##### Table of Contents





SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
 Form 20-F
  (Mark One)o

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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file
    number: 1-10409
  InterContinental Hotels Group
    PLC
 (Exact name of registrant as
    specified in its charter)
 England and Wales
 (Jurisdiction of incorporation
    or organization)
  Broadwater Park,
 Denham, Buckinghamshire UB9 5HR
 (Address of principal executive
    offices)
    Title of each class

Name of each exchange on which registeredAmerican Depositary Shares

New York Stock ExchangeOrdinary Shares of
    1329/47
    pence each

New York Stock Exchange*     *
    
    Not for trading, but only in
    connection with the registration of American Depositary Shares,
    pursuant to the requirements of the Securities and Exchange
    Commission.  Securities registered or to be
    registered pursuant to Section 12(g) of the Act:
    None
  Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the
    Act:
    None
   Indicate the number of outstanding shares of each of the
    issuers classes of capital or common stock as of the close
    of the period covered by the annual report:
  Ordinary Shares of
    1329/47
    pence each

286,976,067   þ o
  o þ
  þ o
  Regulation S-T o o
  Rule 12b-2
  þ o o
    o þ
  Rule 12b-2
 o þ
    US
    GAAP o

International Reporting Standards as issued by
    the International Standards Accounting
    Board þ

Other  o




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##### Table of Contents





TABLE OF
    CONTENTS
   
 PageIntroduction


4Cautionary note regarding forward-looking
    statements


5PART IItem 1.


Identity of Directors, senior management and
    advisors


7Item 2.


Offer statistics and expected timetable


7Item 3.


Key information


7Selected Consolidated financial information


7Risk factors


11Item 4.


Information on the Company


14Summary


14Segmental information


18Hotels


20Soft Drinks


38Trademarks


38Organizational structure


39Property, plant and equipment


40Environment


40Item 4A.


Unresolved staff comments


41Item 5.


Operating and financial review and prospects


41Critical accounting policies


42Operating results


44Liquidity and capital resources


53Item 6.


Directors, senior management and employees


55Directors and senior management


55Compensation


58Board practices


59Employees


62Share ownership


63Item 7.


Major shareholders and related party
    transactions


64Major shareholders


64Related party transactions


64Item 8.


Financial information


64Consolidated Statements and other financial
    information


64Significant changes


65Item 9.


The Offer and Listing


65Plan of distribution


66Selling shareholders


66Dilution


66Expenses of the issue


66 2




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##### Table of Contents



PageItem 10.


Additional information


66Articles of Association


66Material contracts


68Exchange controls


71Taxation


72Documents on display


75Item 11.


Quantitative and qualitative disclosures about
    market risk


75Item 12.


Description of securities other than equity
    securities


78PART IIItem 13.


Defaults, dividend arrearages and
    delinquencies


80Item 14.


Material modifications to the rights of security
    holders and use of proceeds


80Item 15.


Controls and procedures


80Item 16.


[Reserved]


80Item 16A.


Audit Committee financial expert


80Item 16B.


Code of ethics


80Item 16C.


Principal accountant fees and services


81Item 16D.


Exemptions from the Listing Standards for Audit
    Committees


81Item 16E.


Purchases of equity securities by the issuer and
    affiliated purchasers


81Item 16F.


Change in Registrants certifying
    accountant


82Item 16G.


Summary of significant Corporate Governance
    differences from NYSE Listing Standards


82PART IIIItem 17.


Financial Statements


83Item 18.


Financial Statements


84Item 19.


Exhibits


84Exhibit 1EX-4.A.IEX-8EX-12.AEX-12.BEX-13.A   3




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##### Table of Contents



INTRODUCTION    
    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
    1329/47
    pence each;
    Board refers to the Board of directors of
    InterContinental Hotels Group PLC or, where appropriate, the
    Board of InterContinental Hotels Limited or Six Continents
    Limited;
    Britvic refers to Britannia Soft Drinks Limited for
    the period up to November 18, 2005, and thereafter,
    Britannia SD Holdings Limited (renamed Britvic plc on
    November 21, 2005) which became the holding company of
    the Britvic Group on November 18, 2005;
    Britvic Group refers to Britvic and its subsidiaries;
    Company refers to InterContinental Hotels Group PLC,
    InterContinental Hotels Limited or Six Continents Limited or
    their respective Board of directors as the context requires;
    EMEA refers to Europe, the Middle East and Africa;
    Group refers to InterContinental Hotels Group PLC
    and its subsidiaries or, where appropriate, InterContinental
    Hotels Limited or Six Continents Limited and their subsidiaries
    as the context requires;
    Hotels or IHG Hotels refers to the
    hotels business of the Group;
    IHG refers to InterContinental Hotels Group PLC or,
    where appropriate, its Board of directors;
    IHL refers to InterContinental Hotels Limited,
    previously InterContinental Hotels Group PLC, former parent
    company of the Group and re-registered as a private limited
    company on June 27, 2005;
    ordinary share or share refers, before
    April 14, 2003, to the ordinary shares of 28 pence each in
    Six Continents Limited; following that date and until
    December 10, 2004 to the ordinary shares of £1 each in
    IHL; following that date and until June 27, 2005 to the
    ordinary shares of 112 pence each in IHL; following that date
    and until June 12, 2006 to the ordinary shares of 10 pence
    each in IHG; following that date until June 4, 2007 to the
    ordinary shares of
    113/7
    pence each in IHG; and following June 4, 2007 to the
    ordinary shares of
    1329/47
    pence each in IHG;
    Six Continents refers to Six Continents Limited;
    previously Six Continents PLC and re-registered as a private
    limited company on June 6, 2005;
    Soft Drinks refers to the soft drinks business of
    InterContinental Hotels Group PLC, which the Company had through
    its controlling interest in Britvic and which the Company
    disposed of by way of an initial public offering effective
    December 14, 2005; and
    VAT refers to UK value added tax levied by HM
    Revenue and Customs on certain goods and services.     4




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Form 20-F
         CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS  Form 20-F
 5




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##### Table of Contents



Form 20-F
   6




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##### Table of Contents



PART I  ITEM 1.
    IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS    ITEM 2.
    OFFER
    STATISTICS AND EXPECTED TIMETABLE    ITEM 3.
    KEY
    INFORMATION SELECTED
    CONSOLIDATED FINANCIAL INFORMATION  Summary
     7




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##### Table of Contents



Consolidated
    income statement data
  Year ended December 31,2009


2008


2007


2006


2005($ million, except earnings per ordinary share)Revenue:Continuing operations


1,538



1,897



1,817



1,487



1,309Discontinued operations










33



278



2,1771,538



1,897



1,850



1,765



3,486Total operating profit before exceptional operating items:Continuing operations


363



549



488



374



325Discontinued operations










3



50



294363



549



491



424



619Exceptional operating items:Continuing operations


(373
)


(132
)


60



48



(27
)Discontinued operations


















(13
)(373
)


(132
)


60



48



(40
)Total operating (loss)/profit:Continuing operations


(10
)


417



548



422



298Discontinued operations










3



50



281(10
)


417



551



472



579Financial income


3



12



18



48



54Financial expenses


(57
)


(113
)


(108
)


(68
)


(115
)(Loss)/profit before tax


(64
)


316



461



452



518Tax:On profit before exceptional items


(15
)


(101
)


(90
)


(97
)


(161
)On exceptional operating items


112



17







(11
)


Exceptional tax credit


175



25



60



184



15272



(59
)


(30
)


76



(146
)Profit after tax


208



257



431



528



372Gain on disposal of assets, net of tax*


6



5



32



226



605Profit for the year


214



262



463



754



977Attributable to:Equity holders of the parent


213



262



463



754



942Non-controlling interest


1















35Profit for the year


214



262



463



754



977Earnings per ordinary share:Continuing operations:Basic


72.6¢



89.5¢



134.1¢



127.5¢



41.1¢Diluted


70.2¢



86.8¢



130.4¢



124.3¢



40.2¢Total operations:Basic


74.7¢



91.3¢



144.7¢



193.8¢



180.8¢Diluted


72.2¢



88.5¢



140.7¢



189.0¢



176.7¢     *
    
    Relates to discontinued operations. 8




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##### Table of Contents



Consolidated
    statement of financial position data
  December 31,2009


2008


2007


2006


2005($ million, except number of shares)Goodwill and intangible assets


356



445



556



516



411Property, plant and equipment


1,836



1,684



1,934



1,956



2,340Investments and other financial assets


175



195



253



251



267Retirement benefit assets


12



40



49







Deferred tax receivable


95















Current assets


419



544



710



892



1,220Non-current assets classified as held for sale






210



115



98



481Total assets


2,893



3,118



3,617



3,713



4,719Current liabilities


1,053



1,141



1,226



1,261



1,370Long-term debt


1,016



1,334



1,748



594



707Net assets


156



1



98



1,346



1,905Equity share capital


142



118



163



129



84IHG shareholders equity


149



(6
)


92



1,330



1,870Number of shares in issue at period end (millions)


287



286



295



356



433   Dividends
      Ordinary
    dividend
  Pence per ordinary share

$ per ADSInterim

Final

Total

Interim

Final

TotalYear ended December 31,2005


4.60



10.70



15.30



0.081



0.187



0.2682006


5.10



13.30



18.40



0.096



0.259



0.3552007


5.70



14.90



20.60



0.115



0.292



0.4072008


6.40



20.20



26.60



0.122



0.292



0.4142009


7.30



18.70



26.00



0.122



0.292



0.414  9




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##### Table of Contents



Special
    dividend
  Pence perordinary share

$ per ADSJune 2006


118.00



2.17June 2007


200.00



4.00   Return of
    capital
  Pence perordinary share

$ per ADSJune 2005


165.00



2.86  10




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RISK
    FACTORS  Form 20-F
  seven-year
    The
    Group is reliant on the reputation of its brands and the
    protection of its intellectual property rights
  and/or and/or
      The
    Group is exposed to a variety of risks related to identifying,
    securing and retaining franchise and management
    agreements
     11




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The
    Group is exposed to the risks of political and economic
    developments
  and/or
    The
    Group requires organizational capability to manage changes in
    key personnel and senior management
    The
    Group is exposed to the risk of events that adversely impact
    domestic or international travel
    The
    Group is reliant upon its proprietary reservations system and is
    exposed to the risk of failures in the system and increased
    competition in reservations infrastructure
    e-commerce
 12




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##### Table of Contents



The
    Group is exposed to inherent risks in relation to technology and
    systems
    The
    Group is exposed to the risks of the hotel industry supply and
    demand cycle
    The
    Group may experience a lack of selected development
    opportunities
    The
    Group is exposed to risks related to corporate
    responsibility
    The
    Group is exposed to the risk of litigation
  and/or
  The
    Group may face difficulties insuring its business
    The
    Group is exposed to a variety of risks associated with its
    ability to borrow and satisfy debt covenants
   13




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The
    Group is required to comply with data privacy
    regulations
    The
    Group is exposed to the risks related to information
    security
      The
    Group is exposed to funding risks in relation to the defined
    benefits under its pension plans
  wound-up,
    ITEM 4.
    INFORMATION
    ON THE COMPANY SUMMARY  Group
    overview
     14




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Group
    history and recent developments
        Acquisitions
    and dispositions
         15




---



##### Table of Contents



Asset disposal program detail

Number of hotels

Proceeds

Net book value($ billion)Disposed since April 2003


183



5.5



5.2Remaining owned and leased hotels as of December 31, 2009


17







1.7   Return
    of funds
          Return of funds program

Timing

Total return

Returned to
    date(i)

Still to be returned£501 million special dividend


Paid in December 2004



£501m



£501m



NilFirst £250 million share buyback


Completed in 2004



£250m



£250m



Nil£996 million capital return


Paid in July 2005



£996m



£996m



NilSecond £250 million share buyback


Completed in 2006



£250m



£250m



Nil£497 million special dividend


Paid in June 2006



£497m



£497m



NilThird £250 million share buyback


Completed in 2007



£250m



£250m



Nil£709 million special dividend


Paid in June 2007



£709m



£709m



Nil£150 million share buyback


Deferred



£150m



£120m



£30mTotal






£3,603m



£3,573



£30m     (i)
    
    As of March 19, 2010. 16




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Hotels
    Soft
    Drinks
   17




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##### Table of Contents



SEGMENTAL
    INFORMATION  Geographic
    segmentation
    Year ended December 31,2009


2008


2007($ million)Revenue(1)Americas


772



963



948EMEA


397



518



492Asia Pacific


245



290



260Central(2)


124



126



117Continuing operations


1,538



1,897



1,817Americas










16EMEA










17Discontinued
    operations(3)










33Total


1,538



1,897



1,850Operating profit before exceptional operating
    items(1)(4)Americas


288



465



454EMEA


127



171



134Asia Pacific


52



68



63Central(2)


(104
)


(155
)


(163
)Continuing operations


363



549



488Americas










2EMEA










1Discontinued
    operations(3)










3Total


363



549



491     Footnotes on page 19.
  18




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##### Table of Contents



Year ended December 31,2009


2008


2007(%)RevenueAmericas


50.2



50.8



51.2EMEA


25.8



27.3



26.6Asia Pacific


15.9



15.3



14.1Central


8.1



6.6



6.3Continuing operations


100.0



100.0



98.2Americas










0.9EMEA










0.9Discontinued operations










1.8Total


100.0



100.0



100.0Operating profit before exceptional operating itemsAmericas


79.3



84.7



92.5EMEA


35.0



31.1



27.3Asia Pacific


14.3



12.4



12.8Central


(28.6
)


(28.2
)


(33.2
)Continuing operations


100.0



100.0



99.4Americas










0.4EMEA










0.2Discontinued operations










0.6Total


100.0



100.0



100.0     (1)
    
    The results of operations have been
    translated into US dollars at the average rates of exchange for
    the period. In the case of sterling, the translation rate is $1
    = £0.64 (2008 $1 = £0.55, 2007 $1 = £0.50). In
    the case of the euro, the translation rate is $1 = 0.72
    (2008 $1 = 0.68, 2007 $1 = 0.73).(2)
    
    Central revenue primarily relates
    to Holidex (IHGs proprietary reservation system) fee
    income. Central operating profit includes central revenue less
    costs related to global functions.(3)
    
    Discontinued operations were all
    owned and leased hotels.(4)
    
    Operating profit before exceptional
    operating items does not include exceptional operating items for
    all periods presented. Exceptional operating items (charge
    unless otherwise noted) by region are the Americas
    $301 million (2008 $99 million, 2007 credit of
    $17 million); EMEA $22 million (2008 $21 million,
    2007 credit of $21 million); Asia Pacific $7 million (2008
    $2 million, 2007 credit of $17 million); and Central
    $43 million (2008 $10 million, 2007 credit of
    $5 million). 19




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##### Table of Contents



HOTELS  Business
    overview  market and competitive
    environment
    Global
    economic events and industry cycle
      Market
    size
        Drivers
    of growth
   20




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##### Table of Contents




    change in demographics  as the population ages and
    becomes wealthier, increased leisure time and income encourages
    more travel and hotel visits; younger generations are
    increasingly seeking work/life balance, with positive
    implications for increased leisure travel;
    increase in travel volumes as airline capacity grows and
    affordability improves, accentuated in some regions by the
    strength of the market positions of low-cost airlines;
    globalization of trade and tourism;
    increase in affluence and freedom to travel within emerging
    markets, such as China and Brazil; and
    increase in the preference for branded hotels amongst consumers.  Branded
    and unbranded markets
  2009 branded hotel rooms by region as a percentage of the
    total marketUnited States


69
%EMEA


34
%Asia Pacific


29
%         Other
    factors
    IHGs
    business model
       21




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##### Table of Contents



Operations
    Franchised:
  Managed:
    Owned and leased:
      Managementcontracts and jointFranchised


ventures


Owned and leased


TotalNo. of


No. of


No. of


No. of


No. of


No. of


No. of


No. ofhotels


rooms


hotels


rooms


hotels


rooms


hotels


rooms2009


3,799



483,541



622



157,287



17



5,851



4,438



646,6792008


3,585



465,967



585



148,240



16



5,644



4,186



619,8512007


3,392



443,815



539



134,883



18



6,396



3,949



585,094    22




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Strategy
              
    where IHG chooses to compete; and
    how the Group will win when it competes.       23




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##### Table of Contents



Where we compete
  Strategic priorities

2009 status and developmentsTo accelerate profitable growth of our core business in the
    largest markets where scale really counts and also in key global
    gateway cities. Seek opportunities to leverage our scale in new
    business areas.

 90% of deals signed in scale markets and key gateway
    cities;
       10 signings of Hotel Indigo and
    Staybridge Suites outside of  North America; and
       439 hotels opened globally.How we winStrategic priorities

2009 status and developmentsFinancial returnsTo generate higher returns for owners and IHG through revenue
    delivery and improved operating efficiency.

   Increased by four percentage points the
    proportion of revenue delivery through IHG global reservations
    channels and Priority Club Rewards (PCR) direct
    sales. These channels accounted for an average 68% of global
    hotel rooms revenue in 2009;
       Significant procurement savings made;
       Increased use of offshore transaction
    processing; and
       Technology infrastructure developed to
    support owner management and loyalty marketing.Our peopleTo create a more efficient organisation with strong core
    capabilities.

   Continued cascading of Great
    Hotels Guests Love in hotels and corporate offices;
       Meeting ongoing resourcing requirements
    to match hotel growth in scale markets;
       Managing employee engagement; and
       Continued focus on attracting and
    retaining talent.Guest experienceTo operate a portfolio of brands attractive to both owners and
    guests that have clear market positions and differentiation in
    the eyes of the guest.

 1,697 relaunched Holiday Inn and Holiday Inn Express
    hotels open around the world; and
       Industry-leading PCR loyalty program
    with 48 million members, contributing $5.6 billion of global
    system room revenue.Responsible businessTo take an active stance on environment and community issues in
    order to drive increased value for IHG, owners and guests.

