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China Lodging Group, Limited Reports Fourth Quarter and Full Year 2012 Financial Results



China Lodging Group, Limited Reports Fourth Quarter and Full Year 2012
Financial Results

  * Net Revenues increased 35.7% year-over-year for the fourth quarter and
    43.3% for the full year of 2012, exceeding the high end of previously
    announced guidance.
  * Adjusted EBITDA from operating hotels (non-GAAP)^1 increased 23.8% for the
    fourth quarter and 43.6% for the full year of 2012.
  * Net income attributable to China Lodging Group, Limited was RMB18.2
    million (US$2.9 million)^2 for the fourth quarter and RMB174.9 million
    (US$28.1 million) for the full year of 2012. Diluted net earnings per
    ADS^3 for the year were RMB2.83 (US$0.45); adjusted diluted net earnings
    per ADS (non-GAAP) for the year were RMB3.17 (US$0.51), representing a
    growth of 49.5% from prior year.
  * A total of 1,035 hotels or 113,650 hotel rooms in operation as of December
    31, 2012
  * The Company provided guidance for full year 2013 net revenues growth of
    26% to 29% and Q1 net revenue growth of 30% to 32%.

SHANGHAI, China, March 6, 2013 (GLOBE NEWSWIRE) -- China Lodging Group,
Limited (Nasdaq:HTHT) ("China Lodging Group" or the "Company"), a leading and
fast-growing multi-brand hotel group in China, today announced its unaudited
financial results for the fourth quarter and full year ended December 31,
2012.

Fourth Quarter 2012 Operational Highlights

  * During the fourth quarter of 2012, the Company opened 50 leased
    ("leased-and- operated") hotels and 70 net manachised
    ("franchised-and-managed") hotels.
  * The occupancy rate for all hotels in operation (excluding franchised
    Starway hotels) was 92% in the fourth quarter of 2012, compared with 93%
    in the fourth quarter of 2011 and 97% in the previous quarter. The slight
    year-over-year decrease was mainly because our fast expansion led to a
    higher percentage of manachised hotels at the ramping-up stage during the
    fourth quarter of 2012, compared to a year ago. The sequential decrease
    resulted mainly from seasonality.
  * The ADR, which is defined as the average daily rate for all hotels in
    operation (excluding franchised Starway hotels), was RMB176 in the fourth
    quarter of 2012, compared with RMB179 in the fourth quarter of 2011 and
    RMB183 in the previous quarter. The year-over-year decrease was mainly
    attributable to the city mix shifting toward lower-tier cities, partially
    offset by an increase in same-hotel ADR. The sequential decrease resulted
    mainly from seasonality.
  * RevPAR, defined as revenue per available room for all hotels in operation
    (excluding franchised Starway hotels), was RMB162 in the fourth quarter of
    2012, compared with RMB167 in the fourth quarter of 2011 and RMB178 in the
    previous quarter.  RevPAR for leased hotels was RMB167 in the fourth
    quarter of 2012, compared with RMB170 in the fourth quarter of 2011, and
    RMB183 in the previous quarter. 
  * For all hotels which had been in operation for at least 18 months
    (excluding franchised Starway hotels), the same-hotel RevPAR was RMB179
    for the fourth quarter of 2012, a 2% increase from RMB175 for the fourth
    quarter of 2011, with a 1% increase in ADR and a one percentage-point
    increase in occupancy rate.

Full Year 2012 Operational Highlights

  * For the full year of 2012, the Company opened 121 net new leased hotels
    and 221 net new manachised hotels, a total of 342 hotels, exceeding our
    previously announced guidance. As of December 31, 2012, the Company had
    465 leased hotels, 516 manachised hotels, and 54 franchised Starway hotels
    in operation in 171 cities. The leased and manachised hotel rooms in
    operation increased by 35% and 72%, respectively, from a year ago.
  * As of December 31, 2012, the Company had a total pipeline of 410 new
    hotels, including 80 leased hotels and 330 manachised hotels.
  * For the full year of 2012, the occupancy rate for all hotels in operation
    (excluding franchised Starway hotels) was 94%, two percentage points
    higher than 2011. 
  * For the full year of 2012, the ADR was RMB178, compared to RMB180 in 2011.
    The decrease was primarily due to the shift of city mix of hotels toward
    lower-tier cities, partially offset by an increase in same-hotel ADR.
  * For the full year of 2012, the RevPAR for all hotels in operation,
    excluding franchised Starway hotels, was RMB168, a 2% increase from RMB165
    in 2011.  RevPAR for leased hotel was RMB 173, a 4% increase from RMB167
    in 2011.
  * For all the hotels which had been in operation for at least 18 months,
    excluding franchised Starway hotels, the same-hotel RevPAR was RMB186 in
    2012, a 6% increase from RMB176 in 2011, with a 2% increase in ADR and a
    three percentage-point increase in occupancy rate.
  * As of December 31, 2012, the Company's loyalty program had more than 8
    million members, who contributed more than 80% of room nights sold during
    the full year of 2012. In 2012, 96% of room nights were sold through the
    Company's own channels.

"We are delighted that we concluded 2012 with a strong result, exceeding 1,000
hotels and covering 171 cities," said Mr. Qi Ji, founder, executive Chairman
and Chief Executive Officer of China Lodging Group. He continued: "Our blended
hotel occupancy and RevPAR both improved even though we expanded scale and
penetrated our business into lower-tier cities. Our same-hotel RevPAR for the
full year improved by 6%, thanks to our strong brands, highly-motivated work
force and well-established management system. In 2012, we made remarkable
progress in executing our multi-brand strategy and proudly changed our Chinese
name from Hanting to Hua Zhu. From Hi Inn to Joya Hotel, our product offerings
now cover price range from RMB 100 to RMB 1000. We expect each of our brands
to serve as a successful consolidator in its respective segment. We expect
those successes, in whole, will make Hua Zhu a major force in the large and
fast-growing China lodging market." 

Fourth Quarter and full year of 2012 Financial Results

Total revenues for the fourth quarter of 2012 were RMB936.7 million (US$150.3
million), representing a 35.8% year-over-year increase and a 1.2% sequential
decrease. The year-over-year increases were primarily due to the growth of our
number of hotels. The sequential decrease was mainly due to seasonality.

Total revenues for the year of 2012 were RMB3,419.3 million (US$548.8
million), representing an increase of 43.3% from the year of 2011.

Total revenues from leased hotels for the fourth quarter of 2012 were RMB831.1
million (US$133.4 million), representing a 32.6% year-over-year increase and a
1.8% sequential decrease.

