##### Table of Contents

 

 

**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

**Form 20-F**

(Mark One) 

**or**

 

**For the fiscal year ended December 31, 2012**

**or**

 

**or**

 

**Commission file number: 1-10409**

**InterContinental Hotels Group PLC**

*(Exact name of registrant as specifiedin its charter)*

**England and Wales**

*(Jurisdiction of incorporation or organization)*

**Broadwater Park,**

**Denham, Buckinghamshire UB9 5HR**

*(Address of principal executive offices)*

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

 

 

 

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

**None**

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

**None**

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

 

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

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

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

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

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

 

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

Item 17  ̈      Item18 þ

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

Yes             ̈                    No            þ

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

 

 

 

 

Table of Contents
**TABLE OF CONTENTS**

 
   **Page** 
Introduction
   1  
Cautionary Note Regarding Forward-Looking Statements
   2   **PART I**  
Item 1.
 Identity of Directors, Senior Management and Advisors   4  
Item 2.
 
Offer Statistics and Expected Timetable
   4  
Item 3.
 
Key Information
   4   
Selected Consolidated Financial Information
   4   
Risk Factors
   7  
Item 4.
 
Information on the Company
   11   
Summary
   11   
Segmental Information
   14   
Business Overview
   15   
Trademarks
   38   
Organizational Structure
   38   
Property, Plant and Equipment
   39   
Environment
   39  
Item 4A.
 
Unresolved Staff Comments
   41  
Item 5.
 
Operating and Financial Review and Prospects
   41   
Introduction 
   41   
Critical Accounting Policies
   42   
Operating Results
   44   
Liquidity and Capital Resources
   54  
Item 6.
 
Directors, Senior Management and Employees
   56   
Directors and Senior Management
   56   
Compensation
   61   
Board Practices
   62   
Employees
   65   
Share-based Compensation
   65   
Share Ownership
   66  
Item 7.
 
Major Shareholders and Related Party Transactions
   67   
Major Shareholders
   67   
Related Party Transactions
   67  
Item 8.
 
Financial Information
   67   
Consolidated Statements and Other Financial Information
   67   
Significant Changes
   68  
Item 9.
 
The Offer and Listing
   68   
Plan of Distribution
   69   
Selling Shareholders
   69   
Dilution
   69   
Expenses of the Issue
   69  
 
i 

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

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

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

 
 • 
“ADS” refers to an American Depositary Share, being a registered negotiable security, listed on the New York Stock Exchange,representing one InterContinental Hotels Group PLC ordinary share of 14 194/329 pence each; 

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

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

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

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

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

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

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

 
 • 
“ordinary share” or “share” refers, from June 4, 2007 until October 8, 2012 to the ordinary shares of 13 29/47 pence each in the Company; and following October 9, 2012 to the ordinary shares of14 194/329 pence each in the Company; 

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

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

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

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

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

The Company publishesits Consolidated Financial Statements expressed in US dollars. 

In this document, references to “US dollars”,“US$”, “$” or “¢” are to United States currency, references to “euro” or “€” are to the euro, the currency of the European Economic and Monetary Union, references to “poundssterling”, “sterling”, “£”, “pence” or “p” are to UK currency. Solely for convenience, this Annual Report on Form 20-F contains translations of certain pound sterling amounts into US dollars atspecified rates. These translations should not be construed as representations that the pound sterling amounts actually represent such US dollar amounts or could be converted into US dollars at the rates indicated. The noon buying rate in The City

 
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of New York for cable transfers in pounds sterling as certified for customs purposes by the Federal Reserve Bank of New York on March 21, 2013 was £1.00 = $1.5180. For further informationon exchange rates please refer to page F-23. 

The Company’s fiscal year ends on December 31. TheDecember 31 fiscal year end is in line with the calendar accounting year ends of the majority of comparable US and European hotel companies. IHG will continue to report on a December 31 fiscal year-end basis, as the Group believes thisfacilitates more meaningful comparisons with other key participants in the industry. References in this document to a particular year are to the fiscal year unless otherwise indicated. For example, references to the year ended December 31, 2012are shown as 2012 and references to the year ended December 31, 2011 are shown as 2011, unless otherwise specified, and references to other fiscal years are shown in a similar manner. 