   Green Engage energy management system
    developed (patent pending); rolled out to over 900 hotels by
    December 31, 2009;
       Extensive consumer research undertaken
    to quantify green opportunity with consumers; and
       Corporate Responsibility approach
    defined and agreed.  24




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##### Table of Contents



Segmental
    results by activity
    Year ended December 31,2009


2008


2007($ million)Revenue(1)AmericasFranchised


437



495



489Managed


110



168



156Owned and leased


225



300



303772



963



948EMEAFranchised


83



110



81Managed


119



168



167Owned and leased


195



240



244397



518



492Asia PacificFranchised


11



18



16Managed


105



113



99Owned and leased


129



159



145245



290



260Central(2)


124



126



117Total


1,538



1,897



1,817Operating profit before exceptional operating
    items(1)(3)AmericasFranchised


364



426



425Managed


(40
)


51



41Owned and leased


11



55



54Regional overheads


(47
)


(67
)


(66
)288



465



454EMEAFranchised


60



75



58Managed


65



95



87Owned and leased


33



45



33Regional overheads


(31
)


(44
)


(44
)127



171



134Asia PacificFranchised


5



8



6Managed


44



55



46Owned and leased


30



43



36Regional overheads


(27
)


(38
)


(25
)52



68



63Central(2)


(104
)


(155
)


(163
)Total


363



549



488     Footnotes on page 26.
 25




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##### Table of Contents



Year ended December 31,2009


2008


2007(%)RevenueAmericasFranchised


28.4



26.1



26.9Managed


7.2



8.9



8.6Owned and leased


14.6



15.8



16.750.2



50.8



52.2EMEAFranchised


5.4



5.8



4.5Managed


7.7



8.9



9.2Owned and leased


12.7



12.6



13.425.8



27.3



27.1Asia PacificFranchised


0.7



0.9



0.9Managed


6.8



6.0



5.4Owned and leased


8.4



8.4



8.015.9



15.3



14.3Central


8.1



6.6



6.4Total


100.0



100.0



100.0Operating profit before exceptional operating itemsAmericasFranchised


100.2



77.6



87.1Managed


(11.0
)


9.3



8.4Owned and leased


3.0



10.0



11.0Regional overheads


(12.9
)


(12.2
)


(13.5
)79.3



84.7



93.0EMEAFranchised


16.5



13.6



11.9Managed


17.9



17.3



17.8Owned and leased


9.1



8.2



6.8Regional overheads


(8.5
)


(8.0
)


(9.0
)35.0



31.1



27.5Asia PacificFranchised


1.4



1.5



1.2Managed


12.1



10.0



9.4Owned and leased


8.2



7.8



7.4Regional overheads


(7.4
)


(6.9
)


(5.1
)14.3



12.4



12.9Central


(28.6
)


(28.2
)


(33.4
)Total


100.0



100.0



100.0     (1)
    
    The results of operations have been
    translated into US dollars at the average rates of exchange for
    the period. In the case of sterling, the translation rate is $1
    = £0.64 (2008 $1 = £0.55, 2007 $1 = £0.50). In
    the case of the euro, the translation rate is $1 = 0.72
    (2008 $1 = 0.68, 2007 $1 = 0.73).(2)
    
    Central revenue primarily relates
    to Holidex (IHGs proprietary reservation system) fee
    income. Central operating profit includes central revenue less
    costs related to global functions.(3)
    
    Operating profit before exceptional
    operating items does not include exceptional operating items for
    all periods presented. Exceptional operating items (charge
    unless otherwise noted) by region are the Americas
    $301 million (2008 $99 million, 2007 credit of
    $17 million); EMEA $22 million (2008 $21 million,
    2007 credit of $21 million); Asia Pacific $7 million
    (2008 $2 million, 2007 credit of $17 million); and
    Central $43 million (2008 $10 million, 2007 credit of
    $5 million). 26




---



##### Table of Contents



Global
    system
    Priority Club Rewards:
  Central reservation system technology:
  Reservations call centers:
  Internet:
      Sales
    and marketing
   27




---



##### Table of Contents



Global
    brands
  Brands
    overview
    At December 31, 2009Brands

Room numbers

HotelsInterContinental


56,121



166Crowne Plaza


100,994



366Holiday Inn


243,460



1,325Holiday Inn Express


188,007



2,069Staybridge Suites


19,885



182Candlewood Suites


25,283



254Hotel Indigo


4,030



33Other


8,899



43Total


646,679



4,438   InterContinental
  Americas

EMEA

Asia Pacifictotal

total

totalAverage room rate
    $(1)


152.72



213.57



163.27Room
    numbers(2)


18,499



20,586



17,036     (1)
    
    For the year ended
    December 31, 2009; quoted at constant US$ exchange rate.
    Average room rate is for comparable InterContinental hotels.(2)
    
    As at December 31, 2009.      Crowne
    Plaza
  Americas

EMEA

Asia Pacifictotal

total

totalAverage room rate
    $(1)


100.92



141.32



98.56Room
    numbers(2)


55,690



22,157



23,147     (1)
    
    For the year ended
    December 31, 2009; quoted at constant US$ exchange rate.
    Average room rate is for comparable Crowne Plaza hotels.(2)
    
    As at December 31, 2009.  state-of-the-art
 28




---



##### Table of Contents



Holiday
    Inn
  Americas

EMEA

Asia Pacifictotal

total

totalAverage room rate
    $(1)


92.41



105.86



79.04Room
    numbers(2)(3)


161,093



53,372



28,995     (1)
    
    For the year ended
    December 31, 2009; quoted at constant US$ exchange rate.
    Average room rate is for comparable Holiday Inn hotels.(2)
    
    As at December 31, 2009.(3)
    
    The Americas total includes Holiday
    Inn Club Vacations (2,892 rooms).          Holiday
    Inn Express
  Americas

EMEA

Asia Pacifictotal

total

totalAverage room rate
    $(1)


94.56



86.43



49.35Room
    numbers(2)


158,284



23,259



6,464     (1)
    
    For the year ended
    December 31, 2009; quoted at constant US$ exchange rate.
    Average room rate is for comparable Holiday Inn Express hotels.(2)
    
    As at December 31, 2009.     29




---



##### Table of Contents



Staybridge
    Suites
  Americas

EMEAtotal

totalAverage room rate
    $(1)


97.24



Room
    numbers(2)


19,320



565     (1)
    
    For the year ended
    December 31, 2009; quoted at constant US$ exchange rate.
    Average room rate is for comparable Staybridge Suites hotels.(2)
    
    As at December 31, 2009.      Candlewood
    Suites
  AmericastotalAverage room rate
    $(1)


65.68Room
    numbers(2)


25,283     (1)
    
    For the year ended
    December 31, 2009; quoted at constant US$ exchange rate.
    Average room rate is for comparable Candlewood Suites hotels.(2)
    
    As at December 31, 2009.      Hotel
    Indigo
  Americas

EMEAtotal

totalAverage room rate
    $(1)


105.89



Room
    numbers(2)


3,966



64     (1)
    
    For the year ended
    December 31, 2009; quoted at constant US$ exchange rate.
    Average room rate is for comparable Hotel Indigo hotels.(2)
    
    As at December 31, 2009.  24-hour
 30




---



##### Table of Contents



Geographical
    analysis
      Americas

EMEA

Asia Pacific(% of total)Room
    numbers(1)


69



19



12Regional operating profit (before central overheads and
    exceptional operating
    items)(2)


62



27



11     (1)
    
    As at December 31, 2009.(2)
    
    For the year ended
    December 31, 2009.  Americas
    EMEA
    Asia
    Pacific
   31




---



##### Table of Contents



Franchised

Managed

Owned and leased

TotalHotels

Rooms

Hotels

Rooms

Hotels

Rooms

Hotels

RoomsAmericasInterContinental


26



7,439



25



9,149



4



1,911



55



18,499Crowne Plaza


183



49,130



19



6,560











202



55,690Holiday
    Inn(1)


856



150,697



30



9,038



4



1,358



890



161,093Holiday Inn Express


1,845



158,032



1



252











1,846



158,284Staybridge Suites


131



13,513



45



5,574



2



233



178



19,320Candlewood Suites


176



15,842



78



9,441











254



25,283Hotel Indigo


28



3,351



3



405



1



210



32



3,966Other










22



3,219











22



3,219Total


3,245



398,004



223



43,638



11



3,712



3,479



445,354EMEAInterContinental


10



2,277



52



17,016



3



1,293



65



20,586Crowne Plaza


69



15,731



24



6,426











93



22,157Holiday Inn


246



37,270



87



16,102











333



53,372Holiday Inn Express


194



22,874



2



232



1



153



197



23,259Staybridge Suites










4



565











4



565Hotel Indigo


1



64



















1



64Other










2



293











2



293Total


520



78,216



171



40,634



4



1,446



695



120,296Asia PacificInterContinental


6



1,798



39



14,743



1



495



46



17,036Crowne Plaza


3



454



68



22,693











71



23,147Holiday Inn


11



1,974



90



26,823



1



198



102



28,995Holiday Inn Express


2



275



24



6,189











26



6,464Other


12



2,820



7



2,567











19



5,387Total


34



7,321



228



73,015



2



693



264



81,029TotalInterContinental


42



11,514



116



40,908



8



3,699



166



56,121Crowne Plaza


255



65,315



111



35,679











366



100,994Holiday
    Inn(1)


1,113



189,941



207



51,963



5



1,556



1,325



243,460Holiday Inn Express


2,041



181,181



27



6,673



1



153



2,069



188,007Staybridge Suites


131



13,513



49



6,139



2



233



182



19,885Candlewood Suites


176



15,842



78



9,441











254



25,283Hotel Indigo


29



3,415



3



405



1



210



33



4,030Other


12



2,820



31



6,079











43



8,899Total


3,799



483,541



622



157,287



17



5,851



4,438



646,679     (1)
    
    Includes Holiday Inn Club Vacations
    (6 hotels, 2,892 rooms). 32




---



##### Table of Contents



Room count
    and pipeline
                  Americas
      EMEA
   33




---



##### Table of Contents



Asia
    Pacific
      34




---



##### Table of Contents



Hotels


RoomsChange








ChangeGlobal hotel and room count at December 31,

2009


2008


over 2008


2009


2008


over 2008Analyzed by brandInterContinental


166



159



7



56,121



54,736



1,385Crowne Plaza


366



342



24



100,994



93,382



7,612Holiday
    Inn(1)


1,325



1,354



(29
)


243,460



252,103



(8,643
)Holiday Inn Express


2,069



1,932



137



188,007



173,794



14,213Staybridge Suites


182



152



30



19,885



16,644



3,241Candlewood Suites


254



204



50



25,283



20,641



4,642Hotel Indigo


33



22



11



4,030



2,702



1,328Other


43



21



22



8,899



5,849



3,050Total


4,438



4,186



252



646,679



619,851



26,828Analyzed by ownership typeFranchised


3,799



3,585



214



483,541



465,967



17,574Managed(1)


622



585



37



157,287



148,240



9,047Owned and leased


17



16



1



5,851



5,644



207Total


4,438



4,186



252



646,679



619,851



26,828     (1)
    
    Includes Holiday Inn Club Vacations.  Hotels


RoomsChange








ChangeGlobal pipeline at December 31,

2009


2008


over 2008


2009


2008


over 2008Analyzed by brandInterContinental


63



71



(8
)


20,173



21,884



(1,711
)Crowne Plaza


129



133



(4
)


38,555



41,469



(2,914
)Holiday Inn


338



387



(49
)


59,008



64,261



(5,253
)Holiday Inn Express


563



719



(156
)


57,756



70,270



(12,514
)Staybridge Suites


123



166



(43
)


13,360



18,109



(4,749
)Candlewood Suites


169



242



(73
)


14,851



21,790



(6,939
)Hotel Indigo


53



56



(3
)


6,660



7,212



(552
)Other






1



(1
)






90



(90
)Total


1,438



1,775



(337
)


210,363



245,085



(34,722
)Analyzed by ownership typeFranchised


1,158



1,474



(316
)


126,386



156,959



(30,573
)Managed


280



300



(20
)


83,977



87,941



(3,964
)Owned and leased






1



(1
)






185



(185
)Total


1,438



1,775



(337
)


210,363



245,085



(34,722
)  35




---



##### Table of Contents



Seasonality
    Competition
    Key
    relationships
          RevPAR
     36




---



##### Table of Contents



Franchised


Managed


Owned and leasedChange vs








Change vs








Change vs2009


2008


2008


2009


2008


2008


2009


2008


2008AmericasInterContinentalOccupancy


56.6
%


63.5
%


(6.9
)%pts


63.0
%


69.0
%


(6.0
)%pts


76.5
%


80.8
%


(4.3
)%ptsAverage daily rate

$
118.30


$
127.10



(6.93
)%

$
163.03


$
177.48



(8.15
)%

$
196.52


$
259.21



(24.19
)%RevPAR

$
66.95


$
80.69



(17.02
)%

$
102.66


$
122.45



(16.16
)%

$
150.28


$
209.35



(28.22
)%Crowne PlazaOccupancy


55.1
%


60.0
%


(4.9
)%pts


65.0
%


71.1
%


(6.1
)%pts










Average daily rate

$
99.93


$
109.06



(8.37
)%

$
107.19


$
121.28



(11.62
)%










RevPAR

$
55.01


$
65.39



(15.87
)%

$
69.68


$
86.29



(19.25
)%










Holiday InnOccupancy


54.6
%


60.5
%


(5.9
)%pts


64.8
%


70.3
%


(5.5
)%pts


65.7
%


70.0
%


(4.3
)%ptsAverage daily rate

$
91.61


$
97.72



(6.26
)%

$
101.31


$
112.48



(9.93
)%

$
103.78


$
111.00



(6.50
)%RevPAR

$
49.98


$
59.11



(15.46
)%

$
65.67


$
79.11



(16.98
)%

$
68.15


$
77.71



(12.30
)%Holiday Inn ExpressOccupancy


59.3
%


64.7
%


(5.4
)%pts


75.1
%


77.8
%


(2.7
)%pts










Average daily rate

$
94.47


$
99.40



(4.96
)%

$
130.79


$
156.37



(16.36
)%










RevPAR

$
56.07


$
64.38



(12.91
)%

$
98.25


$
121.71



(19.27
)%










Staybridge SuitesOccupancy


66.1
%


69.7
%


(3.6
)%pts


69.0
%


73.5
%


(4.5
)%pts


68.2
%


72.5
%


(4.3
)%ptsAverage daily rate

$
95.06


$
101.67



(6.50
)%

$
100.66


$
110.96



(9.28
)%

$
94.63


$
103.24



(8.34
)%RevPAR

$
62.85


$
70.83



(11.26
)%

$
69.48


$
81.58



(14.83
)%

$
64.56


$
74.83



(13.72
)%Candlewood SuitesOccupancy


65.9
%


67.3
%


(1.4
)%pts


63.2
%


71.3
%


(8.1
)%pts










Average daily rate

$
69.46


$
74.33



(6.55
)%

$
62.59


$
71.79



(12.80
)%










RevPAR

$
45.79


$
50.05



(8.51
)%

$
39.53


$
51.18



(22.75
)%










Hotel IndigoOccupancy


53.7
%


54.8
%


(1.1
)%pts


60.9
%


67.4
%


(6.5
)%pts










Average daily rate

$
104.40


$
116.21



(10.16
)%

$
111.86


$
141.66



(21.04
)%










RevPAR

$
56.03


$
63.68



(12.01
)%

$
68.14


$
95.56



(28.69
)%










   Franchised


Managed


Owned and leasedChange vs








Change vs








Change vs2009


2008


2008


2009


2008


2008


2009


2008


2008EMEAInterContinentalOccupancy


57.7
%


64.1
%


(6.4
)%pts


60.9
%


66.1
%


(5.2
)%pts


76.0
%


74.5
%


1.6
%ptsAverage daily rate

$
275.70


$
305.24



(9.68
)%

$
186.66


$
198.41



(5.92
)%

$
371.80


$
425.28



(12.58
)%RevPAR

$
159.05


$
195.71



(18.73
)%

$
113.73


$
131.13



(13.27
)%

$
282.63


$
316.69



(10.76
)%Crown PlazaOccupancy


62.2
%


64.9
%


(2.7
)%pts


71.1
%


77.1
%


(5.9
)%pts










Average daily rate

$
136.33


$
155.13



(12.11
)%

$
156.54


$
184.06



(14.95
)%










RevPAR

$
84.78


$
100.65



(15.77
)%

$
111.36


$
141.88



(21.51
)%










Holiday InnOccupancy


60.5
%


64.8
%


(4.4
)%pts


68.7
%


72.0
%


(3.3
)%pts










Average daily rate

$
108.92


$
119.93



(9.18
)%

$
99.55


$
109.92



(9.44
)%










RevPAR

$
65.89


$
77.76



(15.27
)%

$
68.38


$
79.11



(13.56
)%










Holiday Inn ExpressOccupancy


66.8
%


70.7
%


(3.9
)%pts


46.7
%


65.6
%


(18.9
)%pts


60.6
%


68.4
%


(7.8
)%ptsAverage daily rate

$
86.43


$
92.54



(6.60
)%

$
79.76


$
121.76



(34.49
)%

$
94.24


$
103.37



(8.83
)%RevPAR

$
57.72


$
65.40



(11.75
)%

$
37.27


$
79.86



(53.34
)%

$
57.11


$
70.70



(19.23
)%   37




---



##### Table of Contents



Franchised


Managed


Owned and leasedChange vs








Change vs








Change vs2009


2008


2008


2009


2008


2008


2009


2008


2008Asia PacificInterContinentalOccupancy


68.4
%


69.8
%


(1.4
)%pts


63.4
%


61.9
%


1.5
%pts


65.2
%


69.0
%


(3.8
)%ptsAverage daily rate

$
164.64


$
213.47



(22.87
)%

$
154.49


$
172.84



(10.61
)%

$
339.45


$
412.15



(17.64
)%RevPAR

$
112.68


$
149.03



(24.39
)%

$
97.97


$
106.96



(8.40
)%

$
221.28


$
284.26



(22.16
)%Crowne PlazaOccupancy


69.8
%


73.3
%


(3.5
)%pts


65.9
%


67.5
%


(1.6
)%pts










Average daily rate

$
109.58


$
144.26



(24.04
)%

$
98.27


$
110.78



(11.30
)%










RevPAR

$
76.45


$
105.68



(27.65
)%

$
64.79


$
74.81



(13.39
)%










Holiday InnOccupancy


69.4
%


71.4
%


(2.1
)%pts


63.3
%


65.6
%


(2.3
)%pts


84.7
%


84.3
%


0.4
%ptsAverage daily rate

$
80.88


$
87.02



(7.06
)%

$
78.60


$
89.81



(12.48
)%

$
99.23


$
109.90



(9.71
)%RevPAR

$
56.13


$
62.18



(9.73
)%

$
49.75


$
58.91



(15.55
)%

$
84.04


$
92.61



(9.25
)%Holiday Inn ExpressOccupancy


54.4
%


60.8
%


(6.4
)%pts


61.7
%


60.1
%


1.6
%pts










Average daily rate

$
76.52


$
75.11



1.88
%

$
48.00


$
55.86



(14.08
)%










RevPAR

$
41.65


$
45.68



(8.82
)%

$
29.61


$
33.56



(11.79
)%










OtherOccupancy


66.6
%


71.7
%


(5.1
)%pts


74.5
%


79.2
%


(4.7
)%pts










Average daily rate

$
119.77


$
124.7



(3.95
)%

$
99.17


$
105.40



(5.91
)%










RevPAR

$
79.83


$
89.39



(10.70
)%

$
73.88


$
83.48



(11.50
)%










   Regulation
   SOFT
    DRINKS       TRADEMARKS   38




---



##### Table of Contents



ORGANIZATIONAL
    STRUCTURE  Principal
    operating subsidiary undertakings
    a
  a
  b
  b
  b
  b
  c
  d
    (a)
    
    Incorporated in Great Britain and
    registered in England and Wales.(b)
    
    Incorporated in the United States.(c)
    