For the year of 2012, total revenues from leased hotels were RMB3,069.4
million (US$492.7 million), representing a 41.3% year-over-year increase. As
of December 31, 2012, the Company had 465 leased hotels in operation, compared
with 344 at the end of 2011.

Total revenues from manachised and franchised hotels for the fourth quarter of
2012 were RMB105.6 million (US$16.9 million), representing a 67.1%
year-over-year increase and a 4.6% sequential increase.

For the year of 2012, total revenues from manachised and franchised hotels
were RMB349.9 million (US$56.1 million), representing a year-over-year
increase of 64.5%, and accounting for 10.2% of total revenues, compared to
8.9% of total revenues for the year of 2011. As of December 31, 2012, the
Company had 516 manachised hotels and 54 franchised Starway hotels in
operation, compared with 295 manachised hotels at the end of 2011.

Net revenues for the fourth quarter of 2012 were RMB883.2 million (US$141.8
million), representing a year-over-year increase of 35.7% and a 1.2%
sequential decrease.

Net revenues for the full year of 2012 were RMB3,224.5 million (US$517.6
million), representing a year-over-year increase of 43.3%.

Hotel operating costs for the fourth quarter of 2012 were RMB694.1 million
(US$111.4 million), compared to RMB493.8 million (US$78.5 million) in the
fourth quarter of 2011 and RMB630.0 million (US$100.2 million) in the previous
quarter, representing 40.6% and 10.2% increases, respectively. The Company's
hotel network expansion, especially the growth in leased hotels, was the main
driver for the increase in hotel operating costs. The average number of leased
hotels in operation^4 during the fourth quarter of 2012 increased 33.7% from
the same period of 2011 and 9.6% sequentially. Total hotel operating costs
excluding share-based compensation expenses (non-GAAP) for the fourth quarter
of 2012 were RMB693.8 million (US$111.4 million), representing 78.6% of net
revenues, compared to 75.8% for the fourth quarter in 2011 and 70.4% in the
previous quarter. The year-over-year increase in cost percentage was mainly
due to cost inflation. Although our cost structure is largely fixed, the
blended cost inflation in the fourth quarter of 2012 exceeded our same-hotel
RevPAR growth of 2%. On top of that, a large number of 77 leased hotels opened
in the third and fourth quarter of 2012 added to the hotel operating cost but
contributed very low revenue during their early stage of ramping-up. The
sequential increase in cost percentage was primarily due to seasonally-lower
RevPAR affecting the percentage calculation.

For the full year of 2012, total hotel operating costs were RMB2,453.9 million
(US$393.9 million), compared to RMB1,703.3 million (US$270.6 million) in 2011.
Excluding share-based compensation, hotel operating costs (non-GAAP) were
RMB2,451.3 million (US$393.5 million), representing 76.0% of net revenues,
compared to 75.6% in 2011. The year-over-year increase of 0.4 percentage point
in cost percentage was mainly driven by cost inflation.

Selling and marketing expenses for the fourth quarter of 2012 were RMB29.0
million (US$4.6 million), compared to RMB29.3 million (US$4.7 million) in the
fourth quarter of 2011 and RMB24.3 million (US$3.9 million) in the previous
quarter. Selling and marketing expenses excluding share-based compensation
expenses (non-GAAP) for the fourth quarter of 2012 were RMB28.8 million
(US$4.6 million), or 3.3% of net revenues, compared to 4.5% for the fourth
quarter in 2011 and 2.7% for the previous quarter. The year-over-year decrease
was mainly attributable to the benefit from economies of scale and the
Company's cost-saving efforts. The sequential increase in percentage resulted
from an increase in marketing programs during the low season.

For the full year of 2012, total selling and marketing expenses were RMB102.8
million (US$16.5 million), compared to RMB94.8 million (US$15.1 million) in
2011. Selling and marketing expenses excluding share-based compensation
expenses (non-GAAP) were RMB101.8 million (US$16.3 million), representing 3.2%
of net revenues, compared to 4.2% in 2011, mainly due to the benefit from
economies of scale and the Company's cost-saving efforts.

General and administrative expenses for the fourth quarter of 2012 were
RMB61.0 million (US$9.8 million), compared to RMB43.8 million (US$7.0 million)
in the fourth quarter of 2011 and RMB55.7 million (US$8.9 million) in the
previous quarter. General and administrative expenses excluding share-based
compensation expenses (non-GAAP) for the fourth quarter of 2012 were RMB56.4
million (US$9.1 million), representing 6.4% of net revenues, compared with
6.4% of net revenues in the fourth quarter of 2011 and 5.5% in the previous
quarter.

General and administrative expenses were RMB217.4 million (US$34.9 million)
for the year of 2012, compared to RMB160.1 million (US$25.4 million) in 2011.
General and administrative expenses excluding share-based compensation
expenses were RMB200.2 million (US$32.1 million), representing 6.2% of net
revenues, compared to 6.5% in 2011, mainly due to the benefit from economies
of scale.

Pre-opening expenses for the fourth quarter of 2012 were RMB69.8 million
(US$11.2 million), compared to RMB49.5 million (US$7.9 million) in the fourth
quarter of 2011 and RMB63.2 million (US$10.1 million) in the previous quarter.
The pre-opening expenses were primarily driven by the number of leased hotels
under conversion during the period. 50 leased hotels were opened during this
quarter and another 80 were in the pipeline at the end of the quarter.

Pre-opening expenses for the full year of 2012 were RMB230.7 million (US$37.0
million), compared to RMB184.3 million (US$29.3 million) in 2011, representing
a year-over-year increase of 25.2%. The increase in pre-opening expenses was
mainly a result of our acceleration of leased hotel openings from 101 in 2011
to 121 in 2012. Our mid-scale brand, JI Hotel, had higher pre-opening expenses
per hotel than our Hanting Hotel brand, due to higher rent for the underlying
property and larger room count. The growth in JI Hotel openings and the strong
JI Hotel pipeline also contributed to the increase of pre-opening expenses in
2012.

Income from operations for the fourth quarter of 2012 was RMB29.3 million
(US$4.7 million), compared to RMB34.4 million (US$5.5 million) in the fourth
quarter of 2011 and RMB120.3 million (US$19.1 million) in the previous
quarter. Excluding share-based compensation expenses, adjusted income from
operations (non-GAAP) for the fourth quarter of 2012 was RMB34.4 million
(US$5.5 million), compared to RMB37.2 million (US$5.9 million) for the fourth
quarter of 2011. The year-over-year decrease was mainly due to cost inflation
and higher pre-opening expenses.

