regus plc annual report and accounts 2008
regus plc annual report and accounts 2008
regus plc sa
26 boulevard royal
l2449 luxembourg
wwwreguscom
workwithoutboundaries our mission
our mission is to develop deliver and support outsourced
workplace solutions that allow individuals and companies
to work however wherever and whenever they need to
our vision
we aim to be the number one in all markets in which we operate
through our controlled and disciplined expansion strategy
our values
the commitment loyalty and efforts of our team members
play a key role in differentiating us from our competitors
regus group key facts
978
business centres
171277
workstations globally
74
countries
83
average occupancy
5442
employees
worldwide
1click
away from
our customers
corporate directory
secretary and registered ofﬁce
tim regan company secretary
regus plc société anonyme
registered ofﬁce registered head ofﬁce
22 grenville street 26 boulevard royal
st helier l2449 luxembourg
jersey
je4 8px
registered number
jersey luxembourg
101523 rcs b 141 159
registrars
equiniti jersey limited
po box 63
11 – 12 esplanade
st helier
jersey
je4 8ph
auditor
kpmg audit sàrl
9 allée scheffer
l2520 luxembourg
legal advisers to the
company as to english law
slaughter and may
one bunhill row
london ec1y 8yy
legal advisers to the
company as to luxembourg law
elvinger hoss  prussen
2 place winston churchill
l2014 luxembourg
corporate stockbrokers
dresdner kleinwort limited
30 gresham street
london ec2v 7pg
credit suisse first boston
one cabot square
london e14 4qj
reservations
uk telephone 0870 880 8484
us telephone 1877regus87 or
001 954 331 1647
websites
wwwreguscom
wwwhqcom
glossary
available workstations
the total number of workstations in the group also termed
inventory during the year this is expressed as a weighted
average at period ends the absolute number is used
nonconsolidated workstations
workstations operated through managed centres joint ventures
and franchise operations
centre contribution
gross proﬁt comprising centre revenues less direct
operating expenses but before administrative expenses
ebitda
earnings before interest tax depreciation and amortisation
enquiries
client enquiries about regus products or services
expansions
a general term which includes new business centres
established by regus and acquired centres in the year
forward order book
the future workstation revenue already contracted with
clients at a point in time
like for like or mature business
the ﬁnancial performance from centres owned and operated
for a full 12 months prior to the start of the ﬁnancial year which
therefore have a fullyear comparative
occupancy
occupied workstations divided by available workstations
expressed as a percentage
occupied workstations
workstations which are in use by clients this is expressed
as a weighted average for the year
organic growth
growth attributable to the mature portfolio and from new
business centres established by regus
revpaw
total revenue per available workstation revenue 
available workstation
revpow
total revenue per occupied workstation contents
annual and interim reports
in electronic format online
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for more information visit
wwwreguscom
directors’ report – business review
financial highlights 2
chairman’s statement 3
group overview 4
chief executive’s review 6
product variety 10
business review
americas 12
united kingdom 13
emea 14
asia pacific 15
financial review 16
corporate responsibility 20
directors’ report –
corporate governance
board of directors 22
other information 24
governance framework 26
director statements 32
remuneration report 33
independent auditors’ report 40
financial statements
consolidated income statement 41
consolidated balance sheet 42
consolidated cash flow statement 43
consolidated statement
of changes in equity 44
notes to the accounts 45
parent company accounts 81
shareholder information
segmental analysis
– management basis 82
five year summary 84
corporate directory and glossary ibc
reguscom section header
header 1 header 2
title 1 title 2
2wwwreguscom
financial highlights
delivering the promise
directors’ report business review
revenue £m gross proﬁt £m operating proﬁt £m
cash from operations £m proﬁt after tax £m basic earnings per share p
0
100
200
300
400
500
600
700
800
900
1000
1100
08 07 06
10772
8624
6800
0
50
100
150
200
250
300
350
400
450
500
08 07 06
3057
2519
1841
0
15
30
45
60
75
90
105
120
135
150
08 07 06
1474
1226
822
0
25
50
75
100
125
150
175
200
225
250
08 07 06
2496
2111
1328
0
10
20
30
40
50
60
70
80
90
100
110
120
08 07 06
1149
1036
823
0
1
2
3
4
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8
9
10
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12
08 07 06
120
105
84
£1 077 2m
249
£3057m
214
£147 4m
202
£2496m
182
£1 149m
109
120p
143
2wwwreguscom regus plc annual report and accounts 20083
chairman’s statement
chairman’s statement
another record year
i am pleased to report that whilst the market
has become tougher in the ﬁnal quarter of 2008
it has been another year of record results for
regus we have delivered posttax earnings
of £1149 million and increased our net cash
balance by over 100 from £1014 million to
£2112 million despite having returned £363
million to shareholders £375 million to the
banks and invested £695 million in growing
our workstation capacity
our business model remains strong with
our results clearly demonstrating the focused
execution of our strategy for proﬁtable growth
and strong cash ﬂow conversion in rapidly
changing markets
financial performance
group revenue has increased by 249 to
£10772 million and gross proﬁt by 214
to £3057 million excluding the impact of new
centre growth the “like for like” improvement
was 141 and 147 respectively
this increase was the result of our continued
controlled blend of organic growth and targeted
acquisition activity coupled with the impact of
currency translation principally the strengthening
of the dollar and euro contributing 40 of the
overall revenue increase
capacity growth
we have continued our measured approach to
growth and in the year to 31 december 2008
we grew our average available workstations
by 153
our improved results were driven by average
occupancy increasing to 829 from 827
in 2007 and revenue per available workstation
“revpaw” increasing 84 to £7029 from
£6487 in 2007 earnings proﬁt after tax grew
by 109 to £1149 million and basic earnings
per share increased by 143 to 120p
during the ﬁnancial year we opened 112
centres for a total investment of £695 million
despite the ongoing challenges of the global
economy we anticipate continuing to make
targeted investments to develop further our
market presence
dividend
given our strong performance the board is
recommending a 12p per share ﬁnal dividend
for the year this will be in addition to the interim
dividend of 06p per share paid by regus group
limited then regus group plc in october 2008
subject to the approval of shareholders at the
2009 agm this ﬁnal dividend will be paid on
friday 29 may 2009 to shareholders on the
register at the close of business on friday
1 may 2009
board
in order to achieve our objective of greater
international diversity at board level the
appointment of three new nonexecutive
directors – douglas sutherland ulrich
ogiermann and lance browne – took place
from october 2008 douglas replaces stephen
east as chairman of the audit committee
i would like to thank stephen and roger orf
who both departed regus as nonexecutive
directors at the end of 2008 for their
longstanding service to the company
john matthews
chairman
20 march 2009
john matthews 4wwwreguscom 4wwwreguscom
directors’ report business review
region
revenue
£2221 m
67
£157m
76
operating proﬁt
21
financial highlights
region
revenue
£4149m
234
£67 3m
56
operating proﬁt
38
financial highlights
contribution to group revenue contribution to group revenue
group overview
the world’s leading provider
of outsourced workplace solutions
united kingdom americas
operations
the region has 495 centres across
14 countries in north and south america
during the year we added 3487 workstations
from opening new centres
opportunities for growth
• maximising yield in existing centres
• expanding into new markets in latin america
and growing our portfolio in key cities where
we have minimal representation
operations
the business in the uk operates in
131 centres during the year we added
2477 workstations from opening
new centres
opportunities for growth
• driving operational efficiencies
• introducing new concepts and products
to help drive sales group overview
regus plc annual report and accounts 20085
new countries in 2008
• malta • monaco • taiwan • el salvador
reguscom ﬁnd out more at
region
revenue
£121 0m
557
£244m
488
operating proﬁt
11
financial highlights
region
revenue
£3192m
328
£703m
244
operating proﬁt
30
financial highlights
contribution to group revenue contribution to group revenue
asia paciﬁc emea
operations
the region has 240 centres across
43 countries during the year we added
1753 workstations from opening new centres
opportunities for growth
• focusing on margins in mature centres
• continuing to look for lowrisk opportunities
to expand into new markets
operations
our business in asia operates in 112 centres
across 15 countries during the year we added
2047 workstations from opening new centres
opportunities for growth
• continuing to consolidate and develop
our position across all markets
• focusing on our operational effectiveness 6wwwreguscom
directors’ report business review
6wwwreguscom
these results achieved under difﬁcult
circumstances especially during the ﬁnal
quarter of the year reﬂect the continued
successful application of our business model
of sustainable measured growth on a global
basis we continue to demonstrate our ongoing
ability to return shareholder value with an 80
increase in our dividend alongside £199 million
of share repurchases made during 2008 i am
also pleased to end the year with a balance
sheet reﬂecting a record level of cash after
repayment of our outstanding debt which will
enable us to further invest for the future in our
people products and technology
through the ongoing implementation of our
core strategy of controlled disciplined growth –
via both organic expansion in existing and
new markets and acquisitions – the group
has delivered substantial workstation growth
in all regions during 2008 average workstations
grew 20322 or 153 to 153260 during 2008
the total number of available workstations
at 31 december 2008 was 159121 if non
consolidated workstations are also taken
into account the total number of workstations
under management increases to 171277
we have seen the number of centres we operate
increase by 60 net of closures new locations
include karachi in pakistan sharjah in the
uae st petersburg in russia fukuoka in
japan and we opened our ﬁrst centres in malta
monaco and taiwan
strategy and objectives
in 2008 we have continued to adhere ﬁrmly
to our strategy – to continue to grow proﬁt and
cash generation through measured sustainable
capacity growth
whilst we are acutely aware of the potential
impact of the current downturn and the
unpredictability of its severity and duration
the core fundamentals of our strategy and
current business model remain unaffected
we will continue to seek to take the business
forward through disciplined growth focused
investment for the long term and through
keeping as nimble as possible in respect
1
2
3
business model
a scalable business model with considerable potential
for further development
future prospects
we believe that we are in a good position to capitalise
on our flexible product offering which makes us an ideal
choice for many companies in times of uncertainty
the unique nature of our business will ensure
that we continue to drive sustainable growth
strategy
our consistent longterm strategy is that of
measured sustainable growth to maximise benefits
for our stakeholders
overview
amidst a backdrop of deteriorating economic
conditions i am delighted to announce a
ﬁfth successive year of record results with
a 25 growth in revenues a 20 growth
in proﬁtability and a doubling of our net cash
balance at 31 december 2008
chief executive’s review
focused on our priorities
our strategy remains one of sustainable and measured development
mark dixon regus plc annual report and accounts 20087
chief executive’s review
of cost control and operational ﬂexibility with
a steady adherence to our fundamentals we
believe we are as well positioned as we could
be to face the forthcoming challenges of 2009
the delivery of our strategy will continue to
come about through focus on our priorities
• brand and product development
• systems and technology
• people and processes
brand and product development
our brand and market presence is strong
enabling us to respond to a wide variety of
customer needs through a centre footprint
which allows us to be local regional or global
in short we have the adaptability and agility to
be many things to many customers however
we recognise the need to continue to respond
to our customers’ needs and leverage further
the core quality and ﬂexibility of our products
which differentiate us from our competitors
the launch of our businessworld programme
in early 2008 has been a signiﬁcant success
with membership expanding rapidly throughout
the year and now encompassing 200000 card
holders who have signed up for one of four
unique businessworld membership packages
with external market research predicting that the
number of mobile workers worldwide will reach
one billion by 2011 we feel that we are the only
company delivering the right product in the right
place at the right time to help them compete in
the current economic climate
we remain focused on highlighting the signiﬁcant
cost savings our clients can secure through our
product offerings
systems and technology
the rollout of our internally developed
inventory reservation and billing system across
our worldwide network has now been completed
with all of our centres utilising this technology
in their day to day operations 2007 495 centres
we are already seeing tangible beneﬁts in terms
of control of our business notably in discount
and exception management and in driving new
sales opportunities
looking ahead we anticipate this system
being a key enabler in our newly established
regional service centres and the system is
being onward developed to ensure full integration
into operational improvements being made in our
centres ie integration to photocopiers telephone
billing systems franking etc wherever possible
we are also seeking to integrate thirdparty
vendors into this infrastructure
1
a leading strategy for growth
expanding
our network
innovative
products
and services
investments
in systems
and technology
operational
excellence
developing
our team
members
generating
proﬁtable
growth
developing
our brand
our priorities for 2009
operational efﬁciency
we will continue to take early action on our
cost structure to manage our cost base in line
with future trading expectations
innovative “recession busting” products
our product solutions for our customers are
immediate easily implemented and generally
require no capital expenditure – all critical
“recession busting” considerations which will
enable them to obtain signiﬁcantly more value for
money and ﬂexibility than a conventional lease
investments in systems and technology
utilising our internally developed inventory
reservation and billing system now rolled
out across our entire worldwide network will
ensure we continue to capture and bill for all
revenue generating opportunities directors’ report business review
8wwwreguscom
2
business model
a globally diversiﬁed business
mobile and home working leader
• virtual office videoconferencing
and meeting rooms
• business lounges membership
cards and day offices
business centre leader
• 978 centres in 74 countries
• 159121 workstations
corporate outsourcing
• training room
• managed offices
we have also made improvements during
the year to our data capture and management
systems which will form a stronger platform
from which to develop better more timely
reporting some earlyadopting centres are
already receiving daily activity and planning
reports to allow them to focus on daily
customerfocused priorities and enable quality
planning for the next one to two weeks ahead
people and processes
the strong results in 2008 have been driven
largely by our 5442 team members and i would
like to take this opportunity to thank all of them
throughout the group for their substantial efforts
in the year our results are a testament to their
hard work diligence and commitment
as we develop our business and invest for
the future we recognise the importance of
enhancing skill sets through training and
development programmes ultimately the
quality of our team members and their ability
to deliver high quality customer service remain
fundamental to the continued longterm delivery
of our business model
we will continue to rely heavily on our people
and their enthusiasm talent and focus to further
develop the success of our business regardless
of external economic factors
change of residence and appointment
of three new nonexecutive directors
in successfully implementing our strategy of
diversiﬁcation both geographically and in our
product offerings we have developed a more
balanced global revenue platform
the creation of a new corporate structure and
organisation for regus incorporated in jersey
and resident in luxembourg has therefore
given us a chance to further internationalise our
business in keeping with our ongoing strategy
coupled with this the appointment of three new
international nonexecutive directors further
enhances our global perspective
responding to market conditions
whilst we have delivered a strong set of 2008
results we anticipate that market conditions
will be challenging during 2009 however we
have the potential to outperform our competition
by maximising revenue and cash growth whilst
keeping a tight control on costs and maintaining
focus on our core strategy
with respect to our cost structure we will
continue to take early action to manage our
cost base in line with future trading expectations
our costs throughout 2008 have continued to
become less ﬁxed in nature as we increase the
number of ﬂexible leases in our portfolio and
regus value proposition
for the customer
• cheaper opex
• zero capex
• flexible
• immediate no fuss
• reliable outsourced solution
• national regional global
for the landlord
• allows small customers
• market rent or better
• incubator
• amenity
• regus brand
• immediate and easy regus plc annual report and accounts 20089
reduce our exposure to longer conventional
leases in addition throughout 2008 we have
continued to implement a number of cost saving
programmes throughout our organisation which
we anticipate will continue to ensure we are able
to act with maximum speed and efﬁciency
as part of this process we have accelerated
plans to consolidate certain central and regional
administrative functions into a number of newly
established regional service centres we expect
that these will be fully operational in the next
ﬁnancial year with a focus on reducing overall
costs and ensuring better integrated ﬁnance
information technology and other support
functions across the group
outlook
we are not at all complacent about the outlook
in the last two months of 2008 the increasing
pressure that we were seeing on our revenues
translated into a softening in our occupancy
and price kpis which has continued into 2009
however although many of the countries in
which we operate are experiencing increasingly
difﬁcult economic conditions we believe that
we are taking the necessary actions and expect
to strengthen our current market leading
position our global footprint strong balance
sheet and cash generation ensure that we are
well positioned to take advantage of appropriate
opportunities to increase shareholder value as
they arise
we recognize that we will have to continue to
challenge ourselves to become more efﬁcient
and drive down costs whilst at the same time
not losing sight of the need for continued long
term investment in growing our business with
a strong global brand driven by the stewardship
of our customerfocused teams a broad and
ﬂexible product range and a business model
we have continued to adhere ﬁrmly to and
deliver upon i am conﬁdent of our position to
meet the challenging market conditions ahead
mark dixon
chief executive ofﬁcer
3
future prospects
united kingdom
• continued early adopter of new
sales and product concepts
• heightened focus on efficiency and cost
• migration of all centres onto centralised
billing and credit control
americas
• expansion into new markets in
latin america
• maximising yield in existing centres
• exploiting new marketing partnerships
emea
• consolidation of processes into
a regional service centre to improve
efficiency of collections reporting
and compliance
• identification of low risk opportunities
for expansion
asia paciﬁc
• new centralised customer
service centre to handle
customer administration
• consolidate and develop our
position as the largest provider
of serviced offices in the region
reguscom ﬁnd out more at
chief executive’s review product variety
the regus product offering includes many “recession busting”
products giving our customers signiﬁcantly more value for money
and ﬂexibility than a conventional lease
businessworld the regus membership card
is gaining momentum with both individual
and corporate customers looking for
workplace ﬂexibility whatever their needs
– whether it is through our lounge access
gold card or the ability to utilise ofﬁces by
the day anywhere across the regus global
network through our platinum membership
platinum
• 5 or 10 days per month or unlimited use of any ofﬁce in any of regus’
1000 business centres worldwide
• pricing levels to suit local national or global packages
• includes all the beneﬁts of gold membership
gold
• unlimited walkin access to 1000 business lounges and cafes worldwide
• complimentary internet and refreshments on every visit
• 10 discount on meeting rooms video conferencing and day ofﬁces
• access to all other regus services on a “payasyougo” basis
blue
• 10 discount on meeting rooms video conferencing and day ofﬁces
• access to all other regus services on a “payasyougo” basis
• free monthly members’ newsletter with special offers from regus and our partners
private ofﬁces are subject to availability product terms and conditions apply
179650
members in 2008
10wwwreguscom
directors’ report business review
10wwwreguscom
membership numbers
0
20
40
60
80
100
120
140
160
180
200
08 07 06 05
179650
126865
62036
14101 42
growth in members
generating revenues and cashﬂow
with extensive marketing and sales focus
during 2008 businessworld experienced
a 42 growth in members and a ninefold
increase in revenues year on year it is
anticipated that continued development
of the product in 2009 will lead to further
growth in the future
900
growth in revenues
98
growth in recession
busting product
revenues half on half
other “recessionbusting” products
the group believes that it is ideally
positioned to deliver the right product
in the right place at the right time to help
our customers compete in the current
economic climate with a range of
“recessionbusting” products – such
as businessworld video conferencing
virtual ofﬁces or campus ofﬁces directors’ report business review
12wwwreguscom
americas
reguscom ﬁnd out more at
performance
our business in the americas comprises canada
usa and south america and has 495 centres
across 14 countries with our main business in
the usa operating 411 centres during the year
we added 3487 workstations from opening
new centres which contributed to the increase
in the average number of workstations from
61160 in 2007 to 70173 in 2008 acquisitions
accounted for 14 of these new centres with the
balance coming from the opening of 25 fully
owned centres the region delivered revenues
of £4149 million – up 234 on 2007 – and
achieved an average mature occupancy of
86 through the year 2007 86
outlook
looking ahead into 2009 we will continue our
aim to maximise yield in our existing centres and
look to grow our portfolio in key cities where we
have minimal representation the trends toward
ﬂexible working practices and strengthening
environmental awareness will both act to further
increase the demand for our product
gross proﬁt £1170m 139
08
contribution to group 38
revenue £m
0
50
100
150
200
250
300
350
400
450
500
08 07 06
4149
3363
3059
group strategy
the strategy for the americas is to maximise yield in our
existing centres whilst targeting growth in key cities where
we have minimal representation
key performance indicators 2008 2007
total contribution £1170m £1027m
mature margin 32 32
mature occupancy 86 86
opportunities in 2009
expansion into new markets in latin america maximisation
of yield in our existing centres and development of
new partnerships regus plc annual report and accounts 200813
united kingdom
performance
our business in the uk operates in 131 centres
during the year we added 2477 workstations
from opening new centres which contributed
to the increase in the average number of
workstations from 27905 in 2007 to 30899
in 2008 acquisitions accounted for seven of
these new centres with the balance of nine
coming from the opening of seven fully owned
centres and two managed centres the region
delivered revenues of £2221 million – up 67
on 2007 – and achieved an average mature
occupancy of 84 through the year 2007 84
outlook
looking ahead into 2009 we are ﬁrmly
focused on driving operational efﬁciencies in
a challenging market alongside the introduction
of new concepts and products to support new
sales growth
reguscom ﬁnd out more at
gross proﬁt £400m 34
08
contribution to group 13
revenue £m
0
25
50
75
100
125
150
175
200
225
250
08 07 06
2221
2081
1266
group strategy
the strategy for the uk is to drive operational efficiencies in
a challenging market and introduce new products to support
new sales growth
key performance indicators 2008 2007
total contribution £400m £414m
mature margin 20 22
mature occupancy 84 84
opportunities in 2009
heightened focus on efficiency and cost and migration
of all centres onto centralised billing and credit control
business review directors’ report business review
14wwwreguscom
emea
reguscom ﬁnd out more at
performance
our business in emea encompasses 240 centres
across 43 countries during the year we added
1753 workstations from opening new centres
which contributed to the increase in the average
number of workstations from 29125 in 2007
to 32352 in 2008 acquisitions accounted for
six of these new centres with the balance of 29
coming from new centre growth – 20 fully owned
centres one joint venture and eight managed
centres we opened centres in two new markets
– malta and monaco the region delivered
revenues of £3192 million – up 328 on 2007
– and achieved an average mature occupancy
of 89 through the year 2007 87
outlook
looking ahead into 2009 whilst continuing
to focus on margins in our mature centres we
will continue to look for lowrisk opportunities
to expand our network into new markets
gross proﬁt £1112m 385
08
contribution to group 37
revenue £m
0
35
70
105
140
175
210
245
280
315
350
08 07 06
3192
2403
1959
group strategy
to continue to focus on margins in our mature centres and to
look for further lowrisk opportunities to expand our network
into new markets
key performance indicators 2008 2007
total contribution £1112m £803m
mature margin 37 36
mature occupancy 89 87
opportunities in 2009
improved efficiency through the consolidation of processes into
a regional service centre and continued identification of lowrisk
opportunities for expansion regus plc annual report and accounts 200815
asia paciﬁc
performance
our business in asia operates in 112 centres
across 15 countries during the year we added
2047 workstations from opening new centres
which contributed to the increase in the average
number of workstations from 14748 in 2007 to
19836 in 2008 acquisitions accounted for one
of these new centres with the balance coming
from the opening of 21 fully owned centres
during the year we opened one centre in the
new market of taiwan the region delivered
revenues of £1210 million – up 557 on 2007 –
and achieved an average mature occupancy
of 82 through the year 2007 80
outlook
looking ahead into 2009 we will continue to
consolidate and develop our position as the
largest provider of serviced ofﬁces across all
asia paciﬁc markets to achieve this objective
we intend to continue our measured growth
plan while continuing to focus on the operational
effectiveness of our current portfolio of centres
to facilitate this we will be adding a new
customer service centre in the philippines to
handle all customer administration in the region
reguscom ﬁnd out more at
gross proﬁt £375m 364
08
contribution to group 12
revenue £m
0
15
30
45
60
75
90
105
120
135
150
08 07 06
1210
777
509
group strategy
to continue to consolidate and develop our position as the largest
provider of serviced offices across all asia pacific markets
key performance indicators 2008 2007
total contribution £375m £275m
mature margin 38 38
mature occupancy 82 80
opportunities in 2009
to improve our operational effectiveness through a new customer
service centre to handle all customer administration in the region
business review 16wwwreguscom
directors’ report business review
16wwwreguscom
the business model continued to work well
in addition to seeing increased proﬁts from the
sites we opened and acquired in 2007 we have
continued to see the proﬁts in our older more
mature sites improve this has enabled us to
both grow the strength of our balance sheet
whilst at the same time continue our expansion
programme which then forms the basis for future
proﬁtable growth
taking the business as a whole we grew its
capacity as measured by the weighted average
number of workstations by 153 to 153260
at the same time the average occupancy of
these workstations increased from 827 to
829 and we sold each one on average for
81 more
these factors have delivered a £248 million
increase in operating proﬁt rising from £1226
million in 2007 to £1474 million in 2008
revenue and gross proﬁt centre contribution
revenue for the group rose 249 to £10772
million 2007 £8624 million and gross proﬁt
centre contribution increased 214 to £3057
million 2007 £2519 million
this movement can be analysed as follows
stephen gleadle
financial review
strong cash generation
increased proﬁts despite toughening economic conditions
revenue
£1 0772m
249
average no of workstations
153260
153
average mature occupancy
83
 02 points
revpaw
£7 029
84
£ million revenue gross proﬁt  of revenue
31 december 2007 8624 2519 292
impact of exchange rates 863 269
31 december 2007 at constant exchange rates 9487 2788 294
growth in mature business 332 99
growth in centres added in 2007 759 311
growth in centres added in 2008 334 103
centres closed 140 38
31 december 2008 10772 3057 284 regus plc annual report and accounts 200817
sterling weakened in value against the us dollar
by an average of 81 and against the euro by
an average of 142 in 2008 when compared
to 2007 this increased our revenue by £863
million and contribution by £269 million
our mature or “like for like” business increased
its revenues by £332 million and its contribution
by £99 million driven by improvements in
occupancy and price
centres that were added in 2007 contributed a
further £759 million of revenue and £311 million
of contribution
new centres added in 2008 both organic and
by acquisition contributed a further £334 million
of revenue but reduced contribution by £103
million due to the normal startup losses incurred
in establishing new centres
the year on year impact of centre closures
was to reduce revenue by £140 million and
contribution by £38 million
taking all this together contribution margins
decreased from 292 to 284
administrative expenses
administrative expenses increased by £290
million in 2008 compared to 2007 £185 million
excluding the impact of exchange however
as a proportion of revenue they reduced from
150 in 2007 to 147 in 2008
included within administrative expenses were
the £48 million costs incurred on the group
reorganisation and scheme of arrangement
completed in october 2008 excluding these
oneoff exceptional costs overheads were
142 of revenues
this falling percentage was achieved even
though the group continued to invest in its
systems and processes
operating proﬁt
operating proﬁt was £1474 million 2007
£1226 million representing a margin of
137 2007 142
share of proﬁt in joint ventures
in the twelve months ended 31 december 2008
the share of joint venture proﬁts attributable
to regus increased to £23 million 2007 £08
million proﬁt this reﬂected the improving
proﬁtability in mature joint ventures in the
americas and emea regions as well as improved
performance from more recently opened joint
ventures in the middle east
net ﬁnancing costs
net ﬁnancing costs can be analysed as follows
£ million 2008 2007
interest payable on bank loans 35 44
interest receivable 53 34
finance lease interest 02 02
noncash amortisation
of deferred ﬁnancing fees 06 05
noncash uk acquisition related 15 23
total net ﬁnancing costs 05 40
the lower interest payable reﬂects the reduction
in the group’s average debt over the year and
the impact of falling interest rates in the group’s
primary markets the average libor rate for
2007 was 585 compared to 504 for 2008
the substantial increase in interest receivable
reﬂects a continued increase in the group’s
