Part B
Form of Permanent Global Note for IHG Finance LLC
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]9
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
PERMANENT GLOBAL NOTE
| 1. | INTRODUCTION |
| 1.1 | The Notes |
This Global Note is issued in respect of the notes (the Notes) of IHG Finance LLC (the Issuer) and guaranteed by InterContinental Hotels Group PLC, Six Continents Limited and InterContinental Hotels Limited (each a Guarantor and together, the Guarantors) described in the final terms (the Final Terms) or drawdown prospectus (Drawdown Prospectus) or securities note (Securities Note) a copy of which is annexed hereto. If a Drawdown Prospectus or a Securities Note is annexed hereto, each reference in this Global Note to “Final Terms” shall be read and construed as a reference to the final terms of the Notes set out in such Drawdown Prospectus or Securities Note. The Notes:
| (a) | Trust Deed: (insofar as they are represented by this Global Note) are subject to and have the benefit of an amended and restated trust deed made on 19 September 2024 (as further amended, supplemented or restated from time to time, the Trust Deed) made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee (the Trustee, which expression shall include all persons for the time being the trustee or trustees appointed under the Trust Deed); and |
| 9 | Legend to appear on every Note with a maturity of more than one year. |
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| (b) | Agency Agreement: are the subject of an amended and restated agency agreement dated 19 September 2024 (as further amended, supplemented or restated from time to time) (the Agency Agreement) made between, inter alios, the Issuer, the Guarantors, the Trustee and Elavon Financial Services DAC, UK Branch as principal paying agent (the Principal Paying Agent, which expression includes any successor or additional principal paying agent appointed from time to time in connection with the Notes, and, together with any additional or successor paying agents appointed from time to time in connection with the Notes, the Paying Agents). |
| 1.2 | Construction |
All references in this Global Note to an agreement, instrument or other document (including the Agency Agreement and the Trust Deed) shall be construed as a reference to that agreement, instrument or other document as the same may be amended, supplemented, replaced or novated from time to time provided that, in the case of any amendment, supplement, replacement or novation made after the date hereof, it is made in accordance with the Conditions and the Trust Deed. Headings and sub-headings are for ease of reference only and shall not affect the construction of this Global Note.
| 1.3 | References to Conditions |
Any reference herein to the “Conditions” is to the Terms and Conditions of the Notes set out in Schedule 2 (Terms and Conditions of the Notes) hereto, as supplemented, amended and/or replaced by the Final Terms and any reference to a numbered “Condition” is to the correspondingly numbered provision thereof. Words and expressions defined in the Conditions shall have the same meanings when used in this Global Note.
| 2. | PROMISE TO PAY |
| 2.1 | Pay to bearer |
The Issuer, for value received, promises to pay to the bearer of this Global Note, in respect of each Note represented by this Global Note, on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions, the Redemption Amount or such lesser amount as is repayable upon any such redemption (or to repay such other amounts of principal on such dates as may be specified in the Final Terms and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Global Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
| 2.2 | NGN Principal Amount |
If the Final Terms specify that the New Global Note form is applicable, this Global Note shall be a “New Global Note” or “NGN” and the principal amount of Notes represented by this Global Note shall be the aggregate amount from time to time entered in the records of both ICSDs.
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The records of the ICSDs (which expression in this Global Note means the records that each ICSD 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)) shall be conclusive evidence of the principal amount of Notes represented by this Global Note and, for these purposes, a statement issued by an ICSD (which statement shall be made available to the bearer upon request) stating the principal amount of Notes represented by this Global Note at any time shall be conclusive evidence of the records of the ICSD at that time.
| 2.3 | CGN Principal Amount |
If the Final Terms specify that the New Global Note form is not applicable, this Global Note shall be a “Classic Global Note” or “CGN” and the principal amount of Notes represented by this Global Note shall be the amount stated in the Final Terms or, if lower, the principal amount most recently entered by or on behalf of the Issuer in the relevant column in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto.
| 3. | NEGOTIABILITY |
This Global Note is negotiable and, accordingly, title to this Global Note shall pass by delivery.
| 4. | EXCHANGE |
This Global Note will become exchangeable, in whole but not in part only and at the request of the bearer of this Global Note, for Definitive Notes (which expression has the meaning given in the Trust Deed) in accordance with the Agency Agreement:
4.1 Upon notice: on the expiry of such period of notice as may be specified in the Final Terms; or
4.2 Upon demand: at any time, if so specified in the Final Terms; or
4.3 In limited circumstances: if the Final Terms specify “in the limited circumstances described in the Permanent Global Note”, then if either of the following events occurs:
| (a) | Closure of clearing systems: Euroclear Bank SA/NV (Euroclear) or Clearstream Banking S.A. (Clearstream and, together with Euroclear, the international central securities depositaries or ICSDs) or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business and no successor clearing system approved by the Trustee is available; or |
| (b) | Event of Default: any of the circumstances described in Condition 12 (Events of Default) occurs; or |
| (c) | Adverse tax consequences: the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes represented by the Permanent Global Note in definitive form. |
| 5. | DELIVERY OF DEFINITIVE NOTES |
Whenever this Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the Final Terms), in an aggregate principal amount equal to the principal amount of Notes represented by this Global Note to the bearer of this Global Note against the surrender of this Global Note to or to the order of the Principal Paying Agent within 30 days of the bearer requesting such exchange.
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| 6. | WRITING DOWN |
On each occasion on which:
6.1 Payment of principal: a payment of principal is made in respect of this Global Note;
6.2 Definitive Notes: Definitive Notes are delivered; or
6.3 Cancellation: Notes represented by this Global Note are to be cancelled in accordance with Condition 9(k) (Redemption and Purchase – Cancellation),
the Issuer shall procure that:
| (a) | if the Final Terms specify that the New Global Note Form is not applicable, (i) the amount of such payment and the aggregate principal amount of such Notes; and (ii) the remaining principal amount of Notes represented by this Global Note (which shall be the previous principal amount hereof less the aggregate of the amounts referred to in (i) above) are entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of Notes represented by this Global Note shall for all purposes be as most recently so entered; and |
| (b) | if the Final Terms specify that the New Global Note Form is applicable, details of the exchange or cancellation shall be entered pro rata in the records of the ISCDs. |
| 7. | WRITING UP |
| 7.1 | Initial Exchange |
If this Global Note was originally issued in exchange for part only of a temporary global note representing the Notes, then all references in this Global Note to the principal amount of Notes represented by this Global Note shall be construed as references to the principal amount of Notes represented by the part of the temporary global note in exchange for which this Global Note was originally issued which the Issuer shall procure:
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, is entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of Notes represented by this Global Note shall for all purposes be as most recently so entered; and |
| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, is entered by the ICSDs in their records. |
| 7.2 | Subsequent Exchange |
If at any subsequent time any further portion of such temporary global note is exchanged for an interest in this Global Note, the principal amount of Notes represented by this Global Note shall be increased by the amount of such further portion, and the Issuer shall procure that the principal amount of Notes represented by this Global Note (which shall be the previous principal amount of Notes represented by this Global Note plus the amount of such further portion) is:
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto, whereupon the principal amount of this Global Note shall for all purposes be as most recently so entered; and |
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| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, entered by the ICSDs in their records. |
| 8. | PAYMENTS |
| 8.1 | Recording of Payments |
Upon any payment being made in respect of the Notes represented by this Global Note, the Issuer shall procure that:
| (a) | CGN: if the Final Terms specify that the New Global Note form is not applicable, details of such payment shall be entered in Schedule 1 (Payments, Exchange and Cancellation of Notes) hereto and, in the case of any payment of principal, the principal amount of the Notes represented by this Global Note shall be reduced by the principal amount so paid; and |
| (b) | NGN: if the Final Terms specify that the New Global Note form is applicable, details of such payment shall be entered pro rata in the records of the ICSDs and, in the case of any payment of principal, the principal amount of the Notes entered in the records of ICSDs and represented by this Global Note shall be reduced by the principal amount so paid. |
| 8.2 | Discharge of Issuer’s obligations |
Payments due in respect of Notes for the time being represented by this Global Note shall be made to the bearer of this Global Note and each payment so made will discharge the Issuer’s obligations in respect thereof. Any failure to make the entries referred to above shall not affect such discharge.
| 8.3 | Payment Business Day |
If the currency of any payment made in respect of Notes represented by this Global Note is euro, the applicable Payment Business Day shall be any day which is a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or, if the currency of any payment made in respect of the Notes represented by this Global Note is not euro, the applicable Payment Business Day shall be any day which is a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre.
| 9. | CALCULATION OF INTEREST |
The calculation of any interest amount in respect of Notes represented by this Global Note will be calculated on the aggregate outstanding principal amount of the Notes represented by this Global Note and not by reference to the Calculation Amount.
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| 10. | CONDITIONS APPLY |
Until this Global Note has been exchanged as provided herein or cancelled in accordance with the Agency Agreement, the bearer of this Global Note shall be subject to the Conditions and, subject as otherwise provided herein, shall be entitled to the same rights and benefits under the Conditions as if the bearer were the holder of Definitive Notes and any related Coupons and Talons in the smallest Specified Denomination and in an aggregate principal amount equal to the principal amount of notes represented by this Global Note.
| 11. | EXERCISE OF PUT OPTION OR CHANGE OF CONTROL PUT OPTION |
For so long as all of the Notes are represented by one or both of the Global Notes and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, the option of the Noteholders provided for in Condition 9(f) (Redemption and Purchase – Redemption at the option of the Noteholders) or, as the case may be, the option of the Noteholders provided for in Condition 9(g) (Redemption and Purchase – Change of Control redemption) may be exercised by an accountholder giving notice to the Principal Paying Agent in accordance with the standard procedures of Euroclear and Clearstream (which may include notice being given on his instructions by Euroclear or Clearstream or any common depositary for them to the Principal Paying Agent by electronic means) of the principal amount of the Notes in respect of which such option is exercised and at the same time presenting or procuring the presentation of the relevant Global Note to the Principal Paying Agent for notation accordingly within the time limits set forth in the relevant Condition.
| 12. | EXERCISE OF CALL OPTION |
For so long as all of the Notes are represented by one or both of the temporary global note and this Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, no drawing of Notes will be required under Condition 9(e) (Redemption and Purchase - Partial redemption) in the event that the Issuer exercises its call option pursuant to Condition 9(c) (Redemption and Purchase - Redemption at the option of the Issuer (Issuer Call Option)) in respect of less than the aggregate principal amount of the Notes outstanding at such time. In such event, the standard procedures of Euroclear and/or Clearstream shall operate to determine which interests in the Global Note(s) are to be subject to such option.
| 13. | NOTICES |
Notwithstanding Condition 18 (Notices), while all the Notes are represented by this Global Note (or by this Global Note and a temporary global note) and this Global Note is (or this Global Note and the temporary global note are) deposited with a depositary or a common depositary for Euroclear and/or Clearstream and/or any other relevant clearing system or a Common Safekeeper (which expression has the meaning given in the Agency Agreement), notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream and/or any other relevant clearing system and, in any case, such notices shall be deemed to have been given to the Noteholders in accordance with Condition 18 (Notices) on the date of delivery to Euroclear and/or Clearstream and/or any other relevant clearing system.
Whilst any Notes held by a Noteholder are represented by a Global Note, notices to be given by such Noteholder may be given by such Noteholder to the Principal Paying Agent through Euroclear and/or Clearstream, as the case may be, in such a manner as the Principal Paying Agent and Euroclear and/or Clearstream, as the case may be, may approve for this purpose.
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| 14. | MEETINGS |
The holders of this Global Note shall, at any meeting of the Noteholders, be treated as having one vote in respect of each £1 in principal amount of the Notes represented by this Global Note.
| 15. | TRUSTEE’S POWERS |
In considering the interests of Noteholders while this Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by any such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Global Note and may consider such interests as if such accountholders were the holders of this Global Note.
| 16. | AUTHENTICATION |
This Global Note shall not be valid for any purpose until it has been authenticated by and on behalf of Elavon Financial Services DAC, UK Branch as principal paying agent.
| 17. | EFFECTUATION |
If the Final Terms specify that the New Global Note form is applicable, this Permanent Global Note shall not be valid for any purpose until it has been effectuated for and on behalf of the entity appointed as Common Safekeeper (which expression has the meaning given in the Agency Agreement).
| 18. | GOVERNING LAW |
This Global Note, and any non-contractual obligations arising out of or in connection with it, are governed by English law.
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AS WITNESS the manual/electronic signature of a duly authorised person on behalf of the Issuer.
| IHG Finance LLC | ) | |||
| By: | ) | |||
| electronic or manual signature | ) | |||
| (duly authorised) | ) | |||
| ISSUED on the Issue Date | ||||
| AUTHENTICATED for and on behalf of | ) | |||
| ELAVON FINANCIAL SERVICES DAC, | ) | |||
| UK BRANCH | ) | |||
| as principal paying agent | ) | |||
| without recourse, warranty or liability | ) | |||
| By: | ||||
| electronic/manual signature | ||||
| (duly authorised) | ||||
| EFFECTUATED for and on behalf of | ) | |||
| [COMMON SAFEKEEPER] | ) | |||
| as common safekeeper without recourse, | ) | |||
| warranty or liability | ) |
| By: | ||||
| electronic/manual signature | ||||
| (duly authorised) | ||||
[Permanent Global Note for IHG Finance LLC – Signature Page]
181
SCHEDULE 110
TO THE PERMANENT GLOBAL NOTE
PAYMENTS, EXCHANGE AND CANCELLATION OF NOTES
| Date of payment, exchange, delivery or cancellation |
Amount of interest then paid |
Amount of principal then paid |
Principal amount of Temporary Global Note then exchanged |
Aggregate principal amount of Definitive Notes then delivered |
Aggregate principal amount of Notes then cancelled |
New principal amount of this Global Note |
Authorised signature |
| 10 | Schedule 1 should only be completed where the Final Terms specify that the New Global Note form is not applicable. |
182
SCHEDULE 2
TO THE PERMANENT GLOBAL NOTE
Terms and Conditions of the Notes
[As set out in Schedule 1 to the Trust Deed]
183
Part C
Form of Definitive Note for IHG Finance LLC
[On the face of the Note:]
[currency][denomination]
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
This Note is one of a series of notes (the Notes) of IHG Finance LLC (the Issuer) and guaranteed by InterContinental Hotels Group PLC, Six Continents Limited and InterContinental Hotels Limited (together, the Guarantors) as described in the final terms (the Final Terms) or drawdown prospectus (Drawdown Prospectus) or securities note (Securities Note) a copy of the relevant particulars of which is endorsed on this Note. Any reference herein to the Conditions is to the Terms and Conditions of the Notes endorsed on this Note, as supplemented, amended and/or replaced by the Final Terms or Drawdown Prospectus or Securities Note and any reference to a numbered Condition is to the correspondingly numbered provision thereof. Words and expressions defined in Condition 2(a) (Interpretation – Definitions) shall have the same meanings when used in this Note.
This Note is issued subject to, and with the benefit of, the Conditions and an amended and restated trust deed (as further modified and/or supplemented and/or novated from time to time, the Trust Deed) dated 19 September 2024 and made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee for the holders of the Notes.
184
The Issuer, for value received, promises to pay to the bearer of this Note the Redemption Amount on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions (or to pay such other amounts of principal on such dates as may be specified in the Final Terms or Drawdown Prospectus or Securities Note), and to pay interest (if any) on the nominal amount of this Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
This Note shall not be valid for any purpose until it has been authenticated by and on behalf of Elavon Financial Services DAC, UK Branch as principal paying agent.
This Note, and any non-contractual obligations arising out of or in connection with it, are governed by English law.
185
AS WITNESS the electronic or manual signature of a duly authorised person on behalf of the Issuer.
| IHG FINANCE LLC | ) | |
| ) |
| By: |
||
| electronic or manual signature |
||
| (duly authorised) |
||
| ISSUED on the Issue Date |
||
| AUTHENTICATED by and on behalf of | ) | |
| ELAVON FINANCIAL SERVICES DAC, | ) | |
| UK BRANCH | ) | |
| as principal paying agent | ) | |
| without recourse, warranty or liability | ) | |
| By: |
||
| electronic or manual signature |
||
| (duly authorised) |
||
[Definitive Note for IHG Finance LLC – Signature Page]
186
[On the reverse of the Note:]
FINAL TERMS
The following is a copy of the relevant particulars of the Final Terms or Drawdown Prospectus or Securities Note.
TERMS AND CONDITIONS
[As set out in Schedule 1 to the Trust Deed]
[At the foot of the Terms and Conditions:]
PRINCIPAL PAYING AGENT
ELAVON FINANCIAL SERVICES DAC, UK BRANCH
125 Old Broad Street
Fifth Floor
London EC2N 1AR
187
PART D
Form of Coupon for IHG Finance LLC
[On the face of the Coupon:]
[For Fixed Rate Notes]
IHG FINANCE LLC
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
and
SIX CONTINENTS LIMITED
and
INTERCONTINENTAL HOTELS LIMITED
Coupon for [currency][amount of interest payment] due on [interest payment date].
