##### 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, 2007oro

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)
  67 Alma Road,
 Windsor, Berkshire SL4 3HD
 (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

294,623,308   þ o
  o þ
  þ 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

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

22Soft Drinks

39Trademarks

39Organizational Structure

39Property, Plant and Equipment

39Environment

40Item 4A.


Unresolved Staff Comments

41Item 5.


Operating and Financial Review and Prospects

41Critical Accounting Policies

41Operating Results

43Liquidity and Capital Resources

51Item 6.


Directors, Senior Management and Employees

54Directors and Senior Management

54Compensation

57Board Practices

58Employees

61Share Ownership

62Item 7.


Major Shareholders and Related Party
    Transactions

63Major Shareholders

63Related Party Transactions

63Item 8.


Financial Information

63Consolidated Statements and Other Financial
    Information

63Significant Changes

64Item 9.


The Offer and Listing

64Plan of Distribution

65Selling Shareholders

65Dilution

65Expenses of the Issue

65 2




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##### Table of Contents



PageItem 10.


Additional Information

65Memorandum and Articles of Association

65Material Contracts

68Exchange Controls

70Taxation

70Documents on Display

74Item 11.


Quantitative and Qualitative Disclosures About
    Market Risk

74Item 12.


Description of Securities Other Than Equity
    Securities

76PART IIItem 13.


Defaults, Dividend Arrearages and
    Delinquencies

76Item 14.


Material Modifications to the Rights of Security
    Holders and Use of Proceeds

76Item 15.


Controls and Procedures

76Item 16.


[Reserved]

77Item 16A.


Audit Committee Financial Expert

77Item 16B.


Code of Ethics

77Item 16C.


Principal Accountant Fees and Services

77Item 16D.


Exemptions from the Listing Standards for Audit
    Committees

78Item 16E.


Purchases of Equity Securities by the Issuer and
    Affiliated Purchasers

78PART IIIItem 17.


Financial Statements

78Item 18.


Financial Statements

79Item 19.


Exhibits

79   3




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INTRODUCTION    
    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
    from time to time;
    Company refers to InterContinental Hotels Group PLC,
    InterContinental Hotels Limited or Six Continents Limited or
    their respective board of directors as the context requires;
    Group 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 and Britvic business refer
    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.    Form 20-F
   4




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




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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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Consolidated
    Income Statement Data
  Years ended December 31,2007(1)


2007


2006


2005(2)


2004(2)$


£


£


£


£(in millions, except per share and ADS amounts)Revenue:Continuing operations


1,771



883



786



697



607Discontinued operations


79



40



174



1,213



1,5971,850



923



960



1,910



2,204Total operating profit before exceptional operating items:Continuing operations


474



237



200



175



125Discontinued operations


17



8



31



164



221491



245



231



339



346Exceptional operating items:Continuing operations


60



30



27



(15
)


(24
)Discontinued operations














(7
)


(25
)60



30



27



(22
)


(49
)Total operating profit:Continuing operations


534



267



227



160



101Discontinued operations


17



8



31



157



196551



275



258



317



297Financial income


18



9



26



30



70Financial expenses


(108
)


(54
)


(37
)


(63
)


(103
)Profit before tax


461



230



247



284



264Tax:On profit before exceptional items


(90
)


(45
)


(53
)


(88
)


(56
)On exceptional items










(6
)






22Exceptional tax


60



30



100



8



161(30
)


(15
)


41



(80
)


127Profit after tax


431



215



288



204



391Gain on disposal of assets, net of tax


32



16



117



311



19Profit for the year


463



231



405



515



410Attributable to:Equity holders of the parent


463



231



405



496



383Minority equity interest














19



27Profit for the year


463



231



405



515



410Earnings per ordinary share:Continuing operations:Basic


131.3¢



65.6p



69.1p



21.9p



36.3pDiluted


127.7¢



63.8p



67.4p



21.4p



35.9pTotal operations:Basic


144.7¢



72.2p



104.1p



95.2p



53.9pDiluted


140.7¢



70.2p



101.5p



93.1p



53.3p   Footnotes on page 9.
 8




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##### Table of Contents



Consolidated
    Balance Sheet Data
  December 31,2007(3)


2007


2006


2005


2004$


£


£


£


£(in millions)Goodwill and intangible assets


556



277



263



238



206Property, plant and equipment


1,934



962



997



1,356



1,926Investments and other financial assets


253



126



128



155



122Retirement benefit assets


65



32











Current assets


710



353



455



707



598Non-current assets classified as held for sale


115



57



50



279



1,826Total assets


3,633



1,807



1,893



2,735



4,678Current liabilities


1,226



610



643



794



926Long-term debt


1,748



869



303



410



1,156Net assets


98



49



686



1,104



1,938Share capital


163



81



66



49



723IHG shareholders equity


92



46



678



1,084



1,821Number of Shares in issue at period end (millions)






295



356



433



622     (1)
    
    US dollar amounts have been
    translated at the weighted average rate for the year of
    £1.00 = $2.01.(2)
    
    The year ended 2004 includes Hotels
    12 months and Soft Drinks 53 weeks ended
    December 25, 2004. The year ended 2005 includes Hotels
    12 months and Soft Drinks 50 weeks and three days
    ended December 14, 2005.(3)
    
    US dollar amounts have been
    translated at the Noon Buying Rate on December 31, 2007 of
    £1.00 = $2.01 solely for convenience.  Dividends
      Ordinary
    dividend
  Pence per ordinary share


$  per ADSInterim


Final


Total


Interim


Final


TotalPeriod ended December 31, 2003Six
    Continents(1)


7.65







7.65



0.119







0.119IHG


4.05



9.45



13.50



0.068



0.174



0.242Year ended December 31,2004


4.30



10.00



14.30



0.077



0.191



0.2682005


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
(2)


0.407     (1)
    
    Restated to reflect an equivalent
    number of shares in InterContinental Hotels Group PLC.(2)
    
    The 2007 final dividend payable to
    ADS holders will be paid in USD and was set using the closing
    USD/GBP spot rate of £1.00:$1.96 on February 15, 2008. 9




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##### Table of Contents



Special
    Dividend
  Pence perordinary share


$ per ADSDecember 2004


72.00



1.39June 2006


118.00



2.17June 2007


200.00



4.00   Return of
    Capital
  Pence perordinary share


$ per ADSJune 2005


165.00



2.86   Exchange
    Rates
    Months


Monthshighest


lowestMonth

exchange rate


exchange rateSeptember 2007


2.04



1.99October 2007


2.08



2.03November 2007


2.11



2.05December 2007


2.07



1.98January 2008


1.99



1.95February 2008


1.99



1.94March 2008 (through March 14, 2008)


2.03



1.99   Period


Averageend


rate(1)


High


LowPeriod ended December 31,2003


1.78



1.63



1.78



1.54Year ended December 31,2004


1.93



1.84



1.95



1.752005


1.73



1.82



1.93



1.712006


1.96



1.84



1.97



1.742007


2.01



2.01



2.11



1.922008 (through March 14, 2008)


2.03



2.00



2.03



1.94     (1)
    
    The average of the Noon Buying Rate
    on the last day of each full month during the period.   10




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RISK
    FACTORS      The
    Group is reliant on the reputation of its brands and the
    protection of its intellectual property rights
        The
    Group is exposed to a variety of risks related to identifying,
    securing and retaining management and franchise
    agreements
       11




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The
    Group is exposed to the risks of political and economic
    developments
      The
    Group is dependent upon recruiting and retaining key personnel
    and developing their skills
    The
    Group is exposed to the risk of events that adversely impact
    domestic or international travel
    The
    Group is reliant upon its proprietary reservation system and is
    exposed to the risk of failures in the system and increased
    competition in reservation infrastructure
     12




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The
    Group is exposed to certain risks in relation to technology and
    systems
  e-commerce
  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
    The
    Group may face difficulties insuring its business
   13




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The
    Group is exposed to a variety of risks associated with its
    ability to borrow and satisfy debt covenants
    The
    Group is required to comply with data privacy
    regulations
    The
    Group is exposed to funding risks in relation to the defined
    benefits under its pension plans
      
    poor investment performance of pension fund investments;


    longer life expectancy than assumed in the plans actuarial
    valuations (which will make pensions payable for longer and
    therefore more expensive to provide);


    adverse annuity rates (which tend in particular to depend on
    prevailing interest rates and life expectancy) as these will
    make it more expensive to secure pensions with an insurance
    company; and


    other events occurring which make past service benefits more
    expensive than predicted in the actuarial assumptions by
    reference to which the Groups past contributions were
    assessed.    ITEM 4.
    INFORMATION
    ON THE COMPANY SUMMARY  Group
    Overview
   14




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##### Table of Contents



Group
    History and Recent Developments
        Acquisitions
    and Dispositions
     15




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##### Table of Contents



FIGURE
    1
  Asset disposal program detail

Number of hotels


Proceeds


Net book value(£ billion)Disposed since April 2003


181



3.0



2.9Remaining owned and leased hotels


18







0.9   Return
    of Funds
         16




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##### Table of Contents



FIGURE
    2
  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


Under way



£150m



£58m



£92mTotal






£3,603m



£3,511m



£92m   (i)
    
    As at March 14, 2008.  Hotels
    Soft
    Drinks
   17




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##### Table of Contents



SEGMENTAL
    INFORMATION  Geographic
    Segmentation
    Year ended December 31,2007


2006


2005(£ million)Revenue(1)Americas


450



422



376Europe, the Middle East and Africa


245



198



192Asia Pacific


130



111



87Central(4)


58



55



42Continuing operations


883



786



697Americas


31



41



69Europe, the Middle East and Africa


9



133



1,090Asia Pacific










54Discontinued
    operations(3)


40



174



1,213Total


923



960



1,910Operating profit before exceptional operating
    items(1)(2)Americas


220



215



186Europe, the Middle East and Africa


67



37



33Asia Pacific


31



29



21Central(4)


(81
)


(81
)


(65
)Continuing operations


237



200



175Americas


8



6



12Europe, the Middle East and Africa






25



141Asia Pacific










11Discontinued
    operations(3)


8



31



164Total


245



231



339     Footnotes on page 19.
  18




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Year ended December 31,2007


2006


2005(%)RevenueAmericas


48.8



44.0



19.7Europe, the Middle East and Africa


26.5



20.6



10.0Asia Pacific


14.1



11.6



4.6Central


6.3



5.7



2.2Continuing operations


95.7



81.9



36.5Americas


3.3



4.3



3.6Europe, the Middle East and Africa


1.0



13.8



57.1Asia Pacific










2.8Discontinued operations


4.3



18.1



63.5Total


100.0



100.0



100.0Operating profit before exceptional operating itemsAmericas


89.8



93.1



54.9Europe, the Middle East and Africa


27.3



16.0



9.7Asia Pacific


12.7



12.6



6.2Central


(33.1
)


(35.1
)


(19.2
)Continuing operations


96.7



86.6



51.6Americas


3.3



2.6



3.5Europe, the Middle East and Africa






10.8



41.6Asia Pacific










3.3Discontinued operations


3.3



13.4



48.4Total


100.0



100.0



100.0     (1)
    
    The results of overseas operations
    have been translated into sterling at weighted average rates of
    exchange for the period. In the case of the US dollar, the
    translation rate is £1 = $2.01 (2006 £1 = $1.84, 2005
    £1 = $1.83) . In the case of the euro, the translation rate
    is £1 = 1.46 (2006 £1 = 1.47, 2005 £1
    = 1.46).(2)
    
    Operating profit before exceptional
    operating items does not include exceptional operating items for
    all periods presented. Exceptional operating items (credit
    unless otherwise noted) by region are the Americas
    £9 million (2006 £25 million, 2005
    £5 million charge); Europe, the Middle East and Africa
    £10 million (2006 £2 million, 2005
    £12 million charge); Asia Pacific £8 million
    (2006 £nil, 2005 £5 million charge); and Central
    £3 million (2006 £nil, 2005 £nil).(3)
    
    Europe, the Middle East and Africa
    includes discontinued operations for Hotels  £nil (2006
    £25 million, 2005 £71 million) and Soft
    Drinks £nil (2006 £nil, 2005 £70 million).
    The Americas and Asia Pacific discontinued operations all relate
    to Hotels. Hotels discontinued operations were all owned and
    leased.(4)
    
    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. 19




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Activity
    Segmentation
    Year ended December 31,2007


2006


2005(£ million)Revenue(1)HotelsAmericas


450



422



376Europe, the Middle East and Africa


245



198



192Asia Pacific


130



111



87Central(4)


58



55



42Continuing operations


883



786



697Hotels(3)Americas


31



41



69Europe, the Middle East and Africa


9



133



419Asia Pacific










54Soft Drinks










671Discontinued operations


40



174



1,213Total


923



960



1,910Operating profit before exceptional operating
    items(1)(2)HotelsAmericas


220



215



186Europe, the Middle East and Africa


67



37



33Asia Pacific


31



29



21Central(4)


(81
)


(81
)


(65
)Continuing operations


237



200



175Hotels(3)Americas


8



6



12Europe, the Middle East and Africa






25



71Asia Pacific










11Soft Drinks










70Discontinued operations


8



31



164Total


245



231



339     Footnotes on page 21.
  20




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##### Table of Contents



Year ended December 31,2007


2006


2005(%)RevenueHotelsAmericas


48.8



44.0



19.7Europe, the Middle East and Africa


26.5



20.6



10.0Asia Pacific


14.1



11.6



4.6Central


6.3



5.7



2.2Continuing operations


95.7



81.9



36.5HotelsAmericas


3.3



4.3



3.6Europe, the Middle East and Africa


1.0



13.8



22.0Asia Pacific










2.8Soft Drinks










35.1Discontinued operations


4.3



18.1



63.5Total


100.0



100.0



100.0Operating profit before exceptional operating itemsHotelsAmericas


89.8



93.1



54.9Europe, the Middle East and Africa


27.3



16.0



9.7Asia Pacific


12.7



12.6



6.2Central


(33.1
)


(35.1
)


(19.2
)Continuing operations


96.7



86.6



51.6HotelsAmericas


3.3



2.6



3.5Europe, the Middle East and Africa






10.8



20.9Asia Pacific










3.3Soft Drinks










20.7Discontinued operations


3.3



13.4



48.4Total


100.0



100.0



100.0     (1)
    
    The results of overseas operations
    have been translated into sterling at weighted average rates of
    exchange for the period. In the case of the US dollar, the
    translation rate is £1=$2.01 (2006 £1 = $1.84, 2005
    £1 = $1.83). In the case of the euro, the translation rate
    is  £1 = 1.46 (2006 £1 = 1.47, 2005
    £1 = 1.46).(2)
    
    Operating profit before exceptional
    operating items does not include exceptional operating items for
    all periods presented. Exceptional operating items (credit
    unless otherwise noted) by region are the Americas
    £9 million (2006 £25 million, 2005
    £5 million charge); Europe, the Middle East and Africa
    £10 million (2006 £2 million, 2005
    £12 million charge); Asia Pacific £8 million
    (2006 £nil, 2005 £5 million charge); and Central
    £3 million (2006 £nil, 2005: £nil).(3)
    
    Hotels discontinued operations were
    all owned and leased.(4)
    
    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. 21




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##### Table of Contents



HOTELS  Overview
            
    change in demographics  as the population ages and
    becomes wealthier, increased leisure time and income encourages
    more travel and hotel visits;
    increase in travel volumes as low cost airlines grow rapidly;
    globalization of trade and tourism;
    increase in affluence and freedom to travel within the Chinese
    middle class; and
    increase in the preference for branded hotels amongst consumers.  FIGURE
    3
  Branded hotel rooms by region as a percentage of the total
    market

2006United States


67
%Europe, Middle East and Africa (EMEA)


35
%Asia Pacific


28
%          22




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##### Table of Contents



Operations
    franchised
  managed and/or
  owned and leased (O & L)
      Managementcontracts and jointOwned or leased


ventures


Franchised


TotalNo. of


No. of


No. of


No. of


No. of


No. of


No. of


No. ofhotels


rooms


hotels


rooms


hotels


rooms


hotels


rooms2007


18



6,396



539



134,883



3,392



443,815



3,949



585,0942006


25



8,460



512



125,214



3,204



422,572



3,741



556,2462005


55



15,485



504



121,249



3,047



400,799



3,606



537,533    23




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##### Table of Contents



Strategy
    
    brand performance  to operate a portfolio of brands
    attractive to both owners and guests that have clear market
    positions and differentiation in the eyes of the guest;
    excellent hotel returns  to generate higher owner
    returns through revenue delivery and improved operating
    efficiency;
    market scale and knowledge  to accelerate profitable
    growth in the largest markets where the Group currently has
    scale; and
    aligned organization  to create a more efficient
    organization with strong core capabilities.          
    a strong brand portfolio across the major markets, where
    IHGs brands achieved revenue per available room
    (RevPAR) growth premiums within respective key
    market segments during 2007;
    market coverage  a presence in nearly 100 countries;
    scale  3,949 hotels, 585,094 rooms and
    137 million room nights per annum;
    IHG global reservation channels delivering $6.8 billion of
    global system room revenue in 2007, including $2.6 billion
    from the internet;
    a loyalty program, Priority Club Rewards, contributing
    $5.2 billion of global system room revenue in 2007; and
    a strong web presence  holidayinn.com is one of the
    industrys most visited sites, with around 75 million
    total site visits per annum.   24




---



##### Table of Contents



Segmental
    Results
    Year ended December 31,2007


2006


2005(£ million)Continuing
    revenue(1)AmericasOwned and leased


128



104



98Managed


78



77



65Franchised


244



241



213450



422



376EMEAOwned and leased


121



92



102Managed


84



71



55Franchised


40



35



35245



198



192AsiaOwned and leased


73



71



59Managed


49



36



25Franchised


8



4



3130



111



87Central(3)


58



55



42Total


883



786



697Continuing operating profit before exceptional operating
    items(1)(2)AmericasOwned and leased


20



12



14Managed


21



27



20Franchised


212



208



186Regional overheads


(33
)


(32
)


(34
)220



215



186EMEAOwned and leased


17



(4
)


(3
)Managed


43



37



31Franchised


29



24



26Regional overheads


(22
)


(20
)


(21
)67



37



33Asia PacificOwned and leased


18



17



11Managed


23



21



16Franchised


3



3



2Regional overheads


(13
)


(12
)


(8
)31



29



21Central(3)


(81
)


(81
)


(65
)Total


237



200



175     Footnotes on page 26.
  25




---



##### Table of Contents



Year ended December 31,2007


2006


2005(%)Continuing revenueAmericasOwned and leased


14.5



13.2



14.1Managed


8.8



9.8



9.3Franchised


27.6



30.7



30.650.9



53.7



54.0EMEAOwned and leased


13.7



11.7



14.6Managed


9.5



9.0



7.9Franchised


4.5



4.5



5.027.7



25.2



27.5Asia PacificOwned and leased


8.3



9.0



8.5Managed


5.6



4.6



3.6Franchised


0.9



0.5



0.414.8



14.1



12.5Central


6.6



7.0



6.0Total


100.0



100.0



100.0Continuing operating profit before exceptional operating itemsAmericasOwned and leased