average free cash balance to £1503 million
£814 million in 2007 in addition improvements
in the management of the group’s cash partially
offset the impact of falling global interest rates
during the year
the movement in the cash balance has been
explained in the cash ﬂow section below
underlying ﬁnance lease costs remained
unchanged as the maturing of older leases have
been offset by new leases the amortisation of
deferred ﬁnancing fees relates to loan arrangement
costs incurred for the new credit facilities entered
into during 2006 to fund the uk acquisition and
include a £01 million impact from accelerated
amortisation resulting from the early repayment
of the group’s debt under the credit facility
financial review directors’ report business review
18wwwreguscom
the unwinding of discounted fair value
adjustments on the regus uk acquisition
resulted in a noncash net ﬁnancing charge of
£15 million in the period to 31 december 2008
compared to £23 million in 2007 the decrease
was as a result of a oneoff credit of £08 million
arising from the accelerated unwinding of the
discounting resulting from the partial waiver
of a loan with a joint venture
following an internal review of our facility
arrangements in march 2009 and given the
strength of the group’s cash position the
board has approved the early surrender of
our £100 million revolving credit facility on an
annualised basis this will save £09 million of
ﬁnancing costs going forward we will utilise
our cash resources to support the letters of credit
which were previously covered by our facility
taxation
the continued improvements in the group
results have meant that there are less
unrecognised losses available to be offset in
the income statement against rising current
tax charges consequently the group has
recognised a £343 million tax charge for the
period representing an accounting tax rate of
23 of proﬁt before tax compared to £158
million or 13 in the comparative period
the current tax charge for the period was £573
million 2007 £223 million charge – an increase
from 19 to 38 of proﬁt before tax deferred tax
was a £230 million credit in the period 2007 £65
million credit on a cash tax basis the group paid
£313 million in tax this represents approximately
210 of proﬁt before tax compared to 135 in
the same period in 2007
earnings per share
earnings per share for the year increased
143 from 105p to 120p the average
number of shares in issue during the year
reﬂected the share buyback programme in
2008 and therefore reduced to 950319978
2007 980961569
currency hedging
given the continued volatility in exchange rates
in january 2009 the board approved a policy
which allows the group to hedge subject to
strict limits the rates at which we translate our
overseas earnings this will enable the group
to have more certainty over the sterling value
of these earnings
goodwill
the group has £2745 million of goodwill in the
balance sheet largely arising from the purchase
in august 2004 of hq global holdings inc and
the purchase in april 2006 of the remaining
58 interest in the regus uk business not
already owned
while impairment tests at the year end on the
carrying value of goodwill indicated that no
impairment was necessary given the relatively
high discount rates the market is currently
applying to our future cash ﬂows and the
need for prudence in a recessionary
environment the headroom in these
calculations was low
it is therefore possible that a future noncash
impairment may be necessary arising from
relatively small changes in assumptions full
details of the approach taken and sensitivities
can be found in note 12 to the accounts
cash ﬂow
strong operating cash ﬂow remains a prime
feature and continued objective of the group
the improvement in operating proﬁt and
continued working capital inﬂows resulted in
the operating cash ﬂow increasing by £385
million to £2496 million 2007 £2111 million regus plc annual report and accounts 200819
the strong cash performance has enabled the group to invest in growth speciﬁcally during the
year 84 new centres were opened at a cost of £574 million a further 28 business centres were
acquired for a net cash consideration of £121 million
to highlight during the year the group has
• repaid to our investors £363 million through both our share buyback and dividend activity
• reduced our debt by £375 million
• invested £695 million in capacity growth
and still ended the year with an increased cash position
this can be analysed as follows
£ million 2008 2007
cash and cash equivalents 2195 1429
bank and other loans 53 403
finance leases 30 15
unamortised ﬁnancing fees – 03
financial assets 2112 1014
overall the group enters 2009 in a strong ﬁnancial position to meet the challenges of a difﬁcult
economic climate and capitalise on opportunities as they arise
stephen gleadle
chief financial ofﬁcer
the group’s cash ﬂow statement has been summarised below
£ million 2008 2007
cash generated from operations 2496 2111
tax and net interest paid 302 169
maintenance capex 329 298
free cash ﬂow 1865 1644
new centre openings 574 509
other acquisitions and jv investments 121 178
share buyback and dividend 363 206
loan repayment 375 170
exercises of share options dividend income and disposal proceeds 19 05
change in cash 451 586
opening cash 1429 809
change in cash 451 586
effect of exchange rates on cash held 315 34
closing cash 2195 1429
financial review directors’ report business review
20wwwreguscom
whilst mindful of the current economic
environment we do not believe that this should
result in a diminution of our commitment to
corporate responsibility “cr” our employee
environmental charitable and social activities
in 2008 together with continued plans in these
areas for 2009 bear this out and we ﬁrmly
believe that our obligations are ongoing – not
only during more positive trading conditions
regus remains active in managing its corporate
responsibility and we recognize that with the
evolving nature of our stakeholders there will
remain a continuous need to meet and exceed
our previous benchmarks
the establishment in 2007 of our cr committee
has allowed us to structure our direction and
communications more effectively regarding
our core employee environmental and
social activities there have been continued
developments in 2008 relating to employee
training appraisals and career development
opportunities and considerable time has
been spent realigning our sales training to
enhance focus on the customer however there
remain areas where we are keen to improve
most notably the rollout of more globally
consistent environmental guidelines and the
communication of an updated cr framework
with global applicability
people
fundamental to these goals is an ongoing
commitment to our employees whose
engagement and focus are vital to ensuring we
continue to deliver successfully on our strategy
with over 5400 team members throughout our
global network the majority of whom work
directly in customer facing roles our people
remain the driving force behind the sustainable
growth of our business we recognise the need
to continue to strengthen our teams through
ensuring that our people feel valued rewarded
and recognized for their efforts that they have
career advancement opportunities and that they
are provided with quality training to allow them
to continue to develop
reguscom ﬁnd out more at
driving competitive advantage
aligning our business strategy and the needs of our stakeholders remains a critical component
of the ongoing sustainable development of our business
corporate responsibility regus plc annual report and accounts 200721
to this end formal training during 2008 –
provided supplementally to onthejob
development – has resulted in the following
• over 2500 team members participating in
classroom training at a cost of £14 million
• the completion of over 17000 hours of online
training using the brainshark learning
management system
• the rollout of worldwide sales retraining to
align our sales forces to the current economic
challenges faced by our customers and
• over 400 team members trained as “experts”
on our new internal inventory reservations
and billing system
we have also continued to highlight to our
employees both our global code of ethics
and our conﬁdential whistleblowing service the
former encapsulates the core principles by which
all of our companies and employees are expected
to work whilst the latter provides a service that
allows team members to conﬁdentially highlight
issues of concern or wrongdoing in the workplace
with review of these identiﬁed matters at the
highest level
environment and sustainability
during the year we have continued to highlight
to our stakeholders the environmental beneﬁts
that a number of our products and services offer
most notably video conferencing “vc” and our
underlying worldwide network of international
regional and local ofﬁces which can allow our
customers to materially reduce the amount
of travelling they need to undertake speciﬁc
examples of our environmental activities include
• with increases in our vc business during 2008
we have been able to build on the air miles
saved by our customers year on year
• distribution of our “why commute” leaﬂets
in a number of us cities promoting the use
of our suburban centres instead of commuting
to city centre locations
• localised initiatives including eliminating
printing out spare copies of invoices reducing
paperwork in general
• considering centre environmental impacts –
our atlantic station centre is based in atlanta’s
ﬁrst precertiﬁed leadership in energy and
environmental design leed gold highrise
lowimpact ofﬁce building
within our ofﬁces we have also continued
to encourage recycling on the part of our
employees and customers and wherever
possible to incorporate lowenergy solutions
into the daytoday operations of our centres
community
we remain committed to supporting the
local communities in which we do business
through fundraising activities by our employees
through providing ofﬁce space and ancillary
services or through more direct corporate avenues
the introduction of the “get started” initiative
encapsulates one of the more signiﬁcant
corporate initiatives we have undertaken
recently “get started” offers ofﬁce space and
practical support for startups that need help
getting off the ground under the scheme we are
offering free use of business lounges and cafés –
worth approximately £10 million – in over 1000
locations worldwide by signing people up to our
businessworld programme we anticipate that
the campaign could help many entrepreneurs
realise their business ambitions whilst mitigating
some of the risk
other causes which we have supported during
the year include
• great causes and debra via the 2008 london
triathlon over £25000 of direct contributions
• 20000 raised in our us business through
considerable numbers of staff donating their
christmas gift cheques to charity
• signiﬁcant numbers of staffdriven initiatives
to support local causes such as providing toys
and presents for local children more than 20
team members in the chicago area helped
prepare and package freezedried nutritional
meals that were shipped to over 59 countries
including the us in order to feed malnourished
children as a group the team prepared 12690
meal packs which can feed 34 children for
one year
corporate responsibility directors’ report corporate governance
22wwwreguscom
1 john matthews
c
chairman
john 64 british was appointed chairman of
regus group plc in july 2002 and had previously
been an independent director since joining regus
in 1995 john was appointed chairman of regus
plc on 27 august 2008 he is currently an
independent director of diploma plc minerva plc
and sdl plc a chartered accountant he was until
2007 chairman of crest nicholson plc and prior
to that had been a managing director of county
natwest and deputy chairman of beazer plc
john is chairman of the nomination committee
2 mark dixon
chief executive ofﬁcer
mark 49 british resident in monaco founded
the regus group in 1989 and has been chief
executive for over 19 years leading the group’s
worldwide expansion programme and the
development of pioneering workplace solutions
prior to 2007 mark was located in the usa
overseeing the integration of the hq global
workplaces acquisition and has now relocated
to europe prior to regus he established
businesses in the retail and wholesale food
industry he was appointed as director of
regus plc on 18 august 2008
3 stephen gleadle
chief financial ofﬁcer
stephen 50 british joined the regus group
as chief financial ofﬁcer in october 2005 prior
to regus he was group financial controller of
tarmac plc and finance director at both synstar
plc and lastminutecom plc stephen is a
chartered accountant he was appointed
director of regus plc on 18 august 2008
board of directors
an international team
the board has a blend of experience demonstrating both depth and global perspective
12
4 56 regus plc annual report and accounts 200723
4 martin robinson
abc
independent senior nonexecutive director
martin 46 british was appointed independent
senior nonexecutive director of regus plc on
27 august 2008 and has been a nonexecutive
director of the regus group since august 2002
martin is chairman of center parcs uk chairman
of alta velocita a director of figaro llp and a
director of the supervisory board of eurodisney
sca until 2007 he was chairman of health club
holdings and is a former ceo and chairman of
center parcs europe he has previously held
senior management positions with scottish and
newcastle plc and sara lee corporation and
worked as a management consultant for four
years with mckinsey  co inc martin is
chairman of the remuneration committee
5 lance browne
abc
independent nonexecutive director
lance 59 british resident in shanghai was
appointed a nonexecutive director of regus
plc on 27 august 2008 lance is vice chairman
of standard chartered bank china limited
chairman of china goldmines plc non
executive director of earthport plc and
chairman of the imi china advisory board
he was previously china senior advisor to
the city of london nonexecutive director
of imi plc and director of business development
at powergen international hk
6 ulrich ogiermann
abc
independent nonexecutive director
ulrich 49 german resident in luxembourg
was appointed a nonexecutive director of
regus plc on 27 august 2008 ulrich is
president and chief executive of cargolux
airlines international sa ulrich previously
held a senior position with lufthansa
7 douglas sutherland
abc
independent nonexecutive director
douglas 52 united states citizen resident in
luxembourg was appointed a nonexecutive
director of regus plc on 27 august 2008
douglas was previously chief financial ofﬁcer
of skype during its acquisition by ebay in
october 2005 and was also chief financial
ofﬁcer at securewave during its acquisition
by patchlink in july 2007 prior to this douglas
enjoyed a career of over 20 years with arthur
andersen as a partner for over a decade
douglas is chairman of the audit committee
notes
a member of the audit committee
b member of the remuneration committee
c member of the nomination committee
board of directors
3
7 directors’ report corporate governance
24wwwreguscom
the directors
1
present their annual report and the audited
ﬁnancial statements of the company
2
and its subsidiaries
for the year ended 31 december 2008
directors
the directors of the company who held ofﬁce during
the ﬁnancial year were
executive directors
mark dixon
rudy lobo resigned 14 october 2008
stephen gleadle
nonexecutive directors
john matthews
martin robinson
lance browne appointed 27 august 2008
ulrich ogiermann appointed 27 august 2008
douglas sutherland appointed 27 august 2008
stephen east resigned 14 october 2008
roger orf resigned 14 october 2008
biographical details of the directors are shown on pages
22 and 23
details of the directors’ interests and shareholdings are given
in the remuneration report on pages 33 to 39
the corporate responsibility statement corporate
governance statement remuneration report and director
statements on pages 20 and 21 and 26 to 39 all form part
of this report
principal activity
regus plc sa is the world’s leading provider of global ofﬁce
outsourcing services
business review
the directors have presented a business review as follows
the chief executive’s review and financial review on pages
6 to 19 respectively address
• review of the company’s business pages 12 to 15
• trends and factors likely to affect the future development
performance and position of the business page 9
• development and performance during the ﬁnancial year
pages 16 to 18
• position of the business at the end of the year page 19
the corporate responsibility report on pages 20 and 21
includes the sections of the business review in respect of
• environmental matters
• employees
• social and community issues
the corporate governance statement on pages 26 to 32
includes a description of the principal risks and uncertainties
facing the company
the director statements on page 32 include the statutory
statement in respect of disclosure to auditors
results and dividends
proﬁt before taxation for the year was £1492 million
2007 £1194 million
the directors are pleased to recommend the payment of a ﬁnal
dividend for 2008 of 12 pence per share 2007 10 pence per
share this is in addition to the interim dividend of 06 pence
per share paid by regus group limited then regus group plc
in october 2008 the ﬁnal dividend of £113 million 2007 £95
million is expected to be paid on 29 may 2009 to shareholders
on the register at the close of business on 1 may 2009
policy and practice on payment of creditors
the group does not follow a universal code dealing speciﬁcally
with payments to suppliers but where appropriate our practice
is to
• agree the terms of payment upfront with the supplier
• ensure that suppliers are made aware of these terms
of payment
• pay in accordance with contractual and other legal
obligations
at 31 december 2008 the number of creditor days outstanding
for the group was 22 days 2007 25 days and for the company
36 days
going concern
the directors having made appropriate enquiries have a
reasonable expectation that the group and the company have
adequate resources to continue in operational existence for
the foreseeable future for this reason they continue to adopt
the going concern basis in preparing the accounts on pages
41 to 81
further details on the going concern basis of preparation
can be found in note 23 to the accounts on page 64
employees
the group treats applicants for employment with disabilities
with full and fair consideration according to their skills and
capabilities should an employee become disabled during
their employment efforts are made to retain them in their
current employment or to explore opportunities for their
retraining or redeployment elsewhere within the group
political and charitable donations
it is the group’s policy not to make political donations either
in the uk or overseas the group made charitable donations
of £01 million during the year 2007 £01 million
other information
1 for purposes of this report and the corporate governance section which follows the deﬁnition of the board or directors includes the board of directors
of regus group plc up until 14 october 2008
2 for purposes of this report the deﬁnition of the company includes regus group plc until 14 october 2008 and regus plc thereafter regus plc annual report and accounts 200825
capital structure
the company’s share capital comprises 945019822 issued
and fully paid up ordinary shares of 1p nominal value in regus
plc 2007 950818822 issued and fully paid up ordinary shares
of 5p nominal value in regus group plc as at 20 march 2009
the company held 5950000 ordinary shares as treasury
shares all ordinary shares except treasury shares have the
same rights to vote at general meetings of the company and
to participate in distributions there are no securities in
issue that carry special rights in relation to the control of the
company the company’s shares are traded on the london
stock exchange
on 14 october 2008 the group completed a capital
reorganisation which resulted in the introduction of the
new holding company of the group regus plc a company
incorporated in jersey with its place of central administration
head ofﬁce in luxembourg and accordingly being registered
as a société anonyme the ordinary shares of regus plc were
admitted to listing on the main market of the london stock
exchange the ordinary shareholders of regus group plc
acquired ordinary shares in regus plc in the same proportions in
which they held regus group plc ordinary shares immediately
prior to the reorganisation and regus group plc became a
wholly owned subsidiary of regus plc the ordinary shares
of regus group plc were delisted from the london stock
exchange the transaction was accounted for as a reverse
acquisition in the consolidated accounts and details can
be found in note 2 of the accounts on page 45
details of the role of the board and the process for the
appointment of directors can be found on pages 26 to 28
at the regus plc extraordinary general meeting held on
27 august 2008 prior to the scheme of arrangement the
shareholders of the company at that time approved a resolution
giving authority for the company to purchase in the market up
to 94884382 shares being no more than 10 of the issued
share capital at the annual general meeting of regus group
plc on 20 may 2008 the shareholders approved a resolution
giving authority for regus group plc to purchase in the market
up to 94996882 ordinary shares representing approximately
10 of the ordinary shares in issue as at 15 april 2008
details of the company’s employee share schemes can be
found in the report of the remuneration committee on pages
33 to 39 the outstanding awards and options do not carry
any rights in relation to the control of the company
substantial interests
at 20 march 2009 the company has been notiﬁed of
the following interests held in the issued share capital
of the company
number of  of
ordinary issued
shares share capital
estorn limited 359058783 3787
blackrock inc 90758402 955
prudential plc 88124110 932
standard life group 46538104 493
tree top convertible sicav 45167670 475
legal  general group plc 28446376 301
 mark dixon indirectly owns 100 of estorn limited
 the interest held by tree top convertible sicav relates to a ﬁnancial instrument
convertible into ordinary shares of the company and not ordinary shares held
auditors
in accordance with the articles of association of the company
a resolution for the reappointment of kpmg audit sàrl as
auditors of the company is to be proposed at the forthcoming
annual general meeting
approval
this report was approved by the board on 20 march 2009
on behalf of the board
tim regan
company secretary
20 march 2009
other information directors’ report corporate governance
26wwwreguscom
the board is committed to the high standards of corporate
governance set out in the combined code published in
june 2006 “the code” for ﬁnancial periods beginning after
1 november 2006 the board is accountable to the company’s
shareholders and this report describes how the board applied
the principles of good governance in its prospectus dated 8
september 2008 the company stated its intention to voluntarily
comply with the combined code so far as it is practical for a
luxembourg company to do so there is no similar corporate
governance regime in luxembourg applicable to the company
the board
at 31 december 2008 the board of directors was made up
of seven members comprising the chairman two executive
directors and four nonexecutive directors biographical
details of the directors are set out on pages 22 and 23
during the year as a result of the group reorganisation and
scheme of arrangement completed on 14 october 2008
regus group plc ceased to be the holding company of the
regus group and a new parent company regus plc was
created the board and committees of regus plc after the
reorganisation were therefore treated as a continuation of
the board and committees of regus group plc prior to
the reorganisation
role of the board
the primary role of the board is to provide entrepreneurial
leadership and to review the overall strategic development
of the group the board approves the corporate plan
and the annual budget and reviews performance against
targets at every meeting through the audit committee the
directors ensure the integrity of ﬁnancial information and the
effectiveness of ﬁnancial controls and the internal control and
risk management system the board has delegated authority
to the remuneration committee to set the remuneration
policy for directors and senior management the nomination
committee recommends the appointment of board directors
and has responsibility for succession planning at board level
the various board committees have authority to make
decisions in their areas of expertise
frequency of meetings
there were three scheduled regus group plc and two regus
plc board meetings during 2008
the number of meetings of the board and committees and
individual attendance by the directors are shown below details
for regus group plc are for the period 1 january 2008 until
14 october 2008 and for regus plc for the period 14 october
2008 until 31 december 2008
main audit remuneration nomination
regus group plc board committee committee committee
total meetings 32 3 2
mark dixon 3
stephen gleadle 3
rudy lobo 3
john matthews32
stephen east 32 3 2
roger orf 31 3 2
martin robinson 32 3 2
main audit remuneration nomination
regus plc board committee committee committee
total meetings 21 – –
mark dixon 2
stephen gleadle 2
john matthews2–
martin robinson 21 – –
lance browne 21 – –
ulrich ogiermann 21 – –
douglas sutherland 21 – –
matters reserved for the board
the board has a formal schedule of matters reserved to it for
its decision to ensure that no one individual has unfettered
powers of decision these include
• approval of regulatory announcements including the
interim and annual ﬁnancial statements
• terms of reference and membership of the board and
its committees
• changes to the group’s capital structure
• changes to the group’s management and control structure
• capital investment in excess of £5 million
• material contracts annual value in excess of £5 million
minutes are taken of all board discussions and decisions
and all directors are encouraged to request inclusion of any
unresolved concerns that they may have in the board minutes
roles of board members
there is a clear division of responsibilities between the
chairman and the chief executive
the chairman
john matthews is responsible for leadership of the board
setting its agenda and monitoring its effectiveness he ensures
effective communication with shareholders and that the board
is aware of the views of major shareholders he facilitates
both the contribution of the nonexecutive directors and
constructive relations between the executive directors and
nonexecutive directors
the chairman together with the company secretary is
responsible for ensuring that all directors are properly briefed
on issues arising at board meetings and that they have full and
timely access to relevant information
the chairman is not deemed to be independent because he
has been a nonexecutive director for more than ten years
the chief executive
mark dixon is responsible for formulating strategy and for its
delivery once agreed by the board he creates a framework
of strategy values organisation and objectives to ensure the
successful delivery of key targets and allocates decision
making and responsibilities accordingly
nonexecutive directors
the nonexecutive directors each bring their own senior level
of experience and objectivity to the board the independent
counsel brought to the group by the nonexecutives enhances
the overall decision making of the board nonexecutives are
governance framework regus plc annual report and accounts 200827
appointed for an initial threeyear term subject to election by
shareholders at the ﬁrst annual general meeting “agm” after
their appointment the board consider the nonexecutive
directors to be independent
company secretary
the company secretary tim regan is responsible for advising
the board through the chairman on all governance matters
and for ensuring that appropriate minutes are taken of all board
meetings and discussions the appointment and removal of the
company secretary are matters reserved for the board
board committees
the board has delegated certain of its governance
responsibilities to the audit nomination and remuneration
committees the company secretary acts as secretary to all of
the board committees and minutes of meetings are circulated
to all board members
the terms of reference of these committees have been
documented and approved by the board and are available on
the company’s website wwwreguscom a brief summary of
the members activities and terms of reference of the board
committees is provided below
audit committee
douglas sutherland appointed and chairman from
14 october 2008
martin robinson
ulrich ogiermann appointed 14 october 2008
lance browne appointed 14 october 2008
roger orf chairman until 10 march 2008
resigned 14 october 2008
stephen east chairman from 10 march 2008
resigned 14 october 2008
the board has delegated the responsibility for applying an
effective system of internal control and compliance accurate
external ﬁnancial reporting fulﬁling its obligations under law
and the combined code and managing the relationship with
the company’s external auditors to the audit committee
the committee consists entirely of nonexecutive directors
the audit committee meets at least three times a year at the
request of the chairman the external auditors the executive
directors the company secretary and the head of risk
management attend each meeting
summary terms of reference
• financial reporting – provide support to the board by
monitoring the integrity of the published financial statements
of the group and any formal announcements relating to
the company’s ﬁnancial performance and ensuring that
they comply fully with the relevant statutes and
accounting standards
• internal control and risk systems – review the effectiveness of
the group’s internal controls and risk management systems
• internal audit – monitor and review the annual internal
audit programme ensuring that the internal audit function is
adequately resourced and free from management restrictions
and review and monitor responses to the ﬁndings and
recommendations of the internal auditors
• external audit – the committee advises the board on the
appointment reappointment remuneration and removal
of the external auditors the committee has the opportunity
to meet with the external auditors without senior management
being present
• employee concerns – the committee reviews the company’s
arrangements under which employees may in conﬁdence
raise any concerns regarding possible wrongdoing in ﬁnancial
reporting or other matters the committee ensures that these
arrangements allow proportionate and independent
investigation and appropriate followup action
the committee also meets independently with the company’s
auditors and with the head of risk management to informally
discuss matters of interest
external auditors
kpmg audit sàrl were the company’s auditors for the
year ended 31 december 2008 for 2009 the committee
has recommended to the board that a resolution to reappoint
kpmg audit sàrl as the company’s auditors be proposed
at the agm the committee will continue to keep under review
the independence and objectivity of the external auditors the
effectiveness of the audit process and the rotation of the lead
audit partner
the scope and extent of nonaudit work undertaken by the
company’s external auditor is monitored by and above certain
thresholds requires prior approval from the committee to
ensure that the provision of nonaudit services does not
impair their independence or objectivity during the year
kpmg performed statutory work in relation to the group
reorganisation kpmg is prohibited from providing services
that would be considered to jeopardise their independence
such as bookkeeping services valuations and system design
remuneration committee
martin robinson chairman
lance browne appointed 14 october 2008
ulrich ogiermann appointed 14 october 2008
douglas sutherland appointed 14 october 2008
roger orf resigned 14 october 2008
stephen east resigned 14 october 2008
details of the remuneration committee are set out in
the remuneration report on pages 33 to 39
nomination committee
john matthews chairman
martin robinson
lance browne appointed 14 october 2008
ulrich ogiermann appointed 14 october 2008
douglas sutherland appointed 14 october 2008
roger orf resigned 14 october 2008
stephen east resigned 14 october 2008
the committee meets as required during the year to
consider matters delegated to it under its terms of reference
board effectiveness performance and leadership were
discussed informally by the board as a whole
summary terms of reference
• board appointment and composition – to regularly review
the structure size and composition of the board and make
recommendations on the role and nomination of directors for
governance framework directors’ report corporate governance
28wwwreguscom
appointment and reappointment to the board for the purpose
of ensuring a balanced board in respect of skills knowledge
and experience
• board committees – to make recommendations to
the board in relation to the suitability of candidates for
membership of the audit and remuneration committees
the appointment and removal of directors are matters
