10Dec201406403091

10DEC201406403091 This document comprises a prospectus relating to the New Greene King Shares and has been prepared in accordance with the Prospectus Rules made under section 73A of the Financial Services and Markets Act 2000 (as amended) (the ‘‘FSMA’’) and has been approved by the Financial Conduct Authority (the ‘‘FCA’’) under the FSMA. This document has been made available to the public in accordance with Prospectus Rule 3.2. Greene King and the Directors whose names appear on page 32 of this document accept responsibility for the information contained in this document. To the best of the knowledge of Greene King and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and contains no omission likely to affect the import of such information. Investors should read the whole of this document carefully. In particular, investors should take account of the section entitled Risk Factors on pages 16 to 25 of this document for a discussion of the risks which might affect the value of an investment in Greene King, the Combined Group and the Greene King Shares.

10DEC201406403091 GREENE KING PLC (Incorporated in England and Wales with registered number 00024511)

Proposed issue of up to 90,000,000 new ordinary shares in connection with the proposed acquisition of Spirit Pub Company plc to be implemented by way of a scheme of arrangement under Part 26 of the Companies Act 2006 and Application for admission of up to 90,000,000 new ordinary shares to the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange Greene King Shares are currently listed on the premium listing segment of the Official List and traded on the London Stock Exchange’s main market for listed securities. Applications will be made to the FCA for the New Greene King Shares to be issued pursuant to the Offer, to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for the New Greene King Shares to be admitted to trading on its main market for listed securities. It is expected that Admission will become effective and that dealings in the New Greene King Shares will commence at 8.00 a.m. on the Business Day following the Effective Date which, subject to the satisfaction or waiver (if capable of waiver) of certain Conditions, including the sanction of the Scheme by the Court, is expected to occur in the first half of 2015 (although this date is subject to change). The New Greene King Shares will rank pari passu in all respects with the Existing Greene King Shares in issue at the date of this document, save that they will not participate in any dividend payable by Greene King by reference to a record date prior to the Effective Date. No application has been made for the New Greene King Shares to be admitted to listing or dealt with on any other exchange. Investors should only rely on the information contained in this document. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representation must not be relied upon as having been so authorised by Greene King, the Directors or the Joint Sponsors. No representation or warranty, express or implied, is made by the Joint Sponsors as to the accuracy or completeness of such information, and nothing contained in this document is, or shall be relied upon as, a promise or representation by the Joint Sponsors as to the past, present or future. In particular, the contents of Greene King’s and Spirit websites do not form part of this document and investors should not rely on them. Without prejudice to any legal or regulatory obligation on Greene King to publish a supplementary prospectus pursuant to section 87G of the FSMA and Prospectus Rule 3.4, neither the delivery of this document nor Admission shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Combined Group taken as a whole since the date of this document or that the information in it is correct as of any time after the date of this document. Persons who come into possession of this document should inform themselves about and observe any applicable restrictions and legal, exchange control or regulatory requirements in relation to the distribution of this document and the Offer. Any failure to comply with such restrictions or requirements may constitute a violation of the securities laws of any such jurisdiction. The contents of this document should not be construed as legal, business or tax advice. Lazard & Co., Limited, which is authorised and regulated by the FCA, is acting as joint financial adviser and joint sponsor for Greene King and no one else in connection with the Offer and Admission and will not regard any other person (whether or not a recipient of this document) as its client in relation to the Offer and Admission and will not be responsible to anyone other than Greene King for providing the protections afforded to its clients nor for the giving of advice in relation to the Offer or Admission or any other matter or arrangement referred to in this document. Apart from the responsibilities and liabilities, if any, which may be imposed on Lazard & Co., Limited by the FSMA or the regulatory regime established thereunder, Lazard & Co., Limited accepts no responsibility whatsoever for the contents of this document, including its accuracy, completeness or for any other statement made or purported to be made by it, or on its behalf, in connection with Greene King, the New Greene King Shares or the Offer. Lazard & Co., Limited, its subsidiaries, branches and affiliates accordingly disclaim all and any liability whether arising in tort, contract or otherwise (save as referred to above) in respect of this document or any such statement. Nothing in this document excludes, or attempts to exclude, Lazard & Co., Limited’s liability for fraud or fraudulent misrepresentation. Citigroup Global Markets Limited, which is authorised and regulated by the FCA and the Prudential Regulation Authority, is acting as joint financial adviser and joint sponsor for Greene King and no-one else in connection with the Offer and Admission and will not regard any other person (whether or not a recipient of this document) as its client in relation to the Offer and Admission and will not be responsible to anyone other than Greene King for providing the protections afforded to its clients nor for the giving of advice in relation to the Offer or Admission or any other matter or arrangement referred to in this document. Apart from the responsibilities and liabilities, if any, which may be imposed on Citigroup Global Markets Limited by the FSMA or the regulatory regime established thereunder, Citigroup Global Markets Limited accepts no responsibility whatsoever for the contents of this document, including its accuracy, completeness or for any other statement made or purported to be made by it, or on its behalf, in connection with Greene King, the New Greene King Shares or the Offer. Citigroup Global Markets Limited, its subsidiaries, branches and affiliates accordingly disclaim all and any liability whether arising in tort, contract or otherwise (save as referred to above) in respect of this document or any such statement. Nothing in this document excludes, or attempts to exclude, Citigroup Global Markets Limited’s liability for fraud or fraudulent misrepresentation.

Notice to Overseas Shareholders General The release, publication or distribution of this document in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and should observe, any applicable requirements. Any failure to comply with these requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such requirements by any person. Unless otherwise determined by Greene King or required by the Code, and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from a jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or form within any jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this document and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this document and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. The availability of the New Greene King Shares to Spirit Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Notice to US Spirit Shareholders The Offer relates to the shares of a UK company and is to be made by means of a scheme of arrangement provided for under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to the proxy solicitation or tender offer rules under the US Exchange Act. Accordingly, the Offer is subject to the disclosure requirements, rules and practices applicable in the UK to schemes of arrangement which differ from the requirements of US proxy solicitation or tender offer rules. The financial information included in this document relating to Spirit has been prepared in accordance with IFRS and therefore may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with US generally accepted accounting principles (‘‘US GAAP’’). US GAAP differs in certain significant respects from IFRS. None of the financial information in this document has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Company Accounting Oversight Board (United States). The New Greene King Shares have not been, and will not be, registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the New Greene King Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into or from the United States absent registration under the US Securities Act or an exemption therefrom. The New Greene King Shares are expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) thereof. Spirit Shareholders who will be affiliates of Greene King after the Effective Date will be subject to certain US transfer restrictions relating to the New Greene King Shares received pursuant to the Scheme. For the purposes of qualifying for the exemption from the registration requirements of the US Securities Act afforded by section 3(a)(10), Spirit will advise the Court that its sanctioning of the Scheme will be relied upon by Greene King as an approval of the Scheme following a hearing on its fairness to Spirit Shareholders. The receipt of New Greene King Shares and cash pursuant to the Offer by a US Spirit Shareholder will be a taxable transaction for US federal income tax purposes, and may also be a taxable transaction under applicable state and local tax laws, as well as foreign and other tax laws. Each Spirit Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Offer. It may be difficult for US Spirit Shareholders to enforce their rights and claims arising out of the US federal securities laws, since Greene King and Spirit are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US Spirit Shareholders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s judgment. None of the securities referred to in this document have been approved or disapproved by the SEC, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of the information contained in this document. Any representation to the contrary is a criminal offence in the United States.

NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES (‘‘RSA421-B’’) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. 18 December 2014 TABLE OF CONTENTS

Page SUMMARY ...... 1 RISK FACTORS ...... 16 PRESENTATION OF INFORMATION ...... 26 INDICATIVE OFFER STATISTICS ...... 29 EXPECTED TIMETABLE OF PRINCIPAL EVENTS ...... 30 DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS ...... 32 PART I INFORMATION ON THE OFFER ...... 33 PART II INFORMATION ON GREENE KING ...... 43 PART III INFORMATION ON SPIRIT ...... 52 PART IV OPERATING AND FINANCIAL REVIEW OF GREENE KING ...... 60 PART V OPERATING AND FINANCIAL REVIEW OF SPIRIT ...... 69 PART VI CAPITALISATION AND INDEBTEDNESS ...... 71 PART VII HISTORICAL CONSOLIDATED FINANCIAL INFORMATION RELATING TO THE GREENE KING GROUP ...... 72 PART VIII HISTORICAL CONSOLIDATED FINANCIAL INFORMATION RELATING TO THE SPIRIT GROUP ...... 87 PART IX UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE COMBINED GROUP...... 88 SECTION A: UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... 88 SECTION B: ACCOUNTANT’S REPORT ON PRO FORMA FINANCIAL INFORMATION . 92 PART X UNITED KINGDOM TAXATION CONSIDERATIONS ...... 94 PART XI DIRECTORS, RESPONSIBLE PERSONS, CORPORATE GOVERNANCE AND EMPLOYEES ...... 97 PART XII ADDITIONAL INFORMATION ...... 115 PART XIII DEFINITIONS ...... 134 SUMMARY Summaries are made up of disclosure requirements known as ‘‘Elements’’. These Elements are numbered in Sections A - E (A.1 - E.7). This summary contains all the Elements required to be included in a summary for this type of security and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of the words ‘‘not applicable’’.

Section A—Introduction and warnings

Element

A.1 Warning to This summary should be read as an introduction to this document. investors Any decision to invest in Greene King Shares should be based on consideration of this document as a whole by the investor. Where a claim relating to the information contained in this document is brought before a court, the plaintiff investor might, under the national legislation of the EEA States, have to bear the costs of translating the prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document or it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to invest in Greene King Shares.

A.2 Subsequent resale Not applicable. The Company is not engaging any financial intermediaries or final placement for subsequent resale or final placement of the New Greene King Shares of securities by after publication of this document. financial intermediaries

Section B—Issuer

Element

B.1 Legal and The Company’s legal name is Greene King plc. commercial name

B.2 Domicile/legal The Company is domiciled in England and Wales. The Company was form/legislation/ incorporated and registered in England and Wales on 1 June 1887, with country of registered number 00024511, as a public company limited by shares. The incorporation principal legislation under which the Company operates is the Companies Act 2006 and regulations made thereunder.

B.3 Current operations Greene King operates over 1,900 managed, tenanted, leased and and principal franchised pubs, restaurants and hotels and has been brewing award- activities and winning ales for more than 200 years. Greene King has three main markets business sectors: • Retail: comprising over 1,000 pubs, restaurants and hotels that it manages in England, Scotland and Wales. Greene King’s pubs, restaurants and hotels are operated under brands and formats such as Hungry Horse, Old English Inns, Loch Fyne Seafood & Grill, Farmhouse Inns and Metropolitan, its premium London estate.

1 Section B—Issuer

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• Pub Partners: its leased pubs business which offers people the opportunity to run Greene King’s pubs in England, Scotland and Wales on a tenanted, leased or franchised basis. There are currently just under 900 sites in Greene King’s Pub Partners estate, of which around two-thirds are run under traditional, brewery-tied tenancy agreements. • Brewing & Brands: sells and distributes a wide range of award- winning craft ales to both the on- and off-trade. These are brewed in one of Greene King’s two breweries, in Bury St Edmunds and Dunbar. B.4a Significant recent In the 2013/2014 financial year (a 53 week year), Greene King’s revenue trends affecting was £1,301.6 million and its operating profit before exceptional items was the Combined £265.6 million. Profit before tax and exceptional items was £173.1 million, Group and its while adjusted basic earnings per share were 61.4 pence. industry During the first half of the current financial year, Greene King achieved a good financial result with revenue up 3.3 per cent to £614.9m, another record for the Company. Operating profit before exceptional items was down 3.1 per cent to £123.3m and profit before tax and exceptional items (PBTE) was down 3.5 per cent. to £82.6m due to lower like-for-like sales growth and the impact of the disposal of 275 pubs to Hawthorn Leisure. Adjusted basic earnings per share were down 1.6 per cent. to 29.9 pence. However, adjusting for the disposal, the retained business grew PBTE by 3.0 per cent. and adjusted basic earnings per share by 5.3 per cent. In the announcement of 4 December 2014, Rooney Anand commented that after 30 weeks (to the end of November), like-for-like Retail sales were up 0.8 per cent., implying growth of 1.5 per cent. over the last twelve weeks of that period. Within this, Greene King’s southern estate strongly outperformed its northern estate. While the latest Greene King Leisure Spend Tracker highlighted that more people expect to spend less on eating and drinking out this Christmas, encouragingly, by the end of November bookings for the festive period were up 7.2 per cent. on last year. Looking ahead, Greene King expects a slight moderation in the operating margin decline for the retained business in the full year due to improved trading, increased cost savings and lower net cost inflation. Greene King has maintained momentum in its other two businesses. After 28 weeks of the current financial year Pub Partners’ like-for-like net income was up 3.4 per cent. while Brewing & Brands own-brewed volume was up 7.1 per cent. after 30 weeks. With real incomes struggling to grow, customers remain cautious about spending on eating and drinking out. As a result, Greene King will continue to tailor its customer-focused strategy with the aim of ensuring that it is able to deliver another year of progress, long-term growth and strong returns to shareholders. Greene King’s Annual Report identified a number of trends which will be significant for the Combined Group and for the industry more generally. These trends include the need to: • develop sites and offers that cater for different generations at the same occasions; • continue investing in digital platforms and colleague training programmes to meet the challenges of a more demanding consumer, providing instant feedback to other customers;

2 Section B—Issuer

Element

• maintain focus on delivering great value for customers, even as the economy improves; and • make sites more convenient for customers by increasing the occasions they use the pubs by expanding the daytime offer and becoming less reliant on ‘‘traditional’’ pub eating and drinking occasions. B.5 Description of the The Company is currently the ultimate holding company of the Greene Combined Group King Group. If the Scheme becomes effective, the Company will become the ultimate holding company of the Combined Group. B.6 Major As at 16 December 2014 (being the latest practicable date prior to the shareholders publication of this document), insofar as it is known to the Company, the following persons are interested directly or indirectly in 3 per cent. or more of the voting rights in respect of the issued ordinary share capital of the Company:

Percentage Number of of issued Greene King Greene King Name Shares Shares Standard Life Investments (Holdings) Limited(1) ...... 26,659,717 12.2% The Capital Group Companies, Inc...... 22,754,367 10.4% Lindsell Train Limited ...... 11,024,256 5.0% Mondrian Investment Partners Limited .... 10,545,743 4.8% Dimensional Fund Advisors Ltd...... 9,199,989 4.2% BlackRock Inc, ...... 8,025,300 3.7% Legal And General Investment Management Ltd ...... 7,864,804 3.6% Henderson Global Investors ...... 7,575,362 3.5%

(1) Comprised of (i) Standard Life Investments Limited and (ii) Ignis Investment Services Limited None of the Company’s major shareholders has different voting rights attached to the shares they hold in the Company. As at 16 December 2014 (being the latest practicable date prior to the publication of this document), the Company was not aware of any person or persons who, directly or indirectly, jointly or severally, exercise or could exercise control over the Company.

3 Section B—Issuer

Element

B.7 Selected historical The tables below set out the Greene King Group’s summary financial key financial information for the periods indicated, reported in accordance with IFRS. information The consolidated financial information for the Greene King Group has been extracted without material adjustment from the historical financial information relating to the Greene King Group.

Summary Group Income Statement

53 week 52 week 52 week 52 week 24 week 24 week period period period period period period ended ended ended ended ended ended 4 May 28 Apr 28 Apr 29 Apr 19 Oct 13 Oct 2014 2013 2013 2012 2014 2013 (as (as (unaudited) (unaudited) restated)(1) reported) £m, except per share data amounts Before exceptional items Revenue ...... 1,301.6 1,194.7 1,194.7 1,140.4 614.9 595.4 Operating costs before exceptional items ...... (1,036.0) (946.5) (946.5) (904.2) (491.6) (468.2) Operating profit before exceptional items ...... 265.6 248.2 248.2 236.2 123.3 127.2 Net finance costs ...... (92.5) (90.0) (86.2) (84.2) (40.7) (41.6) Profit before tax and exceptional items ...... 173.1 158.2 162.0 152.0 82.6 85.6 Tax...... (39.8) (38.0) (38.9) (38.0) (17.3) (19.7) Profit after tax but before exceptional items ...... 133.3 120.2 123.1 114.0 65.3 65.9 Adjusted basic earnings per share(2) —basic ...... 61.4p 55.6p 57.0p 53.0p 29.9p 30.4p —diluted ...... 61.1p 55.3p 56.6p 52.9p 29.8p 30.2p Statutory results Profit after tax but before exceptional items ...... 133.3 120.2 123.1 114.0 65.3 65.9 Exceptional operating costs . . . (66.2) (19.0) (19.0) (24.9) (9.2) (22.2) Exception net finance (costs)/ income ...... (1.7) (28.2) (28.2) (2.0) (1.4) 2.2 Exceptional tax ...... 30.7 22.4 22.4 15.3 9.6 22.7 Profit attributable to equity holders of parent ...... 96.1 95.4 98.3 102.4 64.3 68.6 Earnings per share —basic ...... 44.2p 44.1p 45.5p 47.6p 29.5p 31.6p —diluted ...... 44.0p 43.9p 45.2p 47.5p 29.3p 31.4p

(1) The income statement for the 52 week period ended 28 April 2013 has been restated to reflect the impact of the introduction of IAS 19 Employee benefits (revised 2011). (2) Before exceptional items

Summary Group Statement of Net Assets

Unaudited Unaudited 4 May 28 Apr 29 Apr 19 Oct 13 Oct 2014 2013 2012 2014 2013 £m £m £m £m £m Non-current assets ...... 2,949.4 3,039.3 3,031.4 2,994.2 3,028.6 current assets ...... 410.5 163.3 156.6 299.7 185.7 Total assets ...... 3,359.9 3,202.6 3,188.0 3,293.9 3,214.3 Non-current liabilities ...... (1,782.3) (1,887.0) (1,917.7) (1,743.3) (1,820.2) Current liabilities ...... (514.9) (344.1) (325.0) (527.0) (345.2) Total liabilities ...... (2,297.2) (2,231.1) (2,242.7) (2,270.3) (2,165.4) Total net assets ...... 1,062.7 971.5 945.3 1,023.6 1,048.9

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Summary Group Cash Flow Statement

Unaudited Unaudited 53 week 52 week 52 week 24 week 24 week period period period period period ended ended ended ended ended 4 May 28 Apr 29 Apr 19 Oct 13 Oct 2014 2013 2012 2014 2013 £m £m £m £m £m Net cash flow from operating activities . 204.3 196.3 165.5 115.3 111.8 Net cash flow from investing activities . (129.9) (93.5) (165.5) 8.2 (57.6) Net cash flow from financing activities . 107.8 (114.4) (14.6) (124.7) (9.0) Net increase/ (decrease) in cash and cash equivalents ...... 182.2 (11.6) (14.6) (1.2) 45.2 Opening cash and cash equivalents . . . 20.2 31.8 46.4 202.4 20.2 Closing cash and cash equivalents . . . 202.4 20.2 31.8 201.2 65.4 The following significant changes to the financial condition and operating results of the Greene King Group occurred during these periods: • During the period ended 29 April 2012, the Greene King group acquired 100 per cent. of The Capital Pub Company plc for a total of £96m including acquired debt. The results of The Capital Pub Company were consolidated from 3 September 2011. • During the period ended 4 May 2014, the Greene King group purchased, at par, the entire £60m tranche of the securitised AB1 bond. This purchase was financed from bank loan facilities, which were increased to £460m and extended to June 2018. In anticipation of this bond purchase, during the period ended 28 April 2013 the Greene King Group recognised an exceptional finance charge of £28.2m in respect of the fair value of the related interest rate swap that no longer qualified for hedge accounting. • During the 24 week period ended 19 October 2014, the Greene King Group disposed of a package of 275 non-core tenanted pubs for £75.6m. In anticipation of this disposal, during the period ended 4 May 2014 the group recognised an impairment charge in respect of this disposal group of £34.2m. There has been no significant change in the financial condition or operating results of the Greene King Group since 19 October 2014, being the end of the period for which the Greene King Group’s last unaudited consolidated financial statements were published.

5 Section B—Issuer

Element

Financial information on the Spirit Group The tables below set out the Spirit Group’s summary financial information for the periods indicated, reported in accordance with IFRS. The consolidated financial information for the Spirit Group have been extracted without material adjustment from the historical financial information relating to the Spirit Group.

Summary Group Income Statement

53 week 52 week period period ended 52 week 52 week ended 23 Aug period ended period ended 18 Aug 2014 17 Aug 2013 17 Aug 2013 2012 (as restated)(1) (as reported) £m, except per share data amounts Before exceptional items Revenue ...... 800.9 758.2 758.2 760.0 Operating costs before exceptional items . (679.7) (644.9) (644.9) (650.6) Operating profit before exceptional items . 121.2 113.3 113.3 109.4 Net finance costs ...... (60.9) (59.0) (59.0) (58.3) Profit before tax and exceptional items . . 60.3 54.3 54.3 51.1 Tax...... (13.2) (12.7) (12.7) (12.8) Profit after tax but before exceptional items ...... 47.1 41.6 41.6 38.3 Adjusted basic earnings per share(2) —basic ...... 7.1p 6.3p 6.3p 5.8p —diluted ...... 7.1p 6.3p 6.3p 5.8p Statutory results Profit after tax but before exceptional items ...... 47.1 41.6 41.6 38.3 Exceptional operating costs ...... 73.3 (28.3) (27.6) (610.1) Exception net finance (costs) / income . . (23.4) 42.7 45.0 (29.9) Exceptional tax ...... 2.4 (21.4) (22.1) 38.4 Profit attributable to equity holders of parent ...... 99.4 34.6 36.9 (563.3) Earnings per share —basic ...... 15.1p 5.2p 5.6p (85.4)p —diluted ...... 14.9p 5.2p 5.5p (85.4)p

(1) The income statement for the 52 week period ended 17 August 2013 has been restated to reflect the impact of the introduction of IAS 19 Employee benefits (revised 2011). (2) Before exceptional items

6 Section B—Issuer

Element

Summary Group Statement of Net Assets

23 Aug 18 Aug 2014 17 Aug 2013 2012 £m £m £m (as restated)(1) Non-current assets ...... 1,752.2 1,638.6 1,626.0 Current assets ...... 205.6 138.7 146.7 Total assets ...... 1,957.8 1,777.3 1,772.7 Non-current liabilities ...... (1,008.9) (1,011.9) (1,080.4) Current liabilities ...... (222.7) (188.3) (190.1) Total liabilities ...... (1,231.6) (1,200.2) (1,270.5) Total net assets ...... 726.2 577.1 502.2

Summary Group Cash Flow Statement

53 week 52 week period period ended 52 week ended 23 Aug period ended 18 Aug 2014 17 Aug 2013 2012 £m £m £m (as restated)(1) Net cash flow from operating activities ...... 165.2 121.5 118.5 Net cash flow used in investing activities ...... (9.4) (39.3) (65.3) Net cash flow from financing activities ...... (98.3) (78.0) (95.4) Net increase/(decrease) in cash and cash equivalents .... 57.5 4.2 (42.2) Opening cash and cash equivalents ...... 101.6 97.4 139.6 Closing cash and cash equivalents ...... 159.1 101.6 97.4

(1) The adoption of IAS 19 (revised 2011) has had no impact on the summary lines presented. The following significant changes to the financial condition and operating results of the Spirit Group occurred during these periods: • During the period ended 18 August 2012, the Spirit Group adopted a policy of revaluing its pub estate to open market value resulting in a £514.6m write down through exceptional items. • During the period ended 23 August 2014, the Spirit Group’s securitised debt was re-profiled. To effect this a proportion of the A1 and A3 bonds were exchanged for new A6 and A7 bonds respectively, with the new bonds having a slightly higher interest rate and a longer amortisation profile. There has been no significant change in the financial condition or operating results of the Spirit Group since 23 August 2014, being the end of the period for which the Spirit Group’s last audited consolidated accounts were published.

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Element

B.8 Selected key pro The unaudited pro forma income statement and unaudited pro forma forma financial statement of net assets of the Combined Group set out below have been information prepared for illustrative purposes only, in accordance with item 20.2 of Annex I of the PD Regulation and on the basis of the notes set out below.

Unaudited Pro Forma Statement of Net Assets Adjustments Greene King Spirit as at as at Combined 19 October 23 August Acquisition Group 2014 2014 adjustments Pro forma £m £m £m £m (Note 1 and (Note 2 (Note 4) Note 7) and Note 7) Non-current assets Property, plant and equipment ...... 2,207.3 1,577.5 (135.7)(a) 3,649.1 Operating leases ...... — 48.8 17.6(a) 66.4 Goodwill ...... 701.7 212.1 173.6 1,087.4 Financial assets ...... 23.6 — — 23.6 Deferred tax assets ...... 61.3 37.6 55.7(d) 154.6 Prepayments ...... 0.2 — — 0.2 Trade and other receivables ...... 0.1 — — 0.1 2,994.2 1,876.0 111.2 4,981.4 Current assets Inventories ...... 31.1 9.2 — 40.3 Financial assets ...... 9.1 — — 9.1 Trade and other receivables ...... 45.7 26.0 — 71.7 Prepayments ...... 11.4 — — 11.4 Cash and cash equivalents ...... 201.2 159.1 (86.7) 273.6 298.5 194.3 (86.7) 406.1 Property, plant and equipment held for sale .... 1.2 2.6 12.4(a) 16.2 299.7 196.9 (74.3) 422.3 Total assets ...... 3,293.9 2,072.9 36.9 5,403.7 Current liabilities Borrowings ...... (189.0) (14.7) — (203.7) Derivative financial instruments ...... (28.5) (20.8) — (49.3) Trade and other payables ...... (265.2) (151.9) (25.0)(c) (442.1) Income tax payable ...... (43.9) — — (43.9) Provisions ...... (0.4) (35.3) 7.7(c) (28.0) (527.0) (222.7) (17.3) (767.0) Non-current liabilities Borrowings ...... (1,374.6) (813.6) 17.6(b) (2,170.6) Derivative financial instruments ...... (180.7) (133.8) — (314.5) Trade and other payables ...... — (15.5) (292.3)(c) (307.8) Deferred tax liabilities ...... (98.8) — (4.8)(d) (103.6) Post-employment liabilities ...... (83.3) (3.8) — (87.1) Provisions ...... (5.9) (42.2) 42.2(c) (5.9) (1,743.3) (1,008.9) (237.3) (2,989.5) Total liabilities ...... (2,270.3) (1,231.6) (254.6) (3,756.5) Total net assets ...... 1,023.6 841.3 (217.7) 1,647.2

8 Section B—Issuer

Element

Unaudited Pro Forma Income Statement Adjustments Greene King Spirit for the for the 53 weeks 53 weeks ended ended Combined 4 May 23 August Acquisition Group 2014 2014 adjustments Pro forma £m £m £m £m (Note 1 and (Note 2 and (Note 5) Note 7) Note 7) Revenue ...... 1,301.6 800.9 — 2,102.5 Operating costs ...... (1,102.2) (685.8) (7.7) (1,795.7) Operating profit ...... 199.4 115.1 (7.7) 306.8 Financing income ...... 0.4 2.5 (0.4) 2.5 Financing costs ...... (94.6) (86.8) (17.5) (198.9) Profit before tax ...... 105.2 30.8 (25.6) 110.4 Tax...... (9.1) (11.7) 1.0 (19.8) Profit attributable to equity holders of parent ...... 96.1 19.1 (24.6) 90.6

Notes:

(1) The net assets of Greene King as at 19 October 2014 has been extracted, without material adjustment, from the unaudited interim consolidated financial statements of Greene King for the 24 weeks ended 19 October 2014. The financial information for the 53 weeks ended 4 May 2014 has been extracted without material adjustment, from the audited consolidated financial statements of Greene King for the 53 weeks ended 4 May 2014. (2) The financial information of Spirit has been extracted, without material adjustments, from the unaudited reconciliation of Spirit’s financial information included in Part V of the Circular. (3) A cash payment of 8 pence per Spirit Share comprising the proposed 2014 dividend of 1.5 pence per Spirit Share payable on 10 February 2015 and a special interim dividend of 6.5 pence per Spirit Share payable to Spirit Shareholders on the Effective Date. The dividend payments will result in a total cash reduction of £53.9m. (4) Total consideration to be paid by Greene King Group is £640.1m based on Greene King closing share price of 719.0 pence as at 12 December 2014. Spirit Shareholders will receive 0.1322 New Greene King Shares for each Spirit Share owned. An acquisition adjustment to cash and cash equivalents of £86.7m has been shown to reflect the net cash outflow of the estimated transaction cost to be incurred by Greene King and Spirit of £32.8m and dividend payments as referred to in Note 3 above. The transaction will be accounted for using the acquisition method of accounting. The excess of consideration over the value of the net assets acquired has been reflected as goodwill and other intangible assets. Under the acquisition method of accounting, the purchase price is allocated to the underlying Spirit Group tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill as follows:

9 Section B—Issuer

Element

£m Note Consideration paid (subject to Greene King share price at the Effective Date) 640.1 4 Net assets of Spirit ...... (841.3) 2 Dividend payable in cash to shareholders of Spirit ...... 53.9 3 Transactions costs to be settled in cash by Spirit ...... 16.3 Fair value adjustment to property, plant and equipment and assets held for sale ...... 123.3 4(a) Fair value adjustment to operating leases ...... (17.6) 4(a) Fair value adjustment to securitised debt ...... (17.6) 4(b) Fair value adjustment to other liabilities ...... 267.4 4(c) Deferred tax asset in respect of fair value adjustments ...... (50.9) 4(d) Pro-forma goodwill adjustment ...... 173.6 (a) The fair value of property, plant and equipment, operating leases and assets held for sale is considered to be the open market valuation as reported by Spirit as at 23 August 2014 in its audited financial statements for the period ended, adjusted for the sales value of non-current assets sold subsequent to year end. (b) The fair value of securitised debt reflects quoted market prices as at 13 October 2014, and has been adjusted to write off issue costs previously deferred by Spirit. (c) Increases to current trade and other payables of £25.0m and non-current trade and other payables of £292.3m have been recognised to reflect the net present liability in respect of operating leases that have been identified as having off market rate terms which replaces Spirit’s current provision of £7.7m and non-current provisions of £42.2m for onerous leases. (d) Non-current deferred tax assets of £55.7m have been recognised primarily in respect of the fair value adjustment to trade and other payables for off market leases referred to in Note 4(c) above. Non-current deferred tax liabilities of £4.8m have been recognised in respect of the fair value adjustment to securitised debt referred to in Note 4(b) above.

(5) Adjustments to reflect the acquisition as if it had happened on 29 April 2013 in the pro forma Income Statement are as follows;

(6) The pro-forma Income Statement adjustments are expected to have a continuing effect on the Combined Group, other than the transaction costs in relation to the acquisition costs of £32.8m. (7) No adjustment has been made to reflect the results of Greene King or Spirit since 4 May 2014 and 23 August 2014, respectively, for the Income Statement or since 19 October 2014, respectively, for the Statement of Net Assets. The unaudited pro forma income statement has been prepared to illustrate the effect on earnings of the Combined Group in the 53 weeks ended 4 May 2014 as if the Acquisition had taken place on 29 April 2013. The unaudited pro forma statement of net assets has been prepared to illustrate the effect on net assets of the Combined Group as at 19 October 2014 as if the Acquisition had taken place on that date. The unaudited pro forma income statement and the unaudited pro forma statement of net assets have been prepared for illustrative purposes only and, because of their nature, address a hypothetical situation and, do not, therefore, represent the Combined Group’s actual financial position or results.

10 Section B—Issuer

Element

B.9 Profit forecast or Not applicable. Neither Greene King nor Spirit has made a profit forecast estimate or estimate.

B.10 Audit report on Not applicable. There are no qualifications included in any audit report on the historical the historical financial information included in this document. financial information— qualifications

B.11 Insufficient Not applicable. working capital In the opinion of the Company, taking into account the facilities available to the Greene King Group, the working capital available to the Greene King Group is sufficient for its present requirements, that is for at least the next 12 months following the publication of this document. In the opinion of the Company, taking into account the facilities available to the Combined Group, the working capital available to the Combined Group is sufficient for its present requirements, that is for at least the next 12 months following the publication of this document.

Section C—Securities

Element

C.1 Type and class of Ordinary shares in the capital of the Company, with the New Greene King securities being Shares to be issued pursuant to the Offer. offered When admitted to trading, the International Securities Identification Number (ISIN) for the New Greene King Shares will be GB00B0HZP136.

C.2 Currency of the The Greene King Shares are denominated in sterling. securities issue

C.3 Number of issued As at 16 December 2014 (being the latest practicable date prior to the and fully paid publication of this document), there were 219,024,123 Greene King Shares Greene King in issue (all of which are fully paid), which excludes 132,980 ordinary Shares and par shares which are held in treasury. value The Greene King Shares have a par value of 12.5 pence each.

C.4 Rights attached to The New Greene King Shares will be ordinary shares in the capital of the Greene King Greene King with an nominal value of 12.5 pence each, will be issued Shares credited as fully paid and will rank pari passu in all respects with the Greene King shares in issue at the date of this Prospectus, save that they will not participate in any dividend payable by Greene King by reference to a record date prior to the Effective Date. The Greene King Shares rank equally for voting purposes. On a show of hands, each Shareholder has one vote and, on a poll, each Shareholder has one vote for every Greene King Share held. Each Greene King Share ranks equally for any dividend declared and all dividends shall be declared and paid according to the amounts paid up on the Greene King Shares.

11 Section C—Securities

Element

Each Greene King Share ranks equally for any distributions made on a winding up of the Company. Each Greene King Share ranks equally in the right to receive a relative proportion of shares in the case of a capitalisation of reserves.

C.5 Restrictions on The Greene King Shares are freely transferable and there are no transfer restrictions on transfer in the UK.

C.6 Application for The Existing Greene King Shares are currently admitted to trading on the admission to London Stock Exchange’s main market for listed securities. Application trading on will be made to the London Stock Exchange for the New Greene King regulated market Shares to be admitted to, trading on its main market for listed securities. The London Stock Exchange’s main market is a regulated market.

C.7 Dividend policy For the 2013/2014 financial year, the Board of Greene King recommended a final dividend of 20.8 pence per share, up 6.9 per cent., which was paid on 15 September 2014 to shareholders on the register at the close of business on 15 August 2014. The 2014 final dividend brought the total dividend for the year to 28.4 pence per share, up 6.8 per cent. In addition, on 4 December 2014, the Board of Greene King declared an interim dividend of 7.95 pence per share to be paid on 23 January 2015 to shareholders on the register at the close of business on 19 December 2014. This is in line with the Board’s policy of maintaining a minimum dividend cover of two times underlying earnings, while continuing to invest for future growth, and maintains Greene King’s long-term track record of annual dividend growth.

Section D—Risks

Element

D.1 Key information • The Combined Group’s future prospects could be negatively on key risks impacted by a failure to effectively integrate the Greene King Group relating to the and Spirit Group, including with respect to key employees and IT and Combined Group operational systems. or its industry • Adverse economic conditions in the United Kingdom and elsewhere could have a negative impact on consumer confidence and consumer spending which may affect the Combined Group’s business, financial condition and results of operations. • Pubs within the Combined Group’s estate will face a high level of competition to attract consumers, which may result in a loss of customers, in turn negatively impacting operating results. • Increases in operating and other expenses could have a material impact on the Combined Group’s financial results. • The Combined Group will have a high proportion of fixed overheads which cannot be easily reduced in response to variable revenues, which could negatively impact operating results if revenues were to fall.

12 Section D—Risks

Element

• The Combined Group will be dependent on key executives and personnel for its future success. • The Combined Group will be reliant on positive and continuing relationships with its key suppliers and the loss or deterioration of any such relationship could increase costs and negatively impact results. • The Combined Group’s brand equity (brand image, reputation) could be damaged by adverse or negative consumer reaction to the Group, which could have a corresponding impact on sales and also operating results. • Computer and/or information system breakdowns could impair the Combined Group’s ability to service its clients and thereby negatively impact the Combined Group’s prospects. • The Combined Group is required to comply with certain covenants under its existing borrowing facilities and failure to comply with financial covenants could have a significant impact on the business. • The property market is subject to fluctuations in value which could reduce the value of the Combined Group’s assets. • UK government sponsored campaigns against excessive drinking, licensing reforms relating to the sale of alcoholic beverages and changes in drink driving laws may reduce demand for the Combined Group’s alcoholic beverages, which could in turn negatively impact operating results. • The amendments to the Small Business, Enterprise and Employment Bill approved by the House of Commons in November 2014 which would, if implemented, require large pub-owning businesses such as the Combined Group to provide their tenants and leaseholders with a ‘‘market rent only option’’ (meaning an independently assessed market rent not including an obligation on the tenant to buy from the landlord some or all of the alcohol to be sold at the premises) could be less favourable to the Combined Group than existing commercial arrangements with the relevant tenants and leaseholders.

D.3 Key information • The price of Greene King Shares could be volatile. on key risks • The sale of Greene King Shares by substantial Greene King relating to the Shareholders could depress the price of Greene King Shares. Greene King Shares • Any change in current tax law or practice could adversely affect holders of Greene King Shares. • Holders of Greene King Shares in the United States and other overseas jurisdictions may not be able to participate in future equity offerings of Greene King Shares.

Section E—Offer

Element E.1 Total net proceeds The total costs and expenses relating to the issue of this document, the and estimated Circular and to the negotiation, preparation and implementation of the total expenses Offer are estimated to amount to approximately £16,700,000, (including VAT, the UK Listing Authority listing fee, the Panel fees, professional fees and expenses and the costs of printing and distribution of documents) and are payable by the Company.

13 Section E—Offer

Element

E.2a Reasons for the Not applicable. This document and the Offer does not constitute an offer offer, use of or invitation to any person to subscribe for or purchase any shares in proceeds, Greene King or Spirit. Greene King and Spirit will not receive any estimated net proceeds as a result of the proposed issue of New Greene King Shares. amount of the The Board of Greene King believes that the proposed acquisition of Spirit proceeds in consideration for the issue of New Greene King Shares to the Spirit Shareholders represents a compelling opportunity to accelerate the realisation of Greene King’s strategy by creating the UK’s leading managed pub operator with significantly enhanced quality and scale through a combined managed portfolio of approximately 1,830 pubs. The Combined Group’s managed business will operate a well-balanced, high quality pub portfolio with industry-leading brands and extensive national coverage, including a significant presence in the attractive London and south east segment. In addition, Greene King’s tenanted business will materially benefit from the contribution of Spirit’s high quality leased pubs and Greene King’s beer business will benefit from additional routes to market for its industry-leading ale brands. E.3 Terms and Not applicable. This document and the Offer does not constitute an offer conditions of the or invitation to any person to subscribe for or purchase any shares in offer Greene King or Spirit. Greene King and Spirit will not receive any proceeds as a result of the proposed issue of New Greene King Shares. For completeness, however, note that it is intended that the Offer will be effected by means of a court-sanctioned scheme of arrangement between Spirit and the Spirit Shareholders under Part 26 of the Companies Act 2006. The purpose of the Scheme is to provide for Greene King to become the holder of the entire issued and to be issued ordinary share capital of Spirit. The Offer is also subject to the Conditions and further terms which are summarised below: • the Scheme becoming unconditional and effective and being sanctioned by the Court; • the approval of Greene King Shareholders; • the approval of Spirit Shareholders; • the Competition and Markets Authority indicating, on terms reasonably satisfactory to Greene King and Spirit, that it does not intend to make a CMA Phase 2 Reference (which is an in-depth investigation by the CMA into whether the transaction may result in a substantial lessening of competition and also into what remedies would be appropriate to address any such competition concerns); and • the UK Listing Authority having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New Greene King Shares to listing on the premium segment of the Official List has been approved and (subject to satisfaction of any conditions to which such approval is expressed) will become effective as soon as a dealing notice has been issued by the UK Listing Authority and the London Stock Exchange having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the New Greene King Shares will be admitted to trading on the London Stock Exchange’s main market for listed securities.

14 Section E—Offer

Element

Once the necessary approvals from Spirit Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme will only become effective if approved by the Court and upon delivery of the Court Order(s) to the Registrar of Companies. Subject to satisfaction (or waiver) of the Conditions, the Scheme is expected to become effective in the first half of 2015.

E.4 Material interests Based on their respective holdings at 16 December 2014 (and assuming no movement therein prior to the Effective Date), immediately following Admission, the following persons will be interested directly or indirectly in 3 per cent. or more of the voting rights in respect of the issued ordinary share capital of the Company:

Percentage of Number of issued Greene King Greene King Name Shares Shares Standard Life Investments (Holdings) Limited ...... 27,590,681 8.96 The Capital Group Companies, Inc...... 22,754,367 7.39 Dimensional Fund Advisors Ltd ...... 12,164,511 3.95 Legal and General Investment Management Ltd...... 11,635,174 3.78 Lindsell Train Limited ...... 11,024,256 3.58 Henderson Global Investors ...... 10,800,430 3.51 Mondrian Investment Partners Limited .... 10,545,743 3.42 BlackRock, Inc...... 10,229,802 3.32 No interest is material to the Offer.

E.5 Selling Not applicable. No person is offering to sell any Greene King Shares as shareholders and part of the Offer and as such there are no selling shareholders. lock-up As part of the Offer, the members of the Greene King Board have each agreements given undertakings to Greene King and Spirit not to dispose of any of his or her beneficial holdings in shares of Greene King (or any interest therein) until after the Greene King General Meeting (intended to be held on 13 January 2015).

E.6 Dilution Assuming the issue of 89,019,568 New Greene King Shares pursuant to the Offer, the Existing Greene King Shares will represent 71.1 per cent. of the total issued Greene King Shares immediately following Admission.

E.7 Estimated Not applicable. No expenses will be charged to investors by the Company. expenses charged to investor

15 RISK FACTORS Investing in and holding the Greene King Shares involves financial and other risks. Prior to investing in the Greene King Shares, investors should carefully consider all of the information contained in this document, paying particular attention to the risks factors set out below. Investors should note that the risk factors set out below do not purport to be a complete list or explanation of all risk factors which may affect Greene King, the Greene King Shares or the Offer. Additional risks and uncertainties not currently known to Greene King or which Greene King currently deems immaterial may arise or become material in the future. Due to the fact that the Greene King Group’s and the Spirit Group’s respective operations are of a similar nature in many respects, the risks set out below (other than those relating to the Offer itself) will not be new risks for Greene King which arise only on Completion of the Acquisition. Rather, the potential impact of existing risk factors will be materially increased (in absolute terms) from Completion, as a result of the enhanced scale of the operations of the Combined Group. The occurrence of any of these risks may have a material adverse effect on Greene King’s and, following the Scheme becoming effective, the Combined Group’s business, results of operations, financial condition and/or prospects and/or the price of the Greene King Shares to the detriment of Greene King and/or Greene King Shareholders and investors could lose all of their investment. Investors should consider carefully whether an investment in the Greene King Shares is suitable for them in light of the information contained in this document and their personal circumstances. Prospective investors should note that the risks relating to Greene King, the Combined Group, its industry and the Greene King Shares summarised in the section of this document headed ‘‘Summary’’ are the risks that the Company and the Directors believe to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Greene King Shares. However, as the risks which the Greene King and the Combined Group face relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in the section of this document headed ‘‘Summary’’ but also, among other things, the risks and uncertainties described below. You should consult a legal adviser, an independent financial adviser duly authorised under the FSMA or a tax adviser for legal, financial or tax advice if you do not understand this Prospectus.

PART A: RISKS RELATING TO THE OFFER Conditions to the Offer The Offer is subject to the satisfaction of a number of conditions (which are set out in Part Three of the Scheme Document), on or before 31 May 2015 or such later date as the Company and Spirit may (with the consent of the Panel and the Court, if required) agree, including: • the approval of the Scheme and related resolutions by Spirit Shareholders at the Court Meeting and the Spirit General Meeting; • the Scheme becoming unconditional and effective and being sanctioned by the Court; • the passing of the Resolutions by Greene King Shareholders at the Greene King General Meeting; • the Competition and Markets Authority (the ‘‘CMA’’) indicating, on terms reasonably satisfactory to Greene King and Spirit that it does not intend to make a CMA Phase 2 Reference (which is an in-depth investigation by the CMA into whether the transaction may result in a substantial lessening of competition and also into what remedies would be appropriate to address any such competition concerns); and • the UK Listing Authority having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New Greene King Shares to listing on the premium segment of the Official List has been approved and (subject to satisfaction of any conditions to which such approval is expressed) will become effective as soon as a dealing notice has been issued by the UK Listing Authority and the London Stock Exchange having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the New Greene King Shares will be admitted to trading on the London Stock Exchange’s main market for listed securities. There is no guarantee that these (or any other) Conditions will be satisfied (or waived, if applicable). Failure to satisfy any of the Conditions may result in the Acquisition not being completed, which would mean that costs of approximately £16,700,000 in relation to the issue of this document, the Circular and to the negotiation, preparation and implementation of the Offer will have been incurred by the Company

16 with none of the potential benefits of the Acquisition having been achieved. It would also mean that management’s time spent in connection with the Offer, which could have otherwise been spent in connection with other aspects of the Greene King Group’s business, will not have been spent productively.

