Financial results	2009	2008	% change		% change (CER)
			Total	Excluding LDs 1	Total	Excluding LDs 1
Continuing revenue	$342m	$448m	(24)%	(22)%	(19)%	(17)%
Continuing operating profit	$69m	$124m	(44)%	(41)%	(48)%	(45)%
Total operating profit	$72m	$127m	(43)%	(39)%	(47)%	(44)%
Adjusted continuing EPS	14.8¢	22.9¢	(35)%
Adjusted total EPS	15.5¢	23.6¢	(34)%
Total basic EPS2	9.5¢	21.2¢	(55)%
Net debt	$1,287m	$1,679m

Business headlines
·	Global constant currency RevPAR decline of 13.6%. IHG’s brands outperformed the industry in each of its three regions.
·	1,845 net rooms (36 hotels) added in the quarter taking total system size to 621,696 rooms (4,222 hotels).
·	12,440 rooms (98 hotels) added to the system, 10,595 rooms (62 hotels) removed in line with our quality growth strategy.
·	10,551 rooms (76 hotels) signed, taking the pipeline to 236,343 rooms (1,697 hotels).
·	Net debt of $1.3bn held flat on the position as at 31 December 2008.
·	Exceptional operating items of $26m relate to a $21m previously committed final payment into the UK pension fund and $5m associated with the Holiday Inn relaunch.

Recent trading
·	April was impacted by the movement of Easter from March to April. April global constant currency RevPAR decline of 19.8%; -18.8% Americas, -22.4% EMEA and -20.6% Asia Pacific.
·	No further deterioration in demand is visible in forward bookings, but room rates remain under pressure.

Update on priorities
·	Open rooms. Currently 90,000 rooms under construction, at least 38,000 of which are scheduled to open in the balance of the year (12,440 rooms opened in the quarter). Continued focus on driving up the overall quality of the system means room removals in the balance of the year will be in the region of 25,000.
·	Drive share.  US RevPAR outperformed the market by 3.5 percentage points (IHG US brands Q1 RevPAR decline of 14.2% compared to US industry of 17.7%).
·	Relaunch Holiday Inn. 729 hotels operating under the new standards year to date. Early indications from the first relaunched hotels continue to show RevPAR outperformance of more than 5% compared to a control group.
·	Reduce costs. In February, IHG announced a cost saving programme which would reduce 2009 regional and central costs by $30m at constant currency. Q1 regional and central costs were $7m below 2008 levels on a constant currency basis ($18m on a reported basis). The full year cost savings are on track, and at current exchange rates and including some additional savings, reported regional and central overheads are now expected to be $70m below 2008 levels.

Comme nting on the results , Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said:

" As expected th e  start to the year has been very challenging for the industry.    O ccupancy showed signs of stabilisation in the quarter,  but  r oom rates, which  held up well during 2008 ,   declined  under the pressure of a very  competitive  market. Our brands  continue to  perform strongly across  all thre e of our regions, and in the US our  RevPAR outperformance   has improved further  from the last quarter of 2008,  mostly as a result of our portfolio bias to  midscale  hotels , primarily  Holiday Inn . " The lack of liquidity in the lending markets has slowed our deal pace but we  still  signed 76 hotels in the quarter.    We also opened  close to  100 hotels, more than in the same period last year.    This opening programme combined  with our  continued removal of   under performing   hotels is  driv ing   up the quality of our estate.    We are continuing to invest in our  business  with the major focus   being the   relaunch of Holiday Inn.    We now have   over   700  relaunched hotels   in the system a nd  remain   committed to completing the  programme by the end of 2010.    Feedback  from relaunched hotels  continues to be positive ,  with  RevPAR outperformance in line with expectations. " Our strong balance sheet and long term bank facility provide  a strong platform for our capital light ,  cash generative,  fee based model.    T he  outlook remains  tough   but  we  are  taking decisive action  on  costs   without compromising our ability  to  continue to   grow market share ."

