eLong Reports Fourth Quarter and Full Year 2012 Unaudited Financial Results

 eLong Reports Fourth Quarter and Full Year 2012 Unaudited Financial Results

Hotelroom nights increased 75% in 2012 to more than 16 million

PR Newswire

BEIJING, Feb. 21, 2012

BEIJING, Feb. 21, 2012 /PRNewswire / -- eLong, Inc. (Nasdaq: LONG), a leading
online travel service provider in China, today reported unaudited financial
results for the fourth quarter and full year ended December 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20041118/ELONGLOGO )

Highlights - Fourth Quarter 2012

  oHotel room nights booked through eLong in the fourth quarter increased 94%
    to 5.0 million room nights compared to 2.6 million in the prior year
    period. This was in part due to technology system improvements by which
    groupbuy room nights can be tracked by date of customer stay, rather than
    date of groupbuy voucher expiration. Excluding this technology change,
    room nights in the fourth quarter increased 81% compared to the fourth
    quarter of 2011.
  oOnline hotel bookings comprised more than three-fourths of total hotel
    bookings, compared to more than 60% in the fourth quarter of 2011.
  oHotel commission revenue for the fourth quarter increased 38% to RMB175.0
    million (US$28.1 million), compared to RMB126.6 million (US$20.1 million)
    in the fourth quarter of 2011. Excluding the groupbuy technology system
    change, hotel commission revenue increased 36% compared to the fourth
    quarter of 2011.
  oNet revenues for the fourth quarter increased 32% to RMB208.8 million
    (US$33.5 million), compared to RMB158.2 million (US$25.1 million) in the
    fourth quarter of 2011.
  oeLong's domestic hotel coverage expanded 53% year-on-year. Customers can
    book nearly 200,000 hotels through eLong, including international hotels
    available via direct connection to Expedia.

Highlights - Full Year 2012

  oHotel room nights booked through eLong in 2012 increased 75%  to 16.1
    million room nights compared to 9.2 million in the prior year.
  oHotel commission revenue in 2012 increased 36% to RMB608.3 million
    (US$97.6 million), compared to RMB447.9 million (US$71.2 million) in 2011.
  oNet revenues in 2012 increased 27% to RMB744.2 million (US$119.5 million),
    compared to RMB586.2 million (US$93.1 million) in 2011.
  oLaunched marketing campaign, with the slogan "Book Hotel, Use eLong", that
    improved eLong brand awareness.

"In a dynamic and highly competitive marketplace, eLong performed well in
2012. More and more customers trust eLong to fulfill their hotel booking and
travel needs, and we are also now increasingly seen as an innovator in the
online travel market through our broad hotel coverage, market-leading hotel
groupbuy business and outstanding mobile apps. Our online hotel strategy is
bearing fruit and we will continue our focused execution with an increased
emphasis on mobile in 2013," said Guangfu Cui, Chief Executive Officer of
eLong.

Business Results

Revenues

Total revenues by product for the fourth quarter of 2012 as compared to the
same period in 2011 were as follows (in RMB million):

                    Q4 2012  %      Q4 2011  %      Y/Y
                             Total           Total  Growth
Hotel reservations  175.0    78%    126.6    76%    38%
Air ticketing       31.4     14%    29.0     17%    8%
Other               18.0     8%     12.6     7%     43%
Total revenues      224.4    100%   168.2    100%   33%

Total revenues by product for the full year 2012 as compared to 2011 were as
follows (in RMB million):

                    2012   %      2011   %      Y/Y
                           Total         Total  Growth
Hotel reservations  608.3  76%    447.9  72%    36%
Air ticketing       123.8  16%    125.1  20%    (1%)
Other               65.1   8%     52.0   8%     25%
Total revenues      797.2  100%   625.0  100%   28%

Hotel Reservations

Hotel commission revenue increased 38% in the fourth 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
fourth quarter increased 94% year-on-year to 5.0 million. Commission per room
night decreased 29% year-on-year, primarily due to the growth of groupbuy and
budget hotels and lower average daily rates across other hotel segments, as
well as the increase in the size of our coupon program. Hotel commission
revenue grew to 78% of total revenues from 76% in the prior year quarter.

Hotel commission revenue increased 36% for full year 2012 compared to 2011,
primarily due to higher room night volume, partially offset by a 22% decrease
in commission per room night. Room nights booked through eLong in 2012
increased 75% year-on-year to 16.1 million. Commission per room night declined
primarily due to the growth of groupbuy and budget hotels and lower average
daily rates across other hotel segments, as well as an increase in the size of
our coupon program. Hotel commission revenue grew to 76% of total revenues
from 72% in the prior year.