If required, remedies to obtain Competition and Markets Authority clearance may have a negative impact on the Combined Group The Completion of the Acquisition is subject to the CMA indicating, on terms reasonably satisfactory to Greene King and Spirit, that it does not intend to make a CMA Phase 2 Reference. To secure this decision, Greene King may be required to divest certain pubs, restaurants or hotels of the Combined Group in order to address any competition concern that the CMA identifies as part of its review of the proposed Acquisition. Any such divestments would need to be made within a specific time frame (and potentially under the supervision of a monitoring trustee). In view of that and given the challenging economic environment in which Greene King and Spirit operate, the proceeds of sale of such divestments may be substantially less than the current book value of the pub, restaurants or hotels (if any) subject to divestiture. A divestment of a material number of pubs, restaurants or hotels of the Combined Group may also have a significant negative impact on the value of the Combined Group.

Costs and synergies achieved may differ from those anticipated While Greene King believes that the costs and synergies expected to arise from the transaction have been reasonably estimated, unanticipated events or liabilities may arise which result in a delay or reduction in the benefits derived from the transaction, or in costs significantly in excess of those estimated. The Combined Group may also face challenges with the following: redeploying resources in different areas of operations to improve efficiency; minimising the diversion of management attention from ongoing business concerns; and addressing possible differences between Greene King’s business culture, processes, controls, procedures and systems and those of Spirit. Additionally, the transaction might affect the relationship that Greene King and/or Spirit have with suppliers and business partners, and affect the performance and/or potential growth opportunities. Under any of these circumstances, the business growth opportunities, overhead functions consolidation benefits, purchasing and distribution benefits and other synergies anticipated by Greene King and Spirit to result from the transaction may not be achieved as expected, or at all, or may be delayed materially. To the extent that the Combined Group incurs higher integration costs or achieves lower synergy benefits than expected, its results of operations, financial condition and/or prospects, and the price of New Greene King Shares, may be adversely affected.

The Combined Group’s future prospects will, in part, be dependent on effective integration of the Greene King Group and Spirit Group, including with respect to key employees and IT and operational systems The Combined Group’s future prospects may, in part, be dependent upon the Combined Group’s ability to integrate the Greene King Group and the Spirit Group successfully and any other businesses that it may acquire in the future without material disruption to the existing business including as a result of the integration of IT and operational systems. The performance of the Combined Group in the future will, amongst other things, also depend on the successful integration and motivation of key employees from both the Greene King Group and the Spirit Group. It is possible that failure to retain certain individuals during the integration period will affect the ability to integrate the Greene King Group and the Spirit Group successfully into the Combined Group and could have a material adverse effect on the Combined Group’s results of operations, financial conditions and/or prospects. This risk factor should not, however, be interpreted as suggesting in any way that the Combined Group will not have in place adequate systems and controls with respect to the monitoring of its financial position and prospects.

Greene King Shareholders and Spirit Shareholders will own a smaller percentage of the Combined Group than they currently own in Greene King and Spirit respectively After the Scheme becomes effective, Greene King and Spirit Shareholders will own a smaller percentage of the Combined Group than they currently own of Greene King and Spirit respectively. Based on the number of Spirit Shares in issue as at the close of business on 16 December 2014 (being the last practicable date prior to the publication of this document) and assuming that (i) all vested share options under the

17 Spirit Share Schemes are exercised in full and the resulting Spirit Shares are exchanged for New Greene King Shares pursuant to the Scheme; and (ii) there are no other issues of Spirit Shares or Greene King Shares (including under the Greene King Share Schemes) between 16 December 2014 (being the latest practicable date prior to the publication of this document) and the Effective Date, Greene King Shareholders and former Spirit Shareholders will own approximately 71.1 per cent. and approximately 28.9 per cent. respectively of the outstanding shares of the Combined Group. As a consequence, the number of voting rights which can be exercised and the influence which may be exerted by shareholders in respect of the Combined Group will be reduced.

PART B: RISKS RELATED TO GREENE KING AND, FOLLOWING COMPLETION, THE COMBINED GROUP Throughout its operations, the Combined Group will face various risks, both internal and external, which could have a material impact on the Combined Group’s long-term performance. Greene King intends to continue its practice of managing the risks inherent in its operations in order to mitigate exposure to all forms of risk, where practical, and to transfer risk to insurers, where cost effective.

Adverse economic conditions in the United Kingdom and elsewhere could have a negative impact on consumer confidence and consumer spending which may affect the Combined Group’s business, financial condition and results of operations Each of the pubs and hotels within the Combined Group are located in the United Kingdom. In addition each of Greene King’s two breweries are also in the UK with a majority of the beers and ales currently produced being sold and distributed within the United Kingdom. Given the UK focus of the Combined Group’s operations, it is substantially influenced by general economic conditions in the United Kingdom. Since the start of the global financial crisis in 2008, the UK economy has experienced significant turbulence and a period of recession. While certain economic indicators in the UK have exhibited signs of improvement, the outlook for the UK economy in the near to medium term remains challenging. Any delay in economic recovery or further economic changes could affect consumer expenditure, the managed, leased and tenanted estates and the brewing division of the Combined Group and its revenues and cash flows. Recent recessions in the United Kingdom, and the economic downturn more generally, have had (and will likely continue to have) an adverse effect on consumer confidence and discretionary spending in the United Kingdom. In addition, economic factors such as a rise in interest rates, unemployment and tax rates, lack of availability of consumer credit, a continuation of government policies that favour fiscal austerity and a decrease in spending and/or fiscal stimulus, could all, individually or in the aggregate, adversely affect levels of consumer confidence and discretionary spending. Any reduction in levels of consumer confidence or discretionary spending could adversely affect the Combined Group’s business, operating results and prospects.

Risks associated with the implementation of the business plan The current business plan for the Greene King Group is centred on the vision of building the best pub and beer business in the UK by delivering (i) outstanding value; (ii) exceptional service; and (iii) unbeatable quality across the business. Greene King also has specific strategies in relation to each of its business sectors (Retail, Pub Partners and Brewing & Brands). In relation to the Retail sector, a key priority is to grow the retail estate by acquiring existing pubs, smaller pub businesses and brown or greenfield sites on which to build new pubs. This plan may be adversely affected by competition for suitable sites from other pub companies, other retailers or those seeking alternative uses for such sites. It could also be adversely affected by cost creep due to the supply and demand on land, materials and labour. Any failure of the Combined Group to execute its business plan effectively could have a material adverse effect on the Combined Group’s business, reputation, financial condition and/or operating results.

Pubs within the Combined Group’s estate will face a high level of competition to attract consumers There are a wide variety of pubs and restaurants (including those specifically targeting the casual dining market) as well as off-licences, supermarkets and takeaways and other leisure companies operating within the same space as the Combined Group. Some of these alternative options may offer higher amenity levels or lower prices or may be backed by greater financial and operational resources than those the Combined Group possesses. Any such alternative provider could draw consumers away from pubs which are part of the Combined Group estate. The on-trade beer market in the United Kingdom has been adversely affected by the pricing policies of the large supermarket groups, with the off-trade accounting for a greater

18 proportion of United Kingdom beer sales than in the past. The Combined Group also faces increasing competition from other pub operators. Pubs which are part of the Combined Group estate may not be successful in competing against any or all of these alternatives and a sustained loss of customers to other operators’ pubs or other leisure activities, a decline in beer prices as a result of increased competition or increased consumption of alcohol at home could have an adverse effect on the Combined Group’s operating results, financial condition and prospects.

Inclement weather could have an adverse effect on turnover Attendance at pubs is generally higher during holiday periods, such as Christmas and New Year, and over bank holidays. Outside of holiday periods, the frequenting of pubs is slightly lower during the winter months than in the summer. Attendance levels at the Combined Group’s pubs may also be adversely affected by persistent rain or other inclement weather, especially during the summer months or over the Christmas period (which are peak trading times). This could have a negative effect on potential turnover generated by the Combined Group’s pubs and, in turn, could have a negative effect on the Combined Group’s operating results, financial condition and prospects.

Increases in operating and other expenses could have a material impact on the Combined Group’s financial results The Combined Group’s operating and other expenses could increase without a corresponding increase in turnover. Factors which could increase operating and other expenses include: • increases in the rate of inflation; • increases in taxes and other statutory charges; • changes in laws, regulations or government policies which increase the costs of compliance with such laws, regulations or policies; • significant increases in insurance premiums; • unforeseen capital expenditure arising as a result of defects affecting the Combined Group’s properties which need to be rectified or failure to perform by sub-contractors; • increases in borrowing costs; and • increases in the minimum wage or changes in employment legislation. In addition, the Combined Group’s tenants would be disproportionately exposed to increases in costs (because such tenants have less purchasing power). Such increases or changes could have a negative effect on the Combined Group’s operating results, financial condition and prospects.

An increase in the cost of raw materials or energy could affect the Combined Group’s profitability The components that the Combined Group would use for the production of its brewery products are largely commodities that are subject to price volatility caused by changes in global supply and demand, weather conditions, agricultural uncertainty and/or governmental controls. Commodity price changes may result in unexpected increases in the cost of raw materials, glass bottles and other packaging materials which would be used by the Combined Group. The Combined Group may also be adversely affected by shortages of raw materials or packaging materials. In addition, energy cost increases could result in higher transportation, freight and other operating costs, which would impact the Combined Group’s brewing businesses. Energy cost increases would also impact the Combined Group’s pub businesses. The Combined Group may not be able to increase its prices to offset these increased costs without suffering reduced volume, sales and operating profit.

Increasing global food prices may negatively impact sales margins for the Combined Group’s managed pubs Food and drink purchases will account for a significant portion of the Combined Group’s managed pubs supply costs. The Combined Group will therefore be exposed to the risk of higher food prices depending on world economic conditions, global availability and demand for products. There are some signs that the level of any future price increases may be at a lower rate than that seen recently but prices remain subject to volatility. However, there can be no guarantee that the Combined Group would be able to contain the effect of rising food prices and, if such rises continue, this could result in a reduction of margins and profits from the Combined Group’s managed pubs, which in turn could have a negative effect on the Combined Group’s operating results, financial condition and prospects. In addition, the Combined Group’s tenants would be disproportionately exposed to increases in costs (because such tenants have less purchasing power). Such increases or changes could have a negative effect on the Combined Group’s operating results, financial condition and prospects.

19 The Combined Group will have a high proportion of fixed overheads which cannot be easily reduced in response to variable revenues A high proportion of the Combined Group’s operating overheads and certain other costs will remain constant even if its revenues drop. For example, the expenses of owning and operating managed pubs cannot be significantly reduced when circumstances such as market and economic factors and competition cause a reduction in revenues. Similarly, it may not be possible in the future for the Combined Group’s brewing businesses to implement successful measures to offset potential increases in operating overheads, such as fast-rising input costs for raw materials, fuel and energy.

The Combined Group will be dependent on key executives and personnel for its future success The Combined Group’s future success will be substantially dependent on the continuing services and performance of key executives and its ability to continue to attract and retain highly skilled senior management and qualified pub managers. The current directors of the Company or Spirit cannot give assurances that they, or members of the management teams, will remain with the Combined Group. The failure to recruit, develop, motivate and retain suitable replacements for any of the current directors or significant numbers of other key employees could damage the Combined Group’s business.

The Combined Group will be reliant on positive and continuing relationships with its key suppliers The Combined Group’s agreements with its key suppliers are integral to its business. Termination of these agreements, variation of their terms or the failure of a key supplier to comply with its obligations under these agreements (including if a key supplier were to become insolvent) could have a negative effect on the Combined Group’s ability to ensure that its managed and tenanted pubs are properly supplied with non-Combined Group branded beer and other products and services and could increase costs if it becomes necessary to find alternative suppliers.

The Combined Group could be affected by changes in supplier dynamics brought about by consolidation in the UK brewing and distribution industry In recent years, there has been consolidation in the brewing and distribution industry in the UK. This consolidation could have the effect of exposing the Combined Group to reliance on a limited number of suppliers, and those suppliers may be able to exert pressures on the Combined Group that could result in an increase in the prices paid by it for goods bought or delivered. In particular, the Combined Group would rely on the increasingly limited number of major brewing companies to supply it with beer and other wet products other than those produced by its own brewing businesses.

Health-related food scares could affect the Combined Group’s profitability A major national or international food scare (for example, Bovine Spongiform Encephalopathy (‘BSE’), avian flu, salmonella) affecting foods sold in the Combined Group’s pubs and restaurants could increase costs for the Combined Group in sourcing alternative suppliers or have an impact on consumer preferences, reducing attendance or expenditure at the Combined Group’s pubs and restaurants. A prolonged food scare could therefore have a negative impact on the Combined Group’s operating results, financial condition and prospects.

Deterioration of the Combined Group’s brand equity (brand image, reputation and product quality) It is important that the Combined Group has the ability to maintain and continually improve its profile, image and reputation. The image and reputation of the Combined Group’s products or branded pubs and restaurants may be impacted by various factors, including failure to properly execute the branded model, litigation and complaints from customers, employees, tenants, other third parties or regulatory authorities resulting from quality failure, illness, injury or other health concerns. Such concerns stemming from one product or a number of products or from one brand, even when unsubstantiated, could be harmful to the Combined Group’s image and the reputation of its products and brands. Increased use of digital and social media by customers has the potential to exacerbate or accelerate the consequences of any such issues, providing a platform for grievances (legitimate or not) to be publicised. If any such issue were to occur, sales of the Combined Group’s products and business at its pubs and restaurants could decline and restoring the image and reputation of the Combined Group’s operations may be costly and time consuming. Any harm caused to the Combined Group’s brands or reputation could have a negative effect on the Combined Group’s operating results, financial condition and prospects.

20 The failure of key sporting teams to perform as expected could negatively affect sales Key sporting events, such as rugby union and football tournaments involving national teams or major club sides, have the potential to add incremental sales in those pubs where such sporting events are screened for customers. The failure of English, Welsh or Scottish national teams or of major club sides to qualify for or to perform well in such key sporting events could negatively affect sales in the Combined Group’s pubs, just as the success of such teams could positively affect sales.

Computer and/or information system breakdowns could impair the Combined Group’s ability to service its clients If any of the Combined Group’s financial, human resources, communication or other systems were to be disabled or did not operate properly (including as a result of computer viruses, problems with the internet or sabotage) the Combined Group could suffer disruption to its business, liability to clients, loss of data, regulatory intervention or reputational damage. Each of these could have an adverse effect on the Combined Group’s operating results, financial condition and prospects. The increasing online presence and increased quantity of customer information held by the Combined Group mean that the Combined Group will be in possession of personal data and therefore must comply with strict data protection and privacy laws and regulations. The Combined Group will have procedures in place to ensure compliance with the relevant data protection regulations by its employees and any third party service providers and also implements security measures to help prevent cyber-theft. Notwithstanding such efforts, the Combined Group will be exposed to the risk that data could be wrongfully appropriated, lost or disclosed, stolen or processed in breach of data protection and privacy laws and regulations. An event of this nature could leave the Combined Group subject to investigative or enforcement action by the relevant authorities and could result in loss of goodwill of its customers or deter new customers which could have a material adverse effect on the Combined Group’s business, financial condition, results of operations and prospects.

The Combined Group will have funding and regulatory risks relating to the existing Greene King and Spirit defined benefit pension schemes The principal funding risk for the Combined Group arising from the operation of the existing Greene King and Spirit defined benefit pension schemes (the ‘‘DB Schemes’’) are that the value of their assets (which move in line with markets) may not fully cover the amount of their liabilities, potentially requiring the Combined Group to increase its contributions. In addition, actions by the Pensions Regulator or the trustees of the DB Schemes, or changes to existing pension law, could result in additional funding obligations, which could have a material adverse effect on the overall financial position of the Combined Group. For example: (i) the trustees may increase the employer funding obligations by changing their investment strategy; (ii) the Pensions Regulator may impose increased employer contributions if these are not agreed by the trustees and the employers within 15 months of the triennial valuations; (iii) the DB Schemes may be wound up by the Pensions Regulator or the trustees of the DB Schemes in certain circumstances, which would require the employers to fund the purchase of annuities from an insurance company; and (iv) the Pensions Regulator may require funding from members of the Combined Group for the DB Schemes in certain circumstances (in the form of a contribution notice or financial support direction).

The Combined Group is required to comply with certain covenants under its existing borrowing facilities and failure to comply with financial covenants could have a significant impact on the business. The Combined Group will have obligations to meet regular interest payments and to comply with certain covenants under its borrowing facilities. Breaching the Combined Group’s financial covenants would have a significant impact on its ability to pay dividends or reinvest cash back into the business. If the Combined Group seeks in the future to refinance or renew these facilities, this may result in more onerous obligations with respect to interest and covenants than are applicable to the current term borrowing facilities of Greene King and Spirit respectively.

PART C: RISKS ASSOCIATED WITH INVESTING IN PROPERTY AND PROPERTY MANAGEMENT The property market is subject to fluctuations in value which could reduce the value of the Combined Group’s assets Although the Combined Group’s principal activity would not be the holding of properties as an investment, the Combined Group would hold properties. Any downturn in the UK property market may lead to a sustained reduction in the Combined Group’s freehold property values over time which could in

21 turn impact on the Combined Group’s ability to comply with financial covenants within key financing arrangements. In addition, valuations of pub assets are impacted by the trading performance of the pubs, with poorer trading generally leading to lower valuations. The valuation of property, leases and property- related assets is inherently subjective. As a result, valuations are subject to uncertainty. Moreover, all property and lease valuations are made on the basis of assumptions which may not prove to reflect the true position. There is no assurance that valuations of the Combined Group’s properties, leases and property- related assets will reflect actual sale prices. General fluctuations in the UK property market as well as continuing uncertain market conditions could impede the ability of the Combined Group to acquire and dispose of pubs at an appropriate value which may impact on the Combined Group’s ability to fulfil its planned business strategy. Another potential risk of fluctuations in property and lease value is that in the event that any action needs be taken to enforce any security over the estate of the Combined Group, the value of the assets and the liabilities (in respect of leases), and therefore the amount realised which is available to be applied in satisfying financial obligations may be insufficient. Therefore, various factors connected to fluctuations in property value could have a material adverse effect on the Combined Group’s operating results, financial condition and prospects.

Insurance held by the Combined Group may be insufficient to cover the damage caused by the incidents that they cover and certain types of loss may not be insurable The Combined Group’s properties could suffer physical damage caused by fire or other causes, resulting in losses (including loss of rent) which may not be fully compensated by insurance. In addition, there are certain types of losses that may be uninsurable or are not economically insurable. Insurance proceeds may be insufficient to repair or replace properties that are damaged or destroyed. Should an uninsured loss or a loss in excess of insured limits occur, the Combined Group could lose capital invested in the affected property as well as anticipated future revenue from those properties. In addition, the Combined Group could be liable to repair damage caused by uninsured risks. The Combined Group may also remain liable for any debt or other financial obligation related to those properties. This could have an adverse effect on the Combined Group’s operating results, financial condition and prospects.

PART D: RISKS ASSOCIATED WITH ENVIRONMENTAL LIABILITIES The Combined Group may be affected by the financial costs and reputational damage associated with environmental liabilities The Combined Group may be liable for the costs of removal, investigation or remediation of hazardous or toxic substances located on or in a property owned or leased by it. The costs of any required removal, investigation or remediation of such substances may be substantial. The presence of such substances, or the failure to remediate such substances properly, may also adversely affect the Combined Group’s ability to sell or lease the property or to borrow using the property as security. Publicity surrounding the discovery of such substances could harm the Combined Group’s reputation and consumers could refuse to patronise the Combined Group’s pubs. Laws and regulations, as these may be amended over time, may also impose liability for the release of certain materials into the air or water from a property investment, including asbestos, and such release can form the basis for liability to third persons for personal injury or other damages. Other laws and regulations can limit the development of and impose liability for, the disturbance of wetlands or the habitats of threatened or endangered species. Though the Company and Spirit are unaware of any significant environmental liabilities affecting its owned or leased properties, there can be no guarantee that they do not currently have undiscovered liabilities or that they will not have liabilities in the future. The costs of handling any such liabilities could have an adverse effect upon the Combined Group’s operating results, financial condition and prospects.

PART E: RISKS ASSOCIATED WITH THE REGULATORY FRAMEWORK APPLICABLE TO THE COMBINED GROUP The pub industry in the UK is highly regulated at both national and local level and pub operations require licences, permits and approvals. Delays and failures to obtain required licences or permits and the withdrawal thereof, could negatively affect the Combined Group’s operations A large part of the Combined Group’s business will be subject to laws that affect its operations, including laws and regulations relating to employment, health, sanitation, alcoholic beverage control and safety standards. Difficulties or failures in obtaining and/or maintaining required licences or approvals or the

22 withdrawal of such licences and approvals as a result of the failure to comply with the terms thereof could delay or prohibit the operation of the Combined Group’s pubs. These laws will impose a significant administrative burden on the Combined Group and its tenants and additional or more stringent requirements could be imposed in the future. Each of the Combined Group’s pubs is licensed to permit, amongst other things, the sale of liquor. Should any of the Combined Group’s pub licences be withdrawn or amended, the profitability of any such pub could be adversely impacted. Material breaches of licensing provisions may lead to the closure of pubs. This could have a material adverse effect on the Combined Group’s operating results, financial condition and prospects.

The Combined Group will need to comply with the new statutory code, if implemented, to manage the relationship between pub companies and their tenants The Small Business, Enterprise and Employment Bill which is currently being debated in Parliament, would, if passed into law, oblige the Combined Group to comply with a new statutory code to manage the relationship between pub companies and their tenants. On 18 November 2014, Parliament voted to support ‘‘New Clause 2’’, a series of amendments to the bill which contained provisions of relevance to the way that businesses such as the Combined Group would operate under the statutory code. These include the requirement for large pub-owning businesses such as the Combined Group to provide their tenants and leaseholders, at certain specified times or on the occurrence of certain specified events, with a ‘‘Market Rent Only Option’’ (referring to the right of the tenant, or leaseholder to be offered such tenancy or lease in exchange for an independently assessed market rent and not thereafter being bound by a ‘‘tie’’, which is the term for an obligation to buy from the landlord, or from a person nominated by the landlord, some or all of the alcohol to be sold at the premises). Without New Clause 2, the proposed statutory code would have provided a framework for the regular dealings between the Combined Group and its licensees, which the Directors had expected would have only marginally increased costs to the Combined Group. However, if the bill as amended by New Clause 2 becomes law, the Directors consider that the obligation to comply with the statutory code could have a greater negative impact on the profitability of the Combined Group’s tenanted and leased business, through forcing the Combined Group over a period of time to offer its licensees a ‘‘free-of-tie’’ agreement, which could be less favourable to the Combined Group than existing commercial arrangements with the relevant tenants and leaseholders. While Greene King expects that the Small Business, Enterprise and Employment Bill will be passed into law, there can be no certainty as to the final content of that bill if it is passed into law. The Directors are of the view (which they believe is shared by others in the industry) that New Clause 2 contains a number of unworkable amendments and that there is a very real possibility that these will be the subject of legal challenge from the industry. If the bill is passed into law containing some or all of the amendments set out in New Clause 2, then the Directors believe that there will be a number of options available to the Combined Group in order to mitigate the impact of the changes in law. However, if the Combined Group is unable to implement appropriate mitigating options in a timely manner, then this may have a material adverse impact on the Combined Group’s future operating results, financial condition and prospects.

UK government sponsored campaigns against excessive drinking, licensing reforms relating to the sale of alcoholic beverages and changes in drink driving laws may reduce demand for the Combined Group’s alcoholic beverages The UK government may consider initiatives to deal with so-called ‘binge drinking’, such as the introduction of a mandatory code that would impose a series of mandatory conditions on all alcohol retailers. If such a mandatory code, or similar measures, were to be implemented by the UK government, then the additional conditions imposed on pubs might impact the manner in which all pubs operate and could take effect regardless of the past record of individual pubs. One measure previously contemplated in both Scotland and England involves the introduction of minimum prices for alcoholic drinks. Another measure which is debated from time to time by the government and in the media is the raising of the legal drinking age to 21. Any such measures which reduce the Combined Group’s, its managers’ or its licensees’ flexibility to implement the business strategies that are considered to be the most likely to maximise profitability, could have a material impact on the Combined Group’s operating results, financial condition and prospects. The Combined Group’s businesses are subject to licensing requirements relating to the sale of alcoholic beverages and these requirements are subject to change from time to time. Additional or more stringent requirements could be imposed on the Combined Group’s operations in the future. To the extent that this

23 increases costs or reduces the Combined Group’s ability to sell alcoholic beverages, it could have an adverse effect on the Combined Group’s operating results, financial conditions and prospects. Car drivers and passengers account for a significant proportion of pub customers in the United Kingdom and any future legislation to further reduce the legal blood alcohol limit for drivers in the United Kingdom could affect trading in the Combined Group’s rural and suburban pubs and may result in customers drinking less or frequenting pubs less often. This could lead to a reduction in turnover at certain of the pubs in the Combined Group and lead to a decline in the Combined Group’s overall income from alcoholic drink sales. An increased focus on the potentially harmful effects of alcohol may reduce sales of alcoholic beverages and thus negatively impact the Combined Group’s operating results, financial condition and prospects.

Many of the Combined Group’s pubs operate gaming machines. Any violation of or change in the laws regulating such machines could have a negative effect on the profitability of certain pubs in the Combined Group The Gambling Act 2005 was enacted in 2005 and as part of the legislation new gaming regulations came into force in 2007. There are explicit monetary limits on stakes and prizes, as well as social responsibility provisions requiring close supervision of games. There were also changes to the broader categories of machines permitted in alternative venues such as casinos, licensed betting offices, bingo halls, amusement arcades, family entertainment centres and motorway service stations, that may increase the competitive threat to the Combined Group’s gaming revenue. If the Combined Group’s pubs were to violate the regulatory gaming rules or if the rules were to reduce the number of customers patronising the Combined Group’s pubs, it could have an adverse effect on the Combined Group’s operating results, financial condition and prospects.

The Combined Group will be subject to a variety of taxes The Combined Group’s activities will be subject to a number of taxes, including duty on alcoholic beverages, VAT and other business taxes. Changes in legislation which affect all or any of these matters may adversely affect the financial performance of the Combined Group. The Combined Group has a number of open tax items which have yet to be agreed or are in dispute with HMRC. The largest single item is Sussex, an inter-company funding arrangement undertaken in 2003/2004, which is due to be heard before the Court of Appeal during 2015. In addition, although neither Greene King nor Spirit are a party to the litigation, the Combined Group is awaiting the outcome of the Rank Group plc’s appeal before the Supreme Court to determine whether or not a repayment or payment of VAT is due in respect of amusement machine income. By way of background, in November 2011 the European Court of Justice found that the application of VAT to amusement machines contravened EU law. However, HMRC appealed issuing protective assessments to recover the VAT in the event their appeal was successful. In October 2013 the decision was overturned by the Court of Appeal. The Rank Group plc’s case is the lead case and it has therefore appealed the decision of the Court of Appeal. As such, others in the industry (including the Combined Group) are interested in the outcome of that appeal. The Rank Group plc ‘s latest appeal is due to be heard by the Supreme Court on 20 April 2015 although neither Greene King nor Spirit are a party to the litigation, the resolution of these items could result in additional tax liabilities which may have an adverse effect on the Combined Group’s operating results, financial condition and prospects.

The Combined Group’s pubs are subject to time consuming business regulations The licensed trade, in common with most areas of industry, faces increasing regulation in the fields of employment, health and safety and access for the disabled. A food safety or health and safety incident which causes serious illness, injury or even loss of life to a customer, employee or tenant could have a significant impact on the reputation of the Combined Group and may prompt legal action against the Combined Group. The general trend is to restrict labour mobility and also to make small businesses subject to the same procedures and employment laws as large businesses. Compliance with regulations has an effect on the trade in as much as licensees have to devote more time to this and therefore less time to the trade. This in turn could lead to higher costs and a decrease in revenues in affected pubs which could have an adverse impact on the Combined Group’s operating results, financial condition and prospects.

24 PART F: RISKS RELATED TO GREENE KING SHARES Risks related to Greene King Shares The price of Greene King Shares may be volatile and may be affected by a number of factors, some of which are beyond Greene King’s control, which could cause the value of an investment in the Greene King Shares to decline. The price of the Greene King Shares could be subject to significant fluctuations because of the volatility of the stock market in general and a variety of other factors, some of which are beyond Greene King and the Combined Group’s control, including the other risks relating to an investment in the Combined Group described in this section. Completion of the Offer is subject to approval of the Scheme and related resolutions by Spirit Shareholders at the Court Meeting, approval of the Offer by Greene King Shareholders and relevant anti-trust clearances. Until such time, the price of Greene King Shares and Spirit Shares could be subject to fluctuations because of speculation, volatility of the stock market in general and a variety of other factors, some of which are beyond Greene King’s control. Any change in current tax law or practice could adversely affect holders of Greene King Shares. Statements in this document concerning the taxation of holder of Greene King Shares are based on current UK tax law and published HMRC practice as at the date of this document, either of which is subject to change, possibly with retrospective effect. The taxation of an investment in New Greene King Shares depends on the individual circumstances of investors in New Greene King Shares and the summary of the UK taxation treatment of an investment in the New Greene King Shares set out in Part X (United Kingdom Taxation Considerations) of this document is intended as a general guide only. It does not address the specific tax position of every investor and only deals with rules of UK taxation of general application. Therefore, any investors who are in any doubt as to their tax position regarding the New Greene King Shares and any investors subject to tax in a jurisdiction other than the UK should consult their own independent tax advisers.

Major shareholders Sales by Greene King Shareholders of a substantial number of Greene King Shares may significantly reduce the price of Greene King Shares. Also, any perceived view that any such shareholder might sell substantial numbers of Greene King Shares could depress the price of Greene King Shares for an unknown period of time.

Risks for Overseas Shareholders Holders of Greene King Shares in the United States and other overseas jurisdictions may not be able to participate in future equity offerings of the Combined Group The Act provides for pre-emption rights to be granted to Greene King Shareholders, unless such rights are disapplied by shareholder resolution. However, US shareholders may not be entitled to exercise these rights unless the rights, and the Greene King Shares or shares in the Combined Group are issued pursuant to such rights, are registered under the US Securities Act or an exemption from the registration requirements of the US Securities Act is available. Greene King has no current intention to seek such registration and would evaluate, at the time of any proposed rights issue, whether the offer would qualify for an exemption, as well as the indirect benefits to Greene King or the Combined Group of enabling US shareholders to exercise rights and any other factors it considers to be appropriate at the time, prior to making a decision on whether to utilise an exemption, if available, from the registration requirements of the US Securities Act. Similar issues may arise in relation to other overseas jurisdictions.

25 PRESENTATION OF INFORMATION General Investors should only rely on the information contained in this document. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representation must not be relied upon as having been so authorised by Greene King, the Directors, or the Joint Sponsors. No representation or warranty, express or implied, is made by the Joint Sponsors as to the accuracy or completeness of such information, and nothing contained in this document is, or shall be relied upon as, a promise or representation by the Joint Sponsors as to the past, present or future. Without prejudice to any legal or regulatory obligation on Greene King to publish a supplementary prospectus pursuant to section 87G of the FSMA and Prospectus Rule 3.4, neither the delivery of this document nor Admission shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Greene King Group or the Spirit Group taken as a whole since the date of this document or that the information in it is correct as of any time after the date of this document. The Company will update the information provided in this document by means of a supplementary prospectus if a significant new factor, material mistake or inaccuracy arises or is noted relating to the information included in this document. Any supplementary prospectus will be subject to approval by the FCA and will be made public in accordance with the Prospectus Rules. Greene King will comply with its obligation to publish supplementary prospectuses containing further updated information required by law or by any regulatory authority but assumes no further obligation to publish additional information. The contents of this document are not to be construed as legal, financial or tax advice. Each prospective investor should consult a legal adviser, an independent financial adviser duly authorised under the FSMA or a tax adviser for legal, financial or tax advice in relation to any investment in or holding of Greene King Shares. Each prospective investor should consult with such advisers as needed to make its investment decision and to determine whether it is legally permitted to hold shares under applicable legal investment or similar laws or regulations. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. Investing in and holding the Greene King Shares involves financial risk. Prior to investing in the Greene King Shares, investors should carefully consider all of the information contained in this document, paying particular attention to the section entitled Risk Factors on pages 16 to 25 of this document. Investors should consider carefully whether an investment in the Greene King Shares is suitable for them in light of the information contained in this document and their personal circumstances. The Joint Sponsors and their affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services to the Company, for which they would have received customary fees. The Joint Sponsors and their affiliates may provide such services to the Company and any of their affiliates in the future.

Presentation of financial information The historical consolidated financial information relating to the Greene King Group included in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document, including that which is incorporated by reference into this document and historical consolidated financial information relating to the Spirit Group referred to in Part VIII (Historical Consolidated Financial Information Relating to the Spirit Group) of this document and which is incorporated by reference into this document has been prepared in accordance with IFRS. The significant accounting policies are set out within note 1 of the Greene King Group’s historical consolidated financial information for the fifty-three weeks ended 4 May 2014 referred to in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document and which is incorporated by reference into this document and note 1 of the Spirit Group’s historical consolidated financial information referred to in Part VIII (Historical Consolidated Financial Information Relating to the Spirit Group) of this document and which is incorporated by reference into this document.

EBITDA EBITDA represents earnings before interest, tax, depreciation, amortisation and exceptional items.

26 Like-for-like sales and net income growth ‘‘Like-for-like’’ or ‘‘LFL’’ sales and net income growth is calculated as the performance against the comparable period in the prior reporting period of all relevant premises (pubs, restaurants or hotels) that were trading in the two periods being compared. Pub sales are defined as outlet revenue less machine income. Net income is defined as outlet revenue less costs of goods sold.

Pro forma financial information In this Prospectus, any reference to ‘pro forma’ financial information is to information which has been extracted without material adjustment from the unaudited pro forma financial information contained in Part IX (Unaudited pro forma financial information of the Combined Group) of this document. The unaudited pro forma financial information contained in Part IX (Unaudited pro forma financial information of the Combined Group) of this document has been prepared on the basis of the notes set out therein. The unaudited pro forma financial information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Greene King Group’s, the Spirit Group’s, or the Combined Group’s actual financial position or results. Future results of operations may differ materially from those presented in the combined financial information due to various factors.

Credit ratings Credit ratings included or referred to in this Prospectus have been issued by Fitch and Standard & Poor’s, each of which is established in the European Union. Both Fitch and Standard & Poor’s are registered under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies.

Rounding Percentages and certain amounts included in this document have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be the precise sum of the figures that precede them.

Currencies Unless otherwise indicated in this document, all references to ‘‘sterling’’, ‘‘£’’ or ‘‘pence’’ are to the lawful currency of the UK. Unless otherwise indicated, the financial information contained in this document has been expressed in sterling. The Greene King Group presents its financial statements in sterling.

Forward-looking statements Certain statements contained in this document, including those in the sections headed ‘Summary’, ‘Risk Factors’, ‘Information on Greene King’; ‘Information on Spirit’; ‘Operating and Financial Review of Greene King’; and ‘Operating and Financial Review of Spirit’ constitute ‘forward-looking statements’. All statements other than statements of historical facts included in this document may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words ‘‘targets’’, ‘‘plans’’, ‘‘believes’’, ‘‘expects’’, ‘‘aims’’, ‘‘intends’’, ‘‘will’’, ‘‘may’’, ‘‘anticipates’’, ‘‘estimates’’, ‘‘projects’’ or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Greene King’s or Spirit’s operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Greene King’s or Spirit’s business. Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results, performance or achievements to differ materially from those projected or implied in any forward-looking statements. The important factors that could cause Greene King’s or Spirit’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, economic and

27 business cycles, the terms and conditions of Greene King’s or Spirit’s financing arrangements, foreign currency rate fluctuations, competition in Greene King’s or Spirit’s principal markets, acquisitions or disposals of businesses or assets and trends in Greene King’s and/or Spirit’s principal industries. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Each of Greene King and Spirit and each of their respective members, directors, officers, employees, advisers and any other persons acting on their behalf disclaims any obligation to update any forward-looking or other statements contained herein, except as required by applicable law. The statements above relating to forward-looking statements should not be construed as a qualification on the opinion of Greene King as to working capital set out in paragraph 9 of Part XII (Additional Information) of this document. Prospective investors are advised to read, in particular, the following parts of this document for a more complete discussion of the factors that could affect the Greene King Group’s or the Combined Group’s future performance and the industry in which the Greene King Group or the Combined Group operates: the section entitled Risk Factors on pages 16 to 25 of this document, Part II (Information on Greene King), Part III (Information on Spirit), Part IV (Operating and Financial Review of Greene King), Part V (Operating and Financial Review of Spirit), Part VII (Historical Consolidated Financial Information relating to the Greene King Group), Part VIII (Historical Consolidated Financial Information relating to Spirit Group) and Part IX (Unaudited Pro Forma Financial Information of the Combined Group) of this document. In light of these risks, uncertainties and assumptions, the events described in the forward- looking statements in this document may not occur. The forward-looking statements contained in this document speak only as of the date of this document. The Company, the Directors and the Joint Sponsors expressly disclaim any obligations or undertaking to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable law or regulation, the Prospectus Rules, the Listing Rules or the Disclosure and Transparency Rules.

No profit forecasts or estimates No statement in this document is intended as a profit forecast or estimate for any period and no statement in this document should be interpreted to mean that earnings or earnings per share for Greene King or Spirit, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Greene King or Spirit, as appropriate.

No incorporation of website information The contents of Greene King’s and Spirits’ websites or any hyperlinks accessible from those websites do not form part of this document and investors should not rely on them.

Defined terms Certain terms used in this document are defined and certain technical and other terms used in this document are set out in Part XIII (Definitions) of this document. All times referred to in this document are, unless otherwise stated, are references to London time. All references to legislation in this document are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of any legislation or regulation shall include any amendment, modification, re-enactment or extension thereof. Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

US considerations The Company is incorporated under the laws of England and Wales. Service of process upon Directors, all of whom reside outside of the United States, may be difficult to obtain within the United States. Furthermore, since most directly owned assets of the Company are outside of the United States, any judgment obtained in the United States against it may not be collectible within the United States. There is doubt as to the enforceability of certain civil liabilities under US federal securities laws in original actions in English courts, and, subject to certain exceptions and time limitations, English courts will treat a final and conclusive judgment of a US court for a liquidated amount as a debt enforceable by fresh proceedings in the English courts.

28 INDICATIVE OFFER STATISTICS

Number of Existing Greene King Shares(1) ...... 219,024,123 Number of New Greene King Shares to be issued pursuant to the Scheme(2) ...... 89,019,568 Number of Greene King Shares in issue immediately following Admission(2) ...... 308,043,691 New Greene King Shares as a percentage of the Enlarged Issued Share Capital(2) . . 28.9% ISIN ...... GB00B0HZP136 SEDOL...... B0HZP13

Notes: (1) Number of Greene King Shares as at 16 December 2014 (excludes 132,980 ordinary shares held in treasury). (2) Based on the number of Spirit Shares in issue as at 16 December 2014 and assuming that: (i) all vested share options under the Spirit Share Schemes are exercised in full and the resulting Spirit Shares are exchanged for New Greene King Shares under the Scheme; and (ii) there are no other issues of Spirit Shares or Greene King Shares (including under the Greene King Save4Shares Scheme 2005, Greene King Executive Share Option Plan or Long Term Incentive Plan) between 16 December 2014 and the Effective Date.

29 EXPECTED TIMETABLE OF PRINCIPAL EVENTS The dates and times given in the table below in connection with the Offer are indicative only and are based on Greene King’s current expectations and may be subject to change (including as a result of changes to Court times, the regulatory timetable and/or the process for implementation of the Offer). If any of the times and/or dates below change, the revised times and/or dates will be notified by Greene King to Greene King Shareholders by announcement through a Regulatory Information Service. All times shown in this document are London times unless otherwise stated.

Event Time and/or date Publication of this Prospectus ...... 18 December 2014 Publication of the Scheme Document ...... 18 December 2014 Publication of the Circular ...... 18 December 2014 Latest time for receipt of Spirit Forms of Proxy/CREST Proxy instructions for: i. the Spirit Court Meeting ...... 6.00 p.m. on 9 January 2015(1) ii. the Spirit General Meeting ...... 6.00 p.m. on 9 January 2015(2) Latest time for receipt of Greene King Forms of Proxy/CREST Proxy instructions for the Greene King General Meeting . . . 11.00 a.m. on 9 January 2015(3) Scheme Voting Record Time ...... 6.00 p.m. on 9 January 2015(4) Greene King General Meeting ...... 11.00 a.m. on 13 January 2015 Spirit Annual General Meeting ...... 3.00 p.m. on 13 January 2015 Spirit Court Meeting ...... 3.30 p.m. on 13 January 2015(5) Spirit General Meeting ...... 3.45 p.m. on 13 January 2015(6) Scheme Court Hearing to sanction the Scheme (and date of the Scheme Court Order) ...... A date which is not later than 14 days after the satisfaction of Condition 3.3 in relation to the Competition and Markets Authority (expected to be in the first half of 2015) (‘‘D’’)(7) Filing of Scheme Court Order ...... D(7) Last day of dealings in, and for registration of transfers of, and disablement in CREST of, Spirit Shares ...... D + 1 2015(7) Suspension of Spirit Shares from the Official List and from trading on the London Stock Exchange’s main market for listed securities ...... 5.00 p.m. on D + 1 2015(7) Scheme Record Time ...... 6.00 p.m. on D + 1 2015(7) Reduction Court Hearing to confirm the Capital Reduction . . . D + 2 2015(7) Filing of Reduction Court Order ...... D + 2 2015(7) Effective Date of the Scheme ...... D + 2 2015(7) Delisting of Spirit Shares ...... D + 3 2015(7) Issue of New Greene King Shares ...... D + 3 2015(7) Admission and commencement of dealings in New Greene King Shares ...... 8.00 a.m. on D + 3 2015(7) CREST accounts credited ...... as soon as possible after 8 a.m. on D + 3 2015(7) Despatch of definitive share certificates, where applicable .... within 14 days of the Effective Date(7) Long Stop Date ...... 31 May 2015(8)

Notes: (1) It is requested that forms of proxy for the Spirit Court Meeting be lodged not later than 48 hours prior to the time appointed for the Court Meeting (excluding any part of such 48 hour period falling on a weekend or a public holiday in the UK). Forms of proxy for the Spirit Court Meeting not so lodged may be handed to the Chairman of the start of the Court Meeting (or any adjournment thereof).

30 (2) Forms of proxy for the Spirit General Meeting must be lodged not later than 48 hours prior to the time appointed for the Spirit General Meeting (excluding any part of such 48 hour period falling on a weekend or a public holiday in the UK) in order for it to be valid, or if the Spirit General Meeting is adjourned, no later than 48 hours before the time fixed for the holding of the adjourned meeting. If the form of proxy for the Spirit General Meeting is not returned by such time, it will be invalid. (3) The Greene King Forms of Proxy for the Greene King General Meeting must be returned by no later than 11.00 a.m. on 9 January 2015 (or in the case of an adjourned meeting, not less than 48 hours prior to the time and date set for the adjourned meeting) to be valid. (4) If either the Court Meeting or the Spirit General Meeting is adjourned, the Scheme Voting Record Time for the adjourned meeting will be 6.00 p.m. on the date two days before the date set for the adjourned meeting. (5) To commence at the fixed time or, if later, immediately after the conclusion or adjournment of the Spirit AGM. (6) To commence at the fixed time or, if later, immediately after the conclusion or adjournment of the Court Meeting. (7) These times and dates are indicative only and will depend, among other things, on the merger clearance being sought from the Competition and Markets Authority in respect of the Offer, the timing of which may in turn impact the dates upon which (i) the Court sanctions the Scheme; (ii) the Court confirms the associated Capital Reduction in Spirit; and (iii) the Scheme Court Order and the Reduction Court Order along with the Statement of Capital are delivered to the Registrar of Companies and, in respect of the Reduction Court Order and the Statement of Capital, if the Court so orders for the Scheme to become effective, when such Reduction Court Order and Statement of Capital are registered by the Registrar of Companies. If any of the expected dates change, Greene King and/or Spirit will give notice of the change by issuing an announcement through a Regulatory Information Service. (8) The Long Stop Date is the latest date by which the Scheme must become effective, unless Greene King and Spirit agree, and (if required) the Court and the Panel permit, a later date.

31 DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS Directors ...... Tim Bridge (Chairman) Rooney Anand (Chief Executive Officer) Kirk Davis (Chief Financial Officer) Mike Coupe (Non-executive director) Ian Durant (Senior Independent Non-executive director) Rob Rowley (Non-executive director) Lynne Weedall (Non-executive director) all of whose business address is at Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT Company Secretary ...... Lindsay Keswick Registered and Head Office ...... Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT Lead Financial Adviser and Joint Sponsor ...... Lazard & Co., Limited, 50 Stratton Street, London W1J 8LL Financial Adviser and Joint Sponsor ...... Citigroup Global Markets Limited Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB Legal Advisers to the Company ...... Linklaters LLP, One Silk Street, London EC2Y 8HQ Legal Advisers to the Joint Sponsors ...... Davis Polk & Wardwell London LLP, 99 Gresham Street, London EC2V 7NG Auditors and Reporting Accountant ...... Ernst & Young, 1 More London Place, London SE1 2AF Registrars ...... Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU

32 PART I INFORMATION ON THE OFFER 1 Introduction On 4 November 2014, the Boards of Greene King and Spirit announced that they had agreed the terms of a recommended offer pursuant to which Greene King, or a wholly owned subsidiary of Greene King, would acquire the entire issued and to be issued ordinary share capital of Spirit (the ‘‘Offer’’). The Acquisition will be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the ‘‘Scheme’’).

