Good morning, everyone, and thank you for joining us. Welcome to our 2012 Full Year Presentation. My name is Patrick Cescau, and I've been the Chairman of IHG since the beginning of the year. I have to say I feel very good, very privileged about joining a great team. This company has an impressive track record of delivering both strong financial results, and also, as you know, excellent return to shareholders. And 2012, as you would have seen, is no exception. So in my first couple of weeks with the business, I've been trying to get to know the business a bit better. I've been visiting operation. I've been talking to shareholders, to owners, to guests, to colleagues, and I've been impressed by what I've seen. And there are few things have impressed me particularly. IHG is a company with a very clear strategy and a consistent record of implementation, as you know. But what was impressive for me is there's a real focus across the whole organization of creating preferred brands with our people and our guests at the heart. And there's a deep, really deep, commitment to winning whilst ensuring the business is running in a responsible manner across a whole set of values. So I see a huge potential to further leverage our leading position in many markets across the world, and I'm, of course, delighted to have the opportunity to help guide IHG to do this, build on what I believe is a very strong platform and continue to deliver high-quality growth in the future. And I look forward to meeting many of you in due time. But now I'd like to pass over the Richard Solomons who will start the result presentation. Thank you.

Thanks, Patrick, and good morning, everyone. So in a moment, Tom will take you through the financial results in detail. But first, let me just cover some of the highlights. 2012 was another very strong year for IHG with our preferred brands driving RevPAR up 5.2%. So together with 2.7% net rooms growth, which is fueled increasingly by our expansion in developing markets, this drove up fees almost 7%. So we see significant opportunities to add to our already strong position in many parts of the world. We're making great progress developing our existing brands, and we extended our portfolio in the year by adding the innovative HUALUXE Hotels & Resorts and EVEN Hotels brand. At the same time, we continually look to be efficient, and our cost management, combined with our success in leveraging our scale, has allowed us to reinvest in the business and simultaneously grow our margins over a number of years. We've once again demonstrated the ability of this business to drive powerful cash flows, providing us the flexibility to invest in growth opportunities, and at the same time, it's being able to generate significant and consistent shareholder returns. The $1 billion return on capital we announced in August, combined with a 16% growth in the 2012 total dividend announced today, demonstrates our commitment to this long-standing strategy. So I'll now hand over to Tom who'll talk in more detail about the financial progress IHG's achieved in 2012. And I'll come back later to look a little into the future and to discuss our strategy and business development.

So thank you, Richard, and good morning, everybody. It's nice to see so many familiar faces in the audience. Let me start by highlighting the key financial headlines where we're pleased to be able to report another good year of growth. Revenue and operating profits were up 4% and 10%, respectively. And on an underlying basis, operating profits were up by 13%. This is a constant currency and excludes the impact of $16 million of significant liquidated damages received in 2011 and $3 million in 2012. The interest charge at $54 million was less than the previous year, primarily due to lower average net debt levels. The effective tax rate increased by 3 percentage points to 27%, in line with our guidance and still expect it to rise to the low 30s from 2013, reflecting the geographic mix of our business. Profits after tax grew 8% to $407 million and adjusted earnings per share were up 9% to $0.1415, helped in part by slightly lower average share count. And we had another good year of cash generation with free cash flow of $463 million, up 10% on last year, and I'll go into more detail on this later on. One of the most important metrics for an asset-light, cash-generative business is growth in fee revenues. I'm going to spend some time today, talking about the key drivers of this. RevPAR, room growth and royalty rates and how the relationship between these is changing. Strong RevPAR growth, combined with net rooms growth, drove up our fee revenues by 6.8% this year. This was led by Greater China, up 16% year-on-year to $92 million, almost 3x the level we reported in 2009 and demonstrates the benefits we're now seeing from the ramp-up of the 23,000 rooms we've opened in the region over…