Income from operations for the year was RMB219.7 million (US$35.3 million),
more than doubling RMB107.1 million (US$17.0 million) in 2011. Excluding
share-based compensation expenses, adjusted income from operations (non-GAAP)
for the year of 2012 was RMB240.6 million (US$38.6 million), compared to
RMB122.6 million (US$19.5 million) for the year of 2011. The significant
growth in income from operations was attributable to rapid expansion of our
hotel network, strong same-hotel RevPAR growth and benefit from economies of
scale.

Net income attributable to China Lodging Group, Limited for the fourth quarter
of 2012 was RMB18.2 million (US$2.9 million), compared to RMB30.3 million
(US$4.8 million) in the fourth quarter of 2011 and RMB95.8 million (US$15.2
million) in the previous quarter. Excluding share-based compensation expenses,
adjusted net income attributable to China Lodging Group, Limited (non-GAAP)
for the fourth quarter of 2012 was RMB23.3 million (US$3.7 million), compared
to RMB33.2 million (US$5.3 million) in the fourth quarter of 2011 and RMB103.6
million (US$16.5 million) in the previous quarter. The year-over-year decrease
in net income was mainly due to lower income from operations and interest
income, offset by foreign exchange gain. The sequential decrease in net income
was mainly due to seasonality.

Net income attributable to China Lodging Group, Limited for the full year of
2012 was RMB174.9 million (US$28.1 million), compared to RMB114.8 million
(US$18.2 million) in 2011. Excluding share-based compensation expenses,
adjusted net income attributable to China Lodging Group (non-GAAP) for the
full year of 2012 was RMB195.7 million (US$31.4 million), compared to RMB130.3
million (US$20.7 million) in 2011. The year-over-year increase was mainly
attributable to a higher profit from the expanded base of manachised hotels
and mature leased hotels.

Basic and diluted net earnings per share/ADS. For the fourth quarter of 2012,
basic net earnings per share and diluted net earnings per share were RMB0.07
(US$0.01); basic net earnings per ADS were RMB0.30 (US$0.05) and diluted net
earnings per ADS were RMB0.29 (US$0.05). For the fourth quarter of 2012,
excluding share-based compensation expenses, adjusted basic net earnings per
share (non-GAAP) were RMB0.10 (US$0.02) and adjusted diluted net earnings per
share (non-GAAP) were RMB0.09 (US$0.02); adjusted basic net earnings per ADS
(non-GAAP) and adjusted diluted net earnings per ADS (non-GAAP) were RMB0.38
(US$0.06).

For the full year of 2012, basic net earnings per share were RMB0.72 (US$0.12)
and diluted net earnings per share were RMB0.71 (US$0.11); basic net earnings
per ADS were RMB2.88 (US$0.46), while diluted net earnings per share were
RMB2.83 (US$0.45). For the full year of 2012, excluding share-based
compensation expenses, adjusted net earnings per share (non-GAAP) were RMB0.80
(US$0.13), while adjusted diluted net earnings per share (non-GAAP) were
RMB0.79 (US$0.13), and adjusted net earnings per ADS (non-GAAP) were RMB3.22
(US$0.52), while adjusted diluted net earnings per ADS (non-GAAP) were RMB3.17
(US$0.51).

EBITDA (non-GAAP) for the fourth quarter of 2012 was RMB128.5 million (US$20.6
million), compared with RMB112.0 million (US$17.8 million) in the fourth
quarter of 2011 and RMB213.3 million (US$33.9 million) in the previous
quarter. Excluding pre-opening expenses and share-based compensation expenses,
adjusted EBITDA from operating hotels (non-GAAP) for the fourth quarter of
2012 was RMB203.5 million (US$32.7 million), compared with RMB164.4 million
(US$26.1 million) for the fourth quarter of 2011 and RMB284.3 million (US$45.2
million) for the previous quarter. The year-over-year increase was mainly due
to the expansion of our hotel network. The sequential decrease was mainly due
to seasonality.

EBITDA (non-GAAP) for the full year of 2012 was RMB577.5 million (US$92.7
million), compared to RMB377.4 million (US$60.0 million) in 2011. Excluding
pre-opening expenses and share-based compensation expenses, adjusted EBITDA
from operating hotels (non-GAAP) for the full year of 2012 was RMB829.0
million (US$133.1 million), compared with RMB577.2 million (US$91.7 million)
in 2011. The increase in adjusted EBITDA was mainly driven by the expanded
base of manachised hotels and mature leased hotels.

Hotel income (non-GAAP), which is the difference between net revenues and
hotel operating costs, was RMB189.1 million (US$30.4 million) for the fourth
quarter of 2012, compared with RMB156.9 million (US$24.9 million) in the
fourth quarter of 2011 and RMB263.6 million (US$41.9 million) in the previous
quarter. The year-over-year increase of hotel income (non-GAAP) was mainly
attributable to the enlarged manachised hotel network and the increased number
of mature leased hotels in our portfolio. For leased hotels in operation for
at least six months, the hotel income (non-GAAP) was RMB131.4 million (US$21.1
million) during the fourth quarter of 2012, or 18% of net revenues derived
from those hotels. Leased hotels in operation for less than six months
accounted for 13% of leased room nights available for sale in the fourth
quarter of 2012. Those hotels derived a hotel loss (non-GAAP) of RMB23.6
million (US$3.8 million), or 34% of net revenues derived from those hotels
this quarter, mainly due to anticipated lower revenue achievement of those
hotels during their ramp-up stage. For manachised and franchised hotels, the
hotel income (non-GAAP) was RMB81.3 million (US$13.0 million), or 82% of net
revenue derived from those hotels.

Hotel income (non-GAAP) for the full year of 2012 was RMB770.6 million
(US$123.7 million), compared with RMB546.3 million (US$86.8 million) for 2011.
The year-over-year increase was mainly due to higher hotel income generated
from our expanded network of manachised hotels and mature leased hotels. For
leased hotels in operation for at least six months, the hotel income
(non-GAAP) was RMB577.1 million (US$92.6 million) during 2012, or 22% of net
revenues derived from those hotels. Leased hotels in operation for less than
six months derived a hotel loss (non-GAAP) of RMB72.2 million (US$11.6
million), or 28% of net revenues derived from those hotels in 2012. Losses
generated from leased hotels in operation for less than six months increased
from prior year, due to larger number of rooms added and higher per-hotel
ramping-up loss primarily relating to development of mid-scale hotel brand and
penetration into new cities. For manachised and franchised hotels, hotel
income (non-GAAP) was RMB265.7 million (US$42.6 million), or 81% of net
revenue derived from those hotels.

Cash flow. Net operating cash flow for the fourth quarter of 2012 was RMB191.4
million (US$30.7 million). Cash spent on the purchase of property and
equipment, purchase of intangible assets and acquisitions, which are part of
investing cash flow, was RMB266.2 million (US$42.7 million). 