Such amount is payable, subject to the terms and conditions (the Conditions) endorsed on the Note to which this Coupon relates (which are binding on the holder of this Coupon whether or not it is for the time being attached to such Note), against presentation and surrender of this Coupon at the specified office for the time being of any of the agents shown on the reverse of this Coupon (or any successor or additional agents appointed from time to time in accordance with the Conditions).
[For Floating Rate Notes]
IHG FINANCE LLC
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
and
SIX CONTINENTS LIMITED
and
INTERCONTINENTAL HOTELS LIMITED
This Coupon relates to a Note in the denomination of [currency] [amount].
Coupon for the amount of interest due on the Interest Payment Date falling in [month and year].
Such amount is payable, subject to the terms and conditions (the Conditions) endorsed on the Note to which this Coupon relates (which are binding on the holder of this Coupon whether or not it is for the time being attached to such Note), against presentation and surrender of this Coupon at the specified office for the time being of any of the agents shown on the reverse of this Coupon (or any successor or additional agents appointed from time to time in accordance with the Conditions).
188
The Note to which this Coupon relates may, in certain circumstances specified in the Conditions, fall due for redemption before the maturity date of this Coupon. In such event, this Coupon shall become void and no payment will be made in respect hereof.
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]11
[On the reverse of the Coupon:]
Principal Paying Agent: Elavon Financial Services DAC, UK Branch, 125 Old Broad Street, Fifth Floor, London EC2N 1AR
| 11 | Legend to appear on every Note with a maturity of more than one year. |
189
Part E
Form of Talon for IHG Finance LLC
[On the face of the Talon:]
IHG FINANCE LLC
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
and
SIX CONTINENTS LIMITED
and
INTERCONTINENTAL HOTELS LIMITED
Talon for further Coupons.
On or after the maturity date of the final Coupon which is (or was at the time of issue) part of the Coupon Sheet to which this Talon is (or was at the time of issue) attached, this Talon may be exchanged at the specified office for the time being of the principal paying agent shown on the reverse of this Talon (or any successor principal paying agent appointed from time to time in accordance with the terms and conditions (the Conditions) of the Notes to which this Talon relates) for a further Coupon Sheet (including a further Talon but excluding any Coupons in respect of which claims have already become void pursuant to the Conditions).
The Note to which this Talon relates may, in certain circumstances specified in the Conditions, fall due for redemption before the maturity date of such final Coupon. In such event, this Talon shall become void and no Coupon will be delivered in respect hereof.
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]12
[On the reverse of the Talon:]
Principal Paying Agent: Elavon Financial Services DAC, UK Branch 125 Old Broad Street, Fifth Floor, London EC2N 1AR
| 12 | Legend to appear on every Note with a maturity of more than one year. |
190
SCHEDULE 3
FORM OF GLOBAL REGISTERED NOTE CERTIFICATES
PART A
FORM OF GLOBAL REGISTERED NOTE CERTIFICATE FOR
INTERCONTINENTAL HOTELS GROUP PLC
[THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION UNDER THE SECURITIES ACT.]
[[ISIN]: [•]]
[Common Code: [•]]
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
GLOBAL REGISTERED NOTE CERTIFICATE
191
| 1. | INTRODUCTION |
| 1.1 | The Notes |
This Global Registered Note Certificate is issued in respect of the notes (the Notes) of InterContinental Hotels Group PLC (the Issuer) described in the final terms (the Final Terms) or drawdown prospectus (Drawdown Prospectus) a copy of which is annexed hereto. [If a Drawdown Prospectus is annexed hereto, each reference in this Global Registered Note Certificate to “Final Terms” shall be read and construed as a reference to the final terms of the Notes set out in such Drawdown Prospectus. The Notes:
| (a) | Trust Deed: (insofar as they are represented by this Global Note) are subject to and have the benefit of an amended and restated trust deed made on 19 September 2024 (as further amended, supplemented or restated from time to time, the Trust Deed) made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee (the Trustee, which expression shall include all persons for the time being the trustee or trustees appointed under the Trust Deed); and |
| (b) | Agency Agreement: are the subject of an amended and restated agency agreement dated 19 September 2024 (as further amended, supplemented or restated from time to time) (the Agency Agreement) made between the Issuer, the Guarantors, Elavon Financial Services DAC as registrar (the Registrar which expression includes any successor registrar appointed from time to time in connection with the Notes), Elavon Financial Services DAC, UK Branch as principal paying agent and the Trustee and the other paying agents and the transfer agents named therein. |
| 1.2 | Construction |
All references in this Global Registered Note Certificate to an agreement, instrument or other document (including the Agency Agreement and the Trust Deed) shall be construed as a reference to that agreement, instrument or other document as the same may be amended, supplemented, replaced or novated from time to time provided that, in the case of any amendment, supplement, replacement or novation made after the date hereof, it is made in accordance with the Conditions. Headings and sub-headings are for ease of reference only and shall not affect the construction of this Global Registered Note Certificate.
| 1.3 | References to Conditions |
Any reference herein to the Conditions is to the Terms and Conditions of the Notes set out in Schedule 1 (Terms and Conditions of the Notes) hereto, as supplemented, amended and/or replaced by the Final Terms, and any reference to a numbered Condition is to the correspondingly numbered provision thereof. Words and expressions defined in the Conditions shall have the same meanings when used in this Global Registered Note Certificate.
| 2. | REGISTERED HOLDER |
This certifies that the person whose name is entered in the register maintained by the Registrar in relation to the Notes (the Register) is the duly registered holder (the Holder) of an aggregate principal amount equal to the Aggregate Nominal Amount specified in the Final Terms or (if the Aggregate Nominal Amount in respect of the Series specified in the Final Terms is different from the Aggregate Nominal Amount in respect of the Tranche specified in the Final Terms) the Aggregate Nominal Amount in respect of the Tranche specified in the Final Terms.
192
| 3. | PROMISE TO PAY |
The Issuer, for value received, promises to pay to the Holder, in respect of each Note represented by this Global Registered Note Certificate, the Redemption Amount on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions (or to pay such other amounts of principal on such dates as may be specified in the Final Terms), and to pay interest on each such Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
| 4. | PAYMENT CONDITIONS |
| 4.1 | Payment Business Day: If the currency of any payment made in respect of Notes represented by this Global Registered Note Certificate is euro, the applicable Payment Business Day shall be any day which is a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or, if the currency of any payment made in respect of Notes represented by this Global Registered Note Certificate is not euro, the applicable Payment Business Day shall be any day which is a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre. |
| 4.2 | Payment Record Date: Each payment made in respect of this Global Registered Note Certificate will be made to the person shown as the Holder in the Register at the close of business (in the relevant clearing system) on the Clearing System Business Day before the due date for such payment (the Record Date) where Clearing System Business Day means a day on which each clearing system for which this Global Registered Note Certificate is being held is open for business. |
| 5. | EXCHANGE FOR INDIVIDUAL NOTE CERTIFICATES |
This Global Registered Note Certificate will be exchanged in whole (but not in part) for duly authenticated and completed Individual Note Certificates (which expression has the meaning given in the Trust Deed) in accordance with the Agency Agreement:
5.1 Upon notice: on the expiry of such period of notice as may be specified in the Final Terms; or
5.2 Upon demand: at any time, if so specified in the Final Terms; or
5.3 In limited circumstances: if the Final Terms specifies “in the limited circumstances described in the Global Registered Note Certificate ”, then if either of the following events occurs:
| (a) | Closure of clearing systems: [Euroclear Bank S.A./N.V. (Euroclear) or Clearstream Banking S.A. (Clearstream)] or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business or does in fact do so and no successor clearing system approved by the Trustee is available; or |
193
| (b) | Event of Default: an Event of Default as defined in Condition 12 (Events of Default) occurs. |
| 6. | DELIVERY OF INDIVIDUAL NOTE CERTIFICATES |
Whenever this Global Registered Note Certificate is to be exchanged for Individual Note Certificates, such Individual Note Certificates shall be issued in an aggregate principal amount equal to the principal amount of this Global Registered Note Certificate within five business days of the delivery, by or on behalf of the Holder, Euroclear and/or Clearstream to the Registrar of such information as is required to complete and deliver such Individual Note Certificates (including, without limitation, the names and addresses of the persons in whose names the Individual Note Certificates are to be registered and the principal amount of each such person’s holding) against the surrender of this Global Registered Note Certificate at the Specified Office of the Registrar. Such exchange shall be effected in accordance with the provisions of the Agency Agreement and the regulations concerning the transfer and registration of Notes scheduled thereto and, in particular, shall be effected without charge to any Holder, but against such indemnity as the Registrar may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such exchange. In this paragraph, “business day” means a day on which commercial banks are open for business (including dealings in foreign currencies) in the city in which the Registrar has its Specified Office.
| 7. | CALCULATION OF INTEREST |
The calculation of any interest amount in respect of Notes represented by this Global Registered Note Certificate will be calculated on the aggregate outstanding principal amount of the Notes represented by this Global Registered Note Certificate and not by reference to the Calculation Amount.
| 8. | CONDITIONS APPLY |
Save as otherwise provided herein, the Holder of this Global Registered Note Certificate shall have the benefit of, and be subject to, the Conditions and, for the purposes of this Global Registered Note Certificate, any reference in the Conditions to “Note Certificate” or “Note Certificates” shall, except where the context otherwise requires, be construed so as to include this Global Registered Note Certificate.
| 9. | EXERCISE OF PUT OPTION |
In order to exercise the option contained in Condition 9(f) (Redemption and Purchase – Redemption at the option of the Noteholders) or Condition 9(g) (Change of Control redemption), the Holder must, within the period specified in the Conditions for the deposit of the relevant Note Certificate and Put Option Notice or Change of Control Put Exercise Notice (as applicable) (as each such expression is defined in the Agency Agreement) give notice of such exercise to the Principal Paying Agent, in accordance with the rules and procedures of Euroclear, Clearstream and/or any other relevant clearing system, specifying the principal amount of Notes in respect of which the Put Option or the Change of Control Put Option (as applicable) is being exercised. Any such notice shall be irrevocable and may not be withdrawn.
194
| 10. | EXERCISE OF CALL OPTION |
In connection with an exercise of the option contained in Condition 9(c) (Redemption at the option of the relevant Issuer (Issuer Call Option)) in relation to some only of the Notes, the Notes represented by this Global Registered Note Certificate may be redeemed in part in the principal amount specified by the Issuer in accordance with the Conditions and the Notes to be redeemed will not be selected as provided in the Conditions but in accordance with the rules and procedures of Euroclear, Clearstream (to be reflected in the records of Euroclear and Clearstream as either a pool factor or a reduction in principal amount, at their discretion).
| 11. | NOTICES |
Notwithstanding Condition 18 (Notices), so long as this Global Registered Note Certificate is held on behalf of Euroclear, Clearstream or any other clearing system (an Alternative Clearing System), notices to Holders of Notes represented by this Global Registered Note Certificate may be given by delivery of the relevant notice to Euroclear, Clearstream or (as the case may be) such Alternative Clearing System.
| 12. | DETERMINATION OF ENTITLEMENT |
This Global Registered Note Certificate is evidence of entitlement only and is not a document of title. Entitlements are determined by the Register and only the Holder is entitled to payment in respect of this Global Registered Note Certificate.
| 13. | AUTHENTICATION |
This Global Registered Note Certificate shall not be valid for any purpose until it has been authenticated for and on behalf of Elavon Financial Services DAC as registrar.
| 14. | [EFFECTUATION |
This Global Registered Note Certificate shall not be valid for any purpose until it has been effectuated for or on behalf of the entity appointed as common safekeeper by Euroclear or Clearstream.]
| 15. | GOVERNING LAW |
This Global Registered Note Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.
195
AS WITNESS the electronic/manual signature of a duly authorised person for and on behalf of the Issuer.
| INTERCONTINENTAL HOTELS GROUP PLC | ||
| By: |
|
|
| [electronic / manual signature] | ||
| (duly authorised) | ||
| ISSUED on the Issue Date | ||
| AUTHENTICATED for and on behalf of ELAVON FINANCIAL SERVICES DAC as registrar without recourse, warranty or liability | ||
| By: |
|
|
| [electronic / manual signature] | ||
| (duly authorised) | ||
| EFFECTUATED for and on behalf of [COMMON SAFEKEEPER] as common safekeeper without recourse, warranty or liability | ||
| By: |
|
|
| [electronic / manual signature] | ||
| (duly authorised) | ||
[Registered Global Note for InterContinental Hotels Group PLC – Signature Page]
196
FORM OF TRANSFER
FOR VALUE RECEIVED , being the registered holder of this Global Registered Note Certificate, hereby transfers to
of ,
[currency] in principal amount of the Notes and irrevocably requests and authorises Elavon Financial Services DAC in its capacity as registrar in relation to the Notes (or any successor in its capacity as such) to effect the relevant transfer by means of appropriate entries in the register kept by it.
Dated:
| By: | ||
| (duly authorised) |
Notes
The name of the person by or on whose behalf this form of transfer is signed must correspond with the name of the registered holder as it appears on the face of this Global Registered Note Certificate.
| (a) | A representative of such registered holder should state the capacity in which such representative signs, e.g. executor. |
| (b) | The signature of the person effecting a transfer shall conform to any list of duly authorised specimen signatures supplied by the registered holder or be certified by a recognised bank, notary public or in such other manner as the Registrar may require. |
| (c) | Any transfer of Notes shall be in an amount equal to a Specified Denomination. |
197
SCHEDULE 1
Terms and Conditions of the Notes
[As set out in the Base Prospectus[/Drawdown Prospectus (as applicable)]]
198
PART B
FORM OF INDIVIDUAL NOTE CERTIFICATE FOR INTERCONTINENTAL
HOTELS GROUP PLC
[ISIN: [•]]
[CUSIP No.: [•]]
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
INDIVIDUAL NOTE CERTIFICATE
This Note Certificate is issued in respect of a series of notes (the Notes) of InterContinental Hotels Group PLC (the Issuer) described in the final terms (the Final Terms) [or drawdown prospectus (Drawdown Prospectus)] a copy of the relevant particulars of which is endorsed on this Note. Any reference herein to the Conditions is to the Terms and Conditions of the Notes endorsed on this Note, as supplemented, amended and/or replaced by the Final Terms [or Drawdown Prospectus], and any reference to a numbered Condition is to the correspondingly numbered provision thereof. Words and expressions defined in the Conditions shall have the same meanings when used in this Note.
This is to certify that:
| of | ||||
is the person registered in the register maintained by the Registrar in relation to the Notes (the Register) as the duly registered holder or, if more than one person is so registered, the first-named of such persons (the Holder) of:
[currency]
( [CURRENCY IN WORDS])
199
in aggregate principal amount of the Notes.
The Issuer, for value received, hereby promises to pay the Redemption Amount to the Holder on Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions (or to pay such other amounts of principal on such dates as may be specified in the Final Terms [or Drawdown Prospectus]), and to pay interest on this Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
This Note Certificate is evidence of entitlement only and is not a document of title. Entitlements are determined by the Register and only the Holder is entitled to payment in respect of this Note Certificate.
This Note Certificate shall not be valid for any purpose until it has been authenticated for and on behalf of Elavon Financial Services DAC as registrar.
This Note and any non-contractual obligations arising out of or in connection with it are governed by English law.
200
AS WITNESS the electronic / manual signature of a duly authorised person for and on behalf of the Issuer.
| INTERCONTINENTAL HOTELS GROUP PLC | ||
| By: | ||
| [electronic / manual signature] | ||
| (duly authorised) | ||
| ISSUED as of [issue date] | ||
| AUTHENTICATED for and on behalf of Elavon Financial Services DAC as registrar without recourse, warranty or liability | ||
| By: | ||
| [electronic / manual signature] | ||
| (duly authorised) | ||
| EFFECTUATED for and on behalf of [COMMON SAFEKEEPER] as common safekeeper | ||
| without recourse, warranty or liability | ||
| By: | ||
| [electronic / manual signature] | ||
| (duly authorised) | ||
[Individual Note Certificate for InterContinental Hotels Group PLC – Signature Page]
201
FORM OF TRANSFER
FOR VALUE RECEIVED _____________________, being the registered holder of this Note Certificate, hereby transfers to ______________ of _______________________________________________________________________________________________________
[currency] _________________ in principal amount of the Notes and irrevocably requests and authorises Elavon Financial Services DAC in its capacity as registrar in relation to the Notes (or any successor in its capacity as such) to effect the relevant transfer by means of appropriate entries in the register kept by it.
| Dated: |
|
|
| By: | ||
| (duly authorised) | ||
Notes
The name of the person by or on whose behalf this form of transfer is signed must correspond with the name of the registered holder as it appears on the face of this Note Certificate.
| (a) | A representative of such registered holder should state the capacity in which such representative signs, e.g. executor. |
| (b) | The signature of the person effecting a transfer shall conform to any list of duly authorised specimen signatures supplied by the registered holder or be certified by a recognised bank, notary public or in such other manner as the Registrar may require. |
| (c) | Any transfer of Notes shall be in an amount equal to a Specified Denomination. |
202
[On the reverse of the Note Certificate:]
FINAL TERMS
The following is a copy of the relevant particulars of the Final Terms [or Drawdown Prospectus].
