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Segmental information | 12 Months Ended
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Dec. 31, 2019
Text block [abstract] |
Segmental information | 2. Segmental information The Group has four reportable segments reflecting its geographical regions and its Central functions:
• |  | Americas;
• |  | EMEAA;
• |  | Greater China; and
• |  | Central.
Central functions include technology, sales and marketing, finance, human resources and corporate services; Central revenue arises principally from technology fee income. No operating segments have been aggregated to form these reportable segments. Management monitors the operating results of these reportable segments for the purpose of making decisions about resource allocation and performance assessment. Each of the geographical regions is led by its own Chief Executive Officer who reports to the Group Chief Executive Officer. The System Fund is not viewed as being part of the Group’s core operations as it is not managed to generate a profit or loss for IHG over the longer term. 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 Group Financial Statements, excluding System Fund and exceptional items. Group financing activities, fair value gains/(losses) on contingent purchase consideration and income taxes are managed on a Group basis and are not allocated to reportable segments. Revenue
Year ended 31 December |  | 2019 $m |  |  | 2018 $m |  |  | 2017 $m |
Americas |  |  | 1,040 |  |  |  | 1,051 |  |  |  | 999 |
EMEAA |  |  | 723 |  |  |  | 569 |  |  |  | 457 |
Greater China |  |  | 135 |  |  |  | 143 |  |  |  | 117 |
Central |  |  | 185 |  |  |  | 170 |  |  |  | 157 |
Revenue from reportable segments |  |  | 2,083 |  |  |  | 1,933 |  |  |  | 1,730 |
System Fund revenues |  |  | 1,373 |  |  |  | 1,233 |  |  |  | 1,242 |
Reimbursement of costs |  |  | 1,171 |  |  |  | 1,171 |  |  |  | 1,103 |
Total revenue |  |  | 4,627 |  |  |  | 4,337 |  |  |  | 4,075 |
Profit
Year ended 31 December |  | 2019 $m |  |  | 2018 Restated $m |  |  | 2017 Restated $m |
Americas (see below) |  |  | 700 |  |  |  | 673 |  |  |  | 648 |
EMEAA |  |  | 217 |  |  |  | 206 |  |  |  | 175 |
Greater China |  |  | 73 |  |  |  | 70 |  |  |  | 53 |
Central |  |  | (125 | ) |  |  | (117 | ) |  |  | (102 | )
Operating profit from reportable segments |  |  | 865 |  |  |  | 832 |  |  |  | 774 |
System Fund |  |  | (49 | ) |  |  | (146 | ) |  |  | (34 | )
Operating exceptional items (note 6) |  |  | (186 | ) |  |  | (104 | ) |  |  | 4 |
Operating profit |  |  | 630 |  |  |  | 582 |  |  |  | 744 |
Net finance costs |  |  | (115 | ) |  |  | (96 | ) |  |  | (91 | )
Fair value gains/(losses) on contingent purchase consideration |  |  | 27 |  |  |  | (4 | ) |  |  | — |
Profit before tax |  |  | 542 |  |  |  | 482 |  |  |  | 653 |
Tax |  |  | (156 | ) |  |  | (132 | ) |  |  | (118 | )
Profit for the year |  |  | 386 |  |  |  | 350 |  |  |  | 535 |
All items above relate to continuing operations. Operating profit from reportable segments includes business interruption insurance proceeds of $10m in 2019, relating to the Americas region, which is included in ‘other operating income’ in the Group income statement. Assets
31 December |  | 2019 $m |  |  | 2018 Restated $m |
Americas |  |  | 1,784 |  |  |  | 1,656 |
EMEAA a |  |  | 978 |  |  |  | 738 |
Greater China |  |  | 136 |  |  |  | 110 |
Central |  |  | 772 |  |  |  | 755 |
Segment assets |  |  | 3,670 |  |  |  | 3,259 |
Unallocated assets: |  |  |  |  |  |  |  |
Derivative financial instruments |  |  | 1 |  |  |  | 8 |
Tax receivable |  |  | 44 |  |  |  | 58 |
Deferred tax assets |  |  | 66 |  |  |  | 63 |
Cash and cash equivalents |  |  | 195 |  |  |  | 704 |
Total assets |  |  | 3,976 |  |  |  | 4,092 |
a | Includes assets classified as held for sale of $19m (2018: $nil).