8.4



6.0



8.0Managed


8.9



13.5



11.4Franchised


89.5



104.0



106.3Regional overheads


(13.9
)


(16.0
)


(19.4
)92.9



107.5



106.3EMEAOwned and leased


7.2



(2.0
)


(1.7
)Managed


18.1



18.5



17.7Franchised


12.2



12.0



14.8Regional overheads


(9.3
)


(10.0
)


(12.0
)28.2



18.5



18.8Asia PacificOwned and leased


7.6



8.5



6.3Managed


9.7



10.5



9.1Franchised


1.3



1.5



1.1Regional overheads


(5.5
)


(6.0
)


(4.5
)13.1



14.5



12.0Central


(34.2
)


(40.5
)


(37.1
)Total


100.0



100.0



100.0     (1)
    
    The results of overseas operations
    have been translated into sterling at weighted average rates of
    exchange for the period. In the case of the US dollar, the
    translation rate is £1 = $2.01 (2006 £1 = $1.84, 2005
    £1 = $1.83). In the case of the euro, the translation rate
    is £1 = 1.46 (2006 £1 = 1.47, 2005 £1
    = 1.46).(2)
    
    Operating profit before exceptional
    operating items does not include exceptional operating items for
    all periods presented. Exceptional operating items (credit
    unless otherwise noted) by region are the Americas
    £9 million (2006 £25 million, 2005
    £5 million charge); Europe, the Middle East and Africa
    £10 million (2006 £2 million, 2005
    £12 million charge); Asia Pacific £8 million
    (2006 £nil, 2005 £5 million charge); and Central
    £3 million (2006 £nil, 2005 £nil).(3)
    
    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. 26




---



##### Table of Contents



Year ended December 31,2007


2006


2005($ million)Continuing
    revenue(1)AmericasOwned and leased


257



192



180Managed


156



143



118Franchised


489



443



389902



778



687EMEAOwned and leased


244



169



187Managed


167



131



100Franchised


81



63



64492



363



351Asia PacificOwned and leased


145



131



108Managed


99



65



45Franchised


16



8



6260



204



159Central(3)


117



101



77Total


1,771



1,446



1,274Continuing operating profit before exceptional operating
    items(1)(2)AmericasOwned and leased


40



22



26Managed


41



50



36Franchised


425



382



340Regional overheads


(66
)


(59
)


(62
)440



395



340EMEAOwned and leased


33



(7
)


(5
)Managed


87



68



56Franchised


58



44



48Regional overheads


(44
)


(36
)


(39
)134



69



60Asia PacificOwned and leased


36



31



20Managed


46



39



29Franchised


6



5



5Regional overheads


(25
)


(23
)


(15
)63



52



39Central(3)


(163
)


(149
)


(118
)Total


474



367



321     Footnotes on page 28.
 27




---



##### Table of Contents



Year ended December 31,2007


2006


2005(%)Continuing revenueAmericasOwned and leased


14.5



13.3



14.1Managed


8.8



9.9



9.3Franchised


27.6



30.6



30.550.9



53.8



53.9EMEAOwned and leased


13.8



11.7



14.7Managed


9.4



9.0



7.9Franchised


4.6



4.4



5.027.8



25.1



27.6Asia PacificOwned and leased


8.2



9.0



8.5Managed


5.6



4.5



3.5Franchised


0.9



0.6



0.514.7



14.1



12.5Central


6.6



7.0



6.0Total


100.0



100.0



100.0Continuing operating profit before exceptional operating itemsAmericasOwned and leased


8.4



6.0



8.1Managed


8.6



13.6



11.2Franchised


89.7



104.0



105.9Regional overheads


(13.9
)


(16.0
)


(19.3
)92.8



107.6



105.9EMEAOwned and leased


7.0



(1.9
)


(1.6
)Managed


18.4



18.5



17.4Franchised


12.2



12.0



15.0Regional overheads


(9.3
)


(9.8
)


(12.1
)28.3



18.8



18.7AsiaOwned and leased


7.6



8.5



6.2Managed


9.7



10.6



9.0Franchised


1.3



1.4



1.6Regional overheads


(5.3
)


(6.3
)


(4.6
)13.3



14.2



12.2Central


(34.4
)


(40.6
)


(36.8
)Total


100.0



100.0



100.0     (1)
    
    The results of overseas operations
    have been translated into sterling at weighted average rates of
    exchange for the period. In the case of the US dollar, the
    translation rate is £1 =  $2.01 (2006 £1 = $1.84, 2005
    £1 = $1.83). In the case of the euro, the translation rate
    is £1 = 1.46 (2006 £1 = 1.47, 2005 £1
    = 1.46).(2)
    
    Operating profit before exceptional
    operating items does not include exceptional operating items for
    all periods presented. Exceptional operating items (credit
    unless otherwise noted) by region are the Americas
    £9 million (2006 £25 million, 2005
    £5 million charge); Europe, the Middle East and Africa
    £10 million (2006 £2 million, 2005
    £12 million charge); Asia Pacific £8 million
    (2006 £nil, 2005 £5 million charge); and Central
    2007 £3 million (2006 £nil, 2005 £nil).(3)
    
    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. 28




---



##### Table of Contents



Global
    System
    Priority Club Rewards:
  Central Reservation System Technology:
  Reservation Call Centers:
  Internet:
    Sales
    and Marketing
      
    adding further locations and improving guest satisfaction for
    its brands;
    continuing the focus on enrolments in Priority Club Rewards and
    increasing their share of the total hotel spend;
    continuing to improve the direct channels; and
    improving pricing structure. 29




---



##### Table of Contents



Global
    Brands
  Brands
    Overview
    December 31, 2007Brands

Room numbers


HotelsInterContinental


50,762



149Crowne Plaza


83,170



299Holiday Inn


256,699



1,381Holiday Inn Express


156,531



1,808Staybridge Suites


13,466



122Candlewood Suites


16,825



158Hotel Indigo


1,501



11Other


6,140



21Total


585,094



3,949   InterContinental
  Americas


Americas


EMEA


EMEA


Asia Pacifictotal


O & L


total


O & L


totalAverage room rate
    $(1)


169.83



260.63



190.85



449.58



173.22Room
    numbers(2)


16,624



1,914



20,012



1,288



14,126     (1)
    
    For the year ended
    December 31, 2007; quoted at constant US$ exchange rate.
    Average room rate is for comparable InterContinental hotels.(2)
    
    As at December 31, 2007.      Crowne
    Plaza
  Americas


EMEA


EMEA


Asia Pacifictotal


total


O & L


totalAverage room rate
    $(1)


115.01



150.73



117.61



100.23Room
    numbers(2)


47,893



17,326



233



17,951     (1)
    
    For the year ended
    December 31, 2007; quoted at constant US$ exchange rate.
    Average room rate is for comparable Crowne Plaza hotels.(2)
    
    As at December 31, 2007.     30




---



##### Table of Contents



Holiday
    Inn
  Americas


Americas


EMEA


Asia Pacifictotal


O & L


total


totalAverage room rate
    $(1)


95.97



96.04



119.64



81.18Room
    numbers(2)


177,999



1,882



52,842



25,858     (1)
    
    For the year ended
    December 31, 2007; quoted at constant US$ exchange rate.
    Average room rate is for comparable Holiday Inn hotels.(2)
    
    As at December 31, 2007.      Holiday
    Inn Express
  Americas


EMEA


Asia Pacifictotal


total


totalAverage room rate
    $(1)


94.10



104.73



72.75Room
    numbers(2)


134,551



19,380



2,600     (1)
    
    For the year ended
    December 31, 2007; quoted at constant US$ exchange rate.
    Average room rate is for comparable Holiday Inn Express hotels.(2)
    
    As at December 31, 2007.      Staybridge
    Suites
  AmericastotalAverage room rate
    $(1)


105.06Room
    numbers(2)


13,466     (1)
    
    For the year ended
    December 31, 2007; quoted at constant US$ exchange rate.
    Average room rate is for comparable Staybridge Suites
    hotels.(2)
    
    As at December 31, 2007.     31




---



##### Table of Contents



Candlewood
    Suites
  AmericastotalAverage room rate
    $(1)


70.14Room
    numbers(2)


16,825     (1)
    
    For the year ended
    December 31, 2007; quoted at constant US$ exchange rate.
    Average room rate is for comparable Candlewood Suites hotels.(2)
    
    As at December 31, 2007.      Hotel
    Indigo
  24-hour
    AmericastotalAverage room rate
    $(1)


116.54Room
    numbers(2)


1,501     (1)
    
    For the year ended
    December 31, 2007; quoted at constant US$ exchange rate.
    Average room rate is for comparable Hotel Indigo hotels.(2)
    
    As at December 31, 2007.  Geographical
    Analysis
      Americas


EMEA


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


70



19



11Regional operating profit (before central overheads and
    exceptional operating
    items)(2)


69



21



10     (1)
    
    As at December 31, 2007.(2)
    
    For the year ended
    December 31, 2007. 32




---



##### Table of Contents



Owned and leased


Managed


Franchised


TotalHotels


Rooms


Hotels


Rooms


Hotels


Rooms


Hotels


RoomsAmericasInterContinental


4



1,914



23



8,313



23



6,397



50



16,624Crowne Plaza










19



6,620



153



41,273



172



47,893Holiday Inn


5



1,882



29



9,654



918



166,463



952



177,999Holiday Inn Express










1



252



1,614



134,299



1,615



134,551Staybridge Suites


2



233



41



5,142



79



8,091



122



13,466Candlewood Suites










78



9,410



80



7,415



158



16,825Hotel Indigo










2



305



9



1,196



11



1,501Total


11



4,029



193



39,696



2,876



365,134



3,080



408,859EMEAInterContinental


3



1,288



53



17,077



6



1,647



62



20,012Crowne Plaza


1



233



20



5,234



51



11,859



72



17,326Holiday Inn










86



15,452



249



37,390



335



52,842Holiday Inn Express


1



153



12



1,310



169



17,917



182



19,380Total


5



1,674



171



39,073



475



68,813



651



109,560Asia PacificInterContinental


1



495



28



11,256



8



2,375



37



14,126Crowne Plaza










50



15,833



5



2,118



55



17,951Holiday Inn


1



198



78



23,242



15



2,418



94



25,858Holiday Inn Express










10



2,463



1



137



11



2,600Other










9



3,320



12



2,820



21



6,140Total


2



693



175



56,114



41



9,868



218



66,675TotalInterContinental


8



3,697



104



36,646



37



10,419



149



50,762Crowne Plaza


1



233



89



27,687



209



55,250



299



83,170Holiday Inn


6



2,080



193



48,348



1,182



206,271



1,381



256,699Holiday Inn Express


1



153



23



4,025



1,784



152,353



1,808



156,531Staybridge Suites


2



233



41



5,142



79



8,091



122



13,466Candlewood Suites










78



9,410



80



7,415



158



16,825Hotel Indigo










2



305



9



1,196



11



1,501Other










9



3,320



12



2,820



21



6,140Total


18



6,396



539



134,883



3,392



443,815



3,949



585,094   Americas
    EMEA
   33




---



##### Table of Contents



Asia
    Pacific
    Room Count
    and Pipeline
          Americas
      EMEA
   34




---



##### Table of Contents



Asia
    Pacific
      FIGURE
    4
  Hotels


RoomsChange








ChangeGlobal hotel and room count at December 31

2007


2006


over 2006


2007


2006


over 2006Analyzed by brand:InterContinental


149



148



1



50,762



49,599



1,163Crowne Plaza


299



275



24



83,170



75,632



7,538Holiday Inn


1,381



1,395



(14
)


256,699



260,470



(3,771
)Holiday Inn Express


1,808



1,686



122



156,531



143,582



12,949Staybridge Suites


122



97



25



13,466



10,953



2,513Candlewood Suites


158



130



28



16,825



14,149



2,676Hotel Indigo


11



6



5



1,501



893



608Other


21



4



17



6,140



968



5,172Total


3,949



3,741



208



585,094



556,246



28,848Analyzed by ownership type:Owned and leased


18



25



(7
)


6,396



8,460



(2,064
)Managed


539



512



27



134,883



125,214



9,669Franchised


3,392



3,204



188



443,815



422,572



21,243Total


3,949



3,741



208



585,094



556,246



28,848  35




---



##### Table of Contents



FIGURE
    5
  Hotels


RoomsChange








ChangeGlobal pipeline at December 31

2007


2006


over 2006


2007


2006


over 2006Analyzed by brand:InterContinental


62



36



26



20,013



13,211



6,802Crowne Plaza


118



60



58



36,362



17,113



19,249Holiday Inn


365



299



66



56,945



44,774



12,171Holiday Inn Express


712



574



138



70,142



55,520



14,622Staybridge Suites


157



120



37



17,150



12,605



4,545Candlewood Suites


207



128



79



18,605



11,723



6,882Hotel Indigo


52



24



28



6,565



3,045



3,520Other


1







1



90







90Total


1,674



1,241



433



225,872



157,991



67,881Analyzed by ownership type:Managed


247



139



108



71,814



41,648



30,166Franchised


1,427



1,102



325



154,058



116,343



37,715Total


1,674



1,241



433



225,872



157,991



67,881   Seasonality
    Competition
    Key
    Relationships
       36




---



##### Table of Contents



RevPAR
        Owned & leased


Managed


FranchisedChange vs








Change vs








Change vs2007


2006


2006


2007


2006


2006


2007


2006


2006AmericasInterContinentalOccupancy


83.6
%


81.7
%


1.9
%pts


70.5
%


68.0
%


2.5
%pts


64.7
%


64.9
%


(0.2
)%ptsAverage daily rate

$
260.63


$
241.21



8.05
%

$
172.28


$
161.33



6.79
%

$
126.53


$
116.51



8.60
%RevPAR

$
217.86


$
196.97



10.61
%

$
121.51


$
109.64



10.83
%

$
81.87


$
75.64



8.24
%Crowne PlazaOccupancy


0



0



0



74.9
%


74.7
%


0.2
%pts


64.1
%


63.0
%


1.1
%ptsAverage daily rate


0



0



0


$
142.46


$
133.33



6.85
%

$
109.16


$
103.22



5.75
%RevPAR


0



0



0


$
106.71


$
99.55



7.19
%

$
69.96


$
65.00



7.63
%Holiday InnOccupancy


72.9
%


69.2
%


3.7
%pts


68.9
%


67.6
%


1.3
%pts


63.1
%


63.5
%


(0.4
)%ptsAverage daily rate

$
96.04


$
93.67



2.53
%

$
106.53


$
100.86



5.62
%

$
95.26


$
90.52



5.24
%RevPAR

$
70.01


$
64.79



8.06
%

$
73.45


$
68.19



7.71
%

$
60.12


$
57.44



4.67
%Holiday Inn ExpressOccupancy


0



0



0



75.8
%


74.8
%


1.0
%pts


68.1
%


68.7
%


(0.6
)%ptsAverage daily rate


0



0



0


$
148.58


$
133.55



11.25
%

$
93.96


$
87.32



7.60
%RevPAR


0



0



0


$
112.67


$
99.91



12.77
%

$
63.98


$
59.95



6.72
%Staybridge SuitesOccupancy


73.7
%


74.8
%


(1.1
)%pts


74.9
%


76.5
%


(1.6
)%pts


73.4
%


73.3
%


0.1
%ptsAverage daily rate

$
100.56


$
94.61



6.29
%

$
108.83


$
104.53



4.11
%

$
101.81


$
96.24



5.79
%RevPAR

$
74.12


$
70.73



4.79
%

$
81.56


$
79.92



2.05
%

$
74.77


$
70.53



6.01
%Candlewood SuitesOccupancy


0



0



0



74.5
%


75.7
%


(1.2
)%pts


66.3
%


69.2
%


(2.9
)%ptsAverage daily rate


0



0



0


$
69.81


$
66.50



4.98
%

$
71.14


$
68.99



3.12
%RevPAR


0



0



0


$
52.02


$
50.31



3.40
%

$
47.19


$
47.71



(1.09
)%Hotel IndigoOccupancy


0



0



0



68.4
%


66.3
%


2.1
%pts


53.2
%


41.1
%


12.1
%ptsAverage daily rate


0



0



0


$
142.78


$
143.74



(0.67
)%

$
88.12


$
78.37



12.44
%RevPAR


0



0



0


$
97.72


$
95.25



2.59
%

$
46.89


$
32.25



45.40
%   37




---



##### Table of Contents



Owned & leased


Managed


FranchisedChange vs








Change vs








Change vs2007


2006


2006


2007


2006


2006


2007


2006


2006EMEAInterContinentalOccupancy


81.7
%


79.2
%


2.5
%pts


68.4
%


65.3
%


3.1
%pts


67.1
%


64.5
%


2.6
%ptsAverage daily rate

$
449.58


$
406.56



10.58
%

$
176.96


$
164.13



7.82
%

$
281.93


$
242.64



16.19
%RevPAR

$
367.30


$
322.17



14.01
%

$
121.06


$
107.18



12.95
%

$
189.31


$
156.44



21.01
%Crown PlazaOccupancy


70.9
%


70.1
%


0.8
%pts


78.5
%


77.2
%


1.3
%pts


69.6
%


68.6
%


1.0
%ptsAverage daily rate

$
117.61


$
122.04



(3.63
)%

$
169.52


$
153.74



10.26
%

$
141.89


$
135.03



5.08
%RevPAR

$
83.43


$
85.60



(2.54
)%

$
133.01


$
118.71



12.05
%

$
98.79


$
92.67



6.60
%Holiday InnOccupancy


0



0



0



74.5
%


73.9
%


0.6
%pts


67.6
%


66.3
%


1.3
%ptsAverage daily rate


0



0



0


$
127.69


$
120.05



6.36
%

$
115.87


$
110.27



5.08
%RevPAR


0



0



0


$
95.07


$
88.73



7.15
%

$
78.38


$
73.10



7.22
%Holiday Inn ExpressOccupancy


72.5
%


70.1
%


2.4
%pts


68.3
%


63.5
%


4.8
%pts


73.8
%


72.8
%


1.0
%ptsAverage daily rate

$
81.92


$
84.81



(3.41
)%

$
87.88


$
82.29



6.79
%

$
106.19


$
101.78



4.33
%RevPAR

$
59.39


$
59.49



(0.17
)%

$
60.02


$
52.28



14.80
%

$
78.34


$
74.04



5.81
%   Owned & leased


Managed


FranchisedChange vs








Change vs








Change vs2007


2006


2006


2007


2006


2006


2007


2006


2006Asia PacificInterContinentalOccupancy


69.9
%


72.5
%


(2.6
)%pts


73.8
%


70.2
%


3.6
%pts


73.2
%


70.8
%


2.4
%ptsAverage daily rate

$
377.22


$
339.09



11.24
%

$
154.45


$
150.48



2.64
%

$
184.82


$
157.63



17.25
%RevPAR

$
263.77


$
245.88



7.28
%

$
114.03


$
105.68



7.90
%

$
135.32


$
111.60



21.25
%Crowne PlazaOccupancy


0



0



0



75.7
%


75.3
%


0.4
%pts


84.9
%


85.4
%


(0.5
)%ptsAverage daily rate


0



0



0


$
97.60


$
92.57



5.43
%

$
120.67


$
108.69



11.02
%RevPAR


0



0



0


$
73.87


$
69.67



6.03
%

$
102.41


$
92.80



10.36
%Holiday InnOccupancy


76.7
%


78.6
%


(1.9
)%pts


76.0
%


75.7
%


0.3
%pts


71.1
%


70.8
%


0.3
%ptsAverage daily rate

$
116.17


$
106.32



9.26
%

$
81.87


$
75.43



8.54
%

$
72.78


$
68.49



6.26
%RevPAR

$
89.16


$
83.56



6.70
%

$
62.22


$
57.13



8.91
%

$
51.72


$
48.48



6.68
%Holiday Inn ExpressOccupancy


0



0



0



84.9
%


82.7
%


2.2
%pts


55.4
%


65.4
%


(10.0
)%ptsAverage daily rate


0



0



0


$
75.05


$
67.58



11.05
%

$
56.47


$
53.52



5.51
%RevPAR


0



0



0


$
63.68


$
55.88



13.96
%

$
31.28


$
35.01



(10.65
)%OtherOccupancy


0



0



0



59.3
%


56.4
%


2.9
%pts


0



0



0Average daily rate


0



0



0


$
119.27


$
113.80



4.81
%


0



0



0RevPAR


0



0



0


$
70.74


$
64.22



10.15
%


0



0



0   Regulation
   38




---



##### Table of Contents



SOFT
    DRINKS       TRADEMARKS   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. PROPERTY,
    PLANT AND EQUIPMENT    Europe,Net book value of land and buildings as

the Middle Eastat December 31, 2007

and Africa

Americas

Asia Pacific

Total(£ million)Hotels


318



251



166



735  39




---



##### Table of Contents



ENVIRONMENT        
    developments in global environmental policy;
    how it establishes management responsibility and accountability
    for environmental performance;
    how it evaluates and manages the Groups hotels
    environmental footprint;
    new projects and developments; and
    performance benchmarking against best practice.          
    an online tool which will enable IHG to measure its water,
    waste and energy across the globe was piloted;
    a carbon and environmental footprint, the first by a major
    hotel group was completed;
    compact fluorescent light bulbs were distributed as
    replacements for incandescent bulbs. It is estimated that this
    initiative will result in over $2 million of annual energy
    savings; and
    a range of environmental initiatives were implemented at
    IHGs corporate offices, including recycling and improved
    waste management.       40