    Incorporated in Hong Kong.(d)
    
    Incorporated in France. 39




---



##### Table of Contents



PROPERTY,
    PLANT AND EQUIPMENT    Net book value as at December 31, 2009

Americas

EMEA

Asia Pacific

Total($ million)Land and buildings


533



556



321



1,410Fixtures, fittings and equipment


165



167



94



426698



723



415



1,836          ENVIRONMENT      
    Implementing sound environmental practices in the design,
    development and operation of its hotels;
    Encouraging the development and integration of sustainable
    technologies;
    Endeavouring to reduce its use of energy, water and re-use and
    recycle the resources consumed by its business wherever
    practical;
    Engaging its customers, colleagues, hotel owners, suppliers and
    contractors in its efforts to protect the environment;
    Providing the training and resources required to meet its
    objectives;
    Monitoring, recording and benchmarking its environmental
    performance on a regular basis;
    Making business decisions taking into account these
    commitments; and
    Communicating its policies, practices and program to all its
    stakeholders.     40




---



##### Table of Contents



ITEM 4A.
    UNRESOLVED
    STAFF COMMENTS    ITEM 5.
    OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS  INTRODUCTION
  Business
    and overview
      Operational
    performance
     41




---



##### Table of Contents



CRITICAL
    ACCOUNTING POLICIES        Revenue
    recognition
                Goodwill,
    intangible assets, and property, plant and
    equipment
   42




---



##### Table of Contents




    Property, plant and equipment  $28 million,
    comprising $20 million in respect of a North American hotel
    and $8 million relating to a European hotel;
    Assets held for sale  $45 million, comprising
    $14 million of depreciation not charged whilst held for
    sale and $31 million of impairments relating to two North
    American hotels;
    Goodwill  $78 million relating to the Americas
    managed operations cash-generating unit;
    Intangible assets  $32 million in respect of a
    US management contract; and
    Other financial assets  $14 million relating to
    an investment in an entity that owns a North American hotel that
    the Group manages.    Income
    taxes
      Loyalty
    program
   43




---



##### Table of Contents



Pensions
    and other post-employment benefit plans
   OPERATING
    RESULTS  Accounting
    principles
      Year ended


Year ended


Year endedDecember 31,


December 31,


December 31,2009


2008


2007($ million)RevenueContinuing operations


1,538



1,897



1,817Discontinued operations










33Total revenue


1,538



1,897



1,850Operating profit before exceptional operating itemsContinuing operations


363



549



488Discontinued operations










3Total operating profit before exceptional operating items


363



549



491Exceptional operating items


(373
)


(132
)


60Operating (loss)/profit


(10
)


417



551Net financial expenses


(54
)


(101
)


(90
)(Loss)/profit before tax


(64
)


316



461Tax


272



(59
)


(30
)Profit after tax


208



257



431Gain on disposal of assets, net of tax


6



5



32Profit for the year


214



262



463Earnings per ordinary share:Basic


74.7¢



91.3¢



144.7¢Adjusted


102.8¢



120.9¢



97.2¢   Year
    ended December 2009 compared with year ended December
    2008
   44




---



##### Table of Contents



Exceptional
    operating items
    
    $91 million charge, comprising an onerous contract
    provision of $65 million for the future net unavoidable
    costs under a performance guarantee related to certain
    management contracts with one US hotel owner, and a deposit of
    $26 million written off as it is no longer considered
    recoverable under the terms of the same management contracts;
    $19 million in relation to the Holiday Inn brand family
    relaunch;
    $21 million enhanced pension transfers to deferred members
    of the InterContinental Hotels UK Pension Plan who accepted an
    offer to receive the enhancement as either a cash lump sum or an
    additional transfer value to an alternative pension plan
    provider;
    $197 million of non-cash impairment charges reflecting the
    weaker trading environment in 2009, including $45 million
    relating to hotels reclassified from held for sale assets;
    $43 million which primarily related to the closure of
    certain corporate offices together with severance costs arising
    from a review of the Groups cost base; and
    $2 million loss on disposal of hotels.    Net
    financial expenses
      Taxation
     45




---



##### Table of Contents



Earnings
    per ordinary share
    Highlights
    for the year ended December 31, 2009
    Year ended


Year endedDecember 31,


December 31,2009


2008


Change($ million)


%RevenueAmericas


772



963



(19.8
)EMEA


397



518



(23.4
)Asia Pacific


245



290



(15.5
)Central


124



126



(1.6
)Total


1,538



1,897



(18.9
)Operating profit before exceptional operating itemsAmericas


288



465



(38.1
)EMEA


127



171



(25.7
)Asia Pacific


52



68



(23.5
)Central


(104
)


(155
)


32.9Total


363



549



(33.9
)      46




---



##### Table of Contents



Americas
  Americas
    results
  Year ended


Year endedDecember 31,


December 31,2009


2008


Change($ million)


%RevenueFranchised


437



495



(11.7
)Managed


110



168



(34.5
)Owned and leased


225



300



(25.0
)Total


772



963



(19.8
)Operating profit before exceptional operating itemsFranchised


364



426



(14.6
)Managed


(40
)


51



(178.4
)Owned and leased


11



55



(80.0
)335



532



(37.0
)Regional overheads


(47
)


(67
)


29.9Total


288



465



(38.1
)              47




---



##### Table of Contents



EMEA
  EMEA
    results
  Year ended


Year endedDecember 31,


December 31,2009


2008


Change($ million)


%RevenueFranchised


83



110



(24.5
)Managed


119



168



(29.2
)Owned and leased


195



240



(18.8
)Total


397



518



(23.4
)Operating profit before exceptional operating itemsFranchised


60



75



(20.0
)Managed


65



95



(31.6
)Owned and leased


33



45



(26.7
)158



215



(26.5
)Regional overheads


(31
)


(44
)


29.5Total


127



171



(25.7
)          48




---



##### Table of Contents



Asia
    Pacific
  Asia
    Pacific results
  Year ended


Year endedDecember 31,


December 31,2009


2008


Change($ million)


%RevenueFranchised


11



18



(38.9
)Managed


105



113



(7.1
)Owned and leased


129



159



(18.9
)Total


245



290



(15.5
)Operating profit before exceptional operating itemsFranchised


5



8



(37.5
)Managed


44



55



(20.0
)Owned and leased


30



43



(30.2
)79



106



(25.5
)Regional overheads


(27
)


(38
)


28.9Total


52



68



(23.5
)            49




---



##### Table of Contents



Central
  Year ended


Year endedDecember 31,


December 31,2009


2008


Change($ million)


%Revenue


124



126



(1.6
)Gross central costs


(228
)


(281
)


18.9Net central costs


(104
)


(155
)


32.9     System
    Funds
  Year ended


Year endedDecember 31,


December 31,2009


2008


Change($ million)


%Assessments


1,008



990



1.8       Highlights
    for the year ended December 31, 2008
    Group
    results
       50




---



##### Table of Contents



Americas
                  EMEA
     51




---



##### Table of Contents



Asia
    Pacific
             52




---



##### Table of Contents



Central
   LIQUIDITY
    AND CAPITAL RESOURCES  Sources
    of liquidity
  99-year
              Cash
    from operating activities
     53




---



##### Table of Contents



Cash
    from investing activities
    Cash
    used in financing activities
        Off-balance
    sheet arrangements
    Contractual
    obligations
    Total amounts

Less than





Aftercommitted

1 year

1-3 Years

3-5 years

5 years($ million)Long-term
    debt(i)

    (ii)


934



88



5



426



415Interest
    payable(ii)


209



38



67



52



52Finance lease
    obligations(iii)


3,444



16



32



32



3,364Operating lease obligations


509



51



82



67



309Agreed pension scheme contributions


13



13











Capital contracts placed


9



9











5,118



215



186



577



4,140     (i)
    
    Repayment period classified
    according to the related facility maturity date.(ii)
    
    Including the impact of derivatives.(iii)
    
    Represents the minimum lease
    payments related to the 99-year lease on the InterContinental
    Boston. Payments under the lease step up at regular intervals
    over the lease term.       54




---



##### Table of Contents



Pension
    plan commitments
          ITEM 6.
    DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES DIRECTORS
    AND SENIOR MANAGEMENT      Directors
  Initially


Date of nextappointed to


reappointmentName

Title

the Board


by shareholdersGraham
    Allan(1)(2)

Director


2010



2010Andrew Cosslett

Director and Chief Executive


2005



2011David
    Kappler(1)

Director and Senior Independent Director


2004



2011Ralph
    Kugler(1)(3)

Director


2003



2010Jennifer
    Laing(1)

Director


2005



2012Jonathan
    Linen(1)

Director


2005



2012Richard Solomons

Director and Chief Financial Officer


2003



2012David
    Webster(3)

Director and Chairman


2003



2010Ying
    Yeh(1)

Director


2007



2011     (1)
    
    Non-executive independent director.(2)
    
    Required, under the Companys
    Articles of Association, to stand for election at the 2010
    Annual General Meeting.(3)
    
    Required, under the Companys
    Articles of Association, to stand for re-election at the 2010
    Annual General Meeting. 55




---



##### Table of Contents



Officers
  Initially appointedName

Title

to positionJim Abrahamson

President, The Americas


2009Tom Conophy

Executive Vice President and Chief


2006Information OfficerKirk Kinsell

President, EMEA


2007Tracy Robbins

Executive Vice President, Global Human


2005ResourcesTom Seddon

Executive Vice President and Chief


2007Marketing OfficerGeorge Turner

Executive Vice President, General


2009Counsel and Company Secretary   Former
    Directors and Officers
    Directors
    and Officers
  David
    Webster, Non-Executive Chairman
    Andrew
    Cosslett, Chief Executive
    Richard
    Solomons, Chief Financial Officer and Head of Commercial
    Development
    Graham
    Allan, Non-Executive Director
   56




---



##### Table of Contents



David
    Kappler, Senior Independent Non-Executive Director
    Ralph
    Kugler, Non-Executive Director
    Jennifer
    Laing, Non-Executive Director
    Jonathan
    Linen, Non-Executive Director
    Ying Yeh,
    Non-Executive Director
    Other
    members of the Executive Committee
  Jim
    Abrahamson, President, The Americas
    Tom
    Conophy, Executive Vice President and Chief Information
    Officer
   57




---



##### Table of Contents



Kirk
    Kinsell, President, EMEA
    Tracy
    Robbins, Executive Vice President, Global Human
    Resources
    Tom
    Seddon, Executive Vice President and Chief Marketing
    Officer
  ® e-commerce,
  George
    Turner, Executive Vice President, General Counsel and Company
    Secretary
       COMPENSATION      Share
    plans
    Annual
    Bonus Plan
   58




---



##### Table of Contents



and/or
  Long Term
    Incentive Plan
    Executive
    Share Option Plan
    Sharesave
    Plan
    Options
    and ordinary shares held by Directors
   BOARD
    PRACTICES  Contracts
    of service
    12-month 12-month
 59




---



##### Table of Contents



Directors
    contracts
  Contract

Unexpired term/Directors

date

notice periodAndrew Cosslett


2.3.05



12 monthsRichard Solomons


4.15.03



12 months       Payments
    on termination
      Committees
    Executive
    Committee
    Audit
    Committee
      
    review the Groups public statements on internal control
    and corporate governance compliance prior to their consideration
    by the Board; 60




---



##### Table of Contents




    review the Groups processes for detecting and addressing
    fraud, misconduct and control weaknesses and to consider the
    response to any such occurrence, including overseeing the
    process enabling the anonymous submission of concerns;
    review reports from management, internal audit and external
    audit concerning the effectiveness of internal control,
    financial reporting and risk management processes;
    review with management and the external auditor any financial
    statements required under UK or US legislation before submission
    to the Board;
    establish, review and maintain the role and effectiveness of the
    internal audit function, including overseeing the appointment of
    the Head of Global Internal Audit;
    assume responsibility for the appointment, compensation,
    resignation, dismissal and the overseeing of the external
    auditor, including review of the external audit, its cost and
    effectiveness;
    pre-approve non-audit work to be carried out by the external
    auditor and the fees to be paid for that work, along with the
    monitoring of the external auditors independence; and
    oversee the Groups Code of Ethics and Business Conduct and
    associated procedures for monitoring adherence.      Remuneration
    Committee
    Nomination
    Committee
    Corporate
    Responsibility Committee
   61




---



##### Table of Contents



Disclosure
    Committee
    General
    Purposes Committee
     EMPLOYEES      Americas

EMEA

Asia Pacific

Central

Total2009


3,229



1,712



1,410



1,205



7,5562008


3,384



1,824



1,470



1,271



7,9492007


3,602



2,100



1,514



1,150



8,366            62




---



##### Table of Contents



SHARE
    OWNERSHIP    Ordinary shares


% of sharesof
    1329/47
    pence


outstandingDirectorsGraham Allan


Nil



N/AAndrew Cosslett


496,133



0.17David Kappler


1,400



N/ARalph Kugler


1,169



N/AJennifer Laing


3,373



N/AJonathan Linen


7,343
(1)


N/ARichard Solomons


371,522



0.13David Webster


34,117



0.01Ying Yeh


Nil



N/AOfficersJim Abrahamson


52,203



0.02Tom Conophy


111,087



0.04Kirk Kinsell


63,136
(2)


0.02Tracy Robbins


96,902



0.03Tom Seddon


54,678
(3)


0.02George Turner


13,000



N/A     (1)
    
    Held as American Depositary Shares
    (ADSs).(2)
    
    637 of which are held as ADSs.(3)
    
    24,000 of which are held as ADSs.       63




---



##### Table of Contents



ITEM 7.
    MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS MAJOR
    SHAREHOLDERS    March 19, 2010


March 23, 2009


March 14, 2008Number of


Percent


Number of


Percent


Number of


PercentIdentity of person or group

shares/ADSs


of class


shares/ADSs


of class


shares/ADSs


of classEllerman Corporation Limited


29,921,742



10.00
%


29,921,742



10.00
%


29,921,742



10.00
%Southeastern Asset Management, Inc.


14,860,671



5.17
%


N/A etc.FIL Limited (Fidelity International)


14,687,743



5.14
%


N/A



N/A



N/A



N/ACedar Rock Capital Limited


14,923,417



5.07
%


14,923,417



5.07
%


14,923,417



5.07
%Blackrock, Inc.


14,434,598



5.02
%


N/A etc.Morgan Stanley Institutional Securities Group & Global
    Wealth Management


N/A



N/A



N/A



N/A



13,551,634



4.60
%Legal & General Group Plc


11,336,113



3.96
%


11,416,590



3.99
%


12,179,257



4.09
%Lloyds Banking Group plc


13,619,563



3.84
%


13,619,563



3.84
%


13,619,563



3.84
%        RELATED
    PARTY TRANSACTIONS    ITEM 8.
    FINANCIAL
    INFORMATION CONSOLIDATED
    STATEMENTS AND OTHER FINANCIAL INFORMATION  Financial
    Statements
    Legal
    proceedings
    Dividends
   64




---



##### Table of Contents



SIGNIFICANT
    CHANGES    ITEM 9.
    THE
    OFFER AND LISTING      £ perordinary share


$ per ADSYear ended December 31,

High


Low


High


Low2005


8.42



6.12



14.53



11.492006


12.65



8.07



26.27



14.402007


14.20



8.73



32.59



17.372008


8.84



4.48



17.40



6.522009


9.04



4.46



14.67



6.04   £ perordinary share


$ per ADSYear ended December 31,

High


Low


High


Low2008First quarter


8.84



6.44



17.40



13.26Second quarter


8.65



6.68



16.80



13.15Third quarter


7.87



6.16



14.76



11.53Fourth quarter


6.75



4.48



12.08



6.522009First quarter


6.22



4.46



9.33



6.04Second quarter


6.90



5.59



11.19



8.20Third quarter


8.27



5.92



13.74



9.57Fourth quarter


9.04



7.64



14.67



12.262010First quarter (through March 19, 2010)


10.19



8.87



15.41



13.84   £ perordinary share


$ per ADSMonth ended

High


Low


High


LowSeptember 2009


8.27



7.31



13.74



11.82October 2009


8.57



7.64



13.95



12.26November 2009


8.57



7.85



14.45



12.71December 2009


9.04



8.55



14.67



14.02January 2010


9.37



8.99



15.41



14.27February 2010


9.20



8.87



14.59



13.84March 2010 (through to March 19, 2010)


10.19



9.46



15.35



14.28  65




---



##### Table of Contents



PLAN OF
    DISTRIBUTION   SELLING
    SHAREHOLDERS   DILUTION   EXPENSES
    OF THE ISSUE    ITEM 10.
    ADDITIONAL
    INFORMATION ARTICLES OF
    ASSOCIATION        Principal
    objects
    Directors
       66




---



##### Table of Contents



Rights
    attaching to shares
        Voting
    rights
  29 47
  
    the chairman of the meeting;
    at least five shareholders present in person or by proxy and
    entitled to vote at the meeting;
    any shareholder or shareholders 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 holding shares conferring a
    right to vote at the meeting on which there have been
    paid-up sums
    in the aggregate equal to not less than one-tenth of the total
    sum paid up on all the shares conferring that right.        
    an ordinary resolution, which includes resolutions for the
    election of directors, the approval of financial statements, the
    cumulative annual payment of dividends, the appointment of
    auditors, the increase of authorized share capital or the grant
    of authority to allot shares; and
    a special resolution, which includes resolutions amending the
    Companys memorandum and articles of association,
    disapplying statutory pre-emption rights, modifying the rights
    of any class of the Companys shares at a meeting of the
    holders of such class or relating to certain matters concerning
    the Companys winding up or changing the Companys
    name.       67




---



##### Table of Contents



Variation
    of rights
    Rights
    in a
    winding-up
    
    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;  paid-up
  Limitations
    on voting and shareholding
   MATERIAL
    CONTRACTS    £750,000,000
    Euro Medium Term Note Program
   68




---



##### Table of Contents



and/or and/or
              IHG
    Facility Agreement
        Disposal
    to Hospitality Properties Trust
   69




---



##### Table of Contents



and/or
  UK
    Hotels Disposal
        Australasian
    Hotels Disposals
      Disposal
    to Dabicam SAS
   70




---



##### Table of Contents



Britvic
    Underwriting Agreement
    Disposal
    to Westbridge
          Disposal
    to Morgan Stanley Real Estate Funds
       EXCHANGE
    CONTROLS       71




---



##### Table of Contents



TAXATION    
    certain financial institutions;
    insurance companies;
    dealers and traders in securities or foreign currencies;
    persons holding ordinary shares or ADSs as part of a hedge,
    straddle, conversion transaction, integrated transaction or
    similar transaction;
    persons whose functional currency for US federal income tax
    purposes is not the US dollar;
    partnerships or other entities classified as partnerships for US
    federal income tax purposes;
    persons liable for the alternative minimum tax;
    tax-exempt organizations;
    persons who acquired our ADSs or ordinary shares pursuant to the
    exercise of any employee stock option or otherwise as
    compensation;
    holders that, directly or indirectly, hold 10% or more of the
    Companys voting stock.           72