Air Ticketing

Air ticketing commission revenue increased 8% in the fourth quarter of 2012
compared to the prior year quarter, driven by an 11% increase in air segments
to 637,000, partially offset by a 3% decrease in commission per segment.
Commission per segment decreased mainly due to a 4% decrease in average ticket
price compared to the same quarter of 2011, as well as our air coupon program.
Air ticketing commission revenue decreased to 14% of total revenues from 17%
in the prior year quarter.

Air ticketing commission revenue for full year 2012 decreased 1% compared to
2011, driven by a 4% decrease in commission per segment, partially offset by a
3% increase in air segments to 2.4 million. Commission per segment decreased
due to a lower air commission rate compared to 2011, as well as our air coupon
program which we launched in June 2012. Air ticketing commission revenue
decreased to 16% of total revenues from 20% in the prior year.

Other

Other revenue is primarily derived from advertising and travel insurance.
Other revenue increased 43% year-on-year in the fourth quarter of 2012, mainly
driven by increased advertising revenue. Other revenue increased to 8% of
total revenues from 7% in the prior year quarter.

Other revenue for full year 2012 increased 25% compared to 2011, mainly driven
by increased advertising revenue. Other revenue was 8% of total revenues,
consistent with the prior year.

Profitability

Gross margin in the fourth quarter of 2012 decreased to 72%, compared to 74%
in the fourth quarter of 2011. Gross margin for full year 2012 decreased to
73%, compared to 74% in 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 fourth quarter of 2012 as compared to the same
period in 2011 were as follows (in RMB million):

                                               % of              % of     Y/Y
                                      Q42012  Net      Q42011  Net      Growth
                                               Revenue           Revenue
Service development                   36.4     17%      27.5     17%      32%
Sales and marketing                   110.1    53%      63.5     40%      74%
General and administrative            17.4     8%       14.6     9%       19%
Amortization of intangible assets    0.2      -        0.1      -        N/M
Chargesrelatedtointangibleassets  1.9      1%       -        -        N/M
Total operating expenses              166.0    79%      105.7    66%      57%

Operating expenses for full year 2012 as compared to 2011 were as follows (in
RMB million):

                                                     % of            % of     Y/Y
                                              2012   Net      2011   Net      Growth
                                                     Revenue         Revenue
Service development                           127.5  17%      97.1   17%      31%
Salesandmarketing  412.3  55%      230.9  39%      79%
General and administrative                    63.0   8%       53.2   9%       18%
Amortization of intangible assets            1.1    -        0.5    -        N/M
Charges related to property and equipment     2.2    1%       0.2    -        N/M
and intangible assets
Total operating expenses                      606.1  81%      381.9  65%      59%

Total operating expenses increased 57% for the fourth quarter of 2012 compared
to the fourth quarter of 2011. Total operating expenses increased to 79% of
net revenues in the fourth quarter of 2012 from 66% in the prior year quarter
which led to an operating loss of RMB15.6 million compared to operating income
of RMB12.0 million in the prior year quarter.

Total operating expenses increased 59% for full year 2012 compared to 2011.
Total operating expenses increased to 81% of net revenues in 2012 from 65% in
2011 which led to an operating loss of RMB66.2 million compared to operating
income of RMB49.3 million in the prior year.

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 32% compared to the prior year quarter, mainly driven by
higher personnel expenses. Service development expenses were 17% of net
revenues, consistent with the same quarter of 2011.

Service development expenses for full year 2012 increased 31% compared to
2011, mainly driven by higher personnel expenses. Service development expenses
were 17% of net revenues, consistent with 2011.

Sales and marketing expenses for the fourth quarter of 2012 increased 74% over
the prior year quarter, mainly driven by increased spending on online
marketing, advertising expenses from our brand marketing campaign, and hotel
commission payments to affiliates. Sales and marketing expenses increased to
53% of net revenues in the fourth quarter of 2012 from 40% in the same quarter
of 2011.

Sales and marketing expenses for full year 2012 increased 79% over 2011,
mainly driven by increased spending on online marketing, advertising expenses
from our brand marketing campaign, and hotel commission payments to
affiliates. Sales and marketing expenses increased to 55% of net revenues in
2012 from 39% in 2011.

General and administrative expenses for the fourth quarter of 2012 increased
19% compared to the prior year quarter, mainly driven by higher personnel
expenses. General and administrative expenses decreased to 8% of net revenues
in the fourth quarter of 2012 from 9% in the same quarter of 2011.