Net operating cash flow for the full year of 2012 was RMB715.7 million
(US$114.9 million). Cash spent on the purchase of property and equipment,
purchase of intangible assets, long-term investment and acquisitions was
RMB1,059.8 million (US$170.1 million).

Cash and cash equivalents, Restricted cash, and Short-term investment. As of
December 31, 2012, the Company had a total balance of cash and cash
equivalents, restricted cash and short-term investment of RMB459.7 million
(US$73.8 million).

Business Outlook and Guidance for 2013

"We remain positive on the growing trend of travelling demand in China. Our
brand portfolio is well-positioned to meet the diversified needs of customers
who seek good value for their money. In 2013, we plan to add one Joya Hotel;
55 to 65 mid-scale hotels under JI Hotel and Starway Hotel brands; and 275 to
315 economy hotels under the Hanting Hotel and Hi Inn brands," commented Mr.
Ji. The company expects all new hotels added to be under the leased or
manachised models.

The Company expects to achieve net revenues in the range of RMB845 to 860
million in the first quarter of 2013, representing a 30% to 32% growth
year-over-year. For the full year 2013, the Company expects net revenues to
grow 26% to 29% from 2012.

The above forecast reflects the Company's current and preliminary view, which
is subject to change.

Conference Call

China Lodging Group's management will host a conference call at 8 p.m. EST,
Wednesday, March 6, 2013 (or 9 a.m. on Thursday, March 7, 2013 in the
Shanghai/Hong Kong time zone) following the announcement. To participate in
the event by telephone, please dial +1 (855) 500 8701 (for callers in the US),
+86 400 120 0654 (for callers in China Mainland), +852 3051 2745 (for callers
in Hong Kong) or +65 6723 9385 (for callers outside of the US, China Mainland,
and Hong Kong) and entering pass code 9824 7010. Please dial in approximately
10 minutes before the scheduled time of the call.

A recording of the conference call will be available after the conclusion of
the conference call through March 13, 2013. Please dial +1 (855) 452 5696 (for
callers in the US) or +61 2 8199 0299 (for callers outside the US) and
entering pass code 9824 7010 if you wish to listen to this recording.

The conference call will also be webcast live over the Internet and can be
accessed by all interested parties at the Company's website,
http://ir.htinns.com.

Use of Non-GAAP Financial Measures

To supplement the Company's unaudited consolidated financial results presented
in accordance with U.S. GAAP, the Company uses the following non-GAAP measures
defined as non-GAAP financial measures by the SEC: hotel operating costs
excluding share-based compensation expenses; general and administrative
expenses excluding share-based compensation expenses; selling expenses
excluding share-based compensation expenses; adjusted income from operations
excluding share-based compensation expenses; adjusted net income attributable
to China Lodging Group, Limited excluding share-based compensation expenses;
adjusted basic and diluted net earnings per share and per ADS excluding
share-based compensation expenses; EBITDA; adjusted EBITDA from operating
hotels excluding pre-opening expenses and share-based compensation expenses;
and hotel income. The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with U.S. GAAP. For more
information on these non-GAAP financial measures, please see the table
captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end
of this release. The Company believes that these non-GAAP financial measures
provide meaningful supplemental information regarding Company performance by
excluding share-based compensation expenses that may not be indicative of
Company operating performance. The Company believes that both management and
investors benefit from referring to these non-GAAP financial measures in
assessing Company performance and when planning and forecasting future
periods. These non-GAAP financial measures also facilitate management's
internal comparisons to the Company's historical performance. The Company
believes these non-GAAP financial measures are also useful to investors in
allowing for greater transparency with respect to supplemental information
used regularly by Company management in financial and operational
decision-making. A limitation of using non-GAAP financial measures excluding
share-based compensation expenses is that share-based compensation expenses
have been – and will continue to be – a significant recurring expense in the
Company's business. Management compensates for these limitations by providing
specific information regarding the GAAP amounts excluded from each non-GAAP
measure. The accompanying tables have more details on the reconciliations
between GAAP financial measures that are most directly comparable to non-GAAP
financial measures.

The Company believes that EBITDA is a useful financial metric to assess the
operating and financial performance before the impact of investing and
financing transactions and income taxes, given the significant investments
that the Company has made in leasehold improvements, depreciation and
amortization expense that comprise a significant portion of the Company's cost
structure. In addition, the Company believes that EBITDA is widely used by
other companies in the lodging industry and may be used by investors as a
measure of financial performance. The Company believes that EBITDA will
provide investors with a useful tool for comparability between periods because
it eliminates depreciation and amortization expense attributable to capital
expenditures. The Company also uses adjusted EBITDA from operating hotels,
which is defined as EBITDA before pre-opening expenses and share-based
compensation expenses, to assess operating results of the hotels in operation.
The Company believes that the exclusion of pre-opening expenses and
share-based compensation expenses, a portion of which is non-cash rental
expenses, helps facilitate year-on-year comparison of the results of
operations as the number of hotels in the development stage may vary
significantly from year to year. Therefore, the Company believes adjusted
EBITDA from operating hotels more closely reflects the performance capability
of hotels currently in operation. The calculation of EBITDA and adjusted
EBITDA from operating hotels does not deduct interest income. The presentation
of EBITDA and adjusted EBITDA from operating hotels should not be construed as
an indication that the Company's future results will be unaffected by other
charges and gains considered to be outside the ordinary course ofbusiness.

The use of EBITDA and adjusted EBITDA from operating hotels has certain
limitations. Depreciation and amortization expense for various long-term
assets, income tax and interest expense have been and will be incurred and are
not reflected in the presentation of EBITDA. Pre-opening expenses and
share-based compensation expenses have been and will be incurred and are not
reflected in the presentation of adjusted EBITDA from operating hotels. Each
of these items should also be considered in the overall evaluation of the
results. The Company compensates for these limitations by providing the
relevant disclosure of the depreciation and amortization, interest expense,
income tax expense, pre-opening expenses, share-based compensation expenses
and other relevant items both in the reconciliations to the U.S. GAAP
financial measures and in the consolidated financial statements, all of which
should be considered when evaluating the performance of the Company.

The terms EBITDA and adjusted EBITDA from operating hotels are not defined
under U.S. GAAP, and neither EBITDA nor adjusted EBITDA from operating hotels
is a measure of net income, operating income, operating performance or
liquidity presented in accordance with U.S. GAAP. When assessing the operating
and financial performance, investors should not consider these data in
isolation or as a substitute for the Company's net income, operating income or
any other operating performance measure that is calculated in accordance with
U.S. GAAP. In addition, the Company's EBITDA or adjusted EBITDA from operating
hotels may not be comparable to EBITDA or adjusted EBITDA from operating
hotels – or similarly titled measures utilized by other companies – since such
other companies may not calculate EBITDA or adjusted EBITDA from operating
hotels in the same manner as the Company does.