---



##### Table of Contents



Investors should consult their own tax advisors regarding the
    US federal, state and local, the UK and other tax consequences
    of owning and disposing of shares and ADSs in their particular
    circumstances.
  Taxation
    of dividends
  United
    Kingdom taxation
      United
    States federal income taxation
          Taxation
    of capital gains
  United
    Kingdom taxation
     73




---



##### Table of Contents



United
    States federal income taxation
    PFIC
    rules
  market-to-market
  Additional
    tax considerations
  United
    States backup withholding and information reporting
    United
    Kingdom inheritance tax
     74




---



##### Table of Contents



United
    Kingdom Stamp Duty and Stamp Duty Reserve Tax
    (SDRT)
           DOCUMENTS
    ON DISPLAY  Form 20-F 1-800-SEC-0330
  ITEM 11.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Exchange
    and interest rate risk, and financial instruments
    Treasury
    risk management
   75




---



##### Table of Contents



Credit
    risk
            Interest
    rate risk
        Currency
    risk
       76




---



##### Table of Contents



Quantitative
    information about market risk
  Interest
    rate sensitivity
    At
    December 31, 2009
  Expected to mature before December 31,2010


2011


2012


2013


Thereafter


Total


Fair
    value(i)($ million, except percentages)Long-term debt:Fixed rate public bonds (sterling)


















402



402



402Fixed rate payable


















6.0
%


6.0
%Fixed rate lease debt (US dollar)


















204



204



206Fixed rate payable


















9.7
%


9.7
%Variable rate bank debt (various currencies)


90







5



421







516



516Average interest rate payable


0.8
%






5.3
%


1.0
%






1.0
%(local currency million, except percentages)Interest rate swaps:Principal (US dollar)


150







100











250



(1
)Fixed rate payable


0.7
%






2.0
%










1.2
%Variable rate receivable


0.2
%






0.3
%










0.2
%Principal (euro)






75















75



(6
)Fixed rate payable






5.3
%














5.3
%Variable rate receivable






0.7
%














0.7
%(local currency million, except percentages)Currency swaps:Principal receivable (sterling)


















250



250



(13
)Fixed rate receivable


















6.0
%


6.0
%Principal payable (US dollar)


















415



415Fixed rate payable


















6.2
%


6.2
%     (i)
    
    Represents the net present value of
    the expected cash flows discounted at current market rates of
    interest, except for the public bonds which are shown at market
    value. 77




---



##### Table of Contents



ITEM 12.
    DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES  Fees
    and charges payable to a depositary
  Category (as defined by SEC)

Depositary actions

Associated fee(a) Depositing or substituting the underlying shares

Each person to whom ADRs are issued against deposits of Shares, including deposits and issuances in respect of:
   share distributions, stock split, rights, merger
   Exchange of securities or any other transactions or event or other distribution affecting the ADSs or the Deposited Securities

$5 for each 100 ADSs (or portion thereof)(b) Receiving or distributing dividends

   Distribution of stock dividends

$5 for each 100 ADSs (or portion thereof)   Distribution of cash

$0.02 or less per ADS (or portion thereof)*(c) Selling or exercising rights

Distribution or sale of securities, the fee being in an amount
    equal to the fee for the execution and delivery of ADSs which
    would have been charged as a result of the deposit of such
    securities

$5.00 for each 100 ADSs (or portion thereof)(d) Withdrawing an underlying security

Acceptance of ADRs surrendered for withdrawal of deposited
    securities

$5.00 for each 100 ADSs (or portion thereof)(e) Transferring, splitting or grouping receipts

Transfers, combining or grouping of depositary receipts

$1.50 per ADS(f) General depositary services, particularly those charged on
    an annual basis

   Other services performed by the depositary in administering the ADRs

$0.02 per ADS (or portion thereof)* not more than once each
    calendar year and payable at the sole discretion of the
    depositary by billing Holders or by deducting such charge from
    one or more cash dividends or other cash distributions(g) Expenses of the depositary

Expenses incurred on behalf of Holders in connection with:
   Compliance with foreign exchange control regulations or any law or regulation relating to foreign investment
   The depositarys or its custodians compliance with applicable law, rule or regulation
   Stock transfer or other taxes and other governmental charges
   Cable, telex, facsimile transmission/delivery
   transfer or registration fees in connection with the deposit and withdrawal of Deposited Securities
   Expenses of the depositary in connection with the conversion of foreign currency into US dollars (which are paid out of such foreign currency)
   Any other charge payable by depositary or its agents

Expenses payable at the sole discretion of the depositary by
    billing Holders or by deducting charges from one or more cash
    dividends or other cash distributions
    $20 per transaction     *
    
    These fees are not currently being
    charged by the depositary. 78




---



##### Table of Contents



Fees
    and charges payable by a depositary
  Direct
    payments
    Category of expenses

Amount reimbursed for fiscal year ended December 31,
    2009$000Legal, accounting and other fees incurred in connection with
    preparation of Form 20-F and ongoing SEC compliance and listing
    requirements

178Investor relations

37Advertising and public relations

55   Indirect
    payments
    Category of expenses

Amount waived or paid for fiscal year ended December 31,
    2009$000Fees waived

20  79




---



##### Table of Contents



PART II  ITEM 13.
    DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES    ITEM 14.
    MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
    PROCEEDS    ITEM 15.
    CONTROLS
    AND PROCEDURES  Disclosure
    controls and procedures
  Rules 13a-15(c) 15d-15(e)).
  Managements
    report on internal control over financial
    reporting
  Rule 13a-15(f) 15d-15(f)
  page F-1
  page F-2
  Changes
    in internal control over financial reporting
  Form 20-F
  ITEM 16.
    [RESERVED]  ITEM 16A.
    AUDIT
    COMMITTEE FINANCIAL EXPERT    ITEM 16B.
    CODE
    OF ETHICS   80




---



##### Table of Contents



ITEM 16C.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    Year ended December 31,2009


2008($ million)Audit fees


4.2



3.3Audit related fees


1.8



3.2Tax fees


1.7



1.0Total


7.7



7.5         ITEM 16D.
    EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES    ITEM 16E.
    PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS Period of fiscal year(d) Maximum(c) Total number


number (orof shares (or


approximate dollar(b) Average


units) purchased


value) of shares (or(a) Total number


price paid


as part of publicly


units) that may yet beof shares (or


per share


announced plans


purchased under theunits) purchased


(or unit


or programs


plans or programsMonth 1 (no purchases in this month)


0



0.00



0.



38,694,043Month 2 (no purchases in this month)


0



0.00



0



38,694,043Month 3 (no purchases in this month)


0



0.00



0



38,694,043Month 4 (no purchases in this month)


0



0.00



0



38,694,043Month 5 (no purchases in this month)


0



0.00



0



38,694,043Month 6 (no purchases in this month)


0



0.00



0



28,557,390
*Month 7 (no purchases in this month)


0



0.00



0



28,557,390Month 8 (no purchases in this month)


0



0.00



0



28,557,390Month 9 (no purchases in this month)


0



0.00



0



28,557,390Month 10 (no purchases in this month)


0



0.00



0



28,557,390Month 11 (no purchases in this month)


0



0.00



0



28,557,390Month 12 (no purchases in this month)


0



0.00



0



28,557,390     *
    
    Reflects the resolution passed at
    the companys Annual General Meeting held on May 29,
    2009.   81




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##### Table of Contents



ITEM 16F.
    CHANGE
    IN REGISTRANTS CERTIFYING ACCOUNTANT    ITEM 16G.
    SUMMARY
    OF SIGNIFICANT CORPORATE GOVERNANCE DIFFERENCES FROM NYSE
    LISTING STANDARDS      Basis of
    regulation
    Independent
    Directors
    Chairman
    and Chief Executive
    Committees
   82




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##### Table of Contents



Non-Executive
    Director meetings
    Shareholder
    approval of equity compensation plans
    Compliance
    Certification
   PART III  ITEM 17.
    FINANCIAL
    STATEMENTS   83




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##### Table of Contents



ITEM 18.
    FINANCIAL
    STATEMENTS    PageManagements Report on Internal Control over
    Financial Reporting


F-1Report of Independent Registered Public
    Accounting Firm on Internal Control over Financial Reporting


F-2Report and Consent of Independent Registered
    Public Accounting Firm


F-4Financial StatementsConsolidated income statement for the years ended
    December 31, 2009, 2008 and 2007


F-5Consolidated statement of comprehensive income
    for the years ended December 31, 2009, 2008 and 2007


F-6Consolidated statement of changes in equity for
    the years ended December 31, 2009, 2008 and 2007


F-7Consolidated statement of financial position for
    the years ended December 31, 2009 and 2008


F-9Consolidated statement of cash flows for the
    years ended December 31, 2009, 2008 and 2007


F-10Notes to the Financial Statements


F-11Schedule for the years ended December 31, 2009, 2008, 2007, 2006
    and 2005Schedule II  Valuation and Qualifying
    Accounts


S-1   ITEM 19.
    EXHIBITS    Exhibit 1

Articles of Association of IHGExhibit 4(a)(i)

Trust Deed dated November 27, 2009 relating to a
    £750 million Euro Medium Term Note Program, among
    InterContinental Hotels Group PLC, Six Continents Limited,
    InterContinental Hotels Limited and HSBC Corporate Trustee
    Company (UK) Limited.Exhibit 4(a)(ii)

$2,100 million Facility Agreement dated May 2, 2008
    among Bank of America N.A., Bank of Tokyo-Mitsubishi UFJ Ltd.,
    Barclays Capital, HSBC Bank plc, Lloyds TSB Bank plc, The Royal
    Bank of Scotland plc, Société Générale
    Corporate & Investment Banking and West LB AG
    (incorporated by reference to Exhibit 4(a)(i) of the
    InterContinental Hotels Group PLC Annual Report on
    Form 20-F (File
    No. 1-10409)
    dated April 7, 2009)Exhibit 4(b)(i)

Sale and Purchase Agreement dated March 10, 2006 among BHR
    Luxembourg S.à.r.l., Others, Cooperatie Westbridge Europe
    I.U.A., Others and Westbridge Hospitality Fund L.P.
    relating to a portfolio of certain companies and businesses in
    continental Europe (incorporated by reference to
    Exhibit 4(b)(viii) of the InterContinental Hotels Group PLC
    Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 31, 2006)Exhibit 4(b)(ii)

Sale and Purchase Agreement dated July 13, 2006 between BHR
    Holdings BV and MSREF VI Danube BV relating to the sale of
    certain companies and businesses in continental Europe and Side
    Letter dated September 5, 2006 (incorporated by reference
    to Exhibit 4(b)(ix) of the InterContinental Hotels Group
    PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 30, 2007)Exhibit 4(c)(i)

Richard Solomons service contract dated February 12,
    2003 (incorporated by reference to Exhibit 4(c)(iv) of
    InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated April 8, 2004)Exhibit 4(c)(ii)

Richard Solomons letter of appointment dated April 2005,
    effective from June 27, 2005 on completion of the Scheme of
    Arrangement and the introduction of the new parent company to
    the Group (incorporated by reference to Exhibit 4(c)(vi) of
    the InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 31, 2006)Exhibit 4(c)(iii)

Andrew Cossletts service contract dated December 13,
    2004 (incorporated by reference to Exhibit 4(c)(v) of
    InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated May 3, 2005) 84




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##### Table of Contents



Exhibit 4(c)(iv)

Andrew Cossletts letter of appointment dated April 2005,
    effective from June 27, 2005 on completion of the Scheme of
    Arrangement and the introduction of the new parent company to
    the Group (incorporated by reference to Exhibit 4(c)(viii)
    of the InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 31, 2006)Exhibit 8

List of SubsidiariesExhibit 12(a)

Certification of Andrew Cosslett filed pursuant to 17 CFR
    240.13a-14(a)Exhibit 12(b)

Certification of Richard Solomons filed pursuant to 17 CFR
    240.13a-14(a)Exhibit 13(a)

Certification of Andrew Cosslett and Richard Solomons furnished
    pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C.1350Exhibit 15(a)

Consent of Ernst & Young LLP (included on
    page F-4)  85




---



##### Table of Contents



MANAGEMENTS
    REPORT ON
    INTERNAL CONTROL OVER FINANCIAL REPORTING  Rule 13a-15(f) 15d-15(f)
           F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING    Form 20-F.
          Financial
    Statements
       F-2




---



##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                F-3




---



##### Table of Contents



CONSENT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  (Form F-3 No. 333-108084 Form S-8 333-01572, 333-08336, 333-99785, 333-104691 333-126139) (Form 20-F)
     F-4




---



##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  CONSOLIDATED INCOME STATEMENT
  Year ended December 31,


Year ended December 31,


Year ended December 31,2009


2008


2007Before


Exceptional





Before


Exceptional





Before


Exceptionalexceptional


items





exceptional


items





exceptional


itemsitems


(Note 5)


Total


items


(Note 5)


Total


items


(Note 5)


Total($ million)Revenue (Note 2)


1,538







1,538



1,897







1,897



1,817







1,817Cost of sales


(769
)


(91
)


(860
)


(852
)






(852
)


(856
)






(856
)Administrative expenses


(303
)


(83
)


(386
)


(400
)


(59
)


(459
)


(377
)


(14
)


(391
)Other operating income and expenses


6



(2
)


4



14



25



39



16



70



86472



(176
)


296



659



(34
)


625



600



56



656Depreciation and amortization (Note 2)


(109
)






(109
)


(110
)


(2
)


(112
)


(112
)


(2
)


(114
)Impairment (Note 2)






(197
)


(197
)






(96
)


(96
)






6



6Operating (loss)/profit (Note 2)


363



(373
)


(10
)


549



(132
)


417



488



60



548Financial income (Note 6)


3







3



12







12



18







18Financial expenses (Note 6)


(57
)






(57
)


(113
)






(113
)


(108
)






(108
)(Loss)/profit before tax


309



(373
)


(64
)


448



(132
)


316



398



60



458Tax (Note 7)


(15
)


287



272



(101
)


42



(59
)


(89
)


60



(29
)Profit for the year from continuing operations


294



(86
)


208



347



(90
)


257



309



120



429Profit for the year from discontinued operations (Note 11)






6



6







5



5



2



32



34Profit for the year


294



(80
)


214



347



(85
)


262



311



152



463Attributable to:Equity holders of the parent


293



(80
)


213



347



(85
)


262



311



152



463Non-controlling interest


1







1























Earnings per ordinary share (Note 9)Continuing operations:Basic










72.6¢











89.5¢











134.1¢Diluted










70.2¢











86.8¢











130.4¢Total operations:Basic










74.7¢











91.3¢











144.7¢Diluted










72.2¢











88.5¢











140.7¢    F-5




---



##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  CONSOLIDATED STATEMENT OF COMPREHENSIVE
    INCOME
   Year ended


Year ended


Year endedDecember 31,


December 31,


December 31,2009


2008


2007($ million)Profit for the year


214



262



463Other comprehensive incomeAvailable-for-sale financial assets:Gains/(losses) on valuation


11



(4
)


8Losses/(gains) reclassified to income on impairment/disposal


4



(17
)


(20
)Cash flow hedges:Losses arising during the year


(7
)


(14
)


(2
)Reclassified to financial expenses


11



2



(2
)Defined benefit pension plans:Actuarial (losses)/gains, net of related tax credit of $1m (2008
    $13m, 2007 $nil)


(57
)


(23
)


25Decrease/(increase) in asset restriction on plans in surplus


21



(14
)


(17
)Exchange differences on retranslation of foreign operations,
    including related tax credit of $4m (2008 $1m, 2007 $nil)


43



(56
)


25Tax related to pension contributions






8



11Other comprehensive income/(loss) for the year


26



(118
)


28Total comprehensive income for the year


240



144



491Attributable to:Equity holders of the parent


240



144



489Non-controlling interest










2    F-6




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##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  CONSOLIDATED STATEMENT OF CHANGES IN
    EQUITY
  Share capital


Retained earnings and other reservesSharesheld by





UnrealizedNumber








Capital


employee





gains and


Currency





IHG


Non-of


Nominal


Share


redemption


share


Other


losses


translation


Retained


shareholders


controlling


Totalshares(i)


value(i)


premium(ii)


reserve(ii)


trusts(iii)


reserves(iv)


reserve(v)


reserve(vi)


earnings


equity


interest


equity($ million, number of shares  millions)At January 1, 2007


356



80



49



8



(33
)


(2,914
)


53



209



3,878



1,330



16



1,346Total comprehensive income for the year


























(16
)


24



481



489



2



491Issue of ordinary shares


4



1



31



























32







32Repurchase of shares


(8
)


(2
)


























(160
)


(162
)






(162
)Share capital consolidation


(57
)










































Transfer to capital redemption reserve














2



















(2
)










Purchase of own shares by employee share trusts


















(138
)


















(138
)






(138
)Release of own shares by employee share trusts


















89















(80
)


9







9Equity-settled share-based cost


































60



60







60Tax related to share schemes


































(4
)


(4
)






(4
)Disposals










































(12
)


(12
)Equity dividends paid


































(1,524
)


(1,524
)






(1,524
)Exchange and other adjustments






2



2







(1
)


(4
)


1



















At December 31, 2007


295



81



82



10



(83
)


(2,918
)


38



233



2,649



92



6



98Total comprehensive income for the year


























(29
)


(61
)


234



144







144Issue of ordinary shares










2



























2







2Repurchase of shares


(9
)


(3
)


























(136
)


(139
)






(139
)Transfer to capital redemption reserve














3



















(3
)










Purchase of own shares by employee share trusts


















(24
)


















(24
)






(24
)Release of own shares by employee share trusts


















39















(53
)


(14
)






(14
)Equity-settled share-based cost


































49



49







49Tax related to share schemes


































2



2







2Equity dividends paid


































(118
)


(118
)






(118
)Exchange and other adjustments






(21
)


(23
)


(3
)


19



28



















1



1At December 31, 2008


286



57



61



10



(49
)


(2,890
)


9



172



2,624



(6
)


7



1Total comprehensive income for the year


























20



43



177



240







240Issue of ordinary shares


1







11



























11







11Purchase of own shares by employee share trusts


















(6
)


















(6
)






(6
)Release of own shares by employee share trusts


















55















(61
)


(6
)






(6
)Equity-settled share-based cost


































24



24







24Tax related to share schemes


































10



10







10Equity dividends paid


































(118
)


(118
)






(118
)Exchange and other adjustments






6



7



1



(4
)


(10
)






















At December 31, 2009


287



63



79



11



(4
)


(2,900
)


29



215



2,656



149



7



156     At December 31, 2006 the
    authorized share capital was £160,050,000 comprising
    1,400,000,000 ordinary shares of
    113/7
    pence each and one redeemable preference share of £50,000.
   F-7




---



##### Table of Contents



(i)
    
