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Notes to the Group Financial Statements and Parent Company Financial Statements 129

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VIEWParent Company Financial Statements

In this section we present the balance sheet of our parent company, InterContinental Hotels Group PLC, and the related notes supporting the parent company balance sheet for 2012.

Parent Company Financial Statements

130 Parent company balance sheet

Notes to the Parent Company Financial Statements

131 1 Accounting policies

131 2 Directors

131 3 Investments

131 4 Debtors

131 5 Creditors

132 6 Share capital

132 7 Movements in reserves

133 8 Reconciliation of movements in shareholders’ funds

133 9 Profit and dividends

133 10 Contingencies

133 Statement of Directors’ responsibilities

134 Independent Auditor’s Report to the members

Holiday Inn Resort Kandooma Maldives

130 IHG Annual Report and Financial Statements 2012

Parent Company Financial Statements

Parentcompanybalancesheet 2012 2011 31December2012 Note £m £m

FixedassetsInvestments 3 2,951 2,934CurrentassetsDebtors 4 16 18Creditors: amounts falling due within one year 5 (1,440) (1,960)Netcurrentliabilities (1,424) (1,942)Totalassetslesscurrentliabilities 1,527 992Creditors: amounts falling due after one year 5 (644) (249)Netassets 883 743

CapitalandreservesCalled up share capital 6 39 39Share premium account 7 72 66Capital redemption reserve 7 7 6Share-based payment reserve 7 184 167Profit and loss account 7 581 465Equityshareholders’funds 883 743

Signed on behalf of the Board

TomSinger18 February 2013

No profit and loss account is presented for InterContinental Hotels Group PLC as permitted by Section 408 of the Companies Act 2006. Profit on ordinary activities after taxation amounts to £610m (2011 £264m).

Notes on pages 131 to 133 form an integral part of these Financial Statements.

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Parent Company Financial Statements and Notes to the Parent Company Financial Statements 131

1.AccountingpoliciesBasisofaccountingThe Financial Statements are prepared under the historical cost convention and on a going concern basis. They have been drawn up to comply with applicable accounting standards in the United Kingdom (UK GAAP). These accounts are for the Company and are not consolidated financial statements.

FixedassetinvestmentsFixed asset investments are stated at cost plus deemed capital contributions arising from share-based payment transactions less any provision for impairment. The Company records an increase in its investments in subsidiaries equal to the share-based payments charge recognised by its subsidiaries with a corresponding credit to equity. Details of the Group’s share-based payments are set out in note 27 of the Group Financial Statements on pages 123 to 125.

BorrowingsBorrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. They are subsequently measured at amortised cost. Finance charges, including the transaction costs and any discount or premium on issue, are charged to the profit and loss account using the effective interest rate method.

Borrowings are classified as due after more than one year when the repayment date is more than 12 months from the balance sheet date.

FinancialriskmanagementpoliciesFinancial risk management policies are set out in note 21 of the Group Financial Statements on pages 111 and 112.

CapitalriskmanagementThe Group’s capital risk management policy is set out in note 21 of the Group Financial Statements on page 112.

RelatedpartytransactionsThe Company takes advantage of the exemption under FRS 8 and does not disclose transactions with wholly owned subsidiaries.

2.Directors 2012 2011

Average number of Non-Executive Directors 7 8

2012 2011 £m £m

Remuneration costs 1 1

Detailed information on the emoluments, pensions, option holdings and shareholdings for each Non-Executive Director is shown in the Directors’ Remuneration Report on pages 59 to 78.

3.Investments £m

At 1 January 2012 2,934Share-based payments capital contribution 17At31December2012 2,951

The Company is the beneficial owner of all of the equity share capital of InterContinental Hotels Limited. The principal operating subsidiary undertakings of that company are listed in note 35 of the Group Financial Statements.

4.Debtors 2012 2011 £m £m

Amounts due from subsidiary undertakings 5 5Corporate taxation 11 13 16 18

5.Creditors 2012 2011 £m £m

AmountsfallingduewithinoneyearAmounts due to subsidiary undertakings 1,440 1,960Amountsfallingdueaftermorethanoneyear£250m 6% bonds 2016 249 249£400m 3.875% bonds 2022 395 – 644 249

Notes to the Parent Company Financial Statements

132 IHG Annual Report and Financial Statements 2012

5.Creditorscontinued

The 6% fixed interest sterling bonds were issued on 9 December 2009 and are repayable in full on 9 December 2016. Interest is payable annually on 9 December in each year commencing 9 December 2010 to the maturity date. The bonds were initially priced at 99.465% of face value and are unsecured.

The 3.875% fixed interest sterling bonds were issued on 28 November 2012 and are repayable on 28 November 2022. Interest is payable annually on 28 November in each year commencing 28 November 2013 to the maturity date. The bonds were initially priced at 98.787% of face value and are unsecured.

6.Sharecapital Number of shares millions £m

Allotted,calledupandfullypaidAt 1 January 2012 (ordinary shares of 1329⁄47p each) 290 39Share capital consolidation (19) –Issued on exercise of share options 1 1Repurchased and cancelled under repurchase programme (4) (1)At31December2012(ordinarysharesof14194 ⁄329peach) 268 39

On 7 August 2012, the Group announced a planned $1bn return to shareholders comprising a $0.5bn special dividend with share consolidation and a $0.5bn share repurchase programme. The share consolidation was approved on 8 October 2012 at a General Meeting (GM) of the Company and became effective on 9 October 2012 on the basis of 14 new ordinary shares of 14194⁄329p each for every 15 existing ordinary shares of 1329⁄47p each. The special dividend of 108.4p per share was paid to shareholders on 22 October 2012 at a total cost of £315m (see note 9). Under the authority granted by shareholders at the GM held on 8 October 2012, the share repurchase programme commenced in November 2012 resulting in the repurchase of 4,143,960 shares in the period to 31 December 2012 for a total consideration of £67m. Transaction costs relating to shareholder returns of £1m, net of tax, have been charged to retained earnings.