Thank you, Tom. So in April of this year, IHG will celebrate its 10th anniversary as a stand-alone company. And looking back over that time I think it's fair to say that we have consistently delivered against the clearly defined strategy. So our focus is on high-quality growth. And that drive has led us to remove over 260,000 rooms, which, alone, represent the ninth largest hotel company in the world today. And we have in that same 10-year time frame opened a remarkable 425,000 rooms, giving us one of the highest quality, freshest portfolio of hotels in the business. So our share of the hotel -- of the global room supply is currently around 5%, and as Tom told you, our share of the active hotel pipeline is 12%, which means that we will continue to grow our share of total hotel room supply. Now we've created this advantaged position through the great work that we've been doing to strengthen our existing brands and create new ones, as well as the unique partnership that we enjoy with our owners and especially through the IHG Owners Association. We've all but completed our move to an asset-light business model, disposing of 190 hotels for some $5.7 billion in proceeds. In more recent years, we demonstrated the resilience of our business through the recession, successfully relaunching Holiday Inn and maintaining our dividend whilst continuing to invest in growth. And in the process, we proved that IHG has one of the highest quality income streams in the industry. We, of course, remain committed to continuing to reduce the capital intensity of IHG and committed to our asset-light strategy, which has helped us drive our return on capital employed from 7% in 2003 to some 44% last year. We've delivered significant value to shareholders over…

Let me take out the Crowne Plaza point, and then Tom, maybe you can just talk a bit about the investments margin. I think our model is, as you know, asset light, but on occasions we own hotels, also on occasion, we invest in hotels, whether that's through sliver equity or whatever it might be. So the investment we're talking about putting behind Crowne Plaza is unlikely to be owning one outright. But it certainly will be supporting hotels that maybe currently exist. We think a great representations of the brand all bring in new ones into the systems. So nothing out of the ordinary from the sort of investment that we would do and normally behind our brands. But as we relaunched new brand like Crowne, it's important that we do make sure we've got the right hotels, and owners sometimes -- it says a lot to owners when you're changing a brand, when you're evolving your brand that you're prepared to put some money behind it. And you've seen us do it before with Holiday Inn, you've seen us do it with InterContinental, so very much continuing along with the same, along the same lines. I think Tom, you just want to pick up the other point?

Sure. I mean in terms of your question about investments in emerging markets, I think the key phrase here is it's striking the right balance between investment today with the view to driving growth in the future. And if you think about our business in Greater China, we've got 160 hotels in our pipeline that we need to open over the coming 2 to 3 years. It's almost doubling in the size of the China estate. We've got the HUALUXE brand where we've got 15 deals signed into the pipeline, which will start to open in 2014 and beyond. And just to give you a sense of the scale of what we need to do in China, we need to recruit something like 30,000 people to staff up those managed hotels. So there's a need to invest in the platform there. And then maybe that for a year, the margin doesn't progress at the same rate that it's progressed historically. But that's always a judgment that we've made with a view to ensuring that we take full advantage of the significant growth opportunities that we see ahead of us. In terms of the comment about how long does it take for a new hotel to mature in these markets, I mean what we've tried to give you is a steer as to the value of which you should bring on these new hotels. They open in emerging markets, 30% of the average absolute RevPAR for that region. In terms of how long does it take to ramp up well, there's no precise rule of thumb I can give you. It depends very much on how the demand drives us to mature in that particular locality over time. It'll probably be 2 to 4 years before you see that hotel achieving full RevPAR contribution in that particular location.

Thanks, Tom. James?

James Ainley from Citi. Two questions, please. There's been some comments from your peers about the improvement in the financing environment in the U.S. Can you talk about that, and what you think that means for net rooms' growth both this year the year ahead? Can we expect net rooms' growth to improve from 2012 levels? And then secondly, some comments in the press about banqueting activity in China. Obviously, we don't see that coming through the RevPAR line, so could you talk about what that's doing to your business in China?

Yes, look, I think on the financing, we said margin improvement that the stronger brands, such as ours, have always had better access to capital than the weaker brands. So I think it really is marginal at this point. And of course, even the smallest hotel is several years in planning and zoning and opening. So I think it's going to have no impact on room supply. I think the sort of -- I don't see it having an impact in terms of kicking that up in the short term. So we'll have to see how it evolves. On banqueting, yes, I think the -- in China, we've obviously seen the impact of the change in leadership. And we talked about it last year, and there isn't going to be a full control taken by the new leadership until March this year, as Tom mentioned in his words. So some of our banqueting is being banquet. Government is inextricably linked to business in China, so there's been a bit of a slow down there, so you think about it similar to some of the RevPAR slowdown that we've seen. But obviously, a lot of our business is more broadly based in that, and we think post the new government coming in that things will get back to some more semblance of normality there. That's how business is done in China. Okay, Vicki?

