Good afternoon, ladies and gentlemen, and welcome to the IHG Full Year Results Call. My name is Ingi, and I’ll be your coordinator for today’s conference. For the duration of the call, you will be in listen-only. However, you will have the opportunity to ask questions. [Operator Instructions] I will now hand it over to Catherine Dolton to begin today's conference. Thank you.

Thank you. Good morning, everyone. This is Catherine Dolton, Head of Investor Relations at IHG. I’m joined this morning by Richard Solomons, Chief Executive; and Paul Edgecliffe-Johnson, Chief Financial Officer. Before I hand over to them for the discussion of our results, I need to remind you that in the following discussion, the company may make certain forward-looking statements as defined under U.S. Law. Please check this morning’s press release and the company’s SEC filings for factors that could lead actual results to differ materially from any such forward-looking statements. I’ll now turn the call over to Richard Solomons.

Thanks Catherine. Good morning and thank you for joining us today and welcome to our 2015 full year results conference call. Before I hand over to Paul, I’d like to share some highlights from the year. We continue to diver strong momentum behind our brand portfolio and across all of our regions. Our best opening performance since 2009 to confect the 5,000 hotel mark and solid RevPAR increases deliver underlying fee revenue growth of 8%. The top line growth we delivered was underpinned always by disciplined execution tend to focus on cost efficiency. This allows us to invest in key areas of the business, while at the same time growing up profit margins and free cash flow generation. In addition to trading cash flows as you do doubt all aware, we generated disposal proceeds of $1.3 billion in the year effectively competing our very successful asset disposal program. Reflecting this, our confidence in the future and our ongoing commitment to generating shareholder value, we today announced $1.5 billion special dividend and a 10% increase in the total dividend. This will bring the cash we return the shareholders to over $12 billion since 2003. I’ll now hand over to Paul to discuss the broad hospitality environment and how we’re executing against our strategy. Paul?

Thank you, Richard, and good morning, everyone. We are pleased to report another year of strong performance reflecting all of our key financial metrics. Our hotels operated record occupancies of almost 70% in 2015 which means that our RevPAR growth of 4.4% was predominantly franchise [ph]. Across the year, we added 56,000 rooms increasing our system size by 4.8% which included those added when we acquired Kimpton. Excluding these, we delivered 3.2% growth. The comparability of our total revenue and operating profit continues to be distorted by the impact of own total disposals, managed leases, the acquisition of Kimpton Hotels & Restaurants in 2015 and the impact of foreign exchange. Adjusting for this, we translated 8% underlying revenue growth into an 11% underlying profit increase by leveraging the scalability of our asset-light business and continuing our focus on disciplined cost management. High interest charges were due to bridge financing for the Kimpton acquisition which we subsequently refinanced with a new ten year 300 million sterling bump. Our effective tax rate decreased by 1 point to 30% and we expected to remain in the low 30s for the next few years. In aggregate, this enabled us to increase our underlying earnings per share to 167.3 cents, an increase of 19%. To give some more context as to how and where we drive this growth, I’ll now take to through the performance in each of our regions in more detail. First, the Americas, where with the exception of August, industry demands in the U.S. has been a record levels to 57 months. Other consequence, hotels in the region are driving record occupancies of nearly 70%. In this environment, we were able to deliver solid rate growth taking U.S. RevPAR up 4.7%. This performance moderated somewhat in the fourth quarter where the impact…

Thank you, Paul. Since the immerging in 2003, IHG has outperformed on the two primary metrics of rooms and revenue growth. We’ve always been very focused on the quality of our state hence historically high level of the movers in our comparatives but even with that we’ve driven net system growth about 3% well ahead of the total industry. IHG as a brand owner, whereas RevPAR is obviously important growing share revenues is far more relevant as its history demonstrates the underlying strength of our brands and of course revenues directly drive more than 85% of our fees. Our transitions are predominately fee based business reflects our long term strategy and has enabled us to drive consistent growth more than doubling fee revenue since 2004 up to $1.3 billion last year. Fees combined with asset disposals enabled us to improve our return on capital employed from less than 10% to 57% in 2015. This has been driven by clearly defined consistently applied strategy which remains valid for the future. This does not mean of course the hospitality business and IHG will not change at the customer landscape devotes, however it does remain that our core strength and capabilities will remain at the heart what drives our success. Before talking about our strategy more detail, given the talk of disruptive and change in every industry, I thought it would be helpful to put travelling tourism into context. Travelling tourism is one of the five largest industries in the world generating an annual direct GDP contribution of $2.4 trillion. This number is growing steadily for many years and by 2025, this forecast to represent over 10% of global GDP. It’s a top generator jobs and tax receives in most economies too which explains why governments continue to focus on and supportive both…

Thank you. [Operator Instructions] The first question is from the line of Steven Kent from Goldman Sachs. Please go ahead.