Americas :  midscale  resilience

Revenue performance RevPAR  declined  13.5 %  driven by  both occupancy and rate .     In the US,  IHG brands outperformed the  industry  by  3.5 percentage points ,  driven by the  resilience of  the midscale brands which represent  80% of IHG's rooms in this market.   Continuing  revenue s  declined  2 6 %  to $170 m.    Exclu ding one  $13m liquidated damages receipt  in the first quarter  of 2008, continuing revenues declined 22 %. Operating profit performance O perating profit  from continuing operations  declined   46 % from $ 112 m to $ 60 m .    Excluding the liquidated damages, continuing operating profit declined 39%.  The contribution from c ontinuing owned and leased  hotels  declined from  a profit of $7m to a loss of $ 4 m  driven by a 28 .2 %  decline in RevPAR and the absence of any  contribution from  the Holiday Inn Jamaica  which was  sold in  September 2008 .   Excluding the $13m liquidated damages receipt in the first quarter of 2008, managed  hotels profit  declined b y $14m to a loss of $ 4 m .   This was primarily due to guarantee payments where the commitments are phased evenly through the year, but the hotel cash flows which fund them are seasonally low in the first quarter .   Franchised hotels profit decreas ed by $17m to $80m driven by an 11 % d ecline in royalty fees and a $5 m reduction in  non-royalty  fees .

EMEA:  r esilience  in the Middle East

Revenue performance RevPAR declined   11.6 %  driven by both occupancy and rate. The Middle East remained the strongest market with a decline in RevPAR of 2.3 % . IHG hotels in the UK outperformed the market with a RevPAR decline of 9.0 % .   Continuing revenu es declined 24% (10%  at constant exchange rates   ( CER ) ) to $87m .     Excluding one  $3m liquidated damages receipt in the first quarter of 2009, continuing revenues declined 27% (12% CER).  Operating profit performance   Operating profit  from continuing operations declined   20 %  (13 %  CER )  from  $ 30 m to  $ 24 m  or 30% (23% CER) e xcluding the $3m liquidated damages receipt .     Owned and leased profits decline d by  $4m to $1m, with  a  strong  performance   at the Int erContinental London Park Lane  being  offset by the impact of a  weak market  on the InterContinental Paris Le Grand. Ma naged hotels profit declined  by   $5m to $16m . Continued g ro wth in the Middle East was offset by the annualisation of the  reduced contribution from a portfolio of hotels in the UK ,  first reported in the third quarter of 2008. Excluding the  $3 m liquidated damages receipt  in the first quarter of 2009, franchised hotels profit declined 1 3% to $13m, but grew 7% at CER  as the  contribution from  a  5%  increase in the number   of  franchised rooms partially  o ffset  an 11.8 % RevPAR decline.

Asia  Pacific:  RevPAR outperformance

Revenue performance RevPAR  declined  17.2 %  driven by both occupancy and rate.    Trading in the major cities of   Greater China  remained  very  soft driving RevPAR down   19.9 % , significantly   better than the industry down 32.5%  which was heavily impacted by oversu pply in  major markets.  Continuing revenues  declined   22% (19% CER)  to $ 56m . Operating profit performance   Operating profit from continuing operations  declined   41 %  (35 % CER)  from $ 17 m to $ 10 m .     Operating profit at owned and leased hotels   decreased by $3m to $7m  primarily  reflecting a RevPAR decline of  21 .1 %  at the InterContinental Hong Kong.    Managed hotel s profit  decreased  43% (29% CER)  to $8m .

I nterest and  t ax

The interest c harge for the quarter fell $ 16 m to  $ 14 m  due to a reduction in  interest rates and lower average net debt. Based on the position at the end of the quarter, the tax charge has been calculated using an estimated annual tax rate of 24% (Q1 2008: 29%).   The reported tax rate may continue t o vary year-on-year  but is expected to incr ease in the medium to long term .

Cash  flow  &  n et debt

Capital expenditure of $18m was $10m below 2008  levels  and as disclosed previously, full year maintenance capital expenditure is expected to be c.$75m, down 25% on 2008 levels.  IHG's net  debt was  maintained at $1.3bn at the end of the quarter, including the $ 202m  finance lease on the InterContinental Boston .    IHG remains well place d  in terms of its banking facilities, with a $1.6bn revolving credit facility expiring May 2013 and a $0.5bn term loan expiring November 2010 .

