Thank you for standing by and welcome to the IHG Q3 Results Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]. This announcement contains certain forward-looking statements as defined under US law, Section 21E of the Securities Exchange Act of 1934. These forward-looking statements can be identified by the fact that they do not relate to historical or current facts. Forward-looking statements often use words such as target, expect, intend, believe or other words of similar meaning. By their nature, forward-looking statements are inherently predictive, speculative, and involve risk and uncertainty. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Factors that could affect the business and the financial results are described as risk factors in the InterContinental Hotels Group PLC Annual Report on Form 20-F filed with the United States Securities and Exchange Commission. I would now like to hand the conference over to your host today, Andy Cosslett. Please go ahead.

Thanks very much indeed. Well, good morning, ladies and gentlemen. Thanks for joining the call. This is Andy Cosslett, Chief Executive of InterContinental Hotels Group, and I'm joined here in London by our Finance Director, Rich Solomons. I expect you've all had a chance to look at our results statement already. So, I will just briefly highlight a few key points, and then Rich and I will take any questions that you have. Well, the Group had a good third quarter. Trading was healthy around the world and signings and openings of new hotels continued at record pace. Global RevPAR for IHG increased 6% on a constant currency basis. And year-to-date, we've grown our RevPAR faster than the market in all our major geographies and by 7% overall. Regionally, Asia-Pacific region was the strongest with RevPAR growth of 8.6%, driven primarily by rate increases. In EMEA, RevPAR grew 6.7%. This is a strong performance across the region, including 18% growth in the Middle East. It was impacted by slower growth in Germany as we lagged the football World Cup, which took place last year. In the Americas, RevPAR grew 5.6%, impacted in July and September by the timing of holidays, but both InterContinental and Crowne Plaza outperformed their market segments. Holiday Inn and Holiday Inn Express continued to deliver strong RevPAR premium to their respective segments. During quarter, both grew rates ahead of the market, but saw slightly weaker than market declines in occupancy levels. In our continuing businesses, revenues increased 20% and operating profit 31% at constant exchange rates. Both our Franchised and Managed businesses grew strongly with operating profit up over 16% at constant currency. The profits from our owned and leased hotels increased by 10 million pounds to 15 million pounds as the InterContinental London Park Lane…

Thank you. [Operator Instructions]. Your first question today comes from Patrick Scholes [ph]. Please go ahead.

All right. Good morning. This is the same question I had asked back in September during your Investor Meeting here in New York. Have you seen any changes such as any dropouts from your existing pipeline or any changes in inquiries due to recent credit crunch here in the U.S.?

Hi, Patrick, it's Andy. No, we really haven't. We've been obviously monitoring the situation, as you imagine, very closely. And we're all in Dallas recently for the conference and got the opportunity to talk a lot of owners on the ground as well as being in Atlanta to examine our actual pipeline and see what's going on. We are running at the usual levels of attrition. We've always said we expect to open 90% of the hotels that are in our pipeline and lose about a 10%. There doesn't seem to be any change in that trend. Our signings pace remains strong and we're not really again seeing any change in that dynamic. And the operating performance of the hotels is staying up there. So, no, I think what's happening in the wider macro market is at the moment at least independent from the operational performance of the hotels that we're running in the States.

Okay. That's great. The next question concerns the potential Atlanta sale of your Intercontinental Hotel. What is the status on that? And I'm wondering if you can give us sort of a ballpark number of what you're looking for potential proceeds on that property?

Okay, let me ask Richard to comment to that.

Yes. Hi, Patrick. I can't give you a number, it is not our practice. I'll remind you, we have achieved added book value for all the services we haven’t made so far, but the process is progressing well. We’re well into the second round, David has been talking to potential bidders. All I’ll say is I think not surprisingly, the froth is off the market and since some of them slightly top end, surprising people who turned up at these auctions a few months ago and they are no longer there. They are certainly serious bidders with good cash for assets. So, as and when we have something to say we will come back and say, but nothing right now.

Okay. And my last question concerns your international expansion, especially in China. Approximately what percent of your pipeline there is going to be via management contract versus franchisees? And I think you'd mentioned in the past that you are going to be getting more franchisee growth. But the problem had been really finding qualified operators, but has anything changed your progress in that area?

Just to remind you, the vast majority of our businesses are deals in Asia-Pacific, both current and one we’re signing up on a management basis. Mostly the whole of Asia runs on a management basis, and there were some franchisees in Australasia and in that region, but we are driven by the management contract business in China particularly, and South East Asia, and that continues to be the case. What we have done over the last 2.5 years is building franchising platform in China, specifically for the Holiday Inn Express brand, and we worked very hard to make sure that we had a protectable and deliverable platform, which we could use to extend the brand. And that has really just begun. We launched it a couple of months ago. We are talking to a number of people. We've had a couple of deals confirmed, but it is early days for that. But we hope to see some acceleration in the Holiday Inn Express franchising business through 2008, but for now certainly into the next couple of years management contracts are going to be the bulk of our deals.

Great. Thanks. That's all.

Thanks.

Your next question comes from Harry Tenekis [ph]. Please go ahead.

Hi, you got the tag team.

Hi, Harry.

Hi, Harry.