Vicki Lee from Barclays Just 2 questions. Firstly, just on FelCor, just following the loss of the rooms to Wyndham. Just curious to see if there's sort of more broadly, any concern about competitors just, otherwise getting a bit more competitive when it comes to rates or guarantees that they're offering. Just any color around the U.S. market and that backdrop? And then just secondly, on gearing, how should we be thinking -- is 2x to 2.5x still the level that you're indicating? And if I look out a year and allowing for the CapEx that you talked about today, I think that drops to about 1.4x the use. How should we be thinking about that potential for future cash returns to shareholders?

Okay. I'll take the first one, and Tom [indiscernible]. Yes, I think the FelCor situation was a one-off sort of situation. I mean there's always going to be people looking, trying to grow their business, maybe buying their business, and that's what happened in that situation. It was an incredibly generous offer from Wyndham to take over those hotels, which were quite old portfolio of hotels in our system. But it just wasn't economically viable to match it, but clearly, they've got different objectives in terms of growing their brands, whereas I mentioned Holiday Inn is the fastest-growing brand in its segment in the world, so we have a different dynamic. But these things happen. We took 3 Hampton Inns in the U.K. and convert them to Holiday Inn Expresses because of the system delivery that we can deliver without any financial investment. So I think that the strong brands are going to continue to grow and going to continue to gain share because of what they can deliver. And some of the weaker brands are always going to take the opportunity to come along and buy a little bit of business to get a headline and whatever it might be. But I think if you see the scale of what we're doing in terms of signing hotels. We signed nearly one a day throughout 2012. We opened 226 hotels, which we opened 1 every 39 hours. So we've got an awful lot of activity within our brands and our share of supply. Our share of supply is -- 12% is significant. So I think we're in a very good shape in terms of actually delivering value to owners, so we're then prepared to pay for that.

Just on the signing point, there's sort of no change then in any of the fee structure that you're seeing?

No, there really isn't, and I think that's something that's important. It does come back to value, so owners look for return on investment. And they can always go out and get a cheap brand. I mean there's always people out there and some of the companies who want to get into market, they'll basically give business away. But if they're not generating the revenues and they're generating the returns to owners, then they're always going to pick up a certain type of owner whereas the sort of -- we're building a long-term sustainable business here. And we recently, for example, lengthened our contracts in the U.S. from 10 years in the franchise agreements to 20, which is really about creating these longer-term partnerships with serious owners who are prepared to invest behind the brand. Tom?

To your second question, Vicki, I mean you're quite right. The guidance we gave last year, we're committed to maintaining the investment grade credit rating of the group and to help you with the modeling we gave you to 2x to 2.5x net debt to EBITDA as a sort of benchmark as to the range of leverage that we would be comfortable with. And that still remains the medium-term commitment. I mean we are still in the process of returning the billion dollars. We still have about $400 million to go on the buyback program. And I'm sure we will complete that in due course. And in terms of additional capital that we have available in the group, as you know, our 3 calls on capital are firstly to invest in the business to grow growth, to drive growth; secondly, to pay a progressive dividend; and thirdly, if the risk capital to be returned, then we'll do so. And I'd like to think that given our track record of returning $9 billion since we became an independent company, we have a little bit of trust from the investment community that we'll do the right thing.

Jamie Rollo from Morgan Stanley. First question, actually Tim asked it. What's the guidance for net system growth? I don't know if it's going to be similar to last year, why isn't it getting better as we're putting all the extra cost and capital in? Secondly, the 69% of revenue delivered by U.S. I think it was similar to last year. Why is not -- why has that stopped getting better? And then thirdly, where are you on the sort of asset disposal process of the 2 that are formally for sale and thoughts on Paris and Hong Kong?