reserved for the full board
• board effectiveness – to assess the role of chairman and
chief executive and make appropriate recommendations
to the board
• board performance – to assist the chairman with the annual
performance evaluation to assess the overall and individual
performance and effectiveness of the board
• leadership – to remain fully informed about strategic issues
and commercial matters affecting the company and to keep
under review the leadership needs of the organisation to
enable it to compete effectively
principal risks and uncertainties
there are a number of risks and uncertainties which could have
an impact on the group’s longterm performance the group
has a risk management structure in place designed to identify
manage and mitigate business risks risk assessment and
evaluation are an essential part of the annual planning
budgeting and forecasting cycle
the directors have identiﬁed the following principal risks and
uncertainties affecting the company these do not constitute
all of the risks facing the group
economic downturn in signiﬁcant markets
the group has a signiﬁcant proportion of its centres in the
americas predominantly the usa and europe an economic
downturn in these markets could adversely affect the group’s
operating revenues thereby reducing operating performance or
in an extreme downturn resulting in operating losses
generally the terms on which the group earns revenues
from customers and pays its suppliers principally landlords are
matched to reduce working capital needs however a reduction
in revenues with no immediate decline in the cost base could
result in signiﬁcant funding shortfalls in the business any
funding shortfall may require the group to seek external
funding or sell assets in the longer term
in addition competition may increase as a result of landlords
offering surplus space at discounted prices and companies
seek to reduce their costs by subletting space these factors
could result in reduced revenue for the group as the prices it
is able to charge customers would be reduced
the group has taken a number of actions to mitigate this risk
• the group has entered into performancebased leases with
landlords where rent costs vary with revenues earned by
the centre
• building lease contracts include break clauses at periodic
intervals to allow the group to exit leases should they
become onerous in cities with a number of centres this
allows the group to stagger leases such that an orderly
reduction in exposure to the location may be facilitated
• the proﬁle of clients in a centre is continually reviewed
to avoid undue reliance on a particular client or clients
in a particular industry group
additionally in the event of a downturn the group has
a number of options for mitigating losses for example
by closing centres at lease break points
the group’s strategy also focuses its growth into emerging
markets that will reduce the proportion of the group’s revenue
generated from the usa and europe over time and provide
better protection to the group from an economic downturn
in a single market
exposure to movements in property markets
a number of the group’s lease contracts contain market rent
review clauses this means that the costs of these leases may
vary as a result of external movements in the property market
in particular in the uk lease contracts typically contain
“upward only” rent reviews which means that should open
market rents decrease then regus could be exposed to
paying higher than market rent in these locations
if the group is unable to pass on increased rent costs to
customers due to local property market conditions then this
could result in reduced proﬁtability or operating losses in
these markets
equally for group lease contracts without market rent review
clauses the group may beneﬁt from paying below market rent
in a market with increasing open market rents this may allow
the group to improve proﬁtability if the movements in open
market rents are passed on to clients
the length of the group’s leases or the period after which the
group can exercise any break option in the leases is usually
signiﬁcantly longer than the duration of the group’s contracts
with its customers if demand falls the group may be unable
to increase or maintain occupancy or price levels and if revenue
declines the group may be unable to reduce the lease cost
base additional costs could be incurred if the group disposes
of unproﬁtable centres
exposure to movements in exchange rates
the group has signiﬁcant overseas operations whose
businesses are generally conducted in the currency of the
country in which they operate the principal exposures of the
group are to the us dollar and the euro with approximately
38 of the group’s revenues being attributable to the us
dollar and 19 to the euro respectively
given that transactions generally take place in the functional
currency of group companies the group’s exposure to
transactional foreign exchange risk is limited however the
translation into sterling of overseas proﬁts and net assets will
be affected by prevailing exchange rates in the event that
either the us dollar or euro were to signiﬁcantly depreciate
or appreciate against sterling this would have an adverse
or beneﬁcial impact on the group’s reported performance
and position respectively
the ﬁnancial risk management objectives and policies of the
group together with an analysis of the exposure to such risks
are set out in note 23 of the accounts wherever possible
governance framework continued regus plc annual report and accounts 200829
the group attempts to create natural hedges against currency
exposures through matching income and expense and assets
and liabilities in the same currency
given the continued volatility in exchange rates in january
2009 the board approved a policy which allows the group
to hedge subject to strict limits the rates at which overseas
earnings are translated this will enable the group to have
more certainty over the sterling value of these earnings
group reorganisation and restructuring
in october 2008 the group entered into a reorganisation to create
a new group structure reorganisations of international groups
can lead to a risk of a signiﬁcant tax liability in addition as a
result of the scheme it is expected that regus plc will be
regarded as tax resident solely in luxembourg if regus plc
were nonetheless to be treated as tax resident in any other
jurisdiction this could lead to an increase in the overall
effective tax rate and tax compliance costs of the group
as a jerseyincorporated company having its place of central
administration head office in luxembourg and being tax
resident in luxembourg regus plc is required to comply
with both jersey law and luxembourg law where applicable
in addition regus plc’s ordinary shares are listed on the ofﬁcial
list of the ukla and admitted to trading on the main market
of the london stock exchange it is possible that conﬂicts may
arise between the obligations of regus plc under the laws of
each of these jurisdictions or between the applicable laws and
the listing rules if an irreconcilable conﬂict were to occur then
regus plc may not be able to maintain its status as a company
tax resident in luxembourg
the group manages the risk that a signiﬁcant tax liability could
arise by taking appropriate advice both in carrying out the
group reorganisation and on an ongoing basis in addition the
group believes that under current laws and regulations the risk
of irreconcilable conﬂicts between current laws and regulations
impacting regus plc is low
as part of the group reorganisation the group announced
plans to operate an income access share ias arrangement
for the payment of dividends the group expects that dividends
will be paid to regus plc shareholders who make or are
deemed to make an ias election through the ias
arrangements however there can be no certainty that
dividends will be paid in this way and the ias arrangements
may be suspended or terminated at any time and for any
reason if the ias arrangements do not operate shareholders
will be paid dividends by regus plc which may be subject
to luxembourg withholding tax in addition there is a low
risk that share buybacks undertaken by regus plc could
also be subject to luxembourg withholding tax
centrally managed applications and systems
the group has moved to a centrally managed applications and
systems environment with the resultant effect that all systems
and applications are housed in a central data centre should the
data centre be impacted as a result of circumstances outside
the group’s control there could be an adverse impact on the
group’s operations and therefore its ﬁnancial results this risk
is managed through a detailed service agreement with our
external data centre provider which incorporates appropriate
backup procedures and controls
internal controls
the board has ultimate responsibility for maintaining a sound
system of internal control and for periodically reviewing
its effectiveness
in accordance with the guidance set out in the turnbull report
“internal control guidance for directors on the combined
code” an ongoing process has been established for identifying
managing and evaluating the risks faced by the group the
group’s system of internal controls is designed to
• facilitate the effective and efﬁcient response to risks which
might affect the achievement of the group’s objectives
• safeguard assets from inappropriate use or from loss or fraud
• help ensure the quality of internal and external
ﬁnancial reporting
• help ensure compliance with applicable laws and regulations
no system of internal control can provide absolute assurance
against material misstatement or loss the group’s system
of controls helps to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide
reasonable assurance that potential problems will normally
be prevented or will be detected in a timely manner for
appropriate action
strategy and risk management
the board conducts regular reviews of the group’s strategic
direction country and regional strategic objectives quarterly
plans and performance targets for 2009 have been set by the
executive directors and are regularly reviewed by the main
board in the context of the group’s overall objectives
there is an ongoing process for identifying evaluating and
managing the risks faced by the group major business risks
and their ﬁnancial implications are appraised by the responsible
executives as part of the budget process and these are
endorsed by regional management key risks are reported
to the board and the audit committee the appropriateness
of controls is considered by the executives having regard to
costbeneﬁt materiality and the likelihood of risks crystallising
key risks and actions to mitigate those risks are regularly
considered by the board and are formally reviewed and
approved by the board annually
control environment
high standards of behaviour are demanded from staff at
all levels in the group the following procedures are in place
to support this
• the induction process is used to educate new team
members on the standards required from them in their role
including business ethics and compliance regulations and
internal policies
• all team members are provided with a copy of the “team
member handbook” which contains detailed guidance on
employee policies and the standards of behaviour required
of staff
• policies and procedures manuals and guidelines are readily
accessible through the group’s intranet site
• operational audit and selfcertiﬁcation tools require individual
centre managers to conﬁrm their adherence to group policies
and procedures
governance framework directors’ report corporate governance
30wwwreguscom
to underpin the effectiveness of controls it is the group’s policy
to recruit and develop appropriately skilled management and
staff of high calibre integrity and with appropriate disciplines
the group has also established an externally hosted whistle
blowing channel to enable all staff to report issues and
concerns in conﬁdence
control processes
the group has had procedures in place throughout the year
and up to 20 march 2009 the date of approval of this annual
report which accord with the internal control guidance for
directors on the combined code these include the following
• the board normally meets with regional executives every six
months to carry out a wideranging review of group and
regional ﬁnancial performance business development
opportunities group infrastructure and general group
management issues
• the annual budget process is driven from senior management
meetings budgets are prepared at a detailed level by
business centre and rollup at a country and regional level
the executive directors review regional budgets to ensure
consistency with regional strategic objectives and the ﬁnal
budget is reviewed and approved by the board the approved
budget forms the basis of business management throughout
the year
• operational reports and ﬁnancial reports are prepared and
distributed to the board on a monthly basis actual results
are reviewed against budget and forecast and explanations
are received for all material movements
• key policies and control procedures including ﬁnance
operations and health and safety are documented in
manuals having groupwide application these are available
to all staff on the group’s intranet system
• the board has formal procedures in place for the review and
approval of investment and acquisition projects the group
investment committee comprising the executive directors
reviews all investments prior to approval by the board
additionally the form and content of investment proposals
are standardised to facilitate the review process
• the group has clearly delegated authority limits with regard
to the approval of transactions purchase orders must be
obtained in advance for all purchases in excess of £1000
• numerous reports are generated from the group’s sales
and operating systems on a daily weekly and monthly basis
to provide management at all levels with performance data
for their area of responsibility which helps them to focus
on operational issues that may require their input
information and communications processes
the senior management team is integrally involved in the
business and to this extent regularly discusses and addresses
issues and opportunities with regional and functional teams
formal business review meetings chaired by mark dixon
are held with the regional teams and functional heads on
a monthly basis
regular staff communications include general information on
the business from senior management as well as operational
guidance on changes in policies and procedures
sales staff and operational management periodically attend
regional sales or management conferences at which information
on operational issues is shared delegates present the key
messages to employees who did not attend the event
monitoring effectiveness
the following key mechanisms were available to the board
at various times during the year in the conduct of its review
of internal controls
• review of the group’s monthly management accounts
which contain detailed analysis of ﬁnancial performance
for the group and each of the group’s geographic
reporting segments
• an ongoing process of review through board meetings
senior management meetings and divisional reviews
as well as other management meetings for the formal
identiﬁcation of signiﬁcant operational risks and mitigating
control processes
• internal audit reviews of key risk areas the ﬁndings
and recommendations of each review are reported to
management and the audit committee
• quarterly postinvestment reviews are presented to the
audit committee to allow appraisal of the effectiveness
of investment activity
• a biannual internal control selfassessment and management
certiﬁcation exercise covering the effectiveness of ﬁnancial
and operational controls this is based on a comprehensive
internal control questionnaire collated and reviewed by
internal audit results and any necessary mitigating action
plans are presented to senior management and the board
other matters
board performance evaluation
during 2008 a formal annual performance evaluation was
conducted in respect of the board its committees and
each individual director by means of an internally produced
written questionnaire this required performance to be scored
on a scale of 1 to 5 against a number of criteria with
1 representing a need for urgent improvement in performance
3 representing adequate performance and 5 representing
excellent performance
the results of these evaluations were consolidated by the
chairman and presented to the board for formal consideration
all criteria were scored as adequate or better and
therefore no formal corrective actions have been initiated
the independent senior nonexecutive director reviewed
the chairman’s performance
training and resources
appropriate training is made available for all new directors to
assist them in the discharge of their responsibilities training
is provided on an ongoing basis to meet particular needs with
the emphasis on governance and accounting developments
governance framework continued during the year the company secretary tim regan provided
updates to the board on relevant governance matters whilst
the audit committee regularly considers new accounting
developments through presentations from management
internal audit and the external auditors the board programme
includes presentations from management at which together
with site visits the nonexecutive directors’ understanding of
the business and sector is increased
all directors have access to the advice and services of the
company secretary who is responsible for ensuring that board
procedures corporate governance and regulatory compliance
are followed and complied with should a director request
independent professional advice to carry out his duties such
advice is available to him at the company’s expense
directors and ofﬁcers insurance
the group’s insurance programme is reviewed annually and
appropriate insurance cover is obtained to protect the directors
and senior management in the event of a claim being brought
against any of them in their capacity as directors and ofﬁcers
of the company
dialogue with shareholders
regus reports formally to shareholders twice a year with the
halfyear results announced in augustseptember and the
annual results normally announced in march there are
programmes for the chief executive and chief financial
ofﬁcer to give presentations of these results to the company’s
institutional investors analysts and media in london and
other locations the chief executive and chief financial
ofﬁcer maintain a close dialogue with institutional investors
on the company’s performance governance plans and
objectives these meetings also serve to develop an ongoing
understanding of the views and any concerns of the company’s
major shareholders the nonexecutive directors are given
regular updates as to the views of the institutional shareholders
and the chairman is available to meet with these shareholders on
request the principal communication with private shareholders
is through the annual report the interim report and the agm
the company has engaged the services of brunswick group
plc as their investor relations adviser
agm
the agm will be held in may in luxembourg and will be
attended other than in exceptional circumstances by all
members of the board in addition to the formal business
of the meeting there is normally a trading update and
shareholders are invited to ask questions and are given
the opportunity to meet the directors informally afterwards
notice of the agm together with any related documents is
mailed to shareholders at least 20 working days before the
meeting and separate resolutions are proposed on each issue
the level of proxy votes cast and the balance for and against
each resolution together with the level of abstentions if any
are announced to the meeting following voting by a show
of hands substantial resolutions of the shareholders require
a poll to be taken
financial and other information is made available on the
company’s website wwwreguscom
reelection of the board
all directors submit themselves for reelection by shareholders
at least every three years and directors appointed during the
period are required to seek election at the next agm
nonexecutive directors are subject to the reelection
requirements and serve the company under letters of
appointment which have an initial threeyear term
compliance statement
the company has complied with the provisions set out in
section 1 of the combined code throughout the year ended
31 december 2008 with the exception of the following
• provision d11 – the senior independent nonexecutive
director martin robinson does not have regular meetings
with major external shareholders
the board considers it appropriate for the chairman to be the
main conduit with investors rather than the senior independent
nonexecutive director the chairman participates in investor
meetings and makes himself available for questions in person
at the time of major announcements the chairman regularly
updates the board and particularly the senior independent
nonexecutive director on the results of his meetings and the
opinions of investors on this basis regus considers that the
senior independent nonexecutive director is able to gain full
awareness of the issues and concerns of major shareholders
notwithstanding this policy all directors have a standing
invitation to participate in meetings with investors
regus plc annual report and accounts 200831
governance framework directors’ report corporate governance
32wwwreguscom
statement of directors’ responsibilities in respect
of the annual report and ﬁnancial statements
the directors are responsible for preparing the annual report
and the group and parent company ﬁnancial statements in
accordance with applicable law and regulations
company law requires the directors to prepare group and
parent company ﬁnancial statements for each ﬁnancial year
under that law they are required to prepare the group ﬁnancial
statements in accordance with ifrss as adopted by the eu and
applicable law and are required to prepare the parent company
ﬁnancial statements in accordance with luxembourg generally
accepted accounting practice and applicable law
the group ﬁnancial statements are required by law and ifrss
as adopted by the eu to present fairly the ﬁnancial position and
performance of the group
in preparing each of the group and parent company ﬁnancial
statements the directors are required to
• select suitable accounting policies and then apply
them consistently
• make judgments and estimates that are reasonable
and prudent
• for the group ﬁnancial statements state whether they have
been prepared in accordance with ifrss as adopted by
the eu and
• prepare the ﬁnancial statements on the going concern basis
unless it is inappropriate to presume that the parent company
and group will continue in business
the directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
ﬁnancial position of the parent company and to enable them to
ensure that its ﬁnancial statements comply with applicable law
and regulations they have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of
the group and to prevent and detect fraud and other irregularities
the directors are also responsible for preparing a
directors’ report a remuneration report and corporate
governance statement
the directors are responsible for the maintenance and integrity
of the corporate and ﬁnancial information included on the
company’s website legislation in luxembourg governing
the preparation and dissemination of ﬁnancial statements may
differ from legislation in other jurisdictions and the company’s
articles of association permit the company to communicate
with shareholders in a similar way to that permitted by uk
company law
statutory statement as to disclosure to auditors
the directors who held ofﬁce at the date of approval of
this directors’ report conﬁrm that
• so far as they are aware there is no relevant audit
information of which the company’s auditor is unaware and
• each director has taken all the steps that he ought to have
taken as a director in order to make himself aware of any
relevant audit information and to establish that the
company’s auditor is aware of that information
the annual accounts have been approved by the directors
of regus plc the directors conﬁrm that the annual accounts
have been prepared in accordance with applicable law
and regulations and that they include a fair review of the
development and performance of the business and the position
of the parent company and the undertakings included in the
consolidation taken as a whole together with a description
of the principal risks and uncertainties that they face
by order of the board
mark dixon stephen gleadle
chief executive ofﬁcer chief financial ofﬁcer
20 march 2009
director statements remuneration report
regus plc annual report and accounts 200833
remuneration report
the report has been prepared by the remuneration committee
the “committee” of regus plc
1
and approved by the board of
directors of regus plc the “board”
2
 the report complies with
the uk directors’ remuneration report regulations 2002 and
in compliance with such regulations a separate resolution
approving this report will be put to shareholders at this year’s
annual general meeting
this report sets out the company’s policy on directors’
remuneration for the forthcoming year as well as information
on remuneration paid to directors during the year
information relating to the emoluments and pension
contributions to the directors and directors’ interests in
the company’s shares and under employee share plans
is unaudited
unaudited information
membership and responsibilities of the committee
the committee is made up of nonexecutive directors and
chaired by martin robinson the company’s independent senior
nonexecutive director during the year the members of the
committee were
• martin robinson
• stephen east resigned 14 october 2008
• roger orf resigned 14 october 2008
• lance browne appointed 14 october 2008
• ulrich ogiermann appointed 14 october 2008
• douglas sutherland appointed 14 october 2008
the committee met three times during the year
the committee has responsibility for determining in
consultation with the chairman andor chief executive as
appropriate the total remuneration package of each executive
director and senior manager including bonuses incentive
payments and share options or other share awards
the board has delegated to the committee responsibility to
• determine and agree with the board the remuneration
policy for the executive directors and the group’s other
senior management
• approve the design of and determine targets for any
performance related pay schemes operated by the
company and approve the total annual payments
made under such schemes
following its acquisition of halliwell consulting the
committee receives advice on executive remuneration
from pricewaterhousecoopers “pwc” an external
consultancy which has wide experience of executive
remuneration in uk listed companies pwc has no
other connection with the company
directors are not permitted under regus plc’s articles
of association to vote on their own terms and conditions
of remuneration
the committee’s terms of reference are available on the
company’s website wwwreguscom the members of the
committee attend the company’s agm and are available to
answer shareholders’ questions about directors’ remuneration
compliance with the best practice provisions
in accordance with the board’s commitment to maintaining
high standards of corporate governance the committee
has complied with all remuneration related aspects of the
code during the year
remuneration policy
the principal objectives of the committee’s remuneration
policy are
• to focus on rewarding exceptional pay for exceptional
performance executives should be focused on delivering
exceptional returns to shareholders over both the short and
long terms and given the opportunity to receive exceptional
levels of reward if such performance is delivered conversely
if returns are conservative compensation levels should be
extremely conservative
• to provide remuneration packages that will attract retain and
motivate people of the highest calibre and experience needed
to shape and execute the company’s strategy and to deliver
shareholder value
the guiding principles which the committee has regard to
and balances as far as practicable in determining policy
and objectives for 2008 and future years are
• to maintain a competitive package of total compensation
commensurate with comparable packages available with
similar companies operating in similar markets the
“comparator group”
• to make a signiﬁcant percentage of potential maximum
reward conditional on short and longterm performance
• to ensure that the interests of the executives are closely
aligned with those of the company’s shareholders through
the provision of sharebased incentives
• to link reward to the satisfaction of targeted objectives
which are the main drivers of shareholder value and
• to be sensitive in determining executive directors’
remuneration to pay and employment conditions
throughout the group
1 for purposes of this report the deﬁnition of the committee includes the regus group plc remuneration committee which ceased to exist on 14 october 2008
2 for purposes of this report the deﬁnition of the board includes the board of directors of regus group plc up to 14 october 2008 directors’ report corporate governance
34wwwreguscom
in order to achieve the above policy the committee capped
the pay rise applicable to the ﬁxed elements of the executives’
compensation package for 2008 at 25 this did not apply to
the chief financial ofﬁcer’s salary which following completion
of his probationary period increased from £250000 to £300000
per annum
this ensured a greater weighting towards variable remuneration
with the opportunity for total compensation packages to be
in the upper quartile of salaries earned within the comparator
group dependent upon the degree to which the associated
stringent performance conditions attached to the short and
longterm incentive schemes had been satisﬁed
the table below illustrates the balance between ﬁxed and
performance related variable compensation for each executive
director for the year ended 31 december 2008
mark dixon rudy lobo stephen gleadle
chief executive chief operating chief financial
ofﬁcer ofﬁcer ofﬁcer
 
fixed 309 284 300
variable 691 716 700
resigned from the board 14 october 2008
fixed compensation comprises salary beneﬁts and pension
contributions variable compensation comprises the annual
bonus paid in relation to the year ended 31 december 2008
and the total fair value of share awards granted in the year
excluding entitlements under the value creation plan for
rudy lobo this is prorata for the period to 14 october 2008
the main elements of the packages and the performance
conditions are described below
nonexecutive directors are remunerated with fees set at levels
that are sufﬁcient to attract and retain their services and are
in line with market rates the nonexecutive directors do not
receive any pension or other beneﬁts other than appropriate
expenses nor do they participate in any bonus or share
option schemes
service contracts
details of contracts currently in place for directors are as follows
notice period
and maximum
effective provision for
date of contract term compensation
executive
mark dixon 180808 – 12 months
stephen gleadle 180808 – 12 months
nonexecutive
john matthews 270808 3 yrs 6 months
lance browne 270808 3 yrs 6 months
ulrich ogiermann 270808 3 yrs 6 months
martin robinson 270808 3 yrs 6 months
douglas sutherland 270808 3 yrs 6 months
remuneration packages
the remuneration for executive directors during the year
comprised a basic salary a beneﬁt package an annual
performancebased shortterm incentive award paid partly in
cash and partly in shares and participation in the company’s
share incentive arrangements the regus coinvestment plan
and the value creation plan
basic salary and beneﬁts
the basic salaries of executive directors are reviewed annually
and any increases are effective from 1 january
in light of current market conditions salaries for the chief
executive ofﬁcer and chief financial ofﬁcer during 2009
will be unchanged from 2008 being £522750 and
£300000 respectively
beneﬁts comprise a company car or allowance fuel
private medical insurance disturbance allowance and
a living allowance for the chief executive ofﬁcer
the chairman has agreed to serve at a reduced annual fee
of £114000 and the senior independent nonexecutive has
agreed to serve without a fee
annual bonus scheme
the committee believes ﬁrmly in the ﬁnancial effectiveness
of shortterm incentives accordingly every employee in the
group participates in some form of incentive scheme
the committee sets bonus targets and levels of eligibility
each year
the maximum bonus potential for the executive directors
for the year ending 31 december 2008 was 300 of salary
consisting of a standard bonus and a discretionary bonus
the committee are of the opinion that all financial and
personal measures and targets were achieved by the executive
directors and as such bonuses of 100 of salary were paid for
this element 50 of this bonus payment will be paid in cash
and 50 deferred to purchase shares “investment shares” in
regus plc these shares are awarded under the coinvestment
plan with the opportunity to receive an additional award of
shares “matching shares” after a threeyear period subject