TERMS AND CONDITIONS
[As set out in the Base Prospectus [/ Drawdown Prospectus (as applicable)]]
[At the foot of the Terms and Conditions:]
PRINCIPAL PAYING AGENT
ELAVON FINANCIAL SERVICES
DAC, UK BRANCH
125 Old Broad Street
Fifth Floor
London EC2N 1AR
REGISTRAR AND TRANSFER AGENT
ELAVON FINANCIAL SERVICES DAC
[Block F1
Cherrywood Business Park
Cherrywood
Dublin 18 D18 W2X7
Ireland]
203
Part F
Form of Global Registered Note Certificate for IHG Finance LLC
[THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION UNDER THE SECURITIES ACT.]
[[ISIN]: [•]]
[Common Code: [•]]
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
GLOBAL REGISTERED NOTE CERTIFICATE
| 1. | INTRODUCTION |
| 1.1 | The Notes |
This Global Registered Note Certificate is issued in respect of the notes (the Notes) of IHG Finance LLC (the Issuer) described in the final terms (the Final Terms) or drawdown prospectus (Drawdown Prospectus) a copy of which is annexed hereto. [If a Drawdown Prospectus is annexed hereto, each reference in this Global Registered Note Certificate to “Final Terms” shall be read and construed as a reference to the final terms of the Notes set out in such Drawdown Prospectus. The Notes:
204
| (a) | Trust Deed: (insofar as they are represented by this Global Note) are subject to and have the benefit of an amended and restated trust deed made on 19 September 2024 (as further amended, supplemented or restated from time to time, the Trust Deed) made between the Issuer, the Guarantors and U.S. Bank Trustees Limited as trustee (the Trustee, which expression shall include all persons for the time being the trustee or trustees appointed under the Trust Deed); and |
| (b) | Agency Agreement: are the subject of an amended and restated agency agreement dated 19 September 2024 (as further amended, supplemented or restated from time to time) (the Agency Agreement) made between the Issuer, the Guarantors, Elavon Financial Services DAC as registrar (the Registrar which expression includes any successor registrar appointed from time to time in connection with the Notes), Elavon Financial Services DAC, UK Branch as principal paying agent and the Trustee and the other paying agents and the transfer agents named therein. |
| 1.2 | Construction |
All references in this Global Registered Note Certificate to an agreement, instrument or other document (including the Agency Agreement and the Trust Deed) shall be construed as a reference to that agreement, instrument or other document as the same may be amended, supplemented, replaced or novated from time to time provided that, in the case of any amendment, supplement, replacement or novation made after the date hereof, it is made in accordance with the Conditions. Headings and sub-headings are for ease of reference only and shall not affect the construction of this Global Registered Note Certificate.
| 1.3 | References to Conditions |
Any reference herein to the Conditions is to the Terms and Conditions of the Notes set out in Schedule 1 (Terms and Conditions of the Notes) hereto, as supplemented, amended and/or replaced by the Final Terms, and any reference to a numbered Condition is to the correspondingly numbered provision thereof. Words and expressions defined in the Conditions shall have the same meanings when used in this Global Registered Note Certificate.
| 2. | REGISTERED HOLDER |
This certifies that the person whose name is entered in the register maintained by the Registrar in relation to the Notes (the Register) is the duly registered holder (the Holder) of an aggregate principal amount equal to the Aggregate Nominal Amount specified in the Final Terms or (if the Aggregate Nominal Amount in respect of the Series specified in the Final Terms is different from the Aggregate Nominal Amount in respect of the Tranche specified in the Final Terms) the Aggregate Nominal Amount in respect of the Tranche specified in the Final Terms.
| 3. | PROMISE TO PAY |
The Issuer, for value received, promises to pay to the Holder, in respect of each Note represented by this Global Registered Note Certificate, the Redemption Amount on the Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions (or to pay such other amounts of principal on such dates as may be specified in the Final Terms), and to pay interest on each such Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
205
| 4. | PAYMENT CONDITIONS |
| 4.1 | Payment Business Day: If the currency of any payment made in respect of Notes represented by this Global Registered Note Certificate is euro, the applicable Payment Business Day shall be any day which is a TARGET Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Additional Financial Centre; or, if the currency of any payment made in respect of Notes represented by this Global Registered Note Certificate is not euro, the applicable Payment Business Day shall be any day which is a day on which dealings in foreign currencies may be carried on in the Principal Financial Centre of the currency of payment and in each (if any) Additional Financial Centre. |
| 4.2 | Payment Record Date: Each payment made in respect of this Global Registered Note Certificate will be made to the person shown as the Holder in the Register at the close of business (in the relevant clearing system) on the Clearing System Business Day before the due date for such payment (the Record Date) where Clearing System Business Day means a day on which each clearing system for which this Global Registered Note Certificate is being held is open for business. |
| 5. | EXCHANGE FOR INDIVIDUAL NOTE CERTIFICATES |
This Global Registered Note Certificate will be exchanged in whole (but not in part) for duly authenticated and completed Individual Note Certificates (which expression has the meaning given in the Trust Deed) in accordance with the Agency Agreement:
| 5.1 | Upon notice: on the expiry of such period of notice as may be specified in the Final Terms; or |
| 5.2 | Upon demand: at any time, if so specified in the Final Terms; or |
| 5.3 | In limited circumstances: if the Final Terms specifies “in the limited circumstances described in the Global Registered Note Certificate ”, then if either of the following events occurs: |
| (a) | Closure of clearing systems: [Euroclear Bank S.A./N.V. (Euroclear) or Clearstream Banking S.A. (Clearstream)] or any other relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business or does in fact do so and no successor clearing system approved by the Trustee is available; or |
| (b) | Event of Default: an Event of Default as defined in Condition 12 (Events of Default) occurs. |
| 6. | DELIVERY OF INDIVIDUAL NOTE CERTIFICATES |
Whenever this Global Registered Note Certificate is to be exchanged for Individual Note Certificates, such Individual Note Certificates shall be issued in an aggregate principal amount equal to the principal amount of this Global Registered Note Certificate within five business days of the delivery, by or on behalf of the Holder, Euroclear and/or Clearstream to the Registrar of such information as is required to complete and deliver such Individual Note Certificates (including, without limitation, the names and addresses of the persons in whose names the Individual Note Certificates are to be registered and the principal amount of each such person’s holding) against the surrender of this Global Registered Note Certificate at the Specified Office of the Registrar.
206
Such exchange shall be effected in accordance with the provisions of the Agency Agreement and the regulations concerning the transfer and registration of Notes scheduled thereto and, in particular, shall be effected without charge to any Holder, but against such indemnity as the Registrar may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such exchange. In this paragraph, “business day” means a day on which commercial banks are open for business (including dealings in foreign currencies) in the city in which the Registrar has its Specified Office.
| 7. | CALCULATION OF INTEREST |
The calculation of any interest amount in respect of Notes represented by this Global Registered Note Certificate will be calculated on the aggregate outstanding principal amount of the Notes represented by this Global Registered Note Certificate and not by reference to the Calculation Amount.
| 8. | CONDITIONS APPLY |
Save as otherwise provided herein, the Holder of this Global Registered Note Certificate shall have the benefit of, and be subject to, the Conditions and, for the purposes of this Global Registered Note Certificate, any reference in the Conditions to “Note Certificate” or “Note Certificates” shall, except where the context otherwise requires, be construed so as to include this Global Registered Note Certificate.
| 9. | EXERCISE OF PUT OPTION |
In order to exercise the option contained in Condition 9(f) (Redemption and Purchase – Redemption at the option of the Noteholders) or Condition 9(g) (Change of Control redemption), the Holder must, within the period specified in the Conditions for the deposit of the relevant Note Certificate and Put Option Notice or Change of Control Put Exercise Notice (as applicable) (as each such expression is defined in the Agency Agreement) give notice of such exercise to the Principal Paying Agent, in accordance with the rules and procedures of Euroclear, Clearstream and/or any other relevant clearing system, specifying the principal amount of Notes in respect of which the Put Option or the Change of Control Put Option (as applicable) is being exercised. Any such notice shall be irrevocable and may not be withdrawn.
| 10. | EXERCISE OF CALL OPTION |
In connection with an exercise of the option contained in Condition 9(c) (Redemption at the option of the relevant Issuer (Issuer Call Option)) in relation to the Notes, the Notes represented by this Global Registered Note Certificate may be redeemed at the option of the Issuer in whole or in part in the principal amount specified by the Issuer in accordance with the Conditions and the Notes to be redeemed will not be selected as provided in the Conditions but in accordance with the rules and procedures of Euroclear, Clearstream (to be reflected in the records of Euroclear and Clearstream as either a pool factor or a reduction in principal amount, at their discretion).
| 11. | NOTICES |
Notwithstanding Condition 18 (Notices), so long as this Global Registered Note Certificate is held on behalf of Euroclear, Clearstream or any other clearing system (an Alternative Clearing System), notices to Holders of Notes represented by this Global Registered Note Certificate may be given by delivery of the relevant notice to Euroclear, Clearstream or (as the case may be) such Alternative Clearing System.
207
| 12. | DETERMINATION OF ENTITLEMENT |
This Global Registered Note Certificate is evidence of entitlement only and is not a document of title. Entitlements are determined by the Register and only the Holder is entitled to payment in respect of this Global Registered Note Certificate.
| 13. | AUTHENTICATION |
This Global Registered Note Certificate shall not be valid for any purpose until it has been authenticated for and on behalf of Elavon Financial Services DAC as registrar.
| 14. | [EFFECTUATION |
This Global Registered Note Certificate shall not be valid for any purpose until it has been effectuated for or on behalf of the entity appointed as common safekeeper by Euroclear or Clearstream.]
| 15. | GOVERNING LAW |
This Global Registered Note Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.
208
AS WITNESS the electronic / manual signature of a duly authorised person for and on behalf of the Issuer.
| IHG FINANCE LLC | ||
| By: |
|
|
| [manual or electronic signature] | ||
| (duly authorised) | ||
| ISSUED on the Issue Date | ||
| AUTHENTICATED for and on behalf of | ||
| ELAVON FINANCIAL SERVICES DAC as registrar without recourse, warranty or liability | ||
| By: |
|
|
| [electronic / manual signature] | ||
| (duly authorised) | ||
| EFFECTUATED for and on behalf of | ||
| [COMMON SAFEKEEPER] as common safekeeper without recourse, warranty or liability | ||
| By: |
|
|
| [electronic / manual signature] | ||
| (duly authorised) | ||
[Registered Global Note for IHG Finance LLC – Signature Page]
209
FORM OF TRANSFER
FOR VALUE RECEIVED __________________, being the registered holder of this Global Registered Note Certificate, hereby transfers to _____________________________________________________________________________________________________________ of _____________________________________________________, [currency] _____________ in principal amount of the Notes and irrevocably requests and authorises Elavon Financial Services DAC in its capacity as registrar in relation to the Notes (or any successor in its capacity as such) to effect the relevant transfer by means of appropriate entries in the register kept by it.
| Dated: _______________________ | ||
| By: | ||
| (duly authorised) |
||
Notes
The name of the person by or on whose behalf this form of transfer is signed must correspond with the name of the registered holder as it appears on the face of this Global Registered Note Certificate.
| (d) | A representative of such registered holder should state the capacity in which such representative signs, e.g. executor. |
| (e) | The signature of the person effecting a transfer shall conform to any list of duly authorised specimen signatures supplied by the registered holder or be certified by a recognised bank, notary public or in such other manner as the Registrar may require. |
| (f) | Any transfer of Notes shall be in an amount equal to a Specified Denomination. |
210
SCHEDULE 1
Terms and Conditions of the Notes
[As set out in the Base Prospectus[/Drawdown Prospectus (as applicable)]]
211
PART C
FORM OF INDIVIDUAL NOTE CERTIFICATE FOR IHG FINANCE LLC
[ISIN: [•]]
[CUSIP No.: [•]]
IHG FINANCE LLC
(formed in the State of Delaware with company number 7546892)
[Aggregate principal amount of Series]
[Title of Notes]
unconditionally and irrevocably guaranteed by
INTERCONTINENTAL HOTELS GROUP PLC
(incorporated in England and Wales with company number 05134420)
and
SIX CONTINENTS LIMITED
(incorporated in England and Wales with company number 913450)
and
INTERCONTINENTAL HOTELS LIMITED
(incorporated in England and Wales with company number 4551528)
INDIVIDUAL NOTE CERTIFICATE
This Note Certificate is issued in respect of a series of notes (the Notes) of IHG Finance LLC (the Issuer) described in the final terms (the Final Terms) [or drawdown prospectus (Drawdown Prospectus)] a copy of the relevant particulars of which is endorsed on this Note. Any reference herein to the Conditions is to the Terms and Conditions of the Notes endorsed on this Note, as supplemented, amended and/or replaced by the Final Terms [or Drawdown Prospectus], and any reference to a numbered Condition is to the correspondingly numbered provision thereof. Words and expressions defined in the Conditions shall have the same meanings when used in this Note.
This is to certify that:
|
|
||||
| of _____________________________________ | ||||
|
|
is the person registered in the register maintained by the Registrar in relation to the Notes (the Register) as the duly registered holder or, if more than one person is so registered, the first-named of such persons (the Holder) of:
[currency] ______________________________
( _________________ [CURRENCY IN WORDS])
212
in aggregate principal amount of the Notes.
The Issuer, for value received, hereby promises to pay the Redemption Amount to the Holder on Maturity Date or on such earlier date or dates as the same may become payable in accordance with the Conditions (or to pay such other amounts of principal on such dates as may be specified in the Final Terms [or Drawdown Prospectus]), and to pay interest on this Note on the dates and in the manner specified in the Conditions, together with any additional amounts payable in accordance with the Conditions, all subject to and in accordance with the Conditions.
This Note Certificate is evidence of entitlement only and is not a document of title. Entitlements are determined by the Register and only the Holder is entitled to payment in respect of this Note Certificate.
This Note Certificate shall not be valid for any purpose until it has been authenticated for and on behalf of Elavon Financial Services DAC as registrar.
This Note and any non-contractual obligations arising out of or in connection with it are governed by English law.
213
AS WITNESS the electronic / manual signature of a duly authorised person for and on behalf of the Issuer.
| IHG FINANCE LLC | ||
| By: |
|
|
| [manual or electronic signature] | ||
| (duly authorised) | ||
| ISSUED as of [issue date] | ||
| AUTHENTICATED for and on behalf of | ||
| Elavon Financial Services DAC as registrar without recourse, warranty or liability | ||
| By: |
|
|
| [electronic / manual signature] | ||
| (duly authorised) | ||
| EFFECTUATED for and on behalf of | ||
| [COMMON SAFEKEEPER] as common safekeeper without recourse, warranty or liability | ||
| By: |
|
|
| [electronic / manual signature] (duly authorised) |
||
[Individual Note Certificate for IHG Finance LLC – Signature Page]
214
FORM OF TRANSFER
FOR VALUE RECEIVED _________________, being the registered holder of this Note Certificate, hereby transfers to _____________________________________ of ___________________________________________________________________________ [currency] _______________________ in principal amount of the Notes and irrevocably requests and authorises Elavon Financial Services DAC in its capacity as registrar in relation to the Notes (or any successor in its capacity as such) to effect the relevant transfer by means of appropriate entries in the register kept by it.
| Dated: |
|
|
| By: | ||
| (duly authorised) | ||
Notes
The name of the person by or on whose behalf this form of transfer is signed must correspond with the name of the registered holder as it appears on the face of this Note Certificate.
| (g) | A representative of such registered holder should state the capacity in which such representative signs, e.g. executor. |
| (h) | The signature of the person effecting a transfer shall conform to any list of duly authorised specimen signatures supplied by the registered holder or be certified by a recognised bank, notary public or in such other manner as the Registrar may require. |
| (i) | Any transfer of Notes shall be in an amount equal to a Specified Denomination. |
215
[On the reverse of the Note Certificate:]
FINAL TERMS
The following is a copy of the relevant particulars of the Final Terms [or Drawdown Prospectus].