2 Summary of the terms of the Offer The Offer is proposed to be implemented by way of a scheme of arrangement between Spirit and Scheme Shareholders under Part 26 of the Companies Act. Pursuant to the terms of the Scheme, Spirit Shareholders will receive: for each Spirit Share 0.1322 New Greene King Shares In addition, it is proposed that Spirit Shareholders will receive: • the proposed 2014 final dividend of 1.5 pence per Spirit Share (subject to shareholder approval at Spirit’s annual general meeting on 13 January 2015); and • a special interim dividend of 6.5 pence per Spirit Share held at the Scheme Record Time. The 2014 final dividend will be payable on 10 February 2015 to Spirit Shareholders on the register of members as at 16 January 2015 (unless the Effective Date of the Scheme is prior to 10 February 2015, in which case the final dividend will be paid on the Effective Date). The special interim dividend, which will be conditional upon Completion of the Offer, will be paid after the Effective Date to Spirit Shareholders on the register of members at the Scheme Record Time. The Offer (taking into account the dividend payments) values each Spirit Share at 115 pence based on the Closing Price of a Greene King Share on 3 November 2014 of 808.5 pence. The Offer (taking into account the dividend payments) values the entire issued and to be issued ordinary share capital of Spirit at approximately £773.6 million and represents a premium of approximately: • 52.2 per cent. to the undisturbed Closing Price of 75.5 pence per Spirit Share on 22 September 2014 (being the last Business Day prior to the start of the Offer Period); and • 53.0 per cent. to the volume weighted average Closing Price of approximately 75 pence per Spirit Share for the three-month period to 22 September 2014. In addition, the Offer (taking into account the dividend payments) implies an enterprise value multiple of approximately 10.2 times Spirit’s EBITDA for the 52 weeks ended 16 August 2014. In view of the size of the transaction, the Offer constitutes a ‘‘Class 1’’ transaction (as defined in the Listing Rules) for Greene King, and Greene King is accordingly required to seek the approval of Greene King Shareholders for the Offer at the Greene King General Meeting. Greene King Directors also do not currently have the authority necessary to issue and allot the full number of New Greene King Shares in accordance with section 551 of the Companies Act and, accordingly, the approval of Greene King Shareholders is required to grant the Greene King Directors this authority. The Offer is therefore conditional on, among other things, the requisite resolutions being passed by Greene King Shareholders at the Greene King General Meeting. Following Completion of the Offer, Spirit Shareholders will hold approximately 28.9 per cent. of the Combined Group and Greene King Shareholders approximately 71.1 per cent. of the Combined Group.

33 The Board of Greene King believes that the Combined Group can be expected to achieve cost synergies of at least £30 million per annum (comprised of central cost savings related to certain headcount reductions, removal of duplicate activity costs and fees, and savings related to future share schemes (£21 million), procurement (£7 million) and distribution (£2 million)).3 The one-off costs of delivering these savings are expected to total approximately £25 million. Approximately 40 per cent. of synergies are expected to be realised in 2015/2016, rising to 80 per cent. in 2016/2017, and 98 per cent. in 2017/2018. The expected synergies identified reflect both the beneficial elements and costs and will accrue as a direct result of the success of the Offer and would not be achieved on a standalone basis. Aside from the one-off costs referred to above, the Directors of Greene King are confident there are no dis-synergies to arise in connection with the acquisition of Spirit that will impact the planned benefits.

3 Background to, and reasons for, the Offer Greene King has made significant progress and created strong shareholder value over the last four years through pursuing a focused strategy of strengthening its competitive position within what remains a highly fragmented eating and drinking out market in the UK. In particular, Greene King has expanded its Retail business from 888 to 1,032 sites and improved the overall estate quality through selective acquisitions, new-builds and transfers from Pub Partners. Alongside the focus on Retail, Greene King has improved the quality of its Pub Partners estate through management initiatives and selective exits and maintained industry-leading brand investment in its brewing activities, again strengthening its overall position. Looking ahead, Greene King has identified a number of consumer trends that are likely to shape behaviour over the next decade. As outlined in Greene King’s 2014 annual report, the implications of the expected trends for the industry and the Greene King business are significant and include the need to: • develop sites and offers that cater for different generations at the same occasions; • continue investing in digital platforms and colleague training programmes to meet the challenges of a more demanding consumer, providing instant feedback to other customers; • maintain focus on delivering great value for customers, even as the economy improves; and • make Greene King’s sites more convenient for customers by increasing the occasions they use the pubs by expanding the daytime offer and becoming less reliant on ‘traditional’ pub eating and drinking occasions. As a consequence of these current and future consumer trends, Greene King is focused on evolving its existing strategy to accelerate its retail expansion and ultimately to explore the opportunity to move beyond conventional pub offers. The Board of Greene King believes that the acquisition of Spirit represents a compelling opportunity to accelerate the realisation of this strategy by creating a leading managed pub operator with significantly enhanced quality and scale through a combined managed portfolio of approximately 1,830 pubs. The combined managed business will operate a well-balanced, high-quality pub portfolio with industry leading brands and extensive national coverage, including a significant presence in the attractive London and south east region. In addition, the tenanted business will materially benefit from the contribution of Spirit’s high-quality leased pubs and Greene King’s beer business will benefit from additional routes to market for its industry-leading ale brands. Greene King has a strong track record of acquiring businesses and successfully delivering returns from careful integration into the Group and fully expects the transaction to add to that record.

3 These statements of estimated cost synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost synergies referred to may not be achieved, or those achieved could be materially different from those estimated. Neither these statements nor any other statement in this document should be construed as a profit forecast or interpreted to mean that the Combined Group’s earnings in the first full year following the Offer, or in any subsequent period, would necessarily match or be greater than or be less than those of Greene King and/or Spirit for the relevant preceding financial period or any other period.

34 4 Financial effects of the Offer and synergies The Board of Greene King believes the transaction will deliver enhanced, long-term shareholder value by: creating a leading integrated pub operator in the UK with: • pro forma revenues in excess of £2.1 billion and pro forma operating profits of £306.8 million; • superior scale and geographical spread with 1,110 pubs in the attractive London and south east region; • a portfolio of leading brands with stronger and broader customer appeal; • an opportunity to simplify the brand portfolio across the enlarged estate; and • a broader platform across which to explore options to diversify the retail offer; delivering significant operational efficiencies and cost savings from the combination: • recurring annual synergies of at least £30 million4 per annum expected to arise as a direct result of the transaction from reducing central costs and consolidation of overlapping functions, procurement and distribution savings; • additional potential revenue synergies from rationalisation and optimisation of the combined estate and from sharing best practice across the wider estate; and • estimated one-off cash costs for integration of approximately £25 million are expected to be incurred to achieve these synergies; and creating a stronger combined business with an enhanced financial profile and capital structure: • accelerated growth prospects from revenue and cost efficiencies; • increased balance sheet flexibility to support growth ambitions; and • commitment to Greene King’s progressive dividend policy going forward. The transaction is expected to be accretive to Greene King’s earnings per share from the 2016 financial year and strongly accretive thereafter as the cost efficiencies are achieved and the other synergies are realised.4 The return on capital that results from the transaction is also expected to exceed Greene King’s weighted average cost of capital in the 2017 financial year.

5 Trend information In the 2013/14 financial year (a 53-week year), Greene King’s revenue was £1,301.6 million and its operating profit before exceptional items was £265.6 million. Profit before tax and exceptional items was £173.1 million, while adjusted basic earnings per share were 61.4 pence. During the first half of the current financial year, Greene King achieved a good financial result with revenue up 3.3 per cent to £614.9m, another record for the Company. Operating profit before exceptional items was down 3.1 per cent to £123.3m and profit before tax and exceptional items (PBTE) was down 3.5 per cent. to £82.6m due to lower like-for-like sales growth and the impact of the disposal of 275 pubs to Hawthorn Leisure. Adjusted basic earnings per share were down 1.6 per cent. to 29.9 pence. However, adjusting for the disposal, the retained business grew PBTE by 3.0 per cent. and adjusted basic earnings per share by 5.3 per cent. In the announcement of 4 December 2014, Rooney Anand commented that after 30 weeks (to the end of November), like-for-like Retail sales were up 0.8 per cent., implying growth of 1.5 per cent. over the last twelve weeks of that period. Within this, Greene King’s southern estate strongly outperformed its northern estate. While the latest Greene King Leisure Spend Tracker highlighted that more people expect to spend less on eating and drinking out this Christmas, encouragingly, bookings by the end of November for the festive period were up 7.2 per cent. on last year. Looking ahead, Greene King expects a slight moderation in the operating margin decline for the retained business in the full year due to improved trading, increased cost savings and lower net cost inflation.

4 No statement in this document is intended as a profit forecast or estimate for any period and no statement in this document should be interpreted to mean that earnings or earnings per share for Greene King for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Greene King.

35 Greene King has maintained momentum in its other two businesses. After 28 weeks of the current financial year, Pub Partners’ like-for-like net income was up 3.4 per cent. while Brewing & Brands own-brewed volume was up 7.1 per cent. after 30 weeks. With real incomes struggling to grow, customers remain cautious about spending on eating and drinking out. As a result, Greene King will continue to tailor its customer-focused strategy with the aim of ensuring that it is able to deliver another year of progress, long-term growth and strong returns to shareholders. For the 53-week financial period ended 23 August 2014, Spirit reported like-for-like sales growth (on a 52-week basis) of 4.4 per cent. in managed and like-for-like sales and net income growth of 2.8 per cent. and 4.2 per cent. respectively in leased. Over the 2014 financial year, Spirit generated revenue of £800.9 million, EBITDA of £159.4 million before exceptional items and operating profit of £121.2 million before exceptional items. As at 23 August 2014, Spirit had net assets of £726.2 million.

6 Irrevocable undertakings In aggregate, Greene King and Spirit have received irrevocable undertakings from: • Each of the Spirit directors who hold or are beneficially entitled to Spirit Shares to vote in favour of the Scheme at the Court Meeting and in favour of the resolutions to be proposed at the Spirit General Meeting in respect of 2,017,449 Spirit Shares, representing, in aggregate, approximately 0.3 per cent. of the ordinary share capital of Spirit in issue on 16 December 2014 (being the latest practicable date prior to the publication of this document). • Each of the Greene King Directors who hold or are beneficially entitled to Greene King Shares to vote in favour of the resolutions to be proposed at the Greene King General Meeting in respect of 1,971,483 Greene King Shares, representing, in aggregate, approximately 0.90 per cent. of the ordinary share capital of Greene King in issue on 16 December 2014 (being the latest practicable date prior to the publication of this document).

7 Dividend policy for the Combined Group Following Completion of the Offer, Greene King intends to maintain its existing attractive dividend policy for the Combined Group, targeting dividend cover of around two times underlying earnings.

8 Information on Greene King Greene King’s three main business sectors are ‘‘Retail’’, ‘‘Pub Partners’’ and ‘‘Brewing & Brands’’. Greene King runs over 1,900 managed, tenanted, leased and franchised pubs, restaurants and hotels and has a proud history of brewing award-winning ales for more than 200 years. Greene King’s ‘‘Retail’’ business comprises the pubs, restaurants and hotels that it manages in England, Scotland and Wales. There are currently over 1,000 sites in Greene King’s Retail estate, which are split roughly equally between Greene King’s Local Pubs division and Greene King’s Destination Pubs and Restaurants division. Greene King’s primary sales categories are food, drink and accommodation. Food, the fastest growing category in Retail, comprises over 40 per cent. of sales. Greene King’s pubs, restaurants and hotels are operated under brands and formats such as Hungry Horse, Old English Inns, Loch Fyne Seafood & Grill, Farmhouse Inns and Metropolitan, its premium London estate. Greene King’s ‘‘Pub Partners’’ business offers people the opportunity to run Greene King’s pubs in England, Scotland and Wales on a tenanted, leased or franchised basis. There are currently just under 900 sites in Greene King’s Pub Partners estate, of which around two-thirds are run under traditional, brewery-tied tenancy agreements. Greene King’s ‘‘Brewing & Brands’’ business sells and distributes a wide range of award-winning craft ales to both the on- and off-trade. These are brewed in one of Greene King’s two breweries, in Bury St Edmunds and Dunbar. The strategy is focused on Greene King’s core brands: Old Speckled Hen, the UK’s no.1 premium ale brand, Greene King IPA, Abbot Ale, the UK’s no.1 premium cask ale brand, and Belhaven Best, the no. 1 ale brand in Scotland. The total number of Greene King Group employees as at 4 May 2014 was 23,541.

36 In the 2013/14 financial year (a 53-week year), Greene King’s revenue was £1,301.6 million and its operating profit before exceptional items was £265.6 million. Profit before tax and exceptional items was £173.1 million, while adjusted basic earnings per share were 61.4 pence. During the first half of the current financial year, Greene King achieved a good financial result with revenue up 3.3 per cent to £614.9m, another record for the Company. Operating profit before exceptional items was down 3.1 per cent to £123.3m and profit before tax and exceptional items (PBTE) was down 3.5 per cent. to £82.6m due to lower like-for-like sales growth and the impact of the disposal of 275 pubs to Hawthorn Leisure. Adjusted basic earnings per share were down 1.6 per cent. to 29.9 pence. However, adjusting for the disposal, the retained business grew PBTE by 3.0 per cent. and adjusted basic earnings per share by 5.3 per cent.

9 Information on Spirit Spirit is one of the UK’s leading pub companies, with 1,227 pubs across the UK with a particular focus on London and the South East. Spirit’s business is divided into two main divisions: a managed pub business of 794 pubs and a leased pub business of 433 pubs. Spirit’s managed division operates 794 high quality pubs under five core brands-Chef & Brewer, Fayre & Square (also incorporating Wacky Warehouse), John Barras, Flaming Grill and Taylor Walker. The estate benefits from a significant exposure to the economically stronger London and South East region, with 34 per cent. of its portfolio located in this region. The managed division’s award-winning brand portfolio covers a wide variety of occasions in the mass market and has evolved to reflect the increasing polarisation of consumer tastes towards both value and premium, a trend that is expected to continue. Spirit has completed the refurbishment of approximately 90 per cent. of its managed estate generating average returns on investment in excess of 25 per cent. and an improvement in like-for-like sales of 10.8 per cent. over the past three years. Spirit’s leased division comprises 433 pubs and represents one of the highest quality estates in the sector, with like-for-like beer volumes in growth and consistently ahead of the market through the last financial year. Like-for-like rent is also growing and 96 per cent. of the estate was on substantive leases at the end of the 2014 financial year. Spirit has sought to improve its leased estate through the innovation of new agreement types and active management of the portfolio. Licensees can benefit from best in class levels of support through training, investment, product range and infrastructure. Since 4 August 2011, Spirit has successfully disposed or converted to managed over 120 pubs and has invested over £24 million in refurbishing 46 per cent. of the leased estate. Spirit is headquartered in Burton-upon-Trent, Staffordshire, UK and as at 23 August 2014 had 17,136 employees. For the 53-week financial period ended 23 August 2014, Spirit reported like-for-like sales growth (on a 52-week basis) of 4.4 per cent. in the managed division and like-for-like sales and net income growth of 2.8 per cent. and 4.2 per cent. respectively in the leased division. Over the 2014 financial year, Spirit generated revenue of £800.9 million, EBITDA of £159.4 million before exceptional items and operating profit of £121.2 million before exceptional items. As at 23 August 2014, Spirit had net assets of £726.2 million.

10 Management, employees and locations Both Greene King and Spirit have large numbers of committed and talented employees who work hard to ensure that customers receive the best possible levels of service and quality. Both the Greene King Board and the Spirit Board recognise how important such employees are to the success of the Combined Group. However, in order to achieve some of the expected benefits of the combination of the Greene King Group and the Spirit Group, it will be necessary to perform a detailed review of how best to combine the two groups. The synergy work carried out to date has confirmed the potential to generate cost savings for the Combined Group in areas such as overlapping corporate and support functions where there may be duplication, which the Greene King Board anticipates will involve headcount reductions of less than 1 per cent. of the workforce of the Combined Group. However, at this stage, Greene King has not yet fully developed proposals as to how such headcount reductions will be implemented.

37 Going forward, the Greene King Board anticipates that the investment required to optimise brands and formats across the combined retail pub estate will lead to additional employment opportunities on a pub-by-pub basis. Greene King has given assurances to the Board of Spirit that the existing contractual and statutory employment rights, including pension rights (see below), of all retained management and employees of Spirit will be fully respected following Completion of the Offer. The principal pension schemes operated by the Spirit Group are the Spirit Group Pension Scheme (the ‘‘SGPS’’), the Spirit Group Retail Pension Plan (the ‘‘SGRPP’’) and the Spirit Group Retail Retirement Savings Plan (the ‘‘SGRRSP’’) (the ‘‘Spirit Pension Schemes’’), which provide benefits on a defined benefit basis. The SGPS was closed to new entrants on 1 June 2000 and the defined benefit section was closed to future benefit accrual on 5 April 2005. The last triennial actuarial valuation as at 31 October 2012 showed a funding deficit of £19.5 million, which is expected to be eliminated under an existing recovery plan whereby additional monthly contributions of £260,400 will be paid from 1 November 2012 to 31 October 2017. The SGRPP was closed to new entrants with effect from 31 January 2004 and the defined benefit section was closed to future benefit accrual on 5 April 2005. The last triennial actuarial valuation as at 31 October 2012 showed a funding deficit of £19.6 million, which is expected to be eliminated under an existing recovery plan whereby additional monthly contributions of £155,300 will be paid from 1 November 2012 to 31 October 2017. The SGRRSP was closed to new entrants on 9 November 2001 and also closed to future accruals in 2001. The last triennial actuarial valuation as at 31 October 2012 showed a funding deficit of £2,000. A one-off contribution of £2,000 was paid on 25 November 2013 to eliminate this deficit. The Spirit non-executive directors have confirmed that they intend to resign as directors of Spirit on the Completion of the Offer. It is anticipated that the Spirit executive directors will remain in the business for a short period following Completion of the Offer to effect an orderly handover. Proposals regarding appropriate retention and incentivisation arrangements for relevant employees are under consideration.

11 Spirit Share Schemes and Spirit SIP The Offer will extend to any Spirit Shares which are unconditionally allotted or issued as a result of the exercise of existing options and vesting of awards under the Spirit Share Schemes, or allotted or issued under the Spirit SIP, at or before the Scheme Record Time (as defined in the Scheme). Options and awards under the Spirit Share Schemes will vest shortly after the Effective Date, with options being exercisable for a period of two months thereafter. The number of Spirit Shares in respect of which such options and awards will be permitted to vest will be decided by Spirit’s remuneration committee and communicated to holders before the Effective Date in accordance with the rules of the relevant Spirit Share Scheme. In relation to the Long Term Incentive Plan 2011, the level of permitted vesting will take into account the extent to which the relevant performance conditions have been achieved during the relevant period and the level so determined will be subject to time pro-rating as set out in the plan rules. In respect of each Spirit Share to which such vested option or award relates, the holder will be entitled to receive 0.1322 Greene King Shares (in the case of an option, assuming that such option is exercised within the period of two months after the Effective Date) either by exchanging awards or options for an equivalent right to acquire shares in Greene King, or (if Spirit Shareholders approve the relevant amendments to the articles of association of Spirit to be proposed at the Spirit General Meeting) following exchange under Spirit’s articles of association. Greene King has also agreed to make dividend payments to the holders of any options or awards vesting or exercised after the Effective Date sufficient to ensure that, in respect of each Spirit Share to which such option or award relates, the holder receives an amount which, on an after-tax basis, leaves that holder in the same position as that in which it would have been if it had received the special interim dividend of 6.5 pence per Spirit Share referred to at paragraph 2 of Part I (Information on the Offer) of this document. Further details will be set out in the letters to be sent in due course by Greene King to the holders of options and awards.

38 12 New Greene King Shares The New Greene King Shares will, when issued, be ordinary shares in the capital of Greene King with a nominal value of 12.5 pence each, be fully paid and rank pari passu in all respects with the Greene King shares in issue at the date of this document, save that they will not participate in any dividend payable by Greene King by reference to a record date prior to the Effective Date. The New Greene King Shares will, when issued, be freely transferable and there will be no restrictions on transfer in the UK. The aggregate number of New Greene King Shares to which a Spirit Shareholder will be entitled shall, in each case, be rounded down to the nearest whole number of New Greene King Shares. Fractions of New Greene King Shares will not be allotted to any Spirit Shareholder, but all fractions of New Greene King Shares to which Spirit Shareholders would otherwise have been entitled will be aggregated, allotted, issued and sold in the market after the Effective Date and the net proceeds (after dealing costs) of such sale will be paid in cash to the Spirit Shareholders entitled thereto in accordance with what would otherwise have been their respective fractional entitlements.

13 Structure of the Offer The Offer will be effected by means of a court-sanctioned scheme of arrangement between Spirit and the Spirit Shareholders under Part 26 of the Companies Act 2006. The purpose of the Scheme is to provide for Greene King to become the holder of the entire issued and to be issued ordinary share capital of Spirit. This is to be achieved by the cancellation of the ordinary shares of Spirit and the application of the reserve arising from such cancellation in paying up in full a number of new Spirit Shares (which is equal to the number of ordinary shares cancelled), and issuing the same to Greene King. In consideration for this, the Spirit Shareholders will receive the New Greene King Shares on the basis set out in paragraph 2 of this Part I (Information on the Offer) of this prospectus. To become effective, the Scheme must be approved by a majority in number of the Spirit Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Spirit Shares voted. The Scheme also requires the passing at the Spirit General Meeting of a special resolution necessary to implement the Scheme and approve the related Capital Reduction, and the approval of the Court. The Offer is also subject to the Conditions and further terms set out in the Scheme Document, including, among other things: • the Scheme becoming unconditional and effective and being sanctioned by the Court; • the approval of Greene King Shareholders; • the approval of Spirit Shareholders; • the Competition and Markets Authority indicating, on terms reasonably satisfactory to Greene King and Spirit, that it does not intend to make a CMA Phase 2 Reference (which is an in-depth investigation by the CMA into whether the transaction may result in a substantial lessening of competition and also into what remedies would be appropriate to address any such competition concerns); and • the UK Listing Authority having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New Greene King Shares to listing on the premium segment of the Official List has been approved and (subject to satisfaction of any conditions to which such approval is expressed) will become effective as soon as a dealing notice has been issued by the UK Listing Authority and the London Stock Exchange having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the New Greene King Shares will be admitted to trading on the London Stock Exchange’s main market for listed securities. Once the necessary approvals from Spirit Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be approved by the Court. The Scheme will then become effective upon delivery of the Court Order(s) to the Registrar of Companies. Subject to satisfaction (or waiver) of the Conditions, the Scheme is expected to become effective in the first half of 2015.

39 The Scheme will lapse if: • the Court Meeting and the Spirit General Meeting are not held by the 22nd day after 13 January 2015 or the expected date of such meetings as set out in the Scheme Document (or such later date as may be agreed between Greene King and Spirit); • the Court hearing to approve the Scheme is not held by the 22nd day after the expected date of such hearing as set out in the Scheme Document (being a date which is not later than 14 days after the satisfaction of Condition 3.3 in relation to the Competition and Markets Authority indicating, on terms reasonably satisfactory to Greene King and Spirit, that it does not intend to make a Phase 2 CMA reference of the Offer, or of any matter arising from or relating to the Offer) (or such later date as may be agreed between Greene King and Spirit and announced by Spirit); or • the Scheme does not become effective by a Long Stop Date of 31 May 2015, provided, however, that the deadlines for the timing of the Court Meeting, the Spirit General Meeting and the Court hearing to approve the Scheme as set out above may be waived by Greene King, and the deadline for the Scheme to become effective (the Long Stop Date) may be extended by agreement between Spirit and Greene King. Greene King has agreed with Spirit that the Greene King General Meeting will be scheduled so as to be held on the same date as the Spirit General Meeting. Upon the Scheme becoming effective, it will be binding on all Spirit Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the Spirit General Meeting. Further details of the Scheme, including an indicative timetable for its implementation and notices of the Court Meeting and Spirit General Meeting, will be set out in the Scheme Document, which will also specify the action to be taken by Spirit Shareholders. On 3 December 2014, the government announced that it would bring forward regulations to prohibit ‘‘cancellation schemes’’ as a method of effecting a takeover free from stamp duty or stamp duty reserve tax. The Scheme, as currently proposed, is a cancellation scheme. As at the date of this document it is unclear when the proposed regulations will become effective or what transitional arrangements, if any, will apply to takeovers announced prior to 3 December 2014. If the regulations, when introduced, prohibit the Scheme (in its current form) or otherwise make it inoperable, the terms of the Scheme will be amended to a ‘‘transfer scheme’’ or otherwise in order to render it compliant with the regulations. Any such change would not affect the commercial terms of the Offer for Spirit Shareholders.

14 Scheme Document It is expected that the Scheme Document and the Forms of Proxy accompanying the Scheme Document will be published by Spirit on or about the same date as the Circular and this Prospectus are published by Greene King. The Scheme Document and Forms of Proxy will be made available to all Spirit Shareholders (other than Restricted Overseas Persons) at no charge to them. Spirit Shareholders are urged to read the Scheme Document and the accompanying Forms of Proxy because they will contain important information.

15 Other Offer-related arrangements Confidentiality and Standstill Agreement Greene King and Spirit entered into a confidentiality and standstill agreement on 22 October 2014 (the ‘‘Confidentiality and Standstill Agreement’’) pursuant to which each of Greene King and Spirit has undertaken to keep confidential information relating to the other party and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation. These confidentiality obligations will remain in force for a period of three years from the date of the Confidentiality and Standstill Agreement. The Confidentiality and Standstill Agreement also contains undertakings from both Spirit and Greene King that, for a period of 12 months, neither will solicit each other’s senior employees. Certain standstill provisions, preventing Greene King from acquiring shares in Spirit (save pursuant to the offer), apply to Greene King until the date on which all confidential information provided to Greene King ceases to become price-sensitive information, subject to customary exceptions.

40 A copy of the Confidentiality and Standstill Agreement is available on Greene King’s website at www.greeneking.co.uk and on Spirit’s website at www.spiritpubcompany.com until the Effective Date.

Co-operation Agreement Pursuant to a co-operation agreement dated 4 November 2014 (the ‘‘Co-operation Agreement’’), among other things: • Spirit has agreed to co-operate with Greene King to assist it to obtain clearance from the Competition and Markets Authority; • Greene King has agreed to provide Spirit with certain information and assistance in the preparation of the Scheme Document; • Greene King has agreed to convene the Greene King General Meeting so that it is held on the same date as the Spirit General Meeting, and not to adjourn or postpone the Greene King General Meeting without the consent of Spirit; • Greene King has agreed to certain customary restrictions on the conduct of its business during the period pending Completion of the Acquisition, and which prohibit, among other things: (a) the payment by Greene King of extraordinary dividends; (b) the allotment of further shares (or rights or options in respect of shares) (other than pursuant to its existing share incentive schemes or in order to settle options or awards vesting under its existing incentive schemes); (c) the entry into any transaction which would constitute a class 1 transaction; or (d) the amendment of its constitutional documents in any manner that would have a material and adverse impact on the value of, or rights attaching to, the New Greene King Shares; and • each of Spirit and Greene King has agreed to take any action necessary to implement certain proposals in relation to the Spirit Share Schemes and the Spirit SIP. A copy of the Co-operation Agreement is available on Greene King’s website at www.greeneking.co.uk and on Spirit’s website at www.spiritpubcompany.com until the Effective Date.

16 Listing of New Greene King Shares and de-listing of Spirit Shares Application will be made to the FCA and to the London Stock Exchange, respectively, for the New Greene King Shares to be admitted to the Official List with a premium listing and to trading on the London Stock Exchange’s main market for listed securities (‘‘Admission’’). It is expected that Admission will become effective and dealings for normal settlement in the New Greene King Shares will commence at or shortly after 8.00 a.m. on the Effective Date. Prior to the Scheme becoming effective, Spirit will make an application for the cancellation of the listing of Spirit Shares on the Official List and for the cancellation of trading of the Spirit Shares on the London Stock Exchange’s main market for listed securities, in each case, to take effect from or shortly after the Effective Date. The last day of dealings in Spirit Shares on the main market of the London Stock Exchange is expected to be the Business Day immediately prior to the Effective Date and no transfers will be registered after 6.00 p.m. on that date.

17 General The Offer will be made on the terms and subject to the Conditions and certain further terms set out in the Scheme Document. If Spirit agrees or if (i) the Spirit Board withdraws or adversely modifies its recommendation that Spirit Shareholders vote in favour of the resolutions necessary to enable Spirit to implement the Scheme; (ii) a third party announces a firm intention to make an offer for Spirit which is recommended by the Spirit Board; or (iii) the Court hearing to approve the Scheme is not held by the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed between Greene King and Spirit and announced by Spirit), then Greene King may (with the consent of the Panel) elect to implement the acquisition of the Spirit Shares by way of a takeover offer as an alternative to the Scheme. In such event, the acquisition will be implemented on the same terms and conditions as those set out in this document (subject to any modification or amendment to such terms and conditions as may be agreed with the Panel or which is necessary as a result of the switch from the Scheme to a takeover offer).

41 18 Documents available on website Copies of the following documents will be made available on Greene King’s and Spirit’s websites at www.greeneking.co.uk and www.spiritpubcompany.com, respectively, until the Effective Date: • this Prospectus; • the Scheme Document; • the Circular; • the Announcement; • the irrevocable undertakings referred to in paragraph 6 above; • the Confidentiality and Standstill Agreement; • the Co-operation Agreement; • the Annual Report of Greene King for each of the fifty-three weeks ended 4 May 2014, fifty-two weeks ended 28 April 2013 and fifty-two weeks ended 29 April 2012; • the Annual Report of Spirit for each of the financial years ended 23 August 2014, 17 August 2013 and 18 August 2012; • the report of Ernst & Young LLP set out Section B of Part IX (Accountant’s Report on Pro Forma Financial Information) of this document; • the report of Lazard & Co., Limited and Citigroup Global Capital Markets Limited set out in Part VII (Quantified Financial Benefits Statement) of the Circular; and • the consent letters referred to in paragraph 13 of Part XII (Additional Information) of this document.

42 PART II INFORMATION ON GREENE KING The following information should be read in conjunction with the information appearing elsewhere in this document, including the Greene King Group’s audited historical consolidated financial information for the 52 weeks ended 29 April 2012, 52 weeks ended 28 April 2013 and 53 weeks ended 4 May 2014 which are incorporated into this document by reference as explained in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) and paragraph 18 of Part XII (Additional Information) of this document and are available for inspection in accordance with paragraph 17 of Part XII (Additional Information) and Greene King’s unaudited consolidated financial information for the 24 weeks ended 19 October 2014, which is set out in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document. Unless otherwise indicated, the selected financial information included in this Part II (Information on Greene King) has been extracted without material adjustment from the Greene King Group’s audited historical consolidated financial information contained in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document.

1 Business Overview Greene King’s three main businesses are ‘‘Retail’’, ‘‘Pub Partners’’ and ‘‘Brewing & Brands’’. Greene King runs over 1,900 managed, tenanted, leased and franchised pubs, restaurants and hotels and has a proud history of brewing award-winning ales for more than 200 years. Greene King’s ‘‘Retail’’ business comprises the pubs, restaurants and hotels that it manages in England, Scotland and Wales. There are currently over 1,000 sites in Greene King’s Retail estate, which is split roughly equally between Greene King’s Local Pubs division and Greene King’s Destination Pubs and Restaurants division. Greene King’s primary sales categories are food, drink and accommodation. Food, the fastest growing category in Retail, comprises over 40 per cent. of sales. Greene King’s pubs, restaurants and hotels are operated under brands and formats such as Hungry Horse, Old English Inns, Loch Fyne Seafood & Grill, Farmhouse Inns, its carvery concept, and Metropolitan, its premium London estate. Greene King’s Retail ‘‘Pub Partners’’ business offers people the opportunity to run Greene King’s pubs in England, Scotland and Wales on a tenanted, leased or franchised basis. There are currently just under 900 sites in Greene King’s Pub Partners estate, of which around two-thirds are run under traditional, brewery-tied tenancy agreements. Greene King’s ‘‘Brewing & Brands’’ business sells and distributes a wide range of award-winning craft ales to both the on- and off-trade. These are brewed in one of Greene King’s two breweries, in Bury St Edmunds and Dunbar. The strategy is focused on Greene King’s core brands: Old Speckled Hen, the UK’s no.1 premium ale brand, Greene King IPA, Abbot Ale, the UK’s no.1 premium cask ale brand, and Belhaven Best, the no. 1 ale brand in Scotland.

2 History Greene King has been brewing beer and running pubs for over 200 years. In 1799, Benjamin Greene established his brewing company in Bury St. Edmunds, Suffolk. Greene later formed a partnership with William Buck to buy the 100-year old Wright’s Brewery in Westgate Street in 1806. Separately, Frederick King bought the nearby Maulkins Maltings and renamed it the St. Edmunds Brewery in 1868. It was in 1887 that the two competing companies merged to form Greene, King and Sons, which quickly became one of England’s largest country brewers and the owner of over 100 pubs. Acquisitions of former neighbours then followed, so that, by the 1960s, the Company held 900 pubs. The size of the Group has increased steadily since that time, through a combination of organic growth and, with increasing intensity in recent years, through a series of acquisitions. In 1996, Greene King acquired the Magic Pub Company for £198.8 million, adding 273 managed pubs to its estate, including the Hungry Horse brand. Then, in 1998, the Company added a further 43 pubs with the acquisition of Beards of Sussex for £14.2 million. In 1999, Greene King acquired Marston’s southern estate of 165 pubs and also Morland, the brewer of Old Speckled Hen and Ruddles and the holder of a 408 pub estate, for £182.1 million. Next, in September of 2001, Greene King acquired the 137-strong Old English Inns for £104.8 million, in order to further expand

43 its chain of pubs in the south of England. The Group subsequently disposed of 17 of the pubs acquired in November of that year. In June 2002, Greene King acquired the entire issued share capital of Morrells of Oxford Limited, the Oxford based pubs group, from SDA Limited for £63.4 million. The assets acquired included 57 managed and 50 tenanted pubs, most of which were within 30 miles of Oxford’s city centre. In July 2004, Greene King acquired an estate of 432 managed pubs comprising Laurel’s neighbourhood pubs via a corporate acquisition. The acquisition completed on 6 August 2004 and the total consideration paid by Greene King was £680.2 million. Greene King subsequently sold 34 of the pubs acquired in order to comply with regulatory requirements. In the following July, Greene King acquired the entire issued share capital of T D Ridley & Sons, Limited for total consideration of £44.6 million. The acquired assets of Ridley’s included 73 tenanted pubs, a brewery at Hartford End, near Chelmsford, a quality free trade business and unlicensed property with a value estimated at £6 million. The pubs were predominantly located in Essex. The Hartford End brewery was subsequently closed and the brewing of a number of Ridley’s brands was transferred to the brewery in Bury St. Edmunds. Greene King also acquired The Belhaven Group plc in 2005 by way of an offer subject to the Code for £181.7 million in cash. Founded in 1719, Belhaven was the oldest independent brewery in Scotland and operated both a managed and a tenanted pub estate (a combined estate of around 300 pubs) and a drinks distribution business. Its brewery in Dunbar brews Belhaven Best, the number one ale brand in Scotland. In June 2006, Greene King agreed to acquire Hardy’s & Hanson’s plc, the Nottingham based brewer and holder of a chain of 268 pubs (83 of which were managed and 185 tenanted), for £274.9 million. The acquisition completed in September 2006. The brewery at Kimberley was closed at the end of 2006, although some of Hardy’s & Hanson’s beers continue to be brewed at Bury St. Edmunds. In November of 2006, Greene King sold 155 pubs (15 managed and 140 tenanted) to Admiral Taverns for £56.5 million. To capitalise on the opportunities presented by food sales, in August of 2007, Greene King acquired the entire issued share capital of PCD Group Limited, the holding company of the Loch Fyne Restaurants group of companies, for £66.4 million. At the time of the acquisition, there were 36 Loch Fyne branded restaurants throughout Britain. Since the acquisition, the restaurants have been re-branded as Loch Fyne Seafood & Grill and a number of existing Greene King sites have also been converted to the Loch Fyne Seafood & Grill format. In November 2007, Greene King acquired the entire issued share capital of New Century Inns Limited for £31.9 million. The estate of New Century Inns consisted of 49 tenanted and leased pubs, located in Northumberland, County Durham, Yorkshire and Derbyshire. These 49 high-quality tenanted and leased pubs (all but one freehold), complemented Greene King’s existing estate and strengthened the Group’s position in the north and north east of England. In 2009, Greene King announced a three-for-five rights issue at 270 pence per share to raise approximately £207.5 million, net of expenses. Using proceeds from the rights issue, Greene King acquired a number of high-quality, freehold, managed pubs from Punch Taverns and Mitchells & Butlers. In light of its strategy to selectively take advantage of high quality assets being offered for attractive prices, Greene King acquired 60 further high quality retail sites in 2011 for £206 million through the acquisitions of Cloverleaf, RealPubs and the Capital Pub Company. Cloverleaf owned eleven sites trading as pub/ carvery restaurants, the majority of which were new-build sites. Greene King continued the development of these and other new-build sites and they now trade under the Farmhouse Inns brand. The RealPubs and Capital Pub Company acquisitions brought with them a high quality estate of London pubs, many of which are now in Greene King’s Metropolitan division. On 1 May 2014 Greene King announced it had entered an agreement to dispose of 275 non-core tenanted and leased pubs to Hawthorn Leisure Limited, backed by Avenue Capital Group and May Capital LLP, for a total consideration of £75.6 million. Greene King and Hawthorn Leisure also agreed a three-year beer supply deal for the pubs being disposed of, securing continued and valuable nationwide distribution for Greene King’s industry leading ale brand portfolio. The disposal was consistent with Greene King’s stated strategic direction and increased Greene King’s exposure to the faster growing retail sector, further improved the quality and outlook of Pub Partners’ earnings and further strengthened the balance sheet

44 providing an opportunity to selectively accelerate retail investment and expansion. The sale completed on 2 June 2014. These acquisitions, disposals and capital raising have resulted in a high quality estate comprising properties which tend to be freehold or long leasehold and are well presented, are sited in economically healthy areas (focusing on community and neighbourhood, rather than High Street, locations) and are capable of long term growth, have a strong individual local identity supported where necessary by quality branding, have a flexible trading profile which appeals to a broad range of consumers at different times of the week and have a high quality offer which is relevant to local market dynamics.

3 Strategy Greene King has made significant progress and created strong shareholder value over the last four years through pursuing a focused strategy of strengthening its competitive position within what remains a highly fragmented eating and drinking out market in the UK. In particular, Greene King has improved the overall estate quality and expanded its Retail business from 888 to 1,032 sites through selective acquisitions, new-builds and transfers from Pub Partners. Alongside the focus on Retail, Greene King has improved the quality of its Pub Partners estate through management initiatives and selective exits and maintained industry-leading brand investment in its brewing activities, again strengthening its overall position. Looking ahead, Greene King has identified a number of consumer trends that are likely to shape behaviour over the next decade. As outlined in Greene King’s 2014 annual report, the implications of the expected trends for the industry and the Greene King business are significant and include the need to: • develop sites and offers that cater for different generations at the same occasions; • continue investing in digital platforms and colleague training programmes to meet the challenges of a more demanding consumer, providing instant feedback to other customers; • maintain focus on delivering great value for customers, even as the economy improves; and • make Greene King’s sites more convenient for customers by increasing the occasions they use the pubs by expanding the daytime offer and becoming less reliant on ‘traditional’ pub eating and drinking occasions. Greene King is focused on evolving its existing strategy to reflect these current and future consumer trends, while accelerating its Retail expansion and ultimately exploring the opportunity to move beyond conventional pub offers. The Board of Greene King believes that the proposed acquisition of Spirit represents a compelling opportunity to accelerate the realisation of this strategy by creating the leading managed pub operator with significantly enhanced quality and scale through a combined managed portfolio of approximately 1,830 pubs. The combined managed business will operate a well-balanced, high-quality pub portfolio with industry leading brands and extensive national coverage, including a significant presence in the attractive London and south east region. In addition, the tenanted business will materially benefit from the contribution of Spirit’s high-quality leased pubs and Greene King’s beer business will benefit from additional routes to market for its industry-leading ale brands.

4 Key Strengths Greene King’s key strengths include the following:

Profitable sales growth to generate strong cashflows Greene King has a long track record of ensuring that sales growth does not come at the expense of margins and ultimately, cashflow. This is highlighted by its strong operating profit margins within the Retail business, despite the broadening of the value proposition across the business in response to the economic downturn. At the same time as protecting gross margins where possible, Greene King has a long track record of offsetting inflationary cost pressures that the whole industry has been facing in the last few years, through a rigorous approach to cost control, employing an increasingly sophisticated labour optimisation process and working even more closely with its suppliers to minimise cost increases.

45 Long and successful track record of acquisitions Greene King has more than doubled its turnover since 2001 due to a combination of organic growth and successfully-integrated, value-creative acquisitions. During this time, Greene King has focussed on acquiring managed pubs and restaurants, hotels, tenanted pubs and brewing assets, adding to its geographic coverage, skill base and product range. In recent deals, Greene King has met, and at times exceeded, its own integration and synergy targets. Greene King has been, and believes it will continue to be, a buyer of choice, due to the respect and consideration it shows to the people, brands and properties of acquired companies and assets.

High quality freehold estate, focused on suburban and residential locations Greene King runs over 1,900 pubs and restaurants which are predominantly freehold and long leasehold properties, many of which are situated in the attractive London and south east region. Many of Greene King’s pubs and restaurants are in suburban and residential locations. Over time, the Greene King Group has minimised its exposure to isolated, rural locations. Whilst Greene King has pubs across much of Great Britain, its geographic focus on the relatively affluent south east of England and the resilient Scottish region is a major strength.

Flexible, integrated model combining managed pubs, tenanted pubs and brewing Greene King is able to take advantage of a number of synergies generated through operating managed and tenanted pubs and a brewing business: the combined businesses have greater purchasing power, they can share consumer insights, innovation and best practice and their vertical integration allows the Group to better manage costs. The Group’s pubs benefit from their association with trusted, high quality ale brands and, because its property interests are mainly freehold and long leasehold, Greene King is able to freely transfer properties between its Retail and Pub Partners divisions to optimise the economic profit at each site. The different business streams are both independent and inter-dependent.

Strong management team, blending industry experience with retail and consumer goods skills Greene King’s senior management team possesses a healthy blend of long-term pub and beer industry experience and skills acquired from the retail and fast-moving consumer goods industries. These are important strengths in an industry that increasingly competes with highly focused and successful food retail companies and other leisure providers, across a broad spectrum of leisure activities.

Prudent balance sheet management Greene King has a long track-record of maintaining a prudent balance sheet, continuously optimising the balance between assets and liabilities. Its debt structure is an attractive mix of cheap, long-term securitised debt and slightly more expensive but more flexible, shorter-term bank debt. In 2013, the Greene King Group increased and extended a five-year revolving credit facility. Immediate renewal is available under the facility until June 2018.

Strong relationships with licensees Greene King has consistently aimed to have strong and enduring relationships with its licensee partners. It focuses on short-term, more inter-dependent tenancy agreements, whereby Greene King shares in both the commercial upside and the downside with its licensee partners and aims to operate the right pubs, with the right people, on the right agreement, with the right offer. Pub Partners has award-winning training and development programmes for its licensees.

High quality, market-leading ale brands Greene King’s portfolio of market-leading ales continues to build market share in both the on and the off-trade. Greene King IPA is the number one cask ale in the UK independent free trade business. Over the fifty-three weeks ending 4 May 2014, Greene King’s ale market share rose and one of its core brands, Old Speckled Hen, is the UK’s leading premium ale brand. All brands, including Greene King’s portfolio and seasonal brands, benefit from high levels of investment and quality control.

46 5 Business Divisions Retail The Retail division of Greene King is further split roughly equally between two sub-divisions: the first comprises community, town-local and town-traditional pubs catering for their local communities in England, Wales and Scotland (‘‘Local Pubs’’); the second comprises branded or strongly formatted, mostly food-led pubs and inns (‘‘Destination Pubs’’). In total, there are currently over 1,000 sites within Greene King’s retail estate. The main brands/formats include Hungry Horse, Old English Inns and Loch Fyne Seafood & Grill.

Local Pubs Greene King’s Local Pubs are local market-facing bespoke pubs, where the emphasis is mainly on the individual pub itself, supported by the Greene King brand, rather than a set format. The pubs operate within the premium, mainstream and value segments of the market, with each maintaining its own distinctive character. At the 2014 financial year end, there were 520 pubs in the Local Pubs division, located in communities across the country.

Destination Pubs and Restaurants The pubs within the Destination Pubs sub-division are, by contrast, mostly branded. The main Destination Pubs brands are Hungry Horse, Old English Inns and the Metropolitan Pub Company:

Hungry Horse There are currently 231 Hungry Horse pubs. Hungry Horse pubs are generally located in urban community sites. Hungry Horse pubs offer good value family food, drinks and entertainment.

Old English Inns Greene King’s estate includes a total of 114 inns/hotels, comprising a selection of character inns and hotels set in attractive locations, often with large gardens, traditional English furnishings and individual pub names. Many Old English Inns offer historic buildings and real log fires and beams. The inns are marketed to those seeking venues for business trips and short breaks.