---



##### Table of Contents



ITEM 4A.
    UNRESOLVED
    STAFF COMMENTS    ITEM 5.
    OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS INTRODUCTION  Business
    and Overview
      Operational
    Performance
       CRITICAL
    ACCOUNTING POLICIES     41




---



##### Table of Contents



Revenue
    recognition
              Goodwill,
    intangible assets, and property, plant and
    equipment
    cash-generating
  cash-generating cash-generating cash-generating
  Income
    taxes
   42




---



##### Table of Contents



Loyalty
    program
    Pensions
    and other post-employment benefit plans
  post-employment
 OPERATING
    RESULTS  Accounting
    Principles
      43




---



##### Table of Contents



Year ended


Year ended


Year endedDecember 31,


December 31,


December 31,2007


2006


2005(£ million)GROUP RESULTSRevenue:Continuing operationsHotels


883



786



697Discontinued operationsHotels


40



174



542Soft Drinks










671Total revenue


923



960



1,910Operating profit before exceptional operating items:Continuing operationsHotels


237



200



175Discontinued operationsHotels


8



31



94Soft Drinks










70Total operating profit before exceptional operating items


245



231



339Exceptional operating items


30



27



(22
)Operating profit


275



258



317Net financial expenses


(45
)


(11
)


(33
)Profit before tax


230



247



284Tax


(15
)


41



(80
)Profit after tax


215



288



204Gain on disposal of assets, net of tax


16



117



311Profit available for the year


231



405



515Earnings per ordinary share:Basic


72.2p



104.1p



95.2pAdjusted


48.4p



42.9p



38.2pAdjusted  continuing operations


46.9p



38.0p



23.2p   Year
    ended December 2007 compared with year ended December
    2006
     44




---



##### Table of Contents



Exceptional
    operating items
      Net
    financial expenses
      Taxation
        Earnings
    per share
   45




---



##### Table of Contents



Highlights
    for the year ended December 31, 2007
    Continuing
    Hotels Results
  Year ended


Year endedDecember 31,


December 31,2007


2006


Change(£ million)


%Revenue:Americas


450



422



6.6EMEA


245



198



23.7Asia Pacific


130



111



17.1Central


58



55



5.5883



786



12.3Operating profit before exceptional operating items:Americas


220



215



2.3EMEA


67



37



81.1Asia Pacific


31



29



6.9Central


(81
)


(81
)


237



200



18.5     Americas
  Continuing
    Americas Results
  Year ended


Year endedDecember 31,


December 31,2007


2006


Change($ million)


%Revenue:Owned and leased


257



192



33.9Managed


156



143



9.1Franchised


489



443



10.4902



778



15.9Operating profit before exceptional operating items:Owned and leased


40



22



81.8Managed


41



50



(18.0
)Franchised


425



382



11.3506



454



11.5Regional overheads


(66
)


(59
)


(11.9
)Total $ million


440



395



11.4Sterling equivalent £
    million(i)


220



215



2.3     (i)
    
    The results have been translated
    into pounds sterling at weighted average rates of exchange for
    the year. The translation rates are fiscal 2007: £1 = $2.01
    (2006 £1 = $1.84). 46




---



##### Table of Contents



47




---



##### Table of Contents



Europe,
    Middle East and Africa
  Continuing
    EMEA Results
  Year ended


Year endedDecember 31,


December 31,2007


2006


Change(£ million)


%Revenue:Owned and leased


121



92



31.5Managed


84



71



18.3Franchised


40



35



14.3245



198



23.7Operating profit before exceptional operating items:Owned and leased


17



(4
)


525.0Managed


43



37



16.2Franchised


29



24



20.889



57



56.1Regional overheads


(22
)


(20
)


(10.0
)Total £ million


67



37



81.1Dollar equivalent
    $ million(i)


134



69



94.2     (i)
    
    The results have been translated
    into US dollars at weighted average rates of exchange for the
    year. The translation rates are fiscal 2007: $1 = £0.50
    (2006: $1 = £0.54).           48




---



##### Table of Contents



Asia
    Pacific
  Continuing
    Asia Pacific Results
  Year ended


Year endedDecember 31,


December 31,2007


2006


Change($ million)


%Revenue:Owned and leased


145



131



10.7Managed


99



65



52.3Franchised


16



8



100.0260



204



27.5Operating profit before exceptional operating items:Owned and leased


36



31



16.1Managed


46



39



17.9Franchised


6



5



20.088



75



17.3Regional overheads


(25
)


(23
)


(8.7
)Total $ million


63



52



21.2Sterling equivalent £
    million(i)


31



29



6.9     (i)
    
    The results have been translated
    into pounds sterling at weighted average rates of exchange for
    the year. The translation rates are fiscal 2007: £1 = $2.01
    (2006 £1 = $1.84).             49




---



##### Table of Contents



Central
  Year ended


Year endedDecember 31,


December 31,2007


2006


Change(£ million)


%Revenue


58



55



5.5Gross central costs


(139
)


(136
)


2.2Net central costs £ million


(81
)


(81
)


Dollar equivalent
    $ million(i)


(163
)


(149
)


9.4     (i)
    
    The results have been translated
    into US dollars at weighted average rates of exchange for the
    year. The translation rates are fiscal 2007: $1 = £0.50
    (2006 $1 = £0.54).    Highlights
    for the 12 months ended December 31,
    2006
    Group
    results
    Americas
         50




---



##### Table of Contents



Europe,
    Middle East and Africa
          Asia
    Pacific
          Central
   LIQUIDITY
    AND CAPITAL RESOURCES  Sources
    of Liquidity
     51




---



##### Table of Contents



Cash
    From Operating Activities
      Cash
    From Investing Activities
    Cash
    Used in Financing Activities
      Off-Balance
    Sheet Arrangements
   52




---



##### Table of Contents



Contractual
    Obligations
    Total amounts


Less than








Aftercommitted


1 year


1-3 Years


3-5 years


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


777







777







Finance lease
    obligations(ii)


1,729



8



16



16



1,689Operating lease obligations


196



28



35



25



108Agreed pension scheme contributions


28



18



10







Capital contracts placed


10



10











2,740



64



838



41



1,797     (i)
    
    Repayment period classified
    according to the related facility maturity date.(ii)
    
    Represents the minimum lease
    payments related to the 99 year lease on the
    InterContinental Boston.          Pension
    Plan Commitments
  non-qualified
       53




---



##### Table of Contents



ITEM 6.
    DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES DIRECTORS
    AND SENIOR MANAGEMENT      Directors
  Initially


Date of nextappointed to


reappointmentName

Title

the board


by shareholdersAndrew
    Cosslett(3)

Director and Chief Executive


2005



2008David
    Kappler(1)(3)

Director and Senior Independent Director


2004



2008Ralph
    Kugler(1)(3)

Director


2003



2008Jennifer
    Laing(1)

Director


2005



2009Robert C.
    Larson(1)(2)

Director


2003



2008Jonathan
    Linen(1)

Director


2005



2009Stevan Porter

Director and President, The Americas


2003



2009Sir David
    Prosser(1)(5)

Director


2003



Richard Solomons

Director and Finance Director


2003



2010David Webster

Chairman


2003



2010Ying
    Yeh(1)(4)

Director


2007



2008     (1)
    
    Non-executive independent director.(2)
    
    Robert C. Larson, having served for
    over 9 years as a director, is required to retire and stand
    for
    re-election
    at each Annual General Meeting, if he wishes to continue to
    serve as a director. He is planning to retire as a director on
    December 31, 2008.(3)
    
    Andrew Cosslett, David Kappler and
    Ralph Kugler are required, under the Companys Articles of
    Association, to stand for
    re-election
    at the 2008 Annual General Meeting.(4)
    
    Ying Yeh is required to stand for
    election by shareholders for the first time since her
    appointment as a director in December 2007.(5)
    
    Sir David Prosser is planning to
    retire as a director on May 31, 2008.  Officers
  Name

Title

Initially appointedTom Conophy

Executive Vice President and Chief Information Officer


2006Peter Gowers

President, Asia Pacific


2003Kirk Kinsell

President, EMEA


2007Tracy Robbins

Executive Vice President, Global Human Resources


2005Tom Seddon

Executive Vice President and Chief Marketing Officer


2007Richard Winter

Executive Vice President, Corporate Services, General Counsel
    and Company Secretary


2003   Former
    Directors and Officers
   54




---



##### Table of Contents



Directors
    and Officers
  David
    Webster
  Non-Executive Non-Executive Non-Executive
  Andrew
    Cosslett
  Non-Executive
  Richard
    Solomons
    Stevan
    Porter
    David
    Kappler
  Non-Executive Non-Executive Non-Executive
  Ralph
    Kugler
    Jennifer
    Laing
  Non-Executive
 55




---



##### Table of Contents



Robert C
    Larson
    Jonathan
    Linen
  Non-Executive
  Sir David
    Prosser
  Non-Executive
  Ying
    Yeh
  Non-Executive
  Other
    members of the Executive Committee
  Richard
    Winter
    Tom
    Conophy
    Peter
    Gowers
    Kirk
    Kinsell
   56




---



##### Table of Contents



Tracy
    Robbins
    Tom
    Seddon
  ® e-commerce,
     COMPENSATION      Share
    Plans
    Short
    Term Deferred Incentive Plan
     57




---



##### Table of Contents



Long Term
    Incentive Plan
    Executive
    Share Option Plan
    Sharesave
    Plan
    Options
    and Ordinary Shares held by Directors
  pages F-36 F-40.
 BOARD
    PRACTICES  Contracts
    of Service
    12-month
     58




---



##### Table of Contents



Directors
    Contracts
  Contract


Unexpired term/Directors

date


notice periodAndrew Cosslett


2.3.05



12 monthsStevan Porter


4.15.03



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;
    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 Internal Audit; 59




---



##### Table of Contents




    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
    Disclosure
    Committee
    General
    Purposes Committee
   60




---



##### Table of Contents



EMPLOYEES      EMEA


Americas


Asia Pacific


Central


Total2007


2,739



3,761



2,716



1,150



10,3662006


4,437



3,771



2,225



1,023



11,4562005:Hotels


10,477



5,832



1,737



949



18,995Soft
    Drinks(i)


2,991















2,991Total


13,468



5,832



1,737



949



21,986     (i)
    
    With effect from December 14,
    2005, the Group no longer employed any individuals in the Soft
    Drinks Sector.         61




---



##### Table of Contents



SHARE
    OWNERSHIP    Ordinary shares


% of sharesof
    1329/47
    pence


outstandingDirectorsAndrew Cosslett


240,229



0.08David Kappler


1,400



N/ARalph Kugler


1,169



N/AJennifer Laing


1,404



N/ARobert C.
    Larson(1)


10,269



N/AJonathan
    Linen(1)


7,343



N/AStevan Porter


230,303



0.08Sir David Prosser


2,402



N/ARichard Solomons


225,287



0.07David Webster


31,938



0.01Ying Yeh


Nil



N/AOfficersTom Conophy


35,112



0.01Peter Gowers


139,790



0.05Tracy Robbins


32,833



0.01Richard Winter


139,088



0.05Kirk Kinsell


61,910



0.02Tom Seddon


24,000



N/A     (1)
    
    Held in the form of American
    Depositary Receipts    page F-39.
   62




---



##### Table of Contents



ITEM 7.
    MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS MAJOR
    SHAREHOLDERS    March 2008


March 2007


March 2006Number 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
%


25,286,950



7.13
%



(1)



(1)Morgan Stanley Investment Management Limited


16,494,690



5.60
%



(1)



(1)



(1)



(1)Cedar Rock Capital Limited


14,923,417



5.07
%



(1)



(1)



(1)



(1)Morgan Stanley Institutional Securities Group & Global
    Wealth Management


13,551,634



4.60
%



(1)



(1)



(1)



(1)Legal & General Group Plc


12,179,257



4.09
%


11,927,715



3.37
%


13,753,588



3.17
%Lloyds TSB Group Plc


13,619,563



3.84
%


13,619,563



3.84
%


19,534,651



4.51
%     (1)
    
    No notification of an above 3%
    shareholding received.       RELATED
    PARTY TRANSACTIONS    ITEM 8.
    FINANCIAL
    INFORMATION CONSOLIDATED
    STATEMENTS AND OTHER FINANCIAL INFORMATION  Financial
    Statements
    Legal
    Proceedings
    Dividends
   63




---



##### Table of Contents



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

$ per ADS15 Months ended December 31

High

Low

High

Low2003  October 1 to April 11 Six Continents


6.35


4.61


10.08


7.492003  April 15 to December 31 IHG


5.55


3.38


9.82


5.26Year ended December
    312004


6.91


4.79


13.09


8.702005


8.42


6.12


14.53


11.49   £ perordinary share

$ per ADSYear ended December 31

High

Low

High

Low2006First quarter


9.01


8.07


15.83


14.40Second
    quarter(1)


10.00


8.98


21.21


16.54Third quarter


9.56


8.37


17.91


15.99Fourth quarter


12.65


9.31


26.27


17.642007First quarter


13.42


12.06


30.81


27.17Second
    quarter(2)


14.20


12.41


32.59


24.78Third quarter


13.16


9.19


26.59


18.52Fourth quarter


11.20


8.73


23.34


17.372008First quarter (through March 14, 2008)


8.61


6.44


16.88


13.26     (1)
    
    Prices adjusted for the share
    consolidation effective June 12, 2006. Unadjusted prices
    for the quarter were £10.01 and £8.98 and $18.56 and
    $15.06, respectively.(2)
    
    Prices adjusted for the share
    consolidation effective June 4, 2007. Unadjusted prices for
    the quarter were £14.13 and £12.16 and $28.18 and
    $24.17 respectively. 64




---



##### Table of Contents



£ perordinary share

$ per ADSMonth ended

High

Low

High

LowSeptember 2007


10.38


9.19


21.06


18.52October 2007


11.20


9.93


23.34


20.39November 2007


11.06


9.04


22.87


18.63December 2007


9.64


8.73


19.66


17.37January 2008


8.61


6.44


16.88


13.26February 2008


8.47


7.24


16.82


14.24March 2008 (through to March 14, 2008)


7.96


7.62


15.85


15.15      PLAN OF
    DISTRIBUTION   SELLING
    SHAREHOLDERS   DILUTION   EXPENSES
    OF THE ISSUE    ITEM 10.
    ADDITIONAL
    INFORMATION MEMORANDUM
    AND ARTICLES OF ASSOCIATION        Principal
    Objects
   65




---



##### Table of Contents



Directors
        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.   66




---



##### Table of Contents




    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;
    a special resolution, which includes resolutions amending the
    Companys memorandum and articles of association,
    disapplying statutory pre-emption rights or changing the
    Companys name; and
    an extraordinary resolution, which includes resolutions
    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.            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
 67




---



##### Table of Contents



Limitations
    on Voting and Shareholding
   MATERIAL
    CONTRACTS    IHG
    Facility Agreement
          Disposal
    to Hospitality Properties Trust
      and/or
 68




---



##### Table of Contents



UK
    Hotels Disposal
        Australasian
    Hotels Disposals
      Disposal
    to Dabicam SAS
    Britvic
    Underwriting Agreement
   69




---



##### Table of Contents



Disposal
    to Westbridge
          Disposal
    to Morgan Stanley Real Estate Funds
       EXCHANGE
    CONTROLS       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; 70




---



##### Table of Contents




    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 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.            Investors should consult their own tax advisor 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, and in particular whether they are eligible for
    the benefits of the Treaty.
  Taxation
    of Dividends
  United
    Kingdom Taxation
     71




---



##### Table of Contents



United
    States Federal Income Taxation
          Taxation
    of Capital Gains
  United
    Kingdom Taxation
      United
    States Federal Income Taxation
   72




---



##### Table of Contents



PFIC
    Rules
    Additional
    Tax Considerations
  United
    States Backup Withholding and Information Reporting
    United
    Kingdom Inheritance Tax
    United
    Kingdom Stamp Duty and Stamp Duty Reserve Tax
    (SDRT)
   73




---



##### Table of Contents



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
    Credit
    Risk
    Interest
    Rate Risk
   74




---



##### Table of Contents



Currency
    Risk
        Quantitative
    Information about Market Risk
  Interest
    Rate Sensitivity
    At
    December 31, 2007
  Expected to mature before December 31,2008

2009


2010


2011

Thereafter


Total


Fair
    value(i)(£ million, except percentages)Long-Term Debt:Fixed Rate lease debt (US dollar)
















100



100



126Average dollar interest rate
















9.7
%


9.7
%Variable Rate (various currencies)





773



4










777



777Average interest rate





5.9
%


8.2
%









5.9
%   75




---



##### Table of Contents



Expected to mature before December 31,2008


2009


2010

2011

Thereafter

Total


Fair
    value(i)(local currency million, except percentages)Interest Rate Swaps:Principal (US dollar)


100
















100



Fixed rate payable


4.7
%















4.7
%Variable rate receivable


5.1
%















5.1
%Principal (euro)


75



75












150



Fixed rate payable


3.9
%


4.2
%











4.0
%Variable rate receivable


4.5
%


4.5
%











4.5
%Principal (sterling)


75



75












150



(1
)Fixed rate payable


6.3
%


6.3
%











6.3
%Variable rate receivable


6.2
%


6.3
%











6.3
%     (i)
    
    Represents the net present value of
    the expected cash flows discounted at current market rates of
    interest.  Exchange
    Risk Sensitivity
    Pay

Receive2007

2007(local currency

(£ million)million)Sale of US dollars against sterling


12.5



6   ITEM 12.
    DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES   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)).
 76




---



##### Table of Contents



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    ITEM 16C.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    Year ended December 31,2007


2006(£ million)Audit Fees


2.2



2.4Audit Related Fees


2.0



2.1Tax Fees


0.4



0.7Total


4.6



5.2        77




---



##### Table of Contents



ITEM 16D.
    EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES    ITEM 16E.
    PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS  (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 thePeriod of fiscal year

units) purchased


(or unit)


or programs


plans or programsMonth 1 (no purchases in this month)


0



0.00



0.