TERMS AND CONDITIONS
[As set out in the Base Prospectus[ / Drawdown Prospectus (as applicable)]]
[At the foot of the Terms and Conditions:]
PRINCIPAL PAYING AGENT
ELAVON FINANCIAL SERVICES
DAC, UK BRANCH
125 Old Broad Street
Fifth Floor
London EC2N 1AR
REGISTRAR AND TRANSFER
AGENT
ELAVON FINANCIAL SERVICES
DAC
[Block F1
Cherrywood Business Park
Cherrywood
Dublin 18 D18 W2X7
Ireland]
216
SCHEDULE 4
PROVISIONS FOR MEETINGS OF NOTEHOLDERS
| 1. | DEFINITIONS |
In this Trust Deed and the Conditions, the following expressions have the following meanings:
| 1.1 | In relation to Meetings of holders of Registered Notes and/or holders of Bearer Notes: |
Chairperson means, in relation to any Meeting, the individual who takes the chair in accordance with paragraph 8 (Chairperson);
Extraordinary Resolution means:
| (a) | a resolution passed at a Meeting duly convened and held in accordance with this Schedule by a majority of not less than three quarters of the persons voting thereat upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-quarters of the votes cast on such poll; or |
| (b) | consent given by way of electronic consents through the relevant clearing system(s) (in a form satisfactory to the Trustee) by or on behalf of at least three-quarters in nominal amount of the Notes for the time being outstanding. |
Meeting means a meeting of Noteholders (whether originally convened or resumed following an adjournment, and whether held virtually or in person);
Relevant Fraction means:
| (a) | for all business other than voting on an Extraordinary Resolution, one tenth; |
| (b) | for voting on any Extraordinary Resolution other than one relating to a Reserved Matter, more than half; and |
| (c) | for voting on any Extraordinary Resolution relating to a Reserved Matter, not less than three quarters; |
provided, however, that, in the case of a Meeting which has resumed after adjournment for want of a quorum, it means:
| (i) | for all business other than voting on an Extraordinary Resolution relating to a Reserved Matter, the fraction of the aggregate principal amount of the outstanding Notes represented or held by the Voters actually present at the Meeting; and |
| (ii) | for voting on any Extraordinary Resolution relating to a Reserved Matter, not less than one quarter; |
217
Reserved Matter means any proposal:
| (a) | to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes or to alter the method of calculating the amount of any payment in respect of the Notes on redemption or maturity provided however for the avoidance of doubt that neither a Benchmark Amendment nor a Benchmark Replacement Conforming Change shall constitute a Reserved Matter; |
| (b) | to effect the exchange or substitution of the Notes for, or the conversion of the Notes into, shares, bonds or other obligations or securities of the Relevant Issuer or any other person or body corporate formed or to be formed (other than as permitted under Clause 9.3 (Substitution) of this Trust Deed); |
| (c) | to change the currency in which amounts due in respect of the Notes are payable; |
| (d) | to change the quorum required at any Meeting or the majority required to pass an Extraordinary Resolution; or |
| (e) | to amend this definition; |
Written Resolution means a resolution in writing signed by or on behalf of holders of Notes, who for the time being are entitled to receive notice of a Meeting in accordance with the provisions of this Schedule, holding not less than three-quarters in nominal amount of the Notes of such Series for the time being outstanding, whether contained in one document or several documents in the same form, each signed by or on behalf of one or more such holders of the Notes;
24 hours means a period of 24 hours including all or part of a day (disregarding for this purpose the day upon which such Meeting is to be held) upon which banks are open for business in both the place where the relevant Meeting is to be held and in each of the places where the Paying Agents have their Specified Offices and such period shall be extended by one period or, to the extent necessary, more periods of 24 hours until there is included as aforesaid all or part of a day upon which banks are open for business as aforesaid; and
48 hours means 2 consecutive periods of 24 hours.
| 1.2 | In relation to Meetings of holders of Bearer Notes only: |
Block Voting Instruction means, in relation to any Meeting, a document in the English language issued by a Paying Agent:
| (a) | certifying that the Deposited Notes have been deposited with such Paying Agent (or to its order at a bank or other depositary) or blocked in an account with a clearing system and will not be released until the earlier of: |
| (i) | the conclusion of the Meeting specified in such Block Voting Instruction; and |
218
| (ii) | the surrender to such Paying Agent, not less than 48 hours before the time fixed for the Meeting (or, if the Meeting has been adjourned, the time fixed for its resumption), of the receipt for the Deposited Notes and notification thereof by such Paying Agent to the Relevant Issuer and the Trustee; and |
| (b) | certifying that the depositor of each Deposited Note or a duly authorised person on its behalf has instructed the relevant Paying Agent that the votes attributable to such Deposited Note are to be cast in a particular way on each resolution to be put to the Meeting and that, during the period of 48 hours before the time fixed for the Meeting and ending at the conclusion or adjournment thereof, such instructions may not be amended or revoked; |
| (c) | listing the aggregate nominal amount and (if in definitive form) the certificate numbers of the Deposited Notes, distinguishing for each resolution between those in respect of which instructions have been given to vote for, or against, the resolution; and |
| (d) | authorising a named individual or individuals to vote in respect of the Deposited Notes in accordance with such instructions; |
Deposited Notes means certain specified Bearer Notes which have been deposited with a Paying Agent (or to its order at a bank or other depositary) held to its order or under its control or blocked in an account with a clearing system, for the purposes of a Block Voting Instruction or a Voting Certificate;
Proxy, in the case of Bearer Notes means, in relation to any Meeting, a person appointed to vote under a Block Voting Instruction other than:
| (a) | any such person whose appointment has been revoked and in relation to whom the relevant Paying Agent has been notified in writing of such revocation by the time which is 48 hours before the time fixed for such Meeting; and |
| (b) | any such person appointed to vote at a Meeting which has been adjourned for want of a quorum and who has not been re-appointed to vote at the Meeting when it is resumed; |
Voter means, in relation to any Meeting, the bearer of a Voting Certificate, Proxy or the bearer of a Definitive Note who produces such Definitive Note at the Meeting;
Voting Certificate means, in relation to any Meeting, a certificate in the English language issued by a Paying Agent and dated in which it is stated:
| (a) | that the Deposited Notes have been deposited with such Paying Agent (or to its order or under its control at a bank or other depositary) or blocked in an account with a clearing system and will not be released until the earlier of: |
| (i) | the conclusion of the Meeting; and |
| (ii) | the surrender of such certificate to such Paying Agent; and |
219
| (b) | that the bearer of such certificate is entitled to attend and vote at the Meeting in respect of the Deposited Notes; |
| 1.3 | In relation to any Meeting of the holders of Registered Notes: |
Block Voting Instruction means, in relation to any Meeting, a document in the English language issued by a Registrar:
| (a) | certifying: |
| (i) | that certain specified Registered Notes (each a Blocked Note) have been blocked in an account with a clearing system and will not be released until the conclusion of the Meeting and that the holder of each Blocked Note or a duly authorised person on its behalf has instructed the Registrar that the votes attributable to such Blocked Note are to be cast in a particular way on each resolution to be put to the Meeting; or |
| (ii) | that each registered holder of certain specified Registered Notes (each a Relevant Note) or a duly authorised person on its behalf has instructed the Registrar that the votes attributable to each Relevant Note held by it are to be cast in a particular way on each resolution to be put to the Meeting; and |
in each case that, during the period of 48 hours before the time fixed for the Meeting, such instructions may not be amended or revoked;
| (b) | listing the total principal amount of the Blocked Notes and the Relevant Notes, distinguishing for each resolution between those in respect of which instructions have been given to vote for, or against, the resolution; and |
| (c) | authorising a named individual or individuals to vote in respect of the Blocked Notes and the Relevant Notes in accordance with such instructions; |
Form of Proxy means, in relation to any Meeting, a document in the English language available from the Registrar signed by a Noteholder or, in the case of a corporation, executed under its seal or signed on its behalf by a duly authorised officer and delivered to the Registrar not later than 48 hours before the time fixed for such Meeting, appointing a named individual or individuals to vote in respect of the Registered Notes held by such Noteholder;
Proxy, in the case of Registered Notes means, in relation to any Meeting, a person appointed to vote under a Block Voting Instruction or a Form of Proxy other than:
| (a) | any such person whose appointment has been revoked and in relation to whom the Registrar has been notified in writing of such revocation by the time which is 48 hours before the time fixed for such Meeting; and |
| (b) | any such person appointed to vote at a Meeting which has been adjourned for want of a quorum and who has not been reappointed to vote at the Meeting when it is resumed; |
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Voter means, in relation to any Meeting, (a) a Proxy or (b) (subject to paragraph 5 (Record date in relation to Registered Notes) below) a Noteholder; provided, however, that (subject to paragraph 5 (Record date in relation to Registered Notes) below) any Noteholder which has appointed a Proxy under a Block Voting Instruction or Form of Proxy shall not be a Voter except to the extent that such appointment has been revoked and the Registrar notified in writing of such revocation at least 48 hours before the time fixed for such Meeting.
| 2. | ISSUE OF VOTING CERTIFICATES AND BLOCK VOTING INSTRUCTIONS AND FORMS OF PROXY |
| 2.1 | Bearer Notes |
The holder of a Bearer Note may obtain a Voting Certificate from any Paying Agent or require any Paying Agent to issue a Block Voting Instruction by depositing such Bearer Note with such Paying Agent or arranging for such Bearer Note to be (to its satisfaction) held to its order or under its control or blocked in an account with a clearing system not later than 48 hours before the time fixed for the relevant Meeting. A Voting Certificate or Block Voting Instruction shall be valid until the release of the Deposited Notes to which it relates. So long as a Voting Certificate or Block Voting Instruction is valid, the bearer thereof (in the case of a Voting Certificate) or any Proxy named therein (in the case of a Block Voting Instruction) shall be deemed to be the holder of the Bearer Notes to which it relates for all purposes in connection with the Meeting. A Voting Certificate and a Block Voting Instruction cannot be outstanding simultaneously in respect of the same Bearer Note.
| 2.2 | Registered Notes |
The holder of a Registered Note may require the Registrar to issue a Block Voting Instruction by arranging (to the satisfaction of the Registrar) for such Registered Note to be blocked in an account with a clearing system not later than 48 hours before the time fixed for the relevant Meeting. The holder of a Registered Note may require the Registrar to issue a Block Voting Instruction by delivering to the Registrar written instructions not later than 48 hours before the time fixed for the relevant Meeting. Any holder of a Note may obtain an uncompleted and unexecuted Form of Proxy from the Registrar. A Block Voting Instruction and a Form of Proxy cannot be outstanding simultaneously in respect of the same Registered Note.
| 3. | REFERENCES TO DEPOSIT/RELEASE OR BLOCKING/RELEASE OF NOTES |
| 3.1 | Bearer Notes |
Where Bearer Notes are represented by a Global Note or are held in definitive form within a clearing system, references to the deposit, or release, of Bearer Notes shall be construed in accordance with the usual practices (including blocking the relevant account) of such clearing system.
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| 3.2 | Registered Notes |
Where Registered Notes are represented by a Global Registered Note Certificate or are held in definitive form within a clearing system, references to the blocking, or release, of Registered Notes shall be construed in accordance with the usual practices (including blocking the relevant account) of such clearing system.
| 4. | VALIDITY OF BLOCK VOTING INSTRUCTIONS AND FORMS OF PROXY |
| 4.1 | Bearer Notes |
Block Voting Instructions in relation to Bearer Notes shall be valid only if deposited at the Specified Office of the relevant Paying Agent or at some other place approved by the Trustee, at least 24 hours before the time fixed for the relevant Meeting or the Chairperson decides otherwise before the Meeting proceeds to business. If the Trustee so requires, a notarised copy of each Block Voting Instruction and satisfactory proof of the identity of each Proxy named therein shall be produced at the Meeting, but the Trustee shall not be obliged to investigate the validity of any Block Voting Instruction or the authority of any Proxy.
| 4.2 | Registered Notes |
Block Voting Instructions in relation to Registered Notes and Forms of Proxy shall be valid only if deposited at the specified office of the Registrar or at some other place approved by the Trustee, at least 24 hours before the time fixed for the relevant Meeting or the Chairperson decides otherwise before the Meeting proceeds to business. If the Trustee requires, a notarised copy of each Block Voting Instruction and satisfactory proof of the identity of each Proxy named therein shall be produced at the Meeting, but the Trustee shall not be obliged to investigate the validity of any Block Voting Instruction or the authority of any Proxy.
| 5. | RECORD DATE IN RELATION TO REGISTERED NOTES |
The Relevant Issuer may fix a record date for the purposes of any Meeting of the holders of Registered Notes or any resumption thereof following its adjournment for want of a quorum provided that such record date is not more than 10 days prior to the time fixed for such Meeting or (as the case may be) its resumption. The person in whose name a Registered Note is registered in the Register on the record date at close of business in the city in which the Registrar has its Specified Office shall be deemed to be the holder of such Note for the purposes of such Meeting and notwithstanding any subsequent transfer of such Note or entries in the Register.
| 6. | CONVENING OF MEETING |
The Relevant Issuer, a Relevant Guarantor or the Trustee may convene a Meeting at any time, and the Trustee shall be obliged to do so subject to its being indemnified and/or secured and/or prefunded to its satisfaction upon the request in writing of Noteholders holding not less than one tenth of the aggregate principal amount of the outstanding Notes. Every Meeting shall be held on a date, and at a time and place (which need not be a physical space and instead may be by way of conference call, including by use of a videoconference platform), approved by the Trustee.
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| 7. | NOTICE |
At least 21 days’ notice (exclusive of the day on which the notice is given and of the day on which the relevant Meeting is to be held) specifying the date, time and place of the Meeting shall be given to the Noteholders and the Paying Agents in relation to Bearer Notes, and the Registrar, in relation to Registered Notes (with a copy to the Relevant Issuer) where the Meeting is convened by the Trustee or, where the Meeting is convened by the Relevant Issuer or a Relevant Guarantor, the Trustee.
| 7.1 | In relation to Bearer Notes |
The notice shall set out the full text of any resolutions to be proposed unless the Trustee agrees that the notice shall instead specify the nature of the resolutions without including the full text and shall state that the Bearer Notes may be deposited with, or to the order of, any Paying Agent for the purpose of obtaining Voting Certificates or appointing Proxies not later than 48 hours before the time fixed for the Meeting.
| 7.2 | In relation to Registered Notes |
The notice shall set out the full text of any resolutions to be proposed unless the Trustee agrees that the notice shall instead specify the nature of the resolutions without including the full text and shall state that Registered Notes may be blocked in clearing systems for the purposes of appointing Proxies under Block Voting Instructions until 48 hours before the time fixed for the Meeting and a Noteholder may appoint a Proxy either under a Block Voting Instruction by delivering written instructions to the Registrar or by executing and delivering a Form of Proxy to the Specified Office of the Registrar, in either case until 48 hours before the time fixed for the Meeting.
| 8. | CHAIRPERSON |
An individual (who may, but need not, be a Noteholder) nominated in writing by the Trustee may take the chair at any Meeting but, if no such nomination is made or if the individual nominated is not present within 15 minutes after the time fixed for the Meeting, those present shall elect one of themselves to take the chair failing which, the Relevant Issuer or any Relevant Guarantor may appoint a Chairperson. The Chairperson of an adjourned Meeting need not be the same person as was the Chairperson of the original Meeting.
| 9. | QUORUM |
The quorum at any Meeting shall be one or more Voters representing or holding not less than the Relevant Fraction of the aggregate principal amount of the outstanding Notes.
| 10. | ADJOURNMENT FOR WANT OF QUORUM |
If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairman may decide) after the time fixed for any Meeting a quorum is not present, then:
| (a) | in the case of a Meeting requested by Noteholders, it shall be dissolved; and |
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| (b) | in the case of any other Meeting (unless the Relevant Issuer, the Relevant Guarantors and the Trustee otherwise agree), it shall be adjourned for such period (which shall be not less than 14 days and not more than 42 days) and to such place (which need not be a physical place and instead may be by way of a conference call, including by use of a videoconference platform) as the Chairperson determines (with the approval of the Trustee); provided, however, that: |
| (i) | the Meeting shall be dissolved if the Relevant Issuer, the Relevant Guarantors and the Trustee together so decide; and |
| (ii) | no Meeting may be adjourned more than once for want of a quorum. |
| 11. | ADJOURNED MEETING |
The Chairperson may, with the consent of, and shall if directed by, any Meeting adjourn such Meeting from time to time and from place to place, but no business shall be transacted at any adjourned Meeting except business which might lawfully have been transacted at the Meeting from which the adjournment took place.
| 12. | NOTICE FOLLOWING ADJOURNMENT |
Paragraph 7 (Notice) shall apply to any Meeting which is to be resumed after adjournment for want of a quorum save that:
| (a) | 10 days’ notice (exclusive of the day on which the notice is given and of the day on which the Meeting is to be resumed) shall be sufficient; and |
| (b) | the notice shall specifically set out the quorum requirements which will apply when the Meeting resumes. |
It shall not be necessary to give notice of the resumption of a Meeting which has been adjourned for any other reason.
| 13. | PARTICIPATION |
The following may attend and speak at a Meeting:
| (a) | Voters; |
| (b) | representatives of the Relevant Issuer, the Relevant Guarantors, the Principal Paying Agent and the Trustee; |
| (c) | the financial advisers of the Relevant Issuer, the Relevant Guarantors and the Trustee; |
| (d) | the legal counsel to the Relevant Issuer, the Relevant Guarantors and the Trustee and such advisers; |
| (e) | in relation to Registered Notes, the Registrar, or in relation to Bearer Notes, the Principal Paying Agent; and |
| (f) | any other person approved by the Meeting or the Trustee. |
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| 14. | SHOW OF HANDS |
Every question submitted to a Meeting shall be decided in the first instance by a show of hands. Unless a poll is validly demanded before or at the time that the result is declared, the Chairperson’s declaration that on a show of hands a resolution has been passed, passed by a particular majority, rejected or rejected by a particular majority shall be conclusive, without proof of the number of votes cast for, or against, the resolution. Where there is only one Voter, this paragraph shall not apply and the resolution will immediately be decided by means of a poll.
| 15. | POLL |
A demand for a poll shall be valid if it is made by the Chairperson, the Relevant Issuer, any Relevant Guarantor, the Trustee or one or more Voters representing or holding not less than one fiftieth of the aggregate principal amount of the outstanding Notes. The poll may be taken immediately or after such adjournment as the Chairperson directs, but any poll demanded on the election of the Chairperson or on any question of adjournment shall be taken at the Meeting without adjournment. A valid demand for a poll shall not prevent the continuation of the relevant Meeting for any other business as the Chairperson directs.
| 16. | VOTES |
Every Voter shall have:
| (a) | on a show of hands, one vote; and |
| (b) | on a poll, the number of votes obtained by dividing the aggregate principal amount of the outstanding Note(s) represented or held by such Voter by the unit of currency in which the Notes are denominated. |
In the case of a voting tie the Chairperson shall have a casting vote.