to certain conditions share awards will be granted in the
form of either a nilcost option or a conditional share award
although the cash element of the bonus has been approved
at the time of the drafting of this report the award of investment
shares and associated matching shares has not been made
due to the company being in a close period the committee
will provide full details of the award and relevant performance
conditions in its remuneration report for the year ending 31
december 2009 the maximum number of share awards to be
granted to the executive directors will be based on the price of
an ordinary share at the time of the grant and the monetary
value of investment shares will not exceed 50 of salary and
200 of salary for matching shares
in addition the company’s operating proﬁt exceeded external
forecasts based on a consensus of analysts’ estimates and the
remuneration report continued regus plc annual report and accounts 200835
committee have rewarded this exceptional performance with
a discretionary bonus of 36 of salary paid out of the self
ﬁnancing “pool” system for exceptional performance in
relation to his work in relation to the recent scheme of
arrangement which became effective on 14 october 2008
the committee has awarded the chief financial ofﬁcer a
oneoff cash bonus of £30000
for the year ending 31 december 2009 in consideration of
current market conditions the committee has decided to
reduce the maximum potential bonus from 300 to 200
of salary the standard bonus will remain at a maximum of
100 of salary linked to the achievement of stretching short
term financial and individual performance targets while
the maximum discretionary element for exceptional out
performance will be capped at 100 the discretionary bonus
will be based on a selfﬁnancing bonus “pool” system deﬁned
by reference to a percentage of operating proﬁts in excess of
external forecasts based on a consensus of analysts’ estimates
bonuses are nonpensionable nonexecutive directors do
not receive a bonus
pension beneﬁts
the executive directors participate in the company’s money
purchase personal pension scheme the company matches
contributions up to a maximum of 70 of basic salary the
committee considers that the pension beneﬁts of the executive
directors are low compared with comparative companies but
prefers to offer enhanced variable compensation rather than
a ﬁxed additional pension contribution
the group does not operate a deﬁned beneﬁt pension scheme
and has no plans to introduce such a scheme
long term incentives
overview
the company operates three long term incentive plans the
regus plc coinvestment plan “cip” the regus plc share
option scheme and the regus plc 2008 value creation plan
the “vcp”
coinvestment plan “cip”
there are two elements to the cip
the ﬁrst element operates in conjunction with the annual bonus
whereby a gross bonus up to 50 of salary will be taken as a
deferred award of shares to be released at the end of a three
year period with the balance paid in cash
matching shares will be awarded linked to the number of
investment shares awarded and will vest depending on the
company’s future performance see below matching shares
are awarded at no cost to participants
the maximum number of matching shares which can be
awarded to a participant in the cip is 200 of salary as
such the maximum number of matching shares which can
be awarded based on investment shares awarded is 41
the committee have determined that this ratio will apply
to any payout of the annual bonus
grants during the year ending 31 december 2008
stephen
mark dixon rudy lobo gleadle
cip award face
value  of salary 200 200 200
fair value of cip award £775560 £415911 £380176
fair value of cip award
as a  of salary 152 152 152
 resigned 14 october 2008
 the fair value was calculated by taking the face value of the shares on the date of
award and adjusting this value by the probability of the performance condition
being satisﬁed at this date in accordance with the principles of ifrs 2
the second element is that the committee may also make
stand alone whole share awards “ltip awards” without
reference to the annual bonus up to a maximum of 100
of salary per annum an ltip award is a conditional right over
a whole number of shares with the release being dependent
on the extent to which if at all the challenging performance
conditions set by the committee at the time the ltip award
is made are satisﬁed
no ltip award was made in 2008 it is unlikely that future stand
alone ltip awards will be made to existing executive directors
unless there are exceptional circumstances
the performance conditions associated with the release of the
ltip awards and cip matching shares awards made in the
years 2005 2006 and 2007 are set out in the following table
growth in fcf a 11p 12p 13p 14p
per share over 3 years b 15 20 25 30
10 6 13 19 25
15 13 25 38 50
20 19 38 56 75
25 25 50 75 100
a for nov 2005 ltip and march 2006 cip adjusted eps p for the year ended
31 december 2008
b for march 2007 cip  increase in published eps for the year ended 31 december
2009 compared to the prior year
in addition no ltip awards or cip matching shares are
to be released unless the company’s tsr is at least at the
median when compared against that of the companies
comprising the ftse 350 support services sector at the date
of grant unless the remuneration committee at its discretion
decides otherwise
the company achieved the eps and fcf performance
targets in full for the awards made in 2005 and 2006 as a
result of the level of performance against these key corporate
fundamentals the remuneration committee has partially waived
the tsr underpin as the attainment of these conditions has
not been reﬂected in the share price of the company over the
performance period and accordingly 80 of the matching
shares and ltip shares have been released
it should be noted that for issues relating to commercial
sensitivity and the extreme volatility in the global economic
remuneration report directors’ report corporate governance
36wwwreguscom
environment in which the company operates the committee
believes that it is not practical to set the speciﬁc performance
conditions relating to the release of matching shares granted
in 2008 at this time the committee also intends to take
a similar position in relation to the performance conditions
applying to the matching shares to be granted in march 2009
relating to the bonus paid for the year ending 31 december
2008 once there is more certainty as to the longterm corporate
performance outlook the committee will set targets for the
release of matching shares in accordance with the company’s
performance as measured against some or all of the following
corporate fundamentals
• comparative tsr
• eps growth
• free cash ﬂow
• growth in revenue and
• growth in ebit
the committee will ensure that only 25 of the matching share
award is released for achievement of an “acceptable” level of
performance and that full release a 41 match will only occur
for exceptional performance against the relevant metrics
to give comfort to shareholders that there is integrity of process
in relation to the application of the performance targets and
the operation of the cip the committee will lodge full details of
the performance conditions with its auditors once set and then
disclose details of the targets in the company’s remuneration
report for the year in which the conditions have been set
share option scheme
the options granted to executive directors prior to the
introduction of the cip are set out below the company
continues to grant options on an ad hoc basis to certain
nonparticipants of the cip 
regus plc 2008 value creation plan the “vcp”
the vcp was introduced in 2008 with the objective of delivering
exceptional rewards to participants provided absolute returns to
shareholders are exceptional
the vcp operates over a ﬁve year period from may 2008 to
march 2013 participants in the vcp are granted entitlements
“vcp entitlements” to receive a maximum number of
shares which shall be earned by the conversion of the vcp
entitlements into an option or series of options the “vcp
options” which may be granted on certain dates the
“measurement dates” based on the company’s share price
performance the exercise price for vcp options will be the
closing share price on the date of the company’s 2008 agm
vcp entitlements granted in 2008
stephen
mark dixon rudy lobo gleadle
number of shares subject
to vcp entitlement 3500000 3000000 3000000
 resigned 14 october 2008
 vcp entitlements hold no value
the share price of the company will be calculated at each
measurement date the ﬁrst of which is 31 march 2010 and
compared against a matrix of extremely stretching ﬁxed share
price targets to determine the number of shares subject to the
vcp entitlement over which a vcp option will be granted if
a lower share price target is achieved a vcp option shall be
granted over a lesser number of shares with the ability for the
balance to be received at a subsequent measurement date
subject to relevant share price targets being achieved
the share price targets for the vcp entitlements granted
in 2008 are as set out in the following table
measurement date
shares awarded at each date less
those already earned in a prior year 310310 310311 310312 310313
share price is less than £260 –– ––
share price is more than
£260 but less than £350 25m 18m 12m 06m
share price is more than
£350 but less than £450 35m 25m 18m 12m
share price is £450 or more 35m 25m 18m
the number of ordinary shares above are based on the entitlements of the chief
executive ofﬁcer for the chief financial ofﬁcer the number of ordinary shares will
be lower but based on the same ratios
total shareholder return tsr
the above graph shows the company’s performance
measured by tsr for the group compared with the
performance of the ftse 250 index and the ftse 350
support services index the committee consider the ftse
250 index relevant since it is an index of companies of similar
size to regus plc as detailed earlier in the report the company
considers its tsr performance for share awards under the cip
in comparison to that of the ftse 350 support services index
external appointments
executive directors are permitted to accept appointments on
external boards or committees so long as these are not deemed
to interfere with the business of the group any fees received in
respect of these appointments are retained directly by the relevant
executive director at 31 december 2008 the executive directors
did not hold any external positions for which they received fees
regus plc ftse 250 index ftse 350 support services index
20
0
20
40
60
80
100
120
140
dec 08 dec 07 dec 06 dec 05 dec 04 dec 03
remuneration report continued regus plc annual report and accounts 200837
directors’ emoluments
the aggregate emoluments excluding pensions of the directors were as follows
2008
salary fees beneﬁts bonus total
£’000 £’000 £’000 £’000 £’000
chairman
john matthews
a
2372 2372
executive
mark dixon 5228 – 1017 4495 10740
rudy lobo
b
2206 – 113 1897 4216
stephen gleadle
c
3000 – 190 2880 6070
nonexecutive
roger orf
b
410 410
martin robinson
d
476 476
stephen east
b
395 395
lance browne
e
164 164
ulrich ogiermann
f
138 138
douglas sutherland
g
159 159
10434 4114 1320 9272 25140
2007
salary fees beneﬁts bonus total
£’000 £’000 £’000 £’000 £’000
chairman
john matthews – 1900 –– 1900
executive
mark dixon 5100 – 1015 3825 9940
rudy lobo
b
2735 – 134 2051 4920
stephen gleadle 2500 – 154 1875 4529
nonexecutive
roger orf
b
410 410
martin robinson 410 410
stephen east
b
350 350
10335 3070 1303 7751 22459
a the remuneration for john matthews includes a basic fee of £190000 with an additional fee of £6000 in his capacity as chairman of the nomination committee in 2008
his fee included a fee of £36000 in relation to the additional work on the group reorganisation and scheme of arrangement and a disturbance allowance effective from
27 august 2008 of £5178 the fee relates to serving as chairman of both regus group plc until 14 october 2008 and regus plc from 27 august 2008
b the remuneration for 2008 only includes the remuneration paid during the year in the capacity as directors of regus group plc until 14 october 2008
c the remuneration for stephen gleadle includes a bonus of £30000 in relation to the group reorganisation and scheme of arrangement and a disturbance allowance
effective from 27 august 2008 of £2589
d the remuneration for martin robinson includes a basic fee of £40000 with an additional fee of £5042 in his capacity as senior nonexecutive director and chairman
of the remuneration committee effective from 27 august 2008 in 2008 his fee included a disturbance allowance effective from 27 august 2008 of £2589 the fee
relates to serving as a nonexecutive director of both regus group plc until 14 october 2008 and regus plc from 27 august 2008
e the remuneration for lance browne includes an annualised basic fee of £40000 in 2008 his fee included a disturbance allowance effective from 27 august 2008 of
£2589 the fee relates to serving as a nonexecutive director regus plc for the period from 27 august 2008
f the remuneration for ulrich ogiermann includes an annualised basic fee of £40000 the fee relates to serving as a nonexecutive director of regus plc for the period
from 27 august 2008
g the remuneration for douglas sutherland includes an annualised basic fee of £40000 with an additional fee of £6000 in his capacity as chairman of the audit committee
the fee relates to serving as a nonexecutive director of regus plc for the period from 27 august 2008
remuneration report directors’ report corporate governance
38wwwreguscom
mark dixon was the highest paid director in both 2008 and 2007 beneﬁts include car and fuel allowance medical insurance
life assurance and for stephen gleadle a disturbance allowance mark dixon also received a housing allowance 2008 £100000
2007 £100000
pension contributions
£’000 2008 2007
mark dixon 366 396
rudy lobo until 14 october 2008 154 191
stephen gleadle 210 175
730 762
directors’ share interests
the following directors held beneﬁcial interests in the share capital of the company at 31 december 2007 31 december 2008
and 20 march 2009
20 march 2009 31 december 2008 31 december 2007
ordinary shares of ordinary shares of ordinary shares of
1p in regus plc 1p in regus plc 5p in regus group plc
executive
mark dixon
a
359058783 359058783 363613783
rudy lobo
b
na na 4697098
stephen gleadle 121500 121500 121500
nonexecutive
john matthews 1005777 961397 894869
roger orf
c
na na 747750
martin robinson 215978 190509 121568
stephen east
d
na na 28914
lance browne –– na
ulrich ogiermann –– na
douglas sutherland 150000 150000 na
a the interests of mark dixon are held indirectly through estorn limited an entity in which mark dixon controls 100 of the share capital
b resigned 14 october 2008
c resigned 14 october 2008
d resigned 14 october 2008
directors’ share options
as at 20 march 2009 the beneﬁcial interests of the directors in options granted under the regus group share option plan are
shown below
interest in options
and awards over exercise price date from which expiry date of
director grant date ordinary shares p exercisable grant or award
mark dixon 080904 1708108 6475 080907 080914
all options were granted at the then prevailing market price there have been no movements in the year all the options vested
and became exercisable in september 2007
directors’ interests under the long term incentive plan “ltip”
details of awards over ordinary shares in the company granted to the directors under the ltip  all for nil consideration
are as follows
ltip at 31 december 2008
mark dixon 337398
stephen gleadle 325203
no ltip awards vested or were granted during the year the entitlement to shares under the ltip was subject to achieving
the performance conditions referred to in the ltip section on page 35
the performance period for the ltip awards was 3 november 2005 to 31 december 2008
remuneration report continued regus plc annual report and accounts 200839
directors’ interests under the cip
details of awards over ordinary shares in the company granted to the directors under the cip  all for nil consideration
are as follows
cip at 1 january 2008 shares awarded at 31 december 2008
investment shares
mark dixon 372869 316770 689639
rudy lobo resigned 14 october 2008 198178 169875 na
stephen gleadle 87832 155279 243111
matching shares
mark dixon 1491476 1267080 2758556
rudy lobo resigned 14 october 2008 792712 679500 na
stephen gleadle 351328 621116 972444
no cip awards vested during the year the entitlement to matching shares under the cip is subject to achieving the performance
conditions referred to in the cip section on page 35
the performance period for the cip matching share awards made in 2008 is 1 january 2008 to 31 december 2010 the market
price of the company’s ordinary shares at 31 december 2008 was 4950p and the range during the year was 4125p to 10900p
none of the directors had a beneﬁcial interest in any contract of any signiﬁcance in relation to the business of the company or
its subsidiaries at any time during the ﬁnancial year
annual resolution
shareholders will be given the opportunity to approve the remuneration report at the agm on 19 may 2009
audit requirement
under luxembourg law and regulations there is no requirement for the sections on directors’ remuneration shareholdings and
pension beneﬁts on pages 37 to 39 inclusive to be audited therefore all sections of the remuneration report are unaudited
on behalf of the board
martin robinson
chairman remuneration committee
20 march 2009
remuneration report directors’ report corporate governance
40wwwreguscom
independent auditors’ report to the shareholders
report of the réviseurs d’entreprises on the consolidated
ﬁnancial statements
we have audited the consolidated ﬁnancial statements of regus
plc sa which comprise the consolidated balance sheet as
at 31 december 2008 and the consolidated income statement
consolidated statement of changes in equity and consolidated
cash ﬂow statement for the year then ended and a summary
of signiﬁcant accounting policies and other explanatory notes
as set out on pages 41 to 80
board of directors’ responsibility for the consolidated
ﬁnancial statements
the board of directors is responsible for the preparation and
fair presentation of these consolidated ﬁnancial statements
in accordance with international financial reporting standards
as adopted by the european union this responsibility includes
designing implementing and maintaining internal control
relevant to the preparation and fair presentation of consolidated
ﬁnancial statements that are free from material misstatement
whether due to fraud or error selecting and applying
appropriate accounting policies and making accounting
estimates that are reasonable in the circumstances
responsibility of the réviseur d’entreprises
our responsibility is to express an opinion on these consolidated
ﬁnancial statements based on our audit we conducted our
audit in accordance with international standards on auditing
as adopted by the institut des réviseurs d’entreprises those
standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
whether the consolidated ﬁnancial statements are free from
material misstatement
an audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the
consolidated ﬁnancial statements the procedures selected
depend on the judgement of the réviseur d’entreprises
including the assessment of the risks of material misstatement
of the consolidated ﬁnancial statements whether due to
fraud or error in making those risk assessments the réviseur
d’entreprises considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated ﬁnancial
statements in order to design audit procedures that are
appropriate in the circumstances but not for the purpose
of expressing an opinion on the effectiveness of the
entity’s internal control an audit also includes evaluating
the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the board
of directors as well as evaluating the overall presentation
of the consolidated ﬁnancial statements
we believe that the audit evidence we have obtained is sufﬁcient
and appropriate to provide a basis for our audit opinion
opinion
in our opinion the consolidated ﬁnancial statements set out
on pages 41 to 80 give a true and fair view of the consolidated
ﬁnancial position of regus plc sa as of 31 december
2008 and of its consolidated ﬁnancial performance and its
consolidated cash ﬂows for the year then ended in accordance
with international financial reporting standards as adopted
by the european union
report on other legal and regulatory requirements
the consolidated directors’ report which is the responsibility
of the board of directors is consistent with the consolidated
ﬁnancial statements
luxembourg 20 march 2009
kpmg audit sà rl
9 allée scheffer l2520 luxembourg
réviseurs d’entreprises
thierry ravasio consolidated income statement
regus plc annual report and accounts 200841
year ended year ended
31 dec 2008 31 dec 2007
notes £m £m
revenue 3 10772 8624
cost of sales 7715 6105
gross proﬁt centre contribution 3057 2519
administration expenses 1583 1293
operating proﬁt 5 1474 1226
share of posttax proﬁt of joint ventures 20 23 08
proﬁt before ﬁnancing costs 1497 1234
finance expense 8 68 81
finance income 8 63 41
proﬁt before tax for the year 1492 1194
tax charge 9 343 158
proﬁt after tax for the year 1149 1036
attributable to
equity shareholders of the parent 1139 1031
minority interests 10 05
1149 1036
earnings per ordinary share eps
basic p 10 120 105
diluted p 10 118 104
financial statements financial statements
42wwwreguscom
consolidated balance sheet
as at as at
31 dec 2008 31 dec 2007
notes £m £m
noncurrent assets
goodwill 12 2745 2230
other intangible assets 13 558 469
property plant and equipment 14 2780 1847
deferred tax assets 9 790 468
other long term receivables 15 383 241
investments in joint ventures 20 40 16
7296 5271
current assets
trade and other receivables 16 2318 1864
corporation tax receivable 83 51
cash and cash equivalents 2195 1429
4596 3344
total assets 11892 8615
current liabilities
trade and other payables 17 2148 1689
customer deposits 1748 1304
deferred income 1326 960
corporation tax payable 617 332
obligations under finance leases 18 13 08
bank and other loans 18 51 155
provisions 19 20 34
5923 4482
net current liabilities 1327 1138
total assets less current liabilities 5969 4133
noncurrent liabilities
other payables 17 998 624
obligations under finance leases 18 17 07
bank and other loans 18 02 245
deferred tax liability 9 54 64
provisions 19 85 74
provision for deﬁcit on joint ventures 20 10 21
1166 1035
total liabilities 7089 5517
total assets less liabilities 4803 3098
total equity
issued share capital 21 95 492
treasury shares 14 134
foreign currency translation reserve 670 201
revaluation reserve 100 100
other reserves 153 226
retained earnings 3796 3062
total shareholders’ equity 4800 3093
minority interests 03 05
total equity 4803 3098
total equity and liabilities 11892 8615
approved by the board on 20 march 2009
mark dixon stephen gleadle
chief executive ofﬁcer chief financial ofﬁcer regus plc annual report and accounts 200843
consolidated cash ﬂow statement
year ended year ended
31 dec 2008 31 dec 2007
notes £m £m
proﬁt before tax for the year 1492 1194
adjustments for
net finance costs 05 40
net share of profit on joint ventures 23 08
depreciation charge 562 392
loss on disposal of property plant and equipment 07 02
amortisation of intangible assets 63 64
decrease in provisions 15 42
other noncash movements – share based payments 48 45
operating cash ﬂows before movements in working capital 2139 1687
increase in trade and other receivables 62 282
increase in trade and other payables 419 706
cash generated from operations 2496 2111
interest paid on finance leases 02 02
interest paid on credit facilities 40 40
tax paid 313 161
net cash inﬂow from operating activities 2141 1908
investing activities
purchase of subsidiary undertakings net of cash acquired 25 121 178
purchase of interest in joint ventures – 03
dividends received from joint ventures 10 –
sale of property plant and equipment 09 03
purchase of property plant and equipment 877 792
purchase of intangible assets 26 15
interest received 53 34
net cash outﬂow from investing activities 952 951
financing activities
repayment of loans 361 145
repayment of capital elements of finance leases 14 25
purchase of treasury shares 199 147
payment of ordinary dividend 152 59
payment of dividend to minority shareholders 12 –
exercise of share options – 05
net cash outﬂow from ﬁnancing activities 738 371
net increase in cash and cash equivalents 451 586
cash and cash equivalents at beginning of year 1429 809
effect of exchange rate fluctuations on cash held 315 34
cash and cash equivalents at end of year 22 2195 1429
financial statements financial statements
44wwwreguscom
consolidated statement of changes in equity
attributable to equity holders of the parent
a
foreign
currency total equity
share treasury translation revaluation retained attributed to minority
capital shares reserve reserve other earnings equity holders interests total equity
£m £m £m £m £m £m £m £m £m
balance at 1 january 2007 492 – 175 100 226 2054 2245 – 2245
profit attributable to equity holders – – – – – 1031 1031 – 1031
profit attributable to minority interest – – – – – – – 05 05
currency translation differences – – 26 – – – 26 – 26
deferred tax effect of share options – – – – – 01 01 – 01
total recognised income
and expense for the year 26 – – 1030 1004 05 1009
share based payments – – – – – 45 45 – 45
ordinary dividend paid – – – – – 59 59 – 59
exercise of share options – 13 – –– 08 05 – 05
purchase of treasury shares – 147 – –– – 147 – 147
balance at 31 december 2007 492 134 201 100 226 3062 3093 05 3098
profit attributable to equity holders – – – 1139 1139 1139
profit attributable to minority interest – – – – – 10 10
currency translation differences 871 – – – 871 – 871
total recognised income
and expense for the year 871 – – 1139 2010 10 2020
share based payments – – – – – 48 48 – 48
ordinary dividend paid – – – – – 152 152 – 152
dividend paid to minority interest – – – – – – – 12 12
scheme of arrangement
b
379 – – – 379 – – – –
purchase of treasury shares
in regus group plc – 185 – – – – 185 – 185
cancellation of treasury shares in
regus group plc 18 319 –– – 301 – – –
purchase of treasury shares in regus plc – 14 –– –– 14 – 14
balance at 31 december 2008 95 14 670 100 153 3796 4800 03 4803
a total reserves attributable to equity holders of the parent
• share capital represents the net proceeds the nominal value on the issue of the company’s equity share capital prior to 14 october 2008 the equity share capital
of regus group plc
• treasury shares represent 5950000 ordinary shares of the group that were acquired for the purposes of the group’s employee share option plans and the share buyback
programme during 2008 prior to the scheme of arrangement on 14 october 2008 24624000 shares in regus group plc were acquired and 36571702 shares were
cancelled subsequent to the scheme of arrangement 2750000 foundation shares in regus plc were acquired and a further 3200000 regus plc shares were acquired in the
market
at 20 march 2009 5950000 treasury shares were held as a result of the purchase of treasury sharesthe distributable reserves of the group were reduced by £14 million
• the foreign currency translation reserve is used to record exchange differences arising from the translation of the ﬁnancial statements of foreign subsidiaries and
joint ventures
• the revaluation reserve arose on the restatement of the assets and liabilities of the uk associate from historic cost to fair value at the time of the acquisition of the
outstanding 58 interest on 19 april 2006
• other reserves include £379 million arising from the scheme of arrangement undertaken on 14 october 2008 £65 million relating to merger reserves and £01 million
to the redemption of preference shares partly offset by £292 million arising from the scheme of arrangement undertaken in 2003
b on 14 october 2008 the group entered into a court approved scheme of arrangement as a result of the scheme of arrangement shares in regus group plc were
cancelled and shares in the new group holding company regus plc were issued on the basis of one regus plc share nominal value one pence for one share previously
held in regus group plc nominal value ﬁve pence as a result the shareholders of regus group plc became the shareholders of regus plc the transaction was
accounted for as a reverse acquisition and consequently the aggregate of the group reserves have been attributed to regus plc regus plc annual report and accounts 200845
notes to the accounts
1 authorisation of ﬁnancial statements
the group and company ﬁnancial statements for the year ended
31 december 2008 were authorised for issue by the board of
directors on 20 march 2009 and the balance sheets were signed
on the board’s behalf by mark dixon and stephen gleadle regus
plc sa is a public limited company incorporated in jersey and
registered and domiciled in luxembourg the company’s ordinary
shares are traded on the london stock exchange
the group ﬁnancial statements have been prepared and approved
by the directors in accordance with international financial reporting
standards as adopted by the eu “adopted ifrss” the company
is required to prepare its parent company ﬁnancial statements in
accordance with luxembourg gaap extracts from these are
presented on page 81
2 accounting policies
basis of preparation
the group ﬁnancial statements consolidate those of the parent
company and its subsidiaries together referred to as the “group”
and equity account the group’s interest in the associate and jointly
controlled entities the extract from the parent company ﬁnancial
statements presents information about the company as a separate
entity and not about its group
the accounting policies set out below have unless otherwise
stated been applied consistently to all periods presented in these
group ﬁnancial statements amendments to adopted ifrss issued
by the international accounting standards board iasb and the
international financial reporting interpretations committee ifric
with an effective date from 1 january 2008 did not have a material
effect on the group ﬁnancial statements
ifric 11 “ifrs 2 group and treasury share transactions” was
applicable for accounting periods commencing on or after 1 march
2007 the interpretation addresses how share based payment
should be accounted for within a group and therefore the adoption
of ifric 11 had no impact on the reported income or net assets
of the group
judgements made by the directors in the application of these
accounting policies that have signiﬁcant effect on the ﬁnancial
statements and estimates with a signiﬁcant risk of material
adjustment in the next year are discussed in note 31
the ﬁnancial statements are prepared on a historical cost basis
with the exception of certain ﬁnancial assets and liabilities that are
measured at fair value the ﬁnancial statements have also been
prepared on the basis that the group will continue as a going
concern for the foreseeable future further details on the group’s
ﬁnancial risks including liquidity and credit risk can be found in
note 23 to the accounts
the group and company ﬁnancial statements are presented in
pounds sterling and all values are in million pounds rounded to
one decimal place except where indicated otherwise
adopted ifrss not yet applied
the group did not adopt the following standards interpretations
and amendments to standards which were available for optional
early adoption and were relevant to the group
• ifrs 8 “operating segments” will be applicable for accounting
periods commencing on or after 1 january 2009 the standard
requires the disclosure of segmental information on the basis of
the components of an entity that management monitors in making
operating decisions therefore the adoption of ifrs 8 will have
no impact on the reported income or net assets of the group
• amendments to ifrs 1 and ias 27 “cost of an investment in a
subsidiary jointly controlled entity or associate” requires that all
dividends from a subsidiary jointly controlled entity or associate
should be recognised as income when the right to receive the
dividend is established
• amendments to ias 1 “presentation of financial statements
a revised presentation” will require the presentation of both
a statement of comprehensive income and a statement of
changes in equity as ﬁnancial statements
• amendments to ifrs 2 “share based payment vesting
conditions and cancellations” clariﬁes the nature of vesting
conditions as service conditions and performance conditions
all other conditions are nonvesting conditions
• improvements to ifrs 2007 contains 24 amendments that
result in accounting changes for presentation recognition or
measurement purposes
the adoption of any of the above standards or amendments
to standards is not expected to have a material impact on the
group’s ﬁnancial statements
basis of consolidation
subsidiaries are entities controlled by the group control exists
when the group has the power directly or indirectly to govern the
ﬁnancial and operating policies of an entity so as to obtain beneﬁts
from its activities in assessing control potential voting rights that
are currently exercisable or convertible are taken into account the
ﬁnancial statements of subsidiaries are included in the consolidated
ﬁnancial statements from the date that control commences
the results are consolidated until the date control ceases or the