To monitor performance of hotels at different maturity level and of different
form, the Company also tracks hotel income, which is the difference between
net revenues and hotel operating costs.

Reconciliations of the Company's non-GAAP financial measures, including
EBITDA, adjusted EBITDA from operating hotels, and hotel income, to the
consolidated statement of operations information are included at the end of
this press release.

About China Lodging Group, Limited

China Lodging Group, Limited is a leading and fast-growing multi-brand hotel
group in China. The Company provides business and leisure travelers with
high-quality, and conveniently-located hotel products under five brands,
namely, Joya Hotel, JI Hotel, Starway Hotel, HanTing Hotel, and Hi Inn. For
more information, please visit the Company's website: http://ir.htinns.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995: The information in this release contains forward-looking statements
which involve risks and uncertainties, including statements regarding the
Company's capital needs, business strategy and expectations. Any statements
contained herein that are not statements of historical fact may be deemed to
be forward-looking statements, which may be identified by terminology such as
"may," "should," "will," "expect," "plan," "intend," "anticipate," "believe,"
"estimate," "predict," "potential," "forecast," "project," or "continue," the
negative of such terms or other comparable terminology. Readers should not
rely on forward-looking statements as predictions of future events or results.
Any or all of the Company's forward-looking statements may turn out to be
wrong. They can be affected by inaccurate assumptions, risks and uncertainties
and other factors which could cause actual events or results to be materially
different from those expressed or implied in the forward-looking statements.
In evaluating these statements, readers should consider various factors,
including the anticipated growth strategies of the Company, the future results
of operations and financial condition of the Company, the economic conditions
of China, the regulatory environment in China, the Company's ability to
attract customers and leverage its brand, trends and competition in the
lodging industry, the expected growth of the lodging market in China and other
factors and risks outlined in the Company's filings with the Securities and
Exchange Commission, including its annual report on Form 20-F and other
filings. These factors may cause the Company's actual results to differ
materially from any forward-looking statement. In addition, new factors emerge
from time to time and it is not possible for the Company to predict all
factors that may cause actual results to differ materially from those
contained in any forward-looking statements. Any projections in this release
are based on limited information currently available to the Company, which is
subject to change. This release also contains statements or projections that
are based upon information available to the public, as well as other
information from sources which the Company believes to be reliable, but it is
not guaranteed by the Company to be accurate, nor does the Company purport it
to be complete. The Company disclaims any obligation to publicly update any
forward-looking statements to reflect events or circumstances after the date
of this document, except as required by applicable law.

^1 Defined as EBITDA before pre-opening expenses and share-based compensation
expenses.

^2 The conversion of Renminbi ("RMB") into United States dollars ("US$") is
based on the exchange rate of US$1.00=RMB6.2301 on December 31, 2012 as set
forth in H.10 statistical release of the U.S. Federal Reserve Board and
available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm. 

^3 Each ADS represents four of the Company's ordinary shares.

^4 Calculated as the average of the number of leased hotels in operation at
the beginning of the quarter and the number of leased hotels in operation at
the end of the quarter. 

 
China Lodging Group, Limited 
Unaudited Condensed Consolidated Balance Sheets
                              December 31, September 30, December 31, 2012    
                              2011         2012
                              RMB          RMB           RMB        US$
                              (in thousands)
Assets                                                               
Current assets:                                                      
 Cash and cash equivalents     781,601      465,695       449,844    72,205
 Restricted cash               1,500        61,455        1,790      287
 Short-term Investment         --           --            8,074      1,296
 Accounts receivable, net      37,416       48,125        50,633     8,127
 Prepaid rent                  228,087      278,276       321,305    51,573
 Inventories                   31,232       32,980        37,971     6,095
 Other current assets          53,862       63,886        83,058     13,332
 Deferred tax assets           40,119       40,119        44,231     7,099
 Total current assets          1,173,817    990,536       996,906    160,014
                                                                     
Property and equipment, net    2,095,794    2,670,518     2,951,509  473,750
Intangible assets, net         69,779       117,881       100,980    16,208
Long term investment                        28,129        28,129     4,515
Goodwill                       42,536       42,689        64,180     10,302
Other assets                   102,056      126,508       133,536    21,434
Deferred tax assets            40,968       40,968        54,947     8,820
Total assets                   3,524,950    4,017,229     4,330,187  695,043
                                                                     
Liabilities and equity                                               
Current liabilities:                                                 
 Long-term debt, current       --           240           --         -- 
portion
 Accounts payable              417,605      502,034       624,824    100,291
 Amount due to related         1,030        1,168         801        129
parties
 Salary and welfare payable    80,266       60,069        117,980    18,937
 Deferred revenue              138,148      183,703       200,515    32,185
 Accrued expenses and other    142,146      176,318       187,380    30,076
current liabilities
 Income tax payable            14,148       2,474         23,142     3,715
 Total current liabilities     793,343      926,006       1,154,642  185,333
                                                                     
Long-term debt                 --           640           --         -- 
Deferred rent                  329,774      434,520       470,438    75,511
Deferred revenue               71,698       93,504        99,800     16,019
Other long-term liabilities    61,574       85,129        92,407     14,832
Deferred tax liabilities       12,677       12,677        22,335     3,585
Total liabilities              1,269,066    1,552,476     1,839,622  295,280
                                                                     
Equity                                                               
 Ordinary shares               179          180           180        29
 Additional paid-in capital    2,199,954    2,234,254     2,243,403  360,091
 Retained earnings             85,127       241,822       260,014    41,735
 Accumulated other             (39,166)     (37,648)      (38,408)   (6,165)
comprehensive loss
Total China Lodging Group,     2,246,094    2,438,608     2,465,189  395,690
Limited equity
 Noncontrolling interest       9,790        26,145        25,376     4,073
Total equity                   2,255,884    2,464,753     2,490,565  399,763
Total liabilities and equity   3,524,950    4,017,229     4,330,187  695,043