38,063,720Month 2 02.21.07  02.28.07


1,770,739



12.27



1,770,739



36,292,981Month 3 03.01.07  03.01.07


280,000



11.95



280,000



36,012,981Month 4 (no purchases in this month)


0



0.00



0



36,012,981Month 5 05.16.07  05.25.07


186,525



12.80



186,525



35,826,456Month 6 06.26.07  06.28.07


260,351



12.73



260,351



44,371,983Month 7 (no purchases in this month)


0



0.00



0



44,371,983Month 8 (no purchases in this month)


0



0.00



0



44,371,983Month 9 09.05.07  09.28.07


2,373,182



9.53



2,373,182



41,998,801Month 10 10.03.07  10.05.07


273,788



10.18



273,788



41,725,013Month 11 11.06.07  11.21.07


2,255,716



9.61



2,255,716



39,469,297Month 12 12.17.07  12.18.07


324,543



8.98



324,543



39,144,754        PART III  ITEM 17.
    FINANCIAL
    STATEMENTS   78




---



##### 



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-3Financial StatementsConsolidated Income Statement for the years ended
    December 31, 2007, 2006 and 2005.


F-5Consolidated Statement of Recognized Income and
    Expense for the years ended December 31, 2007, 2006 and
    2005.


F-6Consolidated Balance Sheet for the years ended
    December 31, 2007 and 2006.


F-7Consolidated Statement of Changes in
    Shareholders Funds for the years ended December 31,
    2007, 2006 and 2005


F-8Consolidated Cash Flow Statement for the years
    ended December 31, 2007, 2006 and 2005.


F-10Notes to the Financial Statements


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


S-1Exhibit 1Exhibit 8Exhibit 12.AExhibit 12.BExhibit 13.A    ITEM 19.
    EXHIBITS    Exhibit 1

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

£1,600 million Facility Agreement dated
    November 9, 2004 among Bank of Tokyo-Mitsubishi, Ltd.,
    Barclays Capital, Citigroup Global Markets Limited, HSBC Bank
    plc, JP Morgan plc, Lloyds Bank plc, The Royal Bank of Scotland
    plc, SG Corporate & Investment Banking and West LB AG
    (incorporated by reference to Exhibit 4(ii) of
    InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File No 1-10409) dated May 3, 2005)Exhibit 4(b)(i)

Amended and Restated Purchase and Sale Agreement dated
    February 9, 2005 among BHR Texas L.P., InterContinental
    Hotels Group Resources Inc, Crowne Plaza LAX, LLC, Crowne Plaza
    Hilton Head Holding Company, Holiday Pacific Partners Limited
    Partnership, Staybridge Markham and HPT (incorporated by
    reference to Exhibit 4(b)(ii) of InterContinental Hotels
    Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated May 3, 2005)Exhibit 4(b)(ii)

Amended and Restated Stock Purchase Agreement dated
    February 9, 2005 between Six Continents International
    Holdings, B.V. and HPT IHG-2 (incorporated by reference to
    Exhibit 4(b)(v) of InterContinental Hotels Group PLC Annual
    Report on
    Form 20-F
    (File
    No. 1-10409)
    dated May 3, 2005)Exhibit 4(b)(iii)

Share Purchase Agreement dated March 10, 2005 between IHC
    London (Holdings) Limited, and LGR Acquisition (currently LRG
    Acquisition) and LGR Holdings Limited (currently LRG Holdings
    Limited) (incorporated by reference to Exhibit 4(b)(iv) of
    InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated May 3, 2005)Exhibit 4(b)(iv)

New Zealand Share Sale Deed dated September 1, 2005 between
    Hale International Limited, Six Continents Limited, HANZ
    Holdings (New Zealand) Limited and Eureka Funds Management
    Limited (incorporated by reference to Exhibit 4(b)(v) of
    the InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 31, 2006) 79




---



##### Table of Contents



Exhibit 4(b)(v)

Australia Share and Unit Sale Deed dated September 1, 2005
    between Holiday Inns Holdings (Australia) Pty Limited, SPHC
    Group Pty Limited, HIA(T) Pty Ltd, Six Continents Limited, HANZ
    (Australia) Pty Limited and Eureka Funds Management Limited
    (incorporated by reference to Exhibit 4(b)(vi) of the
    InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 31, 2006)Exhibit 4(b)(vi)

Sale and Purchase Agreement dated September 8, 2005 between
    BHR Holdings BV and DABICAM SAS relating to the sale of the
    InterContinental Hotel, Paris (incorporated by reference to
    Exhibit 4(b)(vi) of the InterContinental Hotels Group PLC
    Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 30, 2007)Exhibit 4(b)(vii)

Britvic Underwriting Agreement dated November 25, 2005
    between, inter alia, Britvic, IHG, the directors of Britvic,
    Citigroup and Deutsche Bank AG (as joint sponsors) and
    Citigroup, Deutsche Bank AG, Lehman Brothers International
    (Europe) and Merrill Lynch International (as joint Underwriters)
    (incorporated by reference to Exhibit 4(b)(vii) of the
    InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 31, 2006)Exhibit 4(b)(viii)

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)(ix)

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)

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

Stevan Porter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)(iv) of
    the InterContinental Hotels Group PLC Annual Report on
    Form 20-F
    (File
    No. 1-10409)
    dated March 31, 2006)Exhibit 4(c)(iii)

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)(iv)

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)(v)

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)Exhibit 4(c)(vi)

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) 80




---



##### Table of Contents



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)  81




---



##### Table of Contents



MANAGEMENTS
    REPORT ON
    INTERNAL CONTROL OVER FINANCIAL REPORTING              F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMON INTERNAL CONTROL OVER FINANCIAL REPORTING





To the Board of Directors and Shareholders of InterContinental
    Hotels Group PLC:



We have audited InterContinental Hotels Group PLCs
    internal control over financial reporting as of
    December 31, 2007, based on criteria established in
    Internal Control-Integrated Framework issued by the Committee of
    Sponsoring Organizations of the Treadway Commission (the
    COSO criteria). InterContinental Hotels Group
    PLCs management is responsible for maintaining effective
    internal control over financial reporting, and for its
    assessment of the effectiveness of internal control over
    financial reporting included in the accompanying Form 20-F. Our
    responsibility is to express an opinion on the companys
    internal control over financial reporting based on our audit.



We conducted our audit in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether effective internal control
    over financial reporting was maintained in all material
    respects. Our audit included obtaining an understanding of
    internal control over financial reporting, assessing the risk
    that a material weakness exists, testing and evaluating the
    design and operating effectiveness of internal control based on
    the assessed risk, and performing such other procedures as we
    considered necessary in the circumstances. We believe that our
    audit provides a reasonable basis for our opinion.



A companys internal control over financial reporting is a
    process designed to provide reasonable assurance regarding the
    reliability of financial reporting and the preparation of
    financial statements for external purposes in accordance with
    generally accepted accounting principles. A companys
    internal control over financial reporting includes those
    policies and procedures that (1) pertain to the maintenance
    of records that, in reasonable detail, accurately and fairly
    reflect the transactions and dispositions of the assets of the
    company; (2) provide reasonable assurance that transactions
    are recorded as necessary to permit preparation of financial
    statements in accordance with generally accepted accounting
    principles, and that receipts and expenditures of the company
    are being made only in accordance with authorizations of
    management and directors of the company; and (3) provide
    reasonable assurance regarding prevention or timely detection of
    unauthorized acquisition, use, or disposition of the
    companys assets that could have a material effect on the
    financial statements.



Because of its inherent limitations, internal control over
    financial reporting may not prevent or detect misstatements.
    Also, projections of any evaluation of effectiveness to future
    periods are subject to the risk that controls may become
    inadequate because of changes in conditions, or that the degree
    of compliance with the policies or procedures may deteriorate.



In our opinion, InterContinental Hotels Group PLC maintained, in
    all material aspects, effective internal control over financial
    reporting as of December 31, 2007, based on the COSO
    criteria.



We also have audited, in accordance with the standards of the
    Public Company Accounting Oversight Board (United States), the
    accompanying Consolidated Balance Sheets of InterContinental
    Hotels Group PLC as of December 31, 2007 and 2006, and the
    related Consolidated Income Statements, Consolidated Statements
    of Recognized Income and Expense, Consolidated Statements of
    Changes in Shareholders Funds and Consolidated Cash Flow
    Statements for each of the three years in the period ended
    December 31, 2007, and the financial statement schedule
    listed in the Index at Item 18. Financial Statements, and
    our report dated March 28, 2008 expressed an unqualified
    opinion thereon.



ERNST & YOUNG LLP



London, England



March 28, 2008

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 31,2007


2006


2005Before


Exceptional





Before


Exceptional





Before


Exceptionalexceptional


items





exceptional


items





exceptional


itemsFor the year ended 31 December 2007

items


(Note 5)


Total


items


(Note 5)


Total


items


(Note 5)


Total(£ million)Revenue (Note 2)


883







883



786







786



697







697Cost of sales


(411
)






(411
)


(355
)






(355
)


(323
)






(323
)Administrative expenses


(188
)


(7
)


(195
)


(180
)






(180
)


(150
)






(150
)Other operating income and expenses


8



38



46



4



27



31



3



(15
)


(12
)292



31



323



255



27



282



227



(15
)


212Depreciation and amortization(Note 2)


(55
)


(1
)


(56
)


(55
)






(55
)


(52
)






(52
)Operating profit (Note 2)


237



30



267



200



27



227



175



(15
)


160Financial income (Note 6)


9







9



26







26



30







30Financial expenses (Note 6)


(54
)






(54
)


(37
)






(37
)


(54
)






(54
)Profit before tax


192



30



222



189



27



216



151



(15
)


136Tax (Note 7)


(42
)


30



(12
)


(41
)


94



53



(30
)


8



(22
)Profit for the year from continuing operations


150



60



210



148



121



269



121



(7
)


114Profit for the year from discontinued operations (Note 11)


5



16



21



19



117



136



97



304



401Profit for the year


155



76



231



167



238



405



218



297



515Attributable to:Equity holders of the parent


155



76



231



167



238



405



199



297



496Minority equity interest


























19







19155



76



231



167



238



405



218



297



515Earnings per ordinary share (Note 9)Continuing operations:Basic










65.6p











69.1p











21.9pDiluted










63.8p











67.4p











21.4pTotal operations:Basic










72.2p











104.1p











95.2pDiluted










70.2p











101.5p











93.1p    F-5




---



##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND
    EXPENSE
  Year ended


Year ended


Year endedDecember 31,


December 31,


December 31,2007


2006


2005(£ million)Income and expense recognized directly in equityGains on valuation of available-for-sale assets


4



16



31(Losses)/gains on cash flow hedges


(1
)


1



1Exchange differences on retranslation of foreign operations


10



(30
)


29Actuarial gains/(losses) on defined benefit pension plans


12



(2
)


(23
)25



(15
)


38Transfers to the income statementOn cash flow hedges: interest payable


(1
)


(1
)


(6
)On disposal of foreign operations: gain on disposal of assets






4



2On disposal of available-for-sale assets: other operating income
    and expenses


(10
)


(14
)


(11
)


(11
)


(4
)TaxTax on items above taken directly to or transferred from equity


(3
)


4



(1
)Tax related to share schemes recognized directly in equity


(2
)


26



8(5
)


30



7Net income recognized directly in equity


9



4



41Profit for the year


231



405



515Total recognized income and expense for the year


240



409



556Attributable to:Equity holders of the parent


240



409



541Minority equity interest










15240



409



556Effects of changes in accounting policyLosses on valuation of available-for-sale assets










(10
)Gains on cash flow hedges










6







(4
)    F-6




---



##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
 CONSOLIDATED
    BALANCE SHEET  December 31,


December 31,2007


2006(£ million)ASSETSProperty, plant and equipment  (Note 10)


962



997Goodwill  (Note 12)


110



109Intangible assets  (Note 13)


167



154Investment in associates  (Note 14)


33



32Retirement benefit assets  (Note 3)


32



Other financial assets  (Note 15)


93



96Total non-current assets


1,397



1,388Inventories  (Note 16)


3



3Trade and other receivables  (Note 17)


235



237Current tax receivable


54



23Cash and cash equivalents  (Note 18)


52



179Other financial assets  (Note 15)


9



13Total current assets


353



455Non-current assets classified as held for sale 
    (Note 11)


57



50Total assets (Note 2)


1,807



1,893LIABILITIESLoans and other borrowings  (Note 20)


(8
)


(10
)Trade and other payables  (Note 19)


(390
)


(402
)Current tax payable


(212
)


(231
)Total current liabilities


(610
)


(643
)Loans and other borrowings  (Note 20)


(869
)


(303
)Retirement benefit obligations  (Note 3)


(55
)


(71
)Trade and other payables  (Note 19)


(139
)


(109
)Deferred tax payable  (Note 25)


(82
)


(79
)Total non-current liabilities


(1,145
)


(562
)Liabilities classified as held for sale 
    (Note 11)


(3
)


(2
)Total liabilities (Note 2)


(1,758
)


(1,207
)Net assets


49



686EQUITYEquity share capital


81



66Capital redemption reserve


5



4Shares held by employee share trusts


(41
)


(17
)Other reserves


(1,528
)


(1,528
)Unrealized gains and losses reserve


19



27Currency translation reserve


6



(3
)Retained earnings


1,504



2,129IHG shareholders equity


46



678Minority equity interest  (Note 26)


3



8Total equity


49



686    F-7




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##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
  CONSOLIDATED STATEMENT OF CHANGES IN
    SHAREHOLDERS FUNDS
  Retained earnings and other reservesSharesShare Capital











held by


UnrealizedNumber of








Capital





employee


gains and


Currency





Total IHGordinary


Ordinary


Share


redemption


Other


share


losses


translation


Retained


shareholdersshares(i)


shares(i)


premium(ii)


reserve(ii)


reserves(iii)


trusts(iv)


reserve(v)


reserve(vi)


earnings


equity(£ million, except per ordinary share amounts)At January 1, 2005


622



697



26



46



1,462



(22
)


3



(12
)


(383
)


1,817Total recognized income and expense for the year


























20



31



490



541Issue of ordinary shares


1



1



3



























4Repurchase of shares


(19
)


(22
)


























(102
)


(124
)Transfer to capital redemption reserve














22



















(22
)


Capital reorganization


(161
)


(632
)


(29
)


(68
)


(2,990
)














2,723



(996
)Proceeds from capital reorganization






















4















4Issue of ordinary shares


1







6



























6Repurchase of shares


(11
)


(1
)


























(82
)


(83
)Transfer to capital redemption reserve














1



















(1
)


Purchase of own shares by employee share trusts






















(29
)














(29
)Release of own shares by employee share trusts






















25











(17
)


8Equity-settled share-based cost


































17



17Equity dividends paid


































(81
)


(81
)At December 31, 2005


433



43



6



1



(1,528
)


(22
)


23



19



2,542



1,084Total recognized income and expense for the year


























4



(22
)


427



409Issue of ordinary shares


4



1



19



























20Repurchase of shares


(28
)


(3
)


























(257
)


(260
)Share capital consolidation


(53
)


































Transfer to capital redemption reserve














3



















(3
)


Purchase of own shares by employee share trusts






















(47
)














(47
)Release of own shares by employee share trusts






















52











(37
)


15Equity-settled share-based cost


































18



18Equity dividends paid


































(561
)


(561
)At December 31, 2006


356



41



25



4



(1,528
)


(17
)


27



(3
)


2,129



678Total recognized income and expense for the year


























(8
)


9



239



240Issue of ordinary shares


4







16



























16Repurchase of shares


(8
)


(1
)


























(80
)


(81
)Share capital consolidation


(57
)


































Transfer to capital redemption reserve














1



















(1
)


Purchase of own shares by employee share trusts






















(69
)














(69
)Release of own shares by employee share trusts






















45











(40
)


5Equity-settled share-based cost


































30



30Equity dividends paid


































(773
)


(773
)At December 31, 2007


295



40



41



5



(1,528
)


(41
)


19



6



1,504



46     At December 31, 2004 the
    authorized share capital was £10,000,049,999 comprising
    8,928,571,428 ordinary shares of 112 pence each and one
    redeemable preference share of £50,000.
   F-8