subsidiary qualiﬁes as a disposal group at which point the assets
and liabilities are carried at the lower of fair value less costs to sell
and carrying value
the attributable results of those companies acquired or disposed
of during the year are included for the periods of ownership
associates are those entities in which the group has signiﬁcant
inﬂuence but not control over the ﬁnancial and operating policies
the consolidated ﬁnancial statements include the group’s share
of the total recognised income and expense of associates on an
equity accounted basis from the date that signiﬁcant inﬂuence
commences until the date that signiﬁcant inﬂuence ceases or
the associate qualiﬁes as a disposal group at which point the
investment is carried at the lower of fair value less costs to sell
and carrying value
joint ventures include jointly controlled entities that are those
entities over whose activities the group has joint control established
by contractual agreement the consolidated ﬁnancial statements
include the group’s share of the total recognised gains and losses
of jointly controlled entities on an equity accounted basis from the
date that joint control commences until the date that joint control
ceases or the jointly controlled entity qualiﬁes as a disposal group
at which point the investment is carried at the lower of fair value
less costs to sell and carrying value
financial statements notes to the accounts continued
financial statements
46wwwreguscom
when the group’s share of losses exceeds its interest in a
joint venture the group’s carrying amount is reduced to nil and
recognition of further losses is discontinued except to the extent
that the group has incurred legal or constructive obligations
or made payments on behalf of a joint venture
on 19 april 2006 the group acquired the remaining 58 of the
shares of the uk business that were not already owned by the
group as a result the group fully consolidated the uk business
from that date the acquisition was accounted for through the
purchase method and as a consequence the entire assets and
liabilities of the uk business were revalued to fair value the effect
of these adjustments on the 42 of the uk business already owned
was reﬂected in the revaluation reserve
on 14 october 2008 regus plc acquired the entire share capital
of regus group plc in exchange for the issue of new shares of
regus plc on the basis of one share in regus plc for one share
held previously in regus group plc at the date of the transaction
regus plc had nominal assets and liabilities and therefore the
transaction was accounted for as a reverse acquisition of regus plc
by regus group plc
consequently no fair value acquisition adjustments were required
and the aggregate of the group reserves have been attributed to
regus plc
goodwill
all business combinations are accounted for using the purchase
method goodwill represents the difference between the cost of
acquisition over the share of the fair value of identiﬁable assets
including intangible assets liabilities and contingent liabilities
of a subsidiary associate or jointly controlled entity at the date
of acquisition
business combinations that took place prior to the group’s
transition date to ifrs on 1 january 2004 have not been restated
under the requirements of ifrs
positive goodwill is stated at cost less any provision for impairment
in value an impairment test is carried out annually and in addition
whenever indicators exist that the carrying amount may not be
recoverable positive goodwill is allocated to cashgenerating units
for the purpose of impairment testing
impairment
the carrying amounts of the group’s assets other than deferred
tax assets are reviewed at each balance sheet date to determine
whether there is any indication of impairment if any such indication
exists the asset’s recoverable amount is estimated
for goodwill assets that have an indeﬁnite useful life and intangible
assets that are not yet available for use the recoverable amount
was estimated at 31 october 2008 and updated in february 2009
an impairment loss is recognised whenever the carrying amount
of an asset or its cashgenerating unit exceeds its recoverable
amount impairment losses are recognised in the income statement
impairment losses recognised in respect of cashgenerating units
are allocated ﬁrst to reduce the carrying amount of any goodwill
allocated to the cashgenerating unit and then to reduce the
carrying amount of the other assets in the unit on a pro rata basis
a cash generating unit is the smallest identiﬁable group of assets
that generates cash inﬂows that are largely independent of the
cash inﬂows from other assets or groups of assets
calculation of recoverable amount
the recoverable amount of relevant assets is the greater of their
fair value less costs to sell and value in use in assessing value in
use the estimated future cash ﬂows are discounted to their present
value using a pretax discount rate that reﬂects current market
assessments of the time value of money and the risks speciﬁc to
the asset for an asset that does not generate largely independent
cash inﬂows the recoverable amount is determined for the cash
generating unit to which the asset belongs
intangible assets
intangible assets acquired separately from the business are
capitalised at cost intangible assets acquired as part of an
acquisition of a business are capitalised separately from goodwill
if their fair value can be identiﬁed and measured reliably on
initial recognition
intangible assets are amortised on a straightline basis over
the estimated useful life of the assets as follows
brand – regus brand indeﬁnite life
brand – other acquired brands 20 years
computer software 3–5 years
customer lists 1–2 years
management agreements minimum duration of the contract
 customer lists recognised on the acquisition of the remaining 58 interest in the
uk business are amortised over four years
amortisation of intangible assets is expensed through administration
expenses in the income statement
leases
plant and equipment leases for which the group assumes
substantially all of the risks and rewards of ownership are classiﬁed
as ﬁnance leases all other leases including all of the group’s
property leases are categorised as operating leases
finance leases
plant and equipment acquired by way of a ﬁnance lease is
capitalised at the commencement of the lease at the lower of its
fair value and the present value of the minimum lease payments
at inception future payments under ﬁnance leases are included
in creditors net of any future ﬁnance charges minimum lease
payments are apportioned between the ﬁnance charge and
the reduction of the outstanding liability finance charges are
recognised in the income statement over the lease term so as
to produce a constant periodic rate of interest on the remaining
balance of the liability
operating leases
minimum lease payments under operating leases are recognised
in the income statement on a straightline basis over the lease term
lease incentives and rent free periods are included in the calculation
of minimum lease payments the commencement of the lease term
is the date from which the group is entitled to use the leased asset
2 accounting policies continued regus plc annual report and accounts 200847
the lease term is the noncancellable period of the lease together
with any further periods for which the group has the option to
continue to lease the asset and when at the inception of the lease
it is reasonably certain that the group will exercise that option
contingent rentals include rent increases based on future inﬂation
indices or nonguaranteed rental payments based on centre
turnover or proﬁtability and are excluded from the calculation
of minimum lease payments contingent rentals are recognised
in the income statement as they are incurred
nonrecurring items
nonrecurring items are those signiﬁcant items which are
separately disclosed by virtue of their size or incidence to
enable a full understanding of the group’s ﬁnancial performance
transactions which may give rise to nonrecurring items are
restructuring reorganisation costs and onerous commitments
property plant and equipment
property plant and equipment is stated at cost less accumulated
depreciation and any impairment in value
depreciation is calculated on a straightline basis over
the estimated useful life of the assets as follows
fixtures and ﬁttings over the shorter of the lease
term and 10 years
furniture 10 years
ofﬁce equipment and telephones 5 – 10 years
motor vehicles 4 years
computer hardware 3 – 5 years
revenue
revenue from the provision of services to customers is measured
at the fair value of consideration received or receivable excluding
sales taxes
workstations
workstation revenue is recognised when the provision of the
service is rendered amounts invoiced in advance are deferred
and recognised as revenue upon provision of the service
customer service income
service income including the rental of meeting rooms is recognised
as services are rendered in circumstances where regus acts as
an agent for the sale and purchase of goods to customers only
the commission fee earned is recognised as revenue
management and franchise fees
fees received for the provision of initial and subsequent services are
recognised as revenue as the services are rendered fees charged
for the use of continuing rights granted by the agreement or for other
services provided during the period of the agreement are recognised
as revenue as the services are provided or the rights used
membership card income
revenue from the sale of membership cards is deferred and
recognised over the period that the beneﬁts of the membership
card are provided
these categories represent all material sources of revenue
earned from the provision of global workplace solutions
employee beneﬁts
the group’s contributions to deﬁned contribution plans and other
paid and unpaid beneﬁts earned by employees are charged to the
income statement as incurred
share based payments
the share option programme entitles certain employees and
directors to acquire shares of the ultimate parent company
these awards are granted by the ultimate parent
the fair value of options granted is recognised as an employee
expense with a corresponding increase in equity the fair value is
measured at grant date and spread over the period during which
the employees become unconditionally entitled to the options the
fair value of the options granted is measured using the black scholes
valuation model or the monte carlo method taking into account the
terms and conditions upon which the options were granted
the amount recognised as an expense is adjusted to reﬂect the
actual number of share options that vest except where forfeiture
is due only to share prices not achieving the threshold for vesting
share appreciation rights cip are also granted by the company
to certain employees the fair value of the amount payable to the
employee is recognised as an expense with a corresponding
increase in equity the fair value is initially recognised at grant date
and spread over the period during which the employees become
unconditionally entitled to payment the fair value of the share
appreciation rights is measured based on the monte carlo valuation
model taking into account the terms and conditions upon which
the instruments were granted
the group also operates a value creation plan vcp which awards
entitlements to certain employees and directors of the group
these entitlements are convertible into options over ordinary shares
subject to the group’s share price reaching certain targets the fair
value of the amount payable to the employee is recognised as an
expense with a corresponding increase in equity the fair value is
initially recognised at the date of the award of the entitlements and
spread over the period during which the entitlements are convertible
into ordinary shares the fair value of the entitlements is based on
the monte carlo valuation model taking into account the terms
and conditions upon which the instruments were granted
taxation
tax on the proﬁt for the year comprises current and deferred tax
tax is recognised in the income statement except to the extent that
it relates to items recognised directly in equity in which case it is
recognised in equity
current tax is the expected tax payable on the taxable income for
the year using tax rates enacted or substantively enacted at the
balance sheet date and any adjustment to tax payable in respect
of previous years
deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for ﬁnancial reporting
purposes and the amounts used for taxation purposes the
following temporary differences are not provided for the initial
recognition of goodwill the initial recognition of assets and liabilities
that affect neither accounting nor taxable proﬁt other than in a
business combination and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
financial statements notes to the accounts continued
financial statements
48wwwreguscom
foreseeable future the amount of deferred tax provided is based
on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities using tax rates enacted
or substantively enacted at the balance sheet date
a deferred tax asset is recognised only to the extent that it is
probable that future taxable proﬁts will be available against which
the asset can be utilised
deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same
taxation authority and the group intends to settle its current tax
assets and liabilities on a net basis
provisions
a provision is recognised in the balance sheet when the group has
a present legal or constructive obligation as a result of a past event
that can be estimated reliably and it is probable that an outﬂow
of economic beneﬁts will be required to settle the obligation
restructuring provisions are made for direct expenditures of a
business reorganisation where the plans are sufﬁciently detailed
and well advanced and where the appropriate communication to
those affected has been undertaken at the balance sheet date
provision is made for onerous contracts to the extent that the
unavoidable costs of meeting the obligations under a contract
exceed the economic beneﬁts expected to be delivered discounted
using an appropriate weighted average cost of capital
foreign currencies
transactions in foreign currencies are recorded using the rate of
exchange ruling at the date of the transaction monetary assets
and liabilities denominated in foreign currencies are translated
using the closing rate of exchange at the balance sheet date
and the gains or losses on translation are taken to the income
statement nonmonetary assets and liabilities that are measured
in terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction the results and
cash ﬂows of overseas operations are translated using the average
rate for the period
assets and liabilities including goodwill and fair value adjustments
of overseas operations are translated using the closing rate with
all exchange differences arising on consolidation being recognised
in the foreign currency translation reserve exchange differences
are released to the income statement on disposal
under the transition requirements of ifrs cumulative translation
differences for all foreign operations have been set to zero at
1 january 2004
finance charges
interest charges and income are accounted for in the income
statement on an accruals basis financing transaction costs that
relate to ﬁnancial liabilities are charged to interest expense using
the effective interest rate method and are recognised within the
carrying value of the related ﬁnancial liability on the balance sheet
fees paid for the arrangement of credit facilities are recognised as
a prepayment and recognised through the ﬁnance expense over the
term of the facility in the event of a facility being drawn the relevant
unamortised portion of the fee is recognised within the carrying
value of the ﬁnancial liability and charged to the interest expense
using the effective interest rate method
where assets or liabilities on the group balance sheet are carried
at net present value the increase in the amount due to unwinding
the discount is recognised as a ﬁnance expense or ﬁnance income
as appropriate
interest bearing borrowings and other ﬁnancial liabilities
financial liabilities including interest bearing borrowings are
recognised initially at fair value less attributable transaction costs
subsequent to initial recognition ﬁnancial liabilities are stated at
amortised cost with any difference between cost and redemption
value being recognised in the income statement over the period
of the borrowings on an effective interest basis
the group derecognises ﬁnancial liabilities when the group’s
obligations are discharged cancelled or expire
financial liabilities are classiﬁed as ﬁnancial liabilities at fair value
through proﬁt or loss where the liability is either held for trading
or is designated as held at fair value through proﬁt or loss on initial
recognition they are stated at fair value with any resultant gain or
loss recognised in the income statement
financial assets
financial assets are classiﬁed as either at fair value through proﬁt
or loss held to maturity investments available for sale ﬁnancial
assets or loans and receivables the classiﬁcation depends on
the nature and purpose of the ﬁnancial assets and is determined
on initial recognition
trade and other receivables that have ﬁxed or determinable
payments and are not quoted in an active market are classiﬁed
as loans and receivables loans and receivables are measured at
amortised cost using the effective interest rate method less any
impairment interest income is recognised by applying the effective
interest rate except for shortterm receivables when recognition
would be immaterial
derivative ﬁnancial instruments
the group’s policy on the use of derivative ﬁnancial instruments can
be found in note 23 derivative ﬁnancial instruments are measured
initially at fair value and changes in the fair value are recognised
through proﬁt or loss unless the derivative ﬁnancial instrument has
been designated as a cash ﬂow hedge whereby the effective
portion of changes in the fair value is deferred in equity
cash and cash equivalents
cash and cash equivalents comprise cash at bank and in hand
and are subject to an insigniﬁcant risk of changes in value
foreign currency translation rates
at 31 december annual average
2008 2007 2008 2007
us dollar 145 200 184 201
euro 103 136 125 146
japanese yen 131 224 190 236
2 accounting policies continued regus plc annual report and accounts 200849
3 segmental analysis – statutory basis
segment information is presented in respect of the group’s geographical segments the group’s primary activity and only business
segment is the provision of global workplace solutions segment results assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis there is no intersegment trading management fees are in
consideration of subsidiaries’ use of group services including but not limited to intellectual property business development services
purchasing information technology sales and marketing ﬁnance and treasury human resources and legal services unallocated items
comprise mainly interest bearing loans borrowings and expenses and corporate assets and expenses segment capital expenditure is the
total cost incurred during the period to acquire segment assets that are expected to be used for more than one year the business is run
on a worldwide basis but managed through four principal geographical segments americas europe middle east and africa emea asia
paciﬁc and the united kingdom the united kingdom segment was added following the acquisition on 19 april 2006 of the remaining 58
of the share capital of the uk business the united kingdom segment does not include the group’s nontrading holding companies that
are based in the uk the emea segment does not include the group’s nontrading head ofﬁce and holding companies that are based in
luxembourg these are shown as unallocated the results of business centres in each of these regions form the basis for reporting
geographical results
americas emea asia paciﬁc united kingdom unallocated total
2008 2008 2008 2008 2008 2008
£m £m £m £m £m £m
revenue 4149 3192 1210 2221 – 10772
gross proﬁt centre contribution 1170 1112 375 400 – 3057
management fees – incomecharges 247 208 81 129 665 –
operating proﬁt 426 495 163 28 362 1474
share of profit of joint ventures 13 09 – 01 – 23
finance expense 68 68
finance income 63 63
proﬁt before tax 1492 1492
tax charge 343 343
proﬁt after tax – – – – 1149 1149
ebitda see note 4 934 822 323 312 292 2099
depreciation 237 115 77 129 04 562
amortisation 24 04 02 26 07 63
increase in provision for bad debts 18 21 – 16 – 55
share based payment – – – – 48 48
nonrecurring items – 06 – 25 53 72
assets 3994 1573 968 2268 3089 11892
liabilities 2060 2020 718 1432 859 7089
net assetsliabilities 1934 447 250 836 2230 4803
capital expenditure incurred 370 212 119 171 31 903
financial statements 3 segmental analysis – statutory basis continued
americas emea asia pacific united kingdom unallocated total
2007 2007 2007 2007 2007 2007
£m £m £m £m £m £m
revenue 3363 2403 777 2081 – 8624
gross proﬁt centre contribution 1027 803 275 414 – 2519
management fees – incomecharges 155 132 39 87 413 –
operating proﬁt 482 433 125 83 103 1226
share of profitloss of joint ventures 08 03 – 03 – 08
finance expense 81 81
finance income 41 41
proﬁt before tax 1194 1194
tax charge 158 158
proﬁt after tax – – – – 1036 1036
ebitda see note 4 828 638 209 312 305 1682
depreciation 161 70 43 116 02 392
amortisation 30 03 02 26 03 64
increase in provision for bad debts 14 11 02 04 – 31
share based payment – – – – 45 45
nonrecurring items 09 19 – 02 25 01
assets 2827 1019 624 2159 1986 8615
liabilities 1386 1360 446 1330 995 5517
net assetsliabilities 1441 341 178 829 991 3098
capital expenditure incurred 284 185 159 169 10 807
assets and liabilities within the unallocated category comprise ﬁnancing and tax items which are used across the group and cannot be
allocated to segments on a meaningful basis
4 reconciliation of operating proﬁt to adjusted ebit and ebitda
americas emea asia paciﬁc united kingdom other total
year ended 31 dec 2008 £m £m £m £m £m £m
operating proﬁt
excluding management charges 673 703 244 157 303 1474
adjusted ebit 673 703 244 157 303 1474
depreciation and amortisation 261 119 79 155 11 625
adjusted ebitda 934 822 323 312 292 2099
americas emea asia pacific united kingdom other total
year ended 31 dec 2007 £m £m £m £m £m £m
operating proﬁt
excluding management charges 637 565 164 170 310 1226
adjusted ebit 637 565 164 170 310 1226
depreciation and amortisation 191 73 45 142 05 456
adjusted ebitda 828 638 209 312 305 1682
note
adjusted ebit and ebitda excludes the results of the joint ventures
notes to the accounts continued
financial statements
50wwwreguscom regus plc annual report and accounts 200851
5 operating proﬁt
operating proﬁt has been arrived at after charging
2008 2007
£m £m
depreciation on property plant and equipment
owned assets 554 389
finance leases 08 03
provision for bad debts 55 31
amortisation of intangibles 63 64
loss on disposal of fixed assets 07 02
exchange differences recognised in the income statement – gainloss 82 11
rents payable in respect of operating leases
property 3369 2706
equipment 33 31
contingent rents paid 139 83
amortisation of uk acquisition fair value adjustments 52 57
staff costs see note 7 1964 1546
fees payable to the group’s auditor for the audit of the group accounts 02 02
fees payable to the group’s auditor and its associates for other services
the audit of the company’s subsidiaries pursuant to legislation 10 08
other services pursuant to legislation 04 –
due diligence on acquisitions included within cost of acquisitions – 01
other services 02 01
6 nonrecurring items
included in the results for the year to 31 december 2008 were nonrecurring items amounting to a charge of £72 million 2007 credit
of £01 million
2008 2007
£m £m
cost of sales
chargereversal of provision for onerous leases 15 10
15 10
administration expenses
costs related to the group reorganisation and scheme of arrangement 48 –
severance pay 09 04
provision for disputed supplier agreement – 23
reversal of provision for an indemnity claim with landlord – 18
57 09
72 01
the above items have been reported as nonrecurring items and are disclosed separately as they are relevant to the understanding
of the group’s ﬁnancial performance
financial statements notes to the accounts continued
financial statements
52wwwreguscom
7 staff costs and numbers
2008 2007
£m £m
the aggregate payroll costs were as follows
wages and salaries 1627 1286
social security 271 202
pension costs 18 13
share based payments 48 45
1964 1546
2008 2007
average full time average full time
equivalents equivalents
the average number of persons employed by the group including executive directors
analysed by category and geography was as follows
centre staff 4109 3613
sales staff 406 333
finance staff 351 299
other staff 576 485
5442 4730
americas 2307 2035
emea 1403 1246
united kingdom 802 775
asia pacific 798 595
corporate functions 132 79
5442 4730
details of directors’ emoluments and interests are given in the remuneration report on pages 33 to 39
8 net ﬁnance expense
2008 2007
£m £m
interest payable and similar charges on bank loans 35 44
interest payable and similar charges on ﬁnance leases 02 02
total interest expense 37 46
deferred financing fees 06 05
unwinding of discount rates 25 30
total ﬁnance expense 68 81
total interest income 53 34
unwinding of discount rates 10 07
total ﬁnance income 63 41
net ﬁnance expense 05 40
deferred ﬁnancing fees relate to loan arrangement costs and facility fees on the £150 million senior credit facilities signed in march and
april 2006 regus plc annual report and accounts 200853
9 taxation
a analysis of charge in the year
2008 2007
£m £m
current taxation
corporate income tax 666 230
previously unrecognised tax losses and temporary differences 112 08
under provision in respect of prior years 19 01
total current taxation 573 223
deferred taxation
origination and reversal of temporary differences 199 227
previously unrecognised tax losses and temporary differences 44 276
underover provision in respect of prior years 13 19
impact of rate changes – 03
total deferred taxation 230 65
tax charge on proﬁt 343 158
b reconciliation of taxation charge
2008 2007
£m  £m 
proﬁt before tax 1492 1194
tax on proﬁt at 285 2007 30 425 285 358 300
tax effects of
expenses not deductible for tax purposes 330 221 77 64
items not chargeable for tax purposes 37 25 45 37
recognition of previously unrecognised deferred tax assets 156 104 284 238
movements in temporary differences in the year not
recognised in deferred tax 12 08 33 27
other movements in temporary differences 254 170 ––
adjustment to tax charge in respect of previous years 32 21 18 15
differences in tax rates on overseas earnings 09 06 37 31
343 230 158 132
the applicable tax rate is determined based on the tax rate in the uk which was the corporate tax rate applicable in the country of domicile
of the parent company of the group from the beginning of the ﬁnancial year until 14 october 2008 the tax rate in the uk reduced from
300 to 280 on 1 april 2008 and the reconciliation for 2008 has been included at the effective uk rate for the year of 285 from
14 october 2008 when the parent company of the group became regus plc the country of domicile became luxembourg where the
corporate tax rate is 29
c factors that may affect the future tax charge
unrecognised tax losses to carry forward against certain future overseas corporation tax liabilities have the following expiration dates
2008 2007
£m £m
2008 – 06
2009 03 09
2010 02 01
2011 10 13
2012 46 40
2013 12 04
2014 11 02
2015 and later 278 220
362 295
available indeﬁnitely 564 553
tax losses available to carry forward 926 848
amount of tax losses recognised in the deferred tax asset 431 768
total tax losses available to carry forward 1357 1616
financial statements notes to the accounts continued
financial statements
54wwwreguscom
9 taxation continued
the following deferred tax assets have not been recognised due to uncertainties over recoverability
2008 2007
£m £m
intangibles 3256 –
accelerated capital allowances 06 06
tax losses 272 281
short term timing differences 49 86
3583 373
d corporation tax
2008 2007
£m £m
corporation tax payable 617 332
corporation tax receivable 83 51
e deferred taxation
the movement in deferred tax is analysed below
short term
property plant temporary
intangibles and equipment tax losses rent differences total
£m £m £m £m £m £m
deferred tax asset
at 1 january 2007 231 129 321 81 61 361
current year movement 25 45 54 45 35 46
prior year movement – 14 – 01 43 30
deferred tax on share options recognised
directly in reserves – – – – 01 01
acquisitions 01 – 06 – 01 06
transfers 52 08 10 06 50 26
exchange movement 05 – 02 01 04 –
at 1 january 2008 200 168 281 134 85 468
current year movement 214 12 148 139 38 231
prior year movement 10 44 13 81 44 16
transfers 03 02 – 01 01 05
exchange movement 68 48 77 29 16 102
at 31 december 2008 61 250 197 222 182 790
deferred tax liability
at 1 january 2007 – 03 – 01 13 17
current year movement 10 02 02 01 07 –
prior year movement – 10 12 – 33 11
acquisitions – – – – 10 10
transfers 54 08 10 06 52 26
at 1 january 2008 44 03 – 06 11 64
current year movement 05 02 01 01 03 12
prior year movement – 10 – 06 08 04
transfers 04 02 – 01 01 06
at 31 december 2008 43 13 01 – 01 54
deferred tax assets recognised on short term temporary differences consist predominantly of provisions deductible when paid and share
based payments deferred tax assets have been recognised in excess of deferred tax liabilities on the basis that there are forecast taxable
proﬁts in the entities concerned
at the balance sheet date the temporary difference arising from unmerited earnings of overseas subsidiaries was £502 million 2007
£390 million it is considered that no signiﬁcant tax liability would arise should these reserves be remitted due to available overseas
tax credits regus plc annual report and accounts 200855
10 earnings per ordinary share basic and diluted
2008 2007
profit attributable to equity shareholders of the parent £1139m £1031m
weighted average number of shares outstanding during the year 950319978 980961569
average market price of one share during the year 741p 1256p
weighted average number of shares under option during the year 6356625 6995284
exercise price for shares under option during the year 6064p 6047p
proﬁt earnings per share
2008 2007 2008 2007
£m £m pence pence
basic and diluted profit for the year attributable to shareholders
and basic earnings per share 1139 1031 120 105
diluted earnings per share 118 104
weighted average number of shares for basic eps number 950319978 980961569
weighted average number of shares under option during the year 6356625 6995284
weighted average number of shares that would have been issued
at average market price 5203468 3367657
weighted average number of awards under the cip and ltip 12362709 2997134
weighted average number of shares for diluted eps number 963835844 987586330
options are considered dilutive when they would result in the issue of ordinary shares for less than the market price of ordinary shares
in the period the amount of the dilution is taken to be the average market price of shares during the period minus the issue price
the number of awards granted under the 2008 cip is an indicative number based on the yearend share price
11 dividends
2008 2007
dividends per regus plc ordinary share proposed 2007 regus group plc ordinary share 12p 10p
interim dividends per regus group plc ordinary share declared and paid during the year 06p –
dividends of £152 million were paid during the year 2007 £59 million the company has proposed to shareholders that a ﬁnal
dividend of 12p per share will be paid 2006 10p subject to shareholder approval it is expected that the dividend will be paid on
29 may 2009
financial statements notes to the accounts continued
financial statements
56wwwreguscom
12 goodwill
£m
cost
at 1 january 2007 2121
recognised on acquisition of subsidiaries 120
exchange differences 11
at 31 december 2007 2230
at 1 january 2008 2230
recognised on acquisition of subsidiaries 37
exchange differences 478
at 31 december 2008 2745
net book value
at 1 january 2008 2230
at 31 december 2008 2745
cashgenerating units comprising individual business centres are grouped by country of operation for the purpose of carrying out
impairment reviews of noncurrent assets as this is the lowest level at which goodwill can be assessed goodwill acquired through
business combinations is held at a country level and is subject to impairment reviews based on the cash ﬂows of these cashgenerating
units the goodwill attributable to the reportable business segments is as follows
2008 2007
£m £m
carrying amount of goodwill included within the americas business segment 1686 1236
carrying amount of goodwill included within the emea business segment 50 31
carrying amount of goodwill included within the asia pacific business segment 106 77
carrying amount of goodwill included within the uk business segment 903 886
2745 2230
the carrying value of goodwill and indeﬁnite life intangibles allocated to two cashgenerating units the usa and uk is material relative to
the total carrying value comprising 90 of the total the remaining 10 of the carrying value is allocated to a further 23 countries 23 cash
generating units the goodwill and indeﬁnite life intangibles allocated to the usa and the uk cashgenerating units is set out below
