eLong Reports Third Quarter 2012 Unaudited Financial Results

         eLong Reports Third Quarter 2012 Unaudited Financial Results  Adds nearly 2 million room nights compared to third quarter of 2011  PR Newswire  BEIJING, Nov. 15, 2012  BEIJING, Nov. 15, 2012 /PRNewswire/ -- eLong, Inc. (Nasdaq: LONG), a leading online travel service provider in China, today reported unaudited financial results for the third quarter ended September 30, 2012.  (Logo: http://photos.prnewswire.com/prnh/20041118/ELONGLOGO)  Highlights    oHotel room nights booked through eLong in the third quarter increased 70%      to 4.6 million room nights compared to 2.7 million in the prior year     period. Online hotel bookings comprised 76% of total hotel bookings,     compared to 60% in the third quarter of 2011.   oHotel commission revenue for the third quarter increased 24% to RMB156.6     million (US$24.9 million), compared to RMB126.0 million (US$19.8 million)     in the third quarter of 2011.   oNet revenues for the third quarter increased 20% to RMB197.3 million     (US$31.4 million), compared to RMB164.3 million (US$25.8 million) in the     third quarter of 2011.   oDomestic hotel coverage network expanded 54% to almost 36,000 domestic     hotels as of September 30, 2012, compared to 23,000 as of September 30,     2011.  In addition, eLong offers over 160,000 international hotels through     a direct connection to Expedia.   oEntered into a new cooperation agreement with Expedia that provides an     increased level of strategic cooperation with our largest shareholder.   oReceived several industry awards and honors, including: being named (1) a     Top Micro-Innovation Company by BizReview Magazine, (2) a 2012 China Best     Employer award by Zhaopin.com and Beijing University, and (3) a 2012 China     Best Call Center by the China Federation of IT Promotion.  "In the third quarter, we launched our largest-ever marketing campaign, featuring our 'Book Hotel, Use eLong' branding and increased coupon promotions. The campaign contributed to significantly improved brand awareness and growth in our market share. It did come with a price, but we are willing to take a short-term loss for long term gain. Going forward, we will continue with our online hotel strategy, invest aggressively and drive harder," said Guangfu Cui, Chief Executive Officer of eLong.  "We are strong believers in the eLong team and their ability to grow and continue to gain share in China. We are just getting started," said Dara Khosrowshahi, President and Chief Executive Officer of Expedia.  Business Results  Revenues  Total revenues by product for the third quarter of 2012 as compared to the same period in 2011 were as follows (in RMB million):                      Q3 2012  %      Q3 2011  %      Y/Y                              Total           Total  Growth Hotel reservations  156.6    74%    126.0    72%    24% Air ticketing       35.2     17%    33.7     19%    5% Other               20.1     9%     15.5     9%     30% Total revenues      211.9    100%   175.2    100%   21%  Hotel Reservations  Hotel commission revenue increased 24% in the third quarter of 2012 compared to the same period in 2011, primarily due to higher volume, partially offset by lower commission per room night. Room nights booked through eLong in the third quarter increased 70% year-on-year to 4.6 million. Commission per room night decreased 27% year-on-year, primarily due to an increase in the size of our coupon program both in terms of the number of hotels and the cash-back amounts offered, as well as the growth of groupbuy and budget hotels and lower average daily rates across other hotel segments. Hotel commission revenue grew to 74% of total revenues from 72% in the prior year quarter.  Air Ticketing  Air ticketing commission revenue increased 5% in the third quarter of 2012 compared to the prior year quarter, driven by a 12% increase in air segments to 662,000, partially offset by a 7% decrease in commission per segment. Commission per segment decreased due to a lower air commission rate compared to the same quarter of 2011 as well as air segments booked using our new air coupon program. Air ticketing commission revenue decreased to 17% of total revenues from 19% in the prior year quarter.  Other  Other revenue is primarily derived from advertising and travel insurance. Other revenue increased 30% year-on-year in the third quarter of 2012, mainly driven by increased advertising revenue. Other revenue was 9% of total revenues, consistent with the prior year quarter.  Profitability  Gross margin in the third quarter of 2012 decreased to 70%, compared to 73% in the third quarter of 2011. Gross margin decline was primarily due to lower hotel commission revenue per room night as well as higher volume-driven fulfillment costs.  Operating expenses for the third quarter of 2012 as compared to the same period in 2011 were as follows (in RMB million):                                Q3 2012  % of Net  Q3 2011  % of Net  Y/Y Growth                                        Revenue            Revenue Service development           33.4     17%       26.4     16%       27% Sales and marketing           144.7    74%       69.0     42%       110% General and administrative    16.2     8%        12.9     8%        25% Amortization of intangible   0.3      -         0.1      -         104% assets Charges related to property and equipment and intangible  0.4      -         -        -         N/M assets Total operating expenses      195.0    99%       108.4    66%       80%  Total operating expenses increased 80% for the third quarter of 2012 compared to the third quarter of 2011. Total operating expenses increased to 99% of net revenues in the third quarter of 2012 from 66% in the prior year quarter which led to an operating loss of RMB56.2 million compared to operating income of RMB11.6 million in the prior year quarter.  