---



##### 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 April 21, 2005 the
    authorized share capital was increased to £50,100 by the
    creation of one redeemable preference share of £50,000. The
    redeemable preference share so created was allotted and treated
    as paid up in full on this date.On May 20, 2005 the authorized
    share capital of the Company was increased from £50,100 to
    £10,000,050,000 by the creation of 9,999,999,900 ordinary
    shares of £1 each. On May 20, 2005 all of the ordinary
    shares of £1 each were consolidated into ordinary shares of
    £6.25 each.On June 27, 2005 the capital
    reorganization (by means of a scheme of arrangement under
    Section 425 of the Companies Act 1985) was completed.
    Under the arrangement, shareholders received 11 new ordinary
    shares and £24.75 cash in exchange for every 15 existing
    ordinary shares held on June 24, 2005. The entire issued
    share capital of InterContinental Hotels Group PLC was
    transferred to New InterContinental Hotels Group PLC at fair
    market value, in exchange for the issue of 443 million
    fully paid ordinary shares of 10 pence each, which were admitted
    to the Official List of the UK Listing Authority and admitted to
    trading on the London Stock Exchange on that date. In accordance
    with the merger relief provisions of Sections 131 and 133
    of the Companies Act 1985, the 443 million shares are
    recorded only at nominal value.On June 30, 2005 £6.15 on
    every £6.25 ordinary share was canceled, thereby reducing
    the nominal value of each ordinary share to 10 pence.On September 8, 2005 the
    redeemable preference share was redeemed at par value. The
    redeemable preference share did not carry any right to receive
    dividends nor to participate in the profits of the Company.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 program, the third of which was completed in
    the first half of 2007. In June 2007, a further
    £150 million share repurchase program commenced.
    During the year, 7,724,844 (2006 28,409,753, 2005 30,600,010)
    ordinary shares were repurchased and canceled under the
    authorities granted by shareholders at general meetings held
    during 2003, 2004, 2005, 2006 and 2007. Of these, 2,237,264 were
    113/7
    pence shares and 5,487,580 were 13
    29/47
    pence shares.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 11
    3/7
    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.Whilst the authorized share capital
    includes one redeemable preference share of £50,000,
    following its redemption in September 2005, this redeemable
    preference share has not been re-issued.The authority given to the Company
    at the Extraordinary General Meeting on June 1, 2007 to
    purchase its own shares was still valid at December 31,
    2007. A resolution to renew the authority will be put to
    shareholders at the Annual General Meeting on May 30, 2008.At December 31, 2007, 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.(ii)
    
    The share premium account and
    capital redemption reserve are not distributable.(iii)
    
    Other reserves comprises the
    revaluation reserve previously recognized under UK GAAP and the
    merger reserve.(iv)
    
    The shares held by employee share
    trusts comprises £41.1 million (2006
    £16.8 million, 2005 £21.7 million) in
    respect of 3.4 million (2006 1.7 million, 2005
    2.9 million) InterContinental Hotels Group PLC ordinary
    shares held by employee share trusts, with a market value at
    December 31, 2007 of £30 million (2006
    £21 million, 2005 £25 million).(v)
    
    The unrealized gains and losses
    reserve records movements for available-for-sale financial
    assets to fair value 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 cashflow hedging instruments
    outstanding at December 31, 2007 was a £2 million
    liability (2006 £1 million asset, 2005
    £1 million asset).  (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,
    2007, the impact of hedging net investments in foreign
    operations was to reduce the amount recorded in the currency
    translation reserve by £7 million (2006 £32
    million, 2005 £9 million). The fair value of
    derivative instruments designated as hedges of net investments
    in foreign operations outstanding at December 31, 2007 was
    £nil  (2006 £3 million net asset, 2005
    £5 million net liability).   F-9




---



##### Table of Contents



INTERCONTINENTAL
    HOTELS GROUP PLC
 CONSOLIDATED
    CASH FLOW STATEMENT  Year ended


Year ended


Year endedDecember 31,


December 31,


December 31,2007


2006


2005(£ million)Profit for the year


231



405



515Adjustments for:Net financial expense


45



11



33Income tax charge/(credit)


15



(41
)


80Exceptional operating items before depreciation


(31
)


(27
)


22Gain on disposal of assets, net of tax


(16
)


(117
)


(311
)Depreciation and amortization


58



64



130Equity-settled share-based cost, net of payments


24



14



12Other non-cash items


(2
)






Operating cash flow before movements in working capital


324



309



481Increase in trade and other receivables


(15
)


(31
)


Increase/(decrease) in trade and other payables


26



10



(32
)Retirement benefit contributions, net of charge


(33
)






(26
)Cash flow from operations


302



288



423Interest paid


(42
)


(33
)


(59
)Interest received


9



24



29Tax paid on operating activities


(37
)


(43
)


(80
)Net cash from operating activities


232



236



313Cash flow from investing activitiesPurchases of property, plant and equipment  Hotels


(57
)


(87
)


(107
)Purchases of intangible assets  Hotels


(20
)


(23
)


(19
)Purchases of associates and other financial assets 
    Hotels


(16
)


(8
)


(10
)Acquisition of subsidiary, net of cash acquired






(6
)


Disposal of assets, net of costs and cash disposed
    of  Hotels


49



620



1,816Proceeds from associates and other financial assets 
    Hotels


57



124



10Purchases of property, plant and equipment  Soft
    Drinks










(47
)Disposal of business, net of cash disposed of  Soft
    Drinks










220Tax paid on disposals


(32
)


(6
)


(11
)Net cash from investing activities


(19
)


614



1,852Cash flow from financing activitiesProceeds from the issue of share capital


16



20



10Purchase of own shares


(81
)


(260
)


(207
)Payment to shareholders as a result of the capital
    reorganisation on June 27, 2005










(996
)Purchase of own shares by employee share trusts


(69
)


(47
)


(29
)Proceeds on release of own shares by employee share trusts


10



19



16Dividends paid to shareholders


(773
)


(561
)


(81
)Dividends paid to minority interests






(1
)


(177
)Increase/(decrease) in borrowings


553



(172
)


(442
)Net cash from financing activities


(344
)


(1,002
)


(1,906
)Net movement in cash and cash equivalents in the year


(131
)


(152
)


259Cash and cash equivalents at beginning of the year


179



324



72Exchange rate effects


4



7



(7
)Cash and cash equivalents at end of the year


52



179



324     F-10




---



##### Table of Contents



Note 1 
    Corporate
    Information and Accounting Policies  Corporate
    information
    Summary
    of significant accounting policies
  Basis
    of preparation
    Statement
    of compliance
            Basis
    of consolidation
      Foreign
    currencies
   F-11




---



##### Table of Contents



Derivative
    financial instruments and hedging
          Property,
    plant and equipment
        Buildings

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

3 to 25 years.         Goodwill
   F-12




---



##### Table of Contents



Intangible
    assets
  Software
    Management
    contracts
    Other
    intangible assets
        Associates
      Financial
    assets
     F-13




---



##### Table of Contents



Financial
    liabilities
    Inventories
    Trade
    receivables
    Cash
    and cash equivalents
        Assets
    held for sale
        Trade
    payables
    Loyalty
    program
      Self
    insurance
   F-14




---



##### Table of Contents



Provisions
    Bank
    and other borrowings
      Retirement
    benefits
  Defined
    contribution plans
    Defined
    benefit plans
          Taxes
  Current
    tax
    Deferred
    tax
   F-15




---



##### Table of Contents



Revenue
    recognition
            Share-based
    payments
          Leases
     F-16




---



##### Table of Contents



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
    Exceptional
    items
      Use of
    accounting estimates and judgments
      
    Impairment  the Company 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.
    Retirement and other post-employment benefits  the
    cost of defined benefit pension plans and other post-employment
    benefits is determined using actuarial valuations. The actuarial
    valuation involves making assumptions about discount rates,
    expected rates of return on assets, future salary increases,
    mortality rates and future pension increases.
    Tax  provisions for tax accruals require judgments on
    the interpretation of tax legislation, developments in tax case
    law and the potential outcomes of tax audits and appeals. In
    addition, deferred tax assets are recognized for unused tax
    attributes to the extent that it is probable that taxable profit
    will be available against which they can be utilized. Judgment
    is required as to the amount that can be recognized based on the
    likely amount and timing of future taxable profits, taking into
    account expected tax planning. F-17




---



##### Table of Contents




    Loyalty program  the future redemption liability
    included in trade and other payables is estimated using
    actuarial methods based on statistical formulae that project the
    timing of future point redemptions based on historical levels to
    give eventual redemption rates and points values.
    Trade receivables  a provision for impairment of
    trade receivables is made on the basis of historical experience
    and other factors considered relevant by management.
    Other  the Company 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 3R

Business Combinations
    Effective from July 1, 2009IFRS 8

Operating Segments 
    Effective from January 1, 2009IAS 23

Borrowing Costs (Amendment) 
    Effective from January 1, 2009IAS 27R

Consolidated and Separate Financial Statements Effective from
    July 1, 2009.IFRIC 11

Group and Treasury Share Transactions 
    Effective from March 1, 2007IFRIC 13

Customer Loyalty Programmes 
    Effective from July 1, 2008.     Note 2 
    Segmental
    Information  Exchange
    Rates
      Hotels
           F-18




---



##### Table of Contents



Franchised
    Managed
    Owned
    and leased
      Soft
    Drinks
   F-19




---



##### Table of Contents



Segmental
    Information
  Year
    ended December 31, 2007
  Revenue
  AsiaAmericas


EMEA


Pacific


Central


Total(£ million)HotelsOwned and leased


128



121



73







322Managed


78



84



49







211Franchised


244



40



8







292Central














58



58Continuing operations


450



245



130



58



883Discontinued operations  owned and leased


31



9











40481



254



130



58



923   Segmental
    result
  AsiaAmericas


EMEA


Pacific


Central


Total(£ million)HotelsOwned and leased


20



17



18







55Managed


21



43



23







87Franchised


212



29



3







244Regional and central


(33
)


(22
)


(13
)


(81
)


(149
)Continuing operations


220



67



31



(81
)


237Discontinued operations  owned and leased


8















8228



67



31



(81
)


245Exceptional operating items


9



10



8



3



30Operating profit


237



77



39



(78
)


275   Continuing


Discontinued


Total(£ million)Operating profit


267



8



275Net finance costs


(45
)






(45
)Profit before tax


222



8



230Tax


(12
)


(3
)


(15
)Profit after tax


210



5



215Gain on disposal of assets, net of tax






16



16Profit for the year


210



21



231  F-20




---



##### Table of Contents



Year
    ended December 31, 2007
  Assets
    and liabilities
  AsiaAmericas


EMEA


Pacific


Central


Total(£ million)Segment assets


614



613



334



83



1,644Non-current assets classified as held for sale


57















57671



613



334



83



1,701Unallocated assets:Current tax receivable


















54Cash and cash equivalents


















52Total assets


















1,807Segment liabilities


(280
)


(237
)


(67
)






(584
)Liabilities classified as held for sale


(3
)














(3
)(283
)


(237
)


(67
)






(587
)Unallocated liabilities:Current tax payable


















(212
)Deferred tax payable


















(82
)Loans and other borrowings


















(877
)Total liabilities


















(1,758
)   Other
    segmental information
  AsiaAmericas


EMEA


Pacific


Central


Total(£ million)Continuing operations:Capital
    expenditure(i)


29



20



20



23



92Additions to:Property, plant and equipment


16



14



14



10



54Intangible assets


4



5



3



13



25Depreciation and
    amortization(ii)


16



18



11



11



56Reversal of previously recorded impairment










3







3Discontinued operations:Capital
    expenditure(i)


1















1Depreciation and
    amortization(ii)


1



1











2     (i)
    
    Comprises purchases of property,
    plant and equipment, intangible assets and other financial
    assets and acquisitions of subsidiaries as included in the
    consolidated cash flow statement.(ii)
    
    Included in the
    £58 million of depreciation and amortization is
    £20 million relating to administrative expenses and
    £38 million relating to cost of sales. F-21




---



##### Table of Contents



Year
    ended December 31, 2006
  Revenue
  AsiaAmericas


EMEA


Pacific


Central


Total(£ million)HotelsOwned and leased


104



92



71







267Managed


77



71



36







184Franchised


241



35



4







280Central














55



55Continuing operations


422



198



111



55



786Discontinued operations  owned and leased


41



133











174463



331



111



55



960   Segmental
    result
  Americas


EMEA


Asia Pacific


Central


Total(£ million)HotelsOwned and leased


12



(4
)


17







25Managed


27



37



21







85Franchised


208



24



3







235Regional and central


(32
)


(20
)


(12
)


(81
)


(145
)Continuing operations


215



37



29



(81
)


200Discontinued operations  owned and leased


6



25











31221



62



29



(81
)


231Exceptional operating items


25



2











27Operating profit


246



64



29



(81
)


258   Continuing


Discontinued


Total(£ million)Operating profit


227



31



258Net finance costs


(11
)






(11
)Profit before tax


216



31



247Tax


53



(12
)


41Profit after tax


269



19



288Gain on disposal of assets, net of tax






117



117Profit for the year


269



136



405  F-22




---



##### Table of Contents



Year
    ended December 31, 2006
  Assets
    and liabilities
  AsiaAmericas


EMEA


Pacific


Central


Total(£ million)Segment assets


647



583



338



73



1,641Non-current assets classified as held for sale


40



10











50687



593



338



73



1,691Unallocated assets:Current tax receivable


















23Cash and cash equivalents


















179Total assets


















1,893Segment liabilities


(295
)


(234
)


(53
)






(582
)Liabilities classified as held for sale


(2
)














(2
)(297
)


(234
)


(53
)






(584
)Unallocated liabilities:Current tax payable


















(231
)Deferred tax payable


















(79
)Loans and other borrowings


















(313
)Total liabilities


















(1,207
)   Other
    segmental information
  AsiaAmericas


EMEA


Pacific


Central


Total(£ million)Continuing operations:Capital
    expenditure(i)


34



49



17



15



115Additions to:Property, plant and equipment


116



53



9



4



182Intangible assets


10



31



1



11



53Depreciation and
    amortization(ii)


15



17



10



13



55Reversal of previously recorded impairment






2











2Discontinued operations:Capital
    expenditure(i)


1



8











9Additions to property, plant and equipment






4











4Depreciation and
    amortization(ii)


4



5











9Impairment of assets held for sale


3















3     (i)
    
    Comprises purchases of property,
    plant and equipment, intangible assets and other financial
    assets and acquisitions of subsidiaries as included in the
    consolidated cash flow statement.(ii)
    
    Included in the
    £64 million of depreciation and amortization is
    £21 million relating to administrative expenses and
    £43 million relating to cost of sales. F-23




---



##### Table of Contents



Year
    ended December 31, 2005*
  Revenue
  Asia





TotalAmericas


EMEA


Pacific


Central


Hotels(£ million)HotelsOwned and leased


98



102



59







259Managed


65



55



25







145Franchised


213



35



3







251Central














42



42Continuing operations


376



192



87



42



697Discontinued operations  owned and leased


69



419



54







542445



611



141



42



1,239   Continuing


Discontinued


Group(£ million)GroupHotels


697



542



1,239Soft Drinks






671



671Total revenue


697



1,213



1,910   Segmental
    result
  TotalAmericas


EMEA


Asia Pacific


Central


Hotels(£ million)HotelsOwned and leased


14



(3
)


11







22Managed


20



31



16







67Franchised


186



26



2







214Regional and central


(34
)


(21
)


(8
)


(65
)


(128
)Continuing operations


186



33



21



(65
)


175Discontinued operations  owned and leased


12



71



11







94198



104



32



(65
)


269   Continuing


Discontinued


Total(£ million)GroupHotels


175



94



269Soft Drinks






70



70175



164



339Exceptional operating items


(15
)


(7
)


(22
)Operating profit


160



157



317Net finance costs


(24
)


(9
)


(33
)Profit before tax


136



148



284Tax


(22
)


(58
)


(80
)Profit after tax


114



90



204Gain on disposal of assets, net of tax






311



311Profit for the year


114



401



515     *
    
    Other than for Soft Drinks which
    reflects the 50 weeks and three days ended December 14. F-24




---



##### Table of Contents



Year
    ended December 31, 2005*
  Assets
    and liabilities
  Asia





Total


SoftAmericas


EMEA


Pacific


Central


Hotels


Drinks


Total(£ million)Segment assets


689



987



346



88



2,110







2,110Non-current assets classified as held for sale


21



258











279







279710



1,245



346



88



2,389







2,389Unallocated assets:Current tax receivable


















22







22Cash and cash equivalents


















324







324Total assets


















2,735







2,735Segment liabilities


(340
)


(261
)


(50
)






(651
)






(651
)Liabilities classified as held for sale


(1
)


(33
)










(34
)






(34
)(341
)


(294
)


(50
)






(685
)






(685
)Unallocated liabilities:Current tax payable


















(324
)






(324
)Deferred tax payable


















(210
)






(210
)Loans and other borrowings


















(412
)






(412
)Total liabilities


















(1,631
)






(1,631
)   Other
    segmental information
  Asia





Total


SoftAmericas


EMEA


Pacific


Central


Hotels


Drinks


Total(£ million)Continuing operations:Capital
    expenditure(i)


17



19



28



13



77







77Additions to:Property, plant and equipment


7



15



30



6



58







58Intangible assets


27



51



9



7



94







94Depreciation and
    amortization(ii)


16



13



8



15



52







52Impairment of property, plant and equipment






7











7







7Discontinued operations:Capital
    expenditure(i)


11



44



4







59



47



106Additions to:Property, plant and equipment


9



33



4







46



36



82Intangible assets






















7



7Depreciation and
    amortization(ii)


4



26



3







33



45



78     *
    
    Other than for Soft Drinks which
    reflects the 50 weeks and three days ended December 14.  (i)
    
    Comprises purchases of property,
    plant and equipment, intangible assets and other financial
    assets and acquisitions of subsidiaries as included in the cash
    flow statement.(ii)
    
    Included in the £130 million
    of depreciation and amortization is £23 million relating to
    administrative expenses and £107 million relating to cost
    of sales. F-25




---



##### Table of Contents



Note 3 
    Staff
    costs and Directors emoluments  Staff
  Year ended December 31,2007


2006


2005(£ million)Costs:Wages and salaries


292



301



465Social security costs


31



38



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


4



6



19Defined contribution plans


12



11



15339



356



560   Employee
    numbers
    Year ended December 31,2007


2006


2005(Number)Americas


3,761



3,771



5,832EMEA


2,739



4,437



10,477Asia Pacific


2,716



2,225



1,737Central


1,150



1,023



949Hotels


10,366



11,456



18,995Soft Drinks










2,99110,366



11,456



21,986   Retirement
    benefits
     F-26




---



##### Table of Contents



Post-Pension plans


employmentUK


US and other


benefits


TotalRecognized in administrative expenses

2007


2006


2005


2007


2006


2005


2007


2006


2005


2007


2006


2005(£ million)Current service costs


5



5



19



























5



5



19Interest cost on benefit obligation


15



13



30



5



5



6



1



1



1



21



19



37Expected return on plan assets


(17
)


(14
)


(32
)


(5
)


(4
)


(5
)














(22
)


(18
)


(37
)3



4



17







1



1



1



1



1



4



6



19Recognized in other operating
    income and expensePlan curtailment










(7
)


































(7
)       Pension plans


Post-employmentUK


US and other


benefits


TotalActuarial gains and losses

2007


2006


2005


2007


2006


2005


2007


2006


2005


2007


2006


2005(£ million)Actual return on plan assets


14



21



79



5



6



4















19



27



83Less: expected return on plan assets


(17
)


(14
)


(32
)


(5
)


(4
)


(5
)














(22
)


(18
)


(37
)(3
)


7



47







2



(1
)














(3
)


9



46Other actuarial gains and losses


15



(12
)