    The Company was incorporated and
    registered in England and Wales with registered number 5134420
    on May 21, 2004 as a limited company under the Companies
    Act 1985 with the name Hackremco (No. 2154) Limited.
    On March 24, 2005 Hackremco (No. 2154) Limited
    changed its name to New InterContinental Hotels Group Limited.
    On April 27, 2005 New InterContinental Hotels Group Limited
    re-registered as a public limited company and changed its name
    to New InterContinental Hotels Group PLC. On June 27, 2005
    New InterContinental Hotels Group PLC changed its name to
    InterContinental Hotels Group PLC.On June 1, 2006, shareholders
    approved a share capital consolidation on the basis of seven new
    ordinary shares for every eight existing ordinary shares. This
    provided for all the authorized ordinary shares of 10 pence each
    (whether issued or unissued) to be consolidated into new
    ordinary shares of
    113/7
    pence each. The share capital consolidation became effective on
    June 12, 2006.On June 1, 2007, shareholders
    approved a share capital consolidation on the basis of 47 new
    ordinary shares for every 56 existing ordinary shares. This
    provided for all the authorized ordinary shares of
    113/7
    pence each (whether issued or unissued) to be consolidated into
    new ordinary shares of
    1329/47
    pence each. The share capital consolidation became effective on
    June 4, 2007.At September 30, 2009, the
    authorized share capital was £160,050,000, comprising
    1,175,000,000 ordinary shares of
    1329/47
    pence each and one redeemable preference share of £50,000.
    As a result of the resolution passed at the Annual General
    Meeting on May 29, 2009 amending the Articles in line with
    the Companies Act 2006, from October 1, 2009 the Company no
    longer has authorized share capital.During 2004 and 2005, the Company
    undertook to return funds of up to £750 million to
    shareholders by way of three consecutive £250 million
    share repurchase programs, the third of which was completed in
    the first half of 2007. In June 2007, a further
    £150 million share repurchase program commenced.During 2008, 9,219,325 (2007
    7,724,844) ordinary shares were repurchased and canceled under
    the authorities granted by shareholders at the Extraordinary
    General Meeting held on June 1, 2007 and at the Annual
    General Meeting held on May 30, 2008. The Company deferred
    its £150 million share repurchase program in November
    2008 in order to preserve cash and maintain the strength of the
    Groups financial position. No shares were repurchased in
    2009.The authority given to the Company
    at the Annual General Meeting on May 29, 2009 to purchase
    its own shares was still valid at December 31, 2009. A
    resolution to renew the authority will be put to shareholders at
    the Annual General Meeting on May 28, 2010.(ii)
    
    The share premium reserve and
    capital redemption reserve are not distributable. The share
    premium reserve has a balance of $79 million (2008
    $61 million, 2007 $82 million) representing the amount
    of proceeds received for shares in excess of their nominal
    value. The capital redemption reserve maintains the nominal
    value of the equity share capital of the Company when shares are
    repurchased or canceled.(iii)
    
    The shares held by employee share
    trusts comprises $3.8 million (2008 $49.2 million,
    2007 $82.6 million) in respect of 0.3 million (2008
    3.0 million, 2007 3.4 million) InterContinental Hotels
    Group PLC ordinary shares held by employee share trusts, with a
    market value at December 31, 2009 of $4 million (2008
    $25 million, 2007 $60 million).(iv)
    
    Other reserves comprises the merger
    and revaluation reserves previously recognized under UK GAAP,
    together with the reserve arising as a consequence of the
    Groups capital reorganization in June 2005. Following the
    change in presentational currency to the US dollar in 2008, this
    reserve also includes exchange differences arising on the
    retranslation to period-end exchange rates of equity share
    capital, the capital redemption reserve and shares held by
    employee share trusts.(v)
    
    The unrealized gains and losses
    reserve records movements to fair value of
    available-for-sale
    financial assets and the effective portion of the cumulative net
    change in the fair value of the cash flow hedging instruments
    related to hedged transactions that have not yet occurred.The fair value of cash flow hedging
    instruments outstanding at December 31, 2009 was a
    $7 million liability (2008 $10 million liability, 2007
    $3 million liability).(vi)
    
    The currency translation reserve
    records the movement in exchange differences arising from the
    translation of the financial statements of foreign operations
    and exchange differences on foreign currency borrowings and
    derivative instruments that provide a hedge against net
    investments in foreign operations. On adoption of IFRS,
    cumulative exchange differences were deemed to be $nil as
    permitted by IFRS 1.During the year ended
    December 31, 2009, the impact of hedging net investments in
    foreign operations was to increase the amount recorded in the
    currency translation reserve by $8 million (2008 reduce by
    $96 million, 2007 reduce by $14 million). The fair
    value of derivative instruments designated as hedges of net
    investments in foreign operations outstanding at
    December 31, 2009 was a $13 million liability (2008
    $nil, 2007 $nil).   F-8




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##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  CONSOLIDATED STATEMENT OF
 FINANCIAL
    POSITION
  December 31,


December 31,2009


2008($ million)ASSETSProperty, plant and equipment  (Note 10)


1,836



1,684Goodwill  (Note 12)


82



143Intangible assets  (Note 13)


274



302Investment in associates  (Note 14)


45



43Retirement benefit assets  (Note 3)


12



40Other financial assets  (Note 15)


130



152Deferred tax receivable  (Note 25)


95



Total non-current assets


2,474



2,364Inventories  (Note 16)


4



4Trade and other receivables  (Note 17)


335



412Current tax receivable


35



36Cash and cash equivalents  (Note 18)


40



82Other financial assets  (Note 15)


5



10Total current assets


419



544Non-current assets classified as held for sale 
    (Note 11)






210Total assets (Note 2)


2,893



3,118LIABILITIESLoans and other borrowings  (Note 21)


(106
)


(21
)Trade and other payables  (Note 19)


(688
)


(746
)Provisions  (Note 20)


(65
)


Current tax payable


(194
)


(374
)Total current liabilities


(1,053
)


(1,141
)Loans and other borrowings  (Note 21)


(1,016
)


(1,334
)Retirement benefit obligations  (Note 3)


(142
)


(129
)Trade and other payables  (Note 19)


(408
)


(392
)Deferred tax payable  (Note 25)


(118
)


(117
)Total non-current liabilities


(1,684
)


(1,972
)Liabilities classified as held for sale 
    (Note 11)






(4
)Total liabilities (Note 2)


(2,737
)


(3,117
)Net assets


156



1EQUITYEquity share capital


142



118Capital redemption reserve


11



10Shares held by employee share trusts


(4
)


(49
)Other reserves


(2,900
)


(2,890
)Unrealized gains and losses reserve


29



9Currency translation reserve


215



172Retained earnings


2,656



2,624IHG shareholders equity


149



(6
)Non-controlling
    interest


7



7Total equity


156



1    F-9




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##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  CONSOLIDATED
    STATEMENT OF CASH FLOWS
  Year ended


Year ended


Year endedDecember 31,


December 31,


December 31,2009


2008


2007($ million)Profit for the year


214



262



463Adjustments for:Net financial expenses


54



101



90Income tax (credit)/charge


(272
)


59



30Depreciation and amortization


109



112



116Impairment


197



96



(6
)Other exceptional operating items


176



34



(56
)Gain on disposal of assets, net of tax


(6
)


(5
)


(32
)Equity-settled share-based cost, net of payments


14



31



48Other items


1



3



(4
)Operating cash flow before movements in working capital


487



693



649Decrease/(increase) in trade and other receivables


58



42



(30
)Increase in trade and other payables


1



81



52Retirement benefit contributions, net of cost


(2
)


(27
)


(66
)Cash flows relating to exceptional operating items


(60
)


(49
)


Cash flow from operations


484



740



605Interest paid


(53
)


(112
)


(84
)Interest received


2



12



18Tax (paid)/received on operating activities


(1
)


1



(74
)Net cash from operating activities


432



641



465Cash flow from investing activitiesPurchases of property, plant and equipment


(100
)


(53
)


(114
)Purchases of intangible assets


(33
)


(49
)


(40
)Investment in associates and other financial assets


(15
)


(6
)


(32
)Disposal of assets, net of costs and cash disposed of


20



25



97Proceeds from associates and other financial assets


15



61



114Tax paid on disposals


(1
)


(3
)


(64
)Net cash from investing activities


(114
)


(25
)


(39
)Cash flow from financing activitiesProceeds from the issue of share capital


11



2



32Purchase of own shares






(139
)


(162
)Purchase of own shares by employee share trusts


(8
)


(22
)


(138
)Proceeds on release of own shares by employee share trusts


2



2



21Dividends paid to shareholders


(118
)


(118
)


(1,524
)Issue of £250m 6% bonds


411







(Decrease)/increase in other borrowings


(660
)


(316
)


1,108Net cash from financing activities


(362
)


(591
)


(663
)Net movement in cash and cash equivalents in the year


(44
)


25



(237
)Cash and cash equivalents at beginning of the year


82



105



351Exchange rate effects


2



(48
)


(9
)Cash and cash equivalents at end of the year


40



82



105    F-10




---



##### Table of Contents



Note 1 
    Accounting
    policies  General
    information
    Summary
    of significant accounting policies
  Basis
    of preparation
    Changes
    in accounting policies
                   F-11




---



##### Table of Contents



Presentational
    currency
        Basis
    of consolidation
      Foreign
    currencies
      Property,
    plant and equipment
         F-12




---



##### Table of Contents



Buildings

lesser of 50 years and unexpired term of lease; andFixtures, fittings and equipment

three to 25 years.         Goodwill
      Intangible
    assets
  Software
      Management
    contracts
    Other
    intangible assets
      Associates
   F-13




---



##### Table of Contents



Financial
    assets
  available-for-sale (available-for-sale
  available-for-sale available-for-sale
  available-for-sale
  Financial
    liabilities
    Inventories
    Trade
    receivables
    Cash
    and cash equivalents
        Assets
    held for sale
     F-14




---



##### Table of Contents



Trade
    payables
    Self
    insurance
    Provisions
      Bank
    and other borrowings
      Derivative
    financial instruments and hedging
          Taxes
  Current
    tax
   F-15




---



##### Table of Contents



Deferred
    tax
        Retirement
    benefits
  Defined
    contribution plans
    Defined
    benefit plans
          Revenue
    recognition
         F-16




---



##### Table of Contents



Share-based
    payments
      and/or
    Leases
      Disposal
    of non-current assets
    
    has a continuing managerial involvement to the degree associated
    with asset ownership;
    has transferred the significant risks and rewards associated
    with asset ownership; and
    can reliably measure and will actually receive the proceeds.  Discontinued
    operations
   F-17




---



##### Table of Contents



Exceptional
    items
    Use of
    accounting estimates and judgments
      
    Trade receivables  a provision for impairment of
    trade receivables is made on the basis of historical experience
    and other factors considered relevant by management.
    Impairment  the Group determines whether goodwill is
    impaired on an annual basis or more frequently if there are
    indicators of impairment. Other non-current assets, including
    property, plant and equipment, are tested for impairment if
    there are indicators of impairment. Impairment testing requires
    an estimate of future cash flows and the choice of a suitable
    discount rate and, in the case of hotels, an assessment of
    recoverable amount based on comparable market transactions.
    System Funds  In addition to management or franchise
    fees, hotels within the IHG system pay cash assessments which
    are collected by IHG for specific use within the System Funds
    (the Funds). Under the governance of the IAHI, the
    Owners Association, IHG operates the Funds on behalf of
    hotel owners with the objective of driving revenues for their
    hotels. The Funds are used to pay for marketing, the Priority
    Club loyalty program and the global reservation system. The
    Funds are planned to operate at breakeven with any short-term
    timing surplus or deficit carried in IHGs statement of
    financial position within working capital.        
    Loyalty program  The hotel loyalty program, Priority
    Club Rewards, enables members to earn points, funded through
    hotel assessments, during each qualifying stay at an IHG branded
    hotel and redeem points at a later date for free accommodation
    or other benefits. The future redemption liability is included
    in trade and other payables and is estimated using eventual
    redemption rates determined by actuarial methods and points
    values. Actuarial gains and losses on the future redemption
    liability are borne by the System Funds and any resulting
    changes in the liability would correspondingly adjust the amount
    of short-term timing differences held in the Consolidated
    statement of financial position.
    Retirement and other post-employment benefits  the
    cost of defined benefit pension plans and other post-employment
    benefits is determined using actuarial valuations. The actuarial
    valuation involves making F-18




---



##### Table of Contents



assumptions about discount rates, expected rates of return on
    assets, future salary increases, mortality rates and future
    pension increases.  
    Tax  provisions for tax accruals require judgments on
    the interpretation of tax legislation, developments in tax case
    law and the potential outcomes of tax audits and appeals. In
    addition, deferred tax assets are recognized for unused tax
    attributes to the extent that it is probable that taxable profit
    will be available against which they can be utilized. Judgment
    is required as to the amount that can be recognized based on the
    likely amount and timing of future taxable profits, taking into
    account expected tax planning. Deferred tax balances are
    dependent on managements expectations regarding the manner
    and timing of recovery of the related assets.
    Other  the Group also makes estimates and judgments
    in the valuation of management and franchise agreements acquired
    on asset disposals, the valuation of financial assets classified
    as
    available-for-sale,
    the outcome of legal proceedings and claims and in the valuation
    of share-based payment costs.  New
    standards and interpretations
    IFRS 2

Share-based Payment (Amendment) 
    Effective from January 1, 2010IFRS 3R

Business Combinations 
    Effective from July 1, 2009IFRS 5

Non-current Assets Held for Sale and Discontinued Operations
    (Amendment) 
    Effective from July 1, 2009IAS 27R

Consolidated and Separate Financial Statements Effective from
    July 1, 2009IAS 39

Financial Instruments: Recognition and Measurement (Amendment)
    
    Effective from July 1, 2009IFRIC 17

Distribution of Non-cash Assets to Owners Effective from July 1,
    2009    F-19




---



##### Table of Contents



Note 2  Exchange
    rates and Segmental information
  Exchange
    rates
      Segmental
    information
                 F-20




---



##### Table of Contents



Segmental
    information
  Year
    ended December 31, 2009
  Revenue
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Franchised


437



83



11







531Managed


110



119



105







334Owned and leased


225



195



129







549Central














124



124Total revenue*


772



397



245



124



1,538   Segmental
    result
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Franchised


364



60



5







429Managed


(40
)


65



44







69Owned and leased


11



33



30







74Regional and central


(47
)


(31
)


(27
)


(104
)


(209
)Reportable segments operating profit


288



127



52



(104
)


363Exceptional operating items  (Note 5)


(301
)


(22
)


(7
)


(43
)


(373
)Operating loss*


(13
)


105



45



(147
)


(10
)   Continuing


Discontinued


Group($ million)Reportable segments operating profit


363







363Exceptional operating items


(373
)






(373
)Operating loss


(10
)






(10
)Net finance costs


(54
)






(54
)Loss before tax


(64
)






(64
)Tax


272







272Profit after tax


208







208Gain on disposal of assets, net of tax






6



6Profit for the year


208



6



214     *
    
    Relates to continuing operations. F-21




---



##### Table of Contents



Year
    ended December 31, 2009
  Assets
    and liabilities
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Segment assets


970



926



631



196



2,723Unallocated assets:Deferred tax receivable


















95Current tax receivable


















35Cash and cash equivalents


















40Total assets


















2,893Segment liabilities


(417
)


(236
)


(63
)


(567
)


(1,283
)Unallocated liabilities:Current tax payable


















(194
)Deferred tax payable


















(118
)Loans and other borrowings


















(1,122
)Derivatives


















(20
)Total liabilities


















(2,737
)   Other
    segmental information
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Capital expenditure(see below)


80



5



14



37



136Non-cash items:Onerous management contracts


91















91Depreciation and
    amortization(i)


33



29



28



19



109Impairment losses


189



8











197     (i)
    
    Included in the $109 million
    of depreciation and amortization is $29 million relating to
    administrative expenses and $80 million relating to cost of
    sales.  Reconciliation
    of capital expenditure
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Capital expenditure per management reporting


80



5



14



37



136Timing differences


(45
)


1



1







(43
)Capital expenditure per the financial statements


35



6



15



37



93Comprising additions to:Property, plant and equipment


29



6



9



13



57Intangible assets


6







3



24



33Investment in associates










3







335



6



15



37



93  F-22




---



##### Table of Contents



Segmental
    information
  Year
    ended December 31, 2008
  Revenue
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Franchised


495



110



18







623Managed


168



168



113







449Owned and leased


300



240



159







699Central














126



126Total revenue*


963



518



290



126



1,897   Segmental
    result
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Franchised


426



75



8







509Managed


51



95



55







201Owned and leased


55



45



43







143Regional and central


(67
)


(44
)


(38
)


(155
)


(304
)Reportable segments operating profit


465



171



68



(155
)


549Exceptional operating items  (Note 5)


(99
)


(21
)


(2
)


(10
)


(132
)Operating profit*


366



150



66



(165
)


417   Continuing


Discontinued


Group($ million)Reportable segments operating profit


549







549Exceptional operating items


(132
)






(132
)Operating profit


417







417Net finance costs


(101
)






(101
)Profit before tax


316







316Tax


(59
)






(59
)Profit after tax


257







257Gain on disposal of assets, net of tax






5



5Profit for the year


257



5



262     *
    
    Relates to continuing operations. F-23




---



##### Table of Contents



Year
    ended December 31, 2008
  Assets
    and liabilities
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Segment assets


1,031



957



613



189



2,790Non-current assets classified as held for sale


209



1











2101,240



958



613



189



3,000Unallocated assets:Current tax receivable


















36Cash and cash equivalents


















82Total assets


















3,118Segment liabilities


(429
)


(257
)


(63
)


(508
)


(1,257
)Liabilities classified as held for sale


(4
)














(4
)(433
)


(257
)


(63
)


(508
)


(1,261
)Unallocated liabilities:Current tax payable


















(374
)Deferred tax payable


















(117
)Loans and other borrowings


















(1,355
)Derivatives


















(10
)Total liabilities


















(3,117
)   Other
    segmental information
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Capital expenditure(see below)


51



5



13



74



143Non-cash items:Depreciation and
    amortization(i)


31



35



26



20



112Impairment losses


75



21











96     (i)
    
    Included in the $112 million
    of depreciation and amortization is $32 million relating to
    administrative expenses and $80 million relating to cost of
    sales.    Reconciliation
    of capital expenditure
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Capital expenditure per management reporting


51



5



13



74



143Timing differences










4







4Exchange and other adjustments


(1
)


(3
)


(2
)


2



(4
)Capital expenditure per the financial statements


50



2



15



76



143Comprising additions to:Property, plant and equipment


43



2



10



36



91Intangible assets


7







2



40



49Investment in associates










3







350



2



15



76



143  F-24




---



##### Table of Contents



Segmental
    information
  Year
    ended December 31, 2007
  Revenue
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Franchised


489



81



16







586Managed


156



167



99







422Owned and leased


303



244



145







692Central














117



117Continuing operations


948



492



260



117



1,817Discontinued operations  owned and leased


16



17











33964



509



260



117



1,850   Segmental
    result
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Franchised