goodwill intangible assets 2008 2007
£m £m £m £m
usa 1561 – 1561 1129
uk 903 112 1015 998
other cashgenerating units 281 – 281 215
2745 112 2857 2342
the indeﬁnite life intangible asset relates to the brand value arising from the acquisition of the remaining 58 of the uk business in
the year ended 31 december 2006 see note 13
the recoverable amount of each of the cashgenerating units above has been determined based on their value in use calculated as
the present value of future cash ﬂows attributable to the unit
the value in use for each cashgenerating unit has been determined using a model which derives the individual value in use for each
unit from the value in use of the group as a whole although the model includes budgets and forecasts prepared by management it also
reﬂects external factors such as capital market risk pricing as reﬂected in the market capitalisation of the group and prevailing tax rates
which have been used to determine the riskadjusted discount rate for the group as the model reﬂects current market risk factors
management believe that the the actual performance of the business is more likely than not to exceed the projections used in the value
in use model in the medium to long term however as described below in the event that trading conditions deteriorate beyond the
assumptions used in the projections it is also possible that impairment charges could arise in future periods regus plc annual report and accounts 200857
the following key assumptions have been used in calculating value in use for each group of cashgenerating units
• future cash ﬂows are based on budgets for 2009 approved by the board and have been adjusted for speciﬁc risks and uncertainties
identiﬁed for each cashgenerating unit the model excludes cost savings and restructurings that are anticipated but had not been
committed to at the date of the determination of the value in use thereafter forecasts have been prepared by management for a
further four years that reﬂect a steady growth rate of 3 and an unchanged underlying gross margin before adjusting for the effect of an
anticipated modest recovery in global economic conditions from 2011 this compared to forecasts used in the model in the year ended
31 december 2007 that projected improving margins throughout the ﬁrst ﬁve years of the model with steady growth thereafter therefore
the current cash ﬂow projections take a more cautious approach than the projections used in 2007 these forecasts exclude the impact
of both organic and acquisitive growth expected to take place in future periods as a result gross margins and real operating proﬁts at
the end of the ﬁve year period remain either at or below the levels achieved in the year ended 31 december 2008 management consider
these projections to be a cautious projection of margins expected at the midcycle position reﬂecting the current uncertain global
economic conditions cash ﬂows beyond 2013 have been extrapolated using a 2 growth rate which does not exceed the long
term growth rate for any of the markets in which the relevant cashgenerating units operate
• a terminal value is included in the assessment reﬂecting the group’s expectation that it will continue to operate in these markets and
the long term nature of the businesses
• a country speciﬁc pretax discount rate was applied to the future pretax cash ﬂows for each cashgenerating unit based on an
underlying posttax discount rate for the group the pretax rate therefore reﬂects current market assessments of the group as a whole
and is adjusted for risks speciﬁc to such businesses in each country the group posttax rate used as the base for the pretax discount
rate was 16 200712 the increase compared to the prior year reﬂected an increase in the market risk adjustment caused by the
current market capitalisation of the group the underlying weighted average cost of capital for the group before the market risk
adjustment was unchanged from 2007 at 9
the trading conditions in which the group operates are subject to competitive and economic pressures that can have a material effect on
the operating performance of the business current market conditions are more challenging for the group and the current global conditions
make forecasting medium term cash ﬂows more difﬁcult than is traditionally the case the forecast cash ﬂows used to derive the value
in use are sensitive to changes in revenues driven by changes in prices occupancy or a combination of both costs and discount rates
including the market assessment of the risks of the group reﬂected in the group’s market capitalisation actual conditions could result
in either better or worse cash ﬂows than included in the value in use calculation should current economic conditions prove to be more
severe or more prolonged than currently expected this would adversely impact the forecast cash ﬂows and could result in impairments
to goodwill and indeﬁnite life intangible assets in future periods it is not possible to predict the extent of such possible impairments
foreseeable events are unlikely to result in a change in the projections of such a signiﬁcant nature so as to result in most cashgenerating
units’ carrying amount exceeding the recoverable amount for the usa and uk cashgenerating units a reasonably possible change in
the key assumptions used to determine the cashgenerating unit’s recoverable amount could cause the unit’s carrying amount to exceed
its recoverable amount
for the usa the goodwill in this cashgenerating unit arose on acquisitions completed since 2004 – principally the acquisition of hq
global workplaces in 2004 the recoverable amount exceeded its carrying amount by 51 million and therefore no impairment was
necessary at 31 december 2008 the main assumptions on which the forecast cash ﬂows were based included the impact of the
economic downturn in the short term on revenues and margins the midcycle revenue achieved in 2013 prior to the application of the
longrun growth rate of 2 and the discount rate used the model assumes a decrease in gross margins in 2009 and 2010 from 28
in 2008 to 20 and a fall in operating proﬁts from 103 million in 2008 to 40 million in 2009 a further fall in gross margins in 2009 and
2010 by ﬁve points to 15 equating to an operating proﬁt of 8 million with recovery to a gross margin of 22 in 2011 would result in the
recoverable amount being equal to the carrying amount the model assumes a midcycle gross margin in 2013 of 23 and an operating
proﬁt of 717 million a reduction to 21 and 547 million would result in the recoverable amount being equal to the carrying amount
the cash ﬂows have been discounted using a posttax discount rate of 15 pretax 18 2007 20 the discount rate used is lower
than the risk adjusted rate for the group of 16 reﬂecting the mature nature of the regus business in the usa and the competitive
environment an increase in the pretax discount rate used from 18 to 22 would result in its recoverable amount being equal to
its carrying amount
for the uk the goodwill in this cashgenerating unit arose on acquisitions completed since 2006 – principally the acquisition of the
remaining 58 of the uk business in 2006 the recoverable amount exceeded its carrying amount by £18 million and therefore no
impairment was necessary at 31 december 2008 the main assumptions on which the forecast cash ﬂows were based included the
impact of the economic downturn in the short term on revenues and margins the midcycle revenue achieved in 2013 prior to the
application of the longrun growth rate and the discount rate used the model assumes a decrease in gross margins in 2009 and 2010
from 19 in 2008 to 15 and a fall in underlying operating proﬁts from £184 million in 2008 to £116 million in 2009 a further fall in gross
margins in 2009 and 2010 by four points to 11 equating to an operating proﬁt of £36 million with recovery to a gross margin of 17 in
2011 would result in the recoverable amount being equal to the carrying amount the model assumes a midcycle gross margin in 2013 of
18 and an operating proﬁt of £217 million a reduction to 16 and £157 million would result in the recoverable amount being equal to
the carrying amount the cash ﬂows have been discounted using a posttax discount rate of 16 pretax 19 2007 17 the discount
rate used is in line with the riskadjusted rate for the group reﬂecting the mature nature of the regus business in the uk and the greater
degree of competition in the market an increase in the pretax discount rate used from 19 to 22 would result in its recoverable
amount being equal to its carrying amount
there is no goodwill relating to the group’s joint ventures
financial statements notes to the accounts continued
financial statements
58wwwreguscom
13 other intangible assets
brand customer lists software total
£m £m £m £m
cost
at 1 january 2007 448 131 61 640
additions at cost – – 15 15
acquisition of subsidiaries – 10 – 10
disposals – – 01 01
reclassification – – 03 03
exchange rate movements 07 01 01 07
at 31 december 2007 441 140 79 660
at 1 january 2008 441 140 79 660
additions at cost – – 26 26
acquisition of subsidiaries – 22 – 22
disposals – – 05 05
exchange rate movements 128 17 23 168
at 31 december 2008 569 179 123 871
amortisation
at 1 january 2007 41 42 47 130
charge for the year 16 35 13 64
disposals – – 01 01
exchange rate movements 02 – – 02
at 31 december 2007 55 77 59 191
at 1 january 2008 55 77 59 191
charge for year 19 30 14 63
disposals – – 05 05
exchange rate movements 28 15 21 64
at 31 december 2008 102 122 89 313
net book value
at 31 december 2008 467 57 34 558
at 31 december 2007 386 63 20 469
included with the brand value is £112 million relating to the acquisition of the remaining 58 of the uk business in the year ended
31 december 2006 the regus brand acquired in this transaction is assumed to have an indeﬁnite useful life due to the fact that the
value of the brand is intrinsically linked to the continuing operation of the group
as a result of the regus brand acquired with the uk business having an indeﬁnite useful life no amortisation is charged but the carrying
value is assessed for impairment on an annual basis the brand was tested at the balance sheet date against the recoverable amount
of the uk business segment at the same time as the goodwill arising on the acquisition of the uk business see note 12 regus plc annual report and accounts 200859
14 property plant and equipment
furniture fittings
and motor vehicles computers total
£m £m £m
cost
at 1 january 2007 2923 171 3094
additions 829 61 890
acquisition of subsidiaries 57 – 57
disposals 53 07 60
reclassifications – 03 03
exchange rate movements 98 07 105
at 31 december 2007 3854 229 4083
at 1 january 2008 3854 229 4083
additions 820 75 895
acquisition of subsidiaries 54 – 54
disposals 106 16 122
reclassifications 04 04 –
exchange rate movements 1260 87 1347
at 31 december 2008 5878 379 6257
accumulated depreciation
at 1 january 2007 1698 124 1822
charge for the year 360 32 392
disposals 47 08 55
exchange rate movements 71 06 77
at 31 december 2007 2082 154 2236
at 1 january 2008 2082 154 2236
charge for the year 507 55 562
disposals 91 15 106
exchange rate movements 729 56 785
at 31 december 2008 3227 250 3477
net book value
at 31 december 2008 2651 129 2780
at 31 december 2007 1772 75 1847
additions include £18 million in respect of assets acquired under ﬁnance leases 2007 £01 million additions also include £nil million
2007 £97 million of ﬁxed assets contributed by landlords
the net book value of furniture ﬁttings and motor vehicles includes amounts held under ﬁnance leases as follows
2008 2007
£m £m
cost 175 121
accumulated depreciation 121 89
net book value 54 32
financial statements notes to the accounts continued
financial statements
60wwwreguscom
15 other long term receivables
2008 2007
£m £m
deposits held by landlords against rent obligations 293 115
amounts owed by joint ventures 37 72
prepayments and accrued income 53 54
383 241
16 trade and other receivables
2008 2007
£m £m
trade receivables 1155 864
amounts owed by joint ventures 22 17
other receivables 131 121
deposits held by landlords against rent obligations 180 187
prepayments and accrued income 680 560
vat recoverable 150 115
2318 1864
17 trade and other payables
2008 2007
£m £m
trade payables 471 372
other tax and social security 201 198
deferred landlord contributions 113 151
amounts owed to joint ventures 10 01
rent accruals 316 186
other accruals 912 663
other creditors 125 118
total current 2148 1689
2008 2007
£m £m
accruals and deferred income 398 122
rent accruals 580 493
other creditors 20 09
total noncurrent 998 624
18 borrowings
the group’s total loan and borrowing position at 31 december 2008 and at 31 december 2007 had the following maturity proﬁles
bank and other loans
2008 2007
£m £m
repayments falling due as follows
amounts falling due after more than one year
in more than one year but not more than two years 02 121
in more than two years but not more than five years – 124
in more than ﬁve years – –
total noncurrent 02 245
total current 51 155
total bank and other loans 53 400 regus plc annual report and accounts 200861
obligations under ﬁnance leases
the maturity of the group’s ﬁnance obligations is as follows
2008 2007
£m £m
amounts payable
within one year or on demand 15 09
in more than one year but not more than two years 12 06
in more than two years but not more than five years 06 02
in more than ﬁve years – –
33 17
less ﬁnance charges allocated to future periods 03 02
present value of future minimum lease payments 30 15
total current 13 08
total noncurrent 17 07
30 15
19 provisions for liabilities and charges
2008 2007
onerous onerous
leases and leases and
closures other total closures other total
£m £m £m £m £m £m
at 1 january 69 39 108 96 52 148
provided in the period 46 – 46 20 29 49
utilised in the period 27 29 56 20 – 20
provisions released 05 – 05 29 42 71
exchange differences 07 05 12 02 – 02
at 31 december 90 15 105 69 39 108
analysed between
current 20 – 20 05 29 34
noncurrent 70 15 85 64 10 74
90 15 105 69 39 108
provisions for onerous leases and closure costs relate to the estimated future costs on centre closures and onerous property leases
the maximum period over which the provisions are expected to be utilised expires by 31 december 2016 other provisions include the
estimated costs of claims against the group outstanding at the year end which due to their nature the maximum period over which they
are expected to be utilised is uncertain
financial statements notes to the accounts continued
financial statements
62wwwreguscom
20 investments in joint ventures and associate
provision for deficit investments in
in joint ventures joint ventures total
£m £m £m
at 1 january 2007 27 09 18
additions 01 02 03
share of profit 03 05 08
exchange rate movements 02 – 02
at 31 december 2007 21 16 05
at 1 january 2008 21 16 05
dividends received from joint ventures – 10 10
share of profit 16 27 43
exchange rate movements 05 07 02
at 31 december 2008 10 40 30
share of profit 16 27 43
amounts written off on loans owed from joint ventures 20 – 20
recognised as share of profit from joint ventures in the income statement 04 27 23
ownership
2008 2007
entity country  
joint ventures
regus algerie sarl algeria 60 60
park business centres limited england 50 50
regus jordan psc jordan 50 50
regus lebanon sarl lebanon 30 30
skyport international ing vastgoed beleggingen wtc1 netherlands 50 50
skyport international ing vastgoed beleggingen wtc2 netherlands 50 50
regus herengracht bv netherlands 50 50
regus al jaidah business centres llc qatar 25 25
regus istanbul is merkezi isletmeciligi as turkey 30 30
asya kozyatagi is merkezi isletmeciligi as turkey 50 –
regus abu dhabi business centres llc uae 49 49
regus equity business centers llc usa 50 50
the results of the joint ventures below are the full results of the joint ventures and do not represent the effective share
2008 2007
£m £m
income statement
revenue 367 294
expenses 279 278
profit before tax 88 16
tax 01 –
proﬁt after tax 87 16
net assetsliabilities
noncurrent assets 103 97
current assets 227 143
current liabilities 253 196
noncurrent liabilities 49 90
net assetsliabilities 28 46 regus plc annual report and accounts 200863
financial statements
21 share capital
ordinary equity share capital
2008 2007
nominal value nominal value
number ‘000 £m number ‘000 £m
authorised
ordinary 5p shares in regus group plc at
1 january 2008 and 14 october 2008 – – 1600000000 800
ordinary 1p shares in regus plc société anonyme
at 14 october 2008 and 31 december 2008 8000000000 800 – –
issued and fully paid up
ordinary 5p shares in regus group plc at 1 january 984791524 492 984791524 492
cancellation of ordinary 5p shares in regus group plc held in treasury 36571702 18 ––
ordinary shares in regus plc issued on formation of the company 2750000 –––
ordinary shares in regus group plc exchanged for ordinary shares in
regus plc under the group reorganisation 948219822 379 ––
ordinary 1p shares in regus plc société anonyme
at 14 october 2008 and 31 december 2008 950969822 95 – –
on the 14 october 2008 the group completed the establishment of regus plc as the new holding company of regus group plc by means
of a scheme of arrangement under sections 895 to 899 of the companies act 2006 as a result regus plc acquired all of the issued share
capital of regus group plc in exchange for the issue of shares in regus plc in the ratio of one regus plc share for one regus group plc share
treasury share transactions involving regus group plc shares between 1 january 2008 and 14 october 2008
in the period ended 14 october 2008 regus group plc repurchased 24624000 year ended 31 december 2007 12853001 of
its own shares in the open market and held these shares as treasury shares during the period none were utilised for the purposes
of employee share option exercises year ended 31 december 2007 905299 at 14 october 2008 36571702 31 december 2007
11947702 shares were held as treasury shares these shares were cancelled as part of the group reorganisation and scheme
of arrangement the holders of ordinary shares in regus group plc were entitled to receive such dividends as were declared by the
company and were entitled to one vote per share at meetings of the company treasury shares did not carry such rights until reissued
treasury share transactions involving regus plc shares between 14 october 2008 and 31 december 2008
in the period from 14 october 2008 to 31 december 2008 regus plc repurchased 3200000 of its own shares in the open market and
held these shares as treasury shares in addition regus plc acquired 2750000 shares that were issued on the foundation of regus plc
on 20 august 2008 and held these as treasury shares as at 20 march 2009 5950000 shares representing 06 of the issued share
capital were held as treasury shares nominal value £01 million the holders of ordinary shares in regus group plc were entitled to
receive such dividends as were declared by the company and were entitled to one vote per share at meetings of the company treasury
shares did not carry such rights until reissued
22 analysis of ﬁnancial resources
noncash exchange
at 1 jan 2008 cash flow changes movements at 31 dec 2008
£m £m £m £m £m
cash and cash equivalents 1429 451 – 315 2195
debt due within one year 155 116 03 09 51
debt due after one year 245 245 01 01 02
finance leases due within one year 08 06 07 04 13
finance leases due after one year 07 08 12 06 17
415 375 23 20 83
net ﬁnancial assets 1014 826 23 295 2112
cash and cash equivalents balances held by the group that are not available for use amounted to £141 million at 31 december 2008
december 2007 £144 million this cash serves as collateral against certain obligations of the group
cash not available for use at 31 december 2008 includes cash held on deposit of which £26 million december 2007 £21 million relates
to collateral against bank loans £93 million december 2007 £102 million relates to deposits which are held by banks and landlords
as security against lease commitments by regus operating companies and £22 million december 2007 £21 million held by the esop
trust these amounts are blocked and not available for use by the business
noncash changes comprise the amortisation of debt issue costs new ﬁnance leases entered into and movements in debt maturity notes to the accounts continued
financial statements
64wwwreguscom
23 financial instruments and ﬁnancial risk management
the objectives policies and strategies applied by the group with respect to ﬁnancial instruments and the management of capital are
determined at group level the group’s board maintains overall responsibility for the risk management strategy of the group and the
chief financial ofﬁcer is responsible for policy on a day to day basis the chief financial ofﬁcer and group treasurer review the group’s
risk management strategy and policies on an ongoing basis the board has delegated to the group audit committee the responsibility
for applying an effective system of internal control and compliance with the group’s risk management policies the audit committee is
supported by the head of risk management in performing this role
exposure to credit interest rate and currency risks arises in the normal course of business the principal ﬁnancial instruments used by
the group to ﬁnance its operations are cash and loans
going concern
the business review on pages 6 to 15 of the report and accounts sets out the group’s strategy and the factors that are likely to affect
the future performance and position of the business the financial review on pages 16 to 19 within the business review includes a review
of the trading performance ﬁnancial position and cash ﬂows of the group a feature of the group has been its strong cash ﬂows during the
year ended 31 december 2008 and its cash balance at that date although many countries that the group operates in are experiencing
increasingly difﬁcult economic conditions the directors believe that the group is taking the necessary actions and expect to strengthen the
current market leading position of the group
after making enquiries the directors have a reasonable expectation that the group has adequate resources to continue in operational
existence for the foreseeable future and accordingly continue to adopt the going concern basis in preparing the annual report
and accounts
following an internal review of the group’s facility arrangements in march 2009 and given the strength of the group’s cash position
the board approved the early surrender of the £100 million revolving credit facility the decision does not impact the judgement of the
directors that it is appropriate for the group to adopt the going concern basis in preparing these accounts
credit risk
credit risk could occur where a customer or counterparty defaults under the contractual terms of a ﬁnancial instrument and arises
principally in relation to customer contracts and the group’s cash deposits
a diversiﬁed customer base and requirement for customer deposits and payments in advance on workstation contracts which contribute
the majority of the group’s revenue minimise the group’s exposure to customer credit risk no single customer contributes a material
percentage of the group’s revenue the group’s policy is to provide against trade receivables when speciﬁc debts are judged to be
irrecoverable or where formal recovery procedures have commenced a provision is created where debts are more than three months
overdue which reﬂects the group’s historical experience of the likelihood of recoverability of these trade receivables these provisions
are reviewed on an ongoing basis to assess changes in the likelihood of recoverability
cash assets and derivative ﬁnancial instruments are only transacted with counterparties of sound credit ratings and management does
not expect any counterparty to fail to meet its obligations
the maximum exposure to credit risk for trade receivables at the reporting date analysed by geographic region is summarised below
2008 2007
£m £m
americas 284 199
emea 513 330
uk 216 220
asia paciﬁc 142 115
1155 864
all of the group’s trade receivables relate to customers purchasing workplace solutions and no individual customer has a material balance
owing as a trade receivable
the ageing of trade receivables at 31 december was
gross provision gross provision
2008 2008 2007 2007
£m £m £m £m
not overdue 1010 08 719 01
past due 0 – 30 days 104 01 102 –
past due 31 – 60 days 43 05 34 –
more than 60 days 74 62 46 36
1231 76 901 37 regus plc annual report and accounts 200865
during the year ended 31 december 2008 the group provided for an additional £55 million against potential bad debts 2007
£31 million and utilised £26 million directly against the balance of trade receivables 2007 £27 million
the group believes no provision is generally required for trade receivables that are not overdue as the group collects the majority
of its revenue in advance of the provision of ofﬁce services and requires deposits from its customers
liquidity risk
the group manages liquidity risk by reviewing its global cash position on a weekly basis and expects to have sufﬁcient liquidity to meet
its ﬁnancial obligations as they fall due in addition to free cash excluding blocked cash of £2054 million 2007 £1285 million the group
has an undrawn senior committed facility of £1000 million 2007 £1360 million
the group’s undrawn senior committed facility of £1000 million expires on 19 march 2011 subject to the group continuing to comply
with the covenants under the facility agreement these covenants include the ratio of net debt to ebitda the ratio of cash ﬂow to net
debt service including the net interest expense and scheduled debt repayments and the ratio of ebitdar to net interest and rental
charges the group does not anticipate that any of the covenants in the facility will be breached in the foreseeable future
in march 2009 the board approved the early surrender of the £100 million revolving credit facility following an internal review of the group’s
facility arrangements of the facility approximately £50 million had been set aside to support bank guarantees provided against obligations
of the group in order to continue to support these the group will deposit sufﬁcient funds with the guaranteeing banks which will reduce
cash available for use by an equivalent amount the directors do not believe that this decision will have an adverse impact on the group’s
liquidity given the strength of the group’s cash position
even though the group has net current liabilities the directors do not consider that this gives rise to a liquidity risk a large proportion
of the net current liabilities comprise balances such as deferred income acquisition related fair value adjustments and rent adjustments
that represent deferred items to be recognised in future periods through the income statement although the group holds customer
deposits of £1748 million which are refundable to customers these are spread across a large number of customers and no deposit
held for an individual customer is material therefore the directors do not believe the balance represents a liquidity risk
the net current liabilities of the group excluding deferred income were £01 million at 31 december 2008 2007 £178 million
it is considered appropriate to exclude deferred income in assessing the liquidity of the group as it reﬂects the future nonrefundable
contractual revenue of the group to be recognised as revenue in the following period
market risk
interest rate risk
in november 2008 the group repaid the remaining £24 million of debt that remained outstanding on the £50 million facility after the
scheduled repayment of £12 million in april 2008 this debt was held at variable interest rates
surplus cash balances are invested to achieve maximum interest returns on a day to day basis whenever possible and subject to
the operational requirements of the group cash is repatriated to the head ofﬁce and managed by the group treasury department
foreign currency risk
the group’s exposure to currency risk at a transactional level is minimal as the majority of day to day transactions of overseas subsidiaries
are carried out in local currency working capital balances are generally held in the functional currency of the overseas subsidiary and
therefore the impact of the retranslation of monetary assets and liabilities in the income statement of overseas subsidiaries is not
considered to have a material impact on the group
the majority of the group’s net assets are in pounds sterling us dollars and euros during the year ended 31 december 2008 the
group did not hedge the translation effect of exchange rate movements on the income statement
derivative ﬁnancial instruments
historically the group has occasionally used derivative ﬁnancial instruments to hedge its exposure to foreign currency and interest rate
ﬂuctuations although natural hedges limit the exposure to these risks at 31 december 2008 there were no derivative ﬁnancial instruments
outstanding 2007 none
no transactions of a speculative nature are undertaken
other market risks
the group does not hold any availableforsale equity securities and is therefore not subject to risks of changes in equity prices
capital management
the group’s parent company is listed on the uk stock exchange and the board’s policy is to maintain a strong capital base the
chief financial ofﬁcer monitors the diversity of the group’s major shareholders and further details of the group’s communication with
key investors can be found in the corporate governance report on pages 26 to 31 in 2006 the board approved the commencement
of a progressive dividend policy to enhance the total return to shareholders
financial statements notes to the accounts continued
financial statements
66wwwreguscom
23 financial instruments and ﬁnancial risk management continued
during the year ended 31 december 2008 the group completed a reorganisation that introduced a new holding company for the group
this was accounted for as a reverse acquisition in the group’s consolidated accounts and as a consequence the shareholders of regus
group plc became the shareholders of the new holding company regus plc this reorganisation had no impact on the group’s approach
to capital management
the group’s chief executive ofﬁcer mark dixon is the major shareholder of the company and both executive members of the board hold
shares in the company details of the directors’ shareholdings can be found in the report of the remuneration committee on pages 33 to
39 in addition the group operates various share option plans for key management and other senior employees
at the 2008 annual general meeting shareholders approved a resolution for the group to repurchase up to 10 of its issued share
capital in the market in june 2007 the group commenced a share buyback programme to meet both the need to issue shares under
the group’s share option programme and more generally as a means of returning cash to shareholders in the year ended 31 december
2008 24624000 regus group plc and 3200000 regus plc shares were repurchased in the market 2007 12853001 and none were
used to satisfy obligations under the share option programme 2007 905299
neither the company nor any of its subsidiaries are subject to externally imposed capital requirements
the group continued its share buyback programme during the year ended 31 december 2008 regus group plc declared an interim
dividend of 06p per share 2007 nil during the year ended 31 december 2008 and regus plc proposed a ﬁnal dividend of 12p per
share 2007 10p per share – an 800 increase on the 2007 dividend there were no other changes to the group’s approach to
capital management during the year
the group’s objective when managing capital equity and borrowings is to safeguard the group’s ability to continue as a going concern
and to maintain an optimal capital structure to reduce the cost of capital the board balances the higher returns possible with higher
levels of borrowings with the stability and security afforded by a sound capital position the group’s return on capital employed for the
year ended 31 december 2008 deﬁned as operating proﬁt divided by total shareholders’ equity was 307 2007 396 during the
year the group repaid the remaining outstanding balance of its principal secured ﬁnancing through an early repayment of £24 million
effective interest rates
in respect of ﬁnancial assets and ﬁnancial liabilities the following table indicates their effective interest rates at the balance sheet date
and the periods in which they mature
as at 31 december 2008
effective carrying contractual less than more than
interest rate value cash ﬂow 1 year 1–2 years 2–5 years 5 years
 £m £m £m £m £m £m
cash and cash equivalents 35 2195 2195 2195 – – –
trade and other receivables – 1984 2060 1743 163 154 –
finance lease liabilities 78 30 30 13 10 07 –
secured bank loans – 10 10 08 02 – –
other loans 132 43 43 43 – – –
customer deposits – 1748 1748 1748 – – –
trade and other payables – 1748 1748 1728 20 – –
net ﬁnancial assets 600 676 398 131 147 –
as at 31 december 2007
effective carrying contractual less than more than
interest rate value cash flow 1 year 1–2 years 2–5 years 5 years
 £m £m £m £m £m £m
cash and cash equivalents 40 1429 1429 1429 – – –
trade and other receivables – 1495 1550 1339 91 120 –
finance lease liabilities 163 15 15 08 05 02 –
secured bank loans 74 357 360 120 120 120 –
other loans 90 43 43 36 03 04 –
customer deposits – 1304 1304 1304 – – –
trade and other payables – 1341 1341 1332 09 – –
net ﬁnancial assets 136 84 32 46 06 – regus plc annual report and accounts 200867