Service development expenses consist of expenses related to technology and our product offering, including our websites, platforms and other system development, as well as our supplier relations function. Service development expenses increased 27% compared to the prior year quarter, mainly driven by higher personnel expenses. Service development expenses increased to 17% of net revenues in the third quarter of 2012 from 16% in the same quarter of 2011.  Sales and marketing expenses for the third quarter of 2012 increased 110% over the prior year quarter, mainly driven by increased advertising expenses from our marketing campaign and a further level of increased investment in online marketing channels. Sales and marketing expenses increased to 74% of net revenues in the third quarter of 2012 from 42% in the same quarter of 2011.  General and administrative expenses for the third quarter of 2012 increased 25% compared to the prior year quarter, mainly driven by higher personnel expenses. General and administrative expenses were 8% of net revenues, consistent with the same quarter of 2011.  Other income/(expense) represents interest income, foreign exchange losses and other income/(expense). Other income was RMB16.2 million in the third quarter of 2012 compared to other income of RMB0.9 million in the third quarter of 2011, primarily driven by an increase in interest income and a decrease in foreign exchange losses. Interest income in the third quarter of 2012 increased to RMB15.0 million, compared to RMB7.2 million in the third quarter of 2011, due to higher interest yield. Foreign exchange losses on our cash and cash equivalents and short-term investments decreased to RMB0.1 million in the third quarter of 2012, from RMB5.9 million in the third quarter of 2011 as we held a smaller percentage of our cash and cash equivalents, short-term investments and restricted cash in US dollars than in the prior year quarter.  As of September 30, 2012, eLong held cash and cash equivalents, short-term investments and restricted cash of RMB1.9 billion (US$306 million), of which 96% was held in Renminbi and 4% was held in US dollars, compared to total cash and cash equivalents, short-term investments and restricted cash of RMB1.9 billion (US$291 million), of which 86% was held in Renminbi and 14% held in US dollars as of September 30, 2011.  Net loss for the third quarter of 2012 was RMB33.1 million, compared to net income of RMB9.4 million during the prior year quarter.  Net loss per ADS and diluted net loss per ADS for the third quarter of 2012 were each RMB0.96 (US$0.16), compared to net income per ADS and diluted net income per ADS of RMB0.28 (US$0.04) in the prior year quarter.  Business Outlook  eLong currently expects net revenues for the fourth quarter of 2012 to increase by 15% to 25% compared to the fourth quarter of 2011. This outlook reflects eLong's current and preliminary view, which is subject to change.  Share Repurchase Program  Since August 17, 2012, no additional shares have been repurchased under eLong's share repurchase program.  Safe Harbor Statement  It is currently expected that the Business Outlook will not be updated until the release of eLong's next quarterly earnings announcement; however, eLong reserves the right to update its Business Outlook at any time for any reason.  Statements in this press release concerning eLong's future business, operating results and financial condition are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "future," "is/are likely to," "should" and "will" and similar expressions as they relate to eLong are intended to identify such forward-looking statements, but are not the exclusive means of doing so. These forward-looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Forward-looking statements include, but are not limited to, statements about our anticipated growth strategies, our future business development, results of operations and financial condition, our ability to control costs and/or maintain profitability, our ability to attract customers and leverage our brand, and trends and competition in the travel industry in China and globally. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause our actual performance and results to differ materially from those discussed in the forward-looking statements. Factors that could affect our actual results and cause our actual results to differ materially from those referred in any forward-looking statement include, but are not limited to, declines or disruptions in the travel industry, international financial, political or economic crises, a slowdown in the PRC economy, an outbreak of bird flu, H1N1 flu, SARS or other disease, eLong's reliance on maintaining good relationships with, and stable air and hotel inventory from, hotel suppliers and airline ticket suppliers, and on establishing new relationships with suppliers on similar terms, our reliance on the TravelSky GDS system for our air business and Baidu for our search engine marketing, the risk that eLong will not be able to increase our brand recognition, the possibility that eLong will be unable to continue timely compliance with the Sarbanes-Oxley Act or other regulatory requirements, the risk that eLong will not be successful in competing against new and existing competitors, the risk that our infrastructure and technology are damaged, fail or become obsolete, risks associated with Expedia, Inc.'s (Nasdaq: EXPE) majority ownership interest and Tencent's shareholding in eLong, risks relating to eLong's investment in other businesses and assets, fluctuations in the value of the Renminbi, inflation in China, changes in eLong's management team and other personnel, risks relating to uncertainties in the PRC legal system, including but not limited to, risks relating to our affiliated Chinese operating entities and risks relating to the application of preferential tax policies, and other risks mentioned in eLong's filings with the U.S. Securities and Exchange Commission, including eLong's Annual Report on Form 20-F.  If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward looking-statements. Investors should not rely upon forward-looking statements as predictions of future events. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained in this press release are qualified by reference to this cautionary statement.  Conference Call  eLong will host a conference call to discuss its third quarter 2012 unaudited financial results on November 16, 2012 at 8:00 am Beijing time (November 15, 2012, 7:00 pm ET). The management team will be on the call to discuss the quarterly results and to answer questions. The toll-free number for U.S. participants is +1-866-844-9413. The dial-in number for Hong Kong participants is +852-3001-3802. International participants can dial +1-210-795-0512. Pass code: eLong.  Additionally, an archived web cast  of this call will be available on the Investor Relations section of the eLong web site at http://www.elong.net/AboutUs/conference.html.  About eLong, Inc.  eLong, Inc. (Nasdaq: LONG - News) is a leading online travel service provider in China. Headquartered in Beijing, eLong provides business and leisure travelers a leading selection of almost 36,000 hotels in China and over 160,000 international hotels in over 200 countries worldwide. eLong empowers travelers to make informed travel decisions with user-friendly website and mobile technology, a 24-hour customer service center and easy to use booking tools such as maps, destination guides, photographs, virtual tours and user reviews. eLong can also fulfill domestic and international air ticket reservations across China. eLong's largest shareholders are Expedia, Inc. (Nasdaq: EXPE) and Tencent Holdings Ltd. (HKSE: 0700). eLong operates websites including www.elong.com, www.elong.net and www.xici.net.  For further information, please contact:  eLong, Inc. Investor Relations ir@corp.elong.com +86-10-6436-7570    eLong, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT PER SHARE AND PER ADS AMOUNTS)                     Three Months Ended                               Nine Months Ended                     Sep. 30,    Jun. 30,    Sep. 30,    Sep. 30,     Sep.30,    Sep. 30,    Sep. 30,                     2011        2012        2012        2012         2011        2012        2012                     RMB         RMB         RMB         USD^(1)      RMB         RMB         USD^(1)                     (Unaudited) (Unaudited) (Unaudited) (Unaudited)  (Unaudited) (Unaudited) (Unaudited) Revenues: Hotel reservations  126,043     153,843     156,598     24,917       321,245     433,335     68,950 Air ticketing       33,681      29,944      35,198      5,600        96,093      92,301      14,686 Other               15,444      13,259      20,053      3,191        39,472      47,149      7,502 Total revenues      175,168     197,046     211,849     33,708       456,810     572,785     91,138 Business tax and    (10,822)    (12,007)    (14,590)    (2,322)      (28,785)    (37,334)    (5,940) surcharges Net revenues        164,346     185,039     197,259     31,386       428,025     535,451     85,198  Cost of         (44,319)    (46,149)    (58,514)    (9,310)      (114,416)   (145,938)   (23,221) services Gross profit        120,027     138,890     138,745     22,076       313,609     389,513     61,977 Operating expenses: Service             (26,347)    (30,494)    (33,381)    (5,311)      (69,595)    (91,110)    (14,497) development Sales and           (68,993)    (90,526)    (144,722)   (23,028)     (167,496)   (302,198)   (48,084) marketing General and         (12,936)    (14,591)    (16,194)    (2,577)      (38,641)    (45,559)    (7,249) administrative Amortization of     (137)       (279)       (279)       (44)         (410)       (809)       (129) intangible assets Charges related to property and        (7)         -           (378)       (60)         (148)       (378)       (60) equipment and intangible assets Total operating    (108,420)   (135,890)   (194,954)   (31,020)     (276,290)   (440,054)   (70,019) expenses Income/(loss) from  11,607      3,000       (56,209)    (8,944)      37,319      (50,541)    (8,042) operations Other income/(expenses): Interest income     