 
China Lodging Group, Limited 
Unaudited Condensed Consolidated Statements of Operations
               Quarter Ended                               Year Ended
               December   September  December 31, 2012     December 31, December 31, 2012
               31, 2011   30, 2012                         2011
               RMB        RMB        RMB        US$        RMB          RMB          US$
               (in thousands, except per share and per ADS data)
Revenues:                                                                             
Leased hotels   626,738    846,687    831,104    133,401    2,172,934    3,069,431    492,678
Manachised and
franchised      63,183     100,955    105,561    16,944     212,644      349,847      56,154
hotels
Total revenues  689,921    947,642    936,665    150,345    2,385,578    3,419,278    548,832
Less: business
tax and         (39,184)   (54,005)   (53,468)   (8,582)    (135,981)    (194,751)    (31,260)
related
surcharges
Net revenues    650,737    893,637    883,197    141,763    2,249,597    3,224,527    517,572
                                                                                      
Operating
costs and                                                                             
expenses:
 Hotel
operating                                                                             
costs:
 Rents          (183,367)  (235,729)  (255,967)  (41,085)   (655,247)    (916,357)    (147,085)
 Utilities      (40,514)   (53,340)   (58,166)   (9,336)    (150,865)    (215,768)    (34,633)
 Personnel      (97,065)   (128,840)  (143,511)  (23,035)   (329,078)    (505,773)    (81,182)
costs
 Depreciation
and             (66,611)   (88,500)   (93,929)   (15,077)   (227,938)    (337,162)    (54,118)
amortization 
 Consumables,
food and        (70,341)   (89,519)   (94,190)   (15,119)   (228,244)    (333,245)    (53,490)
beverage 
 Others         (35,921)   (34,097)   (48,312)   (7,755)    (111,965)    (145,597)    (23,370)
 Total hotel
operating       (493,819)  (630,025)  (694,075)  (111,407)  (1,703,337)  (2,453,902)  (393,878)
costs
 Selling and
marketing       (29,307)   (24,316)   (28,959)   (4,648)    (94,754)     (102,814)    (16,503)
expenses
 General and
administrative  (43,792)   (55,734)   (61,044)   (9,798)    (160,062)    (217,388)    (34,893)
expenses 
 Pre-opening    (49,460)   (63,230)   (69,835)   (11,209)   (184,298)    (230,690)    (37,028)
expenses
Total
operating       (616,378)  (773,305)  (853,913)  (137,062)  (2,142,451)  (3,004,794)  (482,302)
costs and
expenses
Income from     34,359     120,332    29,284     4,701      107,146      219,733      35,270
operations
Interest        5,199      3,932      3,309      531        18,111       14,554       2,336
income
Interest        (213)      (200)      (200)      (32)       (882)        (822)        (132)
expenses
Other income    753        377        374        60         2,649        2,208        354
Foreign
exchange        2,734      (248)      354        57         15,930       (2,000)      (321)
gain/(loss)
Income before   42,832     124,193    33,121     5,317      142,954      233,673      37,507
income tax
Income tax      (11,192)   (26,289)   (13,311)   (2,137)    (24,816)     (54,169)     (8,695)
expense
Net income      31,640     97,904     19,810     3,180      118,138      179,504      28,812
Net income
attributable
to              (1,340)    (2,112)    (1,618)    (260)      (3,306)      (4,617)      (741)
noncontrolling
interests
Net income
attributable
to China        30,300     95,792     18,192     2,920      114,832      174,887      28,071
Lodging Group,
Limited
                                                                                      
Net earnings                                                                          
per share
— Basic         0.12       0.39       0.07       0.01       0.47         0.72         0.12
— Diluted       0.12       0.39       0.07       0.01       0.47         0.71         0.11
                                                                                      
Net earnings                                                                          
per ADS
— Basic         0.50       1.57       0.30       0.05       1.90         2.88         0.46
— Diluted       0.49       1.55       0.29       0.05       1.87         2.83         0.45
                                                                                      
Weighted
average
ordinary                                                                              
shares
outstanding
— Basic         242,461    243,282    244,318    244,318    241,928      243,284      243,284
— Diluted       245,896    247,620    248,265    248,265    246,181      246,981      246,981
                                                                                      
Other
comprehensive                                                                         
income/(loss),
net of tax
Foreign
currency        (2,841)    126        (760)      (122)      (16,463)     758         122
translation
adjustments
Comprehensive   28,799     98,030     19,050     3,058      101,675      180,262      28,934
income
Comprehensive
income
attributable    (1,340)    (2,112)    (1,618)    (260)      (3,306)      (4,617)      (741)
to the
noncontrolling
interest
Comprehensive
income
attributable    27,459     95,918     17,432     2,798      98,369       175,645      28,193
to China
Lodging Group,
Limited

