Intercontinental Hotels Group PLC 6-K, filed Aug 9, 2022

Intercontinental Hotels Group PLC (IHG)

6-K 2022-08-09 For: 2022-08-09

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Added on July 04, 2026

About this 6-K

Intercontinental Hotels Group PLC filed this 6-K on August 9, 2022.

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	Reported			Underlying1
	2022	2021	% change2	% change
REPORTABLE SEGMENTS1:
Revenue1	$840m	$565m	+49%	+53%
Revenue from fee business1	$664m	$505m	+31%	+33%
Operating profit1	$377m	$188m	+101%	+91%
Fee margin1	55.9%	44.1%	+11.8%pts
Adjusted EPS1	121.7¢	40.4¢	+201%	KEY METRICS:
GROUP RESULTS:				● $11.7bn total gross revenue1
Total revenue	$1,794m	$1,179m	+52%	+48% vs 2021, (14)% vs 2019
Operating profit	$361m	$138m	+162%	● +51% global H1 RevPAR1
Basic EPS	117.4¢	26.2¢	+348%	vs 2021, (10.5)% vs 2019
Interim dividend per share	43.9¢	- ¢	NM	● +44% global Q2 RevPAR1
Net debt1	$1,718m	$2,458m	(30)%	vs 2021, (4.5)% vs 2019

●	Further significant improvement in trading: Americas Q2 RevPAR vs 2019 +3.5%, strong sequential improvement also in EMEAA to (10.3)%; Greater China (48.9)% due to localised travel restrictions
●	H1 average daily rate +24% vs 2021, up +4% vs 2019; occupancy +10%pts vs 2021, (10)%pts vs 2019
●	Gross system growth +4.8% YOY, net +3.0% YOY (adjusted for Holiday Inn and Crowne Plaza removals in H2 2021, and the impact of exiting Russia in H1 2022)
●	Opened 14.9k rooms (96 hotels) in H1; global estate now at 883k rooms (6,028 hotels)
●	Signed 30.7k rooms (210 hotels) in H1; global pipeline now at 278k rooms (1,858 hotels)
●	Luxury & Lifestyle portfolio now 445 hotels, 12% of system size; a further 287 hotels represent 19% of group pipeline
●	IHG One Rewards transforms our loyalty programme; further developments to enhance our digital advantage
●	Operating profit from reportable segments of $377m, +101% vs 2021, (down (8)% vs 2019); reported operating profit of $361m, after System Fund result of $3m and operating exceptionals of $(19)m
●	Net cash from operating activities of $175m (2021: $173m), with adjusted free cash flow1 of $142m (2021: $147m); net debt reduction of $163m since start of the year includes $227m of net foreign exchange benefit
●	Trailing 12-month adjusted EBITDA1 of $812m, +78% on a year earlier; net debt:adjusted EBITDA reduced to 2.1x
●	Resumption of interim dividend at 43.9¢, +10% on prior interim payment in 2019
●	Additional $500m of surplus capital to be returned via new share buyback programme

Investor Relations:	Stuart Ford (+44 (0)7823 828 739); Aleksandar Milenkovic (+44 (0)7469 905 720); Joe Simpson (+44 (0)7976 862 072)
Media Relations:	Amy Shields (+44 (0)7881 035 550); Claire Scicluna (+44 (0)7776 778 808)

UK:	0800 640 6441
UK local:	0203 936 2999
US:	+1 855 979 6654
US local:	+1 646 664 1960
All other locations:	+44 203 936 2999
Passcode:	91 98 94

UK:	0203 936 3001
US:	+1 845 709 8569
All other locations:	+44 203 936 3001
Passcode:	07 07 21

●	Global system of 883k rooms (6,028 hotels) at 30 June 2022, weighted 68% across midscale segments and 32% across upscale and luxury
●	Gross growth of +4.8% YOY, with 14.9k rooms (96 hotels) opened in H1, of which 8.3k (51 hotels) in Q2
●	Removal of 12.4k rooms (59 hotels) in H1; this includes the impact of ceasing all operations in Russia, resulting in the removal of 6.5k rooms (28 hotels), equivalent to 0.7% of IHG’s global system
●	Underlying removal rate of 1.8% YOY; the removals in H1 2022 equate to an annualised underlying rate of 1.4%, broadly in line with historical average underlying rate of ~1.5%
●	Net system size growth of +3.0% YOY (adjusted for Holiday Inn and Crowne Plaza removals in H2 2021, and for Russia operations in H1 2022); unadjusted YOY growth of (0.2)%
●	Global pipeline of 278k rooms (1,858 hotels), which represents over 30% of current system size; pipeline growth YTD of +2.7% (+3.5% excluding 2.2k rooms impact from 7 pipeline hotels in Russia)
●	Signed 30.7k rooms (210 hotels) in H1, of which 14.1k (90 hotels) in Q2
●	Signings mix drives pipeline to be weighted 56% across midscale segments and 44% across upscale and luxury
●	More than 40% of the global pipeline is under construction, broadly in line with prior years