Hi, good morning. This is actually Rebecca Stone on for Steve Kent. I was wondering if you could provide a little bit more detail on your exposure to the oil producing markets, I know you said about 14% of U.S. room are in these markets, but I was wondering sort of like over than more detail on the which specific markets are being captured in that as well as how they are doing in the quarter now and your expectations for this year? Thanks.

Paul, can you?

Sure. Thanks Rebecca. So the oil producing market out for an SGL definition, I’ll certainly take you through them but there will be a long list and I am happy to get to off to it. We also 13% exposed to those markets and we indicated the whole as by 11%, fourth quarter it held our RevPAR growth back a little, which we talked about 190 basis points difference that. For the whole of 2015 was about 160 basis points in our U.S. business puts oil market held us back. So it’s going to be a continued trend through considering first half of 2016, I would imagine them next something dramatic changes in the oil industry which I don’t think any of also expecting.

Alright, great, thank you. And just as a quick follow-up, I was wondering if you could talk a little bit about your China RevPAR performance then Tier 2 and 3 cities as well as how much supply you are seeing both Tier 1 markets and Tier 2 and Tier 3? Thanks.

I can take. I mean for us the Tier 1 markets excluding Hong Kong is about a third of revenue and we see a strong RevPAR growth there. And that’s because the demands continues to be good, we are looking around 4.5% demand growth and supply is slight down because there is a suitable population of hotels somehow, so that has come down a lot from what it was few years ago. In the Tier 2, 3, 4, the demand continues, it’s actually be very good 96% but the supply coming through. And often we’re first into those markets that we got great locations that’s competitively coming through now. So you are seeing supply coming through around 6% as well. And our business is about 45% into those markets Tier 2, 3, 4 markets. And then you got Hong Kong which roughly is about 15% of our revenue, Macau about 5% and then got some specific issues of amendment which I think we much talked about and that both negative. So Macau is off about 15% and Hong Kong about some 4% in the fourth quarter and Hong Kong about 9, Macau about 13 for the full year. So the underlying performance in that Tier 1 cities is being good and it’s very encouraging for us.

Great, thank you very much.

Thanks Rebecca.

Thank you. Our next question is from the line of David Katz from Telsey Group. Please go ahead.

Hi, good morning.

Hi David.

So my question is really around capital allocation right. If I take literally the line and the release about the completion of major asset sales, it puts the company in a go forward perspective that’s a little bit new right and so we are obviously focused share repurchase as in dividends and investing in the system but M&A is something that’s always out there, how are you thinking about your capital allocation strategy and the circumstances under which you would consider making an acquisition of some size or what your criteria would be around that?

I’ll start with that and may Paul will then will add to it. Look I think in a way nothing much has changed in the sense what we’ve been continuing to growth the business, invest in the brands, accelerate growth, drive operating margin and generate significant selfless cash you the model as well as anybody. Clearly on top of that we’ve had the asset life of - really be selling real estate and then returning big chunks. But I think you look at all the players in the industries that has running on that way where they can generating cash and choosing what they do with it. So I think it’s quite clear with the underlying picture looks like. In terms of the M&A you know we in a way kicked off the light is surrounded from the acquisition of Kimpton that we’ve talked about. And I suspect we’ll continue to look or we will continue to look for brands that will meant up portfolio that have the quality that we need, that meet consumer demand that’s out there whether that’s by geography. I mean clearly have many different ways we can look at funding acquisitions like that but we always remain very sensitive. Paul, you want to add some?

Yeah, David, we pulled off a little bit more than perhaps we do sometimes very big free cash flow generation and that kind of presentation is up on the website. So given the waterfall to the cash that we generate how we put that behind maintenance and key money and most that remains as free cash and that what goes on the ordinary dividend et cetera. And if you look at that you’ll see that the pretty exceptional free cash flow has been very consistent over the last six years or so at around the $450 million mark and the dividend less than half that. So there is a lot that we can invest back into the business and as Richard said, there are opportunities but then when we look at them off the lines we’re return it to shareholders, right.