sensitivity analysis
at 31 december 2008 it is estimated that a general increase of one percentage point in interest rates would increase the group’s proﬁt
before tax by approximately £15 million 2007 £04 million with a corresponding increase in total equity
it is estimated that a ﬁve percentage point weakening in the value of the us dollar against pounds sterling would have decreased the
group’s proﬁt before tax by approximately £34 million for the year ended 31 december 2008 2007 £31 million it is estimated that
a ﬁve percentage point weakening in the value of the euro against pounds sterling would have decreased the group’s proﬁt before tax
by approximately £11 million for the year ended 31 december 2008 2007 £10 million
it is estimated that a ﬁve percentage point weakening in the value of the us dollar against pounds sterling would have decreased the
group’s total equity by approximately £122 million for the year ended 31 december 2008 2007 £88 million it is estimated that a
ﬁve percentage point weakening in the value of the euro against pounds sterling would have increased the group’s total equity by
approximately £03 million for the year ended 31 december 2008 2007 £nil million
fair value disclosures
the fair values together with the carrying amounts shown in the balance sheet are as follows
2008 2007
carrying amount fair value carrying amount fair value
£m £m £m £m
cash and cash equivalents 2195 2195 1429 1429
trade and other receivables 1984 1984 1495 1495
finance lease liabilities 30 26 15 12
secured bank loans 10 10 357 357
other loans 43 43 43 43
customer deposits 1748 1748 1304 1304
trade and other payables 1748 1748 1341 1341
600 604 136 133
unrecognised gain 04 03
summary of methods and assumptions
trade and other receivablespayables and customer deposits
for receivablespayables with a remaining life of less than one year the notional amount is deemed to reﬂect the fair value
finance lease liabilities
the fair value of ﬁnance leases has been calculated by discounting future cash ﬂows at an appropriate discount rate which reﬂects current
market assessments and the risks speciﬁc to such liabilities
loans and overdrafts
the fair value of bank loans and other loans approximates to the carrying value because interest rates are at ﬂoating rates where payments
are reset to market rates at intervals of less than one year
committed borrowing facilities
principal available
£m £m
at 31 december 2008 1001 503
at 31 december 2007 1372 747
principal committed facilities include £1000 million 2007 £1360 million of senior credit facilities which the group entered into in 2006
of which £503 million 2007 £747 million is available
in march 2009 the board approved the early surrender of the £100 million revolving credit facility following an internal review of the group’s
facility arrangements of the facility approximately £50 million had been set aside to support bank guarantees provided against obligations
of the group in order to continue to support these the group will deposit sufﬁcient funds with the guaranteeing banks which reduce cash
available for use by an equivalent amount
financial statements notes to the accounts continued
financial statements
68wwwreguscom
24 share based payment
regus group share option plan
during 2004 the group established the regus group share option plan which entitles executive directors and certain employees
to share options in regus plc
the table below presents the options outstanding and their exercise price together with an analysis of the movements in the number
of options during the year
2008 2007
weighted weighted
number of average exercise number of average exercise
share options price per share share options price per share
at 1 january 8625287 8003 7261924 6037
granted during the year 4331641 8050 2855764 13522
lapsed during the year 562641 11197 587102 13848
exercised during the year – – 905299 5844
outstanding at 31 december 12394287 7875 8625287 8003
exercisable at 31 december 6356625 6064 6356625 6064
weighted average
numbers exercise price
date of grant granted per share lapsed exercised at 31 dec 2008 exercisable from expiry date
23072004 4106981 5700 – 736842 3370139 23072007 23072014
08092004 3884170 6475 729227 168457 2986486 08092007 08092014
21032007 2148258 13150 352087 – 1796171 21032010 21032017
20042007 707506 14650 511944 – 195562 20042010 20042017
18032008 4331641 8050 285712 – 4045929 18032011 18032018
total 15178556 8041 1878970 905299 12394287
the regus group also operates the regus group share option plan france which is included within the numbers for the regus share
option plan disclosed above the terms of the regus share option plan france are materially the same as the regus group share
option plan with the exception that they are only exercisable from the fourth anniversary of the date of grant assuming the performance
conditions have been met 648081 options awarded under the regus group share option plan france are included in the above table
and none were exercised during the year 2007 none
no options were exercised during the year ended 31 december 2008 the weighted average share price at the date of exercise for share
options exercised during the year ended 31 december 2007 was 13259p regus plc annual report and accounts 200869
financial statements
performance conditions for share options
the options awarded in 2004 included certain performance criteria that needed to be met in order for the share options to vest the share
options vested based on the basic earnings per share adjusted for nonrecurring items and goodwill and intangible amortisation that
exceeded the targets linked to the retail price index the basic earnings per share for performance purposes was 1p 100 of the
options awarded in july and september 2004 vested during 2007
the options awarded in march 2007 april 2007 and march 2008 have the same performance conditions as the cip awards granted in
the same year as described further below
the share options awarded in 2004 were valued using the black scholes model the share options awarded in 2007 and 2008 are
valued using the monte carlo method the inputs to the model are as follows
grant date
march 2008 april 2007 march 2007
share price on grant date 8050 1465p 1315p
exercise price 8050 1465p 1315p
expected volatility 3505 3508 3527
number of simulations 200000 200000 200000
number of companies 36 35 35
option life 3 years 3 years 3 years
expected life 5 years 5 years 5 years
expected dividend 119 040 044
fair value of option at time of grant 296p 554p 538p
risk free interest rate 407 536 516
the expected volatility is based on the historic volatility adjusted for any abnormal movement in share prices
regus plc coinvestment plan cip and long term incentive plan ltip
2008 2007
number of awards number of awards
at 1 january 11379224 7568472
cip awards granted during the year 7480307 4073967
lapsed during the year 512982 263215
outstanding at 31 december 18346549 11379224
plan date of grant numbers granted at 31 dec 2007 lapsed in year at 31 dec 2008 release date
ltip 03112005 3723235 3446678 158658 3288020 03112008
ltip 28092006 140184 140184 93456 46728 28092009
3863419 3586862 252114 3334748
cip investment shares 21032006 772196 772196 – 772196 21032009
cip matching shares 21032006 3088784 3088784 – 3088784 21032009
cip investment shares 21032007 833823 805306 – 805306 21032010
cip matching shares 21032007 3240144 3126076 – 3126076 21032010
cip investment shares 18032008 1557391 – 86956 1470435 18032011
cip matching shares 18032008 5922916 – 173912 5749004 18032011
15415254 7792362 260868 15011801
the fair value of services received in return for share based payments is measured by reference to the fair value of the equity instruments
granted no awards were exercisable at the year end
of the awards of investment and matching shares under the cip on 18 march 2008 2082024 were conditional share awards and
5398283 were nil cost options
the ltipcip awards are valued using the monte carlo method notes to the accounts continued
financial statements
70wwwreguscom
for november 2005 and march 2006 awards
adjusted eps p for the year ended 31 dec 2008
for september 2006 awards  increase in adjusted eps
for year ended 30 june 2009 compared to eps of prior year
24 share based payment continued
the inputs to the model are as follows
18032008 21032007 28092006 21032005 03112005
cip
b
cip
b
ltip
a
cip
b
ltip
a
share price on grant date 8050p 13150p 10700p 10725p 9225p
exercise price nil nil nil nil nil
number of simulations 200000 200000 60000 60000 60000
number of companies 36 35 29 29 29
award life 3 years 3 years 3 years 3 years 3 years
expected dividend 119 044 nil nil nil
fair value of award at time of grant 6121p 10305p 790p 7994p 6500p
risk free interest rate 386 534 438 416 447
a the ltip awards have release dates of 3 november 2008 and 28 september 2009 there is no expiry date and therefore remaining contractual life on the basis that
the awards release immediately the ltip nil cost options have vesting dates of 3 november 2008 and 28 september 2009 and expiry dates of 3 november 2015 and
28 september 2016 respectively the performance conditions for the ltip awards made on 3 november 2005 are based on the ﬁnancial results for the year ended
31 december 2008 and therefore no awards were released during the year ended 31 december 2008
b the cip awards have release dates of 21 march 2009 21 march 2010 and 18 march 2011 there is no expiry date and therefore remaining contractual life on the basis
that the awards release immediately the cip nil cost options have vesting dates of 21 march 2009 21 march 2010 and 18 march 2011 and expiry dates of 21 march
2016 21 march 2017 and 18 march 2018
the performance conditions for the grant of awards under the ltip and cip are set out in the following table
11p 12p 13p 14p
15 20 25 30
growth in free cash flow per share
10 6 13 19 25
15 13 25 38 50
20 19 38 56 75
25 25 50 75 100
 adjusted eps
it is recognised by the remuneration committee that the additional eps targets represent a highly challenging goal and consequently in
determining whether they have been met the committee will exercise its discretion the overall aim is that the relevant eps targets must
have been met on a run rate or underlying basis as such an adjusted measure of eps will be calculated designed to assess the underlying
performance of the business
while the remuneration committee reserves the right to adjust eps as it sees ﬁt at the time by way of example the following adjustments
are currently anticipated
• in a growth company such as regus costs are necessarily incurred in one year to drive proﬁts in future years as such it is important to
ensure management is not incentivised to cut back on these investments to meet eps targets in any one year accordingly those costs
incurred in the vesting year which it considers necessary to drive future growth will be excluded from the eps calculation these would
include inter alia the costs of the business development departments excess marketing expenditures and current year losses from
investing in new locations
• any oneoff or nonrecurring costs will be excluded
• it is expected that in the period between 2006 and 2008 the cash tax rate will rise as cumulative tax losses are utilised thereby increasing
progressively the challenge of achieving a 14p eps target this will then be further complicated by the need to recognise deferred tax
assets as the business strengthens reducing the accounting rate of tax in one year and increasing it in the next to provide greater clarity
and incentive to management eps will be calculated based upon the cash tax rate up to a maximum of 30
• the remuneration committee is of the opinion that the eps and free cash ﬂow performance targets are a transparent and accurate
measure of the company’s performance at this time and are the key corporate metrics for driving longterm shareholder value in
addition the tsr condition will ensure that executives are encouraged to focus on ensuring that the company’s return to shareholders
is competitive compared to comparable companies regus plc annual report and accounts 200871
the performance conditions for awards under the matching share element of the cip made in march 2007 are set out below
 increase in published eps for the year ended 31 december 2009
compared to the published eps for the prior year 15 20 25 30
growth in free cash flow per share over 3 years
10 6 13 19 25
15 13 25 38 50
20 19 38 56 75
25 25 50 75 100
 denotes the  of the award which will be released at the end of the performance period
in addition no awards will be released unless the company’s tsr is at least at the median when compared against that of the companies
comprising the ftse 350 support services sector at the date of the grant subject to the discretion of the remuneration committee
details of the performance conditions for the awards made in march 2008 can be found in the report of the remuneration committee
on pages 35 to 36
as mentioned above awards under the cip in respect of the bonus paid for the year ended 31 december 2008 will be made subsequent
to the publication of this report however the maximum number of awards granted will be based on the price of an ordinary share at the
time of grant and the monetary value will not exceed 50 of basic salary full details of the levels of award and performance conditions
will be disclosed in the committee’s remuneration report for the year ending 31 december 2009
regus plc value creation plan
2008 2007
number of number of
entitlements entitlements
at 1 january – –
vcp entitlements awarded during the year 22500000 –
lapsed during the year 1500000 –
outstanding at 31 december 21000000 –
plan date of award numbers awarded at 31 dec 2007 lapsed in year at 31 dec 2008 measurement date
vcp tier 1 awards 20052008 3500000 – – 3500000 –
vcp tier 2 awards 20052008 6000000 – – 6000000 –
vcp tier 3 awards 20052008 10000000 – – 10000000 –
vcp tier 4 awards 20052008 3000000 – 1500000 1500000 –
31032010
22500000 – 1500000 21000000 31032013
the fair value of services received in return for share based payments are measured by reference to the fair value of the equity instruments
granted no awards were exercisable at the year end
the vcp awards are valued using the monte carlo method
the inputs to the model are as follows
20052008
vcp
share price on award date 10700p
exercise price 10700p
number of simulations 200000
number of companies 36
award life 186 – 486 yrs
expected dividend 093
fair value of award at time of grant £13 million
risk free interest rate 471
financial statements notes to the accounts continued
financial statements
72wwwreguscom
24 share based payment continued
the vcp awards have measurement dates of 31 march 2010 31 march 2011 31 march 2012 and 31 march 2013 if at the measurement
dates the share price targets have been met the eligible vcp entitlements will be converted into options over ordinary shares the options
are not subject to further performance conditions but are exercisable on the following basis
in year ended in year ended in year ended in year ended
31122010 31122011 31122012 31122013
percentage of entitlements converted to options at the 31032010
measurement date that can be exercised 40 20 20 20
percentage of entitlements converted to options at the 31032011
measurement date that can be exercised – 40 30 30
percentage of entitlements converted to options at the 31032012
measurement date that can be exercised – – 40 60
percentage of entitlements converted to options at the 31032013
measurement date that can be exercised – – – 100
the performance conditions of the vcp entitlements are as follows
number of shares earned less those earned at any prior measurement date
tier 1 awards tier 2 awards tier 3 awards tier 4 awards
first measurement date 31032010 share price less than £260 – – – –
share price is £260 or
more but less than £350 2500000 4285714 7142857 2142857
share price is £350 or more 3500000 6000000 10000000 3000000
second measurement date 31032011 share price less than £260 – – – –
share price is £260 or
more but less than £350 1800000 3085714 5142857 1542857
share price is £350 or
more but less than £450 2500000 4285714 7142857 2142857
share price is £450 or more 3500000 6000000 10000000 3000000
third measurement date 31032012 share price less than £260 – – – –
share price is £260 or
more but less than £350 1200000 2057143 3428571 1028571
share price is £350 or
more but less than £450 1800000 3085714 5142857 1542857
share price is £450 or more 2500000 4285714 7142857 2142857
fourth measurement date 31032013 share price less than £260 – – – –
share price is £260 or
more but less than £350 600000 1028571 1714286 514285
share price is £350 or
more but less than £450 1200000 2057143 3428571 1028571
share price is £450 or more 1800000 3085714 5142857 1542857
where the share price targets have not been met by 31 march 2013 then the vcp entitlement will not convert no ordinary shares will be
earned and no vcp options will be granted under the vcp  regus plc annual report and accounts 200873
25 acquisitions
details of all acquisitions made during 2008 are set out below all of the acquired operations are providers of outsourced workplace
solutions where no equity was acquired the group acquired all the operating assets and liabilities of the related business excluding cash
all acquisitions made in the year have been aggregated as no single acquisition is material these transactions have been accounted for
using the purchase method of accounting
purchase
consideration percentage of
including costs equity and voting date of
region £m rights acquired acquisition
equity acquisitions
stonemartin corporate centres limited uk 29 100 30112008
business and net asset acquisitions
stonemartin uk 62 na 02042008
91
in addition to the above a further £46 million of purchase consideration including costs was paid to complete one further equity
acquisition and 12 business and net asset acquisitions
fair value
book value adjustments fair value
£m £m £m
net assets acquired
intangible assets

– 22 22
property plant and equipment 46 08 54
other noncurrent assets 03 01 04
cash 16 – 16
other current assets 09 08 17
current liabilities 15 01 16
noncurrent liabilities – – –
59 38 97
total consideration
cash 133
deferred consideration –
directly attributable costs 04
137
goodwill 40
 intangible assets comprise the fair value of customer contracts or in the case of managed centres the fair value of the management contract acquired
there was no contingent consideration arising on the above acquisitions
if the above acquisitions had occurred on 1 january 2008 the revenue and net retained proﬁt arising from these acquisitions would have
been £198 million and £34 million respectively in the year these acquisitions contributed revenue of £124 million and a net retained proﬁt
of £14 million
the goodwill arising on the above acquisitions reﬂects the anticipated future beneﬁts regus can obtain from operating the businesses
more efﬁciently primarily through increasing occupancy and the addition of value adding services
adjustments to estimated deferred consideration for 2006 acquisitions
estimated deferred consideration arising on acquisitions completed in the year ended 31 december 2006 was reduced by £03 million
resulting in a reduction in goodwill of £03 million
financial statements notes to the accounts continued
financial statements
74wwwreguscom
25 acquisitions continued
details of all acquisitions completed in the year ended 31 december 2007 are set out below
details of all acquisitions made during 2007 are set out in the following table all of the acquired operations are providers of outsourced
workplace solutions where no equity was acquired the group acquired all the operating assets and liabilities of the related business
excluding cash
all acquisitions made in the year have been aggregated as no single acquisition is material these transactions have been accounted
for using the purchase method of accounting
purchase percentage of
consideration equity and voting date of
name region including costs rights acquired acquisition
equity acquisitions
insignia calgary americas 24 100 01112007
business and net asset acquisitions
interactive americas 67 na 13082007
91
in addition to the above a further £83 million of purchase consideration including costs was paid for two equity acquisitions and 18
business and net asset acquisitions
fair value
book value adjustments fair value
£m £m £m
net assets acquired
intangible assets – 10 10
property plant and equipment 54 03 57
other noncurrent assets 04 34 38
cash 08 – 08
other current assets 20 04 24
current liabilities 33 20 53
noncurrent liabilities 10 02 12
43 29 72
total consideration
cash 159
deferred consideration 06
directly attributable costs 09
174
goodwill 102
the above fair value adjustments include the value of acquired customer lists the fair value of the leasehold interests and related deferred
tax impacts
there was no contingent consideration arising on the above acquisitions that has not been recognised on the group balance sheet
if the above acquisitions had occurred on 1 january 2007 the revenue and net retained loss arising from these acquisitions would have
been £267 million and £01 million respectively in the year these acquisitions contributed revenue of £150 million and a net retained loss
of £04 million
the goodwill arising on the above acquisitions reﬂects the anticipated future beneﬁts regus can obtain from operating the businesses
more efﬁciently primarily through increasing occupancy and the addition of value adding services
adjustments to provisional fair values for 2006 and 2005 acquisitions
additional consideration of £18 million was paid in 2007 due to improved ﬁnancial performance of acquisitions under contractual earnout
provisions and additional acquisition costs this resulted in an increase in goodwill of £18 million regus plc annual report and accounts 200875
financial statements
26 capital commitments
2008 2007
£m £m
contracts placed for future capital expenditure not provided in the ﬁnancial statements 116 69
these commitments are principally in respect ofﬁt out obligations on new centres opening in 2009 in addition our share of the capital
commitments of joint ventures amounted to £nil at 31 december 2008 2007 £nil
27 noncancellable operating lease commitments
2008 2007
motor motor
vehicles vehicles
plant and plant and
property equipment total property equipment total
£m £m £m £m £m £m
lease obligations falling due
within one year 4140 28 4168 2863 23 2886
between two and five years 10587 36 10623 8205 30 8235
after ﬁve years 4887 01 4888 3996 05 4001
19614 65 19679 15064 58 15122
noncancellable operating lease commitments exclude future contingent rental amounts such as the variable amounts payable under
performance based leases where the rents vary in line with a centre’s performance
28 contingent assets and liabilities
the group has bank guarantees and letters of credit held with certain banks amounting to £497 million december 2007 £253 million
a number of lawsuits are pending against the group the outcome of which in the aggregate is not expected to have a material effect on
the group the group has been in dispute with a supplier over the performance under a contract and had entered into legal arbitration
prior to 31 december 2008 at the date of the accounts the group believes it is likely that a resolution will be reached in its favour
29 related parties
joint ventures
during the year ended 31 december 2008 the group received management fees of £31 million 2007 £24 million from its joint
venture entities at 31 december 2008 £49 million 2007 £88 million was due to the group from joint ventures of which £nil of
this debt has been provided for at 31 december 2008 2007 £nil during the year £20 million of a loan receivable owed from
a joint venture was waived by the group
key management personnel
no loans or credit transactions were outstanding with directors of ofﬁcers of the company at the end of the year or arose during the
year that need to be disclosed during the year ended 31 december 2008 the group acquired goods and services from a company
indirectly controlled by a director of the company amounting to £18746 2007 £5600 the goods and services were acquired in
armslength transactions
compensation of key management personnel including directors
key management personnel include those personnel including directors that have responsibility and authority for planning directing
and controlling the activities of the group
2008 2007
£m £m
shortterm employee benefits 48 47
termination payments – 04
share based payments 37 34
85 85
share based payments included in the table above reﬂect the accounting charge in the year the full fair value of awards granted in the
year was £56 million 2007 £40 million notes to the accounts continued
financial statements
76wwwreguscom
 of ordinary
country of share and
name of undertaking incorporation votes held
principal activity – trading
regus management de argentina sa argentina 100
regus centres pty ltd australia 100
regus clarence street pty ltd australia 100
regus business centre
melbourne pty ltd australia 100
regus macquarie house pty ltd australia 100
regus bridge street pty ltd australia 100
regus riverside pty ltd australia 100
regus north sydney pty ltd australia 100
regus 303 collins street pty limited australia 100
regus 267 st georges terrace
pty limited australia 100
regus council house pty ltd australia 100
regus bondi junction pty ltd australia 100
regus queens road pty ltd australia 100
regus como pty ltd australia 100
regus chatswood pty ltd australia 100
regus adelaide pty ltd australia 100
regus northbank plaza pty ltd australia 100
regus alfred street pty ltd australia 100
regus business centre gmbh austria 100
regus karntner ring gmbh austria 100
regus borsengebaude gmbh austria 100
regus parkring gmbh austria 100
regus mariahilferstrasse gmbh austria 100
regus twin tower netspace gmbh austria 100
regus business centre spc bahrain 100
regus management bahrain spc bahrain 100
regus business centre sa belgium 100
skyport bruxelles nv belgium 100
regus belgium nv belgium 100
regus stephanie square bvba belgium 100
regus schuman bvba belgium 100
regus rubens bvba belgium 100
regus pegasus bvba belgium 100
regus parc atrium bvba belgium 100
regus braine l’alleud bvba belgium 100
regus léopold square de
meeus bvba belgium 100
regus bulgaria eood bulgaria 100
oceanic business centre inc canada 100
guardian financial corp inc canada 100
pacific business centre inc canada 100
richmond executive centre inc canada 100
willingdon park business centre inc canada 100
rgn – ontario limited partnership canada 100
rgn – alberta limited partnership canada 100
regus business centre canada lp canada 60
regus business centre de chile ii sa chile 100
regus business centre de chile iii sa chile 100
 of ordinary
country of share and
name of undertaking incorporation votes held
regus business centre de chile iv sa chile 100
regus business centre de chile v sa chile 100
regus business services shanghai limited china 100
regus centres services co ltd china 80
regus business centre shanghai ltd china 100
regus business services beijing ltd china 100
regus business services dalian ltd china 100
regus business services shenzhen ltd china 100
regus strategic consulting shanghai ltd china 100
regus executive serviced office shanghai china 100
regus business consultancy beijing ltd china 100
regus business  conference centre
shanghai ltd china 100
regus business consulting
guangzhou ltd china 100
regus executive serviced office
beijing ltd china 100
regus executive service chengdu ltd china 100
regus business service hangzhou ltd china 100
regus managed centre shanghai ltd china 100
regus business centre hangzhou ltd china 100
regus business  conference centre
beijing ltd china 100
union plaza consulting co ltd china 100
regus business consulting shanghai ltd china 100
huanya shang wu fu wu limited china 100
regus colombia ltda colombia 100
regus costa rican centres ltda costa rica 100
regus business centre sro czech republic 100
regus empiria sro czech republic 100
regus burzovni palac sro czech republic 100
regus brno spielberk sro czech republic 100
regus sydhavn aps denmark 100
regus kobenhavn aps denmark 100
regus tuborg aps denmark 100
regus business centre trading fzco dubai 100
regus fzco dubai 100
regus business centre llc egypt egypt 100
regus el salvador ltda el salvador 100
regus g ltd england 100
regus mayfair limited england 100
regus barking limited england 100
regus chelmsford limited england 100
regus hemel hempstead limited england 100
regus peterborough limited england 100
regus lbc ltd england 100
regus uk ltd england 100
regus business centres uk ltd england 100
regus city limited england 100
regus plp uk limited england 100
regus business services ltd england 100
30 principal group companies
the group’s principal subsidiary undertakings at 31 december 2008 their principal activities and countries of incorporation are set
out below regus plc annual report and accounts 200877
 of ordinary
country of share and
name of undertaking incorporation votes held
mos ltd england 100
regus gb ltd england 100
regus south ltd england 100
regus caledonia ltd england 100
nuclei limited england 49
stonemartin corporate centres limited england 100
regus finland oy finland 100
regus paris sas france 100
regus opera sas france 100
regus portes de paris sas france 100
regus vendome sas france 100
regus la defense sas france 100
regus sophie sas france 100
regus montpellier sas france 100
regus provence sas france 100
regus lyon plaza sarl france 100
rbc deutschland gmbh germany 100
regus netspace germany
gmbh  co kg germany 100
regus munchen laim gmbh germany 100
regus hamburg spitalerhof gmbh germany 100
regus dusseldorf airport gmbh germany 100
regus hamburg valentinskamp
gmbh  co kg germany 100
regus munchen artemis gp
gmbh  co kg germany 100
regus hamburg chilehaus gp
gmbh  co kg germany 100
regus munchen maxvorstadt gmbh germany 100
regus bremen airport gmbh  co kg germany 100
regus unterfohring gmbh  co kg germany 100
regus berlin lindencorso gp
gmbh  co kg germany 100
regus koln kaiserwilhelmring
gmbh  co kg germany 100
regus hannover podbielski
gmbh  co kg germany 100
regus frankfurt herriot’s
gmbh  co kg germany 100
regus stuttgart konigsstrasse
gmbh  co kg germany 100
regus munchen schwabing
gmbh  co kg germany 100
regus munchen maximilianstrasse
gmbh  co kg germany 100
regus frankfurt trianon gmbh  co kg germany 100
regus frankfurt kastor  pollux
gmbh  co kg germany 100
regus stuttgart zeppelinkarree
gmbh  co kg germany 100
regus hamburg fleethof gmbh  co kg germany 100
regus berlin checkpoint gmbh  co kg germany 100
regus munchen airport gmbh  co kg germany 100
regus koln neumarktgalerie
gmbh  co kg germany 100
 of ordinary
country of share and
name of undertaking incorporation votes held
regus dusseldorf stadttor gmbh  co kg germany 100
regus dusseldorf prinzenpark
gmbh  co kg germany 100
regus hellas sa greece 100
regus guatemala srl guatemala 100
regus guatemala ii srl guatemala 100
regus business centre ltd hong kong 100
regus business services
hong kong ltd hong kong 100
regus hong kong ltd hong kong 100
regus services limited hong kong 100
regus centre limited hong kong 100
regus centre hk ltd hong kong 100
regus kalman kft hungary 100
regus emke kft hungary 100
regus arpod kft hungary 100
regus kft hungary 100
regus business centre pvt ltd india 100
regus office centre services pvt ltd india 100
regus business centre bangalore pvt ltd india 100
regus business centre gurgaon pvt ltd india 100
murphy road bc pvt ltd india 100
kasturba road business centre pvt ltd india 100
regus business centre chennai pvt ltd india 100
regus business centre pune pvt ltd india 100
regus centre saket pvt ltd india 100
regus office centre gurgaon pvt ltd india 100
regus suburb centres pvt ltd india 100
east india business centre pvt ltd india 100
regus centre services bangalore pvt ltd india 100
regus business centre hyderabad pvt ltd india 100
regus midtown business centre pvt ltd india 100
regus business centre delhi pvt ltd india 100
regus business centre nagpur pvt ltd india 100
regus office centre services chennai pvt ltd india 100
regus mumbai metropoliton bc pvt ltd india 100
regus gurgaon metro bc pvt ltd india 100
pt regus centre indonesia indonesia 100
pt regus business centre satrio indonesia 100
pt regus grand indonesia indonesia 100
regus ireland ltd ireland 100
regus business centres ireland ltd ireland 100
regus franchise international ltd ireland 100
europa business centre ltd ireland 100
regus business centres ltd israel 100
regus business centre srl italy 100
regus business centres italia srl italy 100
regus japan kk japan 100
regus business centre nagoya kk japan 100
regus luxembourg sa luxembourg 100
regus business center luxembourg sa luxembourg 100
regus macau business centre co ltd macau 100
regus centres sdn bhd malaysia 100
regus malaysia sdn malaysia 100
regus sentral sdn bhd malaysia 100
financial statements financial statements
78wwwreguscom
30 principal group companies continued
 of ordinary
country of share and
name of undertaking incorporation votes held
regus malta management limited malta 100
regus business centre sa de cv mexico 100
regus services sa de cv mexico 100
centro regus el sur de mexico sa de cv mexico 100
regus management de mexico sa de cv mexico 100
centros coporativo regus sa de cv mexico 100
centros regus de mexico sa de cv mexico 100