(67
)










(3
)






1



1



15



(11
)


(69
)12



(5
)


(20
)






2



(4
)






1



1



12



(2
)


(23
)     Pension plansUK


US and other


Post-employment benefits


Total2007


2006


2007


2006


2007


2006


2007


2006(£ million)Schemes in surplusFair value of plan assets


304







7















311



Present value of benefit obligations


(274
)






(5
)














(279
)


Retirement benefit assets


30







2















32



Schemes in deficitFair value of plan assets






269



65



56











65



325Present value of benefit obligations


(23
)


(298
)


(87
)


(89
)


(10
)


(9
)


(120
)


(396
)Retirement benefit obligations


(23
)


(29
)


(22
)


(33
)


(10
)


(9
)


(55
)


(71
)Total fair value of plan assets


304



269



72



56











376



325Total present value of benefit obligations


(297
)


(298
)


(92
)


(89
)


(10
)


(9
)


(399
)


(396
)    F-27




---



##### Table of Contents



Assumptions
    Pension plansUK


US


Post-employment benefits2007


2006


2005


2007


2006


2005


2007


2006


2005(%)Wages and salaries increases


4.9



4.6



4.3















4.0



4.0



4.0Pensions increases


3.4



3.1



2.8























Discount rate


5.5



5.0



4.7



5.8



5.8



5.5



5.8



5.8



5.5Inflation rate


3.4



3.1



2.8























Healthcare cost trend rate assumed for next year


























10.0



10.0



9.0Ultimate rate that the cost trend rate trends to


























5.0



5.0



4.5     Pension plansUK


US2007


2006


2005


2007


2006


2005(years)Current pensioners at 65 
    male(i)


23



23



21



18



18



17Current pensioners at 65 
    female(i)


26



26



24



20



20



22Future pensioners at 65 
    male(ii)


24



24



22



18



18



17Future pensioners at 65 
    female(ii)


27



27



25



20



20



22     (i)
    
    Relates to assumptions based on
    longevity (in years) following retirement at the balance sheet
    date.(ii)
    
    Relates to assumptions based on
    longevity (in years) relating to an employee retiring in 2027.    Sensitivities
    UK


USHigher/


Increase/


Higher/


Increase/(lower)


(decrease)


(lower)


(decrease)pension cost


in liabilities


pension cost


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


0.4



15.6







2.4Discount rate  0.25% increase


(0.4
)


(14.7
)






(2.3
)Inflation rate  0.25% increase


0.9



14.6







Inflation rate  0.25% decrease


(0.9
)


(13.8
)






Mortality rate  one year increase


0.6



6.8







2.7  F-28




---



##### Table of Contents



Post-Pension plans


employmentUK


US and other


benefits


TotalMovement in benefit obligation

2007


2006


2007


2006


2007


2006


2007


2006(£ million)Benefit obligation at beginning of year


298



274



89



103



9



11



396



388Current service cost


5



5



















5



5Members contributions


1



1



















1



1Interest expense


15



13



5



5



1



1



21



19Benefits paid


(7
)


(7
)


(5
)


(6
)


(1
)


(1
)


(13
)


(14
)Reclassification(i)










5















5



Actuarial (gain)/ loss arising in the year


(15
)


12















(1
)


(15
)


11Exchange adjustments










(2
)


(13
)


1



(1
)


(1
)


(14
)Benefit obligation at end of year


297



298



92



89



10



9



399



396Comprising:Funded plans


274



275



70



65











344



340Unfunded plans


23



23



22



24



10



9



55



56297



298



92



89



10



9



399



396   Post-Pension plans


employmentUK


US and other


benefits


TotalMovement in plan assets

2007


2006


2007


2006


2007


2006


2007


2006(£ million)Fair value of plan assets at beginning of year


269



250



56



62











325



312Company contributions


27



4



10



1



1



1



38



6Members contributions


1



1



















1



1Benefits paid


(7
)


(7
)


(5
)


(6
)


(1
)


(1
)


(13
)


(14
)Reclassification(i)










7















7



Expected return on assets


17



14



5



4











22



18Actuarial (loss)/gain arising in the year


(3
)


7







2











(3
)


9Exchange adjustments










(1
)


(7
)










(1
)


(7
)Fair value of plan assets at end of year


304



269



72



56











376



325     (i)
    
    Relates to the recognition of the gross assets and obligations
    of the Hong Kong pension scheme.   F-29




---



##### Table of Contents



2007


2006


2005Long-term





Long-term





Long-termrate of





rate of





rate ofreturn





return





returnexpected


Value


expected


Value


expected


Value(%)


(£ million)


(%)


(£ million)


(%)


(£ million)UK pension plansEquities


7.9



109



7.9



128



7.5



125Bonds


4.8



179



4.6



123



4.2



110Other


7.9



16



7.9



18



7.5



15Total market value of assets






304







269







250US pension plansEquities


9.5



39



9.5



34



9.6



38Fixed income


5.5



26



5.5



22



5.5



24Total market value of assets






65







56







62       UK pension plans

2007


2006


2005


2004


2003(£ million)Fair value of plan assets


304



269



250



470



353Present value of benefit obligations


(297
)


(298
)


(274
)


(600
)


(477
)Surplus/(deficit) in the plans


7



(29
)


(24
)


(130
)


(124
)Experience adjustments arising on plan liabilities


15



(12
)


(67
)


(60
)Experience adjustments arising on plan assets


(3
)


7



47



14   US pension plans

2007


2006


2005


2004


2003(£ million)Fair value of plan assets


65



56



62



56



48Present value of benefit obligations


(87
)


(89
)


(103
)


(88
)


(91
)Deficit in the plans


(22
)


(33
)


(41
)


(32
)


(43
)Experience adjustments arising on plan liabilities










(3
)


(5
)Experience adjustments arising on plan assets






2



(1
)


1   US post-employment benefits

2007


2006


2005


2004


2003(£ million)Present value of benefit obligations


(10
)


(9
)


(11
)


(11
)


(11
)Experience adjustments arising on plan liabilities






1



1



(1
)    F-30




---



##### Table of Contents



Policy
    on remuneration of Executive Directors and senior
    executives
    Total
    level of remuneration
    
    attracts high-quality executives in an environment where
    compensation levels are based on global market practice;
    provides appropriate retention strength against loss of key
    executives;
    drives aligned focus and attention to key business initiatives
    and appropriately rewards their achievement;
    supports equitable treatment between members of the same
    executive team; and
    facilitates global assignments and relocation.    Key
    developments
      
    restructuring of the Short Term Incentive Plan and the Short
    Term Deferred Incentive Plan into a single plan, renamed the
    Annual Bonus Plan; and
    a change to the Total Shareholder Return (TSR)
    performance measure linked to the Performance Restricted Share
    Plan, which has been renamed the Long Term Incentive Plan.      The
    main components
     F-31




---



##### Table of Contents



Base salary and benefits
      
    size  turnover, profits and the number of people
    employed;
    diversity and complexity of businesses;
    geographical spread of businesses; and
    relevance to the hotel industry.  Annual Bonus
            Long Term Incentive Plan
 F-32




---



##### Table of Contents




    the increase in IHGs Total Shareholder Return
    (TSR) over the performance period relative to eight*
    identified comparator companies: Accor, Choice, Marriott Hotels,
    Millennium & Copthorne, NH Hotels, Sol Melia, Starwood
    Hotels and Wyndham Worldwide; and
    growth in adjusted Earnings Per Share (EPS) over the
    period.  *
    Following the delisting of Hilton Hotels Corp. shares in October
    2007.        
    50% of the award will be based on IHGs TSR relative to the
    Dow Jones World Hotels Index. 10% of the award will be released
    for the achievement of growth equal to the index and 50% of the
    award will be released for the out-performance of the index by
    8% per annum. Vesting between all stated points will continue to
    be on a straight-line basis; and
    the other 50% of the award will depend on growth in adjusted EPS
    over the period. 10% of the award will be released for threshold
    performance and 50% of the award will be released for superior
    performance. The Remuneration Committee reviews the EPS targets
    each year and, at the time of this report, the target had not
    yet been determined. It will be disclosed when awards are made
    in due course. In setting the target, the Remuneration Committee
    will take into account a range of factors, including IHGs
    strategic plans, City analysts expectations for IHGs
    performance and for the industry as a whole, the historical
    performance of the industry and FTSE 100 market practice.  Executive Share Options page F-39.
    Share capital
  Share Ownership
    Policy
    on external appointments
   F-33




---



##### Table of Contents



Contracts
    of service
  a)
    Policy  12-month
    Non-Executive re-election
  b)
    Directors
    contracts  Contract(1)


Unexpired term/Director

effective date


notice periodAndrew Cosslett


02.03.05



12 monthsRichard
    Hartman(2)


04.15.03



N/AStevan Porter


04.15.03



12 monthsRichard Solomons


04.15.03



12 months     (1)
    
    Each of the Executive Directors
    signed a letter of appointment, effective from completion of the
    June 2005 capital reorganization of the Company on the same
    terms as their original service agreements.(2)
    
    Richard Hartman retired in
    September 2007, at which point his rolling contract with
    12 months notice expired.  Policy
    regarding pensions
  UK-based Top-Up
  US-based
      Policy
    on remuneration of Non-Executive Directors
   F-34




---



##### Table of Contents



Role

FeeChairman


£390,000Senior Independent Director & Chairman of Audit Committee


£95,000Chairman of Remuneration Committee


£80,000Other Non-Executive Directors


£60,000   Directors
    emoluments
  Total emoluments excluding pensionsBase salaries


Performance





Jan 1, 2007 to


Jan 1, 2006 toand fees


payments(1)


Benefits(2)


Dec 31, 2007


Dec 31, 2006(£ thousands)Executive DirectorsAndrew Cosslett


732



519



25



1,276



1,268Richard
    Hartman(3)


398



201



247



846



1,005Stevan
    Porter(4)


416



253



8



677



726Richard Solomons


468



285



18



771



806Non-Executive DirectorsDavid Webster


390







2



392



354David Kappler


95











95



80Ralph
    Kugler(5)


60











60



50Jennifer Laing


60











60



50Robert C Larson


60











60



50Jonathan Linen


60











60



50Sir David Prosser


80











80



65Sir Howard
    Stringer(6)


















43Ying
    Yeh(7)


5











5



Former
    Directors(8)










1



1



1Total


2,824



1,258



301



4,383



4,548     (1)
    
    Performance payments include bonus
    awards in cash in respect of participation in the Short Term
    Incentive Plan (STI) and the Short Term Deferred
    Incentive Plan (STDIP) but exclude bonus awards in
    deferred shares and any matching shares, details of which are
    set out in the STDIP table on
    page F-36.(2)
    
    Benefits incorporate all tax
    assessable benefits arising from the individuals
    employment. For Messrs Cosslett, Hartman and Solomons, this
    relates in the main to the provision of a fully expensed company
    car and private healthcare cover. In addition, Mr Hartman
    received housing, child education and other expatriate benefits.
    For Stevan Porter, benefits relate in the main to private
    healthcare cover and financial counselling.(3)
    
    Richard Hartman retired as a
    Director on September 25, 2007.(4)
    
    Emoluments for Stevan Porter
    include £79,051 that was chargeable to UK income tax.(5)
    
    All fees due to Ralph Kugler were
    paid to Unilever.(6)
    
    Sir Howard Stringer resigned as a
    Director on November 10, 2006.(7)
    
    Ying Yeh was appointed as a
    Director on December 1, 2007.(8)
    
    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-35




---



##### Table of Contents



Long-term
    reward
  Short
    Term Deferred Incentive Plan (STDIP)  now
    called the Annual Bonus Plan
    Valuebased onSTDIP shares








STDIP shares

















shareawarded





Market


vested





Market





STDIP





price ofduring





price


during





price





shares





884.0 penceSTDIP shares


the year





per share


the year





per share


Value


held at


Planned


at Dec 31,held at


Jan 1, 2007


Award


at award


Jan 1, 2007 to


Vesting


at vesting


at vesting


Dec 31,


vesting


2007Directors

Jan 1, 2007


to Dec 31, 2007


date


(pence)


Dec 31, 2007


date


(pence)


(£)


2007


date


(£)Andrew Cosslett


39,916(1
)






4.1.05



617.5



39,916



4.1.07



1260.0



502,942



32,168(3
)






3.8.06



853.67



32,168



3.8.07



1239.6



398,755



32,167(3
),(8)






3.8.06



853.67



















28,877



3.8.08



255,27332,168(3
),(8)






3.8.06



853.67



















28,878



3.8.09



255,28262,575(4
),(8),(9)


2.26.07



1235



















55,870



2.26.10



493,891Total


































113,625







1,004,446Richard Hartman


29,447(2
)






3.16.05



653.67



29,447



3.16.07



1210.5



356,456



29,447(2
)






3.16.05



653.67



















29,447



3.16.08



260,31219,714(3
)






3.8.06



853.67



19,714



3.8.07



1239.6



244,375



19,714(3
),(8)






3.8.06



853.67



















17,698



3.8.08



156,45119,713(3
),(8)






3.8.06



853.67



















17,696



3.8.09



156,43351,281(5
),(9)


2.26.07



1235



















51,281



2.26.10



453,325Total


































116,122







1,026,521Stevan Porter


26,978(2
)






3.16.05



653.67



26,978



3.16.07



1210.5



326,569(10
)


26,978(2
)






3.16.05



653.67



















26,978



3.16.08



238,48620,643(3
)






3.8.06



853.67



20,643



3.8.07



1239.6



255,891(10
)


20,642(3
),(8)






3.8.06



853.67



















18,531



3.8.08



163,81520,642(3
),(8)






3.8.06



853.67



















18,530



3.8.09



163,80633,352(6
),(8),(9)


2.26.07



1235



















29,778



2.26.10



263,238Total


































93,817







829,345Richard Solomons


29,020(2
)






3.16.05



653.67



29,020



3.16.07



1210.5



351,287



29,021(2
)






3.16.05



653.67



















29,021



3.16.08



256,54620,563(3
)






3.8.06



853.67



20,563



3.8.07



1239.6



254,899



20,562(3
),(8)






3.8.06



853.67



















18,459



3.8.08



163,17820,563(3
),(8)






3.8.06



853.67



















18,459



3.8.09



163,17840,048(7
),(8),(9)


2.26.07



1235



















35,757



2.26.10



316,092Total


































101,696







898,994     (1)
    
    This special award was made to
    Andrew Cosslett as part of his overall recruitment terms. The
    shares were to vest in equal portions on the first and second
    anniversary of the award date, subject to his continued
    employment until that time. The second half of the award vested
    on April 1, 2007.(2)
    
    This award was based on financial
    year 2004 performance where the performance measures were
    related to earnings per share (EPS), earnings before
    interest and tax (EBIT) and personal performance.
    Total shares held include matching shares.(3)
    
    This award was based on financial
    year 2005 performance where the performance measures were
    related to EPS, EBIT and personal performance. Total shares held
    include matching shares.(4)
    
    This award was based on financial
    year 2006 performance and the bonus target was 50% of base
    salary. Andrew Cosslett was awarded 50% for EPS performance and
    42% for Group EBIT performance. Andrew Cossletts total
    bonus was therefore 92% of his base salary. One matching share
    was awarded for every two bonus shares earned.(5)
    
    This award was based on financial
    year 2006 performance and the bonus target was 50% of base
    salary. Richard Hartman was awarded 50% for EPS performance and
    34.3% for EMEA EBIT performance. Richard Hartmans total
    bonus was therefore 84.3% of his base salary. One matching share
    was awarded for every two bonus shares earned. F-36




---



##### Table of Contents



(6)
    
    This award was based on financial
    year 2006 performance and the bonus target was 50% of base
    salary. Stevan Porter was awarded 50% for EPS performance and
    33.8% for Americas EBIT performance. Stevan Porters total
    bonus was therefore 83.8% of his base salary. One matching share
    was awarded for every two bonus shares earned.(7)
    
    This award was based on financial
    year 2006 performance and the bonus target was 50% of base
    salary. Richard Solomons was awarded 50% for EPS performance and
    42% for Group EBIT performance. Richard Solomons total
    bonus was therefore 92% of his base salary. One matching share
    was awarded for every two bonus shares earned.(8)
    
    A proportion of these share
    interests were in InterContinental Hotels Group PLC
    113/7 pence
    ordinary shares which were subject to the share consolidation
    effective from June 4, 2007. For every 56 existing
    InterContinental Hotels Group PLC shares held on June 1,
    2007, shareholders received 47 new ordinary shares of 13
    29/47 pence
    each and a special dividend of 200 pence per existing
    ordinary share. As a consequence, shares held at
    December 31, 2007 have been reduced accordingly.(9)
    
    Under the financial year 2006
    STDIP, paid in 2007, 80% of the bonus award was paid in shares
    and deferred for a full three-year period. Participants could
    also defer the remaining 20% of bonus on the same terms.  (10)
    
    The value of Stevan Porters
    shares at vesting includes £67,953 that was chargeable to
    UK income tax. F-37




---



##### Table of Contents



Long Term
    Incentive Plan (LTIP)  previously called
    the Performance Restricted Share Plan
      Maximum


ExpectedMaximum








LTIP shares














value


valueLTIP shares








vested














based on


based onawarded








during














share


shareduring





Market


the year


Market








Maximum


price of


price ofMaximum


the year





price


Jan 1, 2007


price





Actual/


LTIP shares


884.0 pence


884.0 penceLTIP shares


Jan 1, 2007





per share


to


per share


Value


planned


held at


at Dec 31,


at Dec 31,held at


to Dec 31,


Award


at award


Dec 31,


at vesting


at vesting


vesting


Dec 31,


2007


2007Directors

Jan 1, 2007


2007


date


(pence)


2007


(pence)


(£)


date


2007


(£)


(£)Andrew Cosslett


136,432(1
)






4.1.05



617.5



85,133



1249



1,063,311



2.21.07



276,200(2
)






6.29.05



706















2.20.08



276,200



2,441,608



1,350,010(8
)200,740(3
)






4.3.06



941.5















2.18.09



200,740



1,774,542159,506(4
)


4.2.07



1256















2.17.10



159,506



1,410,034Total


































636,446



5,626,184Richard Hartman


165,130(1
)






6.24.04



549.5



103,041



1249



1,286,982



2.21.07



214,870(2
)






6.29.05



706















2.20.08



196,964(5
)


1,741,162



962,863(8
)146,110(3
)






4.3.06



941.5















2.18.09



85,230(5
)


753,434113,731(4
)


4.2.07



1256















2.17.10



28,432(5
)


251,339Total


































310,626



2,745,935Stevan Porter


142,290(1
)






6.24.04



549.5



88,788



1249



1,108,962(6
)


2.21.07



174,900(2
)






6.29.05



706















2.20.08



174,900



1,546,116



855,003(8
)132,240(3
)






4.3.06



941.5















2.18.09



132,240



1,169,00292,667(4
)


4.2.07



1256















2.17.10



92,667



819,177Total


































399,807



3,534,295Richard Solomons


144,990(1
)