7,166       14,006      14,955      2,380        17,061      40,568      6,455 Foreign exchange    (5,923)     (29)        (83)        (13)         (17,189)    (730)       (116) losses Other               (337)       65          1,339       213          (4,855)     2,829       450 Total other income/(expense),   906         14,042      16,211      2,580        (4,983)     42,667      6,789 net Income/(loss) before income tax   12,513      17,042      (39,998)    (6,364)      32,336      (7,874)     (1,253) benefit/(expense)  Income tax      (2,921)     (963)       7,178       1,142        (7,956)     3,567       568 benefit/(expense)  Equity in net   (156)       (65)        (320)       (51)         (115)       (935)       (149) loss of affiliates Net income/(loss)   9,436       16,014      (33,140)    (5,273)      24,265      (5,242)     (834) Net income/(loss)   0.14        0.23        (0.48)      (0.08)       0.42        (0.08)      (0.01) per share Diluted net income/(loss) per   0.14        0.23        (0.48)      (0.08)       0.40        (0.08)      (0.01) share Net income/(loss)   0.28        0.46        (0.96)      (0.16)       0.84        (0.16)      (0.02) per ADS^(2)(3) Diluted net income/(loss) per   0.28        0.46        (0.96)      (0.16)       0.80        (0.16)      (0.02) ADS^(2)(3) Shares used in computing net income per share[:]  Basic      67,831      68,687      68,859      68,859       57,782      68,711      68,711  Diluted    69,547      69,225      69,404      69,404       60,003      69,438      69,438 Share-based compensation        5,886       8,168       6,979       1,110        16,304      22,096      3,516 charges included in:  Cost of     393         638         417         66           1,084       1,520       242 services  Service     2,239       3,221       2,660       423          5,514       8,653       1,377 development  Sales and   1,114       1,069       1,015       162          2,678       3,370       536 marketing  General     2,140       3,240       2,887       459          7,028       8,553       1,361 and administrative   Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB6.2848 on September 30, 2012 in the City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve. No representation is made that the RMB amounts could have been, or could be, converted or settled into USD at the rates stated herein on the reporting dates, at any other rates or at all. Note 2: 1 ADS = 2 shares. Note 3: Non-GAAP financial measures      eLong, Inc. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)                                                                           Dec. 31,    Sep. 30,      Sep. 30,                                                                           2011        2012          2012                                                                           RMB         RMB           USD                                                                                       (Unaudited)   (Unaudited) ASSETS Current assets: Cash and cash equivalents                                                 411,676     341,220       54,293 Short-term investments                                                    1,433,425   1,519,243     241,733 Restricted cash                                                           61,400      61,400        9,770 Accounts receivable, net                                                  83,311      131,620       20,943 Amounts due from related parties                                          11,632      29,896        4,757 Prepaid expenses                                                          18,223      26,626        4,237 Other current assets                                                      33,761      101,300       16,117 Total current assets                                                      2,053,428   2,211,305     351,850 Property and equipment, net                                               44,230      70,772        11,261 Investment in equity affiliates                                           15,549      18,024        2,868 Goodwill                                                                  61,061      61,061        9,716 Intangible assets, net                                                    5,308       6,969         1,109 Other non-current assets                                                  31,142      35,664        5,674 Total assets                                                              2,210,718   2,403,795     382,478 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable                                                          60,899      88,196        14,033 Income taxes payable                                                      7,009       9,650         1,535 Amounts due to related parties                                            2,624       61,076        9,718 Deferred revenue                                                          20,880      40,693        6,475 Accrued expenses and other current liabilities                            111,787     180,929       28,789 Total current liabilities                                                 203,199     380,544       60,550 Other liabilities                                                         1,536       1,494         238 Total liabilities                                                         204,735     382,038       