	Number of  owned  hotels	Proceeds	Net book value
Disposed since April 2003	183	$5.5 bn	$5.2bn
Remaining hotels	16		$1.6 bn

	Americas	EMEA	Asia  Pacific	Total
Openings	9,666	841	1,933	12,440
Removals	(6,759)	(1,494)	(2,342)	(10,595)
Net openings	2,907	(653)	(409)	1,845
Signings	6,602	1,994	1,955	10,551

Three months to 31 Mar ch   $ m	Total		Americas		EMEA			Asia  Pacific		Central
	200 9	200 8	200 9	200 8		200 9	200 8	200 9	200 8	200 9	200 8
Franchised  operating profit	97	114	80	97		16	15	1	2
Managed  operating profit	20	58	(4)	23		16	21	8	14
Continuing owned and leased operating profit	4	22	(4)	7		1	5	7	10
Regional overheads	(27)	(35)	(12)	(15)		(9)	(11)	(6)	(9)
Continuing operating profit pre central overheads	94	159	60	112		24	30	10	17
Central overheads	(25)	(35)	-	-		-	-	-	-	(25)	(35)
Continuing operating profit	69	124	60	112		24	30	10	17	(25)	(35)
Discontinued owned and leased operating profit	3	3	3	3		-	-	-	-
Total operating profit	72	127	63	115		24	30	10	17	(25)	(35)

	Americas		EMEA		Asia  Pacific		Total ***
	Actual currency*	Constant currency**	Actual currency*	Constant currency**	Actual currency*	Constant C urrency**	Actual currency*	Constant currency**
Growth	(46)%	(46)%	(20)%	(13)%	(41)%	(35)%	(44)%	(48)%

Exchange rates	GBP:USD	EUR: USD
200 9	0.7 0	0.77
200 8	0.5 0	0.67

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		3 months ended  31 March 2009			3 months ended  31 March 2008
		Before exceptional  items	Exceptional items (note 7)	Total	Before exceptional items	Exceptional items (note 7)	Total
		$ m	$ m	$ m	$ m	$ m	$ m
Continuing operations
Revenue   (note 3)		342	-	342	448	-	448
Cost of sales		(176)	-	(176)	(205)	-	(205)
Administrative expenses		(73)	(26)	(99)	(91)	(9)	(100)
Other operating income and expenses		1	-	1	1	-	1
		____	____	____	____	____	____
		94	(26)	68	153	(9)	144
Depreciation and amortisation		(25)	-	(25)	(29)	(1)	(30)
		_____	_____	____	_____	_____	____
Operating profit (note 3)		69	(26)	43	124	(10)	114
Financial income		1	-	1	3	-	3
Financial expenses		(15)	-	(15)	(33)	-	(33)
		____	____	____	____	____	____
Profit before tax  (note 3)		55	(26)	29	94	(10)	84
Tax (note 8)		(13)	5	(8)	(27)	3	(24)
		____	____	____	____	____	____
Profit for the period from continuing operations		42	(21)	21	67	(7)	60
Profit for the period from discontinued operations (note 9)		2	4	6	2	-	2
		____	____	____	____	____	____
Profit for the period attributable to the equity holders of the parent		44	(17)	27	69	(7)	62
		====	====	====	====	====	====
Earnings per ordinary share (note 10)
Continuing operations:
	Basic			7.4 ¢			20.5 ¢
	Diluted			7.4 ¢			20.3 ¢
	Adjusted	14.8 ¢			22.9 ¢
	Adjusted diluted	14.7 ¢			22.7 ¢
Total operations:
	Basic			9.5 ¢			21.2 ¢
	Diluted			9.5 ¢			21.0 ¢
	Adjusted	15.5 ¢			23.6 ¢
	Adjusted diluted	15.4 ¢			23.4 ¢
		====		====	====		====

		2009 3 months ended  31 March $ m	2008 3 months ended  31 March restated* $ m
Profit for the period		27	62
Other comprehensive income
G ains on valuation of available-for-sale assets		5	6
Cash flow hedges:
	Losses arising during the period	(4)	-
	Transferred to financial expenses	3	-
Actuarial gains/(losses)  on defined benefit pension plans , net of asset restriction		34	(14)
Exchange differences on retranslation of foreign operations		(14)	20
Tax related to above components of other comprehensive income		(4)	4
Tax related to share schemes		(1)	(4)
Tax related to pension contributions		-	6
		____	____
Other comprehensive income for the period		19	18
		____	____
Total compreh ensive income for the period		46	80
		====	====
Attributable to:
	Equity holders of the parent	47	80
	Minority equity interest	(1)	-
		____	____
		46	80
		====	====

*	Restated for IFRIC 14 (note 1).