General and administrative expenses for full year 2012 increased 18% compared
to 2011, mainly driven by higher personnel expenses. General and
administrative expenses decreased to 8% of net revenues in 2012 from 9% in
2011.

Other income/(expense) represents interest income, foreign exchange losses and
other income/(expense). Other income was RMB13.8 million in the fourth quarter
of 2012 compared to other income of RMB6.3 million in the fourth quarter of
2011, primarily driven by an increase in interest income and a decrease in
foreign exchange losses.

Other income was RMB56.5 million for full year 2012 compared to other income
of RMB1.3 million in 2011, primarily driven by an increase in interest income
and a decrease in foreign exchange losses. Interest income in 2012 increased
to RMB55.3 million, compared to RMB25.6 million in 2011, due to higher
interest yield. Foreign exchange losses on our cash and cash equivalents and
short-term investments decreased to RMB2.0 million in 2012, from RMB19.5
million in 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.

As of December 31, 2012, eLong held cash and cash equivalents, short-term
investments and restricted cash of RMB2.0 billion (US$314 million), of which
98% was held in Renminbi and 2% in US dollars, compared to total cash and cash
equivalents, short-term investments and restricted cash of RMB1.9 billion
(US$303 million), of which 86% was held in Renminbi and 14% held in US dollars
as of December 31, 2011.

Net income for the fourth quarter of 2012 was RMB5.7 million, compared to net
income of RMB15.0 million during the prior year quarter.

Net income for full year 2012 was RMB0.5 million, compared to net income of
RMB39.3 million in 2011.

Net income per ADS and diluted net income per ADS for the fourth quarter of
2012 were each RMB0.16 (US$0.02), compared to net income per ADS and diluted
net income per ADS of RMB0.44 (US$0.08) in the prior year quarter.

Net income per ADS and diluted net income per ADS for full year 2012 were each
RMB0.02 (US$0.002), compared to net income per ADS and diluted net income per
ADS of RMB1.30 (US$0.20) and RMB1.26 (US$0.20) respectively in full year 2011.

Business Outlook

eLong currently expects net revenues for the first quarter of 2013 to increase
by 20% to 30% compared to the first quarter of 2012. This outlook reflects
eLong's current and preliminary view, which is subject to change.

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 fourth quarter 2012 unaudited
financial results on February 22, 2013 at 8:30 am Beijing time (February 21,
2013, 7:30 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. The toll-free numbers for China Mainland participants are
10800-712-1470 (China Unicom) and 10800-120-1470 (China Telecom) and the toll
number for China Mainland participants is 86-400-810-4731. 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 leader in online hotel reservations in
China offering consumers a leading hotel network of almost 200,000 bookable
domestic and international properties in 200 countries worldwide. eLong uses
innovative technology to enable travelers to make informed hotel and air
ticket booking decisions through its convenient website and mobile (iPhone,
iPad, Android, and Windows Phone) applications and easy to use tools such as
destination guides, photos, virtual tours, maps and user reviews. eLong
provides 24-hour customer support and the ability to 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 and www.elong.net.