60,788 Shareholders' equity Ordinary shares                                                           2,864       2,864         456 High-vote ordinary shares                                                 2,691       2,691         428 Treasury stock                                                            (75,494)    (72,377)      (11,516) Additional paid-in capital                                                2,209,469   2,231,344     355,038 Accumulateddeficit  (133,547)   (142,765)     (22,716) Total shareholders' equity                                                2,005,983   2,021,757     321,690 Total liabilities and shareholders' equity                                2,210,718   2,403,795     382,478      eLong, Inc. TRENDED OPERATIONAL METRICS (IN THOUSANDS) The metrics below are intended as a supplement to the financial statements found in this press release and in our filings with the SEC. In the event of discrepancies between amounts in these tables and our historical financial statements, readers should rely on our filings with the SEC and financial statements in our most recent press release. We intend to periodically review and refine the definition, methodology and appropriateness of each of our supplemental metrics. As a result, metrics are subject to removal and/or change, and such changes could be material.                         2011 (Unaudited)                   2012 (Unaudited)                         Q1    Q2     Q3     Q4     2011   Q1    Q2    Q3 Hotel Reservations Room Nights             1,700  2,217  2,702  2,583  9,202  2,844  3,666  4,601 Room Night Y/Y          41%    43%    42%    50%    44%    67%    65%    70% Average Daily Rate Y/Y  (1%)   (9%)   (9%)   (8%)   (7%)   (12%)  (11%)  (9%) Commission/Room Night   (7%)   (15%)  (12%)  (7%)   (10%)  (19%)  (11%)  (27%) Y/Y Hotel Commissions Y/Y   31%    22%    25%    39%    29%    36%    47%    24% Air Ticketing Air Segments            587    568    591    571    2,317  554    525    662 Air Segments Y/Y        (10%)  (4%)   (6%)   1%     (5%)   (6%)   (8%)   12% Average Ticket Value    11%    7%     0%     4%     5%     1%     5%     0% Y/Y Commission/Segment Y/Y  14%    10%    8%     (4%)   7%     (5%)   1%     (7%) Air Commissions Y/Y     2%     6%     2%     (4%)   2%     (10%)  (7%)   5%  Non-GAAP Financial Measures  To supplement the financial measures calculated in accordance with generally accepted accounting principles in the United States, or GAAP, this press release includes certain non-GAAP financial measures including net income per ADS, diluted net income per ADS, Adjusted Earnings Before Interests, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), Adjusted Net Income ("ANI") and Adjusted Net Income Per Share. We believe these non-GAAP financial measures may help investors understand eLong's current financial performance and compare business trends among different reporting periods. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with GAAP. We seek to compensate for the limitations of the non-GAAP measures presented by also providing the comparable GAAP measures, GAAP financial statements, and descriptions of the reconciling items and adjustments, to derive the non-GAAP measures.  Adjusted EBITDA is defined as net income plus (1) interest expense (income); (2) income tax expense; (3) depreciation; (4) amortization of intangible assets; (5) share-based compensation charges; (6) foreign exchange losses (gains); (7) acquisition-related impacts, including (i) goodwill and intangible asset impairment, and (ii) losses (gains) recognized on noncontrolling investment basis adjustments when we acquire controlling interests; and (8) certain other items, including restructuring charges and equity in net loss (income) of affiliates. We believe Adjusted EBITDA is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions, if any, and income tax expense. Since share-based compensation charges are non-cash expenses, we believe excluding them from our calculation of Adjusted EBITDA allows us to provide investors with a more useful tool for assessing our operating and financial performance. In addition, we believe that Adjusted EBITDA is used by other companies and may be used by investors as a measure of our financial performance. The presentation of Adjusted EBITDA should not be construed as an indication that eLong's future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business. The use of Adjusted EBITDA has certain limitations. Amortization and depreciation expenses for various non-current assets, share-based compensation charges, other income/(expenses), and income tax expense have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of eLong's liquidity. We seek to compensate for these limitations by providing the relevant disclosure of our amortization and depreciation expenses, and share-based compensation charges in the reconciliations to the GAAP financial measure. The term Adjusted EBITDA is not defined under GAAP, and Adjusted EBITDA is not measure of net income, income from operations, operating performance or liquidity presented in accordance with GAAP. In addition, eLong's Adjusted EBITDA may not be comparable to Adjusted EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA in the same manner as we do.  Adjusted EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP measures. We present a reconciliation of this non-GAAP financial measure to GAAP below.    