Metropolitan Pub Company The newest division within Destination Pubs is the Metropolitan Pub Company, born out of the rebranding of RealPubs and Capital Pubs (each acquired in 2011). Metropolitan Pub Company primarily operates premium London pubs, which appeal to locals and visitors alike.

Loch Fyne Seafood & Grill Loch Fyne Seafood and Grill is an established and successful range of premium restaurants in the casual dining sector, with an emphasis on sustainably sourced and simply presented good food. There are currently 41 Loch Fyne Seafood & Grill restaurants across the country, operating in freehold or leasehold sites or converted Greene King pubs. Recently, the Retail division has achieved growth in strategically important categories such as food, cask ale, coffee, wine and accommodation. Food is the fastest growing category in Retail, comprises over 40 per cent. of sales.

47 Geographical Analysis of Retail Estate as at 4 May 2014 The below table contains a geographical analysis of the Retail estate:

Percentage of Number of total Retail Region premises estate South East ...... 218 21% London ...... 133 13% North West ...... 96 9% East Midlands ...... 71 6% Yorkshire/Humberside ...... 61 6% West Midlands ...... 58 6% East ...... 144 14% South West ...... 96 9% North East ...... 28 3% Scotland ...... 114 11% Wales ...... 18 2% Total ...... 1,037 100%

Pub Partners The Pub Partners division operates the Group’s tenanted, leased and franchised pubs within England, Wales and Scotland. There are currently just under 900 outlets within Pub Partners with lease agreements representing approximately 20 per cent. of pub business partnerships and tenancy agreements representing around 75 per cent. of pub business partnerships.

Tenancies The Pub Partners division’s tenanted model is based on a hands-on approach to working with licensees. Agreements with licensees are generally for three-year terms, with the repair liability shared between the tenant and Greene King. These agreements are appropriate for first-time licensees and for those who do not wish to take on the extra responsibility of a lease. Newer agreements provide incentives for tenants who build their business and improve customer loyalty.

Leases Pub Partners’ leased model, on the other hand, offers longer, assignable lease agreements with the full liability for repairing and insuring the licensed premises sitting with the lessee. Agreements are generally for ten year terms, which are usually assignable after two years. These agreements tend to attract more entrepreneurial licensees who require more freedom to run the business as they would like.

Franchises Within the suite of the lease agreements there are two forms of franchise or franchise-style agreements available: ‘‘Meet and Eat’’ is a food, drink, service and entertainment package for the value community segment, while ‘‘Local Hero’’ is designed for wet-led community pubs and is based around an extended cask ale offering with local provenance.

48 Geographical Analysis of the Pub Partners Estate as at 4 May 2014 The below table contains a geographical analysis of the Pub Partners estate:

Percentage of total Pub Region Number of pubs Partners estate South East ...... 278 32% London ...... 65 8% North West ...... 5 0% East Midlands ...... 58 7% Yorkshire/Humberside ...... 18 2% West Midlands ...... 10 1% East of England ...... 275 32% South West ...... 34 4% North East ...... 3 0% Scotland ...... 118 14% Wales ...... 0 0% Total ...... 864 100%

Brewing & Brands Brewing & Brands is responsible for the brewing, distribution, marketing and selling of Greene King’s leading portfolio of ale brands, including Greene King IPA, Old Speckled Hen and Abbot Ale. Brewing & Brands operates two breweries, in Bury St. Edmunds and Dunbar. This ensures that the Group’s brewing operation is relatively more efficient than industry norms. As well as the Group’s own pubs, Brewing & Brands sells Greene King’s brands and third-party products to supermarkets and off-licences and to other pub-owning companies and national brewers and to customers in the free trade such as individual pubs, hotels and sports clubs either directly or, via National Account wholesalers, indirectly. Brewing & Brands’ strategy is to drive own-brewed volume through a focus on core brands, supplemented by the growing range of small-batch, innovative brands from the St Edmund brewhouse and other new product development, while operating an efficient cost base. This facilitates sector-leading investment in sales and marketing and generates significant cash for the group.

Greene King IPA Greene King IPA is a multi-medal winning cask ale which has supported rugby union for many years and is currently the sponsor of the Greene King IPA Rugby Championship. It is the number one cask ale brand in the independent Free Trade sector.

Old Speckled Hen According to AC Nielsen, Old Speckled Hen is the no. 1 selling premium ale in the UK, performing strongly in the off-trade as well as being available as a cask ale in pubs across the country. The brand is widening the appeal of ale among a younger, style-conscious crowd. Old Speckled Hen is Brewing & Brand’s leading export brand.

Abbot Ale Abbot Ale is one of Greene King’s core brands and the no. 1 selling premium cask ale in the UK. Like a number of Greene King’s other beers, Abbot Ale has consistently been awarded the prestigious Red Tractor certification, reflecting the quality of the ale and the brand’s commitment to its local origins and use of local ingredients.

Other brands Brewing & Brands also owns and brews over 20 other brands including Ruddles County, Ruddles Best Bitter, Hardy’s & Hanson’s Bitter, St. Edmunds, Olde Trip, Morland Original and Greene King XX Mild. These are cask ales available all year round. It also owns a portfolio of other brands available on a seasonal basis. In 2013 Greene King opened the St Edmund brewhouse to brew and pack a range of innovative craft beers off shorter runs with a broader range of raw materials. Four brands from the new brewhouse won gold awards at the 2014 Monde Selection awards.

49 6 Organisational Structure and Securitisation Legal Structure Greene King Group is headed by Greene King plc, which holds interests in properties and finances some of the Group’s debt. The majority of the significant business of the Group is located within a wholly owned subsidiary of Greene King plc, Greene King Brewing and Retailing Limited (‘‘GKBR’’). GKBR administers the majority of the Group’s supply and retail contracts, holds the intellectual property rights of the Group, and also holds interests in some properties and debts of the Group. GKBR is divided into the three abovementioned operational divisions: Retail, Pub Partners and Brewing & Brands.

Securitisation Greene King Group has thrice raised finance by way of note issues by Greene King Finance plc (the ‘‘Issuer’’) under a securitisation structure. The securitisations relate to the assets and undertakings of a number of entities within Greene King Group, including Greene King Retailing Parent Limited and Greene King Retailing Limited (the ‘‘Securitisation Group’’), and the amounts outstanding on the notes issued by the Issuer are secured by a fixed and floating charge over the portfolio of mortgaged properties and other assets, undertakings and rights of the members of the Securitisation Group from time to time (the ‘‘Securitisation Estate’’). In March 2005, the Issuer issued the £150,000,000 Class A1 Secured Floating Rate Notes due 2031, the £320,000,000 Class A2 Secured 5.318 per cent. Notes due 2031 and the £130,000,000 Class B1 Secured Fixed/Floating Rate Notes due 2034 (together, the ‘‘Original Notes’’). The Class A1 Secured Floating Rate Notes, Class A2 Secured and the Class B1 Secured Fixed/Floating Rate Notes have long-term credit ratings of ‘‘A’’ , ‘‘A’’ and ‘‘BBB’’ respectively from Standard & Poor’s and ‘‘BBB+’’, ‘‘BBB+’’ and ‘‘BBBǁ’’ respectively from Fitch. Then, in May 2006, the Issuer issued the £170,000,000 Class A3 Secured Floating Rate Notes due 2021, the £265,000,000 Class A4 Secured 5.106 per cent. Notes due 2034 and the £115,000,000 Class B2 Secured Floating Rate Notes due 2036 (together, the ‘‘Second Issue Notes’’). The Class A3 Secured Floating Rate Notes, Class A4 Secured and the Class B2 Secured Floating Rate Notes had long-term credit ratings of ‘‘A’’, ‘‘A’’ and ‘‘BBB’’ respectively from Standard’s & Poor and ‘‘BBB+’’, ‘‘BBB+’’ and ‘‘BBBǁ’’ respectively from Fitch. Finally, in June 2008, the Issuer issued the £290,000,000 Class A5 Secured Floating Rate Notes due 2033 (the ‘‘Class A5 Notes’’) and the £60,000,000 Class AB1 Secured Floating Rate Notes due 2036 (the ‘‘Class AB1 Notes’’ and together with the Class A5 Notes, the ‘‘Third Issue Notes’’), although the Third Issue Notes are now held entirely by Greene King plc. The Class A5 Secured Floating Rate Notes and the Class AB1 Secured Floating Rate Notes have long-term credit ratings of ‘‘A’’ and ‘‘BBB+’’ respectively from Standard & Poor’s and ‘‘BBB+’’ and ‘‘BBB’’ respectively from Fitch. The Group’s secured debt had a total nominal value of £1,211.8 million as at 4 May 2014. The entire issued share capital of Greene King Retailing Limited, which is the ‘‘Initial Borrower’’ under the securitisation structure, is held by Greene King Retailing Parent Limited (the ‘‘Securitisation Group Parent’’). The entire issued share capital of the Securitisation Group Parent is held by Greene King. It is established for the purpose of holding the entire issued share capital of the Initial Borrower and certain related activities. By virtue of the covenants and undertakings given by the Securitisation Group Parent in the Issuer/Borrower Facility Agreement and the Borrower Deed of Charge and the security granted by Greene King over the issued share capital of the Securitisation Group Parent. Greene King is restricted in the exercise of its control over the Initial Borrower. Of the total of 2,181 pubs within the Group at 4 May 2014, 1,757 of those sat within the Securitisation Group. The Securitisation Estate contained 645 managed pubs and 1,112 tenanted or leased pubs. Outside the Securitisation Group, Greene King Group operates its brewing and retailing business in both England and Scotland through GKBR, which owns all pub properties comprised in the Group’s estate excluding the Securitisation Estate, and through Premium Dining Restaurants and Pub Limited, which operates all the Loch Fyne Seafood & Grill restaurants.

50 7 Competition Greene King’s direct competition lies in the following areas: • from other pub operators for the provision of food and beverage services to the general public; • from restaurants, coffee shops, cafes, nightclubs and other destination leisure venues and activities; • from other pub operators for the recruitment of high quality licensees and managers; • from other brewers of ale and wholesalers of beer, wine, spirits and soft drinks for sales to wholesale customers; • from supermarkets and off-licences for sales to end consumers; • from all pub operators for the purchase of high quality pubs in prime locations; • from leveraged pub operators for access to competitive debt financing; and • from other pub and leisure operators and land developers for the purchase of quality land for new build sites.

51 PART III INFORMATION ON SPIRIT The following information should be read in conjunction with the information appearing elsewhere in this document, including the Spirit Group’s audited historical consolidated financial information for the three financial years ended 18 August 2012, 17 August 2013 and 23 August 2014 which are incorporated into this document by reference as explained in Part VIII (Historical Consolidated Financial Information Relating to the Spirit Group) and paragraph 18 of Part XII (Additional Information) of this document and are available for inspection in accordance with paragraph 17 of Part XII (Additional Information) of this document. Unless otherwise indicated, the selected financial information included in this Part III (Information on Spirit) has been extracted without material adjustment from the Spirit Group’s audited historical consolidated financial information contained in Part VIII (Historical Consolidated Financial Information Relating to the Spirit Group) of this document.

1 Overview Spirit is one of the UK’s leading pub companies, with 1,227 pubs across the UK with a particular focus on London and the South East. Spirit’s business is divided into two main divisions: a managed pub business of 794 pubs and a leased pub business of 433 pubs. Spirit’s managed division (the ‘‘Managed Estate’’) operates 794 high quality pubs under five core brands—Chef & Brewer, Fayre & Square (also incorporating Wacky Warehouse), John Barras, Flaming Grill, and Taylor Walker. The estate benefits from a significant exposure to the economically stronger London and South East region, with 34 per cent. of its portfolio located in this region. The managed division’s award winning brand portfolio covers a wide variety of occasions in the mass market and has evolved to reflect the increasing polarisation of consumer tastes towards both value and premium, a trend that is expected to continue. Spirit’s leased division (the ‘‘Leased Estate’’) includes 433 pubs and represents one of the highest quality estates in the sector, with like-for-like beer volumes in growth and consistently ahead of the market through the last financial year. Like-for-like rent is also growing and 96 per cent. of the estate was on substantive leases at the end of the 2014 financial year. Spirit has sought to improve its leased estate through the innovation of new agreement types and active management of the portfolio. Licensees can benefit from best in class levels of support through training, investment, product range and infrastructure. Since 4 August 2011 Spirit has successfully disposed or converted to managed over 120 pubs and has invested over £24 million in refurbishing 46 per cent. of the leased estate. Spirit is headquartered in Burton upon Trent, Staffordshire, UK and has 17,136 employees. For the 53 week financial period ended 23 August 2014, Spirit reported like for like sales growth (on a 52 week basis) of 4.4 per cent. in the managed division and like for like sales and net income growth of 2.8 per cent. and 4.2 per cent. respectively in the leased division. Over the 2014 financial year, Spirit generated revenue of £800.9 million, EBITDA of £159.4 million before exceptional items and operating profit of £121.2 million before exceptional items. As at 23 August 2014, Spirit had net assets of £726.2 million.

2 Strategy Spirit has a high quality estate of 1,227 pubs nationwide consisting of 794 managed pubs and 433 leased pubs. The Managed Estate is predominantly branded in that each pub operates under one of a strong portfolio of award winning brands or formats. The brand and format portfolio offers a wide variety of leisure hospitality opportunities and has evolved to reflect the increasing polarisation of consumer tastes towards both value and premium and ensures that consumer needs can be met across a range of occasions. Having a mixed estate of both managed and leased pubs ensures operating flexibility as returns can be maximised based on finding the appropriate operating format for each pub. The estate is regularly reviewed to identify opportunities and to respond to changing local demographics and social change, subject to vacant possession in the case of a leased pub. To achieve its strategy, Spirit focuses on investing in its four key assets—(i) its people, (ii) its brands, (iii) its properties and (iv) its infrastructure. In recent years, Spirit has invested in its portfolio of managed pubs in order to build five core brands and has focused on first rate talent and leadership to ensure the recruitment, development and retention of the best people who can consistently deliver the best guest experience.

52 The Spirit Group has sought to exert greater influence over the retail offering for customers in its leased pubs. In doing so, the Spirit Group intends to utilise the Spirit Group’s scale and the expertise available in the Managed estate to expand the range of services offered to lessees. The leased pub business has also begun to trial new forms of operating lease, designed to reflect a better allocation between the lessor and the lessee of the risks and rewards of operating a leased pub.

3 Managed Estate The Managed Estate comprised 794 managed pubs in England, Wales and Scotland, at 23 August 2014.

Brands used in the Managed Estate The Managed Estate operates under a number of brands and Spirit has continued to invest in building the scale of its core brands. A description of each of the five core brands is set out below:

Chef & Brewer Premium quality pub restaurants offering freshly prepared food and a wide range of drinks served in a relaxed and informal atmosphere by friendly and efficient teams. As at 23 August 2014, there were 138 pubs nationwide operating under the Chef & Brewer brand.

Fayre & Square Family orientated pubs offering a wide choice of affordable food and drink in an informal environment where children are made to feel welcome. Often with a ‘‘Wacky Warehouse’’ play area, these pubs are focused on offering competitively priced dishes for families. As at 23 August 2014, there were 158 pubs operating under the Fayre & Square brand.

Flaming Grill Community pubs offering a menu which focuses upon ‘‘flaming great steaks in a flaming great pub’’ in a relaxed and informal atmosphere. As at 23 August 2014, there were 109 pubs operating under the Flaming Grill brand.

Taylor Walker Traditional metropolitan pubs that aim to deliver the British pub experience to those who live and work in the city as well as those just visiting. Taylor Walker pubs are often traditional and reputable pubs steeped in history, with many located in and around British landmark sites, such as the Punch & Judy in Covent Garden and The Audley in Mayfair. As at 23 August 2014, there were 123 pubs operating under the Taylor Walker name.

John Barras Local pubs designed to be at the heart of their community offering a wide range of drinks together with great value pub food, sport and entertainment tailored specifically to the community catchment. As at 23 August 2014, there were 110 pubs operating under the John Barras brand.

Other branded and un-branded pubs During 2013/2014, Spirit has successfully trialled a new, high quality local inns brand, Golden Oak Inns with a contemporary environment and excellent food and drink. Seven pubs were operating under this brand at 23 August 2014. Not all of the pubs which form part of the Managed division currently operate under one of the brands set out above. As at 23 August 2014, 149 pubs were not operating under any brand.

Good Night Inns In addition, the Spirit Group operates c. 1000 hotel rooms within the Managed Estate, with approximately 600 of these carrying the Good Night Inns brand.

53 Geographical Analysis of Managed Estate The below table contains a geographical analysis of the Managed Estate:

Percentage of Number of total Region pubs Managed Estate London & South East ...... 270 34% North ...... 223 28% Midlands ...... 218 28% South West & Wales ...... 50 6% Scotland ...... 24 3% Total ...... 785 100%

Note: There are nine non-trading sites not included in the geographical analysis contained in the table above

4 Leased Estate As at 23 August 2014, the Leased Estate comprised 433 leased and tenanted pubs in England, Wales and Scotland. A particular feature of Spirit’s Leased Estate is that a significant proportion of that estate has previously been operated as managed pubs and they are therefore typically larger than the pubs in other leased estates. These pubs are best operated by highly skilled licensees who run them as their own business but who may also choose to benefit from Spirit’s economies of scale in purchasing and certain central support functions such as training.

Agreements with retailers The Leased Estate has lease or tenancy agreements with retailers who operate a retail business within the pub premises owned by Spirit. Spirit does not directly manage the retail business in these pubs. As a result, the pubs which constitute the Leased Estate have lower fixed costs for Spirit than those which constitute the Managed Estate. The relationship between Spirit and its retailers is generally governed by the type and terms of the lease or tenancy agreement in place between them. Spirit enters into one of three main categories of such lease or tenancy agreement with its retailers, under which the retailer operates the pub as either a lessee or a tenant and agrees to pay the rent specified in the relevant agreement. The three main categories of tenancy agreement are the standard lease, the standard tenancy and the tenancy-at-will. As part of the lease or tenancy agreement, the retailer also agrees that Spirit or Spirit’s designated supplier is to be the retailer’s sole source of supply for certain products. These ‘‘tie’’ arrangements relate primarily to the retailer’s purchase of beer and cider, sales of which generally constitute the majority of the retailer’s revenue. Standard leases are generally fully repairing, which means that the lessee is responsible for repairs to the premises during the term of the lease, and are generally fully assignable after two years (subject to the consent of Spirit, which is not to be unreasonably withheld). They contain provisions for annual retail price index rent adjustments and, typically, for periodic rent reviews every five years. Tenancy agreements, which are shorter-term arrangements, involve Spirit undertaking to carry out repairs to the pubs, are generally not assignable and have an annual retail price index rent adjustment. They do not, however, contain provisions for periodic rent reviews. Retailers are usually required to provide a deposit on entry into their agreement. Some forms of leases and tenancy agreements contain the landlord’s or the retailer’s options to break the lease or tenancy. In addition, there may be circumstances in which Spirit would allow a retailer to terminate a lease or tenancy agreement early, as it is in the interests of Spirit to have motivated retailers in its pubs. Tenancy-at-will arrangements are used as transitional arrangements, before installing a retailer on a lease or tenancy agreement. Under a tenancy-at-will, a retailer operates the pub on a short-term basis with no notice period to vacate required by either Spirit or the retailer. The use of a lease or tenancy agreement and its terms and conditions vary according to the profit expectations, risk assessment and plans which Spirit and the retailer may have for the pub concerned.

Future evolution of the leased operating model Like many pub operators with leased and tenanted estates, Spirit is looking to improve the traditional leased operating model in order to adapt it to the present economic climate and long-term trends within the pub industry (such as the decline in beer sales and the ban on smoking in public places). Spirit is

54 presently trialling a number of different new leased operating models, some of which involve an element of profit sharing between the lessor and the lessee (which is designed to better align the parties’ respective interests) and some of which involve making certain services which have traditionally only been provided to Spirit’s managed pubs available to lessees.

Geographical analysis of the Leased Estate The below table contains a geographical analysis of the Leased Estate:

Percentage of Number of total Region pubs Leased Estate London & South East ...... 103 24% North ...... 171 39% Midlands ...... 97 21% South West & Wales ...... 22 5% Scotland ...... 40 9% Total ...... 433 100%

5. Securitisation The Spirit Group has previously raised cash through the issuance of listed debenture bonds by Spirit Issuer plc, which are secured over various assets of the Spirit Group (the ‘‘Spirit Debenture’’), including all of the freehold and leasehold pubs owned by companies within the securitisation group. Under the Spirit Debenture, Spirit Issuer plc has issued seven currently outstanding series of debenture bonds, with an aggregate nominal value of £797.0 million as at 16 December 2014 and maturity dates from 2021 to 2036. Certain of the debenture bonds issued under the Spirit Debenture have the benefit of an Ambac Financial Group Inc. guarantee as to the payment of scheduled interest and scheduled principal. Under the terms of the Spirit Debenture, amounts outstanding in respect of the debenture bonds have been loaned by Spirit Issuer plc to the pub owning companies in the securitisation group under the Issuer/ Borrower Facility Agreement, with the repayment of such amounts being secured by way of fixed and floating charges over all of the assets and undertakings of the companies within the Spirit Group that are subject to the Spirit Debenture. As at 23 August 2014, 1,072 pubs are within the securitisation group. The indebtedness owed under the Spirit Debenture is required to be repaid in accordance with agreed amortisation schedules (which commenced in 2014) and continuing until the final maturity of the respective debenture bonds. The interest payable on the floating rate debenture bonds issued by Spirit Issuer plc (or debenture bonds that convert to floating rate debenture bonds) has been hedged to fixed rates. The Spirit Debenture includes provisions which set out the payments to be made under the Issuer/Borrower Facility Agreement (defined below) and under the debenture bonds on each interest payment date and at any other relevant times. The use of surplus cash for making payments and distributions to other members of the Spirit Group and engaging in other activities, such as acquisitions, is only permitted after the payment or allocation of funds for the purpose of making mandatory payments (including in respect of interest and principal repayments and fees) under the terms of the Spirit Debenture and is further subject to the covenants discussed below.

Spirit Debenture Principal Documents • An Issuer/Borrower Facility Agreement dated 25 November 2004 (as amended and restated on 7 July 2006, as further amended on 25 August 2006, 15 May 2009 and pursuant to an agreement dated 23 February 2012 and as further amended and restated on 21 October 2013) between, among others, Spirit Issuer plc, Spirit Pub Company (Managed) Limited, Spirit Pub Company (Leased) Limited and Deutsche Trustee Company Limited as borrower group security trustee (the ‘‘Issuer/Borrower Facility Agreement’’); • A Trust Deed dated 25 November 2004 and a First Supplemental Trust Deed dated 21 October 2013 between Spirit Issuer plc, Ambac Assurance UK Limited (‘‘Ambac’’) and Deutsche Trustee Company Limited as debenture bond trustee;

55 • An Issuer Deed of Charge dated 25 November 2004 and a Supplemental Issuer Deed of Charge dated 21 October 2013 between, among others, Spirit Issuer plc and Deutsche Trustee Company Limited as issuer security trustee, borrower group security trustee and debenture bond trustee; and • A Borrower Group Deed of Charge dated 25 November 2004 (as amended and restated on 7 July 2006 and as amended pursuant to an agreement dated 23 February 2012) and a Supplemental Borrower Group Deed of Charge dated 21 October 2013 between, among others, Spirit Pub Company (Managed) Limited, Spirit Pub Company (Leased) Limited and Deutsche Trustee Company Limited as borrower group security trustee and issuer security trustee.

Details of Outstanding Debenture Bonds The following table sets out the details of the outstanding listed debenture bonds of the Spirit Debenture:

Amount After- Outstanding Swap (as at Interest Scheduled 16 December 2014) Actual Rate Amortisation Ambac Class (£ million) Interest Rate (%) (%) (per £100,000) Guarantee Class A1 ...... 33.0 3-month LIBOR 7.231 December 2014 8,000 Yes: scheduled plus a margin of March 2025 5,000 interest and 0.220 per cent. per June 2025 11,667 scheduled annum plus a September 2025 11,667 principal further margin of December 2025 11,667 0.330 per cent. per March 2026 12,000 annum. June 2026 12,000 September 2026 4,000 Class A2 ...... 186.6 3-month LIBOR 9.381 September 2026 6,000 No plus a margin of December 2026 9,000 1.080 per cent. per March 2027 9,250 annum plus a June 2027 9,250 further margin of September 2027 9,250 1.620 per cent. per December 2027 9,250 annum. March 2028 9,500 June 2028 9,500 September 2028 9,500 December 2028 9,500 March 2029 9,750 June 2029 250 Class A3 ...... 51.5 5.860 per cent. per 5.860 March 2015 5,000 Yes: scheduled annum up to but June 2015 5,000 interest and excluding the September 2015 5,000 scheduled interest payment December 2015 5,000 principal date falling in March 2016 5,200 December 2014, and June 2016 5,200 thereafter 3-month September 2016 5,200 LIBOR plus a December 2016 5,200 margin of 0.220 per March 2017 5,400 cent. per annum June 2017 5,400 plus a further September 2017 5,400 margin of 0.330 per December 2017 5,400 cent. per annum. March 2018 5,600 June 2018 5,600 September 2018 5,600 December 2018 5,600 March 2019 5,800 June 2019 5,800 September 2019 3,600

56 Amount After- Outstanding Swap (as at Interest Scheduled 16 December 2014) Actual Rate Amortisation Ambac Class (£ million) Interest Rate (%) (%) (per £100,000) Guarantee Class A4 ...... 207.7 6.582 per cent. per 6.582 September 2019 1,571 No annum up to but December 2019 4,143 excluding the March 2020 4,286 interest payment June 2020 4,286 date falling in September 2020 4,286 December 2018, and December 2020 4,286 thereafter 3-month March 2021 4,429 LIBOR plus a June 2021 4,429 margin of 1.110 per September 2021 4,429 cent. per annum December 2021 4,429 plus a further March 2022 4,571 margin of 1.665 per June 2022 4,571 cent. per annum. September 2022 4,571 December 2022 4,571 March 2023 4,714 June 2023 4,714 September 2023 4,714 December 2023 4,714 March 2024 4,857 June 2024 4,857 September 2024 4,857 December 2024 4,857 March 2025 2,857 Class A5 ...... 158.5 5.472 per cent. per 5.472 June 2029 6,333 Yes: scheduled annum up to but September 2029 6,500 interest and excluding the December 2029 6,500 scheduled interest payment March 2030 6,667 principal date falling in June 2030 6,667 December 2028, and September 2030 6,667 thereafter 3-month December 2030 6,667 LIBOR plus a March 2031 6,833 margin of 0.300 per June 2031 6,833 cent. per annum September 2031 6,833 plus a further December 2031 6,833 margin of 0.450 per March 2032 7,000 cent. per annum. June 2032 7,000 September 2032 7,000 December 2032 5,667 Class A6 ...... 101.3 3-month LIBOR 8.481 March 2033 6,250 No plus a margin of June 2033 6,250 1.800 per cent. per September 2033 6,250 annum up to but December 2033 6,250 excluding the March 2034 6,250 interest payment June 2034 6,250 date falling in September 2034 6,250 September 2018, December 2034 6,250 and thereafter March 2035 6,250 3-month LIBOR June 2035 6,250 plus a margin of September 2035 6,250 1.800 per cent. per December 2035 6,250 annum plus a March 2036 6,250 further margin of June 2036 6,250 1.500 per cent. per September 2036 6,250 annum. December 2036 6,250

57 Amount After- Outstanding Swap (as at Interest Scheduled 16 December 2014) Actual Rate Amortisation Ambac Class (£ million) Interest Rate (%) (%) (per £100,000) Guarantee Class A7 ...... 58.4 5.860 per cent. up 5.860 March 2033 6,250 No to but excluding the June 2033 6,250 interest payment September 2033 6,250 date in December December 2033 6,250 2014, and thereafter March 2034 6,250 3-month LIBOR June 2034 6,250 plus a margin of September 2034 6,250 3.950 per cent. per December 2034 6,250 annum up to but March 2035 6,250 excluding the June 2035 6,250 interest payment September 2035 6,250 date falling in December 2035 6,250 September 2018, March 2036 6,250 and thereafter June 2036 6,250 3-month LIBOR September 2036 6,250 plus a margin of December 2036 6,250 3.950 per cent. per annum plus a further margin of 1.500 per cent. per annum.

Financial and other covenants Under the Spirit Debenture, the operating companies subject to the Spirit Debenture are subject to certain financial and operating covenants that restrict their business and operations. The key financial and operating covenants are summarised below.

Financial covenants The financial covenants contained in the contractual documentation governing the Spirit Debenture require the operating companies subject to the Spirit Debenture to maintain: (i) a debt service cover ratio of EBITDA to debt service (‘‘DSCR’’) above 1.30:1 and an adjusted DSCR (adjusted to exclude EBITDA represented by pubs acquired for less than market value by the operating companies subject to the Spirit Debenture in the preceding two years) (‘‘Adjusted DSCR’’) at or above 1.10:1; and (ii) in circumstances where the DSCR is below 1.50:1, a loan to value ratio no higher than 67 per cent. As the operating companies within the Spirit Debenture are currently maintaining, and have always maintained, the DSCR above the specified level (the DSCR for the period of the past four financial quarters ending on 23 August 2014 was 1.94:1), the loan to value ratio covenant does not currently apply. The DSCR, Adjusted DSCR and, if it were to apply, the loan to value ratio are tested at the end of each quarter by reference to the unaudited aggregated quarterly interim management accounts of the Spirit Group.

Operating covenants Restrictions on outside payments: The operating companies subject to the Spirit Debenture are permitted to make payments (including dividends and intra-group loans) to Spirit Group companies that are not subject to the Spirit Debenture only in circumstances where no event of default or potential event of default has occurred and is continuing under the terms of the Spirit Debenture, a minimum DSCR of 1.30:1 (which is a different test and calculated differently to the DSCR default ratio described above) is being satisfied and certain other limitations are complied with. Such payments are, subject to certain additional limitations agreed with Ambac in 2013, currently permitted. Restrictions on acquistions: The operating companies in the Spirit Debenture are only permitted to acquire pubs where no event of default or potential event of default has occurred and is continuing under the terms of the Spirit Debenture, a minimum DSCR of 1.80:1 (which is a different test and calculated differently to the DSCR default ratio described above) is being satisfied and where such acquisition is made on arm’s length terms. The DSCR for the period of the past four financial quarters ending on 23 August 2014 was 1.94:1.

58 If the required minimum DSCR cannot be satisfied, then the relevant operating companies are still entitled to make acquisitions if they: (i) can satisfy a lower minimum DSCR of 1.65:1 (which is a different test and calculated differently to the DSCR default level); and (ii) meet an additional weighted average interest rate test. Restrictions on disposals: The operating companies within the Spirit Debenture are permitted to dispose of pubs beyond certain thresholds only where no event of default or potential event of default has occurred and is continuing and provided that either: (i) the loan to value ratio is below 60 per cent. and DSCR is above a prescribed minimum ratio before and after the disposal of 1.65:1 (which is a different test and calculated differently to the DSCR default ratio described above); or (ii) if the DSCR is not above the prescribed minimum, the value or number (as the case may be) of disposals made since the DSCR was last above such minimum does not exceed 15 per cent. of the value or number (whichever is the lower) of the pubs in the Spirit Debenture at the proposed disposal date (or such other percentage not exceeding 25 per cent. as may be agreed with Ambac from time to time). Disposals are currently permitted under these restrictions because for the four financial quarters ending on 23 August 2014 the DSCR was 1.94:1 and the loan to value ratio was 53.8 per cent.

59 PART IV OPERATING AND FINANCIAL REVIEW OF GREENE KING The operating and financial review should be read in conjunction with the Greene King Group’s audited historical consolidated financial information for the 53 weeks ended 4 May 2014, 52 weeks ended 28 April 2013 and 52 weeks ended 29 April 2012 which are incorporated into this document by reference as explained in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) and paragraph 18 of Part XII (Additional Information) of this document and are available for inspection in accordance with paragraph 17 of Part XII (Additional Information) of this document and unaudited historical consolidated financial information for the 24 weeks ended 19 October 2014, which is set out in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document. The following documents, which have been filed with, or notified to, the FCA and are available for inspection in accordance with paragraph 17 of Part XII (Additional Information) of this document, contain financial information about the Greene King Group which is relevant to the Offer: • Greene King’s Annual Report 2014; • Greene King’s Annual Report 2013; and • Greene King’s Annual Report 2012. The table below sets out the sections of these documents which are incorporated by reference into, and form part of, this Part IV (Operating and Financial Review of Greene King) of this document, and only the parts of the documents identified in the table below are incorporated into, and form part of, this Part IV (Operating and Financial Review of Greene King) of this document. The parts of these documents which are not incorporated by reference are either not relevant for investors or are covered elsewhere in this document. To the extent that any part of any information referred to below itself contains information which is incorporated by reference, such information shall not form part of this document.

Information incorporated by Page number(s) Reference reference into this Part IV in reference For the year ended 4 May 2014 Greene King Annual Report 2014 ...... Investment case 2 Greene King Annual Report 2014 ...... Performance highlights 4 Greene King Annual Report 2014 ...... Chairman’s statement 5 Greene King Annual Report 2014 ...... Retail feature 6 - 7 Greene King Annual Report 2014 ...... Pub Partners feature 8 - 9 Greene King Annual Report 2014 ...... Brewing & Brands feature 10 - 11 Greene King Annual Report 2014 ...... Chief executive’s review 12 - 13 Greene King Annual Report 2014 ...... Our business model 14 - 15 Greene King Annual Report 2014 ...... Our markets 16 - 17 Greene King Annual Report 2014 ...... Our strategy 18 - 19 Greene King Annual Report 2014 ...... Operational review (Retail) 20 - 22 Greene King Annual Report 2014 ...... Operational review (Pub Partners) 23 - 24 Greene King Annual Report 2014 ...... Operational review (Brewing & Brands) 25 - 26 Greene King Annual Report 2014 ...... Financial review 27 - 28 Greene King Annual Report 2014 ...... Key performance indicators 29 Greene King Annual Report 2014 ...... Risks and uncertainties 30 - 32 Greene King Annual Report 2014 ...... Corporate responsibility 33 - 39 Greene King Annual Report 2014 ...... Board of directors 40 Greene King Annual Report 2014 ...... Corporate governance statement 41 - 44 Greene King Annual Report 2014 ...... Report of the nomination committee 45 Greene King Annual Report 2014 ...... Report of the audit committee 46 - 48 Greene King Annual Report 2014 ...... Directors’ remuneration report 49 - 60 Greene King Annual Report 2014 ...... Directors’ report 61 - 62 Greene King Annual Report 2014 ...... Directors’ responsibilities statements 63 For the year ended 28 April 2013 Greene King Annual Report 2013 ...... At a glance 2 - 3 Greene King Annual Report 2013 ...... Our performance highlights 4

60 Information incorporated by Page number(s) Reference reference into this Part IV in reference Greene King Annual Report 2013 ...... Chairman’s statement 5 Greene King Annual Report 2013 ...... Our business 6 - 7 Greene King Annual Report 2013 ...... Our markets 8 - 9 Greene King Annual Report 2013 ...... Chief executive’s review 10 - 11 Greene King Annual Report 2013 ...... Our strategy 12 - 13 Greene King Annual Report 2013 ...... Operational review (Retail) 14 - 18 Greene King Annual Report 2013 ...... Operational review (Pub Partners) 19 - 21 Greene King Annual Report 2013 ...... Operational review (Brewing & Brands) 22 - 24 Greene King Annual Report 2013 ...... Financial review 25 - 26 Greene King Annual Report 2013 ...... Key performance indicators 27 Greene King Annual Report 2013 ...... Risks and uncertainties 28 - 30 Greene King Annual Report 2013 ...... Corporate social responsibility 31 - 37 Greene King Annual Report 2013 ...... Board of directors 38 Greene King Annual Report 2013 ...... Senior management 39 Greene King Annual Report 2013 ...... Corporate governance statement 40 - 45 Greene King Annual Report 2013 ...... Directors’ remuneration report 46 - 54 Greene King Annual Report 2013 ...... Directors’ report 55 - 56 Greene King Annual Report 2013 ...... Directors’ responsibilities statements 57 - 58 For the year ended 29 April 2012 Greene King Annual Report 2012 ...... Performance 2 Greene King Annual Report 2012 ...... Our focus 3 - 9 Greene King Annual Report 2012 ...... Chairman’s statement 10 Greene King Annual Report 2012 ...... Market overview 11 Greene King Annual Report 2012 ...... Chief executive’s review 12 - 13 Greene King Annual Report 2012 ...... Delivering our strategy 14 - 15 Greene King Annual Report 2012 ...... Operational review 16 - 22 Greene King Annual Report 2012 ...... Financial review 23 - 24 Greene King Annual Report 2012 ...... Key performance indicators 25 Greene King Annual Report 2012 ...... Risks and uncertainties 26 - 28 Greene King Annual Report 2012 ...... Corporate social responsibility 29 - 33 Greene King Annual Report 2012 ...... Board of directors 34 Greene King Annual Report 2012 ...... Senior management 35 Greene King Annual Report 2012 ...... Corporate governance statement 36 - 40 Greene King Annual Report 2012 ...... Directors’ remuneration report 41 - 47 Greene King Annual Report 2012 ...... Directors’ report 48 - 49 Greene King Annual Report 2012 ...... Directors’ responsibilities statement 50 - 51

61 OPERATING AND FINANCIAL REVIEW RELATING TO THE GREENE KING GROUP FOR THE 24 WEEKS ENDED 19 OCTOBER 2014 The operating and financial review of the Greene King Group’s unaudited historical consolidated financial information for the 24 weeks ended 19 October 2014 set out in this Part IV (Operating and Financial Review of Greene King) has been extracted from the Greene King announcement made on 4 December 2014 in relation to the financial results of the Greene King Group for the 24 weeks ended 19 October 2014.

CHAIRMAN’S STATEMENT RESULTS During the first half of the financial year, we achieved a good financial result with revenue up 3.3% to £614.9m, another record for the company. Operating profit before exceptional items was down 3.1% to £123.3m and profit before tax and exceptional items (‘‘PBTE’’) was down 3.5% to £82.6m due to lower like-for-like sales growth and the impact of the disposal of 275 pubs to Hawthorn Leisure. Adjusted basic earnings per share were down 1.6% to 29.9p. However, adjusting for the disposal, the retained business grew PBTE by 3.0% and adjusted basic earnings per share by 5.3%.

DIVIDEND The board has declared an interim dividend of 7.95p per share, up 4.6% on last year, reflecting underlying growth in earnings and our confidence in the long-term growth prospects for the company. The interim dividend will be paid on 23 January 2015 to those shareholders on the register at the close of business on 19 December 2014.

ACQUISITIONS Following a period of due diligence, and subsequent to the period-end, on 16 October we made a recommended share for share offer for Spirit Pub Company. Assuming the deal is completed, this would add around 800 managed pubs and 430 tenanted and leased sites to our estate. We are hopeful it will complete before the end of this financial year. Aside from Spirit, we continued our ongoing expansion plans. We added 11 sites to our retail estate at a total cost of £14.5m, leaving us with 1,040 sites at the period-end.

DISPOSALS At the start of the year, we completed the disposal of 275 non-core sites to Hawthorn Leisure for £75.6m. Since then we have continued to dispose of additional non-core sites as we aim to reduce our tenanted and leased estate to around 750 sites. In the first half, we sold, or transferred to Retail, a further 26 sites, taking Pub Partners to 864 sites. Outside the Hawthorn disposals, proceeds totalled £9.3m, slightly ahead of book value.

BOARD In September, our chief financial officer, Matthew Fearn, left Greene King because of his continuing ill-health. We wish Matthew and his family well for the future and thank him for the great contribution he made during his three years with us. We welcome Kirk Davis to our board to replace Matthew. Kirk was formerly the finance director at JD Wetherspoon Plc and joined us as chief financial officer on 3 November 2014, after the period-end. While Matthew was away, David Brown covered for him as interim finance director and I would like to thank him for all of his hard work and support during the last eight months.

PEOPLE My thanks go out, too, to everyone who has worked for Greene King over the course of the year so far. I would especially like to thank all the pub managers who work for us. Running a pub is very challenging and it takes a special individual to run one successfully. We have more than a thousand such people working in our business and I am immensely proud of the effort and dedication they show, day after day, to build our business for the long-term.

Tim Bridge Chairman 3 December 2014

62 CHIEF EXECUTIVE’S REVIEW PERFORMANCE SUMMARY In the first half of our financial year, we delivered record sales, driven by both organic growth and new sites in Retail, and supported by continued progress in our Pub Partners and Brewing & Brands businesses, strong returns and further operational and strategic progress. In the 24 weeks to 19 October, and on a retained business basis, we achieved group revenue growth of 5.3%, which converted into operating profit growth of 1.8%. Due to lower Retail LFL sales growth, labour and utility cost increases in Retail and the ongoing change in channel mix within Brewing & Brands, the retained business operating margin fell 70 basis points (‘‘bps’’). We expect the decline in operating margin for the retained business to moderate slightly over the course of the full year due to improved trading, increased cost savings and lower net cost inflation. Adjusted basic earnings per share for the retained business were up 5.3% in the period, and this, combined with the strength of our people, our brands and our strategy, gives us the confidence to increase our dividend per share by 4.6% to 7.95p. We also delivered a return on capital employed (‘‘ROCE’’) of 9.2%, in line with the end of the previous financial year, but a 20 bps improvement over the first half last year. This performance was achieved despite a subdued consumer environment. The consumer outlook is favourable, but current consumer caution has been reflected in volatile spending on eating and drinking out over the last few months, as highlighted by the Greene King Leisure Spend Tracker. In this market context, we made progress in a number of key areas of the business including food sales rising to 42% of Retail sales, achieving a material improvement in our Net Promoter Score (‘‘NPS’’) and improving our food hygiene scores by 4.7%. We were surprised and disappointed with the amendment to the Small Business, Enterprise and Employment Bill, after our period-end, which introduces the concept of a ‘Market Rent Only’ option for tied licensees. While there are a number of unknowns in the amendment, we are confident we will have sufficient optionality to mitigate the potential impact, if and when the proposed changes take effect.

STRATEGIC PROGRESS We are into the final year of our current five-year strategic plan to improve growth and returns to our shareholders. During the period we made further significant progress:— 1. Expanding Retail to 1,100 sites and improving estate quality. We acquired or transferred in 11 sites to take the estate to 1,040 pubs, restaurants and hotels. Since our current strategy commenced, the average EBITDA per pub generated by new sites of £413k is significantly higher than our original expectation for the five-year plan. 2. Reducing the Pub Partners estate and improving estate quality. In Pub Partners, we accelerated our strategy with the disposal of 275 non-core pubs to Hawthorn Capital. In total, we sold 299 non-core sites in the period and transferred two to Retail, taking the estate to 864 pubs and generating growth in the average EBITDA per pub of 13.8%. 3. Maintaining industry-leading beer brand investment to strengthen our leadership position. We again invested in our core ale brands to drive own-brewed volume (‘‘OBV’’) growth and UK ale market outperformance in Brewing & Brands. We increased our volume share of the UK ale market by 80bps to 10.1%*. On 4 November, we announced we had reached an agreement with the board of Spirit Pub Company on the terms of a recommended offer for the company. The transaction is strategically and financially compelling, accelerating the growth of our retail estate, strengthening our position in the eating out market and delivering value to our shareholders. The combined entity would comprise an estate of over 3,100 pubs, restaurants and hotels including over 1,000 pubs in London and the south east. A combined managed estate of over 1,800 pubs will create the UK’s leading managed pub operator and will allow us to extract significant operational synergies including benefiting from enhanced purchasing and distribution scale. Overall, we expect to realise operational

* BBPA May to October 2014

63 efficiencies and cost savings of at least £30m per annum, supplemented by potential further revenue synergies from brand optimisation and sharing best practice. Spirit Pub Company is our near-term priority and would represent an important strategic step for Greene King. Following completion of the acquisition and integration of Spirit, the enlarged estate would position us to continue to explore suitable opportunities to further increase our exposure to eating out and daytime trading.

GREENE KING RETAIL

24 weeks H114 H115 Change Average number of sites trading ...... 996 1,036 +4.0% Revenue ...... £437.5m £465.5m +6.4% EBITDA ...... £111.3m £114.5m +2.9% Operating profit ...... £ 89.6m £ 91.7m +2.3% Operating profit margin ...... 20.5% 19.7% ǁ0.8%pts Average EBITDA per site ...... £111.7k £110.5k ǁ1.1% Greene King Retail generated further growth, coupled with strategic and operational progress, in the first half. We outperformed the sector delivering total sales growth of 6.4% compared to 4.0%* sector growth. LFL sales growth was 0.8%, due to a disappointing first quarter, impacted by tough comparatives from the excellent summer last year and a disappointing World Cup this year, and a stronger second quarter. All main sales categories achieved LFL sales growth. Metropolitan, our premium London estate, continued to perform particularly well as did Farmhouse Inns, our carvery restaurant brand. In line with our strategic objective, food, as a share of sales, is now 42%. Total revenue was £465.5m, up 6.4%, or £28.0m versus last year, with growth in both our Local and Destination divisions. The average weekly take grew 2.3% to £18.7k. Operating profit was up 2.3% to £91.7m with operating margins down 80bps due to the impact of lower LFL trading, additional investment in our employees, upward cost pressure from utilities and other costs. We expect the margin decline to moderate slightly in the second half of the year. Our ongoing progress in Retail is driven by a number of key factors, all predicated on putting customers at the heart of our business, offering them time and money well spent, and providing compelling reasons to visit our pubs time and time again.

