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Segmental information (Tables) | 12 Months Ended
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Dec. 31, 2018
Text block [abstract] |
Summary of Information by Reportable Segment | Following this reorganisation, the management of the Group’s operations, excluding Central functions, is organised within three geographical regions:
• |  | Americas;
• |  | EMEAA; and
• |  | Greater China.
These, together with Central functions, comprise the Group’s four reportable segments. Each of the geographical regions is led by its own Chief Executive Officer who reports to the Group Chief Executive Officer. No operating segments have been aggregated to form these reportable segments. Central functions include costs of global functions including technology, sales and marketing, finance, human resources and corporate services; Central revenue arises principally from technology fee income. Management monitors the operating results of the geographical regions and Central functions separately for the purpose of making decisions about resource allocation and performance assessment. The System Fund is not viewed as being part of the Group’s core operations as IHG is unable to profit from its activities. As such, its results are not regularly reviewed by the Chief Operating Decision Maker (CODM) and it does not constitute an operating segment under IFRS 8. Similarly, reimbursements of costs are not reported to the CODM and so are not included within the reportable segments. Segmental performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the Consolidated Financial Statements, excluding System Fund and exceptional items. Group financing activities and income taxes are managed on a group basis and are not allocated to reportable segments. Comparatives have been restated for IFRS 15 and presentational changes (see pages 109-114) to show segmental information on a consistent basis. Revenue
|  | 2018 $m |  |  | 2017 Restated $m |  |  | 2016 Restated $m |
Americas |  |  | 1,051 |  |  |  | 999 |  |  |  | 969 |
EMEAA |  |  | 569 |  |  |  | 457 |  |  |  | 439 |
Greater China |  |  | 143 |  |  |  | 117 |  |  |  | 112 |
Central |  |  | 170 |  |  |  | 157 |  |  |  | 147 |
Revenue from reportable segments |  |  | 1,933 |  |  |  | 1,730 |  |  |  | 1,667 |
System Fund revenues |  |  | 1,233 |  |  |  | 1,242 |  |  |  | 1,199 |
Reimbursement of costs |  |  | 1,171 |  |  |  | 1,103 |  |  |  | 1,046 |
Total revenue |  |  | 4,337 |  |  |  | 4,075 |  |  |  | 3,912 |
Profit
|  | 2018 $m |  |  | 2017 Restated $m |  |  | 2016 Restated $m |
Americas |  |  | 662 |  |  |  | 637 |  |  |  | 626 |
EMEAA |  |  | 202 |  |  |  | 171 |  |  |  | 157 |
Greater China |  |  | 69 |  |  |  | 52 |  |  |  | 46 |
Central |  |  | (117 | ) |  |  | (102 | ) |  |  | (123 | )
Operating profit from reportable segments |  |  | 816 |  |  |  | 758 |  |  |  | 706 |
System Fund |  |  | (146 | ) |  |  | (34 | ) |  |  | 35 |
Exceptional items (note 6) |  |  | (104 | ) |  |  | 4 |  |  |  | (29 | )
Operating profit |  |  | 566 |  |  |  | 728 |  |  |  | 712 |
Net finance costs |  |  | (81 | ) |  |  | (72 | ) |  |  | (80 | )
Profit before tax |  |  | 485 |  |  |  | 656 |  |  |  | 632 |
Tax |  |  | (133 | ) |  |  | (115 | ) |  |  | (173 | )
Profit for the year |  |  | 352 |  |  |  | 541 |  |  |  | 459 |
All items above relate to continuing operations. Assets
|  | 2018 $m |  |  | 2017 Restated $m |
Americas |  |  | 1,568 |  |  |  | 1,500 |