	System							Pipeline
	Openings	Removals	Net	Total	YTD%	YOY%	Adjusted YOY%a	Signings	Total
Group	14,949	(12,379)	2,570	882,897	+0.3%	(0.2)%	+3.0%	30,732	278,275
Americas	4,287	(2,188)	2,099	501,188	+0.4%	(1.8)%	+0.6%	11,504	100,401
EMEAA	6,828	(8,844)	(2,016)	222,184	(0.9)%	(0.6)%	+5.2%	8,111	80,079
G. China	3,834	(1,347)	2,487	159,525	+1.6%	+5.9%	+8.2%	11,117	97,795

●	The InterContinental brand opened three hotels in the period; growing to 205 across more than 60 countries. Its pipeline of 83 hotels and resorts represents growth equivalent to 30% of current system size.
●	Having reached 3,000 hotels in its 30th year last year, Holiday Inn Express is now in 50 countries, and has a pipeline for a further 26% growth. Holiday Inn Express achieved more than 60 signings in the period, with our Candlewood Suites and Staybridge Suites extended stay brands together adding over 40 more.

●	Vignette Collection, our Luxury & Lifestyle conversion brand that launched last August, has secured its first eight properties, with further strong progress expected over the remainder of 2022.
●	Our upscale conversion brand, voco, has reached 80 open and pipeline hotels. With nine openings in the period, these included the first all-suites format in Doha, a flagship property for the brand in Melbourne, and a presence in four new country markets. The brand was recognised as the World’s Leading Premium Hotel Brand at the World Travel Awards, and is achieving top guest satisfaction scores versus equivalent competing brands.
●	Portfolio opportunities are also increasing, due to the broader suite of brands and the overall enterprise system we can offer owners to support their growth; three portfolio deals in EMEAA in H1 added 10 hotels across six brands.

●	A number of brand halo properties opened in the period, including an all-suites-and-villas Regent property in Phu Quoc (Vietnam) and Australia’s first Kimpton (Sydney).
●	There were six further Kimpton signings in the period and more resort destinations for the brand including Kimpton Aysla Mallorca will be opening soon.
●	Signings for Six Senses increased its pipeline to 35 hotels, on top of 21 currently open.
●	Hotel Indigo is set for a record year of openings; it has reached 134 properties across more than 20 countries, which is set to nearly double with a pipeline of 120 hotels. There were 16 signings for the brand in the half, including new resort properties in Barbados and Grand Cayman.

●	The first two Atwell Suites properties to open have been the prototype new-build at Denver Airport and an adaptive re-use at Miami Brickell, with 23 further hotels in the pipeline.
●	Five new avid hotels opened in the half, taking the brand’s presence to 53 locations, with the first opening in Canada later this year. The avid pipeline totals 157 properties and the brand is outperforming peers in guest satisfaction.

●	14% more points have been redeemed year-to-date compared to 2019, with an 18% increase in reward nights booked.
●	Enrolments in Q2 2022 were more than 30% higher than the comparable period last year, and year-on-year 11 million more loyalty members have been added.
●	Within a month of launching Milestone Rewards, engagement has exceeded our expectations and over 800,000 rewards have been earned.
●	We also launched our largest marketing campaign in more than a decade to help raise awareness and drive more revenue to our hotels for our owners.