1. Consistently exceeding customer value, service and quality expectations We are committed to the delivery of industry-leading value, service and quality to our customers. In the period, we re-launched our known value item (‘‘KVI’’) strategy across many Hungry Horse sites offering customers enhanced value, including entry-price burgers at £3.99 and a kid’s meal deal for £2.99. We increased first time product availability across Retail by 70bps, to 99.7%, we improved NPS and our average food hygiene ‘scores on the doors’ rating improved 4.7%. We also reconfigured the carvery layout in Farmhouse Inns to reduce queue times by over 60% and drive further improvements in consistency and quality. Further examples of quality developments in the period include the introduction of Red Tractor accredited sirloin beef in Eating Inn and a new meal quality guarantee in Hungry Horse.

2. Broadening our customer appeal through growth categories and exciting innovation We constantly evolve our offer to ensure we stay relevant in an environment of increasing consumer choice. New product additions in the period included lighter snacks such as chocolate-coated popcorn and, in Old English Inns, we added separate evening menus including a new cocktail menu. In our Premium High Street and Premium Community pubs, we revitalised our weekly deals to include ‘Gourmet Burger’ nights. In Hungry Horse, new dishes included ‘Chicken Fingers’, while in Eating Inn we added freshly baked bread across the menu.

3. Understanding and aligning our estate to ongoing and emerging consumer trends Emerging consumer trends include a rise in inter-generational leisure occasions, an increase in the use of and access to technology in leisure and eating-out becoming an all-day occasion. We continue to promote

* Peach Coffer Tracker

64 family dining in our sites, with the roll-out of our ‘two courses for’ ‘Golden Years’ offer to further brands across the estate, and in Eating Inn where we have added additional vouchers for children in our Christmas voucher booklet. Also, following the launch of a breakfast offer in Hungry Horse last year, breakfast sales in the brand grew by 23%.

4. Employing the best-trained and most motivated people in the sector Since 2011, over 2,400 colleagues have achieved a nationally recognised apprenticeship qualification, an increase of 200 since the year-end. During the period, we launched a bespoke apprenticeship scheme in Loch Fyne Seafood & Grill, while the overall spend on training has risen 14%. Our Retail employee engagement score rose 3.2%pts to 76.1%.

5. Continued investment in our core estate We continued to invest in our existing estate and ensure that our pubs remain attractive places for customers to spend their time. During the first half of the year, our investment in repairing, maintaining and improving the quality of our existing estate increased by 16.7% to £12.6m, a 2.9% increase in the average investment per pub.

6. Selective acquisitions We have acquired selectively and strategically in the first half and increased our trading estate by 11 sites, taking the estate to 1,040 sites at the period-end. Our Retail expansion programme was slightly slower than anticipated as we focused our property resources on more significant M&A activity, including due diligence on the Spirit Pub Company estate. We therefore continue to see openings to be more heavily weighted to the second half of the year and we expect to open a further 30-35 sites by July 2015.

7. Expanding our digital platform We continue to expand our digital offer. During the period, traffic to our websites grew by 18%, the number of loyalty card holders grew by 22%, and our overall database grew by 55%. This was driven by the ‘Golden Ticket’ data capture initiative in Hungry Horse, whereby customers can enter a monthly prize draw to win a £100 golden ticket.

PUB PARTNERS

24 weeks H114 H115 Change Average number of pubs trading ...... 1,242 912 ǁ26.6% Revenue ...... £ 70.4m £58.3m ǁ17.2% EBITDA ...... £ 35.0m £29.3m ǁ16.3% Operating profit ...... £ 30.7m £25.7m ǁ16.3% Operating profit margin ...... 43.6% 44.1% +0.5%pts Average EBITDA per pub ...... £ 28.2k £32.1k +13.8% Pub Partners made further financial and strategic progress in the first half of the year. It traded ahead of our expectations with LFL net income up 3.7% and average EBITDA per pub up 13.8%. Revenue was down 17.2% on last year reflecting the disposal of 275 pubs to Hawthorn Leisure, which reduced the average size of the estate by 26.6%. Average revenue per pub was therefore up 12.8%. EBITDA was £29.3m, down 16.3%. Operating profit was also impacted by the acceleration of our disposal strategy, but the margin improved, reflecting the higher quality of the remaining Pub Partners estate. Our strategy for Pub Partners remains focused on recruiting the right licensees in the right pubs on the right agreement and offer. We have made good progress in all of those areas: • Right pubs. The disposal of 275 pubs to Hawthorn Leisure for £75.6m accelerated our progress towards owning the best tenanted and leased estate in the UK. This strategic exit of non-core assets continued in the period with the sale of a further 24 non-core pubs and the transfer of two sites to Retail. These moves combined to leave 864 pubs at the period-end including six closed for disposal. We invested £10.3m in our estate with successful developments including the Woolpack, Islip, and The Red Lodge Inn, Bury St Edmunds.

65 • Right people. Recruitment is core to the success of our tenanted pub estate and our quarterly open days for prospective licensees continued to go from strength to strength with a conversion ratio of 25-30%. We launched a new recruitment website, enabling us to reach out more effectively via social media. On training, we collaborated with a new apprenticeship provider and developed further learning programmes including a free sports module designed to help licensees maximise the opportunity from sporting occasions. • Right offer. We continued to work with our licensees, supporting and influencing them where appropriate, to create the best offer. For example at the beginning of the period we launched a bi-monthly ‘Innsight’ magazine, which is written, in partnership with licensees, for licensees. We continued to provide commercial support for individual licensees at key events and, in our Premier Partners estate, we invited partners to present innovative retail concepts and ways of collaborating with us, in a ‘Dragon’s Den’ style forum. As a result of these initiatives, average licensee tenure continued to rise and at the end of the half year stood at five years and five months. We also saw continued low levels of licensee debt and the number of temporary agreements reached a new low, at just 12 at the period-end.

BREWING AND BRANDS

24 weeks H114 H115 Change Revenue ...... £87.5m £91.1m +4.1% EBITDA ...... £16.3m £16.2m ǁ0.6% Operating profit ...... £13.9m £13.8m ǁ0.7% Operating profit margin ...... 15.9% 15.1% ǁ0.8%pts Brewing & Brands continued to take share in the UK ale market and remains the leading cask ale brewer in the UK. Own-brewed volume (‘‘OBV’’) was up 5.9% in a UK ale market down 1.6% in the six months to October*, with our share rising 80bps to 10.1%. Revenue grew by 4.1% to £91.1m, while operating profit was 0.7% lower at £13.8m, reflecting the sale of 275 leased and tenanted pubs to Hawthorn Leisure at the beginning of the year. Excluding the impact of the disposals, operating profit was up 5.4% to £13.7m. Volumes in the take home channel were up significantly and Greene King is now the leading British owned beer brewer among the multiple grocers. Growth in our exports was up by a fifth, driven by the emerging markets and supported by an improvement in sales to the US and a stronger pound. Old Speckled Hen and the broader ‘Hen’ brand family continued to perform strongly with volume growth of over 20%. This strongly outperformed the UK premium ale market which was up 6.2%*. We continued to invest in our industry-leading ale portfolio with much of our focus on new product development. The period included the launch of East Coast IPA, an American influenced keg beer, and the limited edition ‘Old Nutty Hen’. Other exciting developments included winning the exclusive rights to the US beer range Goose Island in England and Wales, encompassing the award-winning 312 Urban Wheat brand, while Greene King IPA performed strongly in a national blind taste test, scoring well against its closest competitor and ahead of three further top selling cask ales.

FINANCIAL REVIEW RESULTS Revenue grew by 3.3% on last year to £614.9m. The biggest driver of this growth came from our retail business where revenue grew by 6.4%, with average revenue per pub rising by 2.3%. Our retail business now accounts for 76% of group revenue. Total revenue in Pub Partners was down 17.2%, driven primarily by the impact of pub disposals, with the average revenue per pub increasing by 12.8%. Brewing & Brands grew revenue by 4.1%. On a retained business basis, stripping out the impact of disposals, total revenue was up 5.3% to £613.1m.

* BBPA May to October 2014

66 Operating profit before exceptionals was £123.3m, down 3.1% on last year, with the operating margin down 130bps to 20.1%. In the first half of the year, the disposed business contributed £1.1m of operating profit, compared to £7.2m in the first half last year and £14.8m in the full year last year. On a retained business basis, operating profit rose 1.8% to £122.2m, with the operating margin down 70bps to 19.9%. The main driver of the reduction in the retained business operating margin was a reduction in the Retail margin, due to lower like-for-like sales, increased employee costs, higher utility charges and other costs. Net interest costs, before exceptional items, of £40.7m were 2.2% lower than the same period last year, as a result of strong cash flow management and the impact of disposal proceeds. Profit before tax and exceptionals was £82.6m, a decrease of 3.5% on last year. The tax charge before exceptional items of £17.3m equates to an effective tax rate of 21%. Earnings per share before exceptional items of 29.9p were down 1.6%. Statutory profit before tax was £72.0m, up 9.8% on last year.

CASH FLOW Operating cash flows remained strong. We delivered EBITDA before exceptional items of £152.5m, down 2.0% on last year but on 13.0% fewer pubs. After investing in the core estate, paying interest, tax and dividends, we generated free cash flow of £29.4m, comfortably ahead of our debt service obligation of £15.3m. This remains a consistent part of our long-term financial strategy. During the period, we disposed of 302 sites as part of our strategy to improve the quality of our estate with the cash proceeds totalling £84.9m. The cash outflow on acquisitions and acquired or transferred sites totalled £35.8m, bringing the net cash inflow in the period to £73.2m.

CAPITAL EXPENDITURE We also invested in both maintaining and developing our core estate, in addition to growing the size of our retail estate. Total expenditure during the period was £76.8m. Capital expenditure on the core estate, including maintenance capital, was £41.0m, an increase of £2.7m over last year. A further £11.2m was invested in acquiring single sites and £24.6m was invested on developing previously acquired sites and transfers from Pub Partners. On a full year basis, we expect investment in the core estate to be in the region of £85m.

NET DEBT AND TREASURY Net debt at the period-end was £1,362.4m, a reduction of £73.2m from the previous year-end, with the key movements being positive free cash flow of £29.4m, disposal proceeds of £84.9m and investment in growing our retail estate of £35.8m. At the period-end, our revolving credit facility was £220m drawn. Our overall credit metrics remain strong, with interest rate hedges in place for 97% of the variable rate debt and a blended average cost of debt of 6.0%. Fixed charge cover declined slightly to 2.9x and interest cover improved to 3.1x. Annualised net debt to EBITDA reduced to 4.2x. Our securitised vehicle had a free cash flow debt service cover ratio of 1.5x at the period-end, giving 26% headroom.

DIVIDEND The board has declared an interim dividend of 7.95p, up 4.6%. This will be paid on 23 January 2015 to shareholders on the register at the close of business on 19 December 2014.

PENSIONS The group maintains two defined contribution schemes which are open to all new employees. The group’s two defined benefit schemes are closed to new entrants and to future accrual. At 19 October 2014, there was an IAS 19 pension deficit of £82.1m, which compares to £52.2m at the previous balance sheet date. The movement is primarily due to an increase in the present value of the scheme’s liabilities resulting from changes to the market derived, actuarial assumptions together with a reduction in the market value of the scheme assets since the year-end. Total cash contributions in the period were £2.7m for past service.

67 EXCEPTIONAL ITEMS As set out in note three to the interim condensed financial statement, we recorded a net exceptional charge of £1.0m during the period, consisting of a £10.6m charge to profit before tax and an exceptional tax credit of £9.6m. During the period, the group incurred £0.8m of exceptional employee costs, which included restructuring costs and costs associated with changes to key management. In addition, we incurred a total of £1.0m in exceptional legal and professional fees in relation to potential acquisitions and uncertain tax positions. An impairment charge of £4.6m was made against the carrying value of a small number of our pubs where specific market conditions have impacted trading. A net loss of £2.9m, which included a £2.1m charge relating to goodwill, was recognised in respect of the disposal pubs and other properties in the period. A £1.4m finance charge in respect of fair value gains on the ineffective element of the group’s cashflow hedges was also recognised. The exceptional tax credit of £9.6m was made up of three items: a £2.9m credit on revaluation and rolled-over property gains, a £1.6m credit in relation to tax on exceptional items and a £5.1m credit in relation to prior periods.

CURRENT TRADING After 30 weeks, Retail LFL sales were up 0.8%, implying growth of 1.5% over the last twelve weeks. Within this, our southern estate strongly outperformed our northern estate. While the latest Greene King Leisure Spend Tracker highlighted that more people expect to spend less on eating and drinking out this Christmas, encouragingly, bookings for the festive period are currently up 7.2% on last year. Looking ahead, we expect a slight moderation in the operating margin decline for the retained business in the full year due to improved trading, increased cost savings and lower net cost inflation. We have maintained momentum in our other two businesses. After 28 weeks, Pub Partners’ LFL net income was up 3.4% while in the last six weeks Brewing & Brands OBV was up 12.0%, leading to growth of 7.1% after 30 weeks. With real incomes struggling to grow, customers remain cautious about spending on eating and drinking out. As a result, we will continue to tailor our customer-focused strategy to ensure we deliver another year of progress, long-term growth and strong returns to our shareholders.

Rooney Anand Chief executive officer 3 December 2014

68 PART V OPERATING AND FINANCIAL REVIEW OF SPIRIT The operating and financial review should be read in conjunction with the Spirit Group’s audited historical consolidated financial information for the years ended 23 August 2014, 17 August 2013, and 18 August 2012 which are incorporated by reference into this document as explained in Part VIII (Historical Consolidated Financial Information Relating to the Spirit Group) and paragraph 18 of Part XII (Additional Information) of this document and are available for inspection in accordance with paragraph 17 of Part XII (Additional Information) of this document. The following documents, which have been filed with, or notified to, the FCA and are available for inspection in accordance with paragraph 17 of Part XII (Additional Information) of this document, contain financial information about the Spirit Group which is relevant to the Offer: • Spirit’s Annual Report 2014; • Spirit’s Annual Report 2013; and • Spirit’s Annual Report 2012. The table below sets out the sections of these documents which are incorporated by reference into, and form part of, this Part V (Operating and Financial Review of Spirit) of this document, and only the parts of the documents identified in the table below are incorporated into, and form part of, this Part V (Operating and Financial Review of Spirit) of this document. The parts of these documents which are not incorporated by reference are either not relevant for investors or are covered elsewhere in this document. To the extent that any part of any information referred to below itself contains information which is incorporated by reference, such information shall not form part of this document.

Information incorporated Page number(s) Reference by reference into this Part V in reference For the year ended 23 August 2014 Spirit Annual Report 2014 ...... Chairman’s statement 2 - 3 Spirit Annual Report 2014 ...... Highlights and key performance indicators 4 - 5 Spirit Annual Report 2014 ...... Chief Executive Officer’s review 6 - 8 Spirit Annual Report 2014 ...... Business model 9 Spirit Annual Report 2014 ...... Our market 10 - 11 Spirit Annual Report 2014 ...... Our strategy 12 - 19 Spirit Annual Report 2014 ...... Managed division overview 20 Spirit Annual Report 2014 ...... Leased division overview 21 Spirit Annual Report 2014 ...... Corporate responsibility 22 - 25 Spirit Annual Report 2014 ...... Principal risk and uncertainties 26 - 29 Spirit Annual Report 2014 ...... Our brands 30 - 36 Spirit Annual Report 2014 ...... Financial review 37 - 39 Spirit Annual Report 2014 ...... Board of directors 40 - 41 Spirit Annual Report 2014 ...... Executive management team 42 - 43 Spirit Annual Report 2014 ...... Directors’ report 44 - 47 Spirit Annual Report 2014 ...... Corporate governance statement 48 - 51 Spirit Annual Report 2014 ...... Nomination committee report 52 Spirit Annual Report 2014 ...... Audit & Risk committee report 53 - 55 Spirit Annual Report 2014 ...... Remuneration report 56 - 70 Spirit Annual Report 2014 ...... Statement of Directors’ responsibilities in relation to the financial statements 71 For the year ended 17 August 2013 Spirit Annual Report 2013 ...... Established Strategy 2 - 3 Spirit Annual Report 2013 ...... Market overview 4 - 5 Spirit Annual Report 2013 ...... Compelling brands 6 - 7 Spirit Annual Report 2013 ...... First rate talent and leadership 8 - 9 Spirit Annual Report 2013 ...... Chairman’s statement 10 Spirit Annual Report 2013 ...... Chief Executive Officer’s review 11

69 Information incorporated Page number(s) Reference by reference into this Part V in reference Spirit Annual Report 2013 ...... Highlights 12 Spirit Annual Report 2013 ...... Our business 13 Spirit Annual Report 2013 ...... Managed division 14 Spirit Annual Report 2013 ...... Our brands 15 - 20 Spirit Annual Report 2013 ...... Leased 21 Spirit Annual Report 2013 ...... Corporate social responsibility 22 - 23 Spirit Annual Report 2013 ...... Financial review 24 - 25 Spirit Annual Report 2013 ...... Spirit’s principal risks and uncertainties 26 - 29 Spirit Annual Report 2013 ...... Board of Directors 30 - 31 Spirit Annual Report 2013 ...... Executive Management Team 32 - 33 Spirit Annual Report 2013 ...... Directors’ report 34 - 37 Spirit Annual Report 2013 ...... Corporate governance statement 38 - 40 Spirit Annual Report 2013 ...... Nomination & Governance Committee report 41 Spirit Annual Report 2013 ...... Audit & Risk Committee report 42 - 43 Spirit Annual Report 2013 ...... Report on Directors’ remuneration 44 - 53 Spirit Annual Report 2013 ...... Statement of Directors’ responsibilities in relation to the financial statements 54 For the year ended 18 August 2012 Spirit Annual Report 2012 ...... Highlights 1 Spirit Annual Report 2012 ...... Our business 2 - 3 Spirit Annual Report 2012 ...... Managed Division 4 - 5 Spirit Annual Report 2012 ...... Our brands 6 - 9 Spirit Annual Report 2012 ...... Leased division 10 - 11 Spirit Annual Report 2012 ...... Chairman’s statement 12 Spirit Annual Report 2012 ...... Chief Executive Officer’s review 13 Spirit Annual Report 2012 ...... Best for team 14 - 15 Spirit Annual Report 2012 ...... Corporate social responsibility 16 - 19 Spirit Annual Report 2012 ...... Financial review 20 - 21 Spirit Annual Report 2012 ...... Principal risks and uncertainties 22 Spirit Annual Report 2012 ...... Our key risks and uncertainties 23 - 25 Spirit Annual Report 2012 ...... Board of Directors 26 - 27 Spirit Annual Report 2012 ...... Executive Management Team 28 - 29 Spirit Annual Report 2012 ...... Directors’ report 30 - 33 Spirit Annual Report 2012 ...... Corporate governance statement 34 - 36 Spirit Annual Report 2012 ...... Nomination & Governance Committee report 37 Spirit Annual Report 2012 ...... Audit & Risk Committee report 38 - 39 Spirit Annual Report 2012 ...... Report on Directors’ remuneration 40 - 49 Spirit Annual Report 2012 ...... Statement of Directors’ responsibilities in relation to the financial statements 50

70 PART VI CAPITALISATION AND INDEBTEDNESS The following tables show the unaudited capitalisation of Greene King as at 19 October 2014 and the unaudited consolidated indebtedness of the Greene King Group as at 19 October 2014. There has been no material change to the capitalisation figures since 19 October 2014. The figures for capitalisation have been extracted without material adjustment from Greene King’s unaudited historical consolidated financial information for the 24 weeks ended 19 October 2014 which are included in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document. The following tables set out the Greene King Group’s capitalisation and indebtedness as at 19 October 2014:

£m Total current debt Secured ...... 31.5 Unguaranteed/Unsecured ...... 157.5 189.0 Total non-current debt (excluding current portion of long-term debt Secured ...... 1,157.4 Unguaranteed/Unsecured ...... 217.2 1,374.6 Total indebtedness at 19 October 2014 ...... 1,563.6 Shareholders’ equity Share capital ...... 27.4 Share premium ...... 257.0 Capital redemption reserve ...... 3.3 Hedging reserve ...... (144.9) Own shares ...... (4.9) Total capitalisation as at 19 October 2014 ...... 137.9

The following table sets out the Greene King Group’s net indebtedness as at 19 October 2014:

£m Total current debt Cash ...... (43.7) Cash equivalents—liquidity facility reserve(1) ...... (157.5) Liquidity ...... (201.2) Current bank debt—liquidity facility loan ...... 157.5 Securitised debt ...... 32.0 Capitalised borrowing costs ...... (0.5) Total indebtedness at 19 October 2014 ...... 189.0 Net current financial indebtedness ...... (12.2) Non-current bank debt—syndicated bank facility ...... 220.0 Securitised debt ...... 1,164.4 Capitalised borrowing costs ...... (9.8) Non-current financial indebtedness ...... 1,374.6 Net financial indebtedness at 19 October 2014 ...... 1,362.4

Note: (1) The balance of the liquidity facility reserve account is restricted cash and can only be used for the purposes of meeting the securitisation’s debt service obligation should there ever be insufficient funds available from operations to meet such payments.

Indirect indebtedness In addition to the above the Greene King Group has provided guarantees totalling £1.1m in respect of free trade customers’ bank borrowings.

71 PART VII HISTORICAL CONSOLIDATED FINANCIAL INFORMATION RELATING TO THE GREENE KING GROUP The following documents, which have been filed with, or notified to, the FCA and are available for inspection in accordance with paragraph 17 of Part XII (Additional Information) of this document, contain financial information about the Greene King Group which is relevant to the Offer: • Greene King’s Annual Report 2014, containing Greene King’s audited consolidated financial statements for the 53 weeks ended 4 May 2014, together with the audit report in respect of that period and a discussion of Greene King’s financial performance; • Greene King’s Annual Report 2013, containing Greene King’s audited consolidated financial statements for the 52 weeks ended 28 April 2013, together with the audit report in respect of that period and a discussion of Greene King’s financial performance; and • Greene King’s Annual Report 2012, containing Greene King’s audited consolidated financial statements for the 52 weeks ended 29 April 2012, together with the audit report in respect of that period and a discussion of Greene King’s financial performance. The table below sets out the sections of these documents which are incorporated by reference into, and form part of, this Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document, and only the parts of the documents identified in the table below are incorporated into, and form part of, this Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document. The parts of these documents which are not incorporated by reference are either not relevant for investors or are covered elsewhere in this document. To the extent that any part of any information referred to below itself contains information which is incorporated by reference, such information shall not form part of this document.

Information incorporated by reference Page number(s) Reference into this Part VII in reference For the 53 weeks ended 4 May 2014 Greene King Annual Report 2014 ...... Independent auditors’ report (Greene 64 - 65 and 102 King Group and Greene King) Greene King Annual Report 2014 ...... Group income statement 66 Greene King Annual Report 2014 ...... Group statement of comprehensive 67 income Greene King Annual Report 2014 ...... Group statement of changes in equity 70 Greene King Annual Report 2014 ...... Notes to the accounts 71 - 101 Greene King Annual Report 2014 ...... Group balance sheet 68 Greene King Annual Report 2014 ...... Group cash flow statement 69 Greene King Annual Report 2014 ...... Greene King balance sheet 103 Greene King Annual Report 2014 ...... Notes to the Greene King accounts 104 - 107 For the 52 weeks ended 28 April 2013 Greene King Annual Report 2013 ...... Independent auditors’ report (Greene 59 and 96 King Group and Greene King) Greene King Annual Report 2013 ...... Group income statement 60 Greene King Annual Report 2013 ...... Group statement of comprehensive 61 income Greene King Annual Report 2013 ...... Group statement of changes in equity 64 Greene King Annual Report 2013 ...... Notes to the accounts 65 - 95 Greene King Annual Report 2013 ...... Group balance sheet 62 Greene King Annual Report 2013 ...... Group cash flow statement 63 Greene King Annual Report 2013 ...... Greene King balance sheet 97 Greene King Annual Report 2013 ...... Notes to the Greene King accounts 98 - 101

72 Information incorporated by reference Page number(s) Reference into this Part VII in reference For the 52 weeks ended 29 April 2012 Greene King Annual Report 2012 ...... Independent auditors’ report (Greene 52 and 89 King Group and Greene King) Greene King Annual Report 2012 ...... Group income statement 53 Greene King Annual Report 2012 ...... Group statement of comprehensive 54 income Greene King Annual Report 2012 ...... Group balance sheet 55 Greene King Annual Report 2012 ...... Group statement of changes in equity 57 Greene King Annual Report 2012 ...... Notes to the group accounts 58 - 88 Greene King Annual Report 2012 ...... Group cash flow statement 56 Greene King Annual Report 2012 ...... Greene King balance sheet 90 Greene King Annual Report 2012 ...... Notes to the Greene King accounts 91 - 95

73 FINANCIAL INFORMATION RELATING TO THE GREENE KING GROUP FOR THE 24 WEEKS ENDED 19 OCTOBER 2014 The unaudited historical consolidated financial information on the Greene King Group for the 24 weeks ended 19 October 2014 which is set out in this Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) has been extracted from the Greene King announcement made on 4 December 2014 in relation to the financial results of the Greene King Group for the 24 weeks ended 19 October 2014. The accompanying notes represent an integral part of the unaudited historical consolidated financial information of the Greene King Group for the 24 weeks ended 19 October 2014. The following pages set out the unaudited historical consolidated financial information of the Greene King Group for the 24 weeks ended 19 October 2014. The unaudited historical consolidated financial information contained in this Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) does not constitute statutory accounts within the meaning of section 434 of the Act.

74 UNAUDITED GROUP INCOME STATEMENT FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

24 weeks to 19 Oct 2014 24 weeks to 13 Oct 2013 Before Exceptional Before Exceptional exceptional items exceptional items items (note 3) Total items (note 3) Total Note £m £m £m £m £m £m Revenue ...... 614.9 — 614.9 595.4 — 595.4 Operating costs ...... (491.6) (1.7) (493.3) (468.2) (4.5) (472.7) Impairment of property, plant and equipment ...... — (4.6) (4.6) — (15.7) (15.7) Net loss on disposal of property, plant and equipment ...... — (2.9) (2.9) — (2.0) (2.0) Operating profit ...... 123.3 (9.2) 114.1 127.2 (22.2) 105.0 Finance income ...... 0.2 — 0.2 0.2 4.2 4.4 Finance costs ...... (39.6) (1.4) (41.0) (40.5) (2.0) (42.5) Other net finance expenses ...... (1.3) — (1.3) (1.3) — (1.3) Profit before tax ...... 82.6 (10.6) 72.0 85.6 (20.0) 65.6 Tax...... 4 (17.3) 9.6 (7.7) (19.7) 22.7 3.0 Profit attributable to equity holders of parent ...... 65.3 (1.0) 64.3 65.9 2.7 68.6 Earnings per share —basic ...... 5 29.5p 31.6p —adjusted basic* ...... 5 29.9p 30.4p —diluted ...... 5 29.3p 31.4p —adjusted diluted* ...... 5 29.8p 30.2p Dividend proposed per share in respect of the period ...... 7.95p 7.60p

* Adjusted basic earnings per share excludes the effect of exceptional items.

75 UNAUDITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

24 weeks to 24 weeks to 19 Oct 2014 13 Oct 2013 £m £m Profit for the period ...... 64.3 68.6 Other comprehensive (loss)/income to be reclassified to the income statement in subsequent periods: Cash flow hedges (Losses)/ gains on cash flow hedges taken to equity ...... (50.0) 48.5 Transfers to income statement on cash flow hedges ...... 13.9 14.7 Tax on cash flow hedges ...... 7.2 (19.7) (28.9) 43.5 Items not to be reclassified to the income statement in subsequent periods: Actuarial (losses)/gains on defined benefit pension schemes ...... (31.6) 9.8 Irrecoverable element of potential future pension surplus ...... — (0.4) Tax on actuarial losses/(gains) ...... 6.3 (3.8) (25.3) 5.6 Other comprehensive (loss)/income for the period, net of tax ...... (54.2) 49.1 Total comprehensive income for the period, net of tax ...... 10.1 117.7

76 UNAUDITED GROUP BALANCE SHEET AS AT 19 OCTOBER 2014

As at As at 19 Oct 2014 4 May 2014 Note £m £m Non current assets Property, plant and equipment ...... 2,207.3 2,169.7 Goodwill ...... 701.7 703.8 Financial assets ...... 23.6 24.2 Deferred tax assets ...... 61.3 51.3 Prepayments ...... 0.2 0.3 Trade and other receivables ...... 0.1 0.1 2,994.2 2,949.4 Current assets Inventories ...... 31.1 30.5 Financial assets ...... 9.1 8.6 Trade and other receivables ...... 45.7 60.2 Prepayments ...... 11.4 13.3 Cash and short term deposits ...... 201.2 216.2 298.5 328.8 Property, plant and equipment held for sale ...... 1.2 81.7 299.7 410.5 Current liabilities Borrowings ...... (189.0) (202.0) Derivative financial instruments ...... 9 (28.5) (9.4) Trade and other payables ...... (265.2) (256.5) Income tax payable ...... (43.9) (46.5) Provisions ...... (0.4) (0.5) (527.0) (514.9) Non current liabilities Borrowings ...... (1,374.6) (1,449.8) Derivative financial instruments ...... 9 (180.7) (163.0) Deferred tax ...... (98.8) (110.0) Post-employment liabilities ...... (83.3) (53.5) Provisions ...... (5.9) (6.0) (1,743.3) (1,782.3) Total net assets ...... 1,023.6 1,062.7 Issued capital and reserves Share capital ...... 27.4 27.4 Share premium ...... 257.0 256.6 Capital redemption reserve ...... 3.3 3.3 Hedging reserve ...... (144.9) (116.0) Own shares ...... (4.9) (6.3) Retained earnings ...... 885.7 897.7 Total equity ...... 1,023.6 1,062.7 Net debt ...... 8 1,362.4 1,435.6

77 UNAUDITED GROUP CASHFLOW STATEMENT FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

24 weeks to 24 weeks to 19 Oct 2014 13 Oct 2013 Note £m £m Operating activities Operating profit ...... 114.1 105.0 Operating exceptional items ...... 9.2 22.2 Depreciation and amortisation ...... 29.2 28.4 EBITDA* ...... 152.5 155.6 Working capital and non-cash movements ...... 7 28.0 16.1 Interest received ...... 0.2 0.2 Interest paid ...... (45.0) (43.1) Tax paid ...... (20.4) (17.0) Net cashflow from operating activities ...... 115.3 111.8 Investing activities Purchase of property, plant and equipment ...... (76.8) (75.1) Movements in financial assets ...... 0.1 0.9 Proceeds from sales of property, plant and equipment ...... 84.9 16.6 Net cashflow from investing activities ...... 8.2 (57.6) Financing activities Equity dividends paid ...... 6 (45.4) (42.1) Issue of shares ...... 0.4 0.7 Purchase of own shares ...... (4.2) (0.3) Financing costs ...... — (2.8) Repayment of borrowings ...... (75.5) (74.5) Advance of borrowings ...... — 110.0 Net cashflow from financing activities ...... (124.7) (9.0) Net (decrease)/increase in cash and cash equivalents ...... (1.2) 45.2 Opening cash and cash equivalents ...... 8 202.4 20.2 Closing cash and cash equivalents ...... 8 201.2 65.4

* EBITDA represents earnings before interest, tax, depreciation, amortisation and exceptional items.

78 UNAUDITED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

Share Share Capital Hedging Own Retained capital premium redemption reserve shares earnings Total £m £m £m £m £m £m £m At 4 May 2014 ...... 27.4 256.6 3.3 (116.0) (6.3) 897.7 1,062.7 Total profit for the period ...... — — — — — 64.3 64.3 Other comprehensive loss ...... — — — (28.9) — (25.3) (54.2) Total comprehensive income ...... — — — (28.9) — 39.0 10.1 Issue of share capital ...... — 0.4 — — — — 0.4 Release of shares ...... — — — — 5.6 (5.6) — Repurchase of shares ...... — — — — (4.2) — (4.2) Share based payments ...... — — — — — 2.4 2.4 Tax on share based payments ...... — — — — — (2.4) (2.4) Equity dividends paid ...... — — — — — (45.4) (45.4) At 19 October 2014 ...... 27.4 257.0 3.3 (144.9) (4.9) 885.7 1,023.6

Share Share Capital Hedging Own Retained capital premium redemption reserve shares earnings Total £m £m £m £m £m £m £m At 28 April 2013 ...... 27.3 253.8 3.3 (160.2) (9.1) 856.4 971.5 Total profit for the period ...... — — — — — 68.6 68.6 Other comprehensive income ...... — — — 43.5 — 5.6 49.1 Total comprehensive income ...... — — — 43.5 — 74.2 117.7 Issue of share capital ...... — 0.7 — — — — 0.7 Release of shares ...... — — — — 4.7 (4.7) — Repurchase of shares ...... — — — — (0.3) — (0.3) Share based payments ...... — — — — — 1.8 1.8 Tax on share based payments ...... — — — — — (0.4) (0.4) Equity dividends paid ...... — — — — — (42.1) (42.1) At 13 October 2013 ...... 27.3 254.5 3.3 (116.7) (4.7) 885.2 1,048.9

79 NOTES TO THE ACCOUNTS FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

1 BASIS OF PREPARATION The interim condensed consolidated financial statements are prepared in accordance with 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 Conduct Authority. The financial information contained in this interim statement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The figures for the period ended 4 May 2014 have been derived from the statutory accounts of the group for that year. These published accounts were prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted for use in the European Union, and reported on by auditors without qualification or statement under Sections 498(2) and 498(3) of the Companies Act 2006 and have been filed with the Registrar of Companies. The interim condensed consolidated financial statements for the 24 weeks ended 19 October 2014 and the comparatives to 13 October 2013 are unaudited but have been reviewed by the auditor; a copy of their review report is included at the end of this report. A combination of the strong operational cashflows generated by the business, and the significant available headroom on its credit facilities, support the directors’ view that the group has sufficient funds available to meet its foreseeable working capital requirements. The directors have concluded therefore that the going concern basis remains appropriate. The accounting policies adopted in the preparation of the interim report are consistent with those applied in the preparation of the group’s annual report for the period ended 4 May 2014, except for the adoption of new standards and interpretations applicable as of 5 May 2014. The group has adopted a number of new standards and interpretations, which have been assessed as having no financial impact or disclosure requirements at the interim.

2 SEGMENT INFORMATION The group has determined three reportable segments that are largely organised and managed separately according to the nature of products and services provided, brands, distribution channels and profile of customers. The segments include the following businesses: Retail: Managed pubs and restaurants Pub Partners: Tenanted and leased pubs Brewing & Brands: Brewing, marketing and selling beer These are also considered to be the group’s operating segments and are based on the information presented to the chief executive who is considered to be the chief operating decision maker. Transfer prices between operating segments are set on an arm’s length basis.

80 NOTES TO THE ACCOUNTS (Continued) FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

2 SEGMENT INFORMATION (Continued) 24 weeks ended 19 October 2014

Pub Brewing & Total Retail Partners Brands Corporate operations £m £m £m £m £m External revenue ...... 465.5 58.3 91.1 — 614.9 Segment operating profit ...... 91.7 25.7 13.8 (7.9) 123.3 Exceptional items ...... (9.2) Net finance cost ...... (42.1) Income tax charge ...... (7.7) Net profit for the period ...... 64.3 EBITDA* ...... 114.5 29.3 16.2 (7.5) 152.5 As at 19 October 2014 Segment assets ...... 2,025.4 613.9 355.4 36.7 3,031.4 Unallocated assets ...... 262.5 2,025.4 613.9 355.4 36.7 3,293.9 Segment liabilities ...... (102.7) (13.2) (72.8) (82.8) (271.5) Unallocated liabilities ...... (1,998.8) (102.7) (13.2) (72.8) (82.8) (2,270.3) Net assets ...... 1,922.7 600.7 282.6 (46.1) 1,023.6

24 weeks ended 13 October 2013

Pub Brewing & Total Retail Partners Brands Corporate operations £m £m £m £m £m External revenue ...... 437.5 70.4 87.5 — 595.4 Segment operating profit ...... 89.6 30.7 13.9 (7.0) 127.2 Exceptional items ...... (22.2) Net finance cost ...... (39.4) Income tax credit ...... 3.0 Net profit for the period ...... 68.6 EBITDA* ...... 111.3 35.0 16.3 (7.0) 155.6 As at 13 October 2013 Segment assets ...... 1,936.8 759.5 362.3 35.7 3,094.3 Unallocated assets ...... 120.0 1,936.8 759.5 362.3 35.7 3,214.3 Segment liabilities ...... (91.3) (11.3) (74.8) (89.2) (266.6) Unallocated liabilities ...... (1,898.8) (91.3) (11.3) (74.8) (89.2) (2,165.4) Net assets ...... 1,845.5 748.2 287.5 (53.5) 1,048.9

* EBITDA represents earnings before interest, tax, depreciation, amortisation and exceptionals.

81 NOTES TO THE ACCOUNTS (Continued) FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

3 EXCEPTIONAL ITEMS

24 weeks to 24 weeks to 19 Oct 2014 13 Oct 2013 £m £m Operating Employee costs ...... 0.8 — Legal and professional fees ...... 1.0 — Impairment of property, plant and equipment ...... 4.6 15.7 VAT...... — 7.0 Insurance proceeds ...... (0.1) (2.5) Net loss on disposal of property, plant and equipment and goodwill ...... 2.9 2.0 9.2 22.2 Financing Fair value loss/(gain) on ineffective element of cash flow hedges ...... 1.4 (4.2) Interest on exceptional VAT payment ...... — 2.0 10.6 20.0 Tax Tax impact of exceptional items ...... (1.6) (3.2) Tax credit in respect of the licensed estate ...... (2.9) (3.1) Tax credit in respect of rate change ...... — (18.8) Adjustment in respect of prior periods ...... (5.1) 2.4 Total exceptional tax ...... (9.6) (22.7) Total exceptional items after tax ...... 1.0 (2.7)

Exceptional employee costs of £0.8m recognised in the period includes restructuring costs and costs associated with changes to key management. During the period the group incurred exceptional legal and professional fees in relation to potential acquisitions and defending uncertain tax positions totaling £1.0m. During the 24 week period to 19 October 2014 the group has recognised an impairment loss of £4.6m (2013: £15.7m) in respect of its licensed estate. The impairment has been recognised in respect of pubs where the higher of value-in-use and fair value less costs to sell has fallen below the net book value. The net loss on disposal of property, plant and equipment of £2.9m (2013: £2.0m) comprises a total profit on disposal of £2.2m (2013: £3.6m) and a total loss on disposal of £5.1m (2013: £5.6m). The total loss on disposal includes £2.1m (2013: £2.7m) in respect of goodwill allocated to parts of operating segments disposed of in the period. During the period ended 2 May 2010 the group received a refund of £7.0m from HMRC in respect of VAT on gaming machines following a ruling involving The Rank Group plc that the application of VAT contravened the EU’s principal of fiscal neutrality. HMRC appealed the ruling issuing protective assessments to recover the VAT in the event their appeal was successful. On 30 October 2013 the decision was overturned and the group was therefore required to repay the VAT of £7.0m and the associated interest of £1.7m. On 16 April 2014 the Supreme Court granted The Rank Group plc permission to appeal which is due to be heard on 20 April 2015. The £1.4m fair value loss (2013: gain £4.2m) is the mark to market movement on the ineffective element of cash flow hedges resulting from changes in the LIBOR yield curve.

Exceptional tax The tax credit in respect of the licensed estate arises from movements in their cost base, including the impact of indexation.

82 NOTES TO THE ACCOUNTS (Continued) FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

3 EXCEPTIONAL ITEMS (Continued) The adjustment in respect of prior periods is in respect of deferred taxation on revaluation and rolled over gains on the licensed estate.

4 TAX The tax charge before exceptional items is £17.3m which equates to an effective tax rate of 21% which is estimated to be the effective rate before exceptional items for the 52 weeks ended 3 May 2015. This compares to an effective rate of 23% for the same period last year.

5 ADJUSTED BASIC EARNINGS PER SHARE Basic earnings per share has been calculated by dividing the profit attributable to equity holders of £64.3m (2013: £68.6m) by the weighted average number of shares in issue during the period (excluding own shares held) of 218.1m (2013: 216.8 m). Adjusted basic earnings per share excludes the effect of exceptional items and is presented to show the underlying performance of the group.

Adjusted basic earnings per share

Earnings Earnings per share 24 weeks to 24 weeks to 24 weeks to 24 weeks to 19 Oct 2014 13 Oct 2013 19 Oct 2014 13 Oct 2013 £m £m p p Basic ...... 64.3 68.6 29.5 31.6 Exceptional items ...... 1.0 (2.7) 0.4 (1.2) Adjusted ...... 65.3 65.9 29.9 30.4

Diluted earnings per share has been calculated on a similar basis taking account of 1.1m (2013: 1.7m) dilutive potential shares under option, giving a weighted average number of ordinary shares adjusted for the effect of dilution of 219.2m (2013: 218.5m). Treasury shares and shares held by the EBT are excluded from the calculation of weighted average number of shares in issue.

6 DIVIDENDS PAID

24 weeks to 24 weeks to 19 Oct 2014 13 Oct 2013 £m £m Declared and paid in the period Final dividend for 2013/14—20.80p (2012/13: 19.45p) ...... 45.4 42.1

83 NOTES TO THE ACCOUNTS (Continued) FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

7 WORKING CAPITAL AND NON-CASH MOVEMENTS

24 weeks to 24 weeks to 19 Oct 2014 13 Oct 2013 £m £m Increase in inventories ...... (0.6) (2.0) Decrease in trade and other receivables ...... 16.5 15.0 Increase in trade and other payables ...... 14.5 2.3 Decrease in provisions ...... (0.6) (0.3) Share-based payments ...... 2.4 1.8 Difference between defined benefit pension contributions paid and amounts charged ...... (2.7) (3.2) Exceptional items ...... (1.5) 2.5 Working capital and non-cash movements ...... 28.0 16.1

8 ANALYSIS AND MOVEMENTS IN NET DEBT

As at As at As at 19 Oct 2014 4 May 2014 13 Oct 2013 £m £m £m Cash in hand, at bank* ...... 43.7 58.7 70.1 Liquidity facility reserve* ...... 157.5 157.5 — Overdrafts ...... — (13.8) (4.7) Cash and cash equivalents ...... 201.2 202.4 65.4 Current portion of borrowings ...... (31.5) (30.7) (29.8) Liquidity facility loan ...... (157.5) (157.5) — Non current portion of borrowings ...... (1,374.6) (1,449.8) (1,474.4) Closing net debt ...... (1,362.4) (1,435.6) (1,438.8)

* included in cash and cash equivalents on the balance sheet

Movements in net debt

24 weeks to 24 weeks to 19 Oct 2014 13 Oct 2013 £m £m Net (decrease)/increase in cash and cash equivalents ...... (1.2) 45.2 Proceeds—advance of loans ...... — (110.0) Repurchase of securitised debt ...... — 60.0 Repayment of principal—securitised debt ...... 15.3 14.5 Repayment of principal—loans and loan notes ...... 60.2 — Financing issue costs ...... — 2.8 Decrease in net debt arising from cash flows ...... 74.3 12.5 Other non cash movements ...... (1.1) (0.9) Decrease in net debt ...... 73.2 11.6 Opening net debt ...... (1,435.6) (1,450.4) Closing net debt ...... (1,362.4) (1,438.8)

84 NOTES TO THE ACCOUNTS (Continued) FOR THE TWENTY-FOUR WEEKS ENDED 19 OCTOBER 2014

9 FINANCIAL INSTRUMENTS IFRS 13 requires the classification of financial instruments measured at fair value to be determined by reference to the source of inputs used to derive fair value. The following derivative financial liabilities are held at fair value:

As at As at 19 Oct 2014 4 May 2014 £m £m Interest rate swaps ...... 209.2 172.4 The inputs used to calculate the fair value of interest rate swaps fall within Level 2 of the prescribed three level hierarchy in IFRS 13. Level 2 fair value measurements use inputs other than quoted prices that are observable for the relevant asset or liability either directly or indirectly. There were no transfers between levels during any period disclosed. The fair value of derivative financial liabilities recognised are calculated by discounting all future cash flows by the appropriate market yield and are adjusted to reflect the group’s associated credit risk. The fair value of financial instruments are equal to their book values with the exception of the group’s securitised debt. The fair value of the group’s securitised debt, based on quoted market prices, at 19 October 2014 was £1,250.1m (4 May 2014: £1,234.7m) compared to a carrying value of £1,188.9m (4 May 2014: £1,203.9).

10 POST BALANCE SHEET EVENTS An interim dividend of 7.95p per share (2013: 7.60p) amounting to a dividend of £17.4m (2013: £16.6m) was declared by the directors at their meeting on 3 December 2014. These financial statements do not reflect this dividend payable. On 4 November 2014 the group announced it had reached an agreement with the board of Spirit Pub Company plc on the terms of a recommended offer that value the company at approximately £774m. The offer is conditional on, amongst other things, the approval of Greene King plc shareholders and Spirit Pub Company plc shareholders.

85 INDEPENDENT REVIEW REPORT TO GREENE KING PLC Introduction We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the 24 weeks ended 19 October 2014 which comprises the group income statement, group statement of comprehensive income, group balance sheet, group cashflow statement, group statement of changes in equity, and notes 1 to 11. We have read the other information contained in the half-yearly financial report 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 in International Standard on Review Engagements 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’ Responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct 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 half-yearly 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 half-yearly 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.

Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 24 weeks ended 19 October 2014 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 Conduct Authority.

Ernst & Young LLP Cambridge 3 December 2014

86 PART VIII HISTORICAL CONSOLIDATED FINANCIAL INFORMATION RELATING TO THE SPIRIT GROUP The historical consolidated financial information on the Spirit Group for the 53 weeks ended 23 August 2014, 52 weeks ended 17 August 2013, and 52 weeks ended 18 August 2012 is set out in Part IV (Historical Consolidated Financial Information Relating to the Spirit Group) of the Circular which is incorporated into this document by reference and is available for inspection in accordance with paragraph 18 of Part XII (Additional Information) of this document. Part IV (Historical Consolidated Financial Information Relating to the Spirit Group) of the Circular sets out consolidated financial information relating to Spirit prepared under International Financial Reporting Standards as adopted by the European Union for each of the fifty-three weeks ended 23 August 2014, fifty-two weeks ended 17 August 2013, and fifty-two weeks ended 18 August 2012. The financial information has been extracted without material adjustment from the corresponding Spirit Annual Report. KPMG LLP of One Snowhill, Snow Hill Queensway, Birmingham B4 6GH, charted accountants regulated by the ICAEW, have issued an unqualified audit opinion on the consolidated financial statements of the Spirit Group included in the Annual Report of the Spirit Group for the fifty three weeks ended 23 August 2014, and KPMG Audit plc of One Snowhill, Snow Hill, Queensway, Birmingham B4 6GH, chartered accountants regulated by the ICAEW, have issued unqualified audit opinions on the consolidated financial statements of the Spirit Group included in the Annual Report of the Spirit Group for the fifty-two weeks ended 17 August 2013 and the fifty-two weeks ended 18 August 2012. The results for the fifty-two weeks ended 18 August 2012 have not been restated for the impact of IAS 19 (revised 2011). The consolidated financial information contained in Part IV (Historical Consolidated Financial Information Relating to the Spirit Group) of the Circular does not constitute statutory information within the meaning of section 434 of the Companies Act.

87 PART IX UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE COMBINED GROUP SECTION A: UNAUDITED PRO FORMA FINANCIAL INFORMATION The unaudited pro forma income statement and unaudited pro forma statement of net assets of the Combined Group set out on the following pages have been prepared for illustrative purposes only, in accordance with item 20.2 of Annex I of the PD Regulation and on the basis of the notes set on the following pages. The unaudited pro forma income statement has been prepared to illustrate the effect on earnings of the Combined Group in the 53 weeks ended 4 May 2014 as if the Acquisition had taken place on 29 April 2013. The unaudited pro forma statement of net assets has been prepared to illustrate the effect on net assets of the Combined Group as at 19 October 2014 as if the Acquisition had taken place on that date. The unaudited pro forma income statement and unaudited pro forma statement of net assets of the Combined Group has been prepared in a manner consistent with the accounting policies adopted by the Greene King Group in preparing historical consolidated financial information for the 53 weeks ended 4 May 2014 as set out in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document, on the basis set out in the notes to the pro forma income statement and in accordance with Annex II to the Prospectus Directive Regulation. The unaudited pro forma income statement and the unaudited pro forma statement of net assets have been prepared for illustrative purposes only and, because of their nature, address a hypothetical situation and, do not, therefore, represent the Combined Group’s actual financial position or results. The unaudited pro forma financial information has not been prepared, or shall not be construed as having been prepared, in accordance with Regulation S-X under the Securities Act. In addition, the unaudited pro forma financial information does not purport to represent what the Greene King Group’s or the Combined Group’s financial position and results of operations actually would have been if the Acquisition had been completed on the dates indicated nor do they purport to represent the Greene King Group’s or the Combined Group’s results of operations for any future period or the Greene King Group’s or the Combined Group’s financial condition at any future date. Shareholders should read the whole of this document and not rely solely on the unaudited pro forma financial information contained in this Part IX (Unaudited pro forma financial information of the Combined Group). In addition to the matters noted above, the unaudited pro forma financial information does not reflect the effect of anticipated synergies and efficiencies associated with the Acquisition.

88 Unaudited Pro Forma Statement of Net Assets

Adjustments Greene King as at Spirit as at Acquisition Combined Group 19 October 2014 23 August 2014 adjustments Pro forma £m £m £m £m (Note 1 and (Note 2 and (Note 4) Note 7) Note 7) Non-current assets Property, plant and equipment ...... 2,207.3 1,577.5 (135.7)(a) 3,649.1 Operating leases ...... — 48.8 17.6(a) 66.4 Goodwill ...... 701.7 212.1 173.6 1,087.4 Financial assets ...... 23.6 — — 23.6 Deferred tax assets ...... 61.3 37.6 55.7(d) 154.6 Prepayments ...... 0.2 — — 0.2 Trade and other receivables ...... 0.1 — — 0.1 2,994.2 1,876.0 111.2 4,981.4 Current assets Inventories ...... 31.1 9.2 — 40.3 Financial assets ...... 9.1 — — 9.1 Trade and other receivables ...... 45.7 26.0 — 71.7 Prepayments ...... 11.4 — — 11.4 Cash and cash equivalents ...... 201.2 159.1 (86.7) 273.6 298.5 194.3 (86.7) 406.1 Property, plant and equipment held for sale ...... 1.2 2.6 12.4(a) 16.2 299.7 196.9 (74.3) 422.3 Total assets ...... 3,293.9 2,072.9 36.9 5,403.7 Current liabilities Borrowings ...... (189.0) (14.7) — (203.7) Derivative financial instruments ...... (28.5) (20.8) — (49.3) Trade and other payables ...... (265.2) (151.9) (25.0)(c) (442.1) Income tax payable ...... (43.9) — — (43.9) Provisions ...... (0.4) (35.3) 7.7(c) (28.0) (527.0) (222.7) (17.3) (767.0) Non-current liabilities Borrowings ...... (1,374.6) (813.6) 17.6(b) (2,170.6) Derivative financial instruments ...... (180.7) (133.8) — (314.5) Trade and other payables ...... — (15.5) (292.3)(c) (307.8) Deferred tax liabilities ...... (98.8) — (4.8)(d) (103.6) Post-employment liabilities ...... (83.3) (3.8) — (87.1) Provisions ...... (5.9) (42.2) 42.2(c) (5.9) (1,743.3) (1,008.9) (237.3) (2,989.5) Total liabilities ...... (2,270.3) (1,231.1) (254.6) (3,756.5) Total net assets ...... 1,023.6 841.3 (217.7) 1,647.2

89 Unaudited Pro Forma Income Statement

Adjustments Greene King for the Spirit for the Combined 53 weeks ended 53 weeks ended Acquisition Group 4 May 2014 23 August 2014 adjustments Pro forma £m £m £m £m (Note 1 and Note 7) (Note 2 and (Note 5) Note 7) Revenue ...... 1,301.6 800.9 — 2,102.5 Operating costs ...... (1,102.2) (685.8) (7.7) (1,795.7) Operating profit ...... 199.4 115.1 (7.7) 306.8 Financing income ...... 0.4 2.5 (0.4) 2.5 Financing costs ...... (94.6) (86.8) (17.5) (198.9) Profit before tax ...... 105.2 30.8 (25.6) 110.4 Tax...... (9.1) (11.7) 1.0 (19.8) Profit attributable to equity holders of parent ...... 96.1 19.1 (24.6) 90.6

Notes: (1) The net assets of Greene King as at 19 October 2014 has been extracted, without material adjustment, from the unaudited interim consolidated financial statements of Greene King for the 24 weeks ended 19 October 2014. The financial information for the 53 weeks ended 4 May 2014 has been extracted without material adjustment, from the audited consolidated financial statements of Greene King for the 53 weeks ended 4 May 2014. (2) The financial information of Spirit has been extracted, without material adjustments, from the unaudited reconciliation of Spirit financial information included in Part V of the Circular. (3) A cash payment of 8 pence per Spirit Share comprising the proposed 2014 dividend of 1.5 pence per Spirit share payable on 10 February 2015 and a special interim dividend of 6.5 pence per Spirit Share payable to Spirit Shareholders on the Effective Date. The dividend payments will result in a total cash reduction of £53.9m. (4) Total consideration to be paid by Greene King Group is £640.1 based on Greene King closing share price of 719.0 pence as at 12 December 2014. Spirit Shareholders will receive 0.1322 New Greene King Shares for each Spirit share owned. An acquisition adjustment to cash and cash equivalents of £86.7m has been shown to reflect the net cash outflow of the estimated transaction costs to be incurred by Greene King and Spirit of £32.8m and dividend payments as referred to in Note 3 above. The transaction will be accounted for using the acquisition method of accounting. The excess of consideration over the value of the net assets acquired has been reflected as goodwill and other intangible assets. Under the acquisition method of accounting, the purchase price is allocated to the underlying Spirit Group tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill as follows:

£m Note Consideration paid (subject to Greene King Share Price at the effective date) ...... 640.1 4 Net assets of Spirit ...... (841.3) 2 Dividend payable in cash to Shareholders of Spirit ...... 53.9 3 Transactions costs to be settled in cash by Spirit ...... 16.3 Fair value adjustment to property, plant and equipment and assets held for sale ...... 123.3 4(a) Fair value adjustment to operating leases ...... (17.6) 4(a) Fair value adjustment to securitised debt ...... (17.6) 4(b) Fair value adjustment to other payables ...... 267.4 4(c) Deferred tax asset in respect of fair value adjustments ...... (50.9) 4(d) Pro-forma goodwill adjustment ...... 173.6 (a) The fair value of property, plant and equipment, operating leases and assets held for sale is considered to be the open market valuation as reported by Spirit as at 23 August 2014 in its audited financial statements for the period then ended, adjusted for the sales value of non-current assets sold subsequent to year end. (b) The fair value of securitised debt reflects quoted market prices as at 13 October 2014, and has been adjusted to write off issue costs previously deferred by Spirit. (c) Increases to current trade and other payables of £25.0m and non-current trade and other payables of £292.3m have been recognised to reflect the net present liability in respect of operating leases that have been identified as having off market rate terms which replaces Spirit’s current provision of £7.7m and non-current provisions of £42.2m for onerous leases.

90 (d) Non-current deferred tax assets of £55.7m have been recognised primarily in respect of the fair value adjustment to trade and other payables for off market leases referred to in Note 4(c) above. Non-current deferred tax liabilities of £4.8m have been recognised in respect of the fair value adjustment to securitised debt referred to in Note 4(b) above. (5) Adjustments to reflect the acquisition as if it had happened on 29 April 2013 in the pro forma Income Statement are as follows;

£m Note Operating costs—Utilisation of off market lease liability ...... 17.3 4(c) Operating costs—Transaction costs on acquisition ...... (32.8) 4 Operating costs—Depreciation and amortisation of fair value adjustment of property, plant and equipment and operating leases ...... (4.4) 4(a) Operating costs—Profit on sale of non-current assets ...... (1.5) 4(a) Operating costs—Impairment reversal of property, plant and equipment and operating leases ...... 13.7 4(a) Finance costs—Unwinding of discount element of liability created on fair value adjustment ...... (13.4) 4(c) Finance costs—Spirit issue costs on existing bonds ...... 0.3 4(b) Finance costs—Amortisation of fair value adjustment on debt ...... (4.4) 4(b) Finance income—Amortisation of fair value adjustment on debt ...... (0.4) 4(b) Tax effect of above adjustments ...... 1.0 (6) The pro forma Income Statement adjustments are expected to have a continuing effect on the Combined Group, other than the transaction costs in relation to the acquisition costs of £32.8m. (7) No adjustment has been made to reflect the results of Greene King or Spirit since 4 May 2014 and 23 August 2014, respectively, for the Income Statement or since 19 October 2014 and 23 August 2014, respectively, for the Statement of Net Assets.

91 SECTION B: ACCOUNTANT’S REPORT ON PRO FORMA FINANCIAL INFORMATION

Ernst & Young LLP Tel: + 44 20 7951 2000 1 More London Place Fax: + 44 20 7951 1345 London ey.com SE1 2AF 15DEC201416232783 The Directors 18 December 2014 Greene King plc Westgate Brewery Bury St Edmunds Suffolk IP33 1QT

Dear Sirs We report on the pro forma financial information (the ‘‘Pro Forma Financial Information’’) set out in Part IX of the prospectus dated 18 December 2014 (the ‘‘Prospectus’’), which has been prepared on the basis described therein, for illustrative purposes only, to provide information about how the Acquisition might have affected the financial information presented on the basis of the accounting policies adopted by Greene King plc (the ‘‘Company’’) in preparing the financial statements for the 53 weeks ended 4 May 2014. This report is required by paragraph 20.2 of Annex I of Commission Regulation (EC) No 809/2004 and is given for the purpose of complying with that item and for no other purpose. Save for any responsibility which we may have under Prospectus Rule 5.5.3R (2)(f) to any persons as to and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 23.1 of Annex I to Commission Regulation (EC) No 809/2004, consenting to its inclusion in the Prospectus.

Responsibilities It is the responsibility of the directors of the Company to prepare the Pro Forma Financial Information in accordance with items 1 to 6 of Annex II of Commission Regulation (EC) No 809/2004. It is our responsibility to form an opinion, as required by item 7 of Annex II of the Commission Regulation (EC) No 809/2004 as to the proper compilation of the Pro Forma Financial Information and to report that opinion to you. In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro Forma Financial Information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro Forma Financial Information with the directors of the Company. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro Forma Financial Information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

92 Opinion In our opinion: • the Pro Forma Financial Information has been properly compiled on the basis stated; and • such basis is consistent with the accounting policies of the Company.

Declaration For the purposes of Prospectus Rule 5.5.3R (2)(f), we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with paragraph 1.2 of Annex I of Commission Regulation (EC) No 809/2004.

Yours faithfully

Ernst & Young LLP

93 PART X UNITED KINGDOM TAXATION CONSIDERATIONS General The following is a summary of certain United Kingdom tax considerations relating to an investment in the New Greene King Shares. The comments set out below are based on current United Kingdom tax law as applied in England and Wales and published HM Revenue & Customs practice (which may not be binding on HM Revenue & Customs), all as at the date of this Prospectus, and all of which may be subject to change, possibly with retrospective effect. They are intended as a general guide and apply only to shareholders of the Company resident and, in the case of an individual, domiciled for tax purposes in the United Kingdom and to whom ‘‘split year’’ treatment does not apply (except insofar as express reference is made to the treatment of non-United Kingdom residents), who hold New Greene King Shares as an investment (and not as securities to be realised in the course of a trade) and who are the absolute beneficial owners thereof. The discussion does not address all possible tax consequences relating to an investment in the New Greene King Shares. Certain categories of shareholders, including those carrying on certain financial activities, those subject to specific tax regimes or benefitting from certain reliefs or exemptions, those holding their shares in an ISA, those connected with the Company or Combined Group and those for whom the New Greene King Shares are employment related securities may be subject to special rules and this summary does not apply to such shareholders. Shareholders or prospective shareholders who are in any doubt about their tax position, or who are resident or otherwise subject to taxation in a jurisdiction outside the United Kingdom, should consult their own professional advisers immediately.

Taxation of Dividends The Company will not be required to withhold amounts on account of United Kingdom tax at source when paying a dividend. A United Kingdom resident individual shareholder who receives a dividend from the Company will be entitled to a tax credit which may be set off against the shareholder’s total income tax liability. The tax credit will be equal to 10 per cent. of the aggregate of the dividend and the tax credit (the ‘‘gross dividend’’), which is also equal to one-ninth of the cash dividend received. Such an individual shareholder who is liable to income tax at the basic rate will be subject to tax on the dividend at the rate of 10 per cent. of the gross dividend, so that the tax credit will satisfy in full such shareholder’s liability to income tax on the dividend. In the case of such an individual shareholder who is liable to income tax at the higher rate, the tax credit will be set against but not fully match the shareholder’s tax liability on the gross dividend and such shareholder will have to account for additional income tax equal to 22.5 per cent. of the gross dividend (which is also equal to 25 per cent. of the cash dividend received) to the extent that the gross dividend when treated as the top slice of the shareholder’s income falls above the threshold for higher rate income tax. In the case of such an individual shareholder who is subject to income tax at the additional rate, the tax credit will also be set against but not fully match the shareholder’s liability on the gross dividend and such shareholder will have to account for additional income tax equal to 27.5 per cent. of the gross dividend (which is also equal to approximately 30.6 per cent. of the cash dividend received) to the extent that the gross dividend when treated as the top slice of the shareholder’s income falls above the threshold for additional rate income tax. A United Kingdom resident individual shareholder who is not liable to income tax in respect of the gross dividend and other United Kingdom resident taxpayers who are not liable to United Kingdom tax on dividends will not be entitled to claim repayment of the tax credit attaching to dividends paid by the Company. Shareholders who are within the charge to corporation tax will be subject to corporation tax on dividends paid by the Company, unless (subject to special rules for such shareholders that are small companies) the dividends fall within an exempt class and certain other conditions are met. Each shareholder’s position will depend on its own individual circumstances, although it would normally be expected that the dividends paid by the Company would fall within an exempt class. Such shareholders will not be able to claim repayment of tax credits attaching to dividends.

94 Non-United Kingdom resident shareholders will not generally be able to claim repayment from HM Revenue & Customs of any part of the tax credit attaching to dividends paid by the Company. A shareholder resident outside the United Kingdom may also be subject to foreign taxation on dividend income under local law. Shareholders who are not resident for tax purposes in the United Kingdom should obtain their own tax advice concerning tax liabilities on dividends received from the Company.

Taxation of Capital Gains Shareholders who are resident in the United Kingdom, or, in the case of individuals, who cease to be resident in the United Kingdom for a period of five years or less, may depending on their circumstances (including the availability of exemptions or reliefs), be liable to United Kingdom taxation on chargeable gains in respect of gains arising from a sale or other disposal of New Greene King Shares.

Stamp duty/SDRT The statements in this section are intended as a general guide to the current United Kingdom stamp duty and SDRT position. Investors should note that certain categories of person are not liable to stamp duty or SDRT and others may be liable at a higher rate or may, although not primarily liable for tax, be required to notify and account for SDRT under the Stamp Duty Reserve Tax Regulations 1986.

Issue No stamp duty or SDRT will arise on the issue of New Greene King Shares in registered form. In the case of New Greene King Shares issued to a clearance service or depositary receipt system, this is as a result of case law which has been accepted by HM Revenue & Customs.

Transfers outside of Depositary Receipt Systems and Clearance Services An unconditional agreement to transfer New Greene King Shares will normally give rise to a charge to SDRT at the rate of 0.5 per cent. of the amount or value of the consideration for the transfer. SDRT is, in general, payable by the purchaser. Transfers of New Greene King Shares will generally be subject to stamp duty at the rate of 0.5 per cent. of the amount or value of consideration given for the transfer (rounded up to the next £5). The purchaser normally pays the stamp duty. If a duly stamped transfer completing an agreement to transfer is produced within six years of the date on which the agreement is made (or, if the agreement is conditional, the date on which the agreement becomes unconditional), any SDRT already paid is generally repayable, normally with interest, and any SDRT charge yet to be paid is cancelled.

Transfers within CREST Paperless transfers of New Greene King Shares within the CREST system are generally liable to SDRT, rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration given for the shares. The operator of CREST is obliged to collect SDRT on relevant transactions settled within the CREST system. Deposits of shares into CREST will not generally be subject to SDRT or stamp duty, unless the transfer into CREST is itself for consideration.

Transfers to and within Depositary Receipt Systems and Clearance Services Where New Greene King Shares are transferred (a) to, or to a nominee or an agent for, a person whose business is or includes the provision of clearance services or (b) to, or to a nominee or an agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT may be payable at the higher rate of 1.5 per cent. of the amount or value of the consideration given or, in certain circumstances, the value of the shares. Except in relation to clearance services that have made an election under section 97A(1) of the Finance Act 1986 (to which the special rules outlined below apply), no stamp duty or SDRT is payable in respect of transfers within clearance services or depositary receipt systems. There is an exception from the 1.5 per cent. charge on the transfer to, or to a nominee or agent for, a clearance service where the clearance service has made and maintained an election under section 97A(1) of the Finance Act 1986, which has been approved by HM Revenue & Customs. In these circumstances,

95 SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable for the transfer will arise on any transfer of New Greene King Shares into such an account and on subsequent agreements to transfer such shares within such account. Any liability for stamp duty or SDRT in respect of a transfer into a clearance service or depositary receipt system, or in respect of a transfer within such a service, which does arise will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will, in practice, be payable by the participants in the clearance service or depositary receipt system.

96 PART XI DIRECTORS, RESPONSIBLE PERSONS, CORPORATE GOVERNANCE AND EMPLOYEES 1 Responsibility The Directors, whose names appear below at paragraph 2.1, and Greene King accept responsibility for the information contained in this document. To the best of the knowledge of the Directors and Greene King (who have taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information.

2 Directors Directors 2.1 The following table sets out information relating to each of the Directors as at the date of this document: Name Current position Tim Bridge ...... Chairman Rooney Anand ...... Chief Executive Officer Kirk Davis ...... Chief Financial Officer Mike Coupe ...... Non-executive Director Ian Durant ...... Senior Independent Non-executive Director Rob Rowley ...... Non-executive Director Lynne Weedall ...... Non-executive Director 2.2 The business address of the Directors is Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT. 2.3 Set out below are the business experience and principal business activities performed outside of Greene King by the Directors, as well as the dates of their initial appointment as directors of Greene King. Tim Bridge, age 65, has been the Chairman since 2 May 2005. He joined Greene King in 1970 and was appointed to the Board in 1977. He has held a variety of positions within the Group, becoming managing director in 1990 and Chief Executive Officer in 1994. In 2005, he stepped down as Chief Executive Officer to take over the role of Chairman. Rooney Anand, age 50, was appointed Chief Executive Officer of Greene King in May 2005. He was initially appointed to the Board in 2001, when he joined the group as managing director of the brewing division. He was previously president and managing director of the UK bakery division at Sara Lee, the international consumer goods business, and, prior to that, at United Biscuits. He is a non-executive director of JB Drinks Holdings Ltd. Kirk Davis, age 43, has been Chief Financial Officer of Greene King since 3 November 2014, with responsibility for the Greene King Group’s finance functions. He has extensive and relevant financial experience, both in consumer retail and more recently in the pub sector. Kirk joined J D Wetherspoon plc in 2008 as deputy finance director and had been its finance director since March 2011. He has extensive experience in the retail sector, having previously worked in senior finance roles in Tesco and Marks & Spencer. Mike Coupe, age 54, joined the Board as a Non-executive Director on 26 July 2011. He is chief executive of Sainsbury’s. Prior to joining Sainsbury’s, he was a director of Big Food Group plc and managing director of Iceland Food Stores. Ian Durant, age 56, joined the Board as a Non-executive Director on 16 March 2007. He currently serves as the Senior independent non-executive Director. As a former finance director at Liberty International Plc, Ian Durant contributes extensive financial experience to the Greene King Board. Ian is also the chairman of Capital & Counties Properties plc and Greggs plc and a non-executive director of Home Retail Group plc. Rob Rowley, age 64, joined the Board as a Non-executive Director on 18 July 2014. He is currently a non-executive director at Taylor Wimpey plc, Moneysupermarket.com Group plc and Morgan Advanced Materials plc and was formerly at Reuters Group plc, where he held various roles including that of finance director.

97 Lynne Weedall, age 47, joined the Board as a Non-executive Director on 11 October 2012. She is currently the group HR director of Dixons Carphone and has worked in a variety of HR and organisational development roles in the retail sector and elsewhere.

3 Directors’ interests 3.1 The direct and indirect interests (all of which, unless otherwise stated, are beneficial) of the Directors in Greene King Shares as at [16] December 2014 (being the latest practicable date prior to the publication of this Prospectus) and as expected to subsist immediately following Admission are set out in the following table: Interests in Greene King Shares Interests in Greene King Shares as at 16 December 2014 immediately following Admission Number of voting Number of voting rights in respect Percentage of rights in respect Percentage of of Greene issued share of Greene issued share Director King Shares capital King Shares capital Tim Bridge ...... 1,477,898(1) 0.675 1,477,898 0.48 Rooney Anand ...... 467,265 0.213 467,265 0.15 Mike Coupe ...... 2,000 0.001 2,000 0.001 Ian Durant ...... 22,320 0.010 22,320 0.007 Lynne Weedall ...... 2,000 0.001 2,000 0.0006 Kirk Davis ...... N/A N/A N/A N/A Rob Rowley ...... N/A N/A N/A N/A

Note 1: Tim Bridge is the beneficial owner of 1,389,998 Greene King Shares and the non-beneficial owner of 87,900 Greene King Shares. 3.2 Taken together, the combined percentage interest of the Directors in voting rights in respect of the issued ordinary share capital of Greene King as at 16 December 2014 (being the latest practicable date prior to the publication of this Prospectus) was approximately 0.9 per cent. 3.3 Taken together, the combined percentage interest of the Directors in voting rights in respect of the issued ordinary share capital of Greene King immediately following Admission will be approximately 0.64 per cent. 3.4 The Directors have no interests in the shares of the Company’s subsidiaries. 3.5 Details of options under the Executive Share Option Plan (‘‘ESOP’’) and Long-Term Incentive Plan (‘‘LTIP’’) over the Greene King Shares held by the Directors as at 16 December 2014 (being the latest practicable date prior to publication of this Prospectus) are set out below. They are not included in the interests of the Directors shown in the table in paragraph 3.1 above. Number of Shares over which options Exercise Period or Director Date of Grant granted Exercise Price Vesting Date Rooney Anand (ESOP) ...... 4 August 2005 74,751 528p 4 August 2008 - 3 August 2015 Rooney Anand (LTIP) ...... 6 August 2012 117,000 Nil cost 6 August 2015 Rooney Anand (LTIP) ...... 4 October 2013 137,260 Nil cost option 5 October 2016 - 3 October 2023 Rooney Anand (LTIP) ...... 24 July 2014 132,722 Nil cost option 25 July 2017 - 23 July 2024 3.6 Save as disclosed in this paragraph 3, none of the Directors nor their immediate families, or connected persons (within the meaning of section 252 of the Act) has any interests (beneficial or non-beneficial) in the share capital of Greene King or any of its subsidiaries. 3.7 Save as disclosed above and in paragraph 5 of Part XII (Additional Information) of this document, no other person involved in the Offer or Admission has an interest which is material to the Offer or Admission.

98 4 Directors’ remuneration and pensions 4.1 Remuneration The remuneration of the Directors for the 53 weeks ended 4 May 2014, as set out in Greene King’s Annual Report, are set out in the table below. Annual pay reflects the responsibilities, market value and sustained performance level of executive directors. Pay is reviewed annually or when a change in responsibility occurs. Benefits Pension Salary/fees Bonus in kind related Long-term Total Director £000 £000 £000 benefits incentives(1) £000(2) Tim Bridge ...... 178 — 32 — — 210 Rooney Anand ...... 551 525 19 138 1,422 2,655 Mike Coupe ...... 45 — — — — 45 Ian Durant ...... 52 — — — — 52 Lynne Weedall ...... 52 — — — — 52

Note 1: The value of the long term incentive remuneration comprises the value of the LTIP which was due to vest in August 2014 based on performance conditions covering the 3 financial years to 4 May 2014, together with the amount of the dividend equivalent paid thereon. Note 2: All figures are based on a 53 week year. Note 3: Rob Rowley and Kirk Davis were appointed after the fifty-three weeks to 4 May 2014. A large proportion of the remuneration paid to Rooney Anand in the 2014 financial year was the result of vesting awards under the Long-Term Incentive Plan (LTIP), and specifically, from Greene King share price growth since the original date of grant, from which all Greene King shareholders benefited. The range of taxable benefits in kind available to executive directors includes the provision of company cars, or cash in lieu, fuel for company cars, life assurance and private medical insurance. Bonus payments are determined by the Remuneration Committee and awarded where justified by performance. For the financial year 2013/2014 and for future financial years, the executive directors have been and will be eligible to receive an annual incentive bonus, the maximum amount being 100 per cent. of annual pay, for the achievement of stretch targets. The targets are a combination of personal and financial performance targets agreed in advance by the Remuneration Committee, with the financial targets relating to operating profit and profit before tax and exceptional items and specific business unit-related targets. For Rooney Anand, in the 53 weeks ended 4 May 2014, awards were based 90 per cent. on financial performance and 10 per cent. on individual performance. Financial performance measures were based on profit before tax and exceptional items and free cash flow.

4.2 Pensions Greene King contributes to defined contribution pension arrangements for the executive directors or, if a Director is impacted by annual or lifetime limits on contribution levels, any excess amount is paid as a cash supplement. The contribution rates are 25 per cent. for Rooney Anand, as Chief Executive Officer, and 20 per cent. for Kirk Davis, as the Chief Financial Officer. No element of remuneration other than annual pay is treated as pensionable and the retirement age for the schemes is 60.

5 Directors’ terms of appointment and remuneration 5.1 Executive Directors’ service agreements The key terms of employment of the Executive Directors are: Date employment Director commenced Notice period Rooney Anand ...... 6 August 2001 12 months Kirk Davis ...... 3 November 2014 12 months Rooney Anand currently serves as Chief Executive Officer for an annual salary of £551,000 pursuant to the terms of a letter of engagement with Greene King dated 24 December 2004. His employment with the Greene King group commenced on 6 August 2001. This appointment can be terminated by

99 Greene King at any time on one year’s written notice. Rooney Anand will remain Chief Executive Officer following Completion. Kirk Davis currently serves as Chief Financial Officer for an annual salary of £320,000 pursuant to the terms of a service agreement with Greene King dated 29 September 2014. This appointment was effective from 3 November 2014. Kirk Davis will remain Chief Financial Officer following Completion. Newly appointed executive Directors are offered a service agreement with a notice period of one year. In the event of the employment of an executive Director being terminated, the committee would pay due regard to best practice and take account of the individual’s duty to mitigate their loss.

5.2 Non-executive Directors’ letters of appointment Non-executive directors are appointed pursuant to letters of appointment. The appointment of all Non-Executive Directors can be terminated by Greene King at any time on three month’s written notice, notwithstanding the expiry dates shown in the table below. Notice Period from Date of Present Company Total Fee Name of Director Appointment Expiry Date (months) (£’000) Tim Bridge (Chairman) ...... 2 May 2005 30 April 2017 3 174 Mike Coupe ...... 26 July 2011 25 July 2017 3 44 Ian Durant ...... 16 March 2007 15 March 2016 3 51 Rob Rowley ...... 18 July 2014 17 July 2017 3 44 Lynne Weedall ...... 11 October 2012 10 October 2015 3 51 The Chairman’s benefits include private healthcare and the provision of a company car. Benefits are reviewed periodically in line with market practice. Set out below are the key terms of the Chairman’s and respective Non-executive Directors letters’ of appointment. Tim Bridge currently serves as Chairman for an annual fee of £174,250 pursuant to the terms of a letter of engagement with Greene King dated 29 April 2014. This appointment was effective from 2 May 2005 and will expire on 30 April 2017. This appointment can be terminated by Greene King at any time on three months’ written notice, notwithstanding the expiry date noted above. Tim Bridge will remain Chairman following Completion. Mike Coupe currently serves as a Non-executive Director for an annual fee of £44,100 pursuant to the terms of a letter of engagement with Greene King dated 10 July 2014. This appointment was effective from 26 July 2011 and will expire on 25 July 2017. This appointment can be terminated by Greene King at any time on three months’ written notice, notwithstanding the expiry date noted above. Mike Coupe will remain a Non-executive Director following Completion. Ian Durant currently serves as a Non-executive Director for an annual fee of £51,250 pursuant to the terms of a letter of engagement with Greene King dated 4 March 2013. This appointment was effective from 16 March 2007 and will expire on 15 March 2016. This appointment can be terminated by Greene King at any time on three months’ written notice, notwithstanding the expiry date noted above. Ian Durant will remain a Non-executive Director following Completion. Rob Rowley currently serves as a Non-executive Director for an annual fee of £44,100 pursuant to the terms of a letter of engagement with Greene King dated 9 July 2014. This appointment was effective from 18 July 2014 and will expire on 17 July 2017. This appointment can be terminated by Greene King at any time on three month’s written notice, notwithstanding the expiry date noted above. Rob Rowley will remain a Non-executive Director following Completion. Lynne Weedall currently serves as a Non-executive Director for an annual fee of £51,250 pursuant to the terms of a letter of engagement with Greene King dated 6 October 2012. This appointment was effective from 11 October 2012 and will expire on 10 October 2015. This appointment can be terminated by Greene King at any time on three months’ written notice, notwithstanding the expiry date noted above. Lynne Weedall will remain a Non-executive Director following Completion.

100 6 Board structure and corporate governance 6.1 Greene King is committed to, and recognises the value and importance of, high standards of corporate governance. As at the date of this document, Greene King is required to comply with and, save as disclosed in this paragraph 6, complies with the Corporate Governance Code. Following the Effective Date Greene King will continue to comply with the Corporate Governance Code. 6.2 The Board currently comprises the Chairman, two Executive Directors and four Non-executive Directors. As from the Effective Date, the Greene King Board will comprise the following members:

Name Role Current company Tim Bridge ...... Chairman Greene King Rooney Anand ...... Chief Executive Officer Greene King Kirk Davis ...... Chief Financial Officer Greene King Mike Coupe ...... Non-Executive Director Greene King Ian Durant ...... Senior Independent Greene King Non-Executive Director Rob Rowley ...... Non-Executive Director Greene King Lynne Weedall ...... Non-Executive Director Greene King All of the Non-executive Directors are considered to be independent. Therefore, more than half of the Board, excluding the Chairman, are independent Non-executive Directors in compliance with the Corporate Governance Code. The Board meets formally eight times a year, with additional meetings as required. All board papers are sent out on a timely basis with sufficient information for the Directors to be able to discharge their duties. The company secretary ensures that all board papers are sent out to non-attending Directors and that, where possible, any comments they have are received beforehand, so that they can be expressed at the meeting. There is a clear and documented division of responsibilities between the roles of the Chairman and the Chief Executive Officer. There are also documented schedules of matters reserved to the Board and matters delegated to committees of the Board. Such reserved matters include decisions on strategic and policy issues, the approval of published financial statements and major acquisitions and disposals, authority levels for expenditure, treasury and risk management policies.

6.3 Board committees There are three key Board committees: the Audit Committee, Remuneration Committee and Nomination Committee. The committees are provided with sufficient resources via the company secretary and, where necessary, have direct access to independent professional advisers to undertake their duties.

Audit Committee The Audit Committee currently comprises the following independent Non-executive Directors: Ian Durant, Mike Coupe and Rob Rowley. Ian Durant acts as chairman. Following the Offer, it is intended that the membership of the Audit Committee will remain unchanged. The Board is satisfied that Ian Durant has recent and relevant financial experience, as the former finance director of Intu Properties plc, formerly Liberty International plc. The role of the Audit Committee is to review the results of the full year audit and the interim results in each case prior to their submission to the Board. It is responsible for reviewing Greene King’s internal financial control systems, advising the Board on the appointment of external auditors, overseeing the relationship with the external auditors, reviewing Greene King’s whistleblowing procedures and considering the need for a full internal audit function. It also reviews the Greene King Group’s risk management policies and procedures prior to submission to the Board and receives detailed reports on the risk management functions within the business units. The Audit Committee generally has three meetings each year. On each occasion, the finance Director and senior members of the finance function are invited to attend. The external Auditors attend all of the meetings. In addition, the chairman of the committee regularly meets privately with the external audit partner to discuss matters relevant to Greene King.

101 The Audit Committee reviews the audit plan presented by the Auditors before the start of each audit cycle and agrees the scope of the audit work. During the audit process, the Audit Committee keeps under review the consistency of accounting policies on a year-to-year basis and across the Greene King Group, and the methods used to account for significant or unusual transactions. The financial statements and interim results are reviewed in detail prior to their submission to the Board. Following the audit, the Audit Committee discusses issues arising from the audit, and any matters the Auditors may wish to discuss. The Audit Committee continuously monitors the relationship with the Auditors and assesses their performance, cost-effectiveness, objectivity and independence. It also satisfies itself as to whether the Auditors are independent of Greene King and that best practice is being observed. The Audit Committee has a policy in relation to the use of Ernst & Young LLP, the company Auditors, for non-audit work, with the primary policy being that non-audit work will be awarded to the firm which provides the best commercial solution for the work in question. The terms of reference under which the Audit Committee operates are set out below: (a) The Audit Committee shall oversee the exercise of putting the external audit out to tender at least once every ten years or explain in the annual report why this action has not been taken. (b) Taking into account the obligations in paragraph a) above, the Audit Committee shall consider and make recommendations to the Board, to be put to the shareholders for approval at the AGM, regarding the appointment and re-appointment or dismissal of the external auditor. The Audit Committee shall oversee the selection process for new auditors and shall ensure that all tendering firms are given access to such information and individuals as may be appropriate during the tendering process. If an auditor resigns, the committee shall investigate the circumstances surrounding this and decide whether any action is required. (c) The Audit Committee shall approve the remuneration and terms of engagement, including any engagement letter, of the external auditor, ensuring that the level of fees is appropriate to enable an effective and high quality audit to be conducted. The committee shall review the audit fees and consider any other fees which are payable to the auditor in respect of non-audit activities. The Audit Committee shall develop and implement a policy regarding the engagement of the external auditor to supply non-audit services, to avoid any threat to auditor objectivity and independence, taking into account any relevant ethical guidance on the subject. (d) The Audit Committee shall, at least annually, review and satisfy itself with the independence (satisfying itself that there are no relationships such as family, employment investment, financial or business between the Company and the Auditor, other than in the ordinary course of business) and objectivity of the external auditor, taking into account consideration of relevant UK professional and regulatory guidelines. The Audit Committee shall monitor the Auditor’s compliance with relevant ethical and professional guidance on the rotation of audit partners, the level of fees paid by the Company compared to the overall fee income of the firm, office, partner and other related requirements. (e) The Audit Committee shall recommend to the Board a policy on the employment of former employees of the Auditors and monitor implementation of this policy. (f) The Audit Committee shall annually assess the qualifications of the Auditors, their expertise and resources, as well as the effectiveness of the audit process, which shall include a report from the external auditor on their own internal quality procedures. (g) The Audit Committee shall evaluate the risks to the quality and effectiveness of the financial reporting process and shall consider whether it is necessary to include the risk of the withdrawal of the Auditor from the market in their evaluation. (h) The Audit Committee shall meet regularly with the Auditors, including once at the planning stage for the year end (where the scope of the audit and the annual audit plan will be considered to ensure that it is consistent with the scope of the audit engagement, having regard to the seniority, expertise and experience of the audit team) and once post audit at the reporting stage. The Audit Committee shall review the findings of the audit and shall discuss any major issues which arose during the audit, any relevant accounting and audit judgements, the levels of errors identified during the audit and the effectiveness of the audit. The Audit Committee shall also discuss any matters the Auditor may wish to discuss (in the absence of management, where necessary). The Audit Committee shall ensure that any representation letters, management letters and responses from management are reviewed.

102 (i) The Audit Committee shall monitor the integrity of the financial statements by keeping under review and challenging, where necessary: (i) the consistency of, and any changes to, accounting policies on a year-to-year basis and across the group; (ii) the methods used to account for significant or unusual transactions where different approaches are possible; (iii) whether Greene King has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor; and (iv) the clarity of disclosure in Greene King’s financial statements and the corporate governance statement (insofar as it relates to audit and risk management), and shall report its views to the Board if it is not satisfied with any aspect of the proposed financial statements. (j) For the purposes of this section, financial statements shall mean the income statements, balance sheets, statements of comprehensive income, cash flow statements and related notes thereto of Greene King and the Greene King Group from time to time and, for the avoidance of doubt, shall not include the chairman’s statement, chief executive’s review, financial review or any other part of the business review. (k) The Audit Committee shall keep under review the adequacy and effectiveness of Greene King’s internal financial controls and internal control and risk management systems. The Audit Committee shall review and approve the statements to be included in the annual report concerning internal controls and risk management. (l) The Audit Committee shall be responsible for monitoring and reviewing the effectiveness of Greene King’s internal audit function and shall, in particular: (i) ensure that the internal auditor is accountable to the Audit Committee; (ii) ensure that the internal audit function has the necessary resources and access to information to enable it to fulfil its mandate; (iii) review and assess the annual internal audit work plan; (iv) receive a report on the results of the internal auditor’s work on a periodic basis; (v) review and monitor management’s responsiveness to the internal auditor’s findings and recommendations; and (vi) monitor and review the effectiveness of Greene King’s internal audit function in the context of Greene King’s overall risk management system. (m) The Audit Committee will review Greene King’s procedures for handling allegations from whistleblowers and ensure that these arrangements allow for proportionate and independent investigation of such matters and appropriate follow up. The Audit Committee shall review Greene King’s procedures for detecting fraud and the systems and controls for the prevention of bribery and shall receive reports of non-compliance. (n) The Audit Committee shall arrange for periodic reviews of its own performance, and, at least annually, shall review its constitution and terms of reference, to ensure that it is operating at maximum effectiveness and recommend any changes that it considers necessary to the Board for approval. The Board makes funds available to the Audit Committee to enable it to take independent legal, accounting or other advice when the Audit Committee reasonably believes it necessary to do so.

Remuneration Committee The Remuneration Committee currently comprises the following independent Non-executive Directors: Lynne Weedall, Mike Coupe and Ian Durant. Lynne Weedall acts as chairman. Following the Offer, it is intended that the membership of the Remuneration Committee will remain unchanged.

103 The role of the Remuneration Committee includes determining the remuneration policy for the executive Directors and the chairman and fixing the total individual remuneration package of each of the executive Directors, considering the granting of share options and awards under the long-term incentive plan and determining bonuses payable to the executive Directors. The Remuneration Committee meets at least three times each year. The chairman and the chief executive, at the request of the Remuneration Committee, attend its meetings. The chairman does not participate in any discussions relating to her own remuneration. The chief executive is consulted by the Remuneration Committee on its proposals, but does not participate in any discussions relating to his own remuneration. The terms of reference under which the Remuneration Committee operates state that: (a) The Remuneration Committee shall determine and agree with the Board the framework or broad policy for the remuneration of Greene King’s chairman, chief executive, the executive Directors and such other members of the executive management as it is designated to consider. The remuneration of non-executive Directors shall be a matter for the chairman and executive members of the Board. No Director or manager shall be involved in any decisions as to their own remuneration. (b) In determining such remuneration policy, the Remuneration Committee shall take into account all factors which it deems necessary. The objective of such policy shall be to attract, retain and motivate executive management of the quality required to run the Company successfully. The remuneration elements should be designed to drive shareholder value and a significant proportion of the remuneration should be structured so as to link rewards to corporate and individual performance and designed to promote the long-term success of Greene King. (c) Within the terms of the agreed policy, the Remuneration Committee shall, in consultation with the chairman and chief executive, determine the total individual remuneration package of the chairman, each executive Director and other designated senior executives, including bonuses, incentive payments and other share awards. (d) In order to ensure that the members of the executive management of Greene King are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of Greene King, the Remuneration Committee shall take into account all factors which it deems necessary. These factors shall include, but are not limited to, the relevant legal and regulatory requirements, the provisions, recommendations and associated guidance of the Corporate Governance Code. (e) The Remuneration Committee shall have regard to the pay and employment conditions across the Company when determining the remuneration policy for Directors, especially when determining annual salary increases. (f) The Remuneration Committee shall obtain reliable, up-to-date information about remuneration in other companies of comparable scale and complexity. (g) The Remuneration Committee shall be responsible for the engagement of any remuneration consultants who advise the committee and shall determine the appropriate criteria for selecting, appointing and setting the terms of reference for the same. (h) The remuneration policy shall be subject to review by the Remuneration Committee to ensure the ongoing appropriateness and relevance of the policy. (i) The Remuneration Committee shall approve the design of, and determine targets for, any performance-related pay schemes operated by Greene King for the executive Directors and designated senior executives and approve the total annual payments made under such schemes. (j) The Remuneration Committee shall review the design of all share incentive Plans for approval by the Board and Shareholders. For any such Plans, the committee shall determine the individual awards to executive Directors and other designated senior executives and the performance targets to be used. (k) The Remuneration Committee shall determine the policy for and scope of pension arrangements for each executive Director and other designated senior executives.

104 (l) The Remuneration Committee shall ensure that the contractual terms on termination, and any payments made, are fair to the individual, and Greene King, that failure is not rewarded and that the duty to mitigate loss is fully recognised. (m) The Remuneration Committee shall oversee any major changes in employee benefits structures throughout Greene King.