425



58



6







489Managed


41



87



46







174Owned and leased


54



33



36







123Regional and central


(66
)


(44
)


(25
)


(163
)


(298
)Continuing operations


454



134



63



(163
)


488Exceptional operating items


17



21



17



5



60Operating profit


471



155



80



(158
)


548Discontinued operations  owned and leased


2



1











3473



156



80



(158
)


551   Continuing


Discontinued


Group($ million)Operating profit before exceptional items


488



3



491Exceptional operating items


60







60Operating profit


548



3



551Net finance costs


(90
)






(90
)Profit before tax


458



3



461Tax


(29
)


(1
)


(30
)Profit after tax


429



2



431Gain on disposal of assets, net of tax






32



32Profit for the year


429



34



463  F-25




---



##### Table of Contents



Year
    ended December 31, 2007
  Other
    segmental information
  AsiaAmericas


EMEA


Pacific


Central


Group($ million)Continuing operations:Capital expenditure


52



36



45



46



179Non-cash items:Depreciation and
    amortization(i)


34



35



22



23



114Reversal of previously recorded impairment










6







6Discontinued operations:Capital expenditure






1











1Non-cash items:Depreciation and
    amortization(i)






2











2     (i)
    
    Included in the $116 million
    of depreciation and amortization is $35 million relating to
    administrative expenses and $81 million relating to cost of
    sales.  Geographical
    information
  Year ended December 31,2009


2008


2007($ million)Revenue:United Kingdom


125



173



164United States


678



819



808Rest of World


735



905



878Total revenue per Consolidated income statement


1,538



1,897



1,850     At


AtDecember 31,


December 31,2009


2008($ million)Non-current assetsUnited Kingdom


389



363United States


805



758France


376



368Peoples Republic of China


354



357Rest of World


313



326Total


2,237



2,172    F-26




---



##### Table of Contents



Note 3 
    Staff
    costs and Directors emoluments  Staff
  Year ended December 31,2009


2008


2007($ million)Costs:Wages and salaries


441



549



551Social security costs


45



55



61Pension and other post-retirement benefits:Defined benefit plans


12



8



8Defined contribution plans


26



30



25524



642



645     Year ended December 31,2009


2008


2007(Number)Americas


3,229



3,384



3,602EMEA


1,712



1,824



2,100Asia Pacific


1,410



1,470



1,514Central


1,205



1,271



1,1507,556



7,949



8,366     Retirement
    benefits
   F-27




---



##### Table of Contents



Pension plans


Post- employmentUK


US and other


benefits


Total2009


2008


2007


2009


2008


2007


2009


2008


2007


2009


2008


2007($ million)Current service costs


7



9



10



1



1



















8



10



10Interest cost on benefit obligation


22



30



30



10



10



10



1



1



1



33



41



41Expected return on plan assets


(21
)


(32
)


(34
)


(8
)


(11
)


(9
)














(29
)


(43
)


(43
)Operating profit before exceptional items


8



7



6



3







1



1



1



1



12



8



8Exceptional items


11



































11







19



7



6



3







1



1



1



1



23



8



8       Pension plans


Post-employmentUK


US and other


benefits


Total2009


2008


2007


2009


2008


2007


2009


2008


2007


2009


2008


2007($ million)Actual return on plan assets


7



(25
)


28



22



(27
)


9















29



(52
)


37Less: expected return on plan assets


(21
)


(32
)


(34
)


(8
)


(11
)


(9
)














(29
)


(43
)


(43
)(14
)


(57
)


(6
)


14



(38
)






















(95
)


(6
)Other actuarial (losses)/gains


(44
)


55



31



(13
)


3







(1
)


1







(58
)


59



31Total actuarial (losses)/gains


(58
)


(2
)


25



1



(35
)






(1
)


1







(58
)


(36
)


25Movement in asset restriction*


21



(14
)


(17
)


























21



(14
)


(17
)(37
)


(16
)


8



1



(35
)






(1
)


1







(37
)


(50
)


8     *
    
    Relates to tax that would be
    deducted at source in respect of a refund of the surplus. F-28




---



##### Table of Contents



Post-Pension plans


employmentUK


US and other


benefits


Total2009


2008


2009


2008


2009


2008


2009


2008($ million)Schemes in surplusFair value of plan assets


426



437



16



16











442



453Present value of benefit obligations


(414
)


(377
)


(12
)


(13
)










(426
)


(390
)Surplus in schemes


12



60



4



3











16



63Asset restriction*


(4
)


(23
)


















(4
)


(23
)Retirement benefit assets


8



37



4



3











12



40Schemes in deficitFair value of plan assets










110



96











110



96Present value of benefit obligations


(47
)


(34
)


(185
)


(172
)


(20
)


(19
)


(252
)


(225
)Retirement benefit obligations


(47
)


(34
)


(75
)


(76
)


(20
)


(19
)


(142
)


(129
)Total fair value of plan assets


426



437



126



112











552



549Total present value of benefit obligations


(461
)


(411
)


(197
)


(185
)


(20
)


(19
)


(678
)


(615
)     *
    
    Relates to tax that would be
    deducted at source in respect of a refund of the surplus.    Assumptions
    Pension plans


Post-employmentUK


US


benefits2009


2008


2007


2009


2008


2007


2009


2008


2007(%)Wages and salaries increases


5.1



4.5



4.9















4.0



4.0



4.0Pensions increases


3.6



3.0



3.4























Discount rate


5.7



5.6



5.5



5.7



6.2



5.8



5.7



6.2



5.8Inflation rate


3.6



3.0



3.4























Healthcare cost trend rate assumed for next year


























9.0



9.5



10.0Ultimate rate that the cost trend rate trends to


























5.0



5.0



5.0     Pension plansUK

US2009

2008

2007

2009

2008

2007(Years)Current pensioners at 65 
    male(i)


23



23



23



18



18



18Current pensioners at 65 
    female(i)


26



26



26



21



20



20Future pensioners at 65 
    male(ii)


24



24



24



18



18



18Future pensioners at 65 
    female(ii)


27



27



27



21



20



20     (i)
    
    Relates to assumptions based on
    longevity (in years) following retirement at the end of the
    reporting period.(ii)
    
    Relates to assumptions based on
    longevity (in years) relating to an employee retiring in 2029. F-29




---



##### Table of Contents



Sensitivities
    UK


USHigher/


Increase/


Higher/


Increase/(lower)


(decrease)


(lower)


(decrease)pension cost


in liabilities


pension cost


in liabilities($ million)Discount rate  0.25% decrease


0.6



23.3







5.2Discount rate  0.25% increase


(0.5
)


(22.2
)






(5.0
)Inflation rate  0.25% increase


1.6



20.7







Inflation rate  0.25% decrease


(1.3
)


(19.8
)






Mortality rate  one year increase


0.8



9.2







6.6     Post-Pension plans


employmentUK


US and other


benefits


Total2009


2008


2009


2008


2009


2008


2009


2008($ million)Movement in benefit obligationBenefit obligation at beginning of year


411



597



185



184



19



20



615



801Current service cost


7



9



1



1











8



10Members contributions


1



1



















1



1Interest expense


22



30



10



10



1



1



33



41Benefits paid


(12
)


(12
)


(13
)


(12
)


(1
)


(1
)


(26
)


(25
)Enhanced pension transfer


(59
)






















(59
)


Reclassification*














5















5Actuarial loss/(gain) arising in the year


44



(55
)


13



(3
)


1



(1
)


58



(59
)Exchange adjustments


47



(159
)


1















48



(159
)Benefit obligation at end of year


461



411



197



185



20



19



678



615Comprising:Funded plans


414



377



151



141











565



518Unfunded plans


47



34



46



44



20



19



113



97461



411



197



185



20



19



678



615     *
    
    Relates to the recognition of the
    gross assets and obligations of the Netherlands pension scheme.  F-30




---



##### Table of Contents



Post-Pension plans


employmentUK


US and other


benefits


Total2009


2008


2009


2008


2009


2008


2009


2008($ million)Movement in plan assetsFair value of plan assets at beginning of year


437



611



112



144











549



755Company contributions


16



30



4



3



1



1



21



34Members contributions


1



1



















1



1Benefits paid


(12
)


(12
)


(13
)


(12
)


(1
)


(1
)


(26
)


(25
)Enhanced pension transfer


(70
)






















(70
)


Reclassification*














4















4Expected return on plan assets


21



32



8



11











29



43Actuarial (loss)/gain arising in the year


(14
)


(57
)


14



(38
)














(95
)Exchange adjustments


47



(168
)


1















48



(168
)Fair value of plan assets at end of year


426



437



126



112











552



549     *
    
    Relates to the recognition of the
    gross assets and obligations of the Netherlands pension scheme.        2009


2008


2007Long-term





Long-term





Long-termrate of





rate of





rate ofreturn





return





returnexpected


Value


expected


Value


expected


Value(%)


($ million)


(%)


($ million)


(%)


($ million)UK pension plansLiability matching investment funds


4.8



196



3.9



192







Equities


9.2



77



7.9



87



7.9



219Bonds


4.8



64



3.9



140



4.8



360Cash


4.8



55



3.9



4







Other


9.2



34



7.9



14



7.9



32Total market value of assets






426







437







611US pension plansEquities


9.5



63



9.5



55



9.5



77Fixed income


5.5



42



5.5



37



5.5



52Total market value of assets






105







92







129    F-31




---



##### Table of Contents



History of experience gains and losses
  2009


2008


2007


2006


2005($ million)UK pension plansFair value of plan assets


426



437



611



527



431Present value of benefit obligations


(461
)


(411
)


(597
)


(585
)


(473
)(Deficit)/surplus in the plans


(35
)


26



14



(58
)


(42
)Experience adjustments arising on plan liabilities


(44
)


55



31



(22
)


(122
)Experience adjustments arising on plan assets


(14
)


(57
)


(6
)


13



86   2009


2008


2007


2006


2005($ million)US and other pension plansFair value of plan assets


126



112



144



111



106Present value of benefit obligations


(197
)


(185
)


(184
)


(175
)


(176
)Deficit in the plans


(71
)


(73
)


(40
)


(64
)


(70
)Experience adjustments arising on plan liabilities


(13
)


3











(5
)Experience adjustments arising on plan assets


14



(38
)






4



(2
)   2009


2008


2007


2006


2005($ million)US post-employment benefitsPresent value of benefit obligations


(20
)


(19
)


(20
)


(19
)


(20
)Experience adjustments arising on plan liabilities


(1
)


1







1



1     Policy
    on remuneration of Executive Directors and senior
    executives
  Remuneration
    policy and structure
    
    attract and retain high-quality executives in an environment
    where compensation levels are based on global market practice;
    drive aligned focus of the senior executive team and reward the
    achievement of business targets and key strategic objectives;
    align rewards of executives with returns to shareholders;
    support equitable treatment between members of the same
    executive team; and
    facilitate global assignments and relocation.   F-32




---



##### Table of Contents



Element

Maximum value

Purpose and alignment with strategyBase Salary (cash)

n/a

To recognize market value of role and the individuals
    skill, performance and experienceAnnual Bonus (cash)

100% of base
    salary(1)

To drive and reward annual performance of individuals and teams
    on both financial and non-financial metrics, and to align
    employee objectives with those of the GroupDeferred Annual Bonus (shares)

100% of base
    salary(1)

To align short-term and long-term reward with returns to
    shareholdersLong Term Incentive Plan (shares)

205% of base
    salary(2)

To drive and reward delivery of sustained long-term earnings per
    share (EPS) and total shareholder return
    (TSR) performance, aligned with the interests of
    shareholdersPension and benefits (varied)

n/a

To provide a competitive level of benefits, providing short-term
    protection and long-term savings opportunities      (1)
    
    Combined Annual Bonus award (cash
    and shares) is subject to a maximum cap of 175% of base salary
    in 2010.(2)
    
    Until 2009, maximum awards were
    normally granted at 270% of salary. In 2009 and 2010, maximum
    awards were reduced to 205% of base salary.    Base
    salary and benefits
   F-33




---



##### Table of Contents




    size  market capitalization, turnover, profits and
    the number of people employed;
    diversity and complexity of business;
    geographical spread of business; and
    relevance to the hotel industry.      2010 salary

2009 salaryAndrew Cosslett


£826,000



£802,000Richard Solomons


£523,000



£510,000   Annual
    Bonus Plan (ABP)
  Structure
    in 2009
      Form 20-F.
    Individual performance measures

Example KPOsFinancial returns

   Total gross revenue and system
    contribution revenueOur people

   Annual employee engagement scoresGuest experience

   Relaunch of Holiday Inn   Global RevPAR growth and RevPAR growth
    ahead of marketResponsible business

   Tracking of reduced water, waste and
    energy consumption      F-34




---



##### Table of Contents



Outcomes
    in 2009
    Payout as % of salaryMeasure

Key performance indicator

Target


Max(2)


ActualFinancial (70%)

EBIT


80.5



161



ZeroIndividual (30%)

OPR(1) -

    Andrew Cosslett


34.5



69



ZeroIndividual (30%)

OPR(1) -

    Richard Solomons


34.5



69



Zero      (1)
    
    Overall Performance Rating for
    individual performance.(2)
    
    Combined EBIT and OPR payout,
    subject to a maximum of 200% of base salary.  Structure
    in 2010
        Long Term
    Incentive Plan (LTIP)
    Structure
    for 2009/2011 cycle
      
    IHGs TSR relative to the Dow Jones World Hotels index
    (two-thirds of the award); and
    growth in adjusted EPS over the period (one-third of the award).      Structure
    for 2010/2012 cycle
   F-35




---



##### Table of Contents



Required TSRPercentage of award



relative to Dow JonesPerformance

vesting

Required EPS growth

World Hotels indexThreshold

20%

5% per annum

Match indexMaximum

100%

15% per annum

Index + 8% per annum     Outcomes
    in 2009 and progress on all current LTIP cycles
    Outcome/Threshold

Maximum

Threshold(1)

Maximum(1)

currentPerformance measure

performance

performance

vesting

vesting

position2007/2009
    LTIP cycleTSR

5th place

    in relative comparator group

1st place

    in relative comparator group

20%

100%

4th place

    in relative comparator groupEPS

Growth of 10% per annum

Growth of 20% per annum
    or more

20%

100%

Growth of 15.2% per annumTotal Vesting









46% of maximum award2008/2010
    LTIP
    cycle(2)TSR

Growth equal to the index

Growth exceeds the index by 8% or more

20%

100%

Growth
    outperformance
    of 12.4%EPS

Growth of 6% per annum

Growth of 16% per annum
    or more

20%

100%

Growth of 16.4% per annum2009/2011
    LTIP
    cycle(3)TSR

Growth equal to the index

Growth exceeds the index by 8% or more

20%

100%

Growth outperformance of 17.2%EPS

Growth of 0% per annum

Growth of 10% per annum
    or more

0%

100%

Growth of -1.4% per annum      (1)
    
    Vesting between threshold and
    maximum occurs on a straight-line basis.(2)
    
    Two years of cycle completed.(3)
    
    One year of cycle completed. F-36




---



##### Table of Contents



Shareholding
    policy
  Share
    ownership
    Executive
    share options
    Share
    capital
      Guideline

Actual shareholdingshareholding

at Dec 31, 2009Executive

as % of salary

as % of
    salary(1)Andrew Cosslett


300



468Richard Solomons


200



565      (1)
    
    Based on share price of 893 pence
    per share as at December 31, 2009.  Policy
    regarding pensions
  Top-Up
   F-37




---



##### Table of Contents



Non-Executive
    Directors pay policy and structure
          Fees at

Fees atRole

Jan 1, 2010

Dec 31, 2009David Webster

Chairman


£398,000


£390,000David Kappler

Senior Independent Director & Chairman of Audit
    Committee


£99,750


£95,000Ralph Kugler

Chairman of Remuneration Committee


£84,000


£80,000Jennifer Laing

Chairman of Corporate Responsibility Committee (from
    March 1, 2009)


£73,500


£70,000Others

Non-Executive Directors


£63,000


£60,000   Service
    contracts
  Policy
  12-month
     F-38




---



##### Table of Contents



Directors
    contracts
  Contracteffective date

Notice periodAndrew Cosslett


02.03.05



12 monthsRichard Solomons


04.15.03



12 months     Audited
    information on Directors emoluments
  Directors
    remuneration in 2009
    Base salaries








Total emolumentsand fees


Performance
    payments(1)


Benefits(2)


excluding pensions2009


2008


2009


2008


2009


2008


2009


2008(£ thousand)Executive DirectorsAndrew
    Cosslett(3)


802



787







495



25



25



827



1,307Stevan
    Porter(4)






503







593







5







1,101Richard
    Solomons(3)


512



561







401



19



18



531



980Non-Executive DirectorsDavid Webster


390



390















2



390



392David Kappler


95



95



















95



95Ralph
    Kugler(5)


80



72



















80



72Jennifer
    Laing(6)


68



60



















68



60Robert C
    Larson(7)






60























60Jonathan Linen


60



60



















60



60Sir David
    Prosser(8)






33























33Ying Yeh


60



60



















60



60Former
    Directors(9)


















1



1



1



1Total


2,067



2,681







1,489



45



51



2,112



4,221     (1)
    
    Performance payments comprise cash
    payments in respect of participation in the ABP but exclude
    bonus payments in deferred shares, details of which are set out
    in the ABP table on page F-40.(2)
    
    Benefits incorporate all tax
    assessable benefits arising from the individuals
    employment. For Messrs Cosslett and Solomons, this relates in
    the main to the provision of a fully expensed company car and
    private healthcare cover.(3)
    
    2008 salaries for Andrew Cosslett
    and Richard Solomons reflect a salary increase effective
    April 1, 2008. They did not receive an increase in 2009.
    Richard Solomons also received a pro rata salary supplement of
    £10,000 per month from July 1, 2008 to January 7,
    2009 reflecting his additional duties as interim President of
    the Americas region.(4)
    
    Stevan Porter passed away on
    August 7, 2008.(5)
    
    Ralph Kuglers fee was
    increased, pro rata, from June 1, 2008 when he became
    Chairman of the Remuneration Committee.(6)
    
    Jennifer Laings fee was
    increased, pro rata, from March 1, 2009 when she became
    Chairman of the Corporate Responsibility Committee.(7)
    
    Robert Larson retired as a Director
    on December 31, 2008.(8)
    
    Sir David Prosser retired as a
    Director and Chairman of the Remuneration Committee on
    May 31, 2008.(9)
    
    Sir Ian Prosser retired as a
    Director on December 31, 2003. However, he had an ongoing
    healthcare benefit of £1,150 during the year. F-39




---



##### Table of Contents



Directors
    pension benefits
  Top-Up
  1 30
   The
    following table sets out the pension benefits of the Executive
    Directors.
  Increase intransfer value

Absolute



AccruedDirectors

Transfer value of

over the year,

increase in

Increase

pension atcontributions

accrued benefits

less Directors

accrued

in accrued

Dec 31,Age at

in the
    year(1)