EMEAA |  |  | 666 |  |  |  | 504 |
Greater China |  |  | 110 |  |  |  | 105 |
Central |  |  | 579 |  |  |  | 541 |
Segment assets |  |  | 2,923 |  |  |  | 2,650 |
Unallocated assets: |  |  |  |  |  |  |  |
Derivative financial instruments |  |  | 8 |  |  |  | — |
Tax receivable |  |  | 58 |  |  |  | 117 |
Deferred tax assets |  |  | 60 |  |  |  | 75 |
Cash and cash equivalents |  |  | 704 |  |  |  | 168 |
Total assets |  |  | 3,753 |  |  |  | 3,010 |
Liabilities
|  | 2018 $m |  |  | 2017 Restated $m |
Americas |  |  | (676 | ) |  |  | (620 | )
EMEAA |  |  | (241 | ) |  |  | (232 | )
Greater China |  |  | (61 | ) |  |  | (64 | )
Central |  |  | 0 |  |  |  | — |
Segment liabilities |  |  | (978 | ) |  |  | (916 | )
Unallocated liabilities: |  |  |  |  |  |  |  |
Loyalty and co-brand deferred revenue and other payables |  |  | (1,291 | ) |  |  | (1,186 | )
Loans and other borrowings |  |  | (2,249 | ) |  |  | (2,019 | )
Tax payable |  |  | (50 | ) |  |  | (89 | )
Deferred tax liabilities |  |  | (131 | ) |  |  | (101 | )
Deferred and contingent purchase consideration |  |  | (131 | ) |  |  | — |
Total liabilities |  |  | (4,830 | ) |  |  | (4,311 | )
Other segmental information
Year ended 31 December 2018 |  | Americas $m |  |  | EMEAA $m |  |  | Greater China $m |  |  | Central $m |  |  | Group $m |
Capital expenditure (see below) |  |  | 74 |  |  |  | 33 |  |  |  | 2 |  |  |  | 134 |  |  |  | 243 |
Non-cash items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortisationa |  |  | 27 |  |  |  | 8 |  |  |  | 3 |  |  |  | 42 |  |  |  | 80 |
Share-based payments cost |  |  | 8 |  |  |  | 4 |  |  |  | 3 |  |  |  | 12 |  |  |  | 27 |
Share of losses/(gains) of associates and joint ventures |  |  | 6 |  |  |  | (5 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 1 |
Year ended 31 December 2017 (Restated) |  | Americas $m |  |  | EMEAA $m |  |  | Greater China $m |  |  | Central $m |  |  | Group $m |
Capital expenditure (see below) |  |  | 120 |  |  |  | 26 |  |  |  | 2 |  |  |  | 188 |  |  |  | 336 |
Non-cash items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortisationa |  |  | 23 |  |  |  | 7 |  |  |  | 1 |  |  |  | 47 |  |  |  | 78 |
Share-based payments cost |  |  | 6 |  |  |  | 4 |  |  |  | 3 |  |  |  | 8 |  |  |  | 21 |
Share of losses/(gains) of associates and joint ventures |  |  | 1 |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | (3 | )
Impairment charges |  |  | 18 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 18 |
Year ended 31 December 2016 (Restated) |  | Americas $m |  |  | EMEAA $m |  |  | Greater China $m |  |  | Central $m |  |  | Group $m |
Capital expenditure |  |  | 67 |  |  |  | 22 |  |  |  | 1 |  |  |  | 148 |  |  |  | 238 |
Non-cash items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortisationa |  |  | 21 |  |  |  | 7 |  |  |  | 1 |  |  |  | 46 |  |  |  | 75 |
Share-based payments cost |  |  | 6 |  |  |  | 4 |  |  |  | 3 |  |  |  | 4 |  |  |  | 17 |
Share of losses/(gains) of associates and joint ventures |  |  | 7 |  |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | 2 |
Impairment charges |  |  | 16 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 16 |
a | Included in the $80m (2017: $78m, 2016: $75m) of depreciation and amortisation is $61m (2017: $53m, 2016: $54m) relating to administrative expenses and $19m (2017: $25m, 2016: $21m) relating to cost of sales. A further $45m of depreciation and amortisation was recorded within System Fund expenses (2017: $36m, 2016: $31m).