Unless the terms of any Block Voting Instruction or Form of Proxy state otherwise, a Voter shall not be obliged to exercise all the votes to which they are entitled or to cast all the votes which he exercises in the same way.
In the case of any Meeting of holders of more than one Series of Notes where not all such Series are in the same currency, the principal amount of such Notes shall for all purposes in this Schedule 4 (whether, inter alia, in respect of the Meeting or any poll resulting therefrom), be the equivalent in pounds sterling translated at the spot rate of a bank nominated by the Trustee for the sale of the relevant currency or currencies for pounds sterling on the seventh dealing day prior to such Meeting, or in the case of a written request pursuant to paragraph 6 (Convening of Meeting), the date of such request. In such circumstances, on any poll each person present shall have one vote for each Unit of Notes (converted as above) which he holds.
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In this paragraph, a “Unit” means the lowest denomination of the Notes as stated in the relevant Final Terms or in the case of a meeting of Noteholders of more than one Series, shall be the lowest common denominator of the lowest denomination of the Notes.
| 17. | VALIDITY OF VOTES BY PROXIES |
Any vote by a Proxy in accordance with the relevant Block Voting Instruction in relation to either Bearer Notes or Registered Notes or Form of Proxy in relation to Registered Notes shall be valid even if such Block Voting Instruction or Form of Proxy or any instruction pursuant to which it was given has been amended or revoked, provided that neither the Relevant Issuer, a Relevant Guarantor, the Trustee nor the Chairperson has been notified in writing of such amendment or revocation by the time which is 24 hours before the time fixed for the relevant Meeting. Unless revoked, any appointment of a Proxy under a Block Voting Instruction or a Form of Proxy in relation to a Meeting shall remain in force in relation to any resumption of such Meeting following an adjournment; provided, however, that no such appointment of a Proxy in relation to a Meeting originally convened which has been adjourned for want of a quorum shall remain in force in relation to such Meeting when it is resumed. Any person appointed to vote at such a Meeting must be reappointed under a Block Voting Instruction (or, in relation to Registered Notes, a Form of Proxy) to vote at the Meeting when it is resumed.
| 18. | POWERS |
A Meeting shall have power (exercisable only by Extraordinary Resolution), without prejudice to any other powers conferred on it or any other person:
| (a) | to approve any Reserved Matter; |
| (b) | to approve any proposal by the Relevant Issuer and the Relevant Guarantors for any modification, abrogation, variation or compromise of any provisions of this Trust Deed, the Agency Agreement or the Conditions or any arrangement in respect of the obligations of the Relevant Issuer or any Relevant Guarantor under or in respect of the Notes; |
| (c) | (other than as permitted under Clause 9.3 (Substitution) of this Trust Deed) to approve the substitution of any person for the Relevant Issuer (or any previous substitute) as principal obligor under the Notes or the substitution of any person for any Relevant Guarantor (or any previous substitute) as guarantor under the Notes; |
| (d) | (other than as permitted under Clause 9.3 (Substitution) of this Trust Deed) to waive any breach or authorise any proposed breach by the Relevant Issuer or any Relevant Guarantor of its obligations under or in respect of this Trust Deed or the Notes or any act or omission which might otherwise constitute an Event of Default under the Notes; |
| (e) | to remove any Trustee; |
| (f) | to approve the appointment of a new Trustee; |
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| (g) | to authorise the Trustee (subject to its being indemnified and/or secured to its satisfaction) or any other person to execute all documents and do all things necessary to give effect to any Extraordinary Resolution; |
| (h) | to discharge or exonerate the Trustee from any liability in respect of any act or omission for which it may become responsible under this Trust Deed or the Notes; |
| (i) | to give any other authorisation or approval which under this Trust Deed or the Notes is required to be given by Extraordinary Resolution; |
| (j) | to appoint any persons as a committee to represent the interests of the Noteholders and to confer upon such committee any powers which the Noteholders could themselves exercise by Extraordinary Resolution; and |
| (k) | to sanction any scheme or proposal for the exchange or sale of the Notes for or the conversion of the Notes into or the cancellation of the Notes in consideration of shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities of the Relevant Issuer or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities as aforesaid and partly for or into or in consideration of cash. |
| 19. | EXTRAORDINARY RESOLUTION BINDS ALL HOLDERS |
An Extraordinary Resolution (i) passed at a meeting of the Noteholders duly convened and held; (ii) passed as a resolution in writing; or (iii) passed by way of electronic consents given by Noteholders through the relevant clearing system(s), in accordance with the provisions of this Schedule, shall be binding upon all Noteholders and Couponholders, whether or not present at such Meeting referred to in (i) above and whether or not voting (including when passed as a resolution in writing or by way of electronic consent), and each of the Noteholders shall be bound to give effect to it accordingly. Notice of the result of every vote on an Extraordinary Resolution shall be given to the Noteholders and, in relation to Bearer Notes, the Paying Agents and, in relation to Registered Notes, the Registrar (with a copy to the Relevant Issuer and the Trustee) within 14 days of the conclusion of the Meeting.
| 20. | MINUTES |
Minutes of all resolutions and proceedings at each Meeting shall be made. The Chairperson shall sign the minutes, which shall be prima facie evidence of the proceedings recorded therein. Unless and until the contrary is proved, every such Meeting in respect of the proceedings of which minutes have been summarised and signed shall be deemed to have been duly convened and held and all resolutions passed or proceedings transacted at it to have been duly passed and transacted.
| 21. | WRITTEN RESOLUTION |
A Written Resolution shall take effect as if it were an Extraordinary Resolution.
227
| 22. | FURTHER REGULATIONS |
Subject to all other provisions contained in this Trust Deed, the Trustee may without the consent of the Relevant Issuer, the Relevant Guarantors or the Noteholders prescribe such further regulations regarding the holding of Meetings of Noteholders and attendance and voting at them as the Trustee may in its sole discretion determine and agree to the holding of meetings by conference call in circumstances where it may be impossible or inadvisable to hold physical meetings.
| 23. | SEVERAL SERIES |
The following provisions shall apply where outstanding Notes belong to more than one Series:
| (a) | Business which in the opinion of the Trustee affects the Notes of only one Series shall be transacted at a separate Meeting of the holders of the Notes of that Series. |
| (b) | Business which in the opinion of the Trustee affects the Notes of more than one Series but does not give rise to an actual or potential conflict of interest between the holders of Notes of one such Series and the holders of Notes of any other such Series shall be transacted either at separate Meetings of the holders of the Notes of each such Series or at a single Meeting of the holders of the Notes of all such Series, as the Trustee shall in its absolute discretion determine. |
| (c) | Business which in the opinion of the Trustee affects the Notes of more than one Series and gives rise to an actual or potential conflict of interest between the holders of Notes of one such Series and the holders of Notes of any other such Series shall be transacted at separate Meetings of the holders of the Notes of each such Series. |
| (d) | The preceding paragraphs of this Schedule shall be applied as if references to the Notes and Noteholders were to the Notes of the relevant Series and to the holders of such Notes. |
In this paragraph, “business” includes (without limitation) the passing or rejection of any resolution.
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TRUST DEED
EXECUTION CLAUSES
| The Issuers | ||||
| EXECUTED and DELIVERED as a DEED by |
) | |||
| INTERCONTINENTAL HOTELS GROUP PLC |
) | |||
| a company incorporated in England and Wales acting by |
) | |||
| ) | ||||
| a director of the Company |
) | /s/ Michael Glover | ||
| ) | /s/ Nicolette Henfrey | |||
| a director / company secretary of the Company |
) | |||
| EXECUTED and DELIVERED as a DEED by |
) | |||
| IHG FINANCE LLC |
) | |||
| a company incorporated in the state of Delaware |
) | /s/ Randall Hammer | ||
| acting by |
) | |||
| ) | ||||
| an authorised signatory of the Company |
) | |||
229
| The Guarantors | ||||
| EXECUTED and DELIVERED as a DEED by |
) | |||
| INTERCONTINENTAL HOTELS GROUP PLC |
) | |||
| a company incorporated in England and Wales acting by |
) | |||
| ) | ||||
| a director of the Company |
) | /s/ Michael Glover | ||
| ) | ||||
| a director / company secretary of the Company |
) | /s/ Nicolette Henfrey | ||
| EXECUTED and DELIVERED as a DEED by |
) | |||
| IHG FINANCE LLC |
) | |||
| a company incorporated in the state of Delaware |
) | /s/ Randall Hammer | ||
| acting by |
) | |||
| ) | ||||
| an authorised signatory of the Company |
) | |||
| EXECUTED and DELIVERED as a DEED by |
) | |||
| INTERCONTINENTAL HOTELS LIMITED |
) | |||
| a company incorporated in England and Wales acting by |
) | |||
| ) | ||||
| a director of the Company |
) | /s/ Michael Glover | ||
| ) | ||||
| a director / company secretary of the Company |
) | /s/ Nicolette Henfrey | ||
| EXECUTED and DELIVERED as a DEED by |
) | |||
| SIX CONTINENTS LIMITED |
) | |||
| a company incorporated in England and Wales acting by |
) | |||
| ) | ||||
| a director of the Company |
) | /s/ Michael Glover | ||
| ) | ||||
| a director / company secretary of the Company |
) | /s/ Nicolette Henfrey | ||
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| The Trustee | ||||||
| EXECUTED as a DEED by |
) | |||||
| U.S. BANK TRUSTEES LIMITED |
) | |||||
| acting by an authorised signatory |
) | |||||
| in the presence of |
) | |||||
| /s/ Ashley Kingham |
Signature of attorney | |||||
|
|
Name of attorney | |||||
| /s/ Victoria de la Cruz |
Signature of witness | |||||
|
|
Name of witness | |||||
|
|
Address of witness | |||||
|
|
||||||
231
Exhibit 4(a)(vi)
| 1 Windsor Dials Arthur Road Windsor Berkshire SL4 1RS United Kingdom
www.ihgplc.com |
EXTENSION REQUEST
| To: |
MUFG Bank, Ltd., as Facility Agent | |
| From: | INTERCONTINENTAL HOTELS GROUP PLC | |
Dated 25 March 2024
US$1,350,000,000 Facility Agreement dated 28 April 2022 (the “Agreement”)
| 1. | We refer to the Agreement. This is an Extension Request. Terms defined in the Agreement have the same meaning in this Extension Request unless given a different meaning in this Extension Request. |
| 2. | Pursuant to paragraph (c) of clause 7.2 (Extension of the Termination Date) of the Agreement, we hereby unconditionally and irrevocably request that the Termination Date be extended to the Second Extended Termination Date. |
| 3. | We confirm that no Default is continuing or has occurred on the date of this Extension Request and that the Repeating Representations are true and correct as at the date of this Extension Request. |
| 4. | Each Lender who confirms to you its unconditional agreement to this Extension Request will be entitled to receive an extension fee of 0.05 per cent. of the amount of its individual Commitment as at 28 April 2024, which the Company will pay to the Facility Agent for each relevant consenting Lender’s account within 5 Business Days of 28 April 2024. |
| 5. | This Extension Request is irrevocable. |
| 6. | This Extension Request and any non-contractual obligations arising out of or in relation to it are governed by English law. |
Yours faithfully
/s/ Michael Cockcroft
By: Michael Cockcroft
INTERCONTINENTAL HOTELS GROUP PLC
InterContinental Hotels Group PLC. Registered in England and Wales No. 5134420. Registered Office: 1 Windsor Dials, Arthur Road, Windsor, Berkshire SL4 1RS.
|
MUFG Bank, Ltd. Processing Centre for Europe, Middle East and Africa Ropemaker Place 25 Ropemaker Street London, EC2Y 9AN |
| Date: | 25 April 2024 | |
| Facility Name: | INTERCONTINENTAL HOTELS - RCF TR | |
| Facility Reference: | 00234815-0006 | |
| Subject: | Confirmation of facility Extension Request (2024) | |
Please be advised that, further to the Extension Request dated 25 March 2024, the request to extend the facility to the Second Extended Termination Date has been approved and the Termination Date is now 30 April 2029 – please amend your records accordingly.
Further to Clause 4 of the Extension Request a separate notice for the extension fee will be sent for your records and reference.
If you have any questions regarding the above, please use the following contact information.
Kind regards,
Peter McGovern
Loan Agency Services
Tel: +44 (0)20-7577-1547/1542/1577
E-mail: loanagency@uk.mufg.jp
| Page 1 of 1 | A member of MUFG, a global financial group |
Exhibit 4(c)(vi)
RULES
OF THE
INTERCONTINENTAL HOTELS GROUP PLC
ANNUAL PERFORMANCE PLAN
APPROVED BY AND ON BEHALF OF THE IHG REMUNERATION COMMITTEE
30 NOVEMBER 2023
Contents
| 1 | Meanings of Words Used |
1 | ||||
| 2 | Granting Awards |
2 | ||||
| 3 | Settlement |
3 | ||||
| 4 | Leaving |
4 | ||||
| 5 | Global Participants |
4 | ||||
| 6 | Investigations |
5 | ||||
| 7 | Takeovers and other corporate events |
5 | ||||
| 8 | Tax |
6 | ||||
| 9 | Terms of employment |
6 | ||||
| 10 | General |
6 | ||||
| 11 | Administration |
8 | ||||
| 12 | Changing the Plan and termination |
8 | ||||
| 13 | Governing law and jurisdiction |
8 | ||||
InterContinental Hotels Group Plc Annual Performance Plan
i
Intercontinental Hotels Group Annual Performance Plan (“APP”)
| 1 | Meanings of Words Used |
In the Plan:
“Award” means an award comprising a Cash Award made to a Participant in accordance with the Plan, Deferred Award made to a Participant in accordance with the DAP, or both, as applicable;
“Cash Award” means a cash award;
“Committee” means the Remuneration Committee of the Company or a duly authorised committee;
“Company” means InterContinental Hotels Group PLC (with registered number 5134420);
“Deferred Award” means any deferred award of shares comprised in an Award in the form of an award under the DAP;
“Deferred Award Plan” or “DAP” means the InterContinental Hotels Group Deferred Award Plan as amended from time to time.