	3 months ended 31 March 2009
	Equity share capital	Other reserves*	Retained earnings	Minority interest	Total equity
	$ m	$m	$ m	$ m	$ m
At beginning of the period	118	(2,748)	2,624	7	1
Total comprehensive income for the period	-	(9)	56	(1)	46
Movement in shares in employee share trusts	-	42	(41)	-	1
Equity-settled share-based cost, net of payments	-	-	3	-	3
Exchange adjustments	(2)	2	-	-	-
	____	____	____	____	____
At end of the period	116	(2,713)	2,642	6	51
	====	====	====	====	====

	3 months ended 31 March 2008
	Equity share capital	Other reserves*	Retained earnings	Minority interest	Total equity
	$ m	$m	$ m	$ m	$ m
At beginning of the period	163	(2,720)	2,649	6	98
Total comprehensive income for the period	-	26	54	-	80
Issue of ordinary shares	1	-	-	-	1
Purchase of own shares	-	-	(25)	-	(25)
Movement in shares in employee share trusts	-	52	(51)	-	1
Equity-settled share-based cost, net of payments	-	-	1	-	1
Exchange adjustments	(1)	1	-	-	-
	____	____	____	____	____
At end of the period	163	(2,641)	2,628	6	156
	====	====	====	====	====

*	Other reserves comprise the capital redemption reserve, shares held by employee share trusts, other reserves, unrealised gains and losses reserve and currency translation reserve.

		2009 3  months ended  31 March	2008 3  months ended  31 March
		$ m	$ m
Profit for the period		27	62
Adjustments for:
	Net financial expenses	14	30
	Income tax charge	9	25
	Gain on disposal of assets - tax credit	(4)	-
	Exceptional operating items before depreciation	26	9
	Depreciation and amortisation	25	30
	Equity settled share-based cost, net of payments	3	1
		_____	_____
Operating cash flow before movements in working capital		100	157
Increase in net working capital		(35)	(54)
Retirement benefit contributions, net of cost		(1)	(22)
Cash flows relating to exceptional operating items		(32)	(7)
		_____	_____
Cash flow from operations		32	74
Interest paid		(14)	(31)
Interest received		1	3
Tax   paid  on operating activities		(28)	(5)
		_____	_____
Net cash from operating activities		(9)	41
		_____	_____
Cash flow from investing activities
Purchases of proper ty, plant and equipment		(9)	(18)
Purchases of intangible assets		(9)	(10)
Proceeds from  associates and other financial assets		8	8
		_____	_____
Net cash from investing activities		(10)	(20)
		_____	_____
Cash flow from financing activities
Proceeds from the issue of share capital		-	1
Purchase of own shares		-	(25)
Purchase of own shares by employee share trusts		(2)	-
Proceeds on release of own shares by employee share trusts		1	1
Increase  in borrowings		66	75
		_____	_____
Net cash from financing activities		65	52
		_____	_____
Net movement in cash and cash equivalents in the period		46	73
Cash and cash equivalents at beginning of the period		82	105
Exchange rate effects		(7)	(1)
		_____	_____
Cash and cash equivalents at end of the period		121	177
		=====	=====