Liabilities
31 December |  | 2019 $m |  |  | 2018 Restated $m |
Americas |  |  | (971 | ) |  |  | (995 | )
EMEAA a |  |  | (398 | ) |  |  | (386 | )
Greater China |  |  | (80 | ) |  |  | (61 | )
Central |  |  | (206 | ) |  |  | (225 | )
Segment liabilities |  |  | (1,655 | ) |  |  | (1,667 | )
Unallocated liabilities: |  |  |  |  |  |  |  |
Loyalty and co-brand deferred revenue and other payables |  |  | (1,339 | ) |  |  | (1,291 | )
Loans and other borrowings |  |  | (2,165 | ) |  |  | (2,014 | )
Derivative financial instruments |  |  | (20 | ) |  |  | — |
Tax payable |  |  | (50 | ) |  |  | (50 | )
Deferred tax liabilities |  |  | (118 | ) |  |  | (124 | )
Deferred and contingent purchase consideration b |  |  | (94 | ) |  |  | (77 | )
Total liabilities |  |  | (5,441 | ) |  |  | (5,223 | )
a | Includes liabilities classified as held for sale of $22m (2018: $nil).
b | Excludes UK portfolio which is included in EMEAA. 2018 has been restated accordingly.
Other segmental information
Year ended 31 December 2019 |  | Americas $m |  |  | EMEAA $m |  |  | Greater China $m |  |  | Central $m |  |  | Group $m |
Capital expenditure (page 153 ) |  |  | 57 |  |  |  | 71 |  |  |  | — |  |  |  | 137 |  |  |  | 265 |
Non-cash items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortisation a |  |  | 44 |  |  |  | 25 |  |  |  | 5 |  |  |  | 42 |  |  |  | 116 |
Share-based payments cost |  |  | 9 |  |  |  | 4 |  |  |  | 2 |  |  |  | 13 |  |  |  | 28 |
Share of losses/(gains) of associates and joint ventures |  |  | 9 |  |  |  | (6 | ) |  |  | — |  |  |  | — |  |  |  | 3 |
Impairment charges |  |  | 50 |  |  |  | 81 |  |  |  | — |  |  |  | — |  |  |  | 131 |
Year ended 31 December 2018 |  | Americas Restated $m |  |  | EMEAA Restated $m |  |  | Greater China Restated $m |  |  | Central Restated $m |  |  | Group Restated $m |
Capital expenditure (page 153 ) |  |  | 74 |  |  |  | 33 |  |  |  | 2 |  |  |  | 142 |  |  |  | 251 |
Non-cash items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortisation a |  |  | 46 |  |  |  | 17 |  |  |  | 7 |  |  |  | 45 |  |  |  | 115 |
Share-based payments cost |  |  | 8 |  |  |  | 4 |  |  |  | 3 |  |  |  | 12 |  |  |  | 27 |
Share of losses/(gains) of associates and joint ventures |  |  | 6 |  |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | 1 |
Year ended 31 December 2017 |  | Americas Restated $m |  |  | EMEAA Restated $m |  |  | Greater China Restated $m |  |  | Central Restated $m |  |  | Group Restated $m |
Capital expenditure |  |  | 120 |  |  |  | 26 |  |  |  | 2 |  |  |  | 202 |  |  |  | 350 |
Non-cash items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortisation a |  |  | 42 |  |  |  | 15 |  |  |  | 5 |  |  |  | 50 |  |  |  | 112 |
Share-based payments cost |  |  | 6 |  |  |  | 4 |  |  |  | 3 |  |  |  | 8 |  |  |  | 21 |
Share of losses/(gains) of associates and joint ventures |  |  | 1 |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | (3 | )
Impairment charge |  |  | 18 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 18 |
a | Included in the $ 116 m (2018: $ 115 m, 2017: $ 112 m) of depreciation and amortisation is $ 82 m (2018: $ 86 m, 2017: $ 78 m) relating to administrative expenses and $ 34 m (2018: $ 29 m, 2017: $ 34 m) relating to cost of sales. A further $ 54 m (2018: $49m, 2017: $41m) of depreciation and amortisation was recorded within System Fund expenses.