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

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

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

The Company furnishes JPMorgan Chase Bank, N.A., as Depositary, with annual reports containing Consolidated Financial Statements and an independent auditor’s opinion thereon. These ConsolidatedFinancial Statements are prepared on the basis of IFRS. The Company also furnishes to the Depositary all notices of shareholders’ meetings and other reports and communications that are made generally available to shareholders of the Company.The Depositary makes such notices, reports and communications available for inspection by registered holders of ADRs and mails to all registered holders of ADRs voting instruction cards with specific reference to the section of the Company’swebsite on which such notices, reports and communications can be viewed. During 2012, the Company reported interim financial information at June 30, 2012 in accordance with the Listing Rules of the UK Listing Authority. In addition, it providedquarterly financial information at March 31, 2012 and at September 30, 2012. During fiscal 2013, the Company intends to report interim financial statements for a time period of six months. For each of the first quarter and third quarter,the Company intends to release interim management statements and publish supplementary data for rooms and revenue per available room (“RevPAR”). The Consolidated Financial Statements may be found on the Company’s website atwww.ihgplc.com. 

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Form 20-F contains certain forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 withrespect to the financial condition, results of operations and business of InterContinental Hotels Group and certain plans and objectives of the Board of Directors of InterContinental Hotels Group PLC with respect thereto. These forward-lookingstatements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”,“intend”, “plan”, “goal”, “believe”, or other words of similar meaning. These statements are based on assumptions and assessments made by InterContinental Hotels Group’s management in light of theirexperience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. 

 
2 

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

By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty. There are a number offactors that could cause actual results and developments to differ materially from those expressed in, or implied by, such forward-looking statements, including, but not limited to: the risks of political and economic developments; the risk ofevents that adversely impact domestic or international travel; the risks of the hotel industry supply and demand cycle; the risks of dependence on a wide range of external stakeholders and business partners; the risks related to identifying,securing and retaining franchise and management agreements; the risks in relation to changing technology and systems; the risks associated with the Group’s reliance on the reputation of its brands and the protection of its intellectual propertyrights; the risks associated with the Group’s reliance on its proprietary reservations system and the risk of failures in the system and increased competition in reservations infrastructure; the risks related to information security and dataprivacy; the risks associated with safety, security and crisis management; the need to find people with the right skills and capability to manage growth and change; the risks of non-compliance with existing and changing regulations across numerouscountries, territories and jurisdictions; the risk of litigation; the risks related to corporate responsibility; the risks related to the Group’s ability to borrow and satisfy debt covenants; the funding risks in relation to the definedbenefits under its pension plans and the risks associated with difficulties the Group may face insuring its business. 

 
3 

Table of Contents
**PART I**

 
**ITEM 1.*********IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS*******
Not applicable. 

 
**ITEM 2.*********OFFER STATISTICS AND EXPECTED TIMETABLE*******
Not applicable. 

 
**ITEM 3.*********KEY INFORMATION*******
**SELECTED CONSOLIDATED FINANCIAL INFORMATION**

**Summary**

The selected consolidated financial data set forth below for theyears ended December 31, 2012, 2011, 2010, 2009 and 2008 has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and inaccordance with IFRS as adopted by the European Union (“EU”), and is derived from the Consolidated Financial Statements of the Group which have been audited by its independent registered public accounting firm, Ernst & Young LLP.

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

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

 
4 

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**Consolidated income statement data**

 
   **Year ended December 31,**    **    2012    **  **    2011    **  **    2010    **  **    2009    **  **    2008    **    **($ million, except earnings per ordinary share)** 
Revenue*
   1,835    1,768    1,628    1,538    1,897    
 

 
  
 

 
  
 

 
  
 

 
  
 

 
 
Total operating profit before exceptional operating