eLong, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AND PER ADS AMOUNTS)
                    Three Months Ended                               Year Ended
                    Dec. 31,   Sep. 30,   Dec. 31,    Dec. 31,    Dec.31, Dec. 31,    Dec. 31,
                    2011        2012        2012        2012         2011      2012        2012
                    RMB         RMB         RMB         USD^(1)      RMB       RMB         USD^(1)
                    (Unaudited) (Unaudited) (Unaudited) (Unaudited)  (Audited) (Unaudited) (Unaudited)
Revenues:
Hotel reservations  126,631     156,598     174,983     28,087       447,877   608,319     97,642
Air ticketing       29,002      35,198      31,454      5,049        125,095   123,754     19,864
Other               12,556      20,053      17,987      2,887        52,028    65,136      10,455
Total revenues      168,189     211,849     224,424     36,023       625,000   797,209     127,961
Business tax and    (10,037)    (14,590)    (15,630)    (2,509)      (38,822)  (52,965)    (8,501)
surcharges
Net revenues        158,152     197,259     208,794     33,514       586,178   744,244     119,460
 Cost of         (40,449)    (58,514)    (58,386)    (9,372)      (154,864) (204,323)   (32,796)
services
Gross profit        117,703     138,745     150,408     24,142       431,314   539,921     86,664
Operating
expenses:
Service             (27,502)    (33,381)    (36,358)    (5,836)      (97,097)  (127,467)   (20,460)
development
Sales and           (63,449)    (144,722)   (110,144)   (17,679)     (230,946) (412,344)   (66,186)
marketing
General and         (14,598)    (16,194)    (17,409)    (2,794)      (53,239)  (62,968)    (10,107)
administrative
Amortization of     (137)       (279)       (247)       (40)         (547)     (1,056)     (170)
intangible assets
Charges related to
property and        (4)         (378)       (1,860)     (299)        (152)     (2,238)     (359)
equipment and
intangible assets
Total operating     (105,690)   (194,954)   (166,018)   (26,648)     (381,981) (606,073)   (97,282)
expenses
Income/(loss) from  12,013      (56,209)    (15,610)    (2,506)      49,333    (66,152)    (10,618)
operations
Other
income/(expenses):
Interest income     8,587       14,955      14,691      2,358        25,648    55,259      8,870
Foreign exchange    (2,314)     (83)        (1,237)     (199)        (19,503)  (1,967)     (316)
losses
Other               24          1,339       340         55           (4,830)   3,168       509
Total other
income/(expense),   6,297       16,211      13,794      2,214        1,315     56,460      9,063
net
Income/(loss)
before income tax   18,310      (39,998)    (1,816)     (292)        50,648    (9,692)     (1,555)
benefit/(expense)
 Income tax      (2,790)     7,178       12,450      1,998        (10,746)  16,016      2,571
benefit/(expense)
Impairment loss on
equity method       -           -           (4,812)     (772)        -         (4,812)     (772)
investment
 Equity in net  (516)       (320)       (107)       (17)         (631)     (1,041)     (167)
loss of affiliates
Net income/(loss)   15,004      (33,140)    5,715       917          39,271    471         77
Net income/(loss)   0.22        (0.48)      0.08        0.01         0.65      0.01        0.001
per share
Diluted net
income/(loss) per   0.22        (0.48)      0.08        0.01         0.63      0.01        0.001
share
Net income/(loss)   0.44        (0.96)      0.16        0.02         1.30      0.02        0.002
per ADS^(2)(3)
Diluted net
income/(loss) per   0.44        (0.96)      0.16        0.02         1.26      0.02        0.002
ADS^(2)(3)
Shares used in computing net
income per share[:]
 Basic         68,389      68,859      69,196      69,196       60,456    68,833      68,833
 Diluted       69,080      69,404      69,862      69,862       62,298    69,443      69,443
Share-based
compensation        5,620       6,979       7,853       1,260        21,922    29,948      4,807
charges included
in:
 Cost of     290         417         412         66           1,374     1,932       310
services
 Service     2,112       2,660       2,807       450          7,626     11,459      1,839
development
 Sales and   943         1,015       952         153          3,620     4,322       694
marketing
 General     2,275       2,887       3,682       591          9,302     12,235      1,964
and administrative


Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying
rate of USD1.00=RMB6.2301 on December 31, 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.31,2011  Dec.31,2012  Dec.31,2012
                                            RMB            RMB            USD
                                            (Audited)      (Unaudited)    (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                   411,676        311,140        49,941
Short-term investments                      1,433,425      1,581,502      253,849
Restricted cash                             61,400         61,400         9,855
Accounts receivable, net                    83,311         127,973        20,541
Amounts due from related parties            11,632         23,639         3,794
Prepaid expenses                            18,223         21,240         3,409
Other current assets                        33,761         68,666         11,023
Total current assets                        2,053,428      2,195,560      352,412
Property and equipment, net                 44,230         72,362         11,615
Investment in equity affiliates             15,549         42,031         6,746
Goodwill                                    61,061         77,782         12,485
Intangible assets, net                      5,308          14,712         2,361
Other non-current assets                    31,142         68,186         10,945
Total assets                                2,210,718      2,470,633      396,564
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                            60,899         124,598        19,999
Income taxes payable                        7,009          14,671         2,355
Amounts due to related parties              2,624          84,236         13,521
Deferred revenue                            20,880         10,197         1,637
Accrued expenses and other current          111,787        198,970        31,937
liabilities
Total current liabilities                   203,199        432,672        69,449
Other liabilities                           1,536          1,086          174
Total liabilities                           204,735        433,758        69,623
Shareholders' equity
Ordinary shares                             2,864          2,864          460
High-vote ordinary shares                   2,691          2,691          432
Treasury stock                              (75,494)       (70,105)       (11,253)
Additional paid-in capital                  2,209,469      2,238,577      359,316
Accumulated deficit                         (133,547)      (137,152)      (22,014)
Total shareholders' equity                  2,005,983      2,036,875      326,941
Totalliabilitiesandshareholders'equity  2,210,718      2,470,633      396,564