6.24.04



549.5



90,473



1249



1,130,008



2.21.07



176,550(2
)






6.29.05



706















2.20.08



176,550



1,560,702



863,069(8
)128,470(3
)






4.3.06



941.5















2.18.09



128,470



1,135,675102,109(4
)


4.2.07



1256















2.17.10



102,109



902,644Total


































407,129



3,599,021Former DirectorsRichard North


144,993(1
),(7)






6.24.04



549.5



90,475



1249



1,130,033



2.21.07



Total


































     (1)
    
    This award was based on performance
    to December 31, 2006 where the performance measure related
    to both the Companys TSR against a group of eight other
    comparator companies and growth in return on capital employed
    (ROCE). 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 fifth
    place; and b) growth in ROCE, with 50% of the award being
    released for 141.6% growth and 10% of the award being released
    for 70% growth. The Company finished in third place in the TSR
    group and achieved ROCE growth of 98.2%. Accordingly, 62.4% of
    the award vested on February 21, 2007.(2)
    
    This award is based on performance
    to December 31, 2007 where the performance measure relates
    to both the Companys TSR against a group of seven other
    comparator companies and the cumulative annual growth rate
    (CAGR) of rooms in the IHG system relative to a
    group of five other comparator companies. The number of shares
    released is 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
    with 50% of the award being released for 3.4% (upper quartile)
    CAGR and 10% of the award being released for 2.4% (median) CAGR. F-38




---



##### Table of Contents



(3)
    
    This award is based on performance
    to December 31, 2008 where the performance measure relates
    to both the Companys TSR against a group of eight other
    comparator companies and the relative CAGR of rooms in the IHG
    system.(4)
    
    This award is based on performance
    to December 31, 2009 where the performance measure relates
    to both the Companys TSR against a group of eight other
    comparator companies and the compound annual growth rate in
    earnings per share (EPS) over the performance period.(5)
    
    Richard Hartmans awards were
    pro-rated to reflect his contractual service during the
    applicable performance periods.(6)
    
    The value of Stevan Porters
    shares at vesting includes £129,378 that was chargeable to
    UK income tax.(7)
    
    Richard Norths award was
    pro-rated to reflect his contractual service during the
    applicable performance period.(8)
    
    The Company finished in fourth
    place in the TSR group and achieved CAGR of 3.1%. Accordingly,
    55.3% of the award vested on February 20, 2008.  Share
    options
    WeightedOrdinary shares under option


averageGranted


Lapsed


Exercised


Options


option


OptionOptions held


during


during


during


held at


price


priceDirectors

at Jan 1, 2007


the year


the year


the year


Dec 31, 2007


(pence)


(pence)Andrew Cosslett


157,300B


















157,300







619.83Total


157,300















157,300



619.83Richard Hartman


337,760218,950











494.17B


















118,810







619.83Total


337,760











218,950



118,810



619.83Stevan Porter


321,630A


















225,260







494.17B


















96,370







619.83Total


321,630















321,630



531.82Richard Solomons


334,639A


















230,320







494.17B


















100,550







619.83C


















3,769







420.50Total


334,639















334,639



531.10     A
    
    Where options are exercisable at
    December 31, 2007. Executive share options granted in 2004
    are exercisable up to April 2014.B
    
    Where options are not yet
    exercisable at December 31, 2007. Executive share options
    granted in 2005 are exercisable up to April 2015. The
    performance condition relating to the 2005 grant of executive
    share options is set out on
    page F-33.C
    
    Sharesave options granted in 2003.
    These are exercisable between March and September 2009.       F-39




---



##### Table of Contents



Directors
    shareholdings
 December 31, 2007


January 1, 2007InterContinental Hotels Group PLC


InterContinental Hotels Group PLCordinary shares of
    1329/47
    pence(2)


ordinary shares of
    113/7
    pence(1)Executive DirectorsAndrew Cosslett


133,101



42,063Stevan Porter


168,162



114,446Richard Solomons


156,810



104,247Non-Executive DirectorsDavid Kappler


1,400



1,669Ralph Kugler


1,169



572Jennifer Laing


1,404



875Robert C Larson


10,269(3
)


6,874(3
)Jonathan Linen


7,343(3
)


8,750(3
)Sir David Prosser


2,402



2,863David Webster


31,938



31,975Ying Yeh






     (1)
    
    These share interests were in
    InterContinental Hotels Group PLC 11
    3/7
    pence ordinary shares prior to the share consolidation effective
    from June 4, 2007. For every 56 existing InterContinental
    Hotels Group PLC shares held on June 1, 2007, shareholders
    received 47 new ordinary shares of 13
    29/47 pence
    each and 200 pence per existing ordinary share.(2)
    
    These shareholdings are all
    beneficial interests and include shares held by Directors
    spouses and other connected persons. None of the Directors has a
    beneficial interest in the shares of any subsidiary.(3)
    
    Held in the form of American
    Depositary Receipts.  Directors
    pensions
    1 30
       F-40




---



##### Table of Contents



Directors
    pension benefits
  Increase/(decrease) intransfer value


Increase/


Increase/Directors


Transfer value of


over the year,


(decrease) in


(decrease)


Accruedcontributions


accrued benefits


less Directors


accrued


in accrued


pension atAge at


in the
    year(1)


Jan 1, 2007


Dec 31, 2007


contributions


pension(2)


pension(3)


Dec 31,
    2007(4)Directors

Dec 31, 2007


(£)


(£)


(£)


(£)


(£ pa)


(£ pa)


(£ pa)Andrew Cosslett


52



34,400



595,300



1,184,200



554,500



27,100



25,300



70,900Richard Hartman


61







1,935,400



1,812,600



(122,800
)


(19,300
)


(23,300
)


75,400(5
)Richard Solomons


46



22,000



1,470,500



2,371,600



879,100



24,900



18,700



168,700   (1)
    
    Contributions paid in the year by
    the Directors under the terms of the plans. Contributions have
    been 5% of full pensionable salary.(2)
    
    The absolute increase or decrease
    in accrued pension during the year.(3)
    
    The increase or decrease in accrued
    pension during the year, excluding any increase for inflation,
    on the basis that increases or decreases to accrued pensions are
    applied at October 1.(4)
    
    Accrued pension is that which would
    be paid annualy on retirement at 60, based on service to
    December 31, 2007.(5)
    
    When Richard Hartman retired on
    September 25, 2007, his pension was £97,600 per annum
    pre-commutation. He took a tax-free cash sum of £385,400,
    leaving a residual pension of £75,400 per annum.    Directors contribution to

Company contribution toDCP

401(k)

DCP

401(k)(£)

(£)

(£)

(£)Stevan Porter


105,000



5,600



74,700



4,500     Note 4 
    Auditors
    Remuneration paid to Ernst & Young LLP  Year ended December 31,2007


2006


2005(£ million)Audit fees


0.8



0.9



1.0Audit fees in respect of subsidiaries


1.3



1.4



2.1Tax fees


0.4



0.7



0.6Fees in respect of reporting under Sarbanes Oxley Act


0.6



1.0



Interim review fees


0.2



0.2



0.2Other services pursuant to legislation


0.1



0.1



0.8Corporate finance fees






0.1



1.8Other


1.2



0.8



0.74.6



5.2



7.2      F-41




---



##### Table of Contents



Note 5 
    Exceptional
    Items  Year ended December 31,2007


2006


2005(£ million)Continuing operationsExceptional operating itemsGain on sale of associate investments*


11







Gain on sale of investments in FelCor Lodging Trust, Inc.*






25



Gain on sale of other financial assets*


18







Reversal of previously recorded impairment*


3



2



Office
    reorganizations(i)


(2
)






Restructuring
    costs*(ii)










(13
)Property
    damage*(iii)










(9
)Employee benefits curtailment
    gain*(iv)










730



27



(15
)TaxTax charge on exceptional operating items






(6
)


Exceptional tax
    credit(v)


30



100



830



94



860



121



(7
)Discontinued operationsExceptional operating itemsImpairment of property, plant and
    equipment(vi)










(7
)Gain on disposal of assetsGain on disposal of assets


20



123



349Tax charge


(4
)


(6
)


(38
)16



117



31116



117



304     *
    Included within other operating income and expenses.    (i)
    Profit on sale and leaseback of new head office less costs
    incurred to date on the office move and closure of the
    Companys Aylesbury facility. Costs will continue to be
    incurred during the first half of 2008. Costs of
    £7 million are included in administrative expenses and
    £1 million in depreciation and amortization. Income of
    £6 million is included in other operating income and
    expenses.(ii)
    Restructuring costs relate to the delivery of the further
    restructuring of the Hotels business.(iii)
    Damage to properties resulting from fire and natural disasters.(iv)
    A curtailment gain arising as a result of the sale of UK hotel
    properties.(v)
    The exceptional tax credit 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,  together
    with, in 2006, a credit in respect of previously unrecognized
    losses.(vi)
    Property, plant and equipment were written down by
    £7 million in 2005 following an impairment review of
    the hotel estate. F-42




---



##### Table of Contents



Note 6 
    Finance
    costs  Year ended December 31,2007


2006


2005(£ million)Financial incomeInterest income


8



21



28Fair value gains


1



5



29



26



30Financial expensesInterest expense  Hotels


45



33



51Interest expense  Soft Drinks










9Finance charge payable under finance leases


9



4



54



37



60Fair value charge










354



37



63      F-43




---



##### Table of Contents



Note 7 
    Tax  Income
    tax
  Year ended December 31,2007


2006


2005(£ million)UK corporation tax at 30% (2006 30%, 2005 30%):Current period


23



16



11Benefit of tax reliefs on which no deferred tax previously
    recognized


(1
)


(10
)


Adjustments in respect of prior periods


(16
)


(4
)


(6
)6



2



5Foreign tax:Current period


100



72



149Benefit of tax reliefs on which no deferred tax previously
    recognized


(8
)


(1
)


(2
)Adjustments in respect of prior periods


(50
)


(94
)


(19
)42



(23
)


128Total current tax


48



(21
)


133Deferred tax:Origination and reversal of temporary differences


(34
)


27



(3
)Changes in tax rates


(2
)


(4
)


(2
)Adjustments to estimated recoverable deferred tax assets


3



(13
)


1Adjustments in respect of prior periods


4



(24
)


(11
)Total deferred tax


(29
)


(14
)


(15
)Total income tax charge/(credit) on profit for the year


19



(35
)


118Further analyzed as tax relating to:Profit before exceptional items


45



53



88Exceptional items (Note 5):Exceptional operating items






6



Exceptional tax
    credit(i)


(30
)


(100
)


(8
)Gain on disposal of assets


4



6



3819



(35
)


118The total tax charge/(credit) can be further analyzed as
    relating to:Profit on continuing operations


12



(53
)


22Profit on discontinued operations


3



12



58Gain on disposal of assets


4



6



3819



(35
)


118     (i)
    
    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, together with, in 2006, a credit in respect of
    previously unrecognized losses. F-44




---



##### Table of Contents



Reconciliation of tax charge/(credit) on total profit,
    including gain on disposal of assets
  Year ended December 31,2007


2006


2005(%)UK corporation tax at standard rate


30.0



30.0



30.0Permanent differences


5.6



3.7



1.3Net effect of different rates of tax in overseas businesses


1.8



3.5



2.9Effect of changes in tax rates


(1.0
)


(1.0
)


(0.3
)Benefit of tax reliefs on which no deferred tax previously
    recognized


(3.3
)


(3.0
)


(0.1
)Effect of adjustments to estimated recoverable deferred tax
    assets


1.3



(0.2
)


0.1Adjustment to tax charge in respect of prior periods


(11.0
)


(6.9
)


(4.5
)Other


0.4



0.4



(0.1
)Exceptional items and gain on disposal of assets


(16.3
)


(36.1
)


(10.7
)7.5



(9.6
)


18.6   Tax
    paid
    Note 8 
    Dividends
    paid and proposed  Year ended December 31,2007


2006


2005


2007


2006


2005(pence per share)








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


13.3



10.7



10.0



47



46



61Interim


5.7



5.1



4.6



17



18



20Special interim


200.0



118.0







709



497



219.0



133.8



14.6



773



561



81Proposed for approval at the Annual General Meeting (not
    recognized as a liability at December 31):Final


14.9



13.3



10.7



44



47



46     Note 9 
    Earnings
    per ordinary share         F-45




---



##### Table of Contents



Year ended December 31,2007


2006


2005Continuing





Continuing





Continuingoperations


Total


operations


Total


operations


TotalBasic earnings per shareProfit available for equity holders (£ million)


210



231



269



405



114



496Basic weighted average number of ordinary shares (millions)


320



320



389



389



521



521Basic earnings per share (pence)


65.6



72.2



69.1



104.1



21.9



95.2Diluted earnings per shareProfit available for equity holders (£ million)


210



231



269



405



114



496Diluted weighted average number of ordinary shares (millions)


329



329



399



399



533



533Diluted earnings per share (pence)


63.8



70.2



67.4



101.5



21.4



93.1   2007


2006


2005(millions)Diluted weighted average of ordinary shares is calculated as:Basic weighted average number of ordinary shares


320



389



521Dilutive potential ordinary shares  employee share
    options


9



10



12329



399



533   Year ended December 31,2007


2006


2005Continuing





Continuing





Continuingoperations


Total


operations


Total


operations


TotalAdjusted earnings per shareProfit available for equity holders (£ million)


210



231



269



405



114



496Less adjusting items (Note 5):Exceptional operating items (£ million)


(30
)


(30
)


(27
)


(27
)


15



15Tax on exceptional operating items (£ million)










6



6







Exceptional tax credit (£ million)


(30
)


(30
)


(100
)


(100
)


(8
)


(8
)Impairment of property, plant and equipment (£ million)






















7Gain on disposal of assets, net of tax (£ million)






(16
)






(117
)






(311
)Adjusted earnings (£ million)


150



155



148



167



121



199Basic weighted average number of ordinary shares (millions)


320



320



389



389



521



521Adjusted earnings per share (pence)


46.9



48.4



38.0



42.9



23.2



38.2Adjusted earnings (£ million)


150



155



148



167



121



199Diluted weighted average number of ordinary shares (millions)


329



329



399



399



533



533Adjusted diluted earnings per share (pence)


45.6



47.1



37.1



41.8



22.7



37.3  F-46




---



##### Table of Contents



Note 10 
    Property,
    Plant and Equipment  Land


Fixtures,and


fittings andbuildings


equipment


Total(£ million)Year ended December 31, 2006Cost:At January 1, 2006


1,155



615



1,770Additions


104



82



186Transfers to non-current assets classified as held for sale


(363
)


(118
)


(481
)Disposals


(2
)


(31
)


(33
)Exchange and other adjustments


(73
)


(42
)


(115
)At December 31, 2006


821



506



1,327Depreciation:At January 1, 2006


(101
)


(313
)


(414
)Provided


(7
)


(41
)


(48
)Transfers to non-current assets classified as held for sale


17



55



72On disposals


2



28



30Exchange and other adjustments


7



23



30At December 31, 2006


(82
)


(248
)


(330
)Net book value at December 31, 2006


739



258



997Year ended December 31, 2007Cost:At January 1, 2007


821



506



1,327Additions


5



49



54Reclassifications


15



(20
)


(5
)Net transfers to non-current assets classified as held for sale


(38
)


(44
)


(82
)Disposals


(7
)


(19
)


(26
)Exchange and other adjustments


3



3



6At December 31, 2007


799



475



1,274Depreciation:At January 1, 2007


(82
)


(248
)


(330
)Provided


(6
)


(33
)


(39
)Net transfers to non-current assets classified as held for sale


17



15



32Reversal of impairment






3



3On disposals


7



18



25Exchange and other adjustments






(3
)


(3
)At December 31, 2007


(64
)


(248
)


(312
)Net book value at December 31, 2007


735



227



962      F-47




---



##### Table of Contents



Note 11 
    Held for
    Sale and Discontinued Operations  Hotels
      Year ended December 31,2007


2006


2005(£ million)Net assets of hotels soldProperty, plant and equipment


35



648



1,961Goodwill










20Net working capital


1



(22
)


1Cash and cash equivalents






31



16Loans and other borrowings






(10
)


Deferred tax






(117
)


(121
)Minority equity interest


(6
)


(13
)


Companys share of net assets disposed of


30



517



1,877ConsiderationCurrent year disposals:Cash consideration, net of costs paid


47



628



1,832Deferred consideration






10



40Management contract value


3



30



82Other






(14
)


(12
)50



654



1,942Net assets disposed of


(30
)


(517
)


(1,877
)Provision against deferred consideration






(10
)


Other, including impairment of held for sale asset






(4
)


Tax


(4
)


(6
)


(38
)Gain on disposal of assets, net of tax(i)


16



117



27Net cash inflowCurrent year disposals:Cash consideration, net of costs paid


47



628



1,832Cash disposed of






(31
)


(16
)Prior year disposals


2



23



49



620



1,816Assets and liabilities held for saleNon-current assets classified as held for sale:Property, plant and equipment


57



40



279Associates






10



57



50



279Liabilities classified as held for sale:Deferred tax


(3
)


(2
)


(34
)   (i)
    
    Reported within discontinued operations.  Soft
    Drinks
    F-48




---



##### Table of Contents



Year endedDecember 31,2005(£ million)Net liabilities of Soft Drinks on disposalProperty, plant and equipment


234Goodwill


18Software


25Inventories


36Trade and other receivables


141Cash and cash equivalents


1Current liabilities


(162
)Borrowings


(341
)Employee benefits


(91
)Deferred tax


8Minority equity interest


66Companys share of net liabilities disposed of


(65
)ConsiderationCash consideration, net of costs paid


221Other


(2
)219Net liabilities disposed of


65Gain on disposal of assets, net of tax


284Net cash inflowCash consideration, net of costs paid


221Cash disposed of


(1
)220   Year ended December 31,2007


2006


2005(£ million)Cash flows attributable to discontinued operationsHotelsOperating profit before interest, depreciation and amortization


10



40



127Investing activities


(1
)


(9
)


(59
)Financing activities






(25
)


(16
)Soft DrinksOperating profit before interest, depreciation and amortization










115Investing activities










(47
)Financing activities










162  F-49




---



##### Table of Contents



Year endedDecember 31,2007


2006


2005(£ million)Results of discontinued operationsRevenue


40



174



1,213Cost of sales


(30
)


(134
)


(897
)Administrative expenses










(74
)10



40



242Depreciation and amortization


(2
)


(9
)


(78
)Operating profit before exceptional operating items


8



31



164Exceptional operating items










(7
)Operating profit


8



31



157Financial expenses










(9
)Profit before tax


8



31



148Tax


(3
)


(12
)


(58
)Profit after tax


5



19



90Gain on disposal of assets, net of tax (Note 5)