“Employee” means any person directly employed by a Member of the Group (including an employed executive director) and, where relevant, includes a former employee;
“Executive Director” means an executive director of the Company;
“Good Leaver Reason” means:
| (i) | death; |
| (ii) | injury, ill health or disability (evidenced to the satisfaction of the Committee); |
| (iii) | the Participant’s employing company ceasing to be a Member of the Group; |
| (iv) | the business or part of the business that employs the Participant being transferred outside of the Group; or |
| (v) | any other reason, at the discretion of the Committee; |
“Group “ means the Company and any company that is a subsidiary of or related to the Company and “Member of the Group” will be understood accordingly;
“Leaves” means ceasing to be an employee (and ceasing to be a director) of all Members of the Group and, unless otherwise determined, will be the date of termination;
“Malus and Clawback Policy” means such policy or policies in place for the purposes of adjusting and/or recovering remuneration, including the InterContinental Hotels Group PLC Malus and Clawback Policy (as amended from time to time), and any provisions or policies adopted to comply with the requirements of applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act), and “Malus” and “Clawback” will have the meanings given in the Malus and Clawback Policy;
“Participant” means a person who has been selected to receive an Award, or, after death, that person’s personal representatives;
“Performance Conditions” means any conditions imposed under rule 2.2;
“Performance Period” means the period in respect of which any Performance Conditions are to be satisfied;
“Plan” means the rules comprised by this The InterContinental Hotels Group Annual Performance Plan, as amended from time to time;
“Salary” has the same meaning as imposed under rule 2.2;
“Taxation” means any tax and social security charges (and/or any similar charges or levies, including interest) arising in connection with the Participant’s receipt of an Award;
InterContinental Hotels Group Plc Annual Performance Plan
1
In the Plan, the singular includes the plural and the plural includes the singular. References to any enactment or statutory requirement will be understood as references to that enactment or requirement as amended or re-enacted and they include any subordinate legislation made under it.
| 2 | Granting Awards |
| 2.1 | Granting an Award |
Only Employees may be selected to participate in the Plan. The Committee shall have absolute discretion as to the selection of Employees for participation in the Plan, and will decide when and how the Plan shall be operated.
Awards will be granted in any way which ensures contractual enforceability.
| 2.2 | Terms of Award |
Participants will be notified of the terms of their Award as soon as practicable, including:
| 2.2.1 | any Performance Conditions and the applicable Performance Period; |
| 2.2.2 | the percentage of Salary comprising any Award; |
| 2.2.3 | the form of the Award; |
| 2.2.4 | the settlement dates; |
| 2.2.5 | the definition of Salary used to calculate the award; and |
| 2.2.6 | whether the Malus and Clawback Policy will apply. |
The Committee may, at any time after providing such notice to Participants, vary the terms of the APP and/or specify any other terms applicable.
| 2.3 | Performance Conditions |
The Committee may make the grant or settlement of an Award conditional on the satisfaction of one or more Performance Conditions.
For Executive Directors, the application of Performance Conditions will be consistent with the Remuneration Policy.
The Committee may change a Performance Condition in accordance with its terms or if anything happens that causes the Committee to reasonably consider it appropriate to do so.
| 2.4 | Award limits |
Awards to Executive Directors may only be granted in accordance with the limits set out in the Remuneration Policy.
Awards to any other Employee must not exceed the limits provided for Executive Directors, unless otherwise determined by the Committee.
| 2.5 | Malus and Clawback |
If there is any discrepancy between the Malus and Clawback Policy and this Plan, the Malus and Clawback Policy will prevail.
InterContinental Hotels Group Plc Annual Performance Plan
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| 2.6 | Administrative errors |
If the Committee grants an Award:
| 2.6.1 | in error, it will be deemed never to have been granted and/or will immediately lapse; and/or |
| 2.6.2 | which is inconsistent with any provisions in the Plan, it will take effect only to the extent permissible under the Plan and will otherwise be deemed never to have been granted and/or will immediately lapse. |
| 3 | Settlement |
| 3.1 | Form of settlement |
Following the Performance Period, an Award will be satisfied in the form of a Cash Award, Deferred Award under the DAP or a combination of the two.
| 3.2 | Timing of settlement |
A Cash Award will be paid on the latest of:
| 3.2.1 | as soon as practicable at the end of the Performance Period (if applicable); and |
| 3.2.2 | the date it is decided that any Performance Conditions are satisfied, |
unless otherwise determined by the Committee.
If the Participant is a US taxpayer, the Cash Award shall be paid no later than 15 March of the calendar year following the end of the Performance Period.
| 3.3 | Extent of Award |
An Award will only be made to the extent the Committee decides that any Performance Conditions are satisfied.
| 3.4 | Overriding discretion |
The Committee may adjust the extent to which an Award will be granted or settled (including to nil) if it considers such payment would otherwise not be appropriate, including when considering:
| 3.4.1 | the wider performance of the Group; |
| 3.4.2 | the conduct, capability or performance of the Participant; |
| 3.4.3 | the experience of stakeholders; |
| 3.4.4 | any windfall gains; |
| 3.4.5 | the total value that would otherwise be received by the Participant compared to the maximum value that the Award was intended to deliver; or |
| 3.4.6 | any other reason at the discretion of the Committee. |
Any use of such discretion will be notified to the Participant as soon as reasonably practicable.
In the event of an adjustment, the Award shall be deemed to have been granted over the adjusted amount. If the Award is adjusted to nil, it shall be treated as if it had never been granted and a Participant shall have no rights to the Award.
InterContinental Hotels Group Plc Annual Performance Plan
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| 4 | Leaving |
| 4.1 | Leaving - during the Performance Period |
Where a Participant Leaves during the Performance Period, the Participant shall not receive any Award unless the Committee determines otherwise.
If a Participant Leaves for a Good Leaver Reason during the Performance Period, the Award will:
| 4.1.1 | if the reason is death, the Award shall be settled as soon as practicable in the form of a Cash Award only, unless otherwise determined by the Committee; |
| 4.1.2 | otherwise continue on its original terms, unless the Committee determines otherwise; and |
| 4.1.3 | be settled only to the extent prescribed by rule 3. |
| 4.2 | Leaving - after the Performance Period |
Where a Participant Leaves after the Performance Period, but before Awards have been made, the Participant shall receive only a Cash Award on the original payment date, unless otherwise determined by the Committee. If any part of the Award had been designated as a Deferred Award under the DAP, the Deferred Award shall immediately lapse under the terms of the DAP.
If a Participant Leaves for a Good Leaver Reason after the Performance Period, but before Awards have been made:
| 4.2.1 | if the reason is death, the Award shall be settled as soon as practicable in the form of a Cash Award only, unless otherwise determined by the Committee; and |
| 4.2.2 | otherwise, the Award will continue on its original terms, unless otherwise determined by the Committee. |
| 4.3 | Good leavers - Extent of Award |
If this rule applies, an Award will only be made:
| 4.3.1 | to the extent that the Committee decides any Performance Conditions have been satisfied; and |
| 4.3.2 | pro-rata to reflect the portion of the Performance Period which occurred before the date the Participant Leaves, |
unless the Committee decides otherwise.
| 4.4 | Changing roles and/or responsibilities |
Where a Participant’s role and/or responsibilities within the Group significantly change, but the Participant does not Leave, the Committee may decide to treat that Participant as Leaving for the purposes of any Awards which have not been granted or settled, in which case the Participant will be treated in respect of those Awards as Leaving at the applicable time for a Good Leaver Reason, unless the Committee decides otherwise.
| 5 | Global Participants |
If a Participant moves from one jurisdiction to another, becomes tax resident in a different jurisdiction or any jurisdiction creates/amends rules and regulations and, as a result, there may be adverse legal, regulatory, tax or administrative consequences for the Participant and/or a Member of the Group in connection with an Award then the Committee may adjust that Participant’s Award so that the Award is on such terms, subject to such conditions and over such value as the Committee may consider appropriate.
InterContinental Hotels Group Plc Annual Performance Plan
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| 6 | Investigations |
If an investigation is ongoing which might lead to the Malus and/or Clawback being triggered then, unless the Committee decides otherwise, the Award will not be made until the investigation is concluded and may be settled as determined by the Committee.
| 7 | Takeovers and other corporate events |
| 7.1 | Takeovers |
For the purposes of this rule 6 (Takeovers and other corporate events), a takeover occurs when:
| 7.1.1 | a general offer to acquire shares made by a person (or a group of persons acting in concert) becomes wholly unconditional; |
| 7.1.2 | under Section 895 of the Companies Act 2006 or equivalent procedure under local legislation, a court sanctions a compromise or arrangement in connection with the acquisition of shares; or |
| 7.1.3 | a person (or a group of persons) obtains Control of the Company in any other way. |
| 7.2 | Other corporate events |
If the Company is or may be affected by:
| 7.2.1 | any demerger, delisting, distribution (other than an ordinary dividend) or other transaction which, in the opinion of the Committee, might affect the current or future value of any Award; or |
| 7.2.2 | any reverse takeover, merger by way of a dual listed company or other significant corporate event, as determined by the Committee, |
the Committee may decide that, for the purposes of this this rule 6 (Takeovers and other corporate events), such event should be treated as if it were a takeover event within rule 6.1 (Takeovers).
| 7.3 | Timing of Award |
Where one of the events set out in rule 6.1 (Takeovers) occurs or the Committee decides pursuant to rule 6.2 (Other corporate events) that an event should be treated in the same way as a takeover during the Performance Period, Awards will be made to the extent provided in rule 6.5 (Extent of an Award) on the date of such event, unless the Committee decides otherwise.
If such event occurs after the Performance Period, but before an Award is made, the Award shall be made in full, unless the Committee determines otherwise.
| 7.4 | Form of Award |
To the extent an Award is made, it shall consist of a Cash Award only, unless the Committee decides otherwise.
InterContinental Hotels Group Plc Annual Performance Plan
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| 7.5 | Extent of an Award |
If this rule applies, an Award will only be made:
| 7.5.1 | to the extent that the Committee decides that any Performance Conditions have been satisfied, unless the Committee determines otherwise; and |
| 7.5.2 | pro-rata to reflect the Performance Period which has occurred to the date of such event. |
| 7.6 | US taxpayers |
For a Participant who is a US taxpayer, the Committee shall attempt to structure the Plan of any adjustment to an Award such that the adjustment does not violate Section 409A.
| 7.7 | Malus and Clawback |
If this rule 6 applies, the Committee may determine that Malus and Clawback will no longer apply to the Award or will be varied in its application.
In relation to any Cash Award acquired prior to the relevant event, Malus and Clawback will continue to apply, with such amendments as the Committee determines.
| 8 | Tax |
Any Member of the Group, any employing company, the trustee of any relevant employee benefit trust or any third-party provider nominated by the Committee may make such withholding arrangements as it considers necessary or desirable to meet any liability for Taxation on a Cash Award.
| 9 | Terms of employment |
| 9.1 | Not part of employment contract |
Nothing in the rules of the Plan or its operation forms part of an Employee’s contract of employment or alters it. Any rights and obligations arising from the employment or former employment relationship between the Employee and the Group are separate from, and are not affected by, the Plan. Participation in the Plan does not create any right to, or expectation of, employment (continued or otherwise).
| 9.2 | No future expectation |
Participation in the Plan in any year does not create any right to or expectation of participation in the Plan in the future.
| 9.3 | Decisions and discretion |
The terms of the Plan do not entitle the Employee to the exercise of any discretion in the Employee’s favour. The Employee will have no claim or right of action in respect of any decision, omission or discretion which may operate to the disadvantage of the Employee.
InterContinental Hotels Group Plc Annual Performance Plan
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| 9.4 | No compensation |
No Employee has any right to compensation or damages for any loss (actual or potential) in relation to the Plan.
| 9.5 | Waiver |
By participating in the Plan, an Employee agrees to waive all rights which might otherwise arise under the Plan.
| 10 | General |
| 10.1 | Data protection |
Receipt of any Award will be subject to ;
| 10.1.1 | any data protection policies applicable to any relevant Member of the Group; |
| 10.1.2 | any applicable privacy notices; and |
| 10.1.3 | where requested, any applicable consents. |
| 10.2 | Notices |
Any notice or other communication required under the Plan will be given in writing, which may include electronically. All notices or communications are sent at the risk of the addressee.
| 10.3 | Bankruptcy |
No Award will be made if the Participant becomes bankrupt or enters into a compromise with the Participant’s creditors generally.
| 10.4 | Not pensionable |
None of the benefits that may be received under the Plan are pensionable.
| 10.5 | Withdrawal |
The Committee retains a general discretion to withdraw some or all of the Participants from the Plan at any time, including during any Performance Period such that no APP will be granted or settled.
| 10.6 | Section 409A |
Awards granted to US Participants are intended to be exempt from Section 409A and, to the extent are not exempt, to comply with the requirements of Section 409A. The provisions of the Plan and any Award document shall be interpreted in a manner that does not result in the imputation of any tax penalty or interest pursuant to 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.
InterContinental Hotels Group Plc Annual Performance Plan
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| 11 | Administration |
| 11.1 | Administration of the Plan |
The Plan will be administered by the Committee, which has authority to make such rules and regulations for the administration of the Plan as it considers necessary or desirable. The Committee may delegate any and all of its rights and powers under the Plan.
| 11.2 | Committee decisions |
All decisions of the Committee in connection with the Plan and its interpretation and the Plan of any Award (including in any dispute) will be final and conclusive.
The Committee will decide whether and how to exercise any discretion in the Plan.
| 12 | Changing the Plan and termination |
| 12.1 | General power |
The Committee may change the Plan in any way and at any time. Variations may affect the terms of Awards which have already been granted or settled.
| 12.2 | Termination |
These Plan will terminate on such date the Committee decides.
| 13 | Governing law and jurisdiction |
The laws of England and Wales govern the Plan and all Awards. The courts of England and Wales have exclusive jurisdiction in respect of any disputes arising in connection with the Plan or any Award.
InterContinental Hotels Group Plc Annual Performance Plan
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Exhibit 11.1
CODE OF PRACTICE FOR DEALING IN INTERCONTINENTAL HOTELS GROUP PLC SECURITIES
Persons Discharging Managerial Responsibilities (‘PDMR’)
IN ACCORDANCE WITH THE
MARKET ABUSE REGULATIONS
EFFECTIVE 3 JULY 2016
Corporate Legal & Secretariat (‘CLS’)
InterContinental Hotels Group PLC
1 Windsor Dials
Arthur Road
Windsor, Berkshire SL4 1RS
Telephone: 01753 972 000
Email: insiders@ihg.com
Effective: July 2016
Last updated: January 2025
CONTENTS
| Section: |
Applies to: | Page: | ||||||
| Introduction |
All | 1 | ||||||
| Glossary |
All | 1 | ||||||
| Part A – Clearance procedures |
All | 4 | ||||||
| 1. Clearance to Deal |
||||||||
| 2. Further guidance |
||||||||
| Appendix 1 – Application for Permission to Deal |
||||||||
| Part B – Additional provisions for PDMRs |
|
Board and Executive Committee Members only |
|
7 | ||||
| 1. Circumstances for refusal |
||||||||
| 2. Notification of transaction |
||||||||
| 3. PCAs and Investment Managers |
||||||||
| Appendix 2 – Transaction Notification |
||||||||
| Appendix 3 – FCA Notification Authorisation |
||||||||
| Appendix 4 – Pro-forma letter from PDMRs to PCAs
|
||||||||
Introduction
The purpose of this Code is to ensure that the directors, executive committee members and certain employees of InterContinental Hotels Group PLC (‘IHG’ or the ‘Company’) and its subsidiaries (together the ‘Group’), do not abuse, and do not place themselves under suspicion of abusing, Inside Information and comply with their obligations under the Market Abuse Regulation.
Part A of this Code contains the Dealing clearance procedures that must be observed by the Company’s persons discharging managerial responsibilities (known as ‘PDMRs’) and those employees who have been told that the clearance procedures apply to them (known together with PDMRs as ‘Restricted Persons’). This means that there will be certain times when such persons cannot deal in IHG shares or other Company Securities.
Part B sets out certain additional obligations that only apply to PDMRs.
Failure by any person who is subject to this Code to observe and comply with its requirements may result in disciplinary action. Depending on the circumstances, such noncompliance may also constitute a civil and/or criminal offence. Depending on the circumstances, such noncompliance may also mean that you and any other person involved in a prohibited dealing has committed a civil and/or criminal offence. This Code also imposes obligations on you in respect of “persons closely associated” with you.
Glossary
Defined Terms:
‘CLS Team’ means any of the Company Secretary, Deputy Company Secretary, and members of the Corporate Legal and Secretariat team.
‘Closed Period’ means a MAR Closed Period and/or an Insider Closed Period.
‘Company Securities’ means any publicly traded or quoted shares or debt instruments of the Company (or of any of the Company’s subsidiaries or subsidiary undertakings) or derivatives or other financial instruments linked to any of them, including phantom options.
‘Dealing’ (together with corresponding terms such as ‘Deal’ and ‘Deals’) means any type of transaction in Company Securities, including purchases, sales, the exercise of options, the receipt of shares under share plans, using Company Securities as security for a loan or other obligation and entering into, amending or terminating any agreement in relation to Company Securities (e.g. a Trading Plan).
‘FCA’ means the UK Financial Conduct Authority.
‘General List’ means the list of those employees of the Group who are not PDMR’s and are considered to have access to sensitive information concerning the Group at all times.
‘Insider Closed Period’ means any period during which Inside Information exists.