●	We have further expanded the scale and reach of our procurement solutions for operating supplies and equipment. More than 2,900 hotels in the Americas are now participating in our F&B purchasing programme. These programmes support menu optimisation, help owners mitigate inflationary pressures and achieve absolute savings. Smaller owner groups recently onboarded in the UK have seen typical savings of 7-15% on food costs and 10-15% on beverage costs.
●	We are also helping owners lower construction and refurbishment costs in our latest format upgrades and helping reduce other costs associated with operating and maintaining their building infrastructure.
●	IHG Voice Cloud, our enhanced intelligent call services solution, will be supporting several hundred hotels by the end of the year. This typically saves an owner around 50 hours a month of on-premises call handling, whilst also driving better guest experiences, boosting loyalty enrolment and delivering revenue up-sell.
●	We are piloting renewable energy sourcing on behalf of our owners and developing a power purchase agreement in a very competitive market. Owners have also been able to lock-in substantial savings though our fixed negotiated rates on other energy costs.
●	The rollout of our IHG NextGen Payments system during 2022 and 2023 adds more guest payment options including e-wallet, and lowers transaction and support fees for our owners.

●	Booking flow improvements. Newly designed webpages that combine rooms and rates choices have contributed to increases in booking conversion of up to one percentage point and revenue uplift of 2 to 3%. This new web experience has also driven a 10 percentage point increase in enrolments to our IHG One Rewards programme.
●	Stay enhancements and attribute pricing. Pilots progressing well to drive cross-sell of non-room extras and for room up-sell which enable owners to generate maximum value from the unique attributes of their room inventory.
●	Next generation IHG mobile app released. The IHG mobile app is our fastest-growing revenue channel. Amongst many enhancements, the new app offers streamlined booking and allows guests to check-in faster, and it powers IHG One Rewards to provide members with seamless access to their loyalty benefits, including the ability to choose and redeem Milestone Rewards. Enhancements are expected to further increase direct bookings and loyalty engagement, and drive incremental spend during stays. Since its relaunch, revenue driven by our mobile app for the Americas and EMEAA regions has been at 30% higher levels than 2019.

●	Over the next three years we are investing significantly to enhance the capabilities of our core HR platforms and technology, to deliver a more seamless user experience and the right data and insights needed to drive performance. A new flagship learning and development offering is also being developed across the business to support talent.
●	We continue to make progress on our commitment to increase ethnic minority leadership representation at a corporate level, notably US ethnic minority leadership where we have committed to doubling representation between 2020 and 2025 (was 13%, now 20%, with a goal of 26% in 2025). Conscious inclusion training is being extended to frontline hotel employees and we are also piloting new inclusive hiring practices in different markets.
●	As one of many programmes to diversify representation in leadership roles, more than 100 colleagues have so far graduated from our RISE programme to increase the number of women in General Manager and other senior positions in our managed hotels.

99.1	Half-year Report dated 9 August 2022

●	The IHG Skills Academy, a free virtual learning platform, is being translated into more languages to broaden the global reach of our IHG Academy programme and continue to break down barriers to education and training.
●	In response to the war in Ukraine and the humanitarian crisis it has caused, IHG made significant donations to our humanitarian charity partners, and has committed to work with our hotel owners in other countries to shelter and recruit refugees. We have a dedicated Refugees Careers Site at careers.ihg.com/Ukraine-support.

	6 months ended 30 June

	2022	2021	%
	$m	$m	change
Revenue
Americas	471	325	44.9
EMEAA	239	84	184.5
Greater China	36	59	(39.0)
Central	94	97	(3.1)
	____	____	____
Revenue from reportable segmentsa	840	565	48.7

System Fund revenues	554	378	46.6
Reimbursement of costs	400	236	69.5
	_____	_____	_____
Total revenue	1,794	1,179	52.2
	_____	_____	_____
Operating profit
Americas	351	224	56.7
EMEAA	59	(27)	NMb
Greater China	5	31	(83.9)
Central	(38)	(40)	(5.0)
	_____	____	_____
Operating profit from reportable segmentsa	377	188	100.5
Analysed as:
Fee Business excluding central	410	264	55.3
Owned, leased and managed lease	5	(36)	NMb
Central	(38)	(40)	(5.0)

System Fund result	3	(46)	NMb
	____	____	____
Operating profit before exceptional items	380	142	167.6
Operating exceptional items	(19)	(4)	375.0
	____	____	____
Operating profit	361	138	161.6

Net financial expenses	(69)	(72)	(4.2)
Analysed as:
Adjusted interest expensea	(64)	(72)	(11.1)
System Fund interest	3	-	NMb

Adjusted EBITDA reconciliation	6 months ended 30 June
	2022	2021
	$m	$m Restateda