 
China Lodging Group, Limited 
Unaudited Condensed Consolidated Statements of Cash Flows
               Quarter Ended                              Year Ended
               December   September  December 31, 2012    December   December 31, 2012
               31, 2011   30, 2012                        31, 2011
               RMB        RMB        RMB        US$       RMB        RMB          US$
               (in thousands)
Operating                                                                          
activities:
Net income      31,640     97,904     19,810     3,180     118,138    179,504      28,812
Adjustments to
reconcile net
income to net                                                                      
cash provided
by operating
activities:
Share-based     2,858      7,789      5,103      819       15,483     20,837       3,345
compensation
Depreciation
and             70,328     90,991     96,834     15,543    236,857    347,575      55,790
amortization
Deferred taxes  (35,714)   --         (18,226)   (2,925)   (35,714)   (18,226)     (2,925)
Bad debt        554        618        (735)      (118)     667        1,238        199
expenses
Deferred rent   27,966     46,155     37,259     5,980     92,927     143,858      23,092
Impairment      710        --         4,549      730       710        5,349        859
loss
Excess tax
benefit from    (8,324)    (2,865)    (793)      (127)     (8,324)    (4,302)      (691)
share-based
compensation
Changes in
operating
assets and
liabilities,                                                                       
net of effect
of
acquisitions:
Accounts        (4,669)    2,129      (1,773)    (285)     (16,401)   (12,336)     (1,980)
receivable
Prepaid rent    (34,442)   (21,382)   (43,029)   (6,907)   (75,820)   (93,218)     (14,963)
Inventories     (4,736)    (1,198)    (4,991)    (801)     (12,792)   (6,714)      (1,078)
Amount due
from related    --         --         --         --        3,267      --           -- 
parties
Other current   (14,701)   926        (20,616)   (3,309)   (15,684)   (29,404)     (4,720)
assets
Other assets    176        (7,705)    (7,030)    (1,128)   (22,102)   (31,482)     (5,053)
Accounts        (627)      (1,775)    5,493      882       3,435      3,390        544
payable
Amount due to
related         (290)      (249)      (366)      (59)      175        (229)        (37)
parties
Salary and
welfare         37,718     (28,811)   57,914     9,296     22,628     36,809       5,906
payables
Deferred        26,549     27,299     23,108     3,709     92,803     90,468       14,521
revenue
Accrued
expenses and    169        14,927     7,425      1,192     34,246     36,076       5,791
other current
liabilities
Income tax
payable and     34,290     8,621      22,078     3,544     7,350      13,296       2,134
receivable
Other
long-term       5,469      9,448      9,348      1,500     16,891     33,231       5,334
liabilities
Net cash
provided by     134,924    242,822    191,362    30,716    458,740    715,720      114,880
operating
activities 
Investing                                                                          
activities:
Purchase of
property and    (208,746)  (278,226)  (263,764)  (42,337)  (768,756)  (998,050)    (160,198)
equipment
Purchases of    (13,037)   (527)      (1,936)    (311)     (14,674)   (3,532)      (567)
intangibles
Amount
received as a
result of       --         --         --         --        6,900      --           -- 
government
zoning
Acquisitions,
net of cash     (9,540)    (3,040)    (510)      (82)      (57,822)   (30,055)     (4,824)
received
Payment to
acquire         --         --         --         --        --         (28,129)     (4,515)
investment
Purchase of
short term      --         --         (8,074)    (1,296)   (30,000)   (8,074)      (1,296)
investment
Proceeds from
sales of        30,000     --         --         --        130,000    --           -- 
short-term
investments
Decrease
(increase) in   4,000      (46,500)   59,665     9,577     (225)      (290)        (47)
restricted
cash
Net cash used
in investing    (197,323)  (328,293)  (214,619)  (34,449)  (734,577)  (1,068,130)  (171,447)
activities
Financing                                                                          
activities:
Net proceeds
from issuance
of ordinary     2,076      7,770      6,017      966       7,285      18,520       2,973
shares upon
exercise of
option
Proceeds from
long-term bank  --         --         --         --        --         1,000        161
loans
Repayment of    --         (90)       (880)      (141)     --         (1,000)      (161)
long term debt
Funds advanced
from            --         --         3,000      482       3,485      3,000        482
noncontrolling
shareholders
Repayment of
funds advanced
from            (533)      (674)      (621)      (100)     (2,568)    (2,681)      (430)
noncontrolling
interest
holders
Contribution
from
noncontrolling  --         210        25         4         459        240          39
interest
holders
Dividend paid
to
noncontrolling  (127)      (183)      (168)      (27)      (3,151)    (3,486)      (560)
interest
holders
Excess tax
benefit from    8,324      2,865      793        127       8,324      4,302        691
share-based
compensation
Net cash
provided by
(used           9,740      9,898      8,166      1,311     13,834     19,895       3,195
in) financing
activities
Effect of
exchange rate
changes on      (2,841)    125        (760)      (122)     (16,463)   758          122
cash and cash
equivalents
Net increase
(decrease) in   (55,500)   (75,448)   (15,851)   (2,544)   (278,466)  (331,757)    (53,251)
cash and cash
equivalents
Cash and cash
equivalents,    837,101    541,143    465,695    74,749    1,060,067  781,601      125,456
beginning of
period
Cash and cash
equivalents,    781,601    465,695    449,844    72,205    781,601    449,844      72,205
end of period

 
China Lodging Group, Limited 
Unaudited reconciliation of GAAP and Non-GAAP Results
                Quarter Ended December 31, 2012
                GAAP Result % of Net Share-based  % of Net Non-GAAP   % of Net
                            Revenues Compensation Revenues Result     Revenues
                RMB                  RMB                   RMB         
                (in thousands)
                                                                       
Hotel operating  694,075    78.6%     318         0.0%      693,757   78.6%
costs
Selling and
marketing        28,959     3.3%      164         0.0%      28,795    3.3%
expenses
General and
administrative   61,044     6.9%      4,621       0.5%      56,423    6.4%
expenses
Pre-opening      69,835     7.9%      --          0.0%      69,835    7.9%
expenses
Total operating
costs and        853,913    96.7%     5,103       0.5%      848,810   96.2%
expenses
Income from      29,284     3.3%      5,103       0.5%      34,387    3.8%
operations
                                                                       
                Quarter Ended December 31, 2012
                GAAP Result % of Net Share-based  % of Net Non-GAAP   % of Net
                            Revenues Compensation Revenues Result     Revenues
                US$                  US$                   US$         
                (in thousands)
                                                                       
Hotel operating  111,407    78.6%     51          0.0%      111,356   78.6%
costs
Selling and
marketing        4,648      3.3%      26          0.0%      4,622     3.3%
expenses
General and
administrative   9,798      6.9%      742         0.5%      9,056     6.4%
expenses
Pre-opening      11,209     7.9%      --          0.0%      11,209    7.9%
expenses
Total operating
costs and        137,062    96.7%     819         0.5%      136,243   96.2%
expenses
Income from      4,701      3.3%      819         0.5%      5,520     3.8%
operations
                                                                       
                Quarter Ended September 30, 2012
                GAAP Result % of Net Share-based  % of Net Non-GAAP   % of Net
                            Revenues Compensation Revenues Result     Revenues
                RMB                  RMB                   RMB         
                (in thousands)
                                                                       
Hotel operating  630,025    70.5%     1,029       0.1%      628,996   70.4%
costs
Selling and
marketing        24,316     2.7%      289         0.0%      24,027    2.7%
expenses
General and
administrative   55,734     6.2%      6,471       0.7%      49,263    5.5%
expenses
Pre-opening      63,230     7.1%      --          0.0%      63,230    7.1%
expenses
Total operating
costs and        773,305    86.5%     7,789       0.8%      765,516   85.7%
expenses
Income/(Loss)    120,332    13.5%     7,789       0.8%      128,121   14.3%
from operations
                                                                       
                Quarter Ended December 31, 2011
                GAAP Result % of Net Share-based  % of Net Non-GAAP   % of Net
                            Revenues Compensation Revenues Result     Revenues
                RMB                  RMB                   RMB         
                (in thousands)
                                                                       
Hotel operating  493,819    75.9%     536         0.1%      493,283   75.8%
costs
Selling and
marketing        29,307     4.5%      178         0.0%      29,129    4.5%
expenses
General and
administrative   43,792     6.7%      2,144       0.3%      41,648    6.4%
expenses
Pre-opening      49,460     7.6%      --          0.0%      49,460    7.6%
expenses
Total operating
costs and        616,378    94.7%     2,858       0.4%      613,520   94.3%
expenses
Income from      34,359     5.3%      2,858       0.4%      37,217    5.7%
operations
                                                                       
                Year Ended December 31, 2012
                GAAP Result % of Net Share-based  % of Net Non-GAAP   % of Net
                            Revenues Compensation Revenues Result     Revenues
                RMB                  RMB                   RMB         
                (in thousands)
                                                                       