Nomination Committee The Nomination Committee currently comprises the following Directors: Tim Bridge, Mike Coupe, Ian Durant, Rob Rowley and Lynne Weedall. Tim Bridge acts as chairman. Following the Offer, it is intended that the membership of the Nomination Committee will remain unchanged. The Nomination Committee generally meets as and when required to discuss succession planning and consider appropriate appointments to the Board and not less than twice a year. The Nomination Committee is responsible for succession planning at Board level, overseeing the selection and appointment of Directors, regularly reviewing the structure, size and composition of the Board and making its recommendations to the Board. It assists in evaluating the commitments of individual Directors and the balance of skills, knowledge and experience on the Board. The Terms of Reference of the Nomination Committee state that: (a) The Nomination Committee shall regularly review the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and make recommendations to the Board with regard to any adjustments that are deemed necessary. It shall satisfy itself, with regard to succession planning, that plans are in place for the Board, taking into account the challenges and opportunities facing Greene King, and the skills and expertise needed on the Board in future. (b) The Nomination Committee shall assess and articulate the time needed to fulfil the roles of chairman, senior independent Director and non-executive Director and shall undertake an annual performance evaluation to ensure that all members of the Board have devoted sufficient time to their duties. (c) The Nomination Committee shall keep under review the leadership needs of Greene King, both executive and non-executive, with a view to ensuring the continued ability of the Company to compete effectively in the market place. (d) The Nomination Committee shall keep up to date and fully informed about strategic issues and commercial changes affecting Greene King and the market in which it operates. (e) The Nomination Committee shall be responsible for determining the process for identifying and nominating for approval by the board candidates to fill vacancies on the Board as and when they arise. (f) The Nomination Committee shall be responsible for ensuring that a description of the roles and capabilities required for all new appointments is prepared and shall approve such description which should take into account the existing composition of the Board. In identifying suitable candidates, the committee shall consider using the services of external advisers to facilitate the search, consider candidates from a range of backgrounds and consider candidates on merit and against objective criteria. (g) The Nomination Committee shall ensure that candidates have sufficient time to undertake the role and review their commitments. (h) The Nomination Committee shall make recommendations to the Board regarding the appointment of a chairman. All other significant commitments of a proposed chairman should be disclosed to the Board before the appointment and any changes to these should be notified to the Board as soon as practicable. (i) The Nomination Committee shall make recommendations to a meeting of all the non-executive Directors regarding the appointment of a chief executive. (j) The Nomination Committee shall ensure that, on appointment to the Board, non-executive Directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside board meetings.

105 (k) The Nomination Committee shall review the results of the Board performance evaluation process that relate to the composition of the Board. (l) The Nomination Committee shall review annually the time required from non-executive Directors. Performance evaluation should be used to assess whether the non-executive Directors are spending enough time to fulfil their duties. (m) The Nomination Committee shall make recommendations to the Board concerning suitable candidates for the role of senior independent Director and the membership of the Audit and Remuneration Committees and any other Board committees, as appropriate, in consultation with the chairmen of those committees. (n) The Nomination Committee shall make recommendations to the Board regarding the position of the chairman, having assessed every three years whether the present incumbent should continue in the post, taking into account the needs of continuity versus freshness of approach. (o) The Nomination Committee shall make recommendations to the Board as regards the re-appointment of any non-executive Director at the conclusion of their specified term of office having given due regard to their performance and ability to contribute to the Board in light of the knowledge, skills and experience required. The Nomination Committee shall also make recommendations to the Board concerning any matters relating to the continuation in office as a Director of any Director at any time. (p) The Nomination Committee shall make recommendations to the Board concerning the re-election by shareholders of any Director required to retire under the annual re-election provisions of the Corporate Governance Code having due regard to their performance and ability to continue to contribute to the Board in light of the knowledge, skills and experience required and the need for progressive refreshing of the Board.

6.4 Risk management and internal control Greene King has established a risk management programme that assists management throughout the Greene King Group to identify, assess and mitigate business, financial, operational and compliance risks. The Board views management of risk as integral to good business practice. The programme is designed to support management’s decision-making and to improve the reliability of business performance.

6.5 Model Code Greene King has established and, following Admission, intends to continue to comply with a code of securities dealing equivalent to the Model Code incorporated into the Listing Rules. The code applies to the Directors, the Directors’ connected persons and relevant employees of the Greene King Group.

7 Directors’ confirmations 7.1 None of the Directors has, during the five years prior to the date of this document, been: (a) convicted in relation to a fraudulent offence; (b) associated with any bankruptcy, receivership or liquidation while acting in the capacity of a member of the administrative, management or supervisory body or of senior manager of any company; (c) subject to any official public incrimination and/or sanction by statutory or regulatory authorities (including designated professional bodies); or (d) disqualified by a court from acting as a member of the administrative, management or supervisory bodies of any issuer or from acting in the management or conduct of the affairs of any company.

8 Conflicts of interest 8.1 None of the Directors has any actual or potential conflicts of interest between their duties to the Company or Spirit (as the case may be) and the private interests and/or other duties he/she may also have. 8.2 No Director was selected to be a director of Greene King or Spirit pursuant to any arrangement or understanding with any major customer, supplier or other person having a business connection with the Greene King Group or the Spirit Group. 8.3 There are no family relationships between any of the Directors.

106 9 Directorships and partnerships Save as set out below, the Directors have not held any directorships of any company, other than those companies in the Greene King Group which are subsidiaries, or been a partner in a partnership at any time in the five years prior to the date of this document:

Director Current directorships/partnerships Former directorships/partnerships Tim Bridge ...... Didlington Fisheries Limited Witham Contract Manufacturing Limited Rooney Anand ..... Cobalt Data Centre 2 LLP Drive Assist Holdings Limited JB Drinks Holdings Limited Kirk Davis ...... JD Wetherspoon plc Mike Coupe ...... J Sainsbury plc JS Information Systems Limited Invicta Film Partnership LLP Sainsbury’s Supermarkets Limited Ian Durant ...... Capital & Counties Properties plc Ealing Swimming Club Limited Home Retail Group plc Avenue Advisory Limited Greggs plc INTU Properties plc Rob Rowley ...... Moneysupermarket.com Group plc INTU Properties plc Taylor Wimpey plc SW6 Developments Limited Morgan Advanced Materials plc Lynne Weedall ..... The Carphone Warehouse Limited

10 Employees 10.1 The average number of staff employed by the Greene King Group for the 52 weeks ended 29 April 2012, the 52 weeks ended 28 April 2013 and the 53 weeks ended 4 May 2014 is set out below:

Average number Financial period ended of employees 4 May 2014 ...... 22,577 28 April 2013 ...... 22,432 29 April 2012 ...... 22,084 10.2 As at 11 December 2014 (being the latest practicable date prior to the publication of this Prospectus), the Greene King Group had 22,269 employees. Temporary employees do not represent a significant proportion of the Greene King Group’s employees. 10.3 As at 4 May 2014, the employees of the Greene King Group were employed as follows:

Brewing & Brands ...... 829 Pub Partners ...... 55 Retail ...... 21,263 Corporate ...... 430 Total ...... 22,577

10.4 The average number of staff employed by the Spirit Group for the three years ended 18 August 2012, 17 August 2013 and 23 August 2014 is set out below:

Average number Financial year ended of employees 23 August 2014 ...... 16,397 17 August 2013 ...... 17,157 18 August 2012 ...... 17,316 10.5 As at 23 August 2014, the Spirit Group had 17,136 employees. Temporary employees do not represent a significant proportion of the Spirit Group’s employees. 10.6 As at 23 August 2014, the employees of the Spirit Group were employed as follows:

Management and administration ...... 422 Retail staff ...... 16,714 Total ...... 17,136

107 11 Greene King Share Schemes Greene King operates the following employee share plans: • Greene King Long-Term Incentive Plan; • Greene King Performance Share Plan 2013; • Greene King Executive Share Option Scheme 1994; • Greene King Save4Shares Scheme 2005; and • Greene King Deferred Share Scheme. The principal features of the plans are summarised below. In addition, Greene King has set up an employee benefit trust in Guernsey, the Greene King Employee Share Trust, which may be used to provide Shares to some or all employees in connection with some or all of the Plans.

11.1 Common features The following features are common to each of the Executive Plans.

Dilution limits Shares can be issued under any of the Executive Plans. In any 10 year period, not more than 10 per cent. of the issued ordinary share capital of Greene King may be issued or committed to be issued under employee share plans adopted by Greene King. In addition, in any 10 year period, not more than 5 per cent. of the issued ordinary share capital of Greene King may be issued or committed to be issued under executive share plans adopted by Greene King. These limits do not include awards, options or other rights which have lapsed or been surrendered. If shares are transferred from treasury to satisfy awards and/or options, these will also be counted towards the dilution limits for as long as required by the IMA guidelines.

Timing of operation Awards and options under the Executive Plans are normally granted within 42 days of the announcement of Greene King’s results for any period. Awards and options may also be granted at other times in exceptional circumstances.

Administration The Executive Plans are administered by the Board, the Remuneration Committee or a duly authorised committee under it. The references to ‘‘Committee’’ for the purpose of this paragraph 11 of Part XI (Directors, Responsible Persons, Corporate Governance and Employees) of this document shall mean the Board, the Remuneration Committee or a duly authorised committee appointed by it, as appropriate.

Amendments Shareholder approval is generally required to amend certain provisions of the Executive Plans to the advantage of participants. These provisions generally relate to (where relevant): eligibility; individual and dilution limits; option price; rights attaching to options or awards; adjustment of options or awards on a variation in the Company’s share capital; and the amendment power. Alterations to the Greene King Executive Share Option Scheme 1994 are generally subject to the prior approval of HMRC. The Remuneration Committee may make any other amendments to the Executive Plans it considers appropriate without seeking Shareholder approval, including: amendments to obtain or maintain HMRC approval; minor amendments to the benefit of the administration of the Executive Plans or which relate to any changes in legislation, or which will obtain or maintain favourable tax treatment, exchange control or regulatory treatment for any participant or Greene King Group company; and adopting further plans, based on the Executive Plans, to take account of tax, exchange control or securities laws which apply to non-UK employees.

108 Other provisions Options and awards granted under the Executive Plans are not pensionable and are granted for no consideration. Except as described below, participants do not have dividend or voting rights in respect of Shares under award or option until such Shares have been issued or transferred to them. Any Shares issued under the Executive Plans will rank equally with other Shares of the same class in issue on the date of allotment except in respect of rights by reference to a record date prior to the date of allotment. In the event of a variation in the share capital of Greene King, including a capitalisation or rights issue, consolidation, demerger, special dividend or other similar event, the Remuneration Committee may adjust awards or options under the Executive Plans as it considers appropriate. Where necessary, adjustments are subject to the prior approval of HMRC.

11.2 Greene King Long-Term Incentive Plan Outline Under the Long-Term Incentive Plan, awards were granted to eligible employees subject to the satisfaction of a performance condition. Awards could be granted as conditional awards of shares, options or forfeitable shares. No new awards have been made under the Long-Term Incentive Plan since December 2013 and none will be made in the future.

Eligibility Awards under the Long-Term Incentive Plan were granted to employees and full-time directors of the Company or any of its subsidiaries.

Grant and vesting of awards The value of awards granted to a participant in any one financial year could not exceed 175 per cent. of the participant’s basic salary at the time of award. Conditional awards typically include an entitlement to receive additional Shares in the form of a dividend equivalent, to the extent that Shares underlying the conditional award vest. Awards vest subject to the satisfaction of an adjusted free cash flow target and an Earnings Per Share performance condition measured at the end of a three-year performance period.

Leaving employment An award will normally lapse when a participant ceases to be employed by the Greene King Group. However, if employment ceases due to ill-health, injury, disability, redundancy, death, the sale of the employing company or business or for other reasons specifically allowed by the Remuneration Committee, the award will immediately vest to the extent that the performance condition has been satisfied. Except in the case of death, the award will generally be pro rated to take account of the early vesting, unless the Remuneration Committee decides otherwise.

Takeovers and restructurings Generally, on a takeover, scheme of arrangement or demergers or other significant distributions, awards will vest early to the extent that the performance condition has been satisfied as at the date of the event. Awards will vest in full on a winding-up of Greene King. Alternatively, participants may, with the agreement of the acquiring company, be allowed to exchange their awards for awards over shares in the acquiring company.

11.3 Greene King Performance Share Plan 2013 Outline Under the Performance Share Plan 2013, awards will take the form of an option to acquire Shares for nil consideration granted by the Greene King Employee Share Trust, an employee benefit trust established by the Company. Awards typically include an entitlement to receive additional Shares in the form of a

109 dividend equivalent, to the extent the Shares underlying the award vest. The exercise of an award will be made conditional upon the achievement of an objective performance target set at the time of grant (‘‘Performance Target’’) and measured over a performance period (determined by the Remuneration Committee at the time of grant but which shall not be less than three years) (‘‘Performance Period’’). Awards will become capable of exercise following a date (‘‘Vesting Date’’) specified at the time of grant which occurs after the expiry of the relevant Performance Period. The Vesting Date for an award may not normally occur before the third anniversary of the date of grant.

Eligibility An award, being an option to acquire shares for nil consideration under the Performance Share Plan 2013, may be granted to any employee of Greene King or any member of the Greene King Group (including an executive Director).

Grant and exercise of options Save in exceptional circumstances, in general, each individual’s participation is limited so that, in any one financial year of the Company, the aggregate market value of Shares subject to all awards (calculated as at the date of grant of each award) granted to the individual under the Performance Share Plan 2013 in that financial year, will not exceed 200 per cent. of the individual’s basic salary at the date of grant. The vesting of awards is subject to the achievement of the Performance Target, measured at the end of the Performance Period. Outstanding awards are subject to an earnings per share Performance Target or a return on capital employed Performance Target. Normally, once an award has vested, an award may only be exercised in the period commencing on the Vesting Date and ending on the tenth anniversary of the date of grant (or such shorter period as may be determined by the Remuneration Committee in its discretion at the date of grant of the award) to the extent that the Performance Target has been satisfied and provided that the participant is still an employee within the Greene King Group. Awards may be satisfied by the issue of new Shares, or the transfer of treasury or market purchase Shares. The remuneration committee will have the discretion to determine that the exercise of an award shall be settled in cash rather than Shares.

Clawback If: (a) a participant engages in conduct which would justify summary dismissal; (b) there has been a material misstatement in the financial results of the company; or (c) there has been a miscalculation or misapplication of the extent to which a Performance Target was achieved and the Remuneration Committee considers that there has been overpayment as a consequence of such event, it will have discretion to: (i) reduce the number of Shares which are subject to subsisting awards held by the participant; and/or (ii) reduce the number of Shares or cash amount which may be subject to any other subsisting awards held by such award holder (whether pursuant to the Performance Share Plan 2013 or any other incentive arrangement); and/or (iii) require a contractual repayment or other reimbursement in respect of an award that has already been exercised and in respect of which Shares have been transferred to the participant. The Remuneration Committee will have a period commencing on the Vesting Date of an award and ending on the later of: (i) twelve months from that date; and (ii) the publication of the next audited company accounts within which to exercise the right to adjust or clawback.

Leaving employment Unless a participant ceases to be employed by the Greene King Group due to death, ill health, injury, disability, redundancy, retirement or change of control of the relevant employing entity (a ‘‘Good Leaver’’), any award held by an eligible employee will generally lapse on the day that person ceases to be employed by the Greene King Group, unless the Remuneration Committee determines otherwise. If a participant ceases to be employed within the Greene King Group by reason of being a Good Leaver, or for any other reason at the discretion of the Remuneration Committee, his award will normally vest on the Vesting Date to the extent any applicable Performance Targets have been achieved, and the award will generally be pro rated to take account of the early vesting, unless the Remuneration Committee decides otherwise. Awards will be exercisable in the six month period following the Vesting Date.

110 Takeovers and restructurings The exercise of awards is possible earlier than the Vesting Date in the event of a takeover, a scheme of arrangement being sanctioned by the court or the voluntary winding up of the company. In the case of a takeover of the company or the transfer out of the Greene King Group of the undertaking employing the awardholder concerned, to the extent any Performance Targets have been satisfied (measured over a shorter period, where appropriate) the Remuneration Committee may allow awards to be exercised immediately before, but with effect from, the takeover or the transfer of the undertaking concerned. In the event of a takeover, scheme of arrangement or voluntary winding up of Greene King, awards will cease to be exercisable six months after the date of the date on which the takeover happens, the court sanctions the relevant scheme or the resolution is passed by the company to provide for the voluntary winding up. If not exercised within the relevant period, options will lapse immediately. The award will generally be pro rated to take account of the early vesting, unless the Remuneration Committee decides otherwise.

11.4 Greene King Executive Share Option Scheme 1994 Outline Under the Executive Share Option Scheme 1994, HMRC-approved and unapproved options were granted at market value. Options are subject to the satisfaction of a performance condition. The Executive Share Option Scheme 1994 expired in August 2005 and no further options can be granted under it. However, to the extent that historically performance conditions have been met and options have vested, options are exercisable until up to 3 August 2015.

Eligibility Options under the Executive Share Option Scheme 1994 were granted to any employees and director of Greene King or any of its subsidiaries. No awards have been granted under the Executive Share Option Scheme 1994 since January 2005.

Grant and exercise of options HMRC-approved options were granted up to a value of £30,000, per participant. No options (approved or unapproved) were granted to a participant where the value of underlying Shares exceeded the participant’s annual salary, unless the Remuneration Committee decided that exceptional circumstances applied (in which case the value could not exceed 250 per cent. of annual salary). No option have been granted since January 2005. The option price is equal to the market value of a Share (as defined in the plan rules) on the date of grant of an option. Options are normally exercisable between 3 and 10 years after grant, subject to the satisfaction of an EPS performance condition. All options under the Executive Share Options Scheme 1994 have now become exercisable.

Leaving employment Where a participant ceases to be employed by the Greene King Group, the option will generally lapse 6 months after cessation (or 12 months in the case of death), unless cessation is due to misconduct, impropriety or inefficiency, in which case the option will lapse on cessation.

Takeovers and restructurings In the event of a takeover, scheme of arrangement, demerger or other significant distribution or on a winding-up, the options will cease to be exercisable at the end of the change of control period (as defined in the rules) or such other time as determined by the Remuneration Committee and in relation to the relevant event. If not exercised within the relevant period, the option will lapse.

11.5 Greene King Save4Shares Scheme 2005 Outline The Save4Shares Scheme 2005 is an all-employee plan under which employees may be invited to apply for options to acquire Shares. The number of Shares over which the option is granted is determined by the

111 amount the employee commits to save under a savings contract, including a tax-free bonus added to the savings at the end of the savings contract. The Save4Shares Scheme 2005 is approved by HMRC.

Eligibility All employees of Greene King and any participating subsidiaries must be invited to participate in the Save4Shares Scheme 2005 if they are UK taxpayers and have been employed by the Greene King Group for a qualifying period (which cannot exceed five years).

Grant and exercise of options The option price must not be less than 80 per cent. of the market value of a Share, calculated as either the price on the Business Day before the date of invitation or the date specified in the invitation or the average price over the three previous Business Days. The savings contract may run over a period of three or five years and must not permit savings of more than (currently) £250 per month. Options are normally exercisable during the six months after the end of the savings contract.

Leaving employment and change of control Options will normally lapse when the participant ceases to be employed by the Greene King Group before vesting. However, if employment ends because of injury, disability, retirement, redundancy, death or the sale of the employing company or business, or in the event of a change in control of Greene King, options immediately become exercisable to the extent of the related savings. Options will remain exercisable for six months (or 12 months in the case of death) and then lapse.

11.6 Greene King Deferred Share Scheme Outline Under the Greene King Deferred Share Scheme, awards are granted to eligible employees based on the achievement of performance conditions set under the Company’s bonus plan, measured over the financial year prior to the award date. Awards are structured as nil-cost options.

Eligibility Awards under the Greene King Deferred Share Scheme may be granted to employees of the Greene King Group (excluding, for the avoidance of doubt, any executive Director).

Grant and exercise of options Unless the Directors of Greene King (or a duly authorised committee) decide otherwise, awards to eligible employees shall be made as soon as practicable following the announcement of the Company’s results. No amount shall be payable by the participant for the acquisition of the shares pursuant to the grant or exercise of an award. The vesting of awards is not subject to the achievement of further performance conditions (other than, typically, continuous service). Awards typically become exercisable on the second anniversary of the award date, and remain exercisable for 12 months. Awards may only be satisfied by the transfer of market purchase shares.

Leaving employment An unvested award will normally lapse when a participant ceases to be employed by the Greene King Group (although the Company can determine otherwise). However, if employment ceases due to ill-health, injury, disability, redundancy, death, transfer of the employing company business outside of the Greene King Group or change in control of the employing company, unvested awards will immediately vest, pro rated to take account of the early vesting, and be exercisable for one month following the participant’s leaving date (after which time the award will lapse). When a participant ceases to be employed by the Greene King Group and holds vested awards, such awards be exercisable for one month following the participant’s leaving date (after which time the award will lapse).

112 Takeovers and restructurings In the case of the Company coming under the control of another person or persons (a ‘‘change of control’’), the deferral period shall end immediately on that change of control and the shall become exercisable for such period as the Directors may determine. In the case of a demerger, dividend in specie, super dividend or any other restructuring transaction not constituting a change of control (a ‘‘restructuring event’’), the Directors of Greene King may determine that the deferral period shall end immediately and that the award shall become exercisable for such period as the Directors may determine. In the case of restructuring event or a change of control, an award will lapse and cease to be exercisable, to the extent not exercised, at the end of the relevant exercise period determined by the Directors.

12 Spirit Share Schemes The Offer will extend to any Spirit Shares which are unconditionally allotted or issued as a result of the exercise of existing options and vesting of awards under the Spirit Share Schemes, or allotted or issued under the Spirit SIP, at or before the Scheme Record Time (as defined in the Scheme). Options and awards under the Spirit Share Schemes will vest shortly after the Effective Date, with options being exercisable for a period of two months thereafter. The number of Spirit Shares in respect of which such options and awards will be permitted to vest will be decided by Spirit’s remuneration committee and communicated to holders before the Effective Date in accordance with the rules of the relevant Spirit Share Scheme. In relation to the Long Term Incentive Plan 2011, the level of permitted vesting will take into account the extent to which the relevant performance conditions have been achieved during the relevant period and the level so determined will be subject to time pro-rating as set out in the plan rules. In respect of each Spirit Share to which such vested option or award relates, the holder will be entitled to receive 0.1322 Greene King Shares (in the case of an option, assuming that such option is exercised within the period of two months after the Effective Date) either by exchanging awards or options for an equivalent right to acquire shares in Greene King, or (if Spirit Shareholders approve the relevant amendments to the articles of association of Spirit to be proposed at the Spirit General Meeting) following exchange under Spirit’s articles of association. Greene King has also agreed to make dividend payments to the holders of any options or awards vesting or exercised after the Effective Date sufficient to ensure that, in respect of each Spirit Share to which such option or award relates, the holder receives an amount which, on an after-tax basis, leaves that holder in the same position as that in which it would have been if it had received the special interim dividend of 6.5 pence per Spirit Share referred to at paragraph 2 of Part I (Information on the Offer) of this document. Further details will be set out in the letters to be sent in due course by Greene King to the holders of options and awards. Spirit currently operates three employee share schemes under which awards are outstanding, as summarised below. No new awards will be made under the Spirit Share Schemes or Spirit SIP once the Scheme becomes fully effective.

12.1 HMRC Approved Spirit SIP All employees of the Spirit Group, including the executive directors, are offered the opportunity to share in the Spirit Group’s success by owning shares in Spirit via HMRC Approved Spirit SIP. The scheme was introduced in November 2011 with shares being acquired at market values on a monthly basis. As at 23 August 2014, 1,643,758 shares had been issued by Spirit to the trust at par value (17 August 2013: 1,256,380 shares). The par value of the shares issued that has been deducted from reserves is negligible. The market value of these shares at 23 August 2014 was £1.2m.

12.2 Spirit Share Bonus Plan 2011 At the discretion of the Spirit Board, certain senior management, who are eligible for an annual bonus, have been granted rights under the Spirit Share Bonus Plan 2011. As at 8 December 2014, eligible employees held rights over ordinary shares that may (disregarding the impact of the Scheme) result in the transfer of 66,036 shares (currently held in trust) on 31 October 2015.

113 12.3 Long Term Incentive Plan 2011 Eligible Spirit senior management have been entitled to participate in the Long Term Incentive Plan, receiving grants of nil-cost options which vest subject to their continued employment for three years from the date of award, and to the extent that the performance conditions set by the Spirit remuneration committee are satisfied. As at 8 December 2014, eligible employees held rights over ordinary shares that may (disregarding the impact of the Scheme) result in the issue of 644,140 shares on 8 May 2015, 5,171,580 shares on 9 November 2015 and 3,828,789 shares on 8 November 2016.

114 PART XII ADDITIONAL INFORMATION 1 The Company 1.1 Greene King was incorporated and registered in England and Wales on 1 June 1887 with registered number 00024511 as a company limited by shares with the name Greene King and Sons Limited. On 19 February 1982, the Company changed its name to Greene King and Sons Public Limited Company and to Greene King plc on 11 September 1990. 1.2 The principal legislation under which the Company operates, and pursuant to which the Greene King Shares have been, and the New Greene King Shares will be created, is the Companies Act and regulations made thereunder. 1.3 The Company is domiciled in England and Wales and its registered and head office is Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT (telephone number: +44 1284 763222). 1.4 The Auditors of Greene King are, and have been throughout the period covered by the financial information in this document, Ernst & Young LLP. Ernst & Young LLP is registered to carry out audit work by the Institute of Chartered Accountants in England and Wales.

2 Share Capital 2.1 Share capital summary (a) On 1 May 2011, being the beginning of the period covered by the financial information in this Prospectus, the issued share capital of Greene King was made up as follows:

Issued Class of Shares Number Amount Fully Paid Greene King Shares ...... 217.0m £27.1m Fully paid (b) During the 52 weeks ended 29 April 2012, Greene King issued 500,000 Shares for a total amount of £100,000, after which the issued share capital of Greene King was made up as follows:

Issued Class of Shares Number Amount Fully Paid Greene King Shares ...... 217.5m £27.2m Fully paid (c) During the 52 weeks ended 28 April 2013, Greene King issued 800,000 Shares for a total amount of £100,000, after which the issued share capital of Greene King was made up as follows:

Issued Class of Shares Number Amount Fully Paid Greene King Shares ...... 218.3m £27.3m Fully paid (d) As at 4 May 2014, being the latest date to which audited accounts for Greene King have been prepared, issued share capital of Greene King, was made up as follows:

Issued Class of Shares Number Amount Fully Paid Greene King Shares ...... 219m £27.4m Fully paid (e) The issued share capital of Greene King as at the date of publication of this Prospectus is made up as follows:

Issued Class of Shares Number Amount Fully Paid Greene King Shares ...... 219,024,123 £27.4m Fully paid Note: Excludes 132,980 ordinary shares held in treasury.

115 (f) The issued share capital of Greene King as it is expected to be after the issue of the New Greene King Shares and immediately following Admission will be made up as follows:

Issued Class of Shares Number Amount Fully Paid Greene King Shares ...... 308,043,691 £38.5m Fully paid (g) Details of the total number of options (all granted for nil consideration) under the Greene King Share Schemes outstanding as at 30 November 2014 (being the latest practicable month-end prior to the publication of this Prospectus) are as follows:

Number of Greene King Shares under Exercise Period or Date of Grant Type of Scheme option Exercise Price Vesting Date Recipients 4 August 2005 .... ESOS 190,674 528p 4 August 2008 - Employees 4 August 2015 1 February 2010 . . . Sharesave 94,081 349p 1 April 2015 - Employees (5 year scheme) 1 October 2015 4 February 2011 . . . Sharesave 75,591 368p 1 April 2016 - Employees (5 year scheme) 1 October 2016 3 February 2012 . . . Sharesave 395,540 387p 1 April 2015 - Employees (3 year scheme) 1 October 2015 3 February 2012 . . . Sharesave 91,445 387p 1 April 2017 - Employees (5 year scheme) 1 October 2017 6 August 2012 .... LTIP 744,322 Nil cost 6 August 2015 Employees 6 February 2013 . . . Sharesave 281,667 505p 1 April 2016 - Employees (3 year scheme) 1 October 2016 6 February 2013 . . . Sharesave 86,179 505p 1 April 2018 - Employees (5 year scheme) 1 October 2018 4 October 2013 . . . PSP 790,762 Nil cost option 4 October 2016 - Employees 3 October 2023 28 January 2014 . . . Sharesave 313,253 701p 1 April 2017 - Employees (3 year scheme) 1 October 2017 28 January 2014 . . . Sharesave 95,936 701p 1 April 2019 - Employees (5 year scheme) 1 October 2019 22 July 2014 ...... DSS 110,140 Nil cost option 22 July 2016 - Employees 22 July 2024 24 July 2014 ...... PSP 675,143 Nil cost option 24 July 2017 - Employees 23 July 2024 (h) The Greene King Shares are in registered form and capable of being held in uncertificated form. The International Securities Identification Number (ISIN) for the Greene King Shares is GB00B0HZP136 and the SEDOL number for the Greene King Shares is B0HZP13. No temporary documents of title will be issued. It is expected that definitive share certificates will be posted to those Shareholders who have requested the issue of Greene King Shares in certificated form within 14 days of the Effective Date. (i) The Company does not have in issue any securities not representing share capital and there are no outstanding debentures, convertible securities, exchangeable securities or securities with warrants issued or proposed to be issued by the Company. (j) As at 16 December 2014 (being the latest practicable date prior to the publication of this Prospectus), the Company held 132,980 shares in treasury.

116 2.2 Existing Shareholder authorities (a) Pursuant to the Act, with effect from 1 October 2009, the concept of authorised share capital was abolished and accordingly there is no limit on the maximum amount of shares that may be allotted by the Company. (b) Pursuant to a resolution of the Company dated 10 September 2014, the Directors are generally and unconditionally authorised, in substitution for all subsisting authorities, pursuant to section 551 of the Act, to allot shares in the Company and to grant rights to subscribe for or to convert any security into shares in the Company: (i) up to an aggregate nominal amount of £9,123,615 which is approximately one-third of the current issued ordinary share capital (excluding any shares held in treasury) as at 21 July 2014 (being the last practicable date prior to the passing of the resolutions). (ii) in connection with a rights issue in favour of ordinary shareholders up to a maximum nominal value of £18,247,230, as reduced by the nominal amount of any shares issued under paragraph (i) above. This amount (before any reduction) represents approximately two-thirds of the company’s current issued ordinary share capital (excluding any shares held in treasury) as at 21 July 2014 (being the latest practicable date prior to the passing of the resolutions). These authorities will expire at the end of the company’s next AGM or on 10 February 2016, whichever is the earlier. The Board will continue to seek to renew these authorities at each AGM in accordance with current best practice from time to time. The Directors have no present intention to exercise these authorities except in connection with Greene King’s employee share Plans. (c) Pursuant to a special resolution of the Company dated 10 September 2014, the Directors are generally and unconditionally empowered pursuant to section 570 of the Act to allot equity securities (as defined in section 560(2) of the Act) pursuant to the authority conferred by the resolution in paragraph (b) above as if section 561(1) of the Act did not apply to any such allotment, provided that this power is limited to: (i) a rights issue or an open offer or other offer of securities (not being a rights issue) or otherwise than in connection with a pre-emptive basis, up to an aggregate nominal amount of £1,368,542, being approximately 5 per cent. of the total ordinary share capital of Greene King in issue as at 21 July 2014 (being the latest practicable date prior to the passing of the resolution). This authority will expire at the end of the company’s next AGM or on 10 February 2016, whichever is the earlier. The Board intends to adhere to the provisions in the Pre-emption Group’s Statement of Principles not to allot shares for cash on a non pre-emptive basis (other than pursuant to a rights issue or pre-emptive offer) in excess of an amount equal to 7.5 per cent. of the total issued ordinary share capital of Greene King within a rolling three-year period without prior consultation with Shareholders. (d) Pursuant to a special resolution of the Company dated 10 September 2014 and in accordance with the Greene King Articles and section 701 of the Act, Greene King is unconditionally and generally authorised for the purposes of section 693 of the Act to make market purchases (as defined in section 693(4) of the Act) of Greene King Shares, provided that: (i) the maximum aggregate number of shares authorised to be purchased is 21,896,676 ordinary shares as permitted by Article 8 of the articles of association until the end of the next AGM or 10 February 2016, whichever is the earlier. This represents 10 per cent. of the ordinary shares in issue as at 21 July 2014 (excluding shares held in treasury) and the Company’s exercise of this authority is subject to the stated upper and lower limits on the price payable which reflect the requirements of the Listing Rules.

117 2.3 Shareholder authorities to be proposed at the Greene King General Meeting The following resolutions are set out in the Circular sent to Greene King Shareholders on or around the date of this Prospectus and it is proposed that these resolutions will be voted on at the Greene King General Meeting in connection with the Offer. The Offer is conditional on the passing of these resolutions: 1. the proposed offer by the Company to acquire the entire issued and to be issued ordinary share capital of Spirit Pub Company plc (‘‘Spirit’’) (the ‘‘Offer’’), to be effected pursuant to a scheme of arrangement of Spirit (the ‘‘Scheme’’) under Part 26 of the Companies Act 2006 (the ‘‘Act’’) or a takeover offer (the ‘‘Takeover Offer’’) made by or on behalf of the Company for the entire issued and to be issued share capital of Spirit, substantially on the terms and subject to the conditions set out in the circular to shareholders of the Company dated 18 December 2014 (the ‘‘Circular’’) outlining the Offer and the prospectus prepared by the Company in connection with Admission (as defined below) dated 18 December 2014 (a copy of each of which is produced to the meeting and signed for identification purposes by the chairman of the meeting) be and is hereby approved and the directors of the Company (the ‘‘Directors’’) (or any duly authorised committee thereof) be and are hereby authorised to: (i) take all such steps as may be necessary or desirable in connection with, and to implement, the Offer; and (ii) agree such modifications, variations, revisions, waivers or amendments to the terms and conditions of the Offer (provided that any such modifications, variations, revisions, waivers or amendments are not a material change to the terms of the Offer for the purposes of Listing Rule 10.5.2) and to any documents and arrangements relating thereto, as they may in their absolute discretion think fit; and 2. subject to and conditional upon the Scheme becoming effective (save for any conditions relating to: (i) the delivery of the order(s) of the High Court of Justice in England and Wales (the ‘‘Court’’) sanctioning the Scheme and confirming the reduction of capital of Spirit to the Registrar of Companies in England and Wales; (ii) registration of such order(s) by the Registrar of Companies in England and Wales; and (iii) (a) the UK Listing Authority having acknowledged to the Company or its agent (and such acknowledgment not having been withdrawn) that the application for the admission of the new ordinary shares of 12.5 pence each in the capital of the Company to be issued pursuant to the Offer (the ‘‘New Greene King Shares’’) to the Official List of the UK Listing Authority with a premium listing has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject (the ‘‘listing conditions’’)) will become effective as soon as a dealing notice has been issued by the Financial Conduct Authority and any listing conditions have been satisfied; and (b) the London Stock Exchange plc having acknowledged to the Company or its agent (and such acknowledgment not having been withdrawn) that the New Greene King Shares will be admitted to trading on the main market of the London Stock Exchange plc (‘‘Admission’’)), or, as the case may be, the Takeover Offer becoming or being declared wholly unconditional (save for Admission), the Directors be and are hereby generally and unconditionally authorised pursuant to section 551 of the Act (in addition, to the extent unutilised, to the authority granted to the Directors at the Company’s annual general meeting held on 10 September 2014, which remains in full force and effect) to exercise all the powers of the Company to allot New Greene King Shares and to grant rights to subscribe for or to convert any security into shares in the Company, credited as fully paid, with authority to deal with fractional entitlements arising out of such allotment as they think fit and to take all such other steps as they may in their absolute discretion deem necessary, expedient or appropriate to implement such allotment, in connection with the Offer up to an aggregate nominal amount of £11,250,000 and which authority shall expire on 31 December 2015 (unless previously revoked, renewed or varied by the Company in general meeting), save that the Company may before such expiry make an offer or enter into an agreement which would or might require shares to be allotted, or rights to subscribe for or to convert securities into shares to be granted, after such expiry and the Directors may allot shares or grant such rights in pursuance of such an offer or agreement as if the authority conferred hereby had not expired.

3 Summary of the Greene King Articles The Greene King Articles, which were adopted pursuant to a special resolution of Greene King passed on 2 September 1999 and amended by special resolution on 3 September 2004, on 4 September 2007, on 2 September 2008 with effect from 1 October 2008, on 12 May 2009, on 8 September 2009 with effect from

118 1 October 2009, and on 7 September 2010, contain, amongst other things, provisions to the following effect:

(a) Objects Section 31 of the Act provides that the objects of a company are unrestricted unless any restrictions are set out in its articles. There are no such restrictions in the Greene King Articles and the objects of Greene King are therefore unrestricted.

(b) Rights attaching to Greene King Shares (i) Voting rights Subject to the Articles and to any special rights or restrictions attached to voting of any class of shares, on a show of hands, every member who is entitled to vote, being an individual is present in person or by proxy or, being a corporation is present by a duly authorised representative, shall have one vote. On a poll every member who is present in person, by proxy or corporate representative shall have one vote for every share of which he is the holder. In the case of joint holders of a share, the vote of the senior (determined by the order in which the names stand in the Register) who tenders a vote either in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. No member shall be entitled to vote either personally or by proxy at a shareholders’ meeting if any call or other sum presently payable by him to Greene king in respect of that share remains unpaid.

(ii) Joint holders In the case of a share held jointly by several persons in certified form, Greene King shall not be bound to issue more than one certificate therefor and delivery of a certificate to one of the joint holders shall be sufficient delivery to all.

(iii) Dividends Unless the rights attached to shares provide otherwise, all dividends shall be apportioned and paid pro rata according to the amounts paid on the shares during the period in respect of which the dividend is paid. Any dividend unclaimed after a period of 12 years from the date it became payable will be forfeited and revert to Greene King. The Directors may (when authorised by ordinary resolution) offer ordinary shareholders the right to receive in lieu of dividend (or part thereof) an allotment of new ordinary shares credited as fully paid.

(c) Variation of class rights Whenever the share capital of Greene King is divided into different classes of shares, the special rights attached to any class may, subject to the provisions of the Statutes, be varied or abrogated either with the consent in writing of the holders of three quarters in nominal value of the issued shares of the class or, whilst Greene King is a going concern or during contemplation of a winding-up, with the sanction of a special resolution passed at a separate meeting of the holders of the class. To every such separate meeting all the provisions of the Articles relating to the general meetings of Greene King and to the proceedings thereat shall mutatis mutandis apply, but so that the necessary quorum at such separate meeting shall be at least two persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class and at an adjourned meeting one person holding shares or his proxy. Any holder of shares of the class present in person or by proxy may demand a poll, upon which every holder of shares of that class shall be entitled to one vote for every share. These provisions will apply to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class the special rights whereof are to be varied.

119 The special rights attached to any class of shares having preferential rights shall not unless otherwise expressly provided by the terms of issue thereof be deemed to be varied by the creation or issue of further shares ranking pari passu therewith or the purchase by the Company of its own shares.

(d) Issue of shares Greene King may issue shares of any class with preferred, deferred or other special rights or subject to such restrictions, whether as regards dividend, return of capital, voting or otherwise, as determined by ordinary resolution.

(e) Alteration of share capital (i) Subject to the provisions of the Statutes, Greene King may issue any shares which are, or at the option of Greene King or the holder are liable, to be redeemed on such terms and in such manner as Greene King before the issue thereof may by ordinary resolution determine. (ii) Subject to the provisions of the Statutes, Greene King may purchase its own shares (including redeemable shares).

(f) Transfer of shares All transfers of shares which are in certificated form may be effected by transfer in writing in any usual or common form or in any other form acceptable to the Directors and may be under hand only. The instrument of transfer of a certificated share shall be signed by or on behalf of the transferor and (except in the case of fully-paid shares) by or on behalf of the transferee. The transferor shall remain the holder of the shares until the name of the transferee is entered in the Register in respect thereof. The Directors may (for certificated shares) in their absolute discretion refuse to register any transfer of shares which is not fully paid provided that, where any such shares are admitted to the Official List of the London Stock Exchange, such discretion may not be exercised in any way as to prevent dealings in the shares of that class from taking place on an open and proper basis. The Directors may likewise refuse to recognise any instrument of transfer of shares in certificated form unless it is in respect of only one class of share, it is lodged at the registered office (or other place where the register is situated) accompanied by the relevant share certificate and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The Directors may also refuse to register an allotment or transfer of shares (whether fully-paid or not) in favour of more than four persons jointly. The registration of transfers may be suspended for any period by the Directors (not exceeding 30 days in any year) except that, in respect of any shares which are participating securities the consent of the operator of the relevant system for those shares will be required.

(g) Subject to the Statutes and the rules (as defined in the CREST Regulations) any class of shares may be held in uncertificated form and title to shares may be transferred by means of a relevant system.

(h) General meetings Greene King shall hold an annual general meeting in each period of six months beginning with the day following Greene King’s accounting reference date, at such place, date and times as may be determined by the Directors. The Directors may, whenever they think fit, and shall on the requisition in accordance with Statute, proceeds to convene a general meeting.

(i) Board authorisation of conflicts Subject to compliance with provisions in the Articles, the Board may authorise any matter which would involve a Director breaching his duty to avoid conflicts of interests. The Director seeking authorisation will declare the nature and extent of his interest as soon as is reasonably practicable, and provide details of the relevant matter.

120 The matter in question must be proposed in writing for consideration at a Board meeting and any requirement as to the quorum at the Board meeting must be met without counting the Director in question and any other interested Director. Subject to certain limited exceptions set out in the Articles, the relevant Director’s vote will not count towards any resolution giving authority. The Board may make any such authorisation subject to any limits or conditions as the Directors may determine and be terminated by the Directors at any time. The relevant Director will be obliged to conduct himself in accordance with any terms imposed by the Board in relation to the conflict. A Director will not be accountable to Greene King for any benefit which he (or a person connected with him) derives from any authorised conflict and any such contract, transaction or arrangement shall not be avoided on the grounds of any such benefit. Where the Board gives authority, the Board may provide that where the relevant Director obtains (otherwise than through his position) information that is confidential to a third party, the Director will not be obliged to disclose that information to Greene King, or to use or apply the information to Greene King’s affairs, where to do so would amount to a breach of confidence. Provided the Director has disclosed the nature and extent of any interest as required by the Companies Act and the Articles, he may have an interest of the following kinds: (i) where the Director (or any person connected with him) may be a party to or otherwise directly or indirectly interested in any transaction or arrangement with a relevant company, or in which Greene King is otherwise interested; (ii) where the Director (or any person connected with him) may be or become a member or director or other officer of, or employed by any relevant company; (iii) where the Director (or any person connected with him) may act (or any firm of which he is a partner, employee or member acts) in a professional capacity for any relevant company (other than as auditor) whether or not he or it is remunerated therefor; (iv) where the Director may be or become a director or another company in which Greene King does not have an interest if that cannot reasonably be regarded as likely to give rise to a conflict of interest at the time of his appointment as director of that company; (v) an interest which cannot reasonable be regarded as likely to give rise to a conflict of interest; (vi) an interest, or a transaction or arrangement giving rise to an interest, of which the Director is not aware; or (vii) any other interest authorised by ordinary resolution.

(j) Directors Number of Directors Unless and until otherwise determined by ordinary resolution, the Directors will be not less than five and not more than twelve in number.

Directors’ shareholding qualification A Director is not required to hold any shares in Greene King. A Director who is not a member of Greene King shall nevertheless be entitled to attend and speak at general meetings.

Directors’ fees The ordinary remuneration of the Directors shall be determined by the Board from time to time. The aggregate amount of fees payable by Greene King to the Directors in any financial year will not exceed £400,0005, unless determined otherwise by ordinary resolution. The Board may decide to pay extra remuneration to a Director who serves on a committee of the Directors, or who otherwise performs services which the Board decides are outside the scope of

5 Note that a resolution was passed on 8 September 2009 to increase the maximum ordinary remuneration determined by the directors in accordance with article 77 of the articles of association to £400,000.

121 his ordinary duties. Such extra remuneration may be by way of salary, commission or such other benefits as the Directors determine. A Director may also be paid all such reasonable expenses as he incurs in connection with the discharge of his duties (including attending or returning from meetings of the Board, committees of the Board or general meetings).

Appointment of executive Directors Subject to the Articles, the Board may appoint one or more of their body to be the holder of any executive office (including the office of Chairman or Deputy Chairman) on such terms and for such period as they may (subject to the provisions of the Statutes) determine. Subject to the Articles and without prejudice to the terms of any contract entered into in any particular case, the Board may at any time revoke or vary the terms of any such appointment.

Removal of a Director Greene King may remove any Director before the expiration of his period of office, despite the provisions in any agreement between Greene King and the Director, by ordinary resolution where special notice is given in accordance with section 312 of the Companies Act. Greene King may elect another person in place of the Director or, in default of such election, fill the vacancy as a casual vacancy.

(k) Pensions and benefits The Directors shall have the power to pay and agree to pay a Director’s remuneration, which may include the payment of gratuities, allowances, pensions or other retirement, superannuation, death, sickness or disability benefits to (or to any person in respect of) that Director.

(l) Indemnification of Directors To the extent permitted by the Companies Act and the UK Listing Authority, each Director, former Director and officer of Greene King and each of the Greene King Group companies shall be indemnified by Greene King out of its own funds against each loss, cost and liability incurred by him in relation to or in connection with his duties, powers or office and may maintain insurance against any liability incurred by a Director of Greene King or a company within the Greene King Group.

(m) Borrowing powers The Directors may exercise all powers of Greene King to borrow money, to mortgage or charge all or any part or parts of its undertakings, property and uncalled capital and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligations of Greene King or any third party. The aggregate amount of the net borrowings of Greene King or its subsidiaries will not, without the previous sanction of an ordinary resolution, exceed an amount equal to four times the adjusted capital and reserves.

4 Disclosure of shareholding ownership The Disclosure and Transparency Rules require a member to notify the Company if the voting rights held by such member (including by way of certain financial instruments) reach, exceed or fall below three per cent. and each one per cent. threshold thereafter up to 100 per cent. Under the Disclosure and Transparency Rules, certain voting rights in the Company may be disregarded.