Jan 1, 2009

Dec 31, 2009

contributions

pension(2)

pension(3)

2009(4)Directors

Dec 31, 2009

(£)

(£)

(£)

(£)

(£ pa)

(£ pa)

(£ pa)Andrew Cosslett


54



39,400



2,028,600



2,574,100



506,100



28,600



28,600



131,200Richard Solomons


48



25,100



3,430,800



3,934,700



478,800



20,400



20,400



217,700   (1)
    
    Contributions paid in the year by
    the Directors under the terms of the plans. Contributions were
    5% of full pensionable salary.(2)
    
    The absolute increase in accrued
    pension during the year.(3)
    
    The increase in accrued pension
    during the year, excluding any increase for inflation.(4)
    
    Accrued pension is that which would
    be paid annually on retirement at 60, based on service to
    December 31, 2009.  Annual
    Bonus Plan deferred share awards
    ABP shares

















Valuevested

















based onduring

















shareFinancial year





ABP awards





Market


the year





Market





ABP





price ofon which





during





price


Jan 1, 2009





price





awards





893 penceperformance


ABP awards


the year





per share


to





per share


Value


held at


Planned


at Dec 31,is based for


held at


Jan 1, 2009


Award


at award


Dec 31,


Vesting


at vesting


at vesting


Dec 31,


vesting


2009Directors

award


Jan 1, 2009


to Dec 31, 2009


date


(pence)


2009


date


(pence)


(£)


2009


date


(£)Andrew Cosslett


2005



28,878
(1)






3.8.06



853.67



28,878



3.9.09



443.93



128,1982006



55,870
(2)






2.26.07



1235



















55,870



2.26.10



498,9192007



71,287
(3)






2.25.08



819.67



















71,287



2.25.11



636,5932008







104,652
(4)


2.23.09



472.67



















104,652



2.23.12



934,542Total






156,035



104,652



























231,809







2,070,054Richard Solomons


2005



18,459
(1)






3.8.06



853.67



18,459



3.9.09



443.93



81,9452006



35,757
(2)






2.26.07



1235



















35,757



2.26.10



319,3102007



45,634
(3)






2.25.08



819.67



















45,634



2.25.11



407,5122008







66,549
(4)


2.23.09



472.67



















66,549



2.23.12



594,283Total






99,850



66,549



























147,940







1,321,105     (1)
    
    This award was based on EPS, EBIT
    and individual performance measures. Total shares held include
    matching shares.(2)
    
    This award was based on EPS and
    EBIT measures. Total shares held include matching shares.(3)
    
    This award was based on Group EBIT
    and net annual rooms additions measures. Total shares held
    include matching shares.(4)
    
    This award was based on Group EBIT,
    net annual rooms additions and individual performance measures.
    The bonus target was 57.5% of base salary. Both Executive
    Directors were awarded 20.52% for Group EBIT performance, 10.97%
    for net annual rooms additions and 30.19% for individual
    performance, resulting in a total deferred shares bonus of
    61.68% of base salary. No matching shares were awarded. F-40




---



##### Table of Contents



Long
    Term Incentive Plan awards
    MaximumMaximum























valueLTIP shares








LTIP shares














based onEnd of year





awarded








vested














shareto which





during





Market


during


Market








Maximum


price ofperformance


Maximum


the year





price


the year


price





Actual/


LTIP awards


893 penceis based


LTIP awards


Jan 1, 2009





per share


Jan 1, 2009 to


per share


Value


planned


held at


at Dec 31,for award


held at


to Dec 31,


Award


at award


Dec 31,


at vesting


at vesting


vesting


Dec 31,


2009Directors

(Dec 31,)


Jan 1, 2009


2009


date


(pence)


2009


(pence)


(£)


date


2009


(£)Andrew Cosslett


2008



200,740







4.3.06



941.5



174,041
(1)


481.25



837,572



2.18.092009
(2)


159,506







4.2.07



1256















2.17.10



159,506



1,424,3892010
(2)


253,559







5.19.08



854















2.16.11



253,559



2,264,2822011
(2)






272,201



4.3.09



604















2.15.12



272,201



2,430,755Total






613,805



272,201



























685,266



6,119,426Richard Solomons


2008



128,470







4.3.06



941.5



111,383
(1)


481.25



536,031



2.18.092009
(2)


102,109







4.2.07



1256















2.17.10



102,109



911,8332010
(2)


161,241







5.19.08



854















2.16.11



161,241



1,439,8822011
(2)






173,096



4.3.09



604















2.15.12



173,096



1,545,747Total






391,820



173,096



























436,446



3,897,462     (1)
    
    This award was based on performance
    to December 31, 2008 where the performance measure related
    to both the Companys TSR against a group of eight other
    comparator companies and cumulative annual growth rate
    (CAGR) of rooms in the IHG system relative to a
    group of eight other comparator companies. The number of shares
    released was graded, according to a) where the Company
    finished in the TSR comparator group, with 50% of the award
    being released for first or second position and 10% of the award
    being released for median position; and b) relative CAGR of
    rooms, with 50% of the award being released for 3.9% (upper
    quartile) CAGR and 10% of the award being released for 3.3%
    (median) CAGR. The Company finished in third place in the TSR
    group and achieved a relative CAGR of 4.9%. Accordingly, 86.7%
    of the award vested on February 18, 2009.(2)
    
    All details of performance
    conditions in relation to these awards are provided on
    page F-35 and F-36. F-41




---



##### Table of Contents



Share
    options
    Ordinary shares under option


WeightedShare





averageOptions held


Lapsed


Exercised


price on


Options


option


Optionat Jan 1,


during


during


date of


held at


price


priceDirectors

2009


the year


the year


exercise (pence)


Dec 31, 2009


(pence)


(pence)Andrew Cosslett


157,300
(1)






157,300



901.89











619.83Total


157,300







157,300











Richard Solomons


230,320
(2)














230,320
(2)






494.17100,550
(1)














100,550
(1)






619.833,769
(3)






3,769



466.75











420.50Total


334,639







3,769







330,870



532.36     (1)
    
    Executive share options granted in
    2005 became exercisable in April 2008 up to April 2015.(2)
    
    Executive share options granted in
    2004 became exercisable in April 2007 up to April 2014.(3)
    
    Sharesave options granted in 2003.
    These were exercisable between March and August 2009.      Note 4 
    Auditors
    remuneration paid to Ernst & Young LLP  Year ended December 31,2009


2008


2007($ million)Group audit fees


1.8



1.7



2.8Audit fees in respect of subsidiaries


2.1



1.5



2.6Tax fees


1.7



1.0



0.8Interim review fees


0.3



0.4



0.4Other services pursuant to legislation


0.3



0.1



0.2Other


1.5



2.8



2.47.7



7.5



9.2      F-42




---



##### Table of Contents



Note 5 
    Exceptional
    items  Year ended December 31,2009


2008


2007($ million)Continuing operationsExceptional operating items:Cost of sales:Onerous management
    contracts(i)


(91
)






Administrative expenses:Holiday Inn brand
    relaunch(ii)


(19
)


(35
)


Reorganization and related
    costs(iii)


(43
)


(24
)


(14
)Enhanced pension
    transfer(iv)


(21
)






(83
)


(59
)


(14
)Other operating income and expenses:Gain on sale of associate investments






13



22Gain on sale of other financial assets






14



36Loss on disposal of hotels
    (Note 11)*


(2
)


(2
)


Reorganization and related
    costs(iii)










12(2
)


25



70Depreciation and amortization:Reorganization and related
    costs(iii)






(2
)


(2
)Impairment:Property, plant and equipment (Note 10)


(28
)


(12
)


6Assets held for sale (Note 11)


(45
)






Goodwill (Note 12)


(78
)


(63
)


Intangible assets (Note 13)


(32
)


(21
)


Other financial assets (Note 15)


(14
)






(197
)


(96
)


6(373
)


(132
)


60Tax:Tax on exceptional operating items


112



17



Exceptional tax
    credit(v)


175



25



60287



42



60Discontinued operationsGain on disposal of assets (Note 11):Gain on disposal of hotels**


2







40Tax credit/(charge)


4



5



(8
)6



5



32(80
)


(85
)


152     *
    Relates to hotels classified as continuing operations.**
    Relates to hotels classified as discontinued operations.    (i)
    An onerous contract provision of $65 million has been
    recognized for the future net unavoidable costs under the
    performance guarantee related to certain management contracts
    with one US hotel owner. In addition to the provision, a deposit
    of $26 million has been written off as it is no longer
    considered recoverable under the terms of the same management
    contracts.(ii)
    Relates to costs incurred in support of the worldwide relaunch
    of the Holiday Inn brand family that was announced on
    October 24, 2007.(iii)
    Primarily relates to the closure of certain corporate offices
    together with severance costs arising from a review of the
    Groups cost base.(iv)
    Relates to the payment of enhanced pension transfers to those
    deferred members of the InterContinental Hotels UK Pension Plan
    who had accepted an offer to receive the enhancement either as a
    cash lump sum or as an additional transfer value to an
    alternative pension plan provider. The exceptional item
    comprises the lump sum payments ($9 million), the IAS 19
    settlement loss arising on the pension transfers
    ($11 million) and the costs of the arrangement ($1
    million). The payments and transfers were made in January 2009.(v)
    Relates to the release of provisions which are exceptional by
    reason of their size or nature relating to tax matters which
    have been settled or in respect of which the relevant statutory
    limitation period has expired (see Note 7). F-43




---



##### Table of Contents



Note 6 
    Finance
    costs  Year ended December 31,2009


2008


2007($ million)Financial incomeInterest income


2



11



15Fair value gains


1



1



33



12



18Financial expensesInterest expense


39



95



90Finance charge payable under finance leases


18



18



1857



113



108      F-44




---



##### Table of Contents



Note 7 
    Tax  Year ended December 31,2009


2008


2007($ million)Income taxUK corporation tax at 28% (2008 28.5%, 2007 30.0%):Current period


26



13



45Benefit of tax reliefs on which no deferred tax previously
    recognized










(1
)Adjustments in respect of prior periods


(33
)


(28
)


(33
)(7
)


(15
)


11Foreign
    tax(i):Current period


79



130



200Benefit of tax reliefs on which no deferred tax previously
    recognized


(6
)


(6
)


(15
)Adjustments in respect of prior
    periods(ii)


(246
)


(63
)


(100
)(173
)


61



85Total current tax


(180
)


46



96Deferred tax:Origination and reversal of temporary differences


(73
)


26



(67
)Changes in tax rates


1



(1
)


(4
)Adjustments to estimated recoverable deferred tax assets


1



(4
)


5Adjustments in respect of prior periods


(25
)


(13
)


8Total deferred tax


(96
)


8



(58
)Total income tax (credit)/charge


(276
)


54



38Further analyzed as tax relating to:Profit before exceptional items


15



101



90Exceptional items (Note 5):Exceptional operating items


(112
)


(17
)


Exceptional tax
    credit(iii)


(175
)


(25
)


(60
)Gain on disposal of assets


(4
)


(5
)


8(276
)


54



38The total tax (credit)/charge can be further analyzed as
    relating to:Continuing operations


(272
)


59



29Profit on discontinued operations










1Gain on disposal of assets


(4
)


(5
)


8(276
)


54



38     (i)
    
    Represents corporate income taxes
    on profit taxable in foreign jurisdictions, a significant
    proportion of which relates to the Groups US subsidiaries.(ii)
    
    In 2009, includes $165 million
    of exceptional releases included at (iii) below together
    with other releases relating to tax matters which have been
    settled or in respect of which the statutory limitation period
    has expired.(iii)
    
    Represents the release of
    provisions which are exceptional by reason of their size or
    nature relating to tax matters which have been settled or in
    respect of which the relevant statutory limitation period has
    expired. F-45




---



##### Table of Contents



Reconciliation of tax (credit)/charge, including gain on
    disposal of assets
  BeforeexceptionalTotal(i)


items(ii)Year ended December 31,2009


2008


2007


2009


2008


2007(%)UK corporation tax at standard rate


28.0



28.5



30.0



28.0



28.5



30.0Non-deductible expenditure and non-taxable income


(36.5
)


8.7



5.6



7.4



6.1



6.9Net effect of different rates of tax in overseas businesses


(43.0
)


10.1



1.8



8.7



7.1



2.2Effect of changes in tax rates


(0.3
)


(0.2
)


(1.0
)


0.1



(0.1
)


(1.2
)Benefit of tax reliefs on which no deferred tax previously
    recognized


7.2



(1.7
)


(3.3
)


(1.5
)


(1.2
)


(4.1
)Effect of adjustments to estimated recoverable deferred tax
    assets


5.9



(1.1
)


1.3



(1.2
)


(0.8
)


1.6Adjustment to tax charge in respect of prior periods


185.5



(23.5
)


(11.0
)


(37.6
)


(16.6
)


(13.8
)Other


(3.8
)


(0.8
)


0.4



0.8



(0.6
)


0.7Exceptional items and gain on disposal of assets


298.3



(2.9
)


(16.3
)










441.3



17.1



7.5



4.7



22.4



22.3     (i)
    
    Calculated in relation to total
    losses/profits including exceptional items.(ii)
    
    Calculated in relation to profits
    excluding exceptional items.  Tax
    paid
      Tax
    risks, policies and governance
     F-46




---



##### Table of Contents



Note 8 
    Dividends
    paid and proposed  Year ended December 31,2009


2008


2007


2009


2008


2007(cents per share)


($ million)Paid during the year:Final (declared in previous year)


29.2



29.2



25.9



83



86



92Interim


12.2



12.2



11.5



35



32



35Special interim










400.0











1,39741.4



41.4



437.4



118



118



1,524Proposed (not recognized as a liability at December 31):Final


29.2



29.2



29.2



84



83



86     Note 9 
    Earnings
    per ordinary share        Year ended December 31,2009


2008


2007Continuing





Continuing





Continuingoperations


Total


operations


Total


operations


TotalBasic earnings per ordinary shareProfit available for equity holders ($ million)


207



213



257



262



429



463Basic weighted average number of ordinary shares (millions)


285



285



287



287



320



320Basic earnings per ordinary share (cents)


72.6



74.7



89.5



91.3



134.1



144.7Diluted earnings per ordinary shareProfit available for equity holders ($ million)


207



213



257



262



429



463Diluted weighted average number of ordinary shares (millions)


295



295



296



296



329



329Diluted earnings per ordinary share (cents)


70.2



72.2



86.8



88.5



130.4



140.7   2009


2008


2007(millions)Diluted weighted average of ordinary shares is calculated as:Basic weighted average number of ordinary shares


285



287



320Dilutive potential ordinary shares  employee share
    options


10



9



9295



296



329   F-47




---



##### Table of Contents



Year ended December 31,2009


2008


2007Continuing





Continuing





Continuingoperations


Total


operations


Total


operations


TotalAdjusted earnings per ordinary shareProfit available for equity holders ($ million)


207



213



257



262



429



463Adjusting items (Note 5):Exceptional operating items ($ million)


373



373



132



132



(60
)


(60
)Tax on exceptional operating items ($ million)


(112
)


(112
)


(17
)


(17
)






Exceptional tax credit ($ million)


(175
)


(175
)


(25
)


(25
)


(60
)


(60
)Gain on disposal of assets, net of tax ($ million)






(6
)






(5
)






(32
)Adjusted earnings ($ million)


293



293



347



347



309



311Basic weighted average number of ordinary shares (millions)


285



285



287



287



320



320Adjusted earnings per ordinary share (cents)


102.8



102.8



120.9



120.9



96.6



97.2Adjusted earnings ($ million)


293



293



347



347



309



311Diluted weighted average number of ordinary shares (millions)


295



295



296



296



329



329Adjusted diluted earnings per ordinary share (cents)


99.3



99.3



117.2



117.2



93.9



94.5  F-48




---



##### Table of Contents



Note 10 
    Property,
    plant and equipment  Land


Fixtures,and


fittings andbuildings


equipment


Total($ million)Year ended December 31, 2008Cost:At January 1, 2008


1,606



955



2,561Additions


6



85



91Net transfers to non-current assets classified as held for sale


(119
)


(60
)


(179
)Disposals


(15
)


(24
)


(39
)Exchange and other adjustments


(112
)


(56
)


(168
)At December 31, 2008


1,366



900



2,266Depreciation and impairment:At January 1, 2008


(129
)


(498
)


(627
)Provided


(11
)


(61
)


(72
)Net transfers to non-current assets classified as held for sale


37



37



74Impairment
    charge(i)


(12
)






(12
)On disposals


15



25



40Exchange and other adjustments






15



15At December 31, 2008


(100
)


(482
)


(582
)Year ended December 31, 2009Cost:At January 1, 2009


1,366



900



2,266Additions


22



35



57Net transfers from non-current assets classified as held for sale


176



104



280Reclassification


14



(14
)


Disposals






(3
)


(3
)Exchange and other adjustments


44



24



68At December 31, 2009


1,622



1,046



2,668Depreciation and impairment:At January 1, 2009


(100
)


(482
)


(582
)Provided


(11
)


(60
)


(71
)Net transfers from non-current assets classified as held for sale


(44
)


(45
)


(89
)Impairment
    charge(ii)


(28
)






(28
)Valuation adjustments arising on reclassification from held for
    sale (Note 11)


(28
)


(17
)


(45
)On disposals






2



2Exchange and other adjustments


(1
)


(18
)


(19
)At December 31, 2009


(212
)


(620
)


(832
)Net book value at December 31, 2009


1,410



426



1,836Net book value at December 31, 2008


1,266



418



1,684Net book value at January 1, 2008


1,477



457



1,934  F-49




---



##### Table of Contents



Note 11 
    Assets
    sold, held for sale and discontinued operations  At

AtDecember 31,

December 31,2009

2008($ million)Assets and liabilities held for saleNon-current assets classified as held for sale:Property, plant and equipment






210Liabilities classified as held for sale:Deferred tax (Note 25)






(4
)          F-50




---



##### Table of Contents



Year ended December 31,2009


2008


2007($ million)Net assets of hotels soldProperty, plant and equipment


22



28



70Net working capital










2Cash and cash equivalents






8



Non-controlling interest










(12
)Groups share of net assets disposed of


22



36



60ConsiderationCurrent year disposals:Cash consideration, net of costs paid


20



34



94Management contract value










620



34



100Net assets disposed of


(22
)


(36
)


(60
)Prior year disposals:Provision release


2







Tax


4



5



(8
)Gain on disposal of assets, net of tax


4



3



32Analyzed as:Loss on disposal of hotel assets from continuing operations
    (Note 5)


(2
)


(2
)


Profit for the year from discontinued operations (Note 5)


6



5



324



3



32Net cash inflowCurrent year disposals:Cash consideration, net of costs paid


20



34



94Cash disposed of






(8
)


Prior year disposals






(1
)


320



25



97   Year ended December 31,2009


2008


2007($ million)Results of discontinued operationsRevenue










33Cost of sales










(28
)







5Depreciation and amortization










(2
)Operating profit










3Tax










(1
)Profit after tax










2Gain on disposal of assets, net of tax (Note 5)