	2009 31 March	2008 31 March restated*	2008 31 December
	$ m	$ m	$ m
ASSETS
Property, plant and equipment	1,660	1,954	1,684
Goodwill	142	224	143
I ntangible assets	300	345	302
Investment in associates	42	67	43
Retirement benefit assets	55	64	40
Other financial assets	153	170	152
	_____	_____	_____
Total non-current assets	2,352	2,824	2,364
	_____	_____	_____
Inventories	4	5	4
Trade and other receivables	393	504	412
Current tax receivable	46	96	36
Cash and cash equivalents	121	177	82
Other financial assets	5	35	10
	_____	_____	_____
Total current assets	569	817	544
Non-current assets classified as held for sale	211	115	210
	______	______	______
Total assets  (note 3)	3,132	3,756	3,118
	=====	=====	=====
LIABILITIES
Loans and other borrowings	(20)	(17)	(21)
Trade and other payables	(683)	(756)	(746)
Current tax payable	(345)	(434)	(374)
	_____	_____	_____
Total current liabilities	(1,048)	(1,207)	(1,141)
	_____	_____	_____
Loans and other borrowings	(1,388)	(1,839)	(1,334)
Retirement benefit obligations	(113)	(119)	(129)
Trade  and other payables	(398)	(281)	(392)
Deferred tax payable	(131)	(147)	(117)
	_____	_____	_____
Total non-current liabilities	(2,030)	(2,386)	(1,972)
Liabilities classified as held for sale	(3)	(7)	(4)
	_____	_____	_____
Total liabilities	(3,081)	(3,600)	(3,117)
	=====	=====	=====
Net assets	51	156	1
	=====	=====	=====
EQUITY
Equity share capital	116	163	118
Capital redemption reserve	10	10	10
Shares held by employee share trusts	(7)	(31)	(49)
Other reserves	(2,888)	(2,917)	(2,890)
Unrealised gains and losses reserve	13	44	9
Currency translation reserve	159	253	172
Retained earnings	2,642	2,628	2,624
	______	______	______
IHG shareholders' equity	45	150	(6)
Minority   equity  interest	6	6	7
	______	______	______
Total equity	51	156	1
	=====	=====	=====

*	Restated for IFRIC 14 (note 1).

1.

Basis of preparation

These condensed interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the  United Kingdom 's Financial Services Authority and IAS 34 'Interim Financial Reporting'. Other than the changes listed below, they have been prepared on a consistent basis using the accounting policies set out in the  InterContinental Hotels Group  (the Group or IHG) Annual Report and Financial Statements for the year ended 31 December 2008. With effect from 1 January 2009, the Group has implemented IAS 1 (Revised) 'Presentation of Financial Statements', IAS 23 (Revised) 'Borrowing Costs', IFRS 8 'Operating Segments' and IFRIC 13 'Customer Loyalty Programmes'. Except for certain presentational changes, including the introduction of a 'Group Statement of Changes in Equity' as a primary financial statement, the adoption of these standards has had no material impact on the financial statements and there has been no requirement to restate prior year comparatives. Following the adoption of IFRIC 14 'IAS 19 - The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction' at 31 December 2007, the 31 March 2008 Statement of Financial Position has been amended to show the retirement benefit assets net of tax previously recorded within deferred tax payable. There have been corresponding changes to the actuarial gains and related tax reported in the restated Group Statement of Comprehensive Income for the three months ended 31 March 2008. There is no change to previously reported net assets. These financial statements are presented in US dollars following a management decision to change the reporting currency from sterling in 2008. The change was made to reflect the profile of the Group's revenue and operating profit which are now primarily generated in US dollars or US dollar linked currencies. Comparative information has been restated into US dollars. These  condensed interim  financial statements are unaudited and do not constitute statutory accounts of the Group within the meaning of Section 240 of the Companies Act 1985. T he auditors have carried out a r eview of the financial information in accordance with the guidance contain ed   in ISRE 2410 ( UK  and  Ireland ) 'Review of Interim F inanc ial Information Performed by the Independent Auditor of the Entity' issued by the A uditing Practices Board. The financial information for the year ended 31 December  2008  has been extracted from the Group's published financial statements for that year  which  contain an unqualified audit report  and   which  have been filed with the Registrar of Companies.

2.

Exchange rates

The results of operations have been translated into  US dollars  at the average rates of exchange for the period. In the case of  sterling , the translation rate for the  three  months ended  31 March is $1= £0.70   (2008 3 months, $1=£0.50 ). In the case of the euro, the translation rate for the  three  months ended  31 March is $ 1 =  €0.77  ( 2008 3 months, $1 = €0.67 ). A ssets and liabilities have been translated into  US dollars  at the rates of exchange on the  balance sheet date . In the case of  sterling, the translation rate is $1=£0.70  ( 2008  31  December $1 = £0.69; 31 March $1 = £0.50 ). In the case of the euro, the  translation rate is $1 = €0.75  ( 2008   31 December $1 = €0.71 ;  31 March    $ 1=  €0.63 ).