Okay. In terms of net system size growth, I think we've talked about around sort of 2% to 3% level with this level of economic activity and debt available. And I don't see that broadly moving. And why hasn't it got better with investment? Well, we've been investing consistently over the years obviously, and the investment that we're talking about this year is just making sure that we absolutely can open hotels that we've currently got in the pipeline. As we talk about the numbers, I think 160 in China, 47 in India and some of the other markets. So it's what it takes to actually drive this business forward in these markets. And don't forget, Tim, we were still talking about margin growth, so we're growing the business quite fast in a lot of different markets. It does require some investment. On the capital side of things, we really -- it's not really going to effect the system size directly because you're talking about a handful of hotels. So with EVEN, it might end up being 3, 4, 5 hotels depending on how we spread it. That doesn't affect system size. What it does do is enable us to make a statement about the brand as we evolve the brand and make sure that it delivers to consumers and then enable us to sell it to third-party owners where we didn't need capital. On the 69%, the 69% or the percentage of system delivery is a very good measure of the scale and strength of your delivery channels. It's not an absolute number that you're targeting to move every single year. It's an amalgam of things. So at that level, that's a good level. I wouldn't mind it going up, I wouldn't necessarily mind if it was down a little bit. The real point is, how sticky is your business in terms of what you're driving to owners? How much do your brands drive, and can you drive through the most profitable channels for owners and that's really an equation, which is not all about systems delivery. So it has been flat, probably for the last couple of years actually give or take, but it's still obviously very, very high relative to pretty much anybody else. And what it is doing is driving, say, the most profitable channels for owners. We've seen the fastest growth in Web, which their margin perspective is the highest, so it's still a very impressive number.

Yes, I think there was a question about the back end of our asset sales. We continue to market the Barclay in New York. And as we said at the interims last year, we're also now looking to market the Barclay and that process has actually started this year. There is no update in terms of where we got to -- we've got in this processes, but I can tell you that both hotels continue to trade well. And ultimately, we're not going to be rushing to doing a deal, because our focus is getting the best deal for shareholders. And that might take a little bit more time. In terms of Paris and Hong Kong, those are currently on the market. We have talked in the past about particular reasons around those assets as to why we wouldn't want to sell them at this point in time. As you know, Hong Kong is -- in the parts of Hong Kong, there were -- there's a massive amounts of open regeneration and development. We want to really see that come through before thinking about possibly disposing the best asset. But on the Barclay and Park Lane, that's where we are at this point.

Tim Barrett from Nomura. A couple of questions on cost, please. And I think you said some of the additional cost investments would go through the COGS line. What bearing does it have on the $13 million to 1 RevPAR profit guidance? And secondly, the small restructuring exception of $60 million, what kind of payback time would you expect on that?

Sure. In terms of our investments in costs, I mean some of that will flow to the regional central cost lines and some of it will go through cost of sales. And your question, specifically, on the sensitivity. I mean that sensitivity that we gave you of 1 point of RevPAR equating to $13 million of EBIT, but it's really designed to help you just flex the RevPAR number and work out with the implications of EBIT would be, all other things, held constant. What it's not designed to do is to pick up the additional cost that we need to invest in the business in order to further our business plans and deliver the growth that we've talked about. So you have to factor that in over and above the EBIT sensitivity. In terms of the exceptional restructuring charges, again, those relate to a number of different situations. The principal amount is in relation to moving some of our back-office functions from the U.K. and the States into India. And typically, we'd expect a payback on those costs in around 12 to 18 months.

Is there any other reason to change the $13 million guidance, anything to do with incentive payments?

No, there's no reason to change that guidance. That's the best guidance that we have available right now in terms of flexing your RevPAR assumption.

Okay. Simon?

It's Simon Larkin from Bank of America Merrill Lynch. Two questions for me, please, around China. Just to be clear, do you expect fee-based margins in China to go backwards 2013 over '12 given your investment plans? Secondly, could you give the time for you to -- obviously, doubling in the size of the system open rooms in China? Can you talk a little bit generally about the business as a whole to the timeframe of opening rooms? I think within these 3 year, 4 years ago, it's 3 years, then you moved it to 5? Is it still 5 or moving in or moving further out? Next question is on your 30% of opened rooms RevPAR delta. Is that to do with ramp-up, or is that to do with the moving to more tertiary and secondary cities because you've been going double-digit in China for a while. I just wondered, what's changing to make it more relevant to this morning's discussion? And finally, on operating cost in China, for the managed and franchise business, currently they're running at sort of $40 million to $50 million, quite a lot lower than in Europe, quite a lot lower than AMEA, and obviously, North America. When you do double this China business, what will that cost base kind of look like trajectory wise, does that get to sort of $60 million, $70 million, is that what kind of you're saying here?