Hotel operating  2,453,902  76.1%     2,592       0.1%      2,451,310 76.0%
costs
Selling and
marketing        102,814    3.2%      1,031       0.0%      101,783   3.2%
expenses
General and
administrative   217,388    6.7%      17,214      0.5%      200,174   6.2%
expenses
Pre-opening      230,690    7.2%      --          0.0%      230,690   7.2%
expenses
Total operating
costs and        3,004,794  93.2%     20,837      0.6%      2,983,957 92.6%
expenses
Income from      219,733    6.8%      20,837      0.6%      240,570   7.4%
operations
                                                                       
                Year Ended December 31, 2012
                GAAP Result % of Net Share-based  % of Net Non-GAAP   % of Net
                            Revenues Compensation Revenues Result     Revenues
                US$                  US$                   US$         
                (in thousands)
Hotel operating  393,878    76.1%     416         0.1%      393,462   76.0%
costs
Selling and
marketing        16,503     3.2%      166         0.0%      16,337    3.2%
expenses
General and
administrative   34,893     6.7%      2,763       0.5%      32,130    6.2%
expenses
Pre-opening      37,028     7.2%      --          0.0%      37,028    7.2%
expenses
Total operating
costs and        482,302    93.2%     3,345       0.6%      478,957   92.6%
expenses
Income from      35,270     6.8%      3,345       0.6%      38,615    7.4%
operations
                                                                       
                Year Ended December 31, 2011
                GAAP Result % of Net Share-based  % of Net Non-GAAP   % of Net
                            Revenues Compensation Revenues Result     Revenues
                RMB                  RMB                   RMB         
                (in thousands)
Hotel operating  1,703,337  75.7%     2,115       0.1%      1,701,222 75.6%
costs
Selling and
marketing        94,754     4.2%      783         0.0%      93,971    4.2%
expenses
General and
administrative   160,062    7.1%      12,585      0.6%      147,477   6.5%
expenses
Pre-opening      184,298    8.2%      --          0.0%      184,298   8.2%
expenses
Total operating
costs and        2,142,451  95.2%     15,483      0.7%      2,126,968 94.5%
expenses
Income from      107,146    4.8%      15,483      0.7%      122,629   5.5%
operations

 
China Lodging Group, Limited 
 Unaudited reconciliation of GAAP and Non-GAAP Results 
             Quarter Ended                               Year Ended
             December   September  December 31, 2012     December 31, December 31, 2012
             31, 2011   30, 2012                         2011
             RMB        RMB        RMB        US$        RMB          RMB          US$
             (in thousands, except per share and per ADS data)
                                                                                    
Net income
attributable
to China
Lodging       30,300     95,792     18,192     2,920      114,832      174,887      28,071
Group,
Limited
(GAAP)
Share-based
compensation  2,858      7,789      5,103      819        15,483       20,837       3,345
expenses
Adjusted net
income
attributable
to China      33,158     103,581    23,295     3,739      130,315      195,724      31,416
Lodging
Group,
Limited
(non-GAAP)
                                                                                    
Net earnings
per share                                                                           
(GAAP)
— Basic       0.12       0.39       0.07       0.01       0.47         0.72         0.12
— Diluted     0.12       0.39       0.07       0.01       0.47         0.71         0.11
                                                                                    
Net earnings
per ADS                                                                             
(GAAP)
— Basic       0.50       1.57       0.30       0.05       1.90         2.88         0.46
— Diluted     0.49       1.55       0.29       0.05       1.87         2.83         0.45
                                                                                    
Adjusted net
earnings per                                                                        
share
(non-GAAP)
— Basic       0.14       0.43       0.10       0.02       0.54         0.80         0.13
— Diluted     0.13       0.42       0.09       0.02       0.53         0.79         0.13
                                                                                    
Adjusted net
earnings per                                                                        
ADS
(non-GAAP)
— Basic       0.55       1.70       0.38       0.06       2.15         3.22         0.52
— Diluted     0.54       1.67       0.38       0.06       2.12         3.17         0.51
                                                                                    
Weighted
average
ordinary                                                                            
shares
outstanding
— Basic       242,461    243,282    244,318    244,318    241,928      243,284      243,284
— Diluted     245,896    247,620    248,265    248,265    246,181      246,981      246,981
                                                                                    
             Quarter Ended                               Year Ended
             December   September  December 31, 2012     December 31, December 31, 2012
             31, 2011   30, 2012                         2011
             RMB        RMB        RMB        US$        RMB          RMB          US$
             (in thousands)
                                                                                    
Net income
attributable
to China
Lodging       30,300     95,792     18,192     2,920      114,832      174,887      28,071
Group,
Limited
(GAAP)
Interest      213        200        200        32         882          822          132
expenses
Income tax    11,192     26,289     13,311     2,137      24,816       54,169       8,695
expense
Depreciation
and           70,328     90,991     96,834     15,543     236,857      347,575      55,790
amortization
EBITDA        112,033    213,272    128,537    20,632     377,387      577,453      92,688
(non-GAAP)
Pre-opening   49,460     63,230     69,835     11,209     184,298      230,690      37,028
expenses
Share-based   2,858      7,789      5,103      819        15,483       20,837       3,345
Compensation
Adjusted
EBITDA from
operating     164,351    284,291    203,475    32,660     577,168      828,980      133,061
hotels
(non-GAAP)
                                                                                    
             Quarter Ended                               Year Ended
             December   September  December 31, 2012     December 31, December 31, 2012
             31, 2011   30, 2012                         2011
             RMB        RMB        RMB        US$        RMB          RMB          US$
             (in thousands)
                                                                                    
Net revenues  650,737    893,637    883,197    141,763    2,249,597    3,224,527    517,572
(GAAP)
Less: Hotel
operating     (493,819)  (630,025)  (694,075)  (111,407)  (1,703,337)  (2,453,902) (393,878)
costs
Hotel income  156,918    263,612    189,122    30,356     546,260      770,625      123,694
(non-GAAP)

                                                                 
                            China Lodging Group, Limited         
Operating Data                                                   
                            As of 
                            December 31,      September 30,     December 31,
                            2011              2012              2012
Total hotels in operation:   639               938               1,035
 Leased hotels               344               415               465
 Manachised hotels           295               446               516
 Franchised hotels*          --                77                54
Total hotel rooms in         71,621            103,322           113,650
operation
 Leased hotels               40,514            48,857            54,694
 Manachised hotels           31,107            46,296            53,381
 Franchised hotels*          --                8,169             5,575
Number of cities             100               149               171
                                                                 
* refers to franchised                                           
Starway hotels
                                                                 
Hotel breakdown by brand