So, two quick questions, can you give us a sense in terms of your removals of some of the hotels that aren't living up to your standards? Would you expect that 20,000 removals a year to begin tapering off over the next year or two?

Harry, we've said in the past and we sort of stand by this I think at the moment in the light of even the latest news following the conference, but we expect this journey that we have been on for the last three or four years to continue for at least another two in terms of the magnitude of numbers we've been taking out. As part of the relaunch package, we’re obviously confirming the quality standards that we're expecting owners to get on Holiday Inn 2 and we've got a deadline by which we are expecting them to get to that, which in America is by the end of the third quarter 2010. And we've done a lot of work to try to model the ranges and surges that might occur around removals. But equally, there're still a lot of owners in the United States thinking who don't have a relationship with IHG we think might come to IHG as a result of this new initiatives around Holiday Inn. So, it is hard to say until we actually get into hand-to-hand combat over the next few months out there, but the early reaction has been strong. So, we've been suggesting that the recent rates of removal is probably around the right level. It might be a touch higher, a touch lower, but I would think we can expect it to be somewhere around that for another couple of years at least.

And my second questions pertains to your leverage ratios. Can you give us a sense of in 2008 what leverage ratio you're going to feel comfortable with?

Harry, it's Richard. We really haven't changed our position on that, 2.5 to 3 times to EBITDAR is what has been confirmed target, but we're comfortable with it as a company and it's an investment grade. And in today's market, I think having a strong balance sheet strongly financed is not a bad place to be. So, we're not moving from that.

The reason I asked is that as your stock price valuation sinks low into the West, does it make sense to perhaps take advantage of that? If no one really wants to buy your stock, does it makes sense for you guys to buy your… and you have been, but I’m just wondering is it… at some point it doesn't make sense to take advantage of those valuations?

Yes, we've got 121 million pounds still to go on the existing program, which we will continue. And as we have said, we will look at the uses of cash flow over time, but we’ll invest in the business or return to shareholders, and we'll just keep an eye on that. But certainly, at the moment, we wouldn't expect to leverage higher in order to do that.

Okay. Thank you.

I won’t say never, but no plans today.

Okay.

Your next question comes from the Bill Tunen [ph]. Please go ahead.

Hey guys, this is Bill Van Tunen [ph].

Hi, Bill.

I had a question, just the room signings in '05 and '06 were seasonally strongest in the fourth quarter, and last year, your net room openings were strongest in the fourth quarter. So, I'm just wondering if we should think of 4Q as just a seasonally strong time for room openings and signings? Thanks.

Hi, Bill. I mean fourth quarter is typically good for openings, and signings seem to have adrenaline happening around that time, and obviously it’s [inaudible] for planning the calendar. But the A&A deal for last year managed to drive a change in the final quarter, which obviously was the singular event last year. We've got some good momentum with us at the moment, but we've said the program is back-end loaded. I think what we are seeing now as we get Q3 results, is the system opening up… the pipeline opening up finally, have this lag that we have to go through to get those open. But no, we don't sort of call individual quarters, the second half has always been bigger than the first half. And take the A&A event out then probably was thereabouts, but we can say that it obviously remained strong because you need to stay strong to get to our forecast or to beat our target, which we are always saying we're going to do.

Great. Thanks.

Thanks.

[Operator Instructions]. Your next question comes from Mark Greenberg [ph]. Please go ahead.

Hi. Could you talk about the negotiated rates… the corporate rates? You mentioned you're starting to work on that now for next year, but at what point you have most of those and what percentage of the room nights in the different categories, different regions or under the corporate rates and has the… where you are using the corporate rates, has that changed either more rooms, fewer rooms, whatever than you might have been in the past?

The corporate rates negotiations it seems are getting longer. The effect… I’m not sure how precise it is, but between 20% and 25% of our revenues, and we’ve got the process underway, but it would be too early to try and give you a clear picture of what's going on other than to say that it is encouraging. We have got good outcomes so far, probably better than we expected and better than this time last year in terms of where we're at against our expectations. So, that's good news, but as I said, it's early days and a lot can change. They go on for a number of months yet and some don’t conclude until the New Year. So, I think it is early days, but encouraging sign. And in terms of the amount of our business around the regions today, is that what you asked... sorry, Mark?

Yes.

I am just looking at some guidance to that. Obviously, the year I'd say is our biggest, I think pretty much it holds… I think it pretty much holds against the profile of our overall business, which obviously is three-quarters in the U.S. and then the majority in the Western Europe and some in Asia-Pacific because it's not particular big in China at this point. But yes, we probably just bias it slightly towards America and Northern Europe, but the considerable and the thick end of the business will be done there.

Is the percentage of the rooms going under the corporate rates, is that increasing or decreasing last couple of years?

Yes, I don't think... I can't answer the question specifically. My view would be that it is pretty stable because we're getting growth across the board in terms of… if you look at the shape of our business, we're getting individual web bookings on the rise, we're getting more TPIs coming in. So, I think we are getting growth across the piece, but I don’t think the composition is changing fundamentally.

Okay.

Thanks a lot.

At this time, there are no further questions.

Okay. Well, thanks very much for coming on everybody this morning and I appreciate your time and your attention. Thanks again, and we’ll update you soon. Thanks.

That does conclude our conference for today. Thank you all for participating. You may now disconnect.