6



5



32Profit for the year from discontinued operations


6



5



34   F-51




---



##### Table of Contents



Year ended December 31,2009


2008


2007(cents per ordinary share)Earnings per ordinary share from discontinued operationsBasic


2.1



1.8



10.6Diluted


2.0



1.7



10.3   Year ended December 31,2009


2008


2007($ million)Cash flows attributable to discontinued operationsOperating profit before interest, depreciation and amortization










5Investing activities










(1
)     Note 12 
    Goodwill  Year ended December 31,2009


2008($ million)CostAt January 1,


206



221Exchange and other adjustments


17



(15
)At December 31,


223



206ImpairmentAt January 1,


(63
)


Impairment charge


(78
)


(63
)At December 31,


(141
)


(63
)Net book value at December 31,


82



143Net book value at January 1,


143



221       Cost


Net book valueAt December 31,2009


2008


2009


2008($ million)Americas managed operations


141



141







78Asia Pacific:Asia Pacific managed and franchised operations


n/a



65



n/a



65Asia Australasia managed and franchised operations


82



n/a



82



n/a223



206



82



143  F-52




---



##### Table of Contents



Americas
    goodwill
        Asia
    Pacific goodwill
       F-53




---



##### Table of Contents



Note 13 
    Intangible
    assets  Management


OtherSoftware


contracts


intangibles


Total($ million)Year ended December 31, 2008Cost:At January 1, 2008


120



249



86



455Additions


40







9



49Disposals


(2
)










(2
)Exchange and other adjustments






(29
)


(2
)


(31
)At December 31, 2008


158



220



93



471Amortization and impairment:At January 1, 2008


(63
)


(26
)


(31
)


(120
)Provided


(20
)


(12
)


(8
)


(40
)Impairment charge
    (i)






(21
)






(21
)Disposals


2











2Exchange and other adjustments






9



1



10At December 31, 2008


(81
)


(50
)


(38
)


(169
)Year ended December 31, 2009Cost:At January 1, 2009


158



220



93



471Additions


24







9



33Disposals










(7
)


(7
)Exchange and other adjustments


3



11



3



17At December 31, 2009


185



231



98



514Amortization and impairment:At January 1, 2009


(81
)


(50
)


(38
)


(169
)Provided


(19
)


(10
)


(9
)


(38
)Impairment charge
    (ii)






(32
)






(32
)Disposals










5



5Exchange and other adjustments






(4
)


(2
)


(6
)At December 31, 2009


(100
)


(96
)


(44
)


(240
)Net book value at December 31, 2009


85



135



54



274Net book value at December 31, 2008


77



170



55



302Net book value at January 1, 2008


57



223



55



335            F-54




---



##### Table of Contents



Note 14 
    Investment
    in associates    At


AtDecember 31,


December 31,2009


2008($ million)Share of associates statement of financial positionCurrent assets


5



5Non-current assets


65



65Current liabilities


(9
)


(20
)Non-current liabilities


(16
)


(7
)Net assets


45



43Share of associates revenue and profitRevenue


31



30Net loss


(1
)


Related party transactionsRevenue from related parties


4



5Amounts owed by related parties


2



2   Note 15 
    Other
    financial assets  At


AtDecember 31,


December 31,2009


2008($ million)Non-currentEquity securities
    available-for-sale


66



64Other


64



88130



152CurrentEquity securities
    available-for-sale


5



6Other






45



10   Available-for-sale available-for-sale
   F-55




---



##### Table of Contents



Year ended


Year endedDecember 31,


December 31,2009


2008($ million)At January 1,


(11
)


(9
)Provided:Operating profit before exceptional items






(2
)Exceptional items


(14
)


At December 31,


(25
)


(11
)   available-for-sale
    Note 16 
    Inventories  At


AtDecember 31,


December 31,2009


2008($ million)Finished goods


2



2Consumable stores


2



24



4   Note 17 
    Trade and
    other receivables  At


AtDecember 31,


December 31,2009


2008($ million)Trade receivables


268



318Other receivables


27



49Prepayments


40



45335



412      F-56




---



##### Table of Contents



At


AtDecember 31,


December 31,2009


2008($ million)Americas


158



208Europe, the Middle East and Africa


90



109Asia Pacific


47



50295



367     At December 31, 2009


At December 31, 2008Gross


Provision


Net


Gross


Provision


Net($ million)Not past due


173



(2
)


171



254



(13
)


241Past due 1 to 30 days


70



(9
)


61



61



(1
)


60Past due 31 to 180 days


80



(19
)


61



63



(5
)


58Past due more than 180 days


57



(55
)


2



99



(91
)


8380



(85
)


295



477



(110
)


367     At


AtDecember 31,


December 31,2009


2008($ million)At January 1,


(110
)


(96
)Provided


(34
)


(28
)Amounts written off


59



14At December 31,


(85
)


(110
)   Note 18 
    Cash and
    cash equivalents  At


AtDecember 31,


December 31,2009


2008($ million)Cash at bank and in hand


23



32Short-term deposits


17



5040



82    F-57




---



##### Table of Contents



Note 19 
    Trade and
    other payables  At


AtDecember 31,


December 31,2009


2008($ million)CurrentTrade payables


99



111Other tax and social security payable


29



31Other payables


278



322Accruals


262



272Derivatives


20



10688



746Non-currentOther payables


408



392         Note 20 
    Provisions  At


AtDecember 31,


December 31,2009


2008($ million)Onerous management contracts


65



    F-58




---



##### Table of Contents



Note 21 
    Loans and
    other borrowings  At December 31, 2009


At December 31, 2008Current


Non-current


Total


Current


Non-current


Total($ million)Secured bank loans


3



5



8



5



2



7Finance leases


16



188



204



16



186



202£250 million 6% bonds






402



402











Unsecured bank loans


87



421



508







1,146



1,146Total borrowings


106



1,016



1,122



21



1,334



1,355Denominated in the following currencies:Sterling






402



402







152



152US dollars


103



348



451



16



873



889Euro






216



216







224



224Other


3



50



53



5



85



90106



1,016



1,122



21



1,334



1,355   Secured
    bank loans
      Finance
    leases
    At December 31, 2009


At December 31, 2008Minimum


Present


Minimum


Presentlease


value of


lease


value ofpayments


payments


payments


payments($ million)Less than one year


16



16



16



16Between one and five years


64



48



64



48More than five years


3,364



140



3,380



1383,444



204



3,460



202Less: amount representing finance charges


(3,240
)






(3,258
)


204



204



202



202     £250 million
    6% bonds
   F-59




---



##### Table of Contents



Unsecured
    bank loans
  30-month
  Facilities
    provided by banks
  At December 31, 2009


At December 31, 2008Utilized


Unutilized


Total


Utilized


Unutilized


Total($ million)Committed


519



1,174



1,693



1,161



946



2,107Uncommitted


3



22



25







25



25522



1,196



1,718



1,161



971



2,132   At December 31,2009


2008($ million)Unutilized facilities expire:Within one year


22



25After two but before five years


1,174



9461,196



971     Note 22 
    Financial
    risk management policies  Overview
      Market
    risk exposure
     F-60




---



##### Table of Contents



Liquidity
    risk exposure
        Credit
    risk exposure
          Capital
    risk management
   F-61




---



##### Table of Contents



Hedging
  Interest
    rate risk
      Foreign
    currency risk
    Hedge of
    net investment in foreign operations
       F-62




---



##### Table of Contents



Note 23 
    Financial
    instruments  Liquidity
    risk
    Between 1

Between 2Less than

and

and

More thanAt December 31, 2009

1 year

2 years

5 years

5 years

Total($ million)Non-derivative financial liabilities:Secured bank loans


3



1



5







9£250m 6% bonds


24



24



73



453



574Finance lease obligations


16



16



48



3,364



3,444Unsecured bank loans


512















512Trade and other payables


668



102



120



302



1,192Provisions


65















65Derivative financial liabilities:Interest rate swaps


7



4



1







12Currency swaps-outflows


26



26



77



467



596Currency swaps-inflows


(24
)


(24
)


(73
)


(453
)


(574
)Less than

Between 1 and

Between 2 and

More thanAt December 31, 2008

1 year

2 years

5 years

5 years

Total($ million)Non-derivative financial liabilities:Secured bank loans


2



8











10Finance lease obligations


16



16



48



3,380



3,460Unsecured bank loans


1,156















1,156Trade and other payables


737



101



113



277



1,228Derivative financial liabilities:Interest rate swaps


6



4



3







13       Fair
    values
    F-63




---



##### Table of Contents



At December 31, 2009


At December 31, 2008Carrying





Carryingvalue


Fair value


value


Fair value($ million)Financial assetsEquity securities
    available-for-sale*
    (Note 15)


71



71



70



70Loans and receivables:Cash and cash equivalents (Note 18)


40



40



82



82Other financial assets (Note 15)


64



64



92



92Trade and other receivables, excluding prepayments (Note 17)


295



295



367



367Financial liabilities£250 million 6% bonds (Note 21)


(402
)


(402
)






Finance lease obligations (Note 21)


(204
)


(206
)


(202
)


(168
)Other borrowings (Note 21)


(516
)


(516
)


(1,153
)


(1,153
)Trade and other payables, excluding derivatives (Note 19)


(1,076
)


(1,076
)


(1,128
)


(1,128
)Derivatives* (Note 19)


(20
)


(20
)


(10
)


(10
)Provisions (Note 20)


(65
)


(65
)






     *
    
    Financial assets and liabilities
    which are measured at fair value.  available-for-sale
  Fair
    value hierarchy
          At December 31, 2009

At December 31, 2008Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total($ million)AssetsEquity securities
    available-for-sale


2







69



71



2







68



70LiabilitiesDerivatives






(20
)






(20
)






(10
)






(10
)  F-64




---



##### Table of Contents



AtDecember 31,2009($ million)Balance at January 1, 2009


68Valuation gains recognized in other comprehensive income


11Impairment*


(10
)Balance at December 31, 2009


69     *
    
    The impairment charge recognized in
    the income statement (see Note 5) also includes
    $4 million of losses reclassified from equity.    Credit
    risk
    At

AtDecember 31,

December 31,2009

2008($ million)Equity securities
    available-for-sale


71



70Loans and receivables:Cash and cash equivalents


40



82Other financial assets


64



92Trade and other receivables, excluding prepayments


295



367470



611   Note 24 
    Net
    debt  At

AtDecember 31,

December 31,2009

2008($ million)Cash and cash equivalents


40



82Loans and other borrowings  current


(106
)


(21
)Loans and other borrowings  non-current


(1,016
)


(1,334
)Net debt


(1,082
)


(1,273
)   F-65




---



##### Table of Contents



Year ended

Year endedDecember 31,

December 31,2009

2008($ million)Movement in net debtNet (decrease)/increase in cash and cash equivalents


(44
)


25Add back cash flows in respect of other components of net debt:Issue of £250m 6% bonds


(411
)


Decrease in other borrowings


660



316Decrease in net debt arising from cash flows


205



341Non-cash movements:Finance lease liability


(2
)


(2
)Exchange and other adjustments


(12
)


47Decrease in net debt


191



386Net debt at beginning of the year


(1,273
)


(1,659
)Net debt at end of the year


(1,082
)


(1,273
)   Note 25 
    Deferred
    tax  OtherProperty,

Deferred







short-termplant and

gains on



Employee

Intangible

temporaryequipment

loan notes

Losses

benefits

assets

differences

Total($ million)At January 1, 2008


248



175



(190
)


(32
)


42



(89
)


154Income statement


(7
)






13



18



(8
)


(8
)


8Statement of comprehensive income














(21
)










(21
)Statement of changes in equity






















2



2Exchange and other adjustments


(15
)


(33
)


36



2



(6
)


(6
)


(22
)At December 31, 2008


226



142



(141
)


(33
)


28



(101
)


121Income statement


(43
)






6



(1
)


1



(59
)


(96
)Statement of comprehensive income














(1
)










(1
)Statement of changes in equity






















(6
)


(6
)Exchange and other adjustments


6



9



(11
)






2



(1
)


5At December 31, 2009


189



151



(146
)


(35
)


31



(167
)


23   At

AtDecember 31,

December 31,2009

2008($ million)Analyzed as:Deferred tax receivable


(95
)


Deferred tax payable


118



117Liabilities classified as held for sale






423



121    F-66




---



##### Table of Contents



Note 26 
    Share-based
    payments  Annual
    Bonus Plan
    Long
    Term Incentive Plan
   F-67




---



##### Table of Contents



Executive
    Share Option Plan
    Sharesave
    Plan
    US
    Employee Stock Purchase Plan
    Former
    Six Continents Share Schemes
          Annual Bonus

Long TermPlan

Incentive PlanNumber of shares awarded in 2009


1,058,734



5,754,548  F-68




---



##### Table of Contents



Annual

Long Term2009

Bonus Plan

Incentive PlanValuation model

Binomial

Monte CarloSimulation andBinomialWeighted average share price (pence)


454.0



612.0Expected dividend yield


4.89
%


5.26
%Risk-free interest rate






2.11
%Volatility*






43
%Term (years)


3.0



3.0Annual

Long Term2008

Bonus Plan

Incentive PlanValuation model

Binomial

Monte CarloSimulation andBinomialWeighted average share price (pence)


836.0



865.0Expected dividend yield


3.33
%


2.76
%Risk-free interest rate






4.78
%Volatility*






30
%Term (years)


3.0



3.0Annual

Long Term2007

Bonus Plan

Incentive PlanValuation model

Binomial

Monte CarloSimulation andBinomialWeighted average share price (pence)


1,252.0



1,262.0Expected dividend yield


2.13
%


2.13
%Risk-free interest rate






5.40
%Volatility*






19
%Term (years)


3.0



3.0     *
    
    The expected volatility was
    determined by calculating the historical volatility of the
    Companys share price corresponding to the expected life of
    the share award. F-69




---



##### Table of Contents



Annual

Long TermBonus Plan

Incentive PlanNumber of shares

Number of shares(thousands)Outstanding at January 1, 2007


1,001



11,325Granted


675



3,539Vested


(418
)


(1,694
)Share capital consolidation


(68
)


Lapsed or canceled


(86
)


(1,707
)Outstanding at December 31, 2007


1,104



11,463Granted


662



5,061Vested


(472
)


(2,752
)Lapsed or canceled


(5
)


(2,619
)Outstanding at December 31, 2008


1,289



11,153Granted


1,059



5,755Vested


(434
)


(3,124
)Lapsed or canceled


(60
)


(1,518
)Outstanding at December 31, 2009


1,854



12,266Fair value of awards granted during the year (cents)At December 31, 2009


735.6



414.1At December 31, 2008


1,436.0



870.4At December 31, 2007


2,387.4



910.0Weighted average remaining contract life (years)At December 31, 2009


1.3



1.3At December 31, 2008


1.6



1.2At December 31, 2007


1.5



1.1     F-70




---



##### Table of Contents



Sharesave Plan

Executive Share Option PlanWeighted





WeightedNumber of

Range of

average

Number of

Range of

averageshares

option prices

option price

shares

option prices

option price(thousands)

(pence)

(pence)

(thousands)

(pence)

(pence)Outstanding at January 1, 2007


165



420.5



420.5



14,079



308.5-619.8



482.2Exercised


(101
)


420.5



420.5



(5,568
)


308.5-619.8



471.9Lapsed or canceled


(7
)


420.5



420.5



(317
)


438.0-619.8



526.8Outstanding at December 31, 2007


57



420.5



420.5



8,194



308.5-619.8



487.4Exercised


(3
)


420.5



420.5



(353
)


434.2-619.8



543.6Lapsed or canceled


(5
)


420.5



420.5



(206
)


349.1-593.2



431.3Outstanding at December 31, 2008


49



420.5



420.5



7,635



308.5-619.8



486.3Exercised


(48
)


420.5



420.5



(1,518
)


308.5-619.8



496.2Lapsed or canceled


(1
)


420.5



420.5



(247
)


438.0-619.8



509.9Outstanding at December 31, 2009














5,870



308.5-619.8



482.8Options exercisableAt December 31, 2009














5,870



308.5-619.8



482.8At December 31, 2008














7,635



308.5-619.8



486.3At December 31, 2007














6,583



308.5-619.8



455.0           Options outstanding and exercisableWeightedaverage

WeightedNumber

remaining

averageoutstanding

contract life

option priceRange of exercise prices (pence)

(thousands)

(years)

(pence)Executive Share Option Plan308.5 to 349.1


268



0.3



347.3422.8 to 494.2


4,574



3.3



459.9619.8


1,028



5.3



619.85,870



3.5



482.8  F-71




---



##### Table of Contents



Note 27 
    Operating
    leases      At

AtDecember 31,

December 31,2009

2008($ million)Due within one year


51



56One to two years


44



50Two to three years


38



47Three to four years


37



40Four to five years


30



33More than five years


309



322509



548       Note 28 
    Capital
    and other commitments  At

AtDecember 31,

December 31,2009

2008($ million)Contracts placed for expenditure on property, plant and
    equipment and intangible assets not provided for in the
    Consolidated Financial Statements


9



40     Note 29 
    Contingencies  At

AtDecember 31,

December 31,2009

2008($ million)Contingent liabilities not provided for in the Consolidated
    Financial Statements


16



12        F-72




---



##### Table of Contents



Note 30 
    Related
    party disclosures    Year ended December 31,2009


2008


2007($ million)Total compensation of key management personnelShort-term employment benefits


9.8



18.4



18.9Post-employment benefits


0.6



0.7



0.9Termination benefits


0.8







Equity compensation benefits


9.5



12.8



18.220.7



31.9



38.0     Note 31 
    System
    Funds      Year ended December 31,2009


2008


2007($ million)Assessment fees received from hotels*


1,008



990



930Key elements of Funds expenditure:*Marketing


165



211



215Priority Club


210



212



238Payroll costs


152



155



144Net surplus/(deficit) for the year


43



10



(34)Cumulative short-term net surplus


71



28



18Loyalty program liability


470



471



426Interest payable to the Funds


2



12



21   *
    
    Not included in the Consolidated
    income statement in accordance with the Groups accounting
    policies.   F-73




---



##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC



SCHEDULE II



VALUATION
    AND QUALIFYING ACCOUNTS  AdditionsBalance at

charged to





Balance atbeginning

costs and

Exchange



end ofof period

expenses

differences

Deductions

period($ million)Year ended December 31, 2009Provisions for bad and doubtful debts


110



34







(59
)


85Year ended December 31, 2008Provisions for bad and doubtful debts


96



28







(14
)


110Year ended December 31, 2007Provisions for bad and doubtful debts


85



23







(12
)


96Year ended December 31, 2006Provisions for bad and doubtful debts


81



29



2



(27
)


85Year ended December 31, 2005Provisions for bad and doubtful debts


83



25



(2
)


(25
)


81  S-1




---



##### Table of Contents



SIGNATURES
  Form 20-F
     By:
    /s/  Richard
    Solomons   Title:
    Chief Financial Officer