Cash flow from operations	336	259
Cash flows relating to exceptional items	15	12
Impairment loss on financial assets	(5)	(8)
Other non-cash adjustments to operating profit/loss	(34)	(35)
System Fund result	(3)	46
System Fund depreciation and amortisation	(42)	(41)
Other non-cash adjustments to System Fund result	(13)	(10)
Working capital and other adjustments	124	(6)
Capital expenditure: contract acquisition costs (key money)	35	16
	________	________
Adjusted EBITDA	413	233
	____	____

●	New training has been rolled out for our Hotel Energy Reduction Opportunities (HERO) tool, which gives owners bespoke sustainability recommendations, costs and savings based upon their hotel’s individual data and characteristics.
●	We continue to roll-out automated data collection across our business to make it easier for our hotels to understand and measure their environmental impacts, identify areas for reduction and track progress.
●	An energy metric has been introduced for all hotels as part of our strategy to decarbonise the existing estate, as well as adding further measures to our brand standards to conserve energy and water.
●	As part of our commitments to tackle waste, we recently announced a global collaboration with Unilever to replace bathroom miniatures with bulk amenities for 4,000 more hotels. The initiative is expected to save at least 850 tonnes of plastic annually in the Americas region alone and provide hotels with savings of 10-30% versus current costs.

CASH FLOW SUMMARY	6 months ended 30 June
	2022	2021	$m
	$m	$m	change

Adjusted EBITDAb	413	233	180

Working capital and other adjustments	(124)	6
Impairment loss on financial assets	5	8
Other non-cash adjustments to operating profit/loss	34	35
System Fund result	3	(46)
Non-cash adjustments to System Fund result	55	51
Capital expenditure: contract acquisition costs (key money) net of repayments	(35)	(16)
Capital expenditure: maintenance	(15)	(9)
Cash flows relating to exceptional items	(15)	(12)
Net interest paid	(37)	(39)
Tax paid	(124)	(47)
Principal element of lease payments	(18)	(17)
	____	____	____
Adjusted free cash flowb	142	147	(5)

Capital expenditure: gross recyclable investments	(1)	(9)
Capital expenditure: gross System Fund capital investments	(18)	(7)
Deferred purchase consideration paid	-	(13)
Disposals and repayments, including other financial assets	7	1
Dividends paid to shareholders	(154)	-
	____	____	____
Net cash flow before other net debt movements	(24)	119	(143)

Add back principal element of lease repayments within adjusted free cash flow	18	17
Exchange and other non-cash adjustments	169	(65)
	____	____	____
Decrease in net debtb	163	71	92

Net debt at beginning of the period	(1,881)	(2,529)
	______	______	____
Net debt at end of the period	(1,718)	(2,458)	740
	______	______	____

	Half Year 2022 vs 2021			Half Year 2022 vs 2019
	RevPAR	ADR	Occupancy	RevPAR	ADR	Occupancy
Group	50.7%	24.4%	10.1%pts	(10.5)%	3.9%	(9.5)%pts
Americas	45.2%	22.1%	10.2%pts	(1.6)%	5.6%	(4.7)%pts
EMEAA	138.4%	35.3%	24.2%pts	(20.9)%	1.0%	(15.7)%pts
G. China	(27.2)%	(4.3)%	(11.9)%pts	(45.9)%	(17.9)%	(20.1)%pts

	Q2 2022 vs 2021			Q2 2022 vs 2019
	RevPAR	ADR	Occupancy	RevPAR	ADR	Occupancy
Group	43.9%	23.5%	9.0%pts	(4.5)%	7.4%	(8.1)%pts
Americas	37.0%	20.2%	8.5%pts	3.5%	9.0%	(3.7)%pts
EMEAA	146.8%	35.8%	28.8%pts	(10.3)%	4.0%	(10.4)%pts
G. China	(39.5)%	(8.9)%	(19.8)%pts	(48.9)%	(18.7)%	(23.5)%pts

	Half Year 2022 vs 2021			Half Year 2022 vs 2019
	CER	AER	Difference	CER	AER	Difference
Group	50.7%	48.6%	2.1%pts	(10.5)%	(11.2)%	0.7%pts
Americas	45.2%	45.1%	0.1%pts	(1.6)%	(1.9)%	0.3%pts
EMEAA	138.4%	121.7%	16.7%pts	(20.9)%	(23.7)%	2.9%pts
G. China	(27.2)%	(27.4)%	0.2%pts	(45.9)%	(43.6)%	(2.3)%pts