16



117



311Profit for the year from discontinued operations


21



136



401Attributable to:Equity holders of the parent


21



136



382Minority equity interest










1921



136



401   2007


2006


2005Pence


Pence


Penceper share


per share


per shareEarnings per share from discontinued operationsBasic


6.6



35.0



73.3Diluted


6.4



34.1



71.7     Note 12 
    Goodwill  At December 31,2007


2006(£ million)At January 1


109



118Acquisition of subsidiary (Note 31)






2Exchange and other adjustments


1



(11
)At December 31


110



109    F-50




---



##### Table of Contents



At December 31,2007


2006(£ million)Americas managed operations


70



72Asia Pacific managed and franchised operations


40



37110



109     Americas
    managed operations
    Asia
    Pacific managed and franchised operations
     F-51




---



##### Table of Contents



Note 13 
    Intangible
    assets  Management


OtherSoftware


contracts


intangibles


Total(£ million)Year ended December 31, 2006Cost:At January 1, 2006


38



84



28



150Additions


10



30



13



53Acquisition of subsidiary (note 31)


1



7







8Disposals










(2
)


(2
)Exchange and other adjustments


(6
)


(4
)


(3
)


(13
)At December 31, 2006


43



117



36



196Amortization:At January 1, 2006


(17
)


(3
)


(10
)


(30
)Provided


(9
)


(4
)


(3
)


(16
)Exchange and other adjustments


3







1



4At December 31, 2006


(23
)


(7
)


(12
)


(42
)Net book value at December 31, 2006


20



110



24



154Year ended December 31, 2007Cost:At January 1, 2007


43



117



36



196Additions


13



5



7



25Reclassifications


5











5Disposals










(1
)


(1
)Exchange and other adjustments


(1
)


2







1At December 31, 2007


60



124



42



226Amortization:At January 1, 2007


(23
)


(7
)


(12
)


(42
)Provided


(9
)


(6
)


(4
)


(19
)Disposals










1



1Exchange and other adjustments


1











1At December 31, 2007


(31
)


(13
)


(15
)


(59
)Net book value at December 31, 2007


29



111



27



167    F-52




---



##### Table of Contents



Note 14 
    Investments
    in associates    At


AtDecember 31,


December 31,2007


2006(£ million)Share of associates balance sheetCurrent assets


3



2Non-current assets


52



50Current liabilities


(8
)


(5
)Non-current liabilities


(14
)


(15
)Net assets


33



32Share of associates revenue and profitRevenue


16



22Net profit


1



2Related party transactionsRevenue from related parties


3



4Amounts owed by related parties


1



1   Note 15 
    Other
    Financial Assets  At


AtDecember 31,


December 31,2007


2006(£ million)Non-currentEquity securities available-for-sale


46



48Other


47



4893



96CurrentEquity securities available-for-sale






9Derivatives






4Other


9



9



13   available-for-sale
   F-53




---



##### Table of Contents



At


AtDecember 31,


December 31,2007


2006(£ million)At January 1,


(21
)


(16
)Provided and charged to gain on disposal of assets






(10
)Recoveries


2



3Disposals


3



Amounts written off against the financial asset


12



1Exchange and other adjustments






1At December 31,


(4
)


(21
)     Note 16 
    Inventories  At


AtDecember 31,


December 31,2007


2006(£ million)Finished goods


1



1Consumable stores


2



23



3   Note 17 
    Trade and
    other receivables  At


AtDecember 31,


December 31,2007


2006(£ million)Trade receivables


180



163Other receivables


29



51Prepayments


26



23235



237     non-interest
 F-54




---



##### Table of Contents



At


AtDecember 31,


December 31,2007


2006(£ million)Americas


115



105Europe, the Middle East and Africa


70



78Asia Pacific


24



31209



214     At December 31, 2007


At December 31, 2006Gross


Provision


Net


Gross


Provision


Net(£ million)Not past due


141



(1
)


140



118







118Past due 1 to 30 days


37



(1
)


36



62



(1
)


61Past due 31 to 180 days


39



(8
)


31



49



(16
)


33More than 181 days


40



(38
)


2



28



(26
)


2257



(48
)


209



257



(43
)


214     At


AtDecember 31,


December 31,2007


2006(£ million)At January 1,


(43
)


(47
)Provided


(12
)


(16
)Amounts written off


6



15Exchange and other adjustments


1



5At December 31,


(48
)


(43
)   Note 18 
    Cash and
    cash equivalents  At


AtDecember 31,


December 31,2007


2006(£ million)Cash at bank and in hand


26



30Short-term deposits


26



14952



179    F-55




---



##### Table of Contents



Note 19 
    Trade and
    other payables  At


AtDecember 31,


December 31,2007


2006(£ million)CurrentTrade payables


49



47Other tax and social security payable


19



26Other payables


172



190Accruals


148



139Derivatives


2



390



402Non-currentOther payables


139



109       Note 20 
    Loans and
    other borrowings  At December 31, 2007


At December 31, 2006Current


Non-current


Total


Current


Non-current


Total(£ million)Secured bank loans






3



3



4



3



7Finance leases


8



92



100



3



94



97Unsecured bank loans






774



774



3



206



209Total borrowings


8



869



877



10



303



313Denominated in the following currencies:Pounds sterling






275



275







102



102US dollars


8



425



433



10



145



155Euro






121



121







54



54Other






48



48







2



28



869



877



10



303



313   Secured
    bank loans
   F-56




---



##### Table of Contents



Finance
    leases
    At December 31, 2007


At December 31, 2006Minimum


Present


Minimum


Presentlease


value of


lease


value ofpayments


payments


payments


payments(£ million)Less than one year


8



8



3



3Between one and five years


32



24



33



24More than five years


1,689



68



1,745



701,729



100



1,781



97Less amount representing finance charges


(1,629
)






(1,684
)


100



100



97



97     Unsecured
    bank loans
    Facilities
    provided by banks
  At December 31, 2007


At December 31, 2006Utilized


Unutilized


Total


Utilized


Unutilized


Total(£ million)Committed


777



377



1,154



213



944



1,157Uncommitted






25



25



3



36



39777



402



1,179



216



980



1,196   At December 31,2007


2006(£ million)Unutilized facilities expire:within one year


75



86after one but before two years


327



after two years






894402



980   Note 21 
    Financial
    risk management policies  Overview
   F-57




---



##### Table of Contents



Market
    risk exposure
            Liquidity
    risk exposure
      Credit
    risk exposure
       F-58




---



##### Table of Contents



Capital
    risk management
    Hedging
  Interest
    rate risk
      Foreign
    currency risk
      Hedge of
    net investment in foreign operations
       F-59




---



##### Table of Contents



Note 22 
    Financial
    Instruments  Liquidity
    risk
    Less than


Between 1 and


Between 2 and


More thanDecember 31, 2007

1 year


2 years


5 years


5 years


Total(£ million)Secured bank loans


1



1



4







6Finance lease obligations


8



8



24



1,689



1,729Unsecured bank loans


781















781Trade and other payables


388



64



50



55



557Derivatives


6















6   Less than


Between 1 and


Between 2 and


More thanDecember 31, 2006

1 year


2 years


5 years


5 years


Total(£ million)Secured bank loans


4



1



5







10Finance lease obligations


3



8



25



1,745



1,781Unsecured bank loans


214















214Trade and other payables


402



47



36



53



538Derivatives


57















57     Credit
    risk
    At


AtDecember 31,


December 31,2007


2006(£ million)Equity securities available-for-sale


46



57Loans and receivables:Cash and cash equivalents


52



179Other financial assets


56



48Trade and other receivables excluding prepayments


209



214Derivatives






4363



502  F-60




---



##### Table of Contents



Interest
    rate risk
    Repricing analysisTotal





Between


BetweenEffective


carrying


Less than


6 months


1 and 2


More thanAs at December 31, 2007

interest rate


amount


6 months


and 1 year


years


5 years(%)


(£ million)Cash and cash equivalents


0.0-5.9



(52
)


(52
)










Secured bank loans


8.2



3



3











Finance lease obligations*


9.7



100















100Unsecured bank loans:Euro floating rate


5.3



121



121











 effect of euro interest rate swaps*


(0.6
)






(55
)






55



US dollar floating rate


5.5



333



333











 effect of US dollar interest rate swaps*


(0.4
)






(50
)


50







Sterling floating rate


6.9



275



275











 effect of sterling interest rate swaps


0.0







(75
)






75



HK dollar floating rate


4.5



45



45











Net debt






825



545



50



130



100     *
    
    These items bear interest at a
    fixed rate.  Repricing analysisTotal





Between


BetweenEffective


carrying


Less than


6 months


1 and 2


More thanAs at December 31, 2006

interest rate


amount


6 months


and 1 year


years


5 years(%)








(£ million)Cash and cash equivalents


0.0-5.2



(179
)


(179
)










Secured bank loans


8.5



7



7











Finance lease obligations*


9.7



97















97Unsecured bank loans:Euro floating rate


4.0



54



54











 effect of euro interest rate swaps*


(1.0
)






(54
)






54



US dollar floating rate


5.7



53



53











 effect of US dollar interest rate swaps*


(1.2
)






(51
)






51



Sterling floating rate


5.6



102



102











Net debt






134



(68
)






105



97Foreign exchange contracts






(4
)


(4
)










130



(72
)






105



97     *
    
    These items bear interest at a
    fixed rate.   F-61




---



##### Table of Contents



Fair
    values
    At December 31, 2007


At December 31, 2006Carrying





Carryingvalue


Fair value


value


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


46



46



57



57Loans and receivables:Cash and cash equivalents (Note 18)


52



52



179



179Other financial assets (Note 15)


56



56



48



48Trade and other receivables, excluding prepayments (Note 17)


209



209



214



214Derivatives (Note 15)










4



4Financial liabilitiesBorrowings, excluding finance lease obligations (Note 20)


(777
)


(777
)


(216
)


(216
)Finance lease obligations (Note 20)


(100
)


(126
)


(97
)


(97
)Trade and other payables (Note 19)


(527
)


(527
)


(511
)


(511
)Derivatives (Note 19)


(2
)


(2
)






     Note 23 
    Net
    debt  At December 31,


At December 31,2007


2006(£ million)Cash and cash equivalents


52



179Loans and other borrowings  current


(8
)


(10
)Loans and other borrowings  non-current


(869
)


(303
)Net debt


(825
)


(134
)   F-62




---



##### Table of Contents



Year ended


Year endedDecember 31,


December 31,2007


2006(£ million)Movement in net debtNet decrease in cash and cash equivalents


(131
)


(152
)Add back cash flows in respect of other components of net debt:(Increase)/decrease in borrowings


(553
)


172(Increase)/decrease in net debt arising from cash flows


(684
)


20Non-cash movements:Finance lease liability


(9
)


(103
)Exchange and other adjustments


2



37Increase in net debt


(691
)


(46
)Net debt at beginning of the year


(134
)


(88
)Net debt at end of the year


(825
)


(134
)   Note 24 
    Share-based
    payments  Short
    Term Deferred Incentive Plan
    Long
    Term Incentive Plan
    Executive
    Share Option Plan
   F-63




---



##### Table of Contents



Sharesave
    Plan
    US
    Employee Stock Purchase Plan
    Former
    Six Continents Share Schemes
          Short Term Deferred

Long TermIncentive Plan

Incentive PlanNumber of shares awarded in 2007


675,515



3,538,535  F-64




---



##### Table of Contents



Short Term Deferred


Long Term2007

Incentive Plan


Incentive PlanValuation model

Binomial


Monte CarloSimulation andBinomialWeighted average share price (pence)


1252.0



1262.0Expected dividend yield


2.13
%


2.13
%Risk-free interest rate






5.40
%Volatility(i)






19
%Term (years)


3.0



3.0   Short Term Deferred


Long Term2006

Incentive Plan


Incentive PlanValuation model

Binomial


Monte CarloSimulation andBinomialWeighted average share price (pence)


831.0



946.0Expected dividend yield






2.32
%Risk-free interest rate






4.90
%Volatility(i)






20
%Term (years)


2.0



3.0   Short Term Deferred


Long Term


Executive Share2005

Incentive Plan


Incentive Plan


Option PlanValuation model

Binomial


Monte Carlo


BinomialSimulation andBinomialWeighted average share price (pence)


652.8



702.0



627.0Exercise price (pence)










620.0Expected dividend yield


2.73
%


3.18
%


3.62
%Risk-free interest rate






4.10
%


4.69
%Volatility(i)






23
%


28
%Term (years)


2.0



3.0



6.5     (i)
    
    The expected volatility was
    determined by calculating the historical volatility of the
    Companys share price corresponding to the expected life of
    the option or share award. F-65




---



##### Table of Contents



Short Term Deferred


Long TermIncentive Plan


Incentive PlanNumber of shares


Number of shares(thousands)Outstanding at January 1, 2005


241



7,735Granted


625



5,174Vested


(32
)


(1,278
)Lapsed or canceled


(5
)


(997
)Outstanding at December 31, 2005


829



10,634Granted


607



4,277Vested


(328
)


(1,395
)Share capital consolidation


(50
)


Lapsed or canceled


(57
)


(2,191
)Outstanding at December 31, 2006


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



11,463Fair value of awards granted during the year (pence)At December 31, 2007


1190.6



453.8At December 31, 2006


894.5



287.0At December 31, 2005


649.1



117.0Weighted average remaining contract life (years)At December 31, 2007


1.5



1.1At December 31, 2006


1.0



1.3At December 31, 2005


1.1



1.2     F-66




---



##### 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)Options outstanding at January 1, 2005


1,262



420.5



420.5



26,741



308.5-593.3



447.6Granted














2,105



619.8



619.8Exercised


(118
)


420.5



420.5



(4,138
)


308.5-593.3



429.1Lapsed or canceled


(280
)


420.5



420.5



(2,089
)


345.6-619.8



465.3Options outstanding at December 31, 2005


864



420.5



420.5



22,619



308.5-619.8



465.4Exercised


(389
)


420.5



420.5



(8,365
)


308.5-619.8



438.7Lapsed or canceled


(310
)


420.5



420.5



(175
)


345.6-619.8



404.6Options outstanding at December 31, 2006


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



526.8Options outstanding at December 31, 2007


57



420.5



420.5



8,194



308.5-619.8



487.4Options exercisableAt December 31, 2007














6,583



308.5-619.8



455.0At December 31, 2006














6,002



308.5-619.8



430.2At December 31, 2005














8,710



308.5-619.8



434.3         Options outstandingWeighted





Options exercisableaverage


Weighted





WeightedNumber


remaining


average


Number


averageoutstanding


contract life


option price


exercisable


option price(thousands)


(years)


(pence)


(thousands)


(pence)Range of exercise prices (pence)Sharesave Plan420.5


57



1.0



420.5







Executive Share Option Plan308.5 to 349.1


565



2.3



347.7



565



347.7349.2 to 498.0


5,905



5.3



462.6



5,905



462.6498.1 to 619.8


1,724



6.8



618.1



113



593.78,194



5.4



487.4



6,583



455.0  F-67




---



##### Table of Contents



Note 25 
    Deferred
    tax payable  OtherProperty,


Deferred











short-termplant and


gains on





Employee


Intangible


temporaryequipment


loan notes


Losses


benefits


assets


differences*


Total(£ million)At January 1, 2005


492



122



(113
)


(39
)


(30
)


(50
)


382Disposals


(150
)










34







3



(113
)Income statement


(87
)






(11
)


(5
)


32



56



(15
)Statement of recognized income and expense














(5
)






(2
)


(7
)Exchange and other adjustments


1







1



(1
)


(3
)


(1
)


(3
)At December 31, 2005


256



122



(123
)


(16
)


(1
)


6



244Disposals


(126
)






2











7



(117
)Income statement


(2
)


(26
)


31



(1
)


16



(32
)


(14
)Statement of recognized income and expense














1







(27
)


(26
)Acquisition of subsidiary (Note 31)


















1







1Exchange and other adjustments


(9
)


(4
)


1



2



1



2



(7
)At December 31, 2006


119



92



(89
)


(14
)


17



(44
)


81Income statement


1



(4
)


(2
)


3



3



(30
)


(29
)Statement of recognized income and expense














3







27



30Exchange and other adjustments


3



(1
)


(3
)






1



3



3At December 31, 2007


123



87



(94
)


(8
)


21



(44
)


85     *
    
    Other short-term temporary
    differences relate primarily to provisions and accruals and
    share-based payments.  At December 31,2007


2006


2005(£ million)Analyzed as:Deferred tax payable


82



79



210Liabilities classified as held for sale


3



2



34At December 31


85



81



244      F-68




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##### Table of Contents



Note 26 
    Minority
    equity interest  Year ended December 31,2007


2006


2005(£ million)At January, 1


8



20



117Total recognized income and expense in the year










15Dividends paid to minority interests






(1
)


(177
)Disposal of hotels (Note 11)


(6
)


(13
)


Disposal of Soft Drinks business (Note 11)










66Acquisition of subsidiary (Note 31)






3



Exchange and other adjustments


1



(1
)


(1
)At December, 31


3



8



20   Note 27 
    Operating
    leases      At December 31,2007


2006(£ million)Due within one year


28



27One to two years


19



21Two to three years


16



19Three to four years


14



14Four to five years


11



9More than five years


108



100196



190    F-69




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##### Table of Contents



Note 28 
    Capital
    and other commitments  At December 31,2007

2006(£ million)Contracts placed for expenditure on property, plant and
    equipment not provided for in the financial statements


10



24   non-recurring
  Note 29 
    Contingencies  At December 31,2007

2006(£ million)Contingent liabilities not provided for in the financial
    statements relating to guarantees


5



11           Note 30 
    Related
    party disclosures    Year ended December 31,2007


2006


2005(£ million)Total compensation of key management personnelShort-term employment benefits


9.4



9.5



6.5Post-employment benefits


0.5



0.5



0.2Termination benefits










0.8Equity compensation benefits


9.1



7.9



6.919.0



17.9



14.4    F-70




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##### Table of Contents



Note 31 
    Acquisition
    of subsidiary    Carryingvalues


Fairpre-acquisition


value(£ million)Intangible assets


1



8Current assets (excluding cash and cash equivalents)


4



4Cash and cash equivalents


4



4Trade and other payables


(3
)


(3
)Current tax payable


(1
)


(1
)Deferred tax payable






(1
)5



11Minority interest






(3
)Net assets acquired






8Goodwill on acquisition






2Consideration, satisfied in cash (including costs of
    £2 million)






10Cash and cash equivalents acquired






(4
)Net cash outflow






6    F-71




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##### 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


periodYear ended December 31, 2007 
    Provisions for bad and doubtful debts


43



12



(1
)


(6
)


48Year ended December 31, 2006Provisions for bad and doubtful debts


47



16



(5
)


(15
)


43Year ended December 31, 2005Provisions for bad and doubtful debts


43



14



4



(14
)


47Year ended December 31, 2004Provisions for bad and doubtful debts


45



20



(3
)


(19
)


43  S-1




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##### Table of Contents



SIGNATURES
  Form 20-F
  
  By:
    /s/  Richard
    Solomons   Title:
    Finance Director