eLong, Inc. TABULAR RECONCILIATION FOR NON-GAAP MEASURE Adjusted EBITDA (IN THOUSANDS)                   2011 (Unaudited)                         2012 (Unaudited)                   Q1      Q2      Q3      Q4      2011     Q1       Q2       Q3                   RMB     RMB     RMB     RMB     RMB      RMB      RMB      RMB Net income        7,712   7,119   9,436   15,004  39,271   11,883   16,014   (33,140) Interest income   (4,591) (5,304) (7,166) (8,587) (25,648) (11,606) (14,006) (14,955) Income tax        2,786   2,250   2,921   2,790   10,747   2,648    963      (7,178) expense/(benefit) Depreciation      4,987   5,206   5,512   5,593   21,298   5,985    6,435    7,096 Amortization of   136     137     137     137     547      251      279      279 intangible assets Share-based compensation      4,779   5,637   5,886   5,620   21,922   6,948    8,168    6,979 charges Foreign exchange  3,131   8,135   5,923   2,314   19,503   617      29       83 losses Other             15      84      161     1,155   1,415    (873)    -        (641) Adjusted EBITDA   18,955  23,264  22,810  24,026  89,055   15,853   17,882   (41,477)  Adjusted Net Income generally captures all items on the statements of operations that occur in normal course operations and have been, or ultimately will be, settled in cash and is defined as net income plus net of tax: (1) share-based compensation charges; (2) acquisition-related impacts, including (i) amortization of intangible assets, including as part of equity-method investments, and goodwill and intangible asset impairment, (ii) losses (gains) recognized on changes in the value of contingent consideration arrangements, and (iii) losses (gains) recognized on noncontrolling investment basis adjustments when we acquire controlling interests; (3) foreign exchange losses; (4) certain other items, including restructuring charges; and (5) discontinued operations. We believe Adjusted Net Income is useful to investors because it represents eLong's results, taking into account depreciation, which management believes is an ongoing cost of doing business, but excluding the impact of other non-cash expenses, infrequently occurring items and items not directly tied to the core operations of our businesses.  Adjusted Net Income Per Share is defined as Adjusted Net Income divided by adjusted weighted average shares outstanding, which include dilution from options and warrants per the treasury stock method and include all shares relating to Performance Units in shares outstanding for Adjusted Net Income Per Share. This differs from the GAAP method for including Performance Units, which treats them on a treasury stock method basis. Shares outstanding for Adjusted Net Income Per Share purposes are therefore higher than shares outstanding for GAAP Net Income Per Share purposes. We believe Adjusted Net Income Per Share is useful to investors because it represents, on a per share basis, eLong's consolidated results, taking into account depreciation, which we believe is an ongoing cost of doing business, as well as other items which are not allocated to the operating businesses such as interest income and income tax expense, but excluding the effects of non-cash expenses not directly tied to the core operations of our businesses. Adjusted Net Income and Adjusted Net Income Per Share have similar limitations as Adjusted EBITDA. In addition, Adjusted Net Income does not include all items that affect our net income and net income per share for the period. Therefore, we think it is important to evaluate these measures along with our consolidated statements of operations.  Adjusted Net Income and Adjusted Net Income Per Share should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP measures. We present a reconciliation of these non-GAAP financial measures to GAAP below.    eLong, Inc. TABULAR RECONCILIATION FOR NON-GAAP MEASURE Adjusted Net Income and Adjusted Net Income Per Share (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)                      2011 (Unaudited)                   2012 (Unaudited)                      Q1     Q2     Q3     Q4     2011   Q1     Q2     Q3                      RMB    RMB    RMB    RMB    RMB    RMB    RMB    RMB Net income           7,712  7,119  9,436  15,004 39,271 11,883 16,014 (33,140) Share-based          4,779  5,637  5,886  5,620  21,922 6,948  8,168  6,979 compensation charges Amortization of      136    137    137    137    547    251    279    279 intangible assets Foreign exchange     3,131  8,135  5,923  2,314  19,503 617    29     83 losses Other                3,432  386    263    524    4,605  (40)   (73)   317 Adjusted net income  19,190 21,414 21,645 23,599 85,848 19,659 24,417 (25,482) Shares used in computing adjusted net income per share: GAAP diluted weighted average     52,105 57,920 69,547 69,080 62,298 69,342 69,225 69,404 shares outstanding Additional           316    229    214    280    262    390    796    747 performance units Adjusted weighted average shares       52,421 58,149 69,761 69,360 62,560 69,732 70,021 70,151 outstanding Adjusted net income  0.37   0.37   0.31   0.34   1.37   0.28   0.35   (0.36) per share    SOURCE eLong, Inc.  Website: http://www.eLong.com Website: http://www.elong.net/AboutUs/conference.html  
Press spacebar to pause and continue. Press esc to stop.