2022 vs 2021	Jan	Feb	Mar	Apr	May	Jun
Group	54.8%	72.3%	56.9%	50.1%	43.8%	39.2%
Americas	53.7%	65.1%	55.7%	48.1%	37.6%	28.0%
EMEAA	92.7%	122.7%	146.1%	165.1%	156.3%	126.0%
G. China	5.6%	36.9%	(39.8)%	(51.5)%	(45.6)%	(17.7)%

2022 vs 2019	Jan	Feb	Mar	Apr	May	Jun
Group	(24.4)%	(18.1)%	(12.1)%	(7.9)%	(5.4)%	(0.6)%
Americas	(14.2)%	(8.2)%	(2.6)%	2.9%	2.0%	5.5%
EMEAA	(41.9)%	(36.6)%	(22.5)%	(17.2)%	(8.3)%	(6.0)%
G. China	(38.4)%	(31.7)%	(53.1)%	(58.6)%	(51.6)%	(35.5)%

2021 vs 2019	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Group	(52.5)%	(53.8)%	(46.6)%	(41.4)%	(37.1)%	(31.0)%	(18.4)%	(23.0)%	(21.5)%	(19.2)%	(19.1)%	(12.1)%
Americas	(45.1)%	(45.4)%	(39.4)%	(32.3)%	(27.8)%	(19.7)%	(7.3)%	(12.1)%	(10.6)%	(10.5)%	(7.4)%	0.4%
EMEAA	(71.1)%	(72.7)%	(70.6)%	(70.1)%	(65.8)%	(59.4)%	(48.2)%	(38.2)%	(42.8)%	(36.3)%	(33.2)%	(30.2)%
G. China	(41.5)%	(51.1)%	(23.2)%	(14.9)%	(12.0)%	(21.5)%	(6.4)%	(55.2)%	(25.9)%	(24.6)%	(46.3)%	(28.1)%

2020 vs 2019	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Group	(1.5)%	(10.8)%	(55.1)%	(81.9)%	(75.6)%	(67.4)%	(58.1)%	(51.0)%	(50.9)%	(51.9)%	(55.3)%	(52.4)%
Americas	0.2%	(0.9)%	(49.0)%	(80.1)%	(72.5)%	(62.0)%	(54.0)%	(48.6)%	(46.4)%	(48.0)%	(51.4)%	(49.5)%
EMEAA	2.1%	(11.3)%	(62.7)%	(89.3)%	(88.5)%	(85.3)%	(74.7)%	(66.3)%	(69.9)%	(70.5)%	(72.4)%	(68.6)%
G. China	(24.6)%	(89.3)%	(81.4)%	(71.2)%	(57.1)%	(48.6)%	(35.9)%	(20.2)%	(11.0)%	(16.9)%	(22.5)%	(15.1)%

		Hotels		Rooms
		Hotels		Rooms
Global hotel and room count			Change over		Change over
		2022	2021	2022	2021
		30 June	31 December	30 June	31 December
Analysed by brand
	Six Senses	21	-	1,439	27
	Regent	8	1	2,532	342
	InterContinental	205	1	69,525	123
	Vignette Collection	2	1	539	393
	Kimpton	75	-	13,304	21
	Hotel Indigo	134	4	17,056	713
	voco	40	9	9,447	2,002
	HUALUXE	18	2	5,147	544
	Crowne Plaza	402	(2)	110,317	(861)
	EVEN Hotels	22	1	3,180	186
	Holiday Inna	1,206	(12)	220,860	(3,824)
	Holiday Inn Express	3,044	28	320,970	3,641
	avid hotels	53	5	4,771	491
	Atwell Suites	2	2	186	186
	Staybridge Suites	314	(1)	33,924	(382)
	Candlewood Suites	363	2	32,222	197
	Otherb	119	(4)	37,478	(1,229)
		_____	____	_______	______
Total		6,028	37	882,897	2,570
		_____	____	_______	______
Analysed by ownership type
	Franchised	5,078	45	630,895	4,780
	Managed	931	(8)	247,381	(2,210)
	Owned, leased and managed lease	19	-	4,621	-
		_____	____	_______	______
Total		6,028	37	882,897	2,570
		_____	____	_______	______

AMERICAS		6 months ended 30 June
Americas Results
		2022	2021	%
		$m	$m	change
Revenue from the reportable segmenta
	Fee business	413	296	39.5
	Owned, leased and managed lease	58	29	100.0
		____	____	____
Total		471	325	44.9
		____	____	____
Operating profit from the reportable segmenta
	Fee business	342	236	44.9
	Owned, leased and managed lease	9	(12)	NMc
		____	____	____
		351	224	56.7
Operating exceptional items		-	(4)	NMc
		____	____	____
Operating profit		351	220	59.5
		____	_____	_______