And if we just think about the issue of the sale, right, and it’s a top of mind issue give pending merger that’s out there, is you know - is scale a benefit to a point is do you believe there is a point of which there is a diminishing benefit from more scale from having you know 750,000 rooms up to a million one or two, do you think those benefits still apply and would be attractive to you or would there really be other reason why you might consider an acquisition?

I think we have sufficient scale without question. We’ve got very large system revenues, we’ve been driving operating performance in margin really effectively and that’s how we’ve got 15% of the global pipeline find out to joint IHG’s brand. We’re absolutely not interested in two things. We are not interesting in begin big to the sake of begin big and we are not interested in destroying shareholder value. So when we look at acquisitions whether it was Candlewood back in 2003, whether it was Kimpton just more recently or launching new brands ourselves as Indigo three years ago, Staybridge three years ago, see even HUALUXE more recently, it’s back and said it’s about meeting consumer demand and driving returns to shareholders. And so I think those are the criteria by which we look at things not just saying well, we just need to bigger and certainly way of very comfortable discovery we have today.

Alright. If I can ask one last one…

Go on.

…which is you know there are certainly across the industry is a growing seriousness of tone in terms of looking at Airbnb and shared economic opportunities and what their benefits and impacts are on the traditional hotel business and some companies have made investments in it and others are just looking at their loyalty members to see if they are participants in such things as Airbnb et cetera. What is your perspective on that dynamic in our industry and what strategies do you have in place?

None of its topical and I talked about it that we compensate not from the supply side, we accommodate from where is the demand and is that question and I said in my prepared remarks, there is demand from casinos the non-hotel products and we tackle that in a number of ways, so we obviously with our extending staying product, we stay within Candlewood with our brand in residences primarily proud and come for us. The hotel industry that could be tacked, you’ve got branded residence outside of the hotel and you like ask a residence and then obviously you’ve got - you talk the Airbnb is not anyone but it has the wide, has booking.com has dozens of others. And in the way we think about it is it’s not a new business, you could rent a home forever, I mean they have down quite nicely booking particularly is a greater website and they’ve been - make it easier both as a home owner put your product out there and as a customer to book. So we have seen some growth, it’s still not growing anything like itself as branded hotels, that may change. So we keep an eye out off on it. So I think it’s one of those sayings which is got a lot of prices form the Silicon Valley money right now, people raising tons of money talking about valuations, but it’s a business we’ve been competing against many, many years and we’ll continue to do so. We certainly locked, but we know a lot of players, we talked to them and few investments made which is interesting, which is something to a some point, but we are not, we don’t ignore it but I think we have to come to, there is an awful lot of customers out who want a hotel experience and they don’t want to you know necessarily a residence experience not different ways of attracting that. So I guess one think we should remember where in an industry where there is significant demand growth you’ve seen that around the world and that’s matching different ways, brand, hotels and then some cruise and they always didn’t exist a few years ago that’s certainly not slow down the groups of hotel companies and now obviously you rent short term rental it’s great that as well. But where we’ve got great demand I think consumers are looking at different ways of tackling it, so we’ll continue to compete effectively and come on it.

Okay, thanks very much. Well done, congratulations.

Thanks David.

Thank you. Our next question is from the line of Christopher Agnew from MKM Partners. Please go ahead with your questions.

Thanks very much, good morning.

Good morning.

Excuse me, you talked about new brands providing top one for growth and 90% of your pipeline in faster growing markets and we’re obviously seeing accelerating unit growth in the U.S. would it be fair to assume that we should see the unit growth accelerate over the next couple of years for you and can you provide any color on the cadence of unit growth from back half weighted in 2015? Thanks.

Hey, thanks Chris. Yeah, the new brands do provide a platform of growth, it’s additive to our core brands then looking at them the cadence, I think you need to look back to when the signings starts to accelerate a few years ago and they happen accelerating year-on-year-on-year and those signings will translate into openings. In the U.S. it comes through more rapidly, then the same China, often in Asia, Middle East and Africa with a larger hotels sometimes part of mix Tier developments. But in the Americas that will come through reasonably quickly. We did see more of the openings come into the second half in 2015 and you know lots actually came into the fourth quarter, difficult to predict that, its hotel opens and you got to get lots in fits, you got to get everything finished, so you tolerate each on sequence that also is equal across the hotels. We do some hotel they consider start generating revenue.