centros de negocios regus sa de cv mexico 100
regus monaco sarl monaco 100
regus maroc sarl morocco 100
satelite business centre schipol bv netherlands 100
skyport international bv netherlands 100
wtc zuiplien bv netherlands 100
skyport amsterdam bv netherlands 100
regus hojel bv netherlands 100
regus weena bv netherlands 100
regus atrium bv netherlands 100
regus atlas bv netherlands 100
regus parkstraat bv netherlands 100
regus zen bv netherlands 100
regus eindhoven bv netherlands 100
regus arnhem bv netherlands 100
regus hilversum bv netherlands 100
regus brainpark bv netherlands 100
regus amersfoort bv netherlands 100
regus tetra bv netherlands 100
regus zürich tower bv netherlands 100
regus breda bv netherlands 100
regus schiphol rijk bv netherlands 100
regus teleport tower bv netherlands 100
regus amstel business park bv netherlands 100
regus rijswijk bv netherlands 100
regus equinox i bv netherlands 100
regus equinox ii bv netherlands 100
regus nijmegen bv netherlands 100
regus tilburg bv netherlands 100
regus zwolle city centre bv netherlands 100
regus maastricht bv netherlands 100
regus den bosch central station bv netherlands 100
regus utrecht papendorp bv netherlands 100
regus rotterdam world port bv netherlands 100
regus leeuwarden crystalic bv netherlands 100
regus shortland street ltd new zealand 100
regus business centre ibsen as norway 100
regus business centre skogen as norway 100
regus business centre nydalen as norway 100
regus business centre karachi pvt ltd pakistan 100
regus business centre sa panama 100
regus business centre sa peru 100
regus net cube inc philippines 100
regus business centre inc philippines 100
regus business centre sp z oo poland 100
regus plaza sp z oo poland 100
regus wisniowy sp z oo poland 100
regus mokotow sp z oo poland 100
 of ordinary
country of share and
name of undertaking incorporation votes held
regus metropolitan sp z oo poland 100
regus zoliborz sp zoo poland 100
regus business centre lda portugal 100
regus international srl romania 100
regus floreasca international srl romania 100
regus rosetti international srl romania 100
llc regus business centre russia 100
regus business centre avrora llc russia 100
regus capital plaza llc russia 100
regus moscow city llc russia 100
st petersburg
austrian business centre llc russia 100
regus business centre atrium llc russia 100
regus business centre citydel llc russia 100
regus singapore business
centre pte ltd singapore 100
regus centres pte ltd singapore 100
regus nac pte ltd singapore 100
regus singapore raffles place pte ltd singapore 100
regus business services marina pte ltd singapore 100
regus business centre bratislava sro slovakia 100
regus southern africa pty south africa 100
regus business centre pty ltd south africa 100
regus business centre sandton pty ltd south africa 100
regus business centre durban pty ltd south africa 100
regus business centre
foreshore pty ltd south africa 100
regus business centre
midrand pty ltd south africa 100
regus business centre
mowbray pty ltd south africa 100
regus business centre
woodmead pty ltd south africa 100
rbc century city pty ltd south africa 100
rbc fourways pty ltd south africa 100
habitaz business center
bryanston pty ltd south africa 100
habitaz business center pty ltd south africa 100
habitaz business center
foreshore pty ltd south africa 100
regus korea ltd south korea 100
regus jongro ltd south korea 100
regus samsungdong limited south korea 100
regus business centre sa spain 100
regus miraflores sl spain 100
regus valencia sl spain 100
regus stureplan ab sweden 100
regus frosundavik ab sweden 100
regus garda ab sweden 100
business centre lilla bommen ab sweden 100
regus stockholm central ab sweden 100
regus solna strand ab sweden 100
regus business centre ag switzerland 100
regus rue du rhône sarl switzerland 100
regus wtc zürich gmbh switzerland 100
notes to the accounts continued regus plc annual report and accounts 200879
 of ordinary
country of share and
name of undertaking incorporation votes held
regus stockerhof gmbh switzerland 100
regus geneva airport sarl switzerland 100
regus seefeld gmbh switzerland 100
regus acacias gmbh switzerland 100
taipei regus business centre co ltd taiwan 100
regus centres ltd thailand 100
office advantage ltd thailand 100
regus tunisie sarl tunisia 100
regus is merkezi isletmeciligi ltd turkey 100
regus yonetim ve danismanlik ltd sti turkey 100
regus business centre ukraine llc ukraine 100
regus podil llc ukraine 100
stratis business centers llc united states 100
regus southeast investments llc united states 100
rgn northwest llc united states 100
buffalo acquisitions sub llc united states 100
delval acquisition sub llc united states 100
rgn – south florida llc united states 100
florida business center
acquisition sub llc united states 100
regus group – north dallas llc united states 100
rgn – new jersey llc united states 100
rgn – midwest llc united states 100
regus dc llc united states 100
rgnll llc united states 100
rgn – northeast llc united states 100
rgn – chicago llc united states 100
rgn – south east llc united states 100
rgn – mission valley llc united states 100
rgn – memphis llc united states 100
rgn – winderely llc united states 100
rgn – peachtree llc united states 100
rgn – midwest i llc united states 100
rgn – midwest ii llc united states 100
rgn – midwest iii llc united states 100
rgn – midwest iv llc united states 100
rgn – midwest v llc united states 100
rgn – midwest vi llc united states 100
rgn – midwest vii llc united states 100
rgn – houston i llc united states 100
rgn – houston ii llc united states 100
rgn – houston iii llc united states 100
rgn – houston iv llc united states 100
hq global workspaces llc united states 100
regus business center llc united states 100
regus venezuela ca venezuela 100
regus centre vietnam ltd vietnam 100
principal activity – management companies
regus australia management pty ltd australia 100
regus do brasil ltda brazil 100
regus management sro czech republic 100
regus emea fsc sro czech republic 100
regus management as denmark 100
regus management ltd
a
england 100
principal activity – management companies
regus management uk ltd england 100
regus management france sarl france 100
regus business centre sas france 100
regus businessworld limited
a
jersey 100
regus amsterdam bv netherlands 100
rmg south africa pty ltd south africa 100
regus business ventures pty ltd south africa 100
regus business world pty ltd south africa 100
regus management españa sl spain 100
regus management group llc united states 100
regus international services llc uruguay 100
principal activity – holding companies
regus h holdings inc british virgin islands 100
rgn services limited canada 100
rgn general partner holdings corp canada 100
rgn limited partner holdings corp canada 100
insignia partnership canada 100
regus management de chile ltda chile 100
regus denmark holding as denmark 100
regus group limited
a
england 100
regus ltd sarl
a
englandluxembourg 100
regus centres ltd england 100
regus investments ltd england 100
regus business centres holding england 100
regus business centres trading ltd england 100
regus h holdings england 100
regus h uk england 100
regus centres uk ltd england 100
regus holdings uk ltd england 100
regus holdings sas france 100
regus deutschland gmbh germany 100
regus germany holding gmbh  co kg germany 100
regus management gmbh germany 100
regus europe ltd jersey 100
regus no1 sarl
a
luxembourg 100
regus no2 sarl
a
luxembourg 100
regus india holdings limited mauritius 100
regus pakistan holdings ltd mauritius 100
regus mexico s de rl de cv mexico 100
regus netherlands bv netherlands 100
regus business centres bv netherlands 100
regus business centre norge as norway 100
regus holding gmbh switzerland 100
regus corporation llc united states 100
regus holdings llc united states 100
regus h holdings llc united states 100
regus international services sa uruguay 100
a shares held directly by regus plc
investments in group subsidiaries are held at cost all of which are
included within the consolidated results the principal activity of all
trading companies is the provision of global workplace solutions
financial statements financial statements
80wwwreguscom
notes to the accounts continued
fair value accounting for business combinations
for each business combination we assess the fair values of
assets and liabilities acquired where there is not an active market
in the category of the noncurrent assets typically acquired with
a business centre or where the books and records of the acquired
company do not provide sufﬁcient information to derive an accurate
valuation management calculates an estimated fair value based
on available information and experience
the main categories of acquired noncurrent assets where
management’s judgement has an impact on the amounts
recorded include tangible ﬁxed assets customer list intangibles
and the fair market value of leasehold assets and liabilities for
signiﬁcant business combinations management also obtains third
party valuations to provide additional guidance as to the appropriate
valuation to be included in the ﬁnancial statements
valuation of intangibles and goodwill
we evaluate the fair value of goodwill and intangibles to assess
potential impairments on an annual basis or during the year if an
event or other circumstance indicates that we may not be able to
recover the carrying amount of the asset we evaluate the carrying
value of goodwill at the appropriate cashgenerating unit level and
make that determination based upon future cash ﬂow projections
which assume certain growth projections which may or may not
occur we record an impairment loss for goodwill when the carrying
value of the intangible asset is less than its estimated fair value
further details of the methodology and assumptions applied to the
impairment review in the year ended 31 december 2008 including
the sensitivity to changes in those assumptions can be found
in note 12
tax assets and liabilities
we base our estimate of deferred tax assets and liabilities on current
tax laws and rates and in certain cases business plans and other
expectations about future outcomes changes in existing laws and
rates and their related interpretations and future business results
may affect the amount of deferred tax liabilities or the valuation
of deferred tax assets over time our accounting for deferred tax
consequences represents management’s best estimate of future
events that can be appropriately reﬂected in the accounting
estimates it is current group policy to recognise a deferred tax
asset when it is probable that future taxable proﬁts will be available
against which the assets can be used the group considers it
probable if the entity has made a taxable proﬁt in the previous year
and is forecast to continue to make a proﬁt in the foreseeable future
where appropriate the group assesses the potential risk of future
tax liabilities arising from the operation of its business in multiple
tax jurisdictions and includes provisions within tax liabilities for those
risks that can be estimated reliably changes in existing tax laws can
affect large international groups similar to regus and could result in
signiﬁcant additional tax liabilities over and above those already
provided for
onerous lease provisions
we have identiﬁed certain poor performing centres where the
lease is considered onerous ie the group does not expect to
recover the unavoidable lease costs up to the ﬁrst break point
the accounts include a provision for our estimate of the net
amounts payable under the terms of the lease to the ﬁrst break
point discounted at an appropriate weighted average cost
of capital
dilapidations
certain of our leases with landlords include a clause obliging the
group to hand the property back in the condition as at the date
of signing the lease the costs to bring the property back to that
condition are not known until the group exits the property so the
group estimates the costs at each balance sheet date however
given that landlords often regard the nature of changes made
to properties as improvements the group estimates that it is
unlikely that any material dilapidation payments will be necessary
consequently provision has been made only for those potential
dilapidation payments when it is probable that an outﬂow will
occur and can be reliably estimated
31 key judgmental areas adopted in preparing these accounts
the preparation of ﬁnancial statements in accordance with ifrs requires management to make certain judgements and assumptions
that affect reported amounts and related disclosures regus plc annual report and accounts 200881
company balance sheet
as at
31 dec 2008
luxembourg gaap
£m
assets
c fixed assets
iii financial assets
1 shares in affiliated undertakings 2952
2 loans to affiliated undertakings 5522
d current assets
iii transferable securities
2 own shares 5950000 shares of £001 per share 14
iv cash at bank and in hand 02
total assets 8490
liabilities
a capital and reserves
i subscribed capital 95
ii share premium account 537
iv reserves
1 reserve for own shares 14
2 other reserve 5186
v proﬁt or loss for the ﬁnancial period 2615
b provisions for liabilities and charges
3 other provisions 02
c creditors
4 trade creditors becoming due and payable within one year 01
5 amounts owed to affiliated undertakings
becoming due and payable within one year 34
becoming due and payable after more than one year 05
6 other creditors
becoming due and payable within one year 01
total liabilities 8490
approved by the board on 20 march 2009
mark dixon stephen gleadle
chief executive ofﬁcer chief financial ofﬁcer
accounting policies
basis of preparation
the ﬁnancial statements have been prepared in accordance with applicable luxembourg accounting standards and under the historical
cost accounting rules which differ in material respects from ifrs in both the measurement and presentation of certain transactions
the company is included in the consolidated accounts of regus plc sa
the balance sheet has been extracted from the full accounts of regus plc sa for the period ended 31 december 2008 which are
available from the company’s head ofﬁce 26 boulevard royal l2449 luxembourg and which will be ﬁled with both the luxembourg
chamber of commerce and the jersey companies registry
regus plc sa parent company accounts
financial statements financial statements
82wwwreguscom
segmental analysis – management basis unaudited
americas emea asia paciﬁc united kingdom other total
2008 2008 2008 2008 2008 2008
mature
workstations 56579 27603 11288 25833 – 121303
occupancy  862 887 821 844 – 860
revenue £m 3631 2769 810 1971 – 9181
contribution £m 1153 1028 304 403 – 2888
2007 expansions
workstations 9514 2996 6187 2507 – 21204
occupancy  794 785 735 739 – 769
revenue £m 417 307 302 149 – 1175
contribution £m 59 90 94 18 – 261
2008 expansions
workstations 3487 1753 2047 2477 – 9764
occupancy  590 559 481 610 – 566
revenue £m 72 102 68 92 – 334
contribution £m 41 14 26 22 – 103
2008 closures
workstations 593 – 314 82 – 989
occupancy  792 – 946 903 – 850
revenue £m 29 14 30 09 – 82
contribution £m 01 08 03 01 – 11
total
workstations 70173 32352 19836 30899 – 153260
occupancy  839 860 761 817 – 829
revenue £m 4149 3192 1210 2221 – 10772
contribution £m 1170 1112 375 400 – 3057
revpaw £ 5912 9871 6095 7188 – 7029 regus plc annual report and accounts 200883
segmental analysis – management basis unaudited
americas emea asia pacific united kingdom other total
2007 2007 2007 2007 2007 2007
mature
workstations 55779 27225 11027 25746 – 119777
occupancy  858 871 801 835 – 851
revenue £m 3159 2258 677 1953 – 8047
contribution £m 1019 811 258 429 – 2517
2007 expansions
workstations 4092 1520 3195 1548 – 10355
occupancy  691 544 331 638 – 550
revenue £m 130 92 55 89 – 366
contribution £m 11 19 05 11 – 46
2007 closures
workstations 288 330 – 443 – 1061
occupancy  765 862 – 858 – 834
revenue £m 15 24 – 24 – 63
contribution £m 01 05 – 07 – 03
2008 closures
workstations 1001 50 526 168 – 1745
occupancy  819 893 934 877 – 862
revenue £m 59 29 45 15 – 148
contribution £m 20 06 22 03 – 51
total
workstations 61160 29125 14748 27905 – 132938
occupancy  847 853 699 824 – 827
revenue £m 3363 2403 777 2081 – 8624
contribution £m 1027 803 275 414 – 2519
revpaw £ 5497 8251 5267 7460 – 6487
notes
• the mature business is deﬁned as those centres owned and operated at least 12 months prior to 1 january 2007 and therefore have a full 12 month comparative
• expansions include new centres opened and acquired businesses
• a 2008 closure is deﬁned as a centre closed during the 12 months ended 31 december 2008 for which there is a 12 month comparative in 2007 a 2007 closure
is deﬁned as a centre closed during the 12 months ended 31 december 2007
• workstation numbers are calculated as the weighted average for the year
• emea represents europe excluding uk middle east and africa
financial statements financial statements
84wwwreguscom
five year summary
full year ended full year ended full year ended full year ended full year ended
31 dec 2008 31 dec 2007 31 dec 2006 31 dec 2005 31 dec 2004
£m £m £m £m £m
revenue 10772 8624 6800 4633 3122
cost of sales before nonrecurring costs 7715 6105 4959 3462 2582
nonrecurring cost of sales 01 66
cost of sales 7715 6105 4959 3461 2648
gross proﬁt centre contribution 3057 2519 1841 1172 474
administration expenses before nonrecurring expenses 1583 1293 1019 649 442
nonrecurring administration expenses 50 20
administration expenses 1583 1293 1019 699 462
operating proﬁt 1474 1226 822 473 12
share of posttax profitloss of joint ventures 23 08 01 02 07
share of posttax proﬁtloss of associate – – 12 02 30
proﬁtloss before ﬁnancing costs 1497 1234 833 473 25
finance expense 68 81 80 108 37
finance income 63 41 22 22 13
proﬁtloss before tax for the year 1492 1194 775 387 49
tax chargecredit 343 158 48 61 26
proﬁtloss after tax for the year 1149 1036 823 448 23
attributable to
equity shareholders of the parent 1139 1031 823 445 24
minority interests 10 05 – 03 01
1149 1036 823 448 23
earningsloss per ordinary share eps
basic p 120p 105p 84p 45p 03p
diluted p 118p 104p 83p 45p –
weighted average number of shares outstanding ‘000s 950320 980962 984792 984792 859702
balance sheet data as at 31 december
intangible assets 3303 2699 2631 1610 1332
property plant and equipment 2780 1847 1272 766 761
deferred tax assets 790 468 361 219 62
trade and other receivables 2824 2172 1727 1003 760
cash and cash equivalents 2195 1429 809 741 823
total assets 11892 8615 6800 4339 3738
current liabilities 5923 4482 3408 2299 1824
noncurrent liabilities 1081 961 1030 433 888
provisions 85 74 117 79 89
equity minority interests 03 05 – – 06
equity shareholders’ funds 4800 3093 2245 1528 943
total liabilities and equity 11892 8615 6800 4339 3738 our mission
our mission is to develop deliver and support outsourced
workplace solutions that allow individuals and companies
to work however wherever and whenever they need to
our vision
we aim to be the number one in all markets in which we operate
through our controlled and disciplined expansion strategy
our values
the commitment loyalty and efforts of our team members
play a key role in differentiating us from our competitors
regus group key facts
978
business centres
171277
workstations globally
74
countries
83
average occupancy
5442
employees
worldwide
1click
away from
our customers
corporate directory
secretary and registered ofﬁce
tim regan company secretary
regus plc société anonyme
registered ofﬁce registered head ofﬁce
22 grenville street 26 boulevard royal
st helier l2449 luxembourg
jersey
je4 8px
registered number
jersey luxembourg
101523 rcs b 141 159
registrars
equiniti jersey limited
po box 63
11 – 12 esplanade
st helier
jersey
je4 8ph
auditor
kpmg audit sàrl
9 allée scheffer
l2520 luxembourg
legal advisers to the
company as to english law
slaughter and may
one bunhill row
london ec1y 8yy
legal advisers to the
company as to luxembourg law
elvinger hoss  prussen
2 place winston churchill
l2014 luxembourg
corporate stockbrokers
dresdner kleinwort limited
30 gresham street
london ec2v 7pg
credit suisse first boston
one cabot square
london e14 4qj
reservations
uk telephone 0870 880 8484
us telephone 1877regus87 or
001 954 331 1647
websites
wwwreguscom
wwwhqcom
glossary
available workstations
the total number of workstations in the group also termed
inventory during the year this is expressed as a weighted
average at period ends the absolute number is used
nonconsolidated workstations
workstations operated through managed centres joint ventures
and franchise operations
centre contribution
gross proﬁt comprising centre revenues less direct
operating expenses but before administrative expenses
ebitda
earnings before interest tax depreciation and amortisation
enquiries
client enquiries about regus products or services
expansions
a general term which includes new business centres
established by regus and acquired centres in the year
forward order book
the future workstation revenue already contracted with
clients at a point in time
like for like or mature business
the ﬁnancial performance from centres owned and operated
for a full 12 months prior to the start of the ﬁnancial year which
therefore have a fullyear comparative
occupancy
occupied workstations divided by available workstations
expressed as a percentage
occupied workstations
workstations which are in use by clients this is expressed
as a weighted average for the year
organic growth
growth attributable to the mature portfolio and from new
business centres established by regus
revpaw
total revenue per available workstation revenue 
available workstation
revpow
total revenue per occupied workstation regus plc annual report and accounts 2008
regus plc annual report and accounts 2008
regus plc sa
26 boulevard royal
l2449 luxembourg
wwwreguscom
workwithoutboundaries


Summary:
 6wwwreguscom
directors’ report business review
6wwwreguscom
these results achieved under difﬁcult
circumstances especially during the ﬁnal
quarter of the year reﬂect the continued
successful application of our business model
of sustainable measured growth on a global
basis we continue to demonstrate our ongoing
ability to return shareholder value with an 80
increase in our dividend alongside £199 million
of share repurchases made during 2008 i am
also pleased to end the year with a balance
sheet reﬂecting a record level of cash after
repayment of our outstanding debt which will
enable us to further invest for the future in our
people products and technology
through the ongoing implementation of our
core strategy of controlled disciplined growth –
via both organic expansion in existing and
new markets and acquisitions – the group
has delivered substantial workstation growth
in all regions during 2008 average workstations
grew 20322 or 153 to 153260 during 2008
the total number of available workstations
at 31 december 2008 was 159121 if non
consolidated workstations are also taken
into account the total number of workstations
under management increases to 171277
we have seen the number of centres we operate
increase by 60 net of closures new locations
include karachi in pakistan sharjah in the
uae st petersburg in russia fukuoka in
japan and we opened our ﬁrst centres in malta
monaco and taiwan
strategy and objectives
in 2008 we have continued to adhere ﬁrmly
to our strategy – to continue to grow proﬁt and
cash generation through measured sustainable
capacity growth
whilst we are acutely aware of the potential
impact of the current downturn and the
unpredictability of its severity and duration
the core fundamentals of our strategy and
current business model remain unaffected
we will continue to seek to take the business
forward through disciplined growth focused
investment for the long term and through
keeping as nimble as possible in respect
1
2
3
business model
a scalable business model with considerable potential
for further development
future prospects
we believe that we are in a good position to capitalise
on our flexible product offering which makes us an ideal
choice for many companies in times of uncertainty
the unique nature of our business will ensure
that we continue to drive sustainable growth
strategy
our consistent longterm strategy is that of
measured sustainable growth to maximise benefits
for our stakeholders
overview
amidst a backdrop of deteriorating economic
conditions i am delighted to announce a
ﬁfth successive year of record results with
a 25 growth in revenues a 20 growth
in proﬁtability and a doubling of our net cash
balance at 31 december 2008
chief executive’s review
focused on our priorities
our strategy remains one of sustainable and measured development
mark dixon regus plc annual report and accounts 20087
chief executive’s review
of cost control and operational ﬂexibility with
a steady adherence to our fundamentals we
believe we are as well positioned as we could
be to face the forthcoming challenges of 2009
the delivery of our strategy will continue to
come about through focus on our priorities
• brand and product development
• systems and technology
• people and processes
brand and product development
our brand and market presence is strong
enabling us to respond to a wide variety of
customer needs through a centre footprint
which allows us to be local regional or global
in short we have the adaptability and agility to
be many things to many customers however
we recognise the need to continue to respond
to our customers’ needs and leverage further
the core quality and ﬂexibility of our products
which differentiate us from our competitors
the launch of our businessworld programme
in early 2008 has been a signiﬁcant success
with membership expanding rapidly throughout
the year and now encompassing 200000 card
holders who have signed up for one of four
unique businessworld membership packages
with external market research predicting that the
number of mobile workers worldwide will reach
one billion by 2011 we feel that we are the only
company delivering the right product in the right
place at the right time to help them compete in
the current economic climate
we remain focused on highlighting the signiﬁcant
cost savings our clients can secure through our
product offerings
systems and technology
the rollout of our internally developed
inventory reservation and billing system across
our worldwide network has now been completed
with all of our centres utilising this technology
in their day to day operations 2007 495 centres
we are already seeing tangible beneﬁts in terms
of control of our business notably in discount
and exception management and in driving new
sales opportunities
looking ahead we anticipate this system
being a key enabler in our newly established
regional service centres and the system is
being onward developed to ensure full integration
into operational improvements being made in our
centres ie integration to photocopiers telephone
billing systems franking etc wherever possible
we are also seeking to integrate thirdparty
vendors into this infrastructure
1
a leading strategy for growth
expanding
our network
innovative
products
and services
investments
in systems
and technology
operational
excellence
developing
our team
members
generating
proﬁtable
growth
developing
our brand
our priorities for 2009
operational efﬁciency
we will continue to take early action on our
cost structure to manage our cost base in line
with future trading expectations
innovative “recession busting” products
our product solutions for our customers are
immediate easily implemented and generally
require no capital expenditure – all critical
“recession busting” considerations which will
enable them to obtain signiﬁcantly more value for
money and ﬂexibility than a conventional lease
investments in systems and technology
utilising our internally developed inventory
reservation and billing system now rolled
out across our entire worldwide network will
ensure we continue to capture and bill for all
revenue generating opportunities directors’ report business review
8wwwreguscom
2
business model
a globally diversiﬁed business
mobile and home working leader
• virtual office videoconferencing
and meeting rooms
• business lounges membership
cards and day offices
business centre leader
• 978 centres in 74 countries
• 159121 workstations
corporate outsourcing
• training room
• managed offices
we have also made improvements during
the year to our data capture and management
systems which will form a stronger platform
from which to develop better more timely
reporting some earlyadopting centres are
already receiving daily activity and planning
reports to allow them to focus on daily
customerfocused priorities and enable quality
planning for the next one to two weeks ahead
people and processes
the strong results in 2008 have been driven
largely by our 5442 team members and i would
like to take this opportunity to thank all of them
throughout the group for their substantial efforts
in the year our results are a testament to their
hard work diligence and commitment
as we develop our business and invest for
the future we recognise the importance of
enhancing skill sets through training and
development programmes ultimately the
quality of our team members and their ability
to deliver high quality customer service remain
fundamental to the continued longterm delivery
of our business model
we will continue to rely heavily on our people
and their enthusiasm talent and focus to further
develop the success of our business regardless
of external economic factors
change of residence and appointment
of three new nonexecutive directors
in successfully implementing our strategy of
diversiﬁcation both geographically and in our
product offerings we have developed a more
balanced global revenue platform
the creation of a new corporate structure and
organisation for regus incorporated in jersey
and resident in luxembourg has therefore
given us a chance to further internationalise our
business in keeping with our ongoing strategy
coupled with this the appointment of three new
international nonexecutive directors further
enhances our global perspective
responding to market conditions
whilst we have delivered a strong set of 2008
results we anticipate that market conditions
will be challenging during 2009 however we
have the potential to outperform our competition
by maximising revenue and cash growth whilst
keeping a tight control on costs and maintaining
focus on our core strategy
with respect to our cost structure we will
continue to take early action to manage our
cost base in line with future trading expectations
our costs throughout 2008 have continued to
become less ﬁxed in nature as we increase the
number of ﬂexible leases in our portfolio and
regus value proposition
for the customer
• cheaper opex
• zero capex
• flexible
• immediate no fuss
• reliable outsourced solution
• national regional global
for the landlord
• allows small customers
• market rent or better
• incubator
• amenity
• regus brand
• immediate and easy regus plc annual report and accounts 20089
reduce our exposure to longer conventional
leases in addition throughout 2008 we have
continued to implement a number of cost saving
programmes throughout our organisation which
we anticipate will continue to ensure we are able
to act with maximum speed and efﬁciency
as part of this process we have accelerated
plans to consolidate certain central and regional
administrative functions into a number of newly
established regional service centres we expect
that these will be fully operational in the next
ﬁnancial year with a focus on reducing overall
costs and ensuring better integrated ﬁnance
information technology and other support
functions across the group
outlook
we are not at all complacent about the outlook
in the last two months of 2008 the increasing
pressure that we were seeing on our revenues
translated into a softening in our occupancy
and price kpis which has continued into 2009
however although many of the countries in
which we operate are experiencing increasingly
difﬁcult economic conditions we believe that
we are taking the necessary actions and expect
to strengthen our current market leading
position our global footprint strong balance
sheet and cash generation ensure that we are
well positioned to take advantage of appropriate
opportunities to increase shareholder value as
they arise
we recognize that we will have to continue to
challenge ourselves to become more efﬁcient
and drive down costs whilst at the same time
not losing sight of the need for continued long
term investment in growing our business with
a strong global brand driven by the stewardship
of our customerfocused teams a broad and
ﬂexible product range and a business model
we have continued to adhere ﬁrmly to and
deliver upon i am conﬁdent of our position to
meet the challenging market conditions ahead
mark dixon
chief executive ofﬁcer
3
future prospects
united kingdom
• continued early adopter of new
sales and product concepts
• heightened focus on efficiency and cost
• migration of all centres onto centralised
billing and credit control
americas
• expansion into new markets in
latin america
• maximising yield in existing centres
• exploiting new marketing partnerships
emea
• consolidation of processes into
a regional service centre to improve
efficiency of collections reporting
and compliance
• identification of low risk opportunities
for expansion
asia paciﬁc
• new centralised customer
service centre to handle
customer administration
• consolidate and develop our
position as the largest provider
of serviced offices in the region
reguscom ﬁnd out more at
chief executive’s review