Reconciliation of capital expenditure
Year ended 31 December 2018 |  | Americas $m |  |  | EMEAA $m |  |  | Greater China $m |  |  | Central $m |  |  | Group $m |
Capital expenditure per management reporting |  |  | 74 |  |  |  | 33 |  |  |  | 2 |  |  |  | 134 |  |  |  | 243 |
Contract acquisition costs |  |  | (32 | ) |  |  | (26 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (58 | )
Landlord contributions to property, plant and equipment |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 8 |  |  |  | 8 |
Timing differences and other adjustments |  |  | 1 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1 |
Additions per the Financial Statements |  |  | 43 |  |  |  | 7 |  |  |  | 2 |  |  |  | 142 |  |  |  | 194 |
Comprising additions to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 13 |  |  |  | 2 |  |  |  | 2 |  |  |  | 30 |  |  |  | 47 |
Intangible assets |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 112 |  |  |  | 112 |
Investment in associates and joint ventures |  |  | 3 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3 |
Other financial assets |  |  | 27 |  |  |  | 5 |  |  |  | 0 |  |  |  | 0 |  |  |  | 32 |
|  |  | 43 |  |  |  | 7 |  |  |  | 2 |  |  |  | 142 |  |  |  | 194 |
Year ended 31 December 2017 (Restated) |  | Americas $m |  |  | EMEAA $m |  |  | Greater China $m |  |  | Central $m |  |  | Group $m |
Capital expenditure per management reporting |  |  | 120 |  |  |  | 26 |  |  |  | 2 |  |  |  | 188 |  |  |  | 336 |
Contract acquisition costs |  |  | (36 | ) |  |  | (21 | ) |  |  | — |  |  |  | — |  |  |  | (57 | )
Landlord contributions to property, plant and equipment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | 14 |
Timing differences and other adjustments |  |  | (12 | ) |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | (13 | )
Additions per the Financial Statements |  |  | 72 |  |  |  | 5 |  |  |  | 2 |  |  |  | 201 |  |  |  | 280 |
Comprising additions to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 10 |  |  |  | — |  |  |  | 2 |  |  |  | 32 |  |  |  | 44 |
Intangible assets |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 169 |  |  |  | 172 |
Investment in associates and joint ventures |  |  | 47 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 47 |
Other financial assets |  |  | 12 |  |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 17 |
|  |  | 72 |  |  |  | 5 |  |  |  | 2 |  |  |  | 201 |  |  |  | 280 |
Summary of Geographical Information | Geographical information
|  | Year ended 31 December 2018 $m |  |  | Year ended 31 December 2017 Restated $m |  |  | Year ended 31 December 2016 Restated $m |
Revenue |  |  |  |  |  |  |  |  |  |  |  |
United Kingdom |  |  | 151 |  |  |  | 74 |  |  |  | 72 |
United States |  |  | 1,950 |  |  |  | 1,845 |  |  |  | 1,750 |
China |  |  | 222 |  |  |  | 201 |  |  |  | 192 |
Rest of World |  |  | 781 |  |  |  | 713 |  |  |  | 699 |
|  |  | 3,104 |  |  |  | 2,833 |  |  |  | 2,713 |
System Fund (note 32) |  |  | 1,233 |  |  |  | 1,242 |  |  |  | 1,199 |
|  |  | 4,337 |  |  |  | 4,075 |  |  |  | 3,912 |
For the purposes of the above table, hotel revenue is determined according to the location of the hotel and other revenue is attributed to the country of origin. In addition to the United Kingdom, revenue relating to an individual country is separately disclosed when it represents 10% or more of total revenue. System Fund revenues are not included in the geographical analysis as the Group does not monitor the Fund’s revenue by location of the hotel, or in the case of the loyalty programme, according to the location where members consume their rewards.
|  | 31 December 2018 $m |  |  | 31 December 2017 Restated $m |
Non-current assets |  |  |  |  |  |  |  |
United Kingdom |  |  | 148 |  |  |  | 52 |
United States |  |  | 1,510 |  |  |  | 1,476 |
Rest of World |  |  | 361 |  |  |  | 297 |
|  |  | 2,019 |  |  |  | 1,825 |

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