Americas Comparable RevPARb movement on previous year		6 months ended 30 June 2022
Fee business
	InterContinental	162.3%
	Kimpton	101.0%
	Hotel Indigo	62.8%
	Crowne Plaza	83.2%
	EVEN Hotels	108.9%
	Holiday Inn	50.0%
	Holiday Inn Express	34.2%
	Staybridge Suites	29.1%
	Candlewood Suites	20.1%
	All brands	44.9%
Owned, leased and managed lease
	All brands	119.5%

		6 months ended 30 June
EMEAA results
		2022	2021	%
		$m	$m	change
Revenue from the reportable segmenta
	Fee business	121	53	128.3
	Owned, leased and managed lease	118	31	280.6
		____	____	____
Total		239	84	184.5
		____	____	____
Operating profit/(loss) from the reportable segmenta
	Fee business	63	(3)	NMc
	Owned, leased and managed lease	(4)	(24)	(83.3)
		____	____	____
		59	(27)	NMc
Operating exceptional items		(19)	-	NMc
		____	____	_____
Operating profit/(loss)		40	(27)	NMc
		____	____	_____

EMEAA comparable RevPARb movement on previous year		6 months ended 30 June 2022

Fee business
	Six Senses	161.6%
	Regent	39.9%
	InterContinental	115.8%
	Kimpton	334.5%
	Hotel Indigo	375.6%
	voco	95.4%
	Crowne Plaza	120.7%
	Holiday Inn	143.5%
	Holiday Inn Express	157.6%
	Staybridge Suites	53.9%
	All brands	135.1%

Owned, leased and managed lease
	All brands	422.6%

		6 months ended 30 June

Greater China results		2022	2021	%
		$m	$m	change

Revenue from the reportable segmenta
	Fee business	36	59	(39.0)
		____	____	_____
Total		36	59	(39.0)
		____	____	_____
Operating profit from the reportable segmenta
	Fee business	5	31	(83.9)
		____	____	____
Operating profit		5	31	(83.9)
		____	____	____

Greater China comparable RevPARb movement on previous year		6 months ended 30 June 2022

Fee business
	Regent	(20.0)%
	InterContinental	(40.3)%
	Hotel Indigo	(23.8)%
	HUALUXE	(28.5)%
	Crowne Plaza	(23.9)%
	Holiday Inn	(18.5)%
	Holiday Inn Express	(21.8)%
	All brands	(27.2)%

●	total rooms revenue from franchised hotels;
●	total hotel revenue from managed hotels (includes food and beverage, meetings and other revenues and reflects the value IHG drives to managed hotel owners by optimising the performance of their hotels); and
●	total hotel revenue from owned, leased and managed lease hotels.

●	System Fund – the Fund is not managed to generate a profit or loss for IHG over the longer term, but is managed for the benefit of the hotels within the IHG System. The System Fund is operated to collect and administer cash assessments from hotel owners for the specific purpose of use in marketing, the Guest Reservation Systems and loyalty programme.
●	Revenues related to the reimbursement of costs – there is a cost equal to these revenues so there is no profit impact. Cost reimbursements are not applicable to all hotels, and growth in these revenues is not reflective of growth in the performance of the Group. As such, management does not include these revenues in their analysis of results.
●	Exceptional items – these are identified by virtue of their size, nature, or incidence and can include, but are not restricted to, gains and losses on the disposal of assets, impairment charges and reversals, the costs of individually significant legal cases or commercial disputes, and reorganisation costs. As each item is different in nature and scope, there will be little continuity in the detailed composition and size of the reported amounts which affect performance in successive periods. Separate disclosure of these amounts facilitates the understanding of performance including and excluding such items. Further detail of amounts presented as exceptional is included in note 5 to the interim Group Financial Statements.

●	Underlying revenue;
●	Underlying operating profit;
●	Underlying fee revenue; and
●	Fee margin.

●	Interest income is recorded in the System Fund on the outstanding cash balance relating to the IHG loyalty programme. These interest payments are recognised as interest expense for IHG.
●	Other components of System Fund interest income and expense, including capitalised interest, lease interest expense and interest income on overdue receivables.