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   Q4    2012
Hotel Reservations
Room Nights        1,700 2,217 2,702 2,583 9,202 2,843 3,666 4,601 5,014 16,124
Room Night Y/Y     41%   43%   42%   50%   44%   67%   65%   70%   94%   75%
Average Daily Rate (1%)  (9%)  (9%)  (8%)  (7%)  (12%) (11%) (9%)  (15%) (12%)
Y/Y
Commission/Room    (7%)  (15%) (12%) (7%)  (10%) (19%) (11%) (27%) (29%) (22%)
Night Y/Y
Hotel Commissions  31%   22%   25%   39%   29%   36%   47%   24%   38%   36%
Y/Y
Air Ticketing
Air Segments       587   568   591   571   2,317 554   525   662   637   2,378
Air Segments Y/Y   (10%) (4%)  (6%)  1%    (5%)  (6%)  (8%)  12%   11%   3%
Average Ticket     11%   7%    0%    4%    5%    1%    5%    0%    (4%)  1%
Value Y/Y
Commission/Segment 14%   10%   8%    (4%)  7%    (5%)  1%    (7%)  (3%)  (4%)
Y/Y
Air Commissions    2%    6%    2%    (4%)  2%    (10%) (7%)  5%    8%    (1%)
Y/Y

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 (benefit); (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,
impairment loss on equity method investment 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 (benefit). 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 (benefit) 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       Q4       2012
                                            RMB     RMB     RMB     RMB     RMB      RMB      RMB      RMB      RMB      RMB
Net income/(loss)                           7,712   7,119   9,436   15,004  39,271   11,883   16,013   (33,140) 5,715    471
Interest income                             (4,591) (5,304) (7,166) (8,587) (25,648) (11,607) (14,006) (14,955) (14,691) (55,259)
Income tax expense/(benefit)                2,786   2,250   2,921   2,790   10,747   2,649    963      (7,178)  (12,450) (16,016)
Depreciation                                4,987   5,206   5,512   5,593   21,298   5,985    6,435    7,096    7,420    26,936
Amortization of intangible assets           136     137     137     137     547      251      279      279      247      1,056
Share-based compensation charges            4,779   5,637   5,886   5,620   21,922   6,948    8,168    6,979    7,853    29,948
Foreign exchange losses                     3,131   8,135   5,923   2,314   19,503   618      29       83       1,237    1,967
Impairmentlossonequitymethodinvestment -       -       -       -       -        -        -        -        4,812    4,812
Other                                       15      84      161     1,155   1,415    (873)    -        (641)    1,627    113
Adjusted EBITDA                             18,955  23,264  22,810  24,026  89,055   15,854   17,881   (41,477) 1,770    (5,972)

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 (benefit), 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       Q4     2012
                                                 RMB    RMB    RMB    RMB    RMB    RMB    RMB    RMB      RMB    RMB
Net income/(loss)                                7,712  7,119  9,436  15,004 39,271 11,882 16,014 (33,140) 5,715  471
Share-based compensation charges                 4,779  5,637  5,886  5,620  21,922 6,948  8,168  6,979    7,853  29,948
Amortization of intangible assets                136    137    137    137    547    251    279    279      247    1,056
Foreign exchange losses                          3,131  8,135  5,923  2,314  19,503 618    29     83       1,237  1,967
Other                                            3,432  386    263    524    4,605  (40)   (73)   317      1,711  1,915
Adjusted net income/(loss)                       19,190 21,414 21,645 23,599 85,848 19,659 24,417 (25,482) 16,763 35,357
Shares used in computing adjusted net income per share:
GAAPdilutedweightedaveragesharesoutstanding 52,105 57,920 69,547 69,080 62,298 69,342 69,225 69,404   69,862 69,443
Additional performance units                     316    229    214    280    262    390    796    747      904    724
Adjusted weighted average shares outstanding     52,421 58,149 69,761 69,360 62,560 69,732 70,021 70,151   70,766 70,167
Adjusted net income/(loss) per share             0.37   0.37   0.31   0.34   1.37   0.28   0.35   (0.36)   0.24   0.50



SOURCE eLong, Inc.

Website: http://www.eLong.com
Contact: eLong, Inc., Investor Relations, ir@corp.elong.com, +86-10-6436-7570
 
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