That's a lot of questions. I think on the fee-based margin will go back slightly in 2013. I think in terms of the timeframe, we talked about 3 to 5 years, and 5 years comes about because these are very large buildings, 300, 400, 500, 1,000 rooms. We're talking averages here, often part of mixed-use developments, maybe even the same building or multiple building. So they just take a long time to develop until you've been out there, you've seen these massive developments would go on. So it's no longer than any other places just literally the physical reality of building these hotels. So that does take time. Do you want to talk about -- pick up the other two Tom?

Yes, sure. It is true to say that an increasing part of our growth China is coming out of secondary and tertiary cities, and they typically have lower RevPARs than you've seen using primary cities. SO that mix effect has to be taken into account in the that you model, the valuable, the incremental rooms that we have to our system size in China. In terms of the 30% statistic, that is simply just to help you think about how quickly to factor in the value of those additional rooms over time. And again, we've talked about that in terms of phasing that's in -- as the value of those rooms increases over a number of years. In terms of operating costs, I mean, undoubtedly, our cost base in China will grow as a function of our growing system size there and the fact that we see significant growth opportunities ahead of us. But the important point I think is not to get too preoccupied on margin growth in 1 particular year or costs in a particular year, but rather just stand back and look at the way that we're growing the business over time and the balance, we tried to strike between investments to fuel that growth and delivering that growth over the medium to longer term.

Couple of things just to add, Tom, clearly as we grow in the developing markets, proportionately, it's become a high level of growth. And as you've had lower growth relatively in Europe and the U.S. because of the economic situation as we've grown that business, it's become a bigger proportion. So these dynamics of the way RevPAR goes and the speed of opening and so on, is a good thing because of the proportion of business that we have in these developing markets. So I think -- we wanted to highlight how that will work. I think as you look at China, and it's true in some other markets as well, but particularly China, the hotels are getting built at the same time as the demand drivers. So it's one of the reasons why the ramp up is what it is. You've got a lot of new supply coming in at the same time, but a lot of our developments here are in effectively new cities or very, very highly developed cities were being developed extensively. So you've got the offices and the scores on the hospitals and the train stations and airports all being built at the same time. So it's inevitable that it's going to just take much longer to build up, but you want to be there early. I mean, as you know, we're the leading international company, hotel company in China by a mile, so we're always invited in early. And you want to be there, and you want to get the best location. So it's just an inevitable consequence of the way the country is developing. It's not a bad thing, but it's just the way it is. And I think you've seen that the way we've grown our fees in those markets -- so again, that's I think, the way to look at it, sort of drives our bottom line. So in China, we grew our fees by 16% in 2012, obviously, much lower RevPAR growth, which is the new rooms coming through.

Just to follow-up on all these questions on costs and these new rooms. Maybe you can help us -- you can give us a -- just what the absolute cost base is going to go up year-on-year? You used to give us that guidance. And maybe on the net rooms, what is 1% system growth to the group in million dollars like the RevPAR sensitivity?

I think it's just the wrong way to look at it. I think when managing a diverse business across the world, our focus is on margin growth. And we talked about that for some period of time. Absolute costs are going to -- if you think -- managing absolute cost is really not what we're focused on. What we're focused on is driving margin, and we do think a lot about cost. Some just talked about the exceptional items. So even the finance organization that we've done moved a lot of show. We've driven a lot of centralization, so that's very much a focus of the business, all those things you'd expect us to do. But the real thing is in context of the very fast-growing business in parts of the world, we have to manage our cost. And driving margin seems to be the best way to do it because that's actually showing efficiency and showing scale benefit. So that's how we talk about margin as opposed to absolute costs. And in a dynamic world, that's what you've got to manage. Okay. Great well, thank you very much. I appreciate your time and look forward to catching up with you all in the coming minutes or days.