Reconciliation of capital expenditure
Year ended 31 December 2019 |  | Americas $m |  |  | EMEAA $m |  |  | Greater China $m |  |  | Central $m |  |  | Group $m |
Capital expenditure per management reporting |  |  | 57 |  |  |  | 71 |  |  |  | — |  |  |  | 137 |  |  |  | 265 |
Goodwill |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 4 |
Contract acquisition costs |  |  | (27 | ) |  |  | (35 | ) |  |  | — |  |  |  | — |  |  |  | (62 | )
Timing differences and other adjustments |  |  | 4 |  |  |  | 1 |  |  |  | — |  |  |  | (4 | ) |  |  | 1 |
Additions per the Group Financial Statements |  |  | 34 |  |  |  | 41 |  |  |  | — |  |  |  | 133 |  |  |  | 208 |
Comprising additions to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill and other intangible assets |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | 104 |  |  |  | 108 |
Property, plant and equipment |  |  | 19 |  |  |  | 29 |  |  |  | — |  |  |  | 29 |  |  |  | 77 |
Investment in associates and joint ventures |  |  | 14 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14 |
Other financial assets |  |  | 1 |  |  |  | 8 |  |  |  | — |  |  |  | — |  |  |  | 9 |
|  |  | 34 |  |  |  | 41 |  |  |  | — |  |  |  | 133 |  |  |  | 208 |
Year ended 31 December 2018 |  | Americas Restated $m |  |  | EMEAA Restated $m |  |  | Greater China Restated $m |  |  | Central Restated $m |  |  | Group Restated $m |
Capital expenditure per management reporting |  |  | 74 |  |  |  | 33 |  |  |  | 2 |  |  |  | 142 |  |  |  | 251 |
Contract acquisition costs |  |  | (32 | ) |  |  | (26 | ) |  |  | — |  |  |  | — |  |  |  | (58 | )
Timing differences and other adjustments |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
Additions per the Group Financial Statements |  |  | 43 |  |  |  | 7 |  |  |  | 2 |  |  |  | 142 |  |  |  | 194 |
Comprising additions to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intangible assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 112 |  |  |  | 112 |
Property, plant and equipment |  |  | 13 |  |  |  | 2 |  |  |  | 2 |  |  |  | 30 |  |  |  | 47 |
Investment in associates and joint ventures |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |
Other financial assets |  |  | 27 |  |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 32 |
|  |  | 43 |  |  |  | 7 |  |  |  | 2 |  |  |  | 142 |  |  |  | 194 |
Geographical information
Year ended 31 December |  | 2019 $m |  |  | 2018 $m |  |  | 2017 $m |
Revenue |  |  |  |  |  |  |  |  |  |  |  |
United Kingdom |  |  | 265 |  |  |  | 151 |  |  |  | 74 |
United States |  |  | 1,957 |  |  |  | 1,950 |  |  |  | 1,845 |
China |  |  | 214 |  |  |  | 222 |  |  |  | 201 |
Rest of World |  |  | 818 |  |  |  | 781 |  |  |  | 713 |
|  |  | 3,254 |  |  |  | 3,104 |  |  |  | 2,833 |
System Fund (note 33 ) |  |  | 1,373 |  |  |  | 1,233 |  |  |  | 1,242 |
|  |  | 4,627 |  |  |  | 4,337 |  |  |  | 4,075 |
For the purposes of the above table, hotel and reimbursable revenues are 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 |  | 2019 $m |  |  | 2018 Restated $m |
Non-current assets |  |  |  |  |  |  |  |
United Kingdom |  |  | 184 |  |  |  | 205 |
United States |  |  | 1,632 |  |  |  | 1,643 |
Rest of World |  |  | 847 |  |  |  | 510 |
|  |  | 2,663 |  |  |  | 2,358 |
For the purposes of the above table, non-current assets comprise goodwill and other intangible assets, property, plant and equipment, right-of-use assets, investments in associates and joint ventures, non-current contract costs and non-current contract assets. In addition to the United Kingdom, non-current assets relating to an individual country are separately disclosed when they represent 10 % or more of total non-current assets, as defined above.

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