3.	Segmental Information
	Revenue	2009 3  months  e nded   31 March	2008 3  months   ended  31 March
		$ m	$ m
	Continuing operations :
	Americas    (note 4)	170	230
	EMEA   (note 5)	87	115
	Asia  Pacific   (note 6)	56	72
	Central	29	31
		____	____
	Revenue from continuing operations	342	448
	Discontinued operations -  Americas  (note 4)	9	11
		____	____
	Total revenue	351	459
		====	====

	Profit	2009 3  months   ended  31 March $ m	2008 3  months   ended  31 March $ m
	Continuing operations :
	Americas  (note 4)	60	112
	EMEA  (note 5)	24	30
	Asia Pacific  (note 6)	10	17
	Central	(25)	(35)
		____	____
	Reportable segments'  operating  profit	69	124
	Exceptional operating items (note 7)	(26)	(10)
		____	____
	Operating profit from continuing operations	43	114
	Financial income	1	3
	Financial expenses	(15)	(33)
		____	____
	Profit before tax from continuing operations	29	84
	Discontinued operations -  Americas  (note 4)	3	3
		____	____
	Total profit before tax	32	87
		====	====

	Assets	2009 31 March $ m	2008 31 March restated* $ m	2008 31 December $ m
	Americas	1,238	1,361	1,240
	EMEA	932	1,274	958
	Asia  Pacific	604	683	613
	Central	191	165	189
		____	____	____
	Segment assets	2,965	3,483	3,000
	Unallocated assets:
	Current tax receivable	46	96	36
	Cash and cash equivalents	121	177	82
		____	____	____
	Total assets	3,132	3,756	3,118
		====	====	====

*

Restated for IFRIC 14 (note 1).

4 .	Americas
			2009 3  months  ended 31 March $ m	2008 3  months  ended 31 March $ m
	Revenue
		Owned and leased	40	63
		Managed	31	53
		Franchised	99	114
			____	____
	Continuing operations		170	230
	Discontinued operations*		9	11
			____	____
	Total		179	241
			====	====
	Operating profit
		Owned and leased	(4)	7
		Managed	(4)	23
		Franchised	80	97
		Regional overheads	(12)	(15)
			____	____
	Continuing operations		60	112
	Discontinued operations*		3	3
			____	____
	Total		63	115
			====	====

*

Discontinued operations are all owned and leased.

5 .	EMEA
			2009 3  months  ended 31 March $ m	2008 3  months  ended 31 March $ m
	Revenue
		Owned and leased	38	53
		Managed	28	40
		Franchised	21	22
			____	____
	Total		87	115
			====	====
	Operating profit
		Owned and leased	1	5
		Managed	16	21
		Franchised	16	15
		Regional overheads	(9)	(11)
			____	____
	Total		24	30
			====	====

All results relate to continuing operations.

6 .	Asia  Pacific
			2009 3  months  ended 31 March $ m	2008 3  months  ended 31 March $ m
	Revenue
		Owned and leased	32	40
		Managed	21	28
		Franchised	3	4
			___	___
	Total		56	72
			====	====
	Operating profit
		Owned and leased	7	10
		Managed	8	14
		Franchised	1	2
		Regional overheads	(6)	(9)
			____	____
	Total		10	17
			====	====

All results relate to continuing operations.

7.	Exceptional items			2009 3 months ended 31 March $ m	2008 3 months ended 31 March $ m
	Continuing operations:
	Exceptional operating items
		Administrative expenses:
			Holiday Inn brand relaunch (a)	(5)	(6)
			Office reorganisations (b)	-	(3)
			Enhanced pension transfer (c)	(21)	-
				____	____
				(26)	(9)
					-
		Depreciation and amortisation:
			Office reorganisations (b)	-	(1)
				____	____
				(26)	(10)
				====	====
	Tax
	Tax on  exceptional operating items			5	3
				====	====
	Discontinued operations:
	Gain on disposal of assets  - tax credit			4	-
				====	====

	The above items are treated as exceptional by reason of their size or nature.
	a )	Relates to costs incurred in support of the worldwide relaunch of the Holiday Inn brand family that was announced on 24 October 2007.
	b )	Related  to costs incurred on the relocation of the Group's head office and the closure of its Aylesbury facility.
	c)	Relates to the payment of enhanced pension transfers to those deferred members of the  InterContinental Hotels  UK Pension Plan who had accepted an offer to receive the enhancement either as a cash lump sum or as an additional transfer value to an alternative pension plan provider. The exceptional item comprises the lump sum payments, the IAS 19 settlement loss arising on the pension transfers and the costs of the arrangement. The payments and transfers were made in January 2009.