‘Inside Information’ means information which relates to the Company or the Group or any Company Securities, which is not publicly available, which is likely to have a significant effect on the price of Company Securities or on the price of related derivative financial instruments and which an investor would be likely to use as part of the basis of his or her investment decision.
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‘Investment Programme’ means a share acquisition scheme relating only to the Company’s shares under which: (a) shares are purchased by a Restricted Person pursuant to a regular standing order or direct debit or by regular deduction from the person’s salary or director’s fees; or (b) shares are acquired by a Restricted Person by way of a standing election to re-invest dividends or other distributions received; or (c) shares are acquired as part payment of a Restricted Person’s remuneration or director’s fees.
‘MAR Closed Period’ means:
| (a) | the period of 30 calendar days before the release of a preliminary announcement of the Company’s annual results or, where no such announcement is released, the period of 30 calendar days before the publication of the Company’s annual financial report; and |
| (b) | the period of 30 calendar days before the publication of the Company’s half-yearly financial report. |
‘Market Abuse Regulation’ means the UK Market Abuse Regulation.
‘Notifiable Transaction’ means any transaction relating to Company Securities conducted for the account of a PDMR or PCA, whether the transaction was conducted by the PDMR or PCA or on his or her behalf by a third party and regardless of whether or not the PDMR or PCA had control over the transaction. This captures every transaction which changes a PDMR’s or PCA’s holding of Company Securities, even if the transaction does not require clearance under this Code. It also includes gifts of Company Securities, the grant of options or share awards, the exercise of options or vesting of share awards and transactions carried out by investment managers or other third parties on behalf of a PDMR, including where discretion is exercised by such investment managers or third parties and including under Trading Plans or Investment Programmes.
‘PCA’ means a person closely associated with a PDMR, being:
| (a) | the spouse or civil partner of a PDMR; or |
| (b) | a PDMR’s child or stepchild under the age of 18 years who is unmarried and does not have a civil partner; or |
| (c) | a relative who has shared the same household as the PDMR for at least one year on the date of the relevant Dealing; or |
| (d) | a legal person, trust or partnership, the managerial responsibilities of which are discharged by a PDMR (or by a PCA referred to in paragraphs (A), (B), or (C) of this definition), which is directly or indirectly controlled by such a person, which is set up for the benefit of such a person, or the economic interests of which are substantially equivalent to those of such a person. |
‘PDMR’ means a person discharging managerial responsibilities in respect of the Company, being either:
| (a) | a member of the board of directors of the Company; or |
| (b) | a member of the executive committee of the Company. |
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‘Restricted Period’ means, in respect of each Restricted Project List, the period during which an employee is named on a maintained Restricted Project List.
‘Restricted Person’ means any of:
| (a) | a PDMR; |
| (b) | employees named on a Restricted Project List during the relevant Restricted Period; |
| (c) | employees named on a Results Project List during the relevant Results Restricted Period; |
| (d) | employees named on the General List; and/or |
| (e) | any other person who has been told by the Company that the clearance procedures in Part A of this Code apply to him or her. |
‘Restricted Project List’ means the list of those employees of the Group who are considered to have access to sensitive information which is not publicly available and concerns a business transaction or circumstances relating to the Group and which may give rise to or become Inside Information.
‘Results Project List’ means the list of those employees of the Group who are considered to have access to sensitive information concerning the financial results of the Group during a Results Restricted Period.
‘Results Restricted Period’ means any of the following:
| (a) | the period of 60 days immediately preceding the preliminary announcement of IHG’s annual results or, if shorter, the period from the end of the relevant financial year up to and including the time of the announcement; |
| (b) | in relation to half year results, the period from the end of the relevant financial period up to and including the time of the announcement; and |
| (c) | in relation to Q1 and Q3 Trading Updates, the period of 14 days immediately preceding the announcement. |
‘Trading Plan’ means a written plan entered into by a Restricted Person and an independent third party that sets out a strategy for the acquisition and/or disposal of Company Securities by the Restricted Person, and:
| (a) | specifies the amount of Company Securities to be dealt in and the price at which and the date on which the Company Securities are to be dealt in; or |
| (b) | gives discretion to that independent third party to make trading decisions about the amount of Company Securities to be dealt in and the price at which and the date on which the Company Securities are to be dealt in; or |
| (c) | includes a method for determining the amount of Company Securities to be dealt in and the price at which and the date on which the Company Securities are to be dealt in. |
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Part A – Clearance procedures
| 1. | Clearance to Deal |
If you are a Restricted Person, the following procedures apply to you:
| 1.1 | You must not Deal for yourself or for anyone else, directly or indirectly, in Company Securities without obtaining clearance from the Company in advance. |
| 1.2 | Applications for permission to Deal must be made in writing using the form set out in Appendix 1 and submitting the same to the CLS Team or by email to insiders@ihg.com. An application for permission submitted by email and containing the information required in Appendix 1 will also be acceptable. |
| 1.3 | You must not submit an application for permission to Deal if you are in possession of Inside Information. If you become aware that you are or may be in possession of Inside Information after you submit an application, you have a continuous disclosure obligation and must inform the Company Secretary or Deputy Company Secretary as soon as possible, and you must refrain from Dealing even if you have been given clearance. |
| 1.4 | If you are in possession of Inside Information, you must not recommend, encourage or induce anybody else to Deal for themselves or for anyone else, directly or indirectly, in Company Securities. |
| 1.5 | You will receive a written response to your application, normally within five business days. The Company will not normally give you reasons if you are refused permission to Deal. You must keep any refusal confidential and not discuss it with any other person. |
| 1.6 | If you are given clearance, you must Deal as soon as possible and in any event within two business days of receiving clearance. |
| 1.7 | Clearance to Deal may be given subject to conditions. Where this is the case, you must observe those conditions when Dealing. |
| 1.8 | You must not enter into, amend or cancel a Trading Plan or an Investment Programme under which Company Securities may be purchased or sold unless clearance has been given to do so. |
| 1.9 | Different clearance procedures will apply where Dealing is being carried out by the Company in relation to an employee share plan (e.g. if the Company is making an option grant or share award to you, or shares are receivable on vesting under a long-term incentive plan). You will be notified separately of any arrangements for clearance if this applies to you. |
| 1.10 | If you act as the trustee of a trust, or are on a Company advisory committee to a trust, you should contact the Company Secretary, Deputy Company Secretary or email insiders@ihg.com about your obligations in respect of any Dealing in Company Securities carried out by the trustee(s) of that trust. |
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| 1.11 | You should seek further guidance from the Company Secretary, Deputy Company Secretary or email insiders@ihg.com before transacting in: |
| (a) | units or shares in a collective investment undertaking (e.g. a UCITS or an Alternative Investment Fund) which holds, or might hold, Company Securities; or |
| (b) | financial instruments which provide exposure to a portfolio of assets which has, or may have, an exposure to Company Securities. |
This is the case even if you do not intend to transact in Company Securities by making the relevant investment.
| 2. | Further guidance |
If you are uncertain as to whether or not a particular transaction requires clearance, you must obtain guidance from the Company Secretary, Deputy Company Secretary or email insiders@ihg.com before carrying out that transaction.
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APPENDIX 1
InterContinental Hotels Group PLC (the ‘Company’)
Application for Permission to Deal
If you wish to apply for clearance to Deal under the Company’s Dealing Code, please complete the table below and submit this form via email to insiders@ihg.com. By submitting this form, you will be deemed to have confirmed and agreed that:
| (i) | the information included in this form is accurate and complete; |
| (ii) | you are not in possession of Inside Information relating to the Company or any Company Securities and by Dealing, you would not be in breach of any applicable law or regulation in relation to dealing with publicly traded securities; |
| (iii) | if you are given clearance to Deal and you still wish to Deal, you will do so as soon as possible and in any event within two business days; and |
| (iv) | if you become aware that you are in possession of Inside Information before you Deal, you will inform the Company Secretary and refrain from Dealing. |
| NB. | You are also required following any Dealing to notify the Company Secretary, the Deputy Company Secretary or insiders@ihg.com within one working day of the date on which Dealing took place. |
| Applicant | ||
| Name | ||
| Contact details | For executive directors and other employees, please include email address and extension number. For non-executive directors, please include email address and telephone number. | |
| Proposed dealing | ||
| Description of the security | e.g. a share, ADR, a debt instrument, a derivative or a financial instrument linked to a share or debt instrument. | |
| Number of securities | If actual number is not known, provide a maximum amount (e.g. ‘up to 100 shares’ or ‘up to £1,000 of shares’). | |
| Nature of dealing | Description of the transaction type (e.g. acquisition; disposal; subscription; option exercise; settling a contract for difference; entry into, or amendment or cancellation of, an investment programme or trading plan). | |
| Other details | Please include all other relevant details that might reasonably assist the person considering your application for clearance (e.g. transfer will be for no consideration).
If you are applying for clearance to enter into, amend or cancel an investment programme or trading plan, please provide full details of the relevant programme or plan or attach a copy of its terms. |
|
SIGNATURE:_____________________________ PRINT NAME: _____________________________ DATE: ____/____/20____
Decision taken in relation to the application for permission to deal
| Clearance granted: | Yes ☐ No ☐ | |||
| Designated officer: |
|
(Chair/ Chief Executive/ Director/ Company Secretary) | ||
| Date of decision: | ____/____/20____ | |||
Special conditions attaching to permission: Clearance is granted on the basis that the above transaction is completed no later than close of business on____/____/20____, being two business days following the date of permission.
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Part B – Additional provisions for PDMRs
PDMRs are required to seek clearance to deal in accordance with Part A of this Code and, in addition, the provisions of this Part B apply to PDMRs.
| 1. | Circumstances for refusal |
You will not ordinarily be given clearance to Deal in Company Securities during any period when there exists any matter which constitutes Inside Information or during a MAR Closed Period.
| 2. | Notification of transactions |
| 2.1 | You must notify the Company and the FCA in writing of every Notifiable Transaction in Company Securities, which includes transactions where clearance is not required, conducted for your account as follows: |
| (a) | Notifications to the Company must be made in writing by completing the form set out in Appendix 2 and submitting the same to the CLS Team as soon as practicable and in any event within one business day of the transaction date. A transaction notification submitted by email and containing the information required in Appendix 2 will also be acceptable. You should ensure that your investment managers (whether discretionary or not) notify you of any Notifiable Transactions conducted on your behalf promptly so as to allow you to notify the Company within this time frame. |
| (b) | Notifications to the FCA must be made within three business days of the transaction date. A copy of the notification form is available from the CLS Team or on the FCA’s website. |
| (c) | The CLS Team can complete the FCA notification for you provided: (i) they have received your written authority to do so (please use the form of authorisation set out at Appendix 3 and send it to the CLS Team); and (ii) they are informed in writing of the transaction as soon as practicable and in any event within one business day of the transaction date. |
| 2.2 | If you are uncertain as to whether or not a particular transaction is a Notifiable Transaction, you must obtain guidance from the Company Secretary, Deputy Company Secretary or insiders@ihg.com. |
| 3. | PCAs and Investment Managers |
| 3.1 | You must provide the Company with a list of your PCAs and notify the Company of any changes that need to be made to that list. |
| 3.2 | Your PCAs are also required to notify the Company and the FCA in writing, within the time frames given in paragraph 2.1, of every Notifiable Transaction conducted for their account. You should inform your PCAs in writing of this requirement using the template in Appendix 4 and keep a copy. |
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| 3.3 | The CLS Team can complete the FCA notification on behalf of your PCA provided: (a) they have received written authority from your PCA to do so (the form of authorisation is also included as Schedule 3 to Appendix 4 for completion by your PCA and submission to the CLS Team); and (b) they are informed of the transaction as soon as practicable, and in any event within one business day of the transaction date. |
| 3.4 | You should ask your investment managers (whether or not discretionary) not to Deal in Company Securities on your behalf during Closed Periods. |
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APPENDIX 2
InterContinental Hotels Group PLC
Transaction Notification
Please send your completed form to insiders@ihg.com. If you require any assistance in completing this form, please contact email insiders@ihg.com.
| Details of PDMR / person closely associated with them (‘PCA’) | ||||
| Name | Include first name(s) and last name(s).
If the PCA is a legal person, state its full name including legal form as provided for in the register where it is incorporated, if applicable. |
|||
| Relationship to PDMR | For example, spouse, member of household, etc. | |||
| Position / Status | For PDMRs, state job title e.g. CEO, CFO.
For PCAs, state that the notification concerns a PCA and the name and position of the relevant PDMR. |
|||
| Initial notification / amendment | Please indicate if this is an initial notification or an amendment to a prior notification. If this is an amendment, please explain the previous error that this amendment has corrected. | |||
| Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted | ||||
| Description of the financial instrument | State the nature of the instrument e.g. a share, a debt instrument, a derivative or a financial instrument linked to a share or debt instrument. | |||
| Nature of transaction | Description of the transaction type e.g. acquisition, disposal, subscription, contract for difference, etc.
If the transaction was conducted pursuant to an investment programme or a trading plan, please indicate that fact and provide the date on which the relevant investment programme or trading plan was entered into. |
|||
| Price(s) and volume(s) | Price (s) | Volume(s) | ||
9
| Where more than one transaction of the same nature (purchase, disposal, etc.) of the same financial instrument are executed on the same day and at the same place of transaction, prices and volumes of these transactions should be separately identified in the table above, using as many lines as needed. Do not aggregate or net off transactions. In each case, please specify the currency and the metric for quantity. |
| Aggregated information
Aggregated volume
Price |
Please aggregate the volumes of multiple transactions
when these transactions:
– relate to the same financial instrument;
– are of the same nature;
– are executed on the same day; and
– are executed at the same place of transaction.
Please state the metric for quantity.
Please provide:
– in the case of a single transaction, the price of the single transaction; and
– in the case where the volumes of multiple transactions are aggregated, the weighted average price of the aggregated transactions.
Please state the currency. |
|
| Date of the transaction | Date of the particular day of execution of the notified transaction, using the date format: YYYY-MM-DD and please specify the time zone. | |
| Place of the transaction | Please name the trading venue where the transaction was executed. If the transaction was not executed on any trading venue, please state ‘outside a trading venue’ in this box. | |
10
APPENDIX 3
FCA notification authorisation
The Company Secretary
InterContinental Hotels Group PLC (‘IHG’)
1 Windsor Dials
Arthur Road
Windsor, Berkshire SL4 1RS
Dear [name of Company Secretary]
Notification of transaction to the Financial Conduct Authority (‘FCA’)
I hereby confirm that I grant permission for IHG to complete the notification required to be submitted to the FCA relating to dealing in IHG securities, following receipt from me of a Transaction Notification.
| Yours faithfully | ||
| DATE: |
____/_______________________/20______ | |
| PRINT NAME: |
|
|
| SIGNATURE: |
|
|
11
APPENDIX 4
Pro-forma letter from PDMRs to PCAs
[PCA NAME AND ADDRESS]
DATE: ____/______/20_____
Dear [PCA NAME]
InterContinental Hotels Group PLC – Transactions in the Company’s shares or debt instruments and related financial instruments
I am a person discharging managerial responsibility in relation to InterContinental Hotels Group PLC (the ‘Company’). For the purposes of the UK Market Abuse Regulation (MAR), you are a person closely associated with me.
| 1. | Notification of transactions |
MAR requires you, as a person closely associated with me, to notify the Company and the Financial Conduct Authority (‘FCA’) of the occurrence of all transactions conducted on your own account in the Company’s shares or debt instruments, or derivatives or any other financial instruments relating to those shares or debt instruments. The Company must in turn announce the information. Schedule 1 to this letter sets out a non-exhaustive indicative list of the types of transactions which are notifiable.
Under MAR, notification must be made promptly to the Company and FCA within three working days of the transaction taking place. The Company in turn must notify the market within two working days of the notification. The Company requires the notification to be made to it within one working day of the day on which the transaction occurred, in order to give it time to comply with its obligation to notify the market.
Your notification must contain the following information:
| • | your name; |
| • | the Company’s name; |
| • | the reason for the notification; |
| • | a description of, and the identifier of, the financial instrument; |
| • | the nature of the transaction (for example, acquisition or disposal); |
| • | the date and place of the transaction; and |
| • | the price and volume of the transaction; |
I attach at Schedule 2 a form for disclosure of transactions, which you should complete as appropriate. Completed forms should be addressed to the Company at its registered office, marked for the attention of the Company Secretary, and delivered by hand to the Company Secretary or Deputy Company Secretary, or scanned and emailed to insiders@ihg.com. Following receipt of the information from you, the Company will notify the market. If you have any questions on these notification obligations or their application, please contact insiders@ihg.com or the Company Secretary at +44(0)1753 972 000.