Chris, this is Rich. Anything that out that I think is there is being quite of lot talk about growing supply but as you are growing supply is good for us. And whether it’s a much share of new supply have this supply that’s a good thing and clearly the brand. And if we want new supply, there is more hotels and our ability to drive business. What we focus on more than supply is industry revenues and industry revenues have been growing pretty strongly around the world. In fact one of the Chairs put at this morning said actually in total revenue terms, we’ve grown our revenue 6% to 8% in each of our regions with China just behind the Americas. So I think there is some simplistic stuff out there about the implications of new supply, actually it’s pretty good thing for us.

Yeah, and maybe a follow-up to about then, one of your peers that think also from the previous cycle is transitioned much more of an asset like model put out actually scenario with 0% GDP growth in the U.S. what RevPAR free growth and EBITDA growth would potentially look like, I don’t know if you would have that to similar sort of scenario and outline. And then maybe just can you give the 1% change in RevPAR what the sort of its impact on EBITDA?

I think in terms of I think making just completely theoretical hot setting of scenario using very helping, but I would say as we had 0.3% growth in RevPAR in China and 8% revenue growth because we open new ones. It’s really down to what are the drivers of hotels revenues. Overtime GDP is the best driver, best correlate in terms of revenues overtime, in the short time, some of our income comparable to so on. So I think you measure that you can do your own modeling. But an important thing is that for those of us with strong brands over indexing in new supply and over indexing in revenues not in place. Then we are still the best place to be. And sort of clips you can maybe in my shorten notes the U.S. but I am dementedly the thing that will make us successful is we have strong differentiate to both the fine brand and whichever channel you go through whatever happens, more and more in today’s world customers not just in customers want to be associated with brands that means something that delivers against they promise and that too we have both excites too. And you kwon what if GDP doesn’t find or even if there is rescission which is there is no sign off at this point in time. The important our own is we outperformed the competition, important thing for our guest is we’re giving the service they want. And sure, so not much sure markets had projections. Paul, do you want to pick up on sensitivity?

So, Chris as we’ve talked about before, we are pretty much correlated into revenues in hotels, what you’ll see as a 1% change in RevPAR all it sounds about $12 million impact in the business.

Thanks Paul.

Thank you.

Thank you. Our next question is from the line of David Loeb from Baird. Please go ahead with your questions.

Yeah, this is actually David Loeb.

Hi David.

Can we talk a little bit about the slide on page 40, several things out that I view from this and I wanted to ask you about things like OTA parody, where you OTA commission rate is, it looks like you’re featuring here.

It’s actually numbering David, so what was that.

The one about dynamic marking in clear guest benefits, so are you experimenting more or pushing a little harder with some non-refundable rates and preferred rates for IHG rewards club members?

You know we’ve been saying around with rates actually for quite some time and saying and just trying to manage that effect. I think this percentage is in U.K. was much more out being really clear that we were achieving our price promise. And let’s get back few years, pretty much every big hotel rates went out with a lowest internet rate guarantee, the customers didn’t believe it. And the reason they didn’t believe it because it wasn’t always true. And the fact is that with - that growing complexity in the distribution level what’s happening was people was retelling wholesale prices and things like that. And actually the promise is weren’t true. What we’ve done in the U.K. and they are doing is absolutely sure by managing somebody’s parts of distribution world that when we say it’s lowest is lowest. That’s one of the key things. So where we won’t necessarily do, you know we made it very clear to the customer it will cheap as we told them that and the pricing is well and really cleaver marketing. We got the message through and we saw a massive increase in direct booking. Now I want to be - and we are taking that out now into France and Germany and in U.S. and Asia, Middle East, Africa. I think a point I want to make is it comes up a few times is that this is not an anti-OTA stones, this is pro-direct booking stones for loyal customers who want to be loyal and have an affinity with our brands and our brand family. There are lots of people out there who are to travel is primarily who only can brand diagnostic and we never going to be able to afford only one can spend a 90 to travel those people to us directly and the OTAs do a really good job of bringing those people to us. And as I said to every time I meet the executives from the OTAs bringing incremental business is profitable, so we have that. But fairly for a lot of our business going direct is much effective not just for our own, but also for the guest, improving up the knowledge about the market to directly giving the rules to the royalty scheme, all that works really well. And so this is just a way of being a big smarter and keeping to our promise.

Well to keep going on OTAs - excuse me - can you talk a little bit about your latest OTA commission deal, it does appear that you’ve got a rid of great parade because on this slide you are showing rates that are lower than the OTA rates, but what’s the current commission rates that you are paying for example?

What we done - nice try.