8 .	Tax
	The tax charge on the combined profit from continuing and discontinued operations, excluding the impact of e xceptional items (note 7 ), has been calculated using an estimated effective ann ual tax rate of 24% (2008 29 %)  analysed as follows.

			2009	2009	2009	2008	2008	2008
	3 months ended 31 March		Profit $ m	Tax $ m	Tax rate	Profit $ m	Tax $ m	Tax r ate
	Before exceptional items
	Continuing operations		55	(13)		94	(27)
	Discontinued operations		3	(1)		3	(1)
			____	____		____	____
			58	(14)	24%	97	(28)	29%
	Exceptional items
	Continuing operations		(26)	5		(10)	3
	Discontinued operations		-	4		-	-
			____	____		____	____
			32	(5)		87	(25)
			====	====		====	====
	Analysed as:
		UK  tax		4			(4)
		Foreign tax		(9)			(21)
				____			_____
				(5)			(25)
				====			====

By also excluding the effect of prior year items, the equivalent effective tax  rate would be approximately 39% (2008 3 months ended 31 March 35%; year ended 31 December 39%). Prior year items  have been treated as relating wholly to continuing operations.

9 .	Discontinued operations
	Discontinued operations are those relating to hotels sold or those classified as held for sale as part of the asset disposal programme that commenced in 2003. These disposals underpin IHG's strategy of growing its managed and franchised business whilst reducing asset ownership.
	The results of discontinued operations  which have been included in the consolidated income statement are  as follows:

		2009 3  months  ended 31 March	2008 3  months  ended 31 March
		$ m	$ m
	Revenue	9	11
	Cost of sales	(6)	(8)
		____	____
	Operating profit	3	3
	Tax	(1)	(1)
		____	____
	Profit after tax	2	2
	Gain on disposal of assets - tax credit	4	-
		____	____
	Profit for the period from discontinued operations	6	2
		====	====
		2009 3 months ended 31 March  cents per share	2008 3 months ended 31 March cents per share
	Earnings per share from discontinued operations
	Basic	2.1	0.7
	Diluted	2.1	0.7
		====	====

The effect of discontinued operations on segment results is  shown in notes 3 and 4 .

10.

Earnings per ordinary share

Basic earnings per ordinary share is calculated by dividing the profit for the period available for IHG equity holders by the weighted average number of ordinary shares, excluding investment in own shares, in issue during the period. Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional exercise of the weighted average number of dilutive ordinary share options outstanding during the period. Adjusted earnings per ordinary share is disclosed in order to show performance undistorted by exceptional items, to give a more meaningful comparison of the Group's performance.

	3 months ended 31 March		2009	2009	2008	2008
			Continuing operations	Total	Continuing operations	Total
	Basic earnings per share
	Profit available for equity holders  ($m)		21	27	60	62
	Basic weighted average number of ordinary shares (millions)		284	284	292	292
	Basic earnings per share ( cents )		7.4	9.5	20.5	21.2
			====	=====	====	=====
	Diluted earnings per share
	Profit available for equity holders  ($m)		21	27	60	62
	Diluted weighted average number of ordinary  shares (millions)		285	285	295	295
	Diluted earnings per share ( cents )		7.4	9.5	20.3	21.0
			====	=====	===	===
	Adjusted earnings per share
	Profit available for equity holders ($m)		21	27	60	62
	Adjusting items (note 7):
		Exceptional operating items ($m)	26	26	10	10
		Tax ($m)	(5)	(5)	(3)	(3)
		Gain on disposal of assets, net of tax ($m)	-	(4)	-	-
			____	____	____	____
	Adjusted earnings ($m)		42	44	67	69
	Basic weighted average number of ordinary shares (millions)		284	284	292	292
	Adjusted earnings per share (cents)		14.8	15.5	22.9	23.6
			====	====	====	====
	Diluted weighted average number of ordinary shares (millions)		285	285	295	295
	Adjusted diluted earnings per share (cents)		14.7	15.4	22.7	23.4
			====	====	====	====

The diluted weighted average number of or dinary shares is calculated as:

		2009 3 months   ended 31 March millions	2008 3 months   ended 31 March millions
	Basic weighted average number of ordinary shares	284	292
	Dilutive potential ordinary shares - employee share options	1	3
		____	____
		285	295
		====	====