12
The same notification must also be sent to the FCA using the email address on their website. If you wish, the Company will do this on your behalf, although you will retain responsibility for ensuring that your obligations have been complied with. The Company can complete this notification for you provided: (i) it has received your written authority to do so (please complete and deliver the form of authorisation set out at Schedule 3 by hand to the Company Secretary or Deputy Company Secretary, or scan and email it to insiders@ihg.com); and (ii) it is informed of the transaction as soon as practicable and in any event within one business day of the transaction date.
These notification obligations are in addition to any disclosure obligation you may have under DTR 5 as a major shareholder to disclose voting rights in respect of the Company’s shares of 3 per cent or more.
Yours sincerely
[PDMRs NAME]
13
Schedule 1
Non-exhaustive list of notifiable transactions
| Transaction |
| An acquisition, disposal, short sale, subscription or exchange |
| The acceptance or exercise of a share option or award, including of a share option/award granted to managers or employees as part of their remuneration package, and the disposal of shares stemming from the exercise and/or vesting of a share option/award |
| Entering into or exercising equity swaps |
| Transactions in or related to derivatives, including cash-settled transactions |
| Entering into a contract for difference on a financial instrument of the Company |
| The acquisition, disposal or exercise of rights, including put and call options, and warrants |
| Subscriptions to a capital increase or debt instrument issuance |
| Transactions in derivatives and financial instruments linked to a debt instrument of the concerned issuer, including credit default swaps |
| Conditional transactions, upon the occurrence of the conditions and actual execution of the transactions |
| Automatic or non-automatic conversion of a financial instrument into another financial instrument, including the exchange of convertible bonds to shares |
| Gifts and donations made or received, and inheritance received |
| Transactions executed in index-related products, baskets and derivatives |
| Transactions executed by a manager of an alternative investment fund in which the PDMR or its PCA has invested |
| Transactions executed in shares or units of investment funds, including alternative investment funds (AIFs) |
| Transactions executed by a third party under an individual portfolio or asset management mandate on behalf or for the benefit of a PDMR or their PCA |
| Borrowing or lending of shares or debt instruments of the Company or derivatives or other financial instruments linked to them |
| The pledging or lending of financial instruments by a PDMR or a PCA. A pledge or similar security interest, of financial instruments in connection with the depositing of the financial instruments in a custody account does not need to be notified, unless and until such time that such pledge or other security interest is designated to secure a specific credit facility |
| Transactions undertaken by persons professionally arranging or executing transactions or by another person on behalf of a PDMR or a PCA, including where discretion is exercised |
14
Schedule 2
InterContinental Hotels Group PLC
Transaction Notification
Please send your completed form to insiders@ihg.com. If you require any assistance in completing this form, please contact email insiders@ihg.com.
| Details of PDMR / person closely associated with them (‘PCA’) |
||||
| Name | Include first name(s) and last name(s).
If the PCA is a legal person, state its full name including legal form as provided for in the register where it is incorporated, if applicable. |
|||
| Relationship to PDMR | For example, spouse, member of household, etc. | |||
| Position / Status | For PDMRs, state job title e.g. CEO, CFO. For PCAs, state that the notification concerns a PCA and the name and position of the relevant PDMR. |
|||
| Initial notification / amendment | Please indicate if this is an initial notification or an amendment to a prior notification. If this is an amendment, please explain the previous error that this amendment has corrected. | |||
| Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted | ||||
| Description of the financial instrument | State the nature of the instrument e.g. a share, a debt instrument, a derivative or a financial instrument linked to a share or debt instrument. | |||
| Nature of transaction | Description of the transaction type e.g. acquisition, disposal, subscription, contract for difference, etc.
If the transaction was conducted pursuant to an investment programme or a trading plan, please indicate that fact and provide the date on which the relevant investment programme or trading plan was entered into. |
|||
| Price(s) and volume(s) | Price (s) | Volume(s) | ||
15
| Where more than one transaction of the same nature (purchase, disposal, etc.) of the same financial instrument are executed on the same day and at the same place of transaction, prices and volumes of these transactions should be separately identified in the table above, using as many lines as needed. Do not aggregate or net off transactions. In each case, please specify the currency and the metric for quantity. | ||||
| Aggregated information
Aggregated volume
Price |
Please aggregate the volumes of multiple transactions
when these transactions:
– relate to the same financial instrument;
– are of the same nature;
– are executed on the same day; and
– are executed at the same place of transaction.
Please state the metric for quantity.
Please provide:
– in the case of a single transaction, the price of the single transaction; and
– in the case where the volumes of multiple transactions are aggregated, the weighted average price of the aggregated transactions.
Please state the currency. |
|||
| Date of the transaction | Date of the particular day of execution of the notified transaction, using the date format: YYYY-MM-DD and please specify the time zone. | |||
| Place of the transaction | Please name the trading venue where the transaction was executed. If the transaction was not executed on any trading venue, please state ‘outside a trading venue’ in this box. | |||
16
Schedule 3
FCA notification authorisation
The Company Secretary
InterContinental Hotels Group PLC
1 Windsor Dials
Arthur Road
Windsor, Berkshire SL4 1RS
Dear [name of Company Secretary]
Notification of transaction to the Financial Conduct Authority (‘FCA’)
I hereby confirm that I grant permission for IHG to complete the notification required to be submitted to the FCA relating to dealing in IHG securities, following receipt from me of a Transaction Notification.
| Yours faithfully | ||
| DATE: | ____/_______________________/20______ | |
| PRINT NAME: |
|
|
| SIGNATURE: |
|
|
17
CODE OF PRACTICE FOR DEALING IN
INTERCONTINENTAL HOTELS GROUP PLC
SECURITIES
Restricted Employees
IN ACCORDANCE WITH THE
MARKET ABUSE REGULATIONS
EFFECTIVE 3 JULY 2016
InterContinental Hotels Group PLC
1 Windsor Dials
Arthur Road
Windsor, Berkshire SL4 1RS
Telephone: 01753 972 000
Email: insiders@ihg.com
Effective: 3 July 2016
Last updated: January 2025
CONTENTS
| Section: |
Applies to: | Page: | ||||||
| Introduction |
All | 2 | ||||||
| Glossary |
All | 2 | ||||||
| Clearance procedures
1. Clearance to Deal 2. Further guidance |
All | 5 | ||||||
| Appendix 1 – Application for Permission to Deal |
All | 7 | ||||||
Introduction
The purpose of this Code is to ensure that certain employees of InterContinental Hotels Group PLC (‘IHG’ or the ‘Company’) and its subsidiaries (together the ‘Group’), do not abuse, and do not place themselves under suspicion of abusing, Inside Information and comply with their obligations under the Market Abuse Regulation.
This Code contains the Dealing clearance procedures that must be observed by the Company’s employees who have been told that the clearance procedures apply to them (known together with PDMRs as ‘Restricted Persons’). This means that there will be certain times when such persons cannot deal in IHG shares or other Company Securities.
Failure by any person who is subject to this Code to observe and comply with its requirements may result in disciplinary action. Depending on the circumstances, such noncompliance may also mean that you and any other person involved in a prohibited dealing has committed a civil and/or criminal offence.
If you are not sure whether this Code is applicable to you, please refer to the definition of “Restricted Persons” below or speak to the CLS Team.
Glossary
Defined Terms:
‘CLS Team’ means any of the Company Secretary, Deputy Company Secretary, and members of the Corporate Legal and Secretariat team.
‘Company Securities’ means any publicly traded or quoted shares or debt instruments of the Company (or of any of the Company’s subsidiaries or subsidiary undertakings) or derivatives or other financial instruments linked to any of them, including phantom options.
‘Dealing’ (together with corresponding terms such as ‘Deal’ and ‘Deals’) means any type of transaction in Company Securities, including purchases, sales, the exercise of options, the receipt of shares under share plans, using Company Securities as security for a loan or other obligation and entering into, amending or terminating any agreement in relation to Company Securities (e.g. a Trading Plan).
‘General List’ means the list of those employees of the Group who are not PDMRs and are considered to have access to sensitive information concerning the Group at all times.
‘Inside Information’ means information which relates to the Company or the Group or any Company Securities, which is not publicly available, which is likely to have a significant effect on the price of Company Securities or on the price of related derivative financial instruments and which an investor would be likely to use as part of the basis of his or her investment decision.
‘Investment Programme’ means a share acquisition scheme relating only to the Company’s shares under which: (a) shares are purchased by a Restricted Person pursuant to a regular standing order or direct debit or by regular deduction from the person’s salary or director’s fees; or (b) shares are acquired by a Restricted Person by way of a standing election to re-invest dividends or other distributions received; or (c) shares are acquired as part payment of a Restricted Person’s remuneration or director’s fees.
2
‘Market Abuse Regulation’ means the UK Market Abuse Regulation.
‘PDMR’ means a person discharging managerial responsibilities in respect of the Company, being either:
| (a) | a member of the board of directors of the Company; or |
| (b) | a member of the executive committee of the Company. |
‘Restricted Period’ means, in respect of each Restricted Project List, the period during which an employee is named on a maintained Restricted Project List.
‘Restricted Person’ means:
| (a) | a PDMR; |
| (b) | employees named on a Restricted Project List during the relevant Restricted Period; |
| (c) | employees named on a Results Project List during the relevant Results Restricted Period; |
| (d) | employees named on the General List; and/or |
| (e) | any other person who has been told by the Company that the clearance procedures apply to him or her. |
‘Restricted Project List’ means the list of those employees of the Group who are considered to have access to sensitive information which is not publicly available and concerns a business transaction or circumstances relating to the Group and which may give rise to or become Inside Information.
‘Results Project List’ means the list of those employees of the Group who are considered to have access to sensitive information concerning the financial results of the Group during a Results Restricted Period.
‘Results Restricted Period’ means any of the following:
| (a) | the period of 60 days immediately preceding the preliminary announcement of IHG’s annual results or, if shorter, the period from the end of the relevant financial year up to and including the time of the announcement; |
| (b) | in relation to half year results, the period from the end of the relevant financial period up to and including the time of the announcement; and |
| (c) | in relation to Q1 and Q3 Trading Updates, the period of 14 days immediately preceding the announcement. |
‘Trading Plan’ means a written plan entered into by a Restricted Person and an independent third party that sets out a strategy for the acquisition and/or disposal of Company Securities by the Restricted Person, and:
| (a) | specifies the amount of Company Securities to be dealt in and the price at which and the date on which the Company Securities are to be dealt in; or |
3
| (b) | gives discretion to that independent third party to make trading decisions about the amount of Company Securities to be dealt in and the price at which and the date on which the Company Securities are to be dealt in; or |
| (c) | includes a method for determining the amount of Company Securities to be dealt in and the price at which and the date on which the Company Securities are to be dealt in. |
4
Clearance procedures
| 1. | Clearance to Deal |
If you are a Restricted Person, the following procedures apply to you:
| 1.1 | You must not Deal for yourself or for anyone else, directly or indirectly, in Company Securities without obtaining clearance from the Company in advance. |
| 1.2 | Applications for permission to Deal must be made in writing using the form set out in Appendix 1 and submitting the same to the CLS Team or by email to insiders@ihg.com. An application for permission submitted by email and containing the information required in Appendix 1 will also be acceptable. |
| 1.3 | You must not submit an application for permission to Deal if you are in possession of Inside Information. If you become aware that you are or may be in possession of Inside Information after you submit an application, you have a continuous disclosure obligation and must inform the Company Secretary or Deputy Company Secretary as soon as possible, and you must refrain from Dealing even if you have been given clearance. |
| 1.4 | If you are in possession of Inside Information, you must not recommend, encourage or induce anybody else to Deal for themselves or for anyone else, directly or indirectly, in Company Securities. |
| 1.5 | You will receive a written response to your application, normally within five business days. The Company will not normally give you reasons if you are refused permission to Deal. You must keep any refusal confidential and not discuss it with any other person. |
| 1.6 | If you are given clearance, you must Deal as soon as possible and in any event within two business days of receiving clearance. |
| 1.7 | Clearance to Deal may be given subject to conditions. Where this is the case, you must observe those conditions when Dealing. |
| 1.8 | You must not enter into, amend or cancel a Trading Plan or an Investment Programme under which Company Securities may be purchased or sold unless clearance has been given to do so. |
| 1.9 | Different clearance procedures will apply where Dealing is being carried out by the Company in relation to an employee share plan (e.g. if the Company is making an option grant or share award to you, or shares are receivable on vesting under a long-term incentive plan). You will be notified separately of any arrangements for clearance if this applies to you. |
| 1.10 | If you act as the trustee of a trust, or are on a Company advisory committee to a trust, you should contact the Company Secretary, Deputy Company Secretary or email insiders@ihg.com about your obligations in respect of any Dealing in Company Securities carried out by the trustee(s) of that trust. |
5
| 1.11 | You should seek further guidance from the Company Secretary, Deputy Company Secretary or email insiders@ihg.com before transacting in: |
| (a) | units or shares in a collective investment undertaking (e.g. a UCITS or an Alternative Investment Fund) which holds, or might hold, Company Securities; or |
| (b) | financial instruments which provide exposure to a portfolio of assets which has, or may have, an exposure to Company Securities. |
This is the case even if you do not intend to transact in Company Securities by making the relevant investment.
| 2. | Further guidance |
If you are uncertain as to whether or not a particular transaction requires clearance, you must obtain guidance from the Company Secretary, Deputy Company Secretary or email insiders@ihg.com before carrying out that transaction.
6
APPENDIX 1
InterContinental Hotels Group PLC (the ‘Company’)
Application for Permission to Deal
Restricted Employee
If you wish to apply for clearance to Deal under the Company’s Dealing Code, please complete the table below and submit this form via email to insiders@ihg.com. By submitting this form, you will be deemed to have confirmed and agreed that:
| (i) | the information included in this form is accurate and complete; |
| (ii) | you are not in possession of Inside Information relating to the Company or any Company Securities and by Dealing, you would not be in breach of any applicable law or regulation in relation to dealing with publicly traded securities; |
| (iii) | if you are given clearance to Deal and you still wish to Deal, you will do so as soon as possible and in any event within two business days; and |
| (iv) | if you become aware that you are in possession of Inside Information before you Deal, you will inform the Company Secretary and refrain from Dealing. |
NB. If you are a PDMR, you are also required following any Dealing to notify the Company Secretary, the Deputy Company Secretary or insiders@ihg.com within one working day of the date on which Dealing took place.
| Applicant | ||||
| Name | ||||
| Contact details | For executive directors and other employees, please include email address and extension number. For non-executive directors, please include email address and telephone number. | |||
| Proposed dealing | ||||
| Description of the security | e.g. a share, ADR, a debt instrument, a derivative or a financial instrument linked to a share or debt instrument. | |||
| Number of securities | If actual number is not known, provide a maximum amount (e.g. ‘up to 100 shares’ or ‘up to £1,000 of shares’). | |||
| Nature of dealing | Description of the transaction type (e.g. acquisition; disposal; subscription; option exercise; settling a contract for difference; entry into, or amendment or cancellation of, an investment programme or trading plan). | |||
| Estimated number of securities held after this transaction | If actual number is not known, provide a maximum amount (e.g. ‘up to 100 shares’ or ‘up to £1,000 of shares’). | |||
| Other details | Please include all other relevant details that might reasonably assist the person considering your application for clearance (e.g. transfer will be for no consideration).
If you are applying for clearance to enter into, amend or cancel an investment programme or trading plan, please provide full details of the relevant programme or plan or attach a copy of its terms. |
|||
7
SIGNATURE:_____________________________ PRINT NAME: _____________________________ DATE: ____/____/20____
Decision taken in relation to the application for permission to deal
| Clearance granted: | Yes ☐ No ☐ | |||
| Designated officer: | (Chair/ Chief Executive/ Director/ Company Secretary) | |||
| Date of decision: | ____/____/20____ | |||
Special conditions attaching to permission: Clearance is granted on the basis that the above transaction is completed no later than close of business on____/____/20____, being two business days following the date of permission
8
Exhibit 12(a)
I, Elie Maalouf, 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: February 27, 2025
/s/ Elie Maalouf
Elie Maalouf
Chief Executive Officer
Exhibit 12(b)
I, Michael Glover, 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: February 27, 2025
/s/ Michael Glover
Michael Glover
Chief Financial Officer
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, 2024 (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.
Elie Maalouf, the Chief Executive Officer, and Michael Glover, 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: February 27, 2025
| By: | /s/ Elie Maalouf |
|||
| Name: | Elie Maalouf | |||
| Title: | Chief Executive Officer | |||
| By: | /s/ Michael Glover |
|||
| Name: | Michael Glover | |||
| Title: | Chief Financial Officer | |||
Exhibit 15(a)
Consent of independent registered public accounting firm
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-271687, 333-267963, 333-254081, 333-197846, 333-181334, 333-126139, 333-104691, 333-99785 and 333-89508) of InterContinental Hotels Group PLC of our report dated 17 February 2025 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.
/s/PricewaterhouseCoopers LLP
Birmingham, United Kingdom
27 February 2025