You know Kimpton do disclose that, so that’s why I asked, I think you are both set up about 8% now.

I think you finally not, but we don’t disclose that. But I think what you’ve got is in euro, you’ve got regulate it’s coming out against most David, I mention close is, I think I am looking for France and I think Germany are about to do it and it will happen elsewhere because it’s having competitive. So I think that’s one of things is came. What we are talking about is closing as a group which what we’ve always been able to market somewhat different into closing these group, so that will continue.

And finally on this topic the advance purchase rate, is some of that design to come back repricing software like TripA and Tingo?

I think that’s maybe - that maybe an indirect benefit, it really is more about actually if you can talk people in early and pay advance rate in almost anything from an airline to lots of things booking and you get special deals, that think is unusual. I mean in many ways that is quite a long way behind a few years ago in terms of having sophistication in that pricing mechanisms and I think that’s again some of the bigger guys of all really put up on that.

Okay and then one kind of quick follow-up to David’s questions of consolidation. Can you feel like there is a disadvantage to your U.K. in terms of the kind of disclosure you have to have when you are involved in consolidation?

I think we are in the U.K. and as we have buy by the rules. And it used to and when we first starting taking of the rating is much lower than U.S. that’s really not the case now. So we’re in the U.K. we can’t really move and [indiscernible].

And if I can do one more topic?

Go on.

Thank you. Sorry. I wanted to talk a little bit unit growth, do you expect the same level of quality related removals in the near term - in the medium term?

So David, we talked about 2% to 3% exits and we will continue to do that while we think it’s a right thing for the business. It may more from the top of that range down overall to that range of time. But everything gets the right thing for a hotel when it comes to the end of its contract to move and for us to exit and brining something else, it’s new, that’s great. If you look at our gross openings, our gross openings are the highest in the industry, its more room on an organic basis than we did in 2015, which demonstrates the sense of our brand proposition.

And then finally, I promise the last one.

Finally, finally.

How do you view the risk of the China pipeline in terms of what’s going on there in terms of financing environment of delays coming from the government or the economic situation?

In a way, just in China we don’t really know what’s going happen. What we’ve seen now consistently haven’t been there long than anybody you know back in ‘84 and given the number of signings and openings we’ve got which is again ahead of anybody else in the industry. And I think we do feel very good about the medium to long term in China but we have to remember it is an emerging market, there will be some volatility potentially. But we’ve not really seen that and if you actually look in 2015, we saw 20,000 room into the system and got 85,000-86,000 opens, that’s a mostly we ever seen. But what’s happening is interesting, I think Paul you talked about in your - this morning is how we’ve seen high level of conversions than we’ve seen before because as a recent pressure on performance the weaker brands really can’t deliver. And so I think if we did a slowdown in openings, the demand continue to grow which is what we are seeing then there probably be more conversion opportunities going forward and we’ve been maybe somebody can talk about very much on these cause, we’ve been very, very focused on driving our operational performance. So owners do know not only for the brand deliver revenues we can get it through the bottom line effect where there is no question in this business.

It’s great, thank you very much.

Thanks David.

Thank you. Our next question is from the line of Thomas Allen from Morgan Stanley. Please go ahead.

Hi, good morning, good mid-day for you. One quick question on this Americas trends, last year you talked about a lot of the dynamic of last fill which was supporting kind of the independence in the lower chain scales, if we look at RevPAR growth year-to-date, you’ve actually see a flip where those lot to change ratio underperforming, any there is on what’s going on in the market and expectations of how that’s going to change? Thanks.

Yeah, thanks Thomas. Yeah we actually continuing to see that impact through 2015 that some of the lower end chains that have very low occupancy. First on to first nine months benefiting but then when you bring in the skew around oil, you got a trend taking out of everybody - that impact that’s having but you got people who are had a very low level of occupancy on some of these brands are independent hotels and when you are ruing and so 70% occupancy that way up and that’s high in the midway period often when we don’t have the - the range that coming out before. If you look at just something like the January numbers, that’s such a small number - it’s - I wouldn’t read anything into it. That through 2015 the same stories we talked about before.

Okay, all I had. Thank you.

Thanks Tom.

Okay, thank you. We have no further questions in the queue at this time. Thanks you.

Thanks. And thanks everybody, I appreciate you calling and listening. And if you got any questions, obviously we’ll pick it up, we have our team here. We look forward to answering some of you. Thanks.

Thank you for joining today’s call ladies and gentlemen, you may now replace your handsets.