International Financial Reporting Standards

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International Financial Reporting Standards
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Impact of IFRS Business Performance

• UK GAAP Pro forma IFRS (2)
• 2004 Profit Before Tax (1) 383m 374m
• 2004 EPS (1) 20.4p 20.0p
• 2004 Net Assets 2,554m 2,388m
• Before goodwill amortisation and exceptional
  items
• This includes the pro forma impact of IAS 32 and
  39, which will not be adopted until 1 January
  2005

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International Financial Reporting Standards

• Background
• Under EU regulation, Hilton is required to report
  its results for 2005 under IFRS
• Key differences from UK GAAP highlighted at 2003
  Prelims announcement
• Pensions and employee benefits
• Deferred tax
• Goodwill, brands and licences
• Share-based payments
• Derivatives, hedge accounting and convertible
  bond
• 2004 opening balance sheet and 2004 comparative
  information now completed and audited. This
  comparative information may be amended by future
  changes in IFRS and its interpretation
• Hilton has adopted Financial Instruments
  standards (IAS32 IAS 39) from 1 January 2005
• Unaudited pro forma financial information has
  been prepared to illustrate the impact of IAS 32
  IAS 39 on 2004 results

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IFRS Summary

• Key Impacts
• 2004 pro forma EPS reduced by 2
• Potential for increased volatility due to fair
  value of derivatives and pensions
• 2004 Net Assets reduced from 2,554m to 2,388m
  (pro forma)
• Cash flows unaffected
• IFRS Timetable
• Detailed reconciliations from UK GAAP are
  available on website www.hiltongroup.com
• IFRS conference call for interested parties at
  10am (UK time) on
• 3 March 2005
• Interim IFRS financials announced 25 August 2005

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IFRS First Time Adoption Elections

• - no restatement prior to Transition Date (1
  January 2004)
• all actuarial gains and losses recognised in
  equity at Transition Date
• - only awards granted after 7 November 2002 have
  been considered
• - not adopted until 1 January 2005, pro forma
  impact on 2004 disclosed
• - no remeasurement of assets to fair value at
  Transition Date

• Business Combinations
• Employee Benefits
• Share-based payments
• Financial Instruments
• Property, Plant Equipment