5 Major Shareholders 5.1 In addition to the interests of the Directors set out in Part XI (Directors, Responsible Persons, Corporate Governance and Employees) of this document, as at 16 December 2014 (being the latest practicable date prior to the publication of this Prospectus), insofar as it is known to Greene King, the following persons are, or will be at Admission, interested directly or indirectly in 3 per cent. or more of the voting rights in respect of the issued ordinary share capital of Greene King based on the

122 assumption that the holdings of such persons in Greene King as at 16 December 2014 do not change, 89,018,568 New Greene King Shares are issued in connection with the Offer and that no other issues of Greene King Shares occur between the date of this document and Admission: As at 16 December 2014 (latest practicable date prior to publication of this Immediately following document) Admission Number of Percentage of Number of Percentage of Greene King issued Greene Greene King issued Greene Name Shares King Shares Shares King Shares Standard Life Investments (Holdings) Limited(1) . 26,659,717 12.2% 27,590,681 8.96 The Capital Group Companies, Inc...... 22,754,367 10.4% 22,754,367 7.39 Lindsell Train Limited ...... 11,024,256 5.0% 11,024,256 3.58 Mondrian Investment Partners Limited ...... 10,545,743 4.8% 10,545,743 3.42 Dimensional Fund Advisors Ltd ...... 9,199,989 4.2% 12,164,511 3.95 BlackRock, Inc ...... 8,025,300 3.7% 10,229,802 3.32 Legal And General Investment Management Ltd . 7,864,804 3.6% 11,635,174 3.78 Henderson Global Investors ...... 7,575,362 3.5% 10,800,430 3.51

(1) Comprised of Standard Life Investments Limited and Ignis Investment Services Limited. 5.2 Save as disclosed above, the Directors are not aware of any person who is interested directly or indirectly in 3 per cent. or more of the existing issued share capital of Greene King. 5.3 As at 16 December 2014 (being the latest practicable date prior to the publication of this Prospectus), Greene King was not aware of any person or persons who, directly or indirectly, jointly or severally, exercise or could exercise control over Greene King, nor is it aware of any arrangements the operation of which may result in a change in control of Greene King. 5.4 The Company’s share capital consists of one class of ordinary shares with equal voting rights (subject to the Articles). None of Greene King’s major shareholders has or will have different voting rights attached to the shares they hold in Greene King.

6 Related party transactions 6.1 As at 16 December 2014, Standard Life Investments (Holdings) Limited (parent company) held 26,659,717 Greene King Shares, representing approximately 12.2 per cent. of the issued ordinary share capital of Greene King and 7,042,090 Spirit Shares. As a result, the acquisition of Standard Life’s Spirit Shares is classified as a related party transaction under the Listing Rules. Due to the size of Standard Life’s holding, the acquisition by Greene King of Standard Life’s Spirit Shares is a ‘‘smaller related party transaction’’ under Listing Rule 11.1.10, the impact of which was that Greene King was required under the Listing Rules to make an announcement of the smaller related party transaction and to obtain a sponsor’s written confirmation that the arrangements are fair and reasonable as far as Greene King’s shareholders are concerned. The announcement was made on 11 December 2014. Under the Listing Rules, a separate vote of Greene King’s independent shareholders will not be required in connection with the smaller related party transaction. 6.2 Other than as described in paragraph 6.1, the Company has not entered into any related party transaction during the period covered by the historical financial information contained or referred to in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) up to the date of this document.

7 Material Contracts 7.1 In addition to the Co-operation Agreement and the Confidentiality and Standstill Agreement (which are summarised in Part I (Information on the Offer) of this document and the securitisation arrangements which are summarised in Part II (Information on Greene King), the following contracts (not being contracts entered into in the ordinary course of business) have been entered into by members of the Greene King Group (i) within the two years immediately preceding the date of this document which are or may be, material or (ii) which contain any provision under which any member

123 of the Greene King Group has any obligation or entitlement which is material to the Greene King Group as at the date of this document: 7.2 On 1 May 2014 Greene King announced that it had entered an agreement to dispose of 275 non-core tenanted and leased pubs to Hawthorn Leisure Limited, backed by Avenue Capital Group and May Capital LLP, for a total consideration of £75.6 million. Greene King and Hawthorn Leisure also agreed a three-year beer supply deal for the pubs being disposed, securing continued and valuable nationwide distribution for Greene King’s industry leading ale brand portfolio. The disposal was consistent with Greene King’s stated strategic direction and increases Greene King’s exposure to the faster growing retail sector, further improves the quality and outlook of Pub Partners’ earnings and further strengthens the balance sheet providing an opportunity to selectively accelerate retail investment and expansion. The sale completed on 2 June 2014. 7.3 On 13 June 2013, the Company entered into an amendment and restatement agreement (the ‘‘Amendment and Restatement Agreement’’) amending and restating the facility agreement dated 1 April 2011 (the ‘‘Facility Agreement’’). The Amendment and Restatement Agreement is between Greene King as borrower and original guarantor, Greene King Brewing and Retailing Limited, Greene King Investments Limited and Greene King Pubs Limited (formerly Greene King Operations Limited) as original guarantors, HSBC Bank plc, Lloyds TSB Bank plc, Santander UK plc, Co-operatieve Centrale Raiffeisen- Boerenleenbank B.A. (trading as Rabobank International) London branch, Svenska Handelsbanken AB (PUBL) Cambridge branch, The Royal Bank of Scotland plc, Bank of Taiwan London branch and Scotiabank Europe plc as lenders, AIB Group (UK) plc as acceding lender and Lloyds TSB Bank plc acting as agent. The Facility Agreement (as amended by the Amendment and Restatement Agreement) provides a facility of £460,000,000 for a term of 5 years from 28 June 2013. The Facility Agreement (as amended by the Amendment and Restatement Agreement) is a revolving loan facility to be drawn in sterling and is made available by the lenders for utilisation by the borrower from 1 April 2011 up to and including one month before the termination date, being five years from 28 June 2013. The proceeds of loans made under the Facility Agreement (as amended by the Amendment and Restatement Agreement) may be used towards: (a) refinancing existing indebtedness (including refinancing of certain facilities which have as at the date hereof been repaid and cancelled); and (b) the general corporate and working capital purposes of Greene King and the wider Greene King Group (other than any securitisation vehicle), including, but not limited to, the buy-back of own shares and the financing of certain approved acquisitions. Utilisations under the Facility Agreement (as amended by the Amendment and Restatement Agreement) bear interest at the percentage rate per annum which is the aggregate of: (a) the margin (which varies subject to a grid based on financial covenant levels); (b) LIBOR; and (c) mandatory costs, if any, to cover certain regulatory costs. Under the Facility Agreement (as amended by the Amendment and Restatement Agreement), Greene King undertakes to ensure compliance with certain financial covenants in relation to (a) the ratio of consolidated EBITDA to consolidated net interest payable; (b) the ratio of consolidated net debt to consolidated EBITDA, and; (c) the level of consolidated net debt to consolidated tangible fixed assets. The Facility Agreement (as amended by the Amendment and Restatement Agreement) contains customary representations and warranties, affirmative and negative covenants (including covenants on disposals, acquisitions, security and borrowings), indemnities and events of default, each with appropriate carve-outs and materiality thresholds. Greene King has also obtained the consent of Lloyds Bank plc (as Agent under the Facility Agreement) to bring Spirit’s securitisation vehicle within the definition of ‘‘Permitted Securitisation’’ for the purposes of the Facility Agreement, on completion of the Acquisition. 7.4 Save as disclosed in paragraphs 7.1 - 7.3, there are no contracts (other than contracts entered into in the ordinary course of business) which have been entered into by members of the Greene King Group (i) within the two years immediately preceding the date of this document which are or may be, material or (ii) which contain any provision under which any member of the Greene King Group has any obligation or entitlement which is material to the Greene King Group as at the date of this document.

124 8 Significant subsidiaries Greene King is the principal operating and holding company of the Greene King Group. The principal subsidiaries and subsidiary undertakings of Greene King are as follows:

Percentage ownership Registered interest and Country of Name number voting power Field of activity incorporation Registered Office Greene King Brewing and 03298903 100 Brewing and England Westgate Retailing Limited retailing Brewery, Bury St. Edmunds, Suffolk IP33 1QT Greene King Retailing Parent 05265454 100 Holding England Westgate Limited company Brewery, Bury St. Edmunds, Suffolk IP33 1QT Greene King Pubs Limited 07427021 100 Property England Westgate Brewery, Bury St. Edmunds, Suffolk IP33 1QT Greene King Investments 07426985 100 Holding England Westgate Limited company Brewery, Bury St. Edmunds, Suffolk IP33 1QT Greene King Retailing Limited 05265451 100 Pub retailing England Westgate Brewery, Bury St. Edmunds, Suffolk IP33 1QT Greene King Services Limited 03324493 100 Employment England Westgate Brewery, Bury St. Edmunds, Suffolk IP33 1QT Greene King Retail Services 03324496 100 Employment England Westgate Limited Brewery, Bury St. Edmunds, Suffolk IP33 1QT Greene King Properties 07543698 100 Property England Westgate Limited Brewery, Bury St. Edmunds, Suffolk IP33 1QT Premium Dining Restaurant SC181811 100 Restaurant Scotland Belhaven and Pubs Ltd Retailing Brewery, Brewery Lane, Dunbar, East Lothian, EH4Z 1PE Greene King Developments 07425525 100 Property England Westgate Limited Brewery, Bury St Edmunds, Suffolk IP33 1QT

125 9 Working capital 9.1 In the opinion of Greene King, taking into account the facilities available to the Greene King Group, the working capital available to the Greene King Group is sufficient for its present requirements, that is for at least the next 12 months following the publication of this document. 9.2 In the opinion of Greene King, taking into account the facilities available to the Combined Group, the working capital available to the Combined Group is sufficient for its present requirements, that is for at least the next 12 months following the publication of this document.

10 Litigation Litigation affecting the Greene King Group 10.1 Save as disclosed in the following paragraphs, there are no governmental, legal or arbitration proceedings nor, so far as Greene King is aware, are any such proceedings pending or threatened which may have, or have had during the 12 months immediately preceding the date of this document, a significant effect on the Greene King Group’s financial position or profitability. 10.2 Greene King is currently in dispute with HM Revenue & Customs over the tax treatment of an inter- company funding transaction implemented in 2003/2004. The case was heard before the First Tier Tribunal in 2011 and the Upper Tribunal in 2013 and 2014, both decisions being in favour of HM Revenue & Customs. Greene King has been given permission to appeal the latest decision and the case will be heard by the Court of Appeal by 27 April 2015. If Greene King were to ultimately fail with its appeal then it would be required to repay corporation tax of £8.4m and interest of £4.3m. In view of the uncertainty as to the eventual outcome of this case full provision has been made for these amounts in the profit and loss account. 10.3 In addition, although neither Greene King nor Spirit are a party to the litigation, the Combined Group is awaiting the outcome of the Rank Group plc’s appeal before the Supreme Court on 20 April 2015 to determine whether or not a repayment (of approximately £7 million) or payment (of approximately £18 million) of VAT is due in respect of amusement machine income. By way of background, in November 2011 the European Court of Justice found that the application of VAT to amusement machines contravened EU law. However, HMRC appealed issuing protective assessments to recover the VAT in the event their appeal was successful. In October 2013 the decision was overturned by the Court of Appeal. The Rank Group plc’s case is the lead case and it has therefore appealed the decision of the Court of Appeal. As such, others in the industry (including the Combined Group) are interested in the outcome of that appeal. The Rank Group plc ‘s latest appeal is due to be heard by the Supreme Court on 20 April 2015.

Litigation affecting the Spirit Group 10.4 Save as disclosed in paragraph 10.3, there are no governmental, legal or arbitration proceedings nor, so far as Greene King is aware, are any such proceedings pending or threatened which may have, or have had during the 12 months immediately preceding the date of this document, a significant effect on the Spirit Group’s financial position or profitability.

11 Sources and bases of selected financial information 11.1 In this document unless otherwise stated: (a) financial information relating to the Greene King Group has been extracted (without material adjustment) from the audited historical financial information referred to in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document for the fifty-three weeks ended 4 May 2014 and the unaudited historical financial information set out in Part VII (Historical Consolidated Financial Information Relating to the Greene King Group) of this document for the 24 weeks ended 19 October 2014, in each case which was prepared in accordance with IFRS; and (b) financial information relating to the Spirit Group has been extracted (without material adjustment) from the historical financial information referred to in Part VIII (Historical Consolidated Financial Information Relating to the Spirit Group) of this document and which is incorporated by reference into this document from the Circular, for the financial year ended 23 August 2014 which was prepared in accordance with IFRS.

126 11.2 Where information contained in this document originates from a third party source, it is identified where it appears in this document together with the name of its source. Such third party information has been accurately reproduced and, so far as Greene King is aware and is able to ascertain from information published by the relevant third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

12 Significant change 12.1 There has been no significant change in the financial or trading position of the Greene King Group since 19 October 2014, being the end of the period for which the Greene King Group’s last unaudited consolidated financial statements were published. 12.2 There has been no significant change in the financial or trading position of the Spirit Group since 23 August 2014, being the end of the period for which the Spirit Group’s last audited consolidated accounts were published.

13 Consent 13.1 Lazard & Co., Limited, whose address is 50 Stratton Street, London W1J 8LL, has given and has not withdrawn its written consent to the issue of this document with the inclusion of its name and references to it in the form and context in which they appear. 13.2 Citigroup Global Markets Limited, whose address is Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, has given and has not withdrawn its written consent to the issue of this document with the inclusion of its name and references to it in the form and context in which they appear. 13.3 Ernst & Young LLP, whose address is 1 More London Place, London SE1 2AF, has given and has not withdrawn its written consent to the inclusion in this document of its report in Part IX (Unaudited Pro Forma Financial Information of the Combined Group) of this document in the form and context in which it appears and has authorised the content of its report for the purposes of Prospectus Rule 5.5.3R(2)(f).

14 Property, plant and equipment Aside from the assets listed below, there is no existing or planned tangible fixed asset which is material to the Greene King Group. The Greene King Group owns the following principal properties:

Location Tenure Size (Sq. ft.) Westgate Brewery, Freehold 1,162,964.88 sq ft Bury St Edmunds, Suffolk IP33 1QT Belhaven Brewery, Heritable 253,940 sq ft Brewery Lane, Dunbar, East Lothian EH42 1PE Eastwood Distribution Centre, Leasehold 233,176.68 sq ft 12 Meadowbank Way, Eastwood, Nottingham, Nottinghamshire, NG16 3SE Old Speckled Hen Hall, Freehold 208,042.56 sq ft Moreton Hall Industrial Estate, Bury St Edmunds, Suffolk, IP32 7BT Abingdon Distribution Centre, Freehold 111,774.96 sq ft 23 Nuffield Way, Abingdon, Oxfordshire, OX14 1RL The Greene King Group is not aware of any environmental issues that may affect the Greene King Group’s utilisation of its tangible fixed assets.

127 15 Expenses of the Offer The total expenses relating to the issue of this Prospectus and the Circular and to the negotiation, preparation and implementation of the Offer are estimated to amount to approximately £16,700,000 (including VAT, the UK Listing Authority listing fee, the Panel fees, professional fees and expenses and the costs of printing and distribution of documents) and are payable by Greene King.

16 General 16.1 Save as disclosed in this document, the Directors are unaware of any exceptional factors which have influenced Greene King’s activities. 16.2 Save as disclosed in this document, the Directors are unaware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on Greene King’s prospects for the current financial year. 16.3 Save as disclosed in this document, there are no investments in progress and there are no future investments on which the Directors have already made firm commitments which are significant to the Greene King Group. 16.4 Save as disclosed in this document, the Directors believe that Greene King is not dependent on patents or licences, industrial, commercial or financial contracts or new manufacturing processes which are material to Greene King’s business or profitability. 16.5 Greene King is subject to the provisions of the Code, including the rules regarding mandatory takeover offers set out in the Code. Under Rule 9 of the Code, when: (i) a person acquires shares which, when taken together with shares already held by him or persons acting in concert with him (as defined in the Code), carry 30 per cent. or more of the voting rights of a company subject to the Code; or (ii) any person who, together with persons acting in concert with him, holds not less than 30 per cent. but not more than 50 per cent. of the voting rights of a company subject to the Code, and such person, or any person acting in concert with him, acquires additional shares which increases his percentage of the voting rights in the company, then, in either case, that person, together with the persons acting in concert with him, is normally required to make a general offer in cash at the highest price paid by him or any person acting in concert with him for shares in the company within the preceding 12 months for all of the remaining equity share capital of the company. 16.6 If Greene King were to be subject to a takeover offer (within the meaning of Part 28 of the Act), the Greene King Shares would also be subject to the compulsory acquisition procedures set out in sections 979 to 991 of the Act. Under section 979 of the Act, where an offeror makes a takeover offer and has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire not less than 90 per cent. of the shares to which the offer relates and, in a case where the shares to which the offer relates are voting shares, not less than 90 per cent. of the voting rights carried by those shares, that offeror is entitled to compulsorily acquire the shares of any holder who has not acquired the offer on the terms of the offer. 16.7 Since 29 April 2013, there has been no takeover offer (within the meaning of Part 28 of the Act) for any Greene King Shares.

17 Documents on display Copies of the following documents are available for inspection during usual business hours on any Business Day for a period of 12 months following Admission at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ: (a) the memorandum and articles of association of Greene King; (b) the Announcement; (c) the Scheme Document; (d) the Co-operation Agreement; (e) the Confidentiality and Standstill Agreement; (f) the Annual Report of Greene King for each of the fifty-three weeks ended 4 May 2014, fifty-two weeks ended 28 April 2013 and fifty-two weeks ended 29 April 2012;

128 (g) the Annual Report of Spirit for each of the financial years ended 23 August 2014, 17 August 2013, and 18 August 2012; (h) the report of Ernst & Young LLP set out in Section B of Part IX (Unaudited Pro Forma Financial Information of the Combined Group) of this document; (i) the consent letters referred to in paragraph 13 above; and (j) this document.

18 Information incorporated by reference 18.1 The following documents, which have been approved by, filed with or notified to the FCA, and are available for inspection in accordance with paragraph 17 of this Part XII (Additional Information) contain information about the Greene King Group and Spirit, which is relevant to this document: (a) Greene King’s Annual Report 2014, containing Greene King’s audited consolidated financial statements for the fifty-three weeks ended 4 May 2014, together with the audit report in respect of that period and a discussion of Greene King’s financial performance; (b) Greene King’s Annual Report 2013, containing Greene King’s audited consolidated financial statements for the fifty-two weeks ended 28 April 2013, together with the audit report in respect of that period and a discussion of Greene King’s financial performance; (c) Greene King’s Annual Report 2012, containing Greene King’s audited consolidated financial statements for the fifty-two weeks ended 29 April 2012, together with the audit report in respect of that period and a discussion of Greene King’s financial performance; (d) Spirit’s Annual Report 2014, containing Spirit’s audited consolidated financial statements for the financial year ended 23 August 2014, together with the audit report in respect if that period and a discussion of Spirit’s financial performance; (e) Spirit’s Annual Report 2013, containing Spirit’s audited consolidated financial statements for the financial year ended 17 August 2013, together with the audit report in respect if that period and a discussion of Spirit’s financial performance; and (f) Spirit’s Annual Report 2012, containing Spirit’s audited consolidated financial statements for the financial year ended 18 August 2012, together with the audit report in respect if that period and a discussion of Spirit’s financial performance. The table below sets out the sections of these documents which are incorporated by reference into, and form part of, this Prospectus, and only the parts of the documents identified in the table below are incorporated into, and form part of, this Prospectus. The parts of these documents which are not incorporated by reference are either not relevant for investors or are covered elsewhere in this Prospectus. To the extent that any part of any information referred to below itself contains information which is incorporated by reference, such information shall not form part of this Prospectus.

Page number(s) Information incorporated by in reference Reference reference into this Prospectus document For the fifty-three weeks ended 4 May 2014 Greene King Annual Report 2014 ..... Investment case 2 - 3 Greene King Annual Report 2014 ..... Performance highlights 4 Greene King Annual Report 2014 ..... Chairman’s statement 5 Greene King Annual Report 2014 ..... Retail feature 6 - 7 Greene King Annual Report 2014 ..... Pub Partners feature 8 - 9 Greene King Annual Report 2014 ..... Brewing & Brands feature 10 - 11 Greene King Annual Report 2014 ..... Chief executive’s review 12 - 13 Greene King Annual Report 2014 ..... Our business model 14 - 15 Greene King Annual Report 2014 ..... Our markets 16 - 17 Greene King Annual Report 2014 ..... Our strategy 18 - 19 Greene King Annual Report 2014 ..... Operational review (Retail) 20 - 22 Greene King Annual Report 2014 ..... Operational review (Pub Partners) 23 - 24

129 Page number(s) Information incorporated by in reference Reference reference into this Prospectus document Greene King Annual Report 2014 ..... Operational review (Brewing and 25 - 26 Brands) Greene King Annual Report 2014 ..... Financial Review 27 - 28 Greene King Annual Report 2014 ..... Key performance indicators 29 Greene King Annual Report 2014 ..... Risks and uncertainties 30 - 32 Greene King Annual Report 2014 ..... Corporate Responsibilities 33 - 39 Greene King Annual Report 2014 ..... Board of directors 40 Greene King Annual Report 2014 ..... Corporate governance statement 41 - 44 Greene King Annual Report 2014 ..... Report of the nomination committee 45 Greene King Annual Report 2014 ..... Report of the audit committee 46 - 48 Greene King Annual Report 2014 ..... Directors’ remuneration report 49 - 60 Greene King Annual Report 2014 ..... Directors’ report 61 - 62 Greene King Annual Report 2014 ..... Directors’ responsibilities statement 63 Greene King Annual Report 2014 ..... Independent auditors’ report (Greene 64 - 65 and 102 King Group and Greene King) Greene King Annual Report 2014 ..... Group income statement 66 Greene King Annual Report 2014 ..... Group statement of comprehensive 67 income Greene King Annual Report 2014 ..... Group balance sheet 68 Greene King Annual Report 2014 ..... Group cash flow statement 69 Greene King Annual Report 2014 ..... Group statement of changes in equity 70 Greene King Annual Report 2014 ..... Notes to the accounts 71 - 101 Greene King Annual Report 2014 ..... Greene King balance sheet 103 Greene King Annual Report 2014 ..... Notes to the Greene King accounts 104 - 107 Greene King Annual Report 2014 ..... Group financial record 108 For the fifty-two weeks ended 28 April 2013 Greene King Annual Report 2013 ..... At a glance 2 - 3 Greene King Annual Report 2013 ..... Our performance highlights 4 Greene King Annual Report 2013 ..... Chairman’s statement 5 Greene King Annual Report 2013 ..... Our business 6 - 7 Greene King Annual Report 2013 ..... Our markets 8 - 9 Greene King Annual Report 2013 ..... Chief executive’s review 10 - 11 Greene King Annual Report 2013 ..... Our strategy 12 - 13 Greene King Annual Report 2013 ..... Operational review (Retail) 14 - 18 Greene King Annual Report 2013 ..... Operational review (Pub Partners) 19 - 21 Greene King Annual Report 2013 ..... Operational review (Brewing and 22 - 24 Brands) Greene King Annual Report 2013 ..... Financial review 25 - 26 Greene King Annual Report 2013 ..... Key performance indicators 27 Greene King Annual Report 2013 ..... Risks and uncertainties 28 - 30 Greene King Annual Report 2013 ..... Corporate social responsibility 31 - 37 Greene King Annual Report 2013 ..... Board of directors 38 Greene King Annual Report 2013 ..... Senior management 39 Greene King Annual Report 2013 ..... Corporate governance statement 40 - 45 Greene King Annual Report 2013 ..... Directors’ remuneration report 46 - 54 Greene King Annual Report 2013 ..... Directors’ report 55 - 56 Greene King Annual Report 2013 ..... Directors’ responsibilities statements 57 - 58 Greene King Annual Report 2013 ..... Independent auditors’ report (Greene 59 and 96 King Group and Greene King) Greene King Annual Report 2013 ..... Group income statement 60 Greene King Annual Report 2013 ..... Group statement of comprehensive 61 income Greene King Annual Report 2013 ..... Group statement of changes in equity 64 Greene King Annual Report 2013 ..... Group balance sheet 62 Greene King Annual Report 2013 ..... Group cash flow statement 63 Greene King Annual Report 2013 ..... Notes to the accounts 65 - 95

130 Page number(s) Information incorporated by in reference Reference reference into this Prospectus document Greene King Annual Report 2013 ..... Greene King balance sheet 97 Greene King Annual Report 2013 ..... Notes to the Greene King accounts 98 - 101 Greene King Annual Report 2013 ..... Group financial record 102 For the fifty-two weeks ended 29 April 2012 Greene King Annual Report 2012 ..... Performance 2 Greene King Annual Report 2012 ..... Our focus 3 - 9 Greene King Annual Report 2012 ..... Chairman’s statement 10 Greene King Annual Report 2012 ..... Market overview 11 Greene King Annual Report 2012 ..... Chief executive’s review 12 - 13 Greene King Annual Report 2012 ..... Delivering our strategy 14 - 15 Greene King Annual Report 2012 ..... Operational review 16 - 22 Greene King Annual Report 2012 ..... Financial review 23 - 24 Greene King Annual Report 2012 ..... Key performance indicators 25 Greene King Annual Report 2012 ..... Risks and uncertainties 26 - 28 Greene King Annual Report 2012 ..... Corporate social responsibility 29 - 33 Greene King Annual Report 2012 ..... Board of directors 34 Greene King Annual Report 2012 ..... Senior management 35 Greene King Annual Report 2012 ..... Corporate governance statement 36 - 40 Greene King Annual Report 2012 ..... Directors’ remuneration report 41 - 47 Greene King Annual Report 2012 ..... Directors’ report 48 - 49 Greene King Annual Report 2012 ..... Directors’ responsibility statements 50 - 51 Greene King Annual Report 2012 ..... Independent auditors’ report (Greene 52 and 89 King Group and Greene King) Greene King Annual Report 2012 ..... Group income statement 53 Greene King Annual Report 2012 ..... Group statement of comprehensive 54 income Greene King Annual Report 2012 ..... Group balance sheet 55 Greene King Annual Report 2012 ..... Group cash flow statement 56 Greene King Annual Report 2012 ..... Group statement of changes in equity 57 Greene King Annual Report 2012 ..... Notes to the group accounts 58 - 88 Greene King Annual Report 2012 ..... Greene King balance sheet 90 Greene King Annual Report 2012 ..... Notes to the Greene King accounts 91 - 95 Greene King Annual Report 2012 ..... Group financial record 96 For the year ended 23 August 2014 Spirit Annual Report 2014 ...... Chairman’s statement 2 - 3 Spirit Annual Report 2014 ...... Highlights and key performance 4 - 5 indicators Spirit Annual Report 2014 ...... Chief Executive Officer’s review 6 - 8 Spirit Annual Report 2014 ...... Business model 9 Spirit Annual Report 2014 ...... Our market 10 - 11 Spirit Annual Report 2014 ...... Our strategy 12 - 19 Spirit Annual Report 2014 ...... Managed division overview 20 Spirit Annual Report 2014 ...... Leased division overview 21 Spirit Annual Report 2014 ...... Corporate responsibility 22 - 25 Spirit Annual Report 2014 ...... Principal risk and uncertainties 26 - 29 Spirit Annual Report 2014 ...... Our brands 30 - 36 Spirit Annual Report 2014 ...... Financial review 37 - 39 Spirit Annual Report 2014 ...... Board of directors 40 - 41 Spirit Annual Report 2014 ...... Executive management team 42 - 43 Spirit Annual Report 2014 ...... Directors’ report 44 - 47 Spirit Annual Report 2014 ...... Corporate governance statement 48-51 Spirit Annual Report 2014 ...... Nomination committee report 52 Spirit Annual Report 2014 ...... Audit & Risk committee report 53 - 55 Spirit Annual Report 2014 ...... Remuneration report 56 - 70

131 Page number(s) Information incorporated by in reference Reference reference into this Prospectus document Spirit Annual Report 2014 ...... Statement of Directors’ responsibilities in 71 relation to the financial statements For the year ended 17 August 2013 Spirit Annual Report 2013 ...... Established Strategy 2 - 3 Spirit Annual Report 2013 ...... Market overview 4 - 5 Spirit Annual Report 2013 ...... Compelling brands 6 - 7 Spirit Annual Report 2013 ...... First rate talent and leadership 8 - 9 Spirit Annual Report 2013 ...... Chairman’s statement 10 Spirit Annual Report 2013 ...... Chief Executive Officer’s review 11 Spirit Annual Report 2013 ...... Highlights 12 Spirit Annual Report 2013 ...... Our business 13 Spirit Annual Report 2013 ...... Managed division 14 Spirit Annual Report 2013 ...... Our brands 15 - 20 Spirit Annual Report 2013 ...... Leased 21 Spirit Annual Report 2013 ...... Corporate social responsibility 22 - 23 Spirit Annual Report 2013 ...... Financial review 24 - 25 Spirit Annual Report 2013 ...... Spirit’s principal risks and uncertainties 26 - 29 Spirit Annual Report 2013 ...... Board of Directors 30 - 31 Spirit Annual Report 2013 ...... Executive Management Team 32 - 33 Spirit Annual Report 2013 ...... Directors’ report 34 - 37 Spirit Annual Report 2013 ...... Corporate governance statement 38 - 40 Spirit Annual Report 2013 ...... Nomination & Governance Committee 41 report Spirit Annual Report 2013 ...... Audit & Risk Committee report 42 - 43 Spirit Annual Report 2013 ...... Report on Directors’ remuneration 44 - 53 Spirit Annual Report 2013 ...... Statement of Directors’ responsibilities in 54 relation to the financial statements For the year ended 18 August 2012 Spirit Annual Report 2012 ...... Highlights 1 Spirit Annual Report 2012 ...... Our business 2 - 3 Spirit Annual Report 2012 ...... Managed Division 4 - 5 Spirit Annual Report 2012 ...... Our brands 6 - 9 Spirit Annual Report 2012 ...... Leased division 10 - 11 Spirit Annual Report 2012 ...... Chairman’s statement 12 Spirit Annual Report 2012 ...... Chief Executive Officer’s review 13 Spirit Annual Report 2012 ...... Best for team 14 - 15 Spirit Annual Report 2012 ...... Corporate social responsibility 16 - 19 Spirit Annual Report 2012 ...... Financial review 20 - 21 Spirit Annual Report 2012 ...... Principal risks and uncertainties 22 Spirit Annual Report 2012 ...... Our key risks and uncertainties 23 - 25 Spirit Annual Report 2012 ...... Board of Directors 26 - 27 Spirit Annual Report 2012 ...... Executive Management Team 28 - 29 Spirit Annual Report 2012 ...... Directors’ report 30 - 33 Spirit Annual Report 2012 ...... Corporate governance statement 34 - 36 Spirit Annual Report 2012 ...... Nomination & Governance Committee 37 report Spirit Annual Report 2012 ...... Audit & Risk Committee report 38 - 39 Spirit Annual Report 2012 ...... Report on Directors’ remuneration 40 - 49 Spirit Annual Report 2012 ...... Statement of Directors’ responsibilities in 50 relation to the financial statements 18.2 The table below sets out the sections of the Circular which are incorporated by reference into, and form part of, this Prospectus, and only the parts of the Circular identified in the table below are incorporated into, and form part of, this Prospectus. The parts of the Circular which are not incorporated by reference are either not relevant for investors or are covered elsewhere in this Prospectus. To the extent that any part of any information referred to below itself contains

132 information which is incorporated by reference, such information shall not form part of this Prospectus.

Page number(s) in reference Information incorporated by reference Document reference document Information on Spirit Historical consolidated financial information relating to the Spirit Group ...... Part IV 24 - 154 Dated: 18 December 2014

133 PART XIII DEFINITIONS The following definitions apply throughout this document unless the context otherwise requires:

Acquisition ...... the proposed acquisition by the Company of the entire issued and to be issued ordinary share capital of Spirit to be implemented by means of the Scheme (or, if applicable, by means of a contractual offer) Admission ...... the admission of the New Greene King Shares to the Official List with a premium listing and to trading on the London Stock Exchange’s main market for listed securities AGM ...... means the annual general meeting of Greene King or Spirit (as applicable) Amendment and Restatement Agreement ...... the amendment and restatement agreement dated 13 June 2013 in relation to the Facility Agreement, as defined in paragraph 7.3 of Part XII (Additional Information) of this document Announcement ...... the announcement made by Greene King and Spirit on 4 November pursuant to Rule 2.7 of the Code Audit Committee ...... the audit committee of Greene King Board or Directors ...... the board of directors of Greene King or Spirit (as applicable) and ‘‘Director’’ means any member of the Board Business Day ...... a day (other than Saturdays, Sundays and public holidays in the UK) on which banks are open for business in the City of London Capital Reduction ...... the proposed reduction of the share capital of Spirit involving the cancellation of the Scheme Shares pursuant to the Scheme under sections 645 to 648 of the Companies Act as described in the Scheme Document certificated or in certificated form . . . where a share or other security is not in uncertificated form (that is, not in CREST) Chairman ...... means the chairman of the Board Circular ...... the circular sent by Greene King to Shareholders dated the same date as this document, containing details of the Offer Citi ...... Citigroup Global Markets Limited of Citigroup Centre, Canada Square, Canary Wharf, London, E14 5LB Closing Price ...... the closing middle market price of a Greene King Share or a Spirit Share as derived from the Daily Official List CMA Phase 2 Reference ...... a reference pursuant to sections 22 or 33, 45 or 62 of the Enterprise Act 2002 of the Offer to the chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 Code ...... the City Code on Takeovers and Mergers Combined Group ...... the combined group, comprising the Greene King Group and the Spirit Group Companies Act ...... the Companies Act 2006 (as amended) Competition and Markets Authority or CMA ...... the UK Competition and Markets Authority, a UK statutory body established under the Enterprise and Regulatory Reform Act 2013 (as amended)

134 Completion ...... the time at which the Scheme becomes effective, expected to be on the Effective Date or such other time as the Reduction Court Order is registered by the Registrar of Companies Conditions ...... the conditions to the implementation of the Offer (including the Scheme) which are set out in Part Three of the Scheme Document Confidentiality and Standstill Agreement ...... the confidentiality and standstill agreement between Spirit and Greene King as described in Part I (Information on the Offer) of this document Co-operation Agreement ...... the co-operation agreement between Spirit and Greene King as described in Part I (Information on the Offer) of this document Corporate Governance Code ...... the UK Corporate Governance Code published by the Financial Reporting Council in September 2012 (as amended) Court ...... the High Court of Justice in England and Wales Court Meeting ...... the meeting of the Scheme Shareholders convened by order of the Court pursuant to section 899 of the Companies Act (and any adjournment thereof) to be held on 13 January 2015 for the purpose of considering and, if thought fit, approving the Scheme (with or without amendment) of which notice is set out in Part Ten of the Scheme Document Court Orders ...... the order(s) of the Court sanctioning the Scheme and confirming the Capital Reduction CREST ...... the system for the paperless settlement of trades in securities and the holding of uncertified securities operated by Euroclear in accordance with the Uncertified Securities Regulations 2001 (SI 2001 No. 3755) CREST Regulations ...... the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) Daily Official List ...... the daily official list of the London Stock Exchange Directors or Greene King Directors . . the directors of Greene King as at the date of this document, being Tim Bridge, Rooney Anand, Kirk Davis, Mike Coupe, Ian Durant, Rob Rowley and Lynne Weedall Disclosure and Transparency Rules . . the disclosure rules and transparency rules made by the FCA pursuant to section 73A of FSMA earnings ...... profit or loss after taxation, unless the context otherwise requires earnings before investment income, interest and taxation EEA State ...... a member state of the European Economic Area Effective ...... in the context of the Acquisition, if the Acquisition is implemented by way of the Scheme, the Scheme having become effective pursuant to its terms Effective Date ...... the date on which the Scheme becomes effective in accordance with its terms Enlarged Issued Share Capital ..... the issued share capital of Greene King at Admission, as enlarged by the issue of New Greene King Shares EPS ...... earnings per share (basic unless otherwise indicated) Euroclear ...... Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales

135 Excluded Shares ...... any Spirit Shares which are registered in the name of or beneficially owned by any member of the Greene King Group at the Scheme Record Time and any Spirit Shares held as treasury shares Executive Plans ...... each of the following share incentive schemes of Greene King: Greene King Long-Term Incentive Plan, Greene King Performance Share Plan 2013 and the Greene King Executive Share Option Scheme 1994, as described in Part XI (Directors, Responsible Persons, Corporate Governance and Employees) of this document Existing Greene King Shares ...... the Greene King Shares in issue as at the date of this document FCA or Financial Conduct Authority . the UK Financial Conduct Authority Facility Agreement ...... the facility agreement dated 1 April 2011 as defined in paragraph 7.3 of Part XII (Additional Information) of this document Financial Adviser ...... Citi Forms of Proxy ...... the Greene King Forms of Proxy and the Spirit Forms of Proxy (as applicable) FSMA ...... the Financial Services and Markets Act 2000, as amended from time to time Greene King Articles ...... the articles of association of Greene King Greene King Forms of Proxy ...... the form of proxy for use at the Greene King General Meeting which accompanies the Circular Greene King General Meeting ...... the general meeting of Greene King to be held at Lazard & Co., Limited, 50 Stratton Street, London W1J 8LL, on 13 January 2015 at 11.00am (or any adjournment thereof) notice of which is set out at the end of the Circular Greene King Group ...... the Company and its subsidiary undertakings Greene King or the Company ...... Greene King plc, a company registered in England and Wales with the number 00024511 whose registered office is at Westgate Brewery, Bury St Edmunds, Suffolk, IP33 1QT Greene King Share Schemes ...... each of the following share incentive schemes of Greene King: Greene King Long-Term Incentive Plan, Greene King Performance Share Plan 2013, Greene King Executive Share Option Scheme 1994, Greene King Save4Shares Scheme 2005 and the Greene King Deferred Share Scheme as described in Part XI (Directors, Responsible Persons, Corporate Governance and Employees) of this document Greene King Shareholders or Shareholders ...... the holders of Greene King Shares Greene King Shares ...... the ordinary shares in the capital of Greene King HMRC ...... Her Majesty’s Revenue & Customs IFRS ...... International Financial Reporting Standards as adopted by the European Union ISIN ...... International Securities Identification Number Joint Sponsors ...... Lazard and Citi IAS ...... International Accounting Standards Lazard ...... Lazard & Co., Limited of 50 Stratton Street, London, W1J 8LL

136 Lead Financial Adviser ...... Lazard Legal Advisers ...... Linklaters LLP, One Silk Street, London EC2Y 8HQ Listing Rules ...... the rules and regulations made by the Financial Conduct Authority in its capacity as the UKLA under Part 6 of the Financial Services and Markets Act 2000 (as amended), and contained in the UKLA’s publication of the same name London Stock Exchange ...... London Stock Exchange plc Long Stop Date ...... 31 May 2015, being the latest date by which the Scheme must become effective unless Greene King and Spirit agree, and (if required) the Court and the Panel permit, a later date LTIP ...... long-term incentive plan Model Code ...... the model code on directors’ dealings in securities set out in Chapter 9 of the Listing Rules New Greene King Shares ...... the new Greene King Shares to be issued and credited as fully-paid to holders of Scheme Shares pursuant to the Scheme Nomination Committee ...... the nomination committee of Greene King Notice of Greene King General Meeting ...... the notice of the Greene King General Meeting which is set out at the end of the Circular Offer ...... the recommended offer being made by the Company to acquire the entire issued and to be issued ordinary share capital of Spirit not already directly or indirectly owned by the Company to be effected by means of the Scheme and, where the context admits, any subsequent revision, variation, extension or renewal thereof Offer Period ...... the offer period (as defined by the Code) relating to Spirit, which commenced on 23 September 2014 Official List ...... the official list maintained by the UKLA Overseas Shareholders ...... Spirit Shareholders (or nominees of, or custodians or trustees for Spirit Shareholders) not resident in, or nationals or citizens of, the UK Panel ...... the UK Panel on Takeovers and Mergers Plans or Plan ...... all or any of the Greene King Share Schemes Prospectus ...... this document Prospectus Directive Regulation or Commission Regulation ...... Commission Regulation (EC) No. 809/2004 Prospectus Rules ...... the prospectus rules made by the FCA pursuant to section 73A of the FSMA Reduction Court Hearing ...... the hearing by the Court of the claim form to confirm the Capital Reduction under section 648 of the Act Reduction Court Order ...... the order of the Court confirming the Capital Reduction Registrar of Companies ...... the Registrar of Companies for England and Wales Registrars ...... Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU Regulation S ...... Regulation S under the US Securities Act Regulatory Information Service ..... any channel recognised as a channel for the dissemination of regulatory information by listed companies as defined in the Listing Rules

137 Remuneration Committee ...... the remuneration committee of Greene King Reporting Accountant and Auditors . . Ernst & Young LLP, 1 More Place, London, SE1 2AF Resolutions ...... the ordinary resolutions to approve the making of the Offer and the allotment of the New Greene King Shares to the Spirit Shareholders pursuant to the Scheme as set out in the Notice of the Greene King General Meeting at the end of the Circular Restricted Jurisdictions ...... any jurisdiction where the extension or availability of the Offer to Spirit Shareholders generally in such jurisdiction would contravene any applicable law Restricted Overseas Person ...... Spirit Shareholders resident in, or nationals or citizens of, Restricted Jurisdictions or who are nominees or custodians, trustees or guardians for, citizens, residents or nationals of such Restricted Jurisdictions Scheme ...... the scheme of arrangement under Part XXVI of the Companies Act between Spirit and the Scheme Shareholders set out in Part Four of the Scheme Document, with or subject to any modification thereof or addition thereto or condition approved or imposed by the Court and agreed by Spirt and the Company Scheme Court Hearing ...... the hearing by the Court of the claim form for the sanction of the Scheme Scheme Court Order ...... the order of the Court sanctioning the Scheme under section 899 of the Act Scheme Document ...... the document sent to Spirit Shareholders containing, amongst other things, the Scheme and the notices convening the Court Meeting and the Spirit General Meeting Scheme Record Time ...... the date and time specified in the Scheme Document by reference to which the Scheme will be binding on the holders of Spirit Shares at such time Scheme Shareholders ...... holders of a Scheme Share, and a ‘‘Scheme Shareholder’’ shall mean any one of the Scheme Shareholders Scheme Shares ...... the Spirit Shares: (i) in issue at the date of the Scheme Document and which remain in issue at the Scheme Record Time; (ii) if any, issued after the date of the Scheme Document but before the Scheme Voting Record Time and which remain in issue at the Scheme Record Time; and (iii) if any, issued at or after the Scheme Voting Record Time but at or before the Scheme Record Time on terms that the original or any subsequent holders thereof are, or shall have agreed in writing, to be bound by the Scheme and, in each case, which remain in issue at the Scheme Record Time, in each case other than any Excluded Shares Scheme Voting Record Time ...... the date and time specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting will be determined, expected to be 6pm on the day which is two business days before the Court Meeting or, if the Court Meeting is adjourned, 6pm on the day which is two business days before the date of such adjourned Court Meeting SDRT ...... stamp duty reserve tax SEC ...... The US Securities and Exchange Commission

138 SEDOL ...... Stock Exchange Daily Official List Spirit ...... Spirit Pub Company plc, a company incorporated under the laws of England and Wales with company number 07662835, whose registered office is at Sunrise House, Ninth Avenue, Burton-Upon-Trent, Staffordshire, DE14 3JZ Spirit Directors ...... the directors of Spirit Spirit Forms of Proxy ...... the forms of proxy in connection with each of the Court Meeting and the Spirit General Meeting, which will accompany the Scheme Document Spirit General Meeting ...... the general meeting of Spirit Shareholders (and any adjournment thereof) convened in connection with the Scheme to be held on 13 January 2015 Spirit Group ...... Spirit and any of Spirit’s subsidiary undertakings and, where the context permits, each of them Spirit Share Schemes ...... means each of the following share incentive schemes of Spirit: the Long Term Incentive Plan 2011 and the Share Bonus Plan 2011 Spirit SIP ...... Means the following share incentive schemes of Spirit: the Share Incentive Plan 2011 Spirit Shareholders ...... holders of Spirit Shares Spirit Shares ...... the existing unconditionally allotted or issued and fully paid ordinary shares of 1 penny each in the capital of Spirit and any further such ordinary shares which are unconditionally allotted or issued before the Scheme becomes effective Statement of Capital ...... the statement of capital showing, as altered by the Reduction Court Order, the information required by section 649 of the Act with respect to Spirit’s share capital UK Listing Authority or UKLA ..... the UK Listing Authority, being the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 (as amended) UK or United Kingdom ...... the United Kingdom of Great Britain and Northern Ireland uncertificated or in uncertificated form ...... in respect of a share or other security, where that share or other security is recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which may be transferred by means of CREST US Exchange Act ...... the United States Securities Exchange Act 1934, as amended US or United States ...... the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction and any political sub-division thereof US Securities Act ...... the United States Securities Act 1933, as amended, and the rules and regulations promulgated under such Act VAT ...... any value added tax imposed under directive 2006/11 2/EC, the Value Added Tax Act 1994 and/or any primary or secondary legislation supplemental to either of them and/or any equivalent tax in any other jurisdiction

139 Merrill Corporation Ltd, London 14ZDE19401