11 .	Net debt
		2009 31 March	2008 31 March	2008 31 December
		$ m	$ m	$ m
	Cash and cash equivalents	121	177	82
	Loans and other borrowings  -  current	(20)	(17)	(21)
	Loans and other borrowings - non-current	(1,388)	(1,839)	(1,334)
		____	____	____
	Net debt	(1,287)	(1,679)	(1,273)
		====	====	====
	Finance lease liability included above	(202)	(200)	(202)
		====	====	====

12 .	Movement in net debt
			2009 3 months ended 31 March	2008 3 months ended 31 March	2008 12 months ended 31 December
			$ m	$ m	$ m
	Net increase  in cash and cash equivalents		46	73	25
	Add back cash flow s  in respect of other components of net debt:
		(Increase)/decrease  in borrowings	(66)	(75)	316
			____	____	____
	(Increase)/decrease  in net debt arising from cash flows		(20)	(2)	341
	Non-cash movements:
		Finance lease liability	(1)	(5)	(2)
		Exchange and other adjustments	7	(13)	47
			____	____	____
	(Increase) /decrease in net debt		(14)	(20)	386
	Net debt at beginning of the period		(1,273)	(1,659)	(1,659)
			____	____	____
	Net debt at end of the period		(1,287)	(1,679)	(1,273)
			====	====	====

13.

Dividends The proposed final dividend of 29.2 cents per share for the year ended 31 December 2008 is not recognised in these accounts as it remains subject to approval at the Annual General Meeting to be held on 29 May 2009. If approved, the dividend will be paid on 5 June 2009 to shareholders who were registered on 27 March 2009 at an expected total cost of $83m.

14 .

Capital commitments and contingencies

At  31 March 2009,   the  amoun t  contracted for but not provided  for  in the financial statements for expenditure on property, plant and equipment was  $33m (2008 31 December $40m; 31 March $18m ). At  31 March 2009 , the Group h ad contingent liabilities of $10m (2008 31 December $12m; 31 March $20m ), mainly comprising guarantees given in the ordinary course of business. In limited cases, the Group may provide performance guarantees to third-party owners to secure management contracts. The maximum exp osure under such guarantees is $232m (2008 31 December $249m; 31 March $218m ).   Payments under any such guarantees are charged to the income statement as incurred. The Group has given warranties in respect of the disposal of certain of its former subsidiaries. It is the view of the Directors that, other than to the extent that liabilities have been provided for in these financial statements, such warranties are not expected to result in  material  financial loss to the Group .

15.	Other  commitments
	On 24 October 2007, the Group announced a worldwide relaunch of its Holiday Inn brand family. In support of this relaunch, IHG will make a non-recurring revenue investment of $60m which will be charged to the Group income statement as an exceptional item. $40m has been incurred to date, including the $5m charged in the first three months of 2009.

INDEPENDENT REVIEW REPORT TO  InterContinental Hotels Group pLC

Introduction We have been  engaged  by the Company to review the  condensed set of  financial  statements in the interim financial report  for the  three  months ended  31 March 2009  which comprises the Group income statement, Group statement of  comprehensive income, Group statement of changes in equity,  Group  statement of cash flows , Group  statement of financial position  and the related notes  1  to  15 . We have read the othe r information contained in the interim financial r eport and considered whether it contains any apparent misstatements or material inconsistencies with the information  in the condensed set of financial statements . This report is made solely to the Company in accordance with guidance contained i n ISRE 2410 ( UK  and  Ireland ) 'Review of Interim Financial Information   Performed by the Independent Auditor of the Entity'  issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' R esponsibilities The interim financial report  is the responsibility of, and has been approved by, the Directors. The Directors are respon sible for preparing the interim financial r eport in accordance with the  Disclosure and Transparency  Rules of the  United Kingdom 's  Financial Services Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.   Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review. Scope of Review We conducted our review in accordance with  International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information   Performed by the Independent Auditor of the Entity'  issued by the Auditing Practices Board for use in the United Kingdom. A review  of interim financial information  consists of making enquiries , primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures . A review  is  substantially less in scope than an audit  conducted  in accordance with International Standards on Auditing ( UK  and  Ireland ) and  consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit . Accordingly we do not express an audit opinion. C onclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the three months ended 31 March 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. Ernst & Young LLP London 11 May 2009