No shares were repurchased in 2011.

The authority given to the Company at the GM held on 8 October 2012 to purchase its own shares was still valid at 31 December 2012. A resolution to renew the authority will be put to shareholders at the Annual General Meeting (AGM) on 24 May 2013.

The Company no longer has an authorised share capital.

The aggregate consideration in respect of ordinary shares issued under option schemes during the year was £7m (2011 £5m).

Thousands

OptionstosubscribeforordinarysharesAt 1 January 2012 2,170Exercised* (1,365)Lapsed or cancelled (107)At31December2012 698

Option exercise price per ordinary share (pence) 438.0-619.8Final exercise date 4 April 2015

* The weighted average option price was 492.8p for shares exercised under the Executive Share Option Plan.

7.Movementsinreserves Share Capital Share-based premium redemption payments Profit and account reserve reserve loss account £m £m £m £m

At 1 January 2012 66 6 167 465Premium on allotment of ordinary shares 6 – – –Repurchase of shares – – – (66)Transfer to capital redemption reserve – 1 – (1)Transaction costs relating to shareholder returns – – – (1)Profit after tax – – – 610Share-based payments capital contribution – – 17 –Dividends – – – (426)At31December2012 72 7 184 581

Notes to the Parent Company Financial Statements continued

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Notes to the Parent Company Financial Statements and Statement of Directors’ responsibilities 133

8.Reconciliationofmovementsinshareholders’funds 2012 2011 £m £m

Earnings available for shareholders 610 264Dividends (426) (92) 184 172Issue of ordinary shares 7 5Repurchase of shares (67) –Transaction costs relating to shareholder returns (1) –Share-based payments capital contribution 17 19Netmovementinshareholders’funds 140 196Shareholders’ funds at 1 January 743 547Shareholders’fundsat31December 883 743

9.Profitanddividends

Profit on ordinary activities after tax amounts to £610m (2011 £264m).

A final dividend, declared in the previous year, of 24.7p (2011 22.0p) per share was paid during the year, amounting to £72m (2011 £63m). An interim dividend of 13.5p (2011 9.8p) per share was paid during the year, amounting to £39m (2011 £29m). A special interim dividend of 108.4p per share was paid during the year, amounting to £315m. A final dividend of 27.7p (2011 24.7p) per share, amounting to £74m (2011 £71m), is proposed for approval at the AGM. The proposed final dividend is payable on shares in issue at 22 March 2013.

The audit fee of £0.02m (2011 £0.02m) was borne by a subsidiary undertaking in both years.

10.Contingencies

Contingent liabilities of £nil (2011 £65m) in respect of guarantees of the liabilities of subsidiaries have not been provided for in the Financial Statements.

Statement of Directors’ responsibilities

InrelationtotheParentCompanyFinancialStatementsThe following statement, which should be read in conjunction with the Independent Auditor’s Report set out on the following page, is made with a view to distinguishing for shareholders the respective responsibilities of the Directors and of the auditor in relation to the Parent Company Financial Statements.

The Directors are responsible for preparing the Parent Company Financial Statements and Directors’ Remuneration Report in accordance with applicable United Kingdom law and United Kingdom Generally Accepted Accounting Practice (UK GAAP).

The Directors are required to prepare financial statements for each financial year which present fairly the financial position of the Company and the financial performance of the Company for that period.

In preparing these Financial Statements, the Directors are required to:

• select suitable accounting policies and apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements; and

• prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors have responsibility for ensuring that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the Company and which enable them to ensure that the Parent Company Financial Statements comply with the Companies Act 2006.

The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

134 IHG Annual Report and Financial Statements 2012

Independent Auditor’s Report to the members of InterContinental Hotels Group PLC

We have audited the Parent Company Financial Statements of InterContinental Hotels Group PLC for the year ended 31 December 2012 which comprise the parent company balance sheet and the related notes 1 to 10. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

RespectiveresponsibilitiesofDirectorsandauditorAs explained more fully in the Statement of Directors’ responsibilities set out on page 133, the Directors are responsible for the preparation of the Parent Company Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the Parent Company Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

ScopeoftheauditoftheFinancialStatementsAn audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the Financial Statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited Financial Statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

OpiniononFinancialStatementsIn our opinion the Parent Company Financial Statements:

• give a true and fair view of the state of the Company’s affairs as at 31 December 2012;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

OpiniononothermattersprescribedbytheCompaniesAct2006In our opinion:

• the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and

• the information given in the Directors’ Report for the financial year for which the Financial Statements are prepared is consistent with the Parent Company Financial Statements.

MattersonwhichwearerequiredtoreportbyexceptionWe have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the Parent Company Financial Statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

OthermatterWe have reported separately on the Group Financial Statements of InterContinental Hotels Group PLC for the year ended 31 December 2012.

AlisonDuncan(Seniorstatutoryauditor)for and on behalf of Ernst & Young LLP, Statutory Auditor London 18 February 2013

Notes:

1. The maintenance and integrity of the InterContinental Hotels Group PLC website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the Financial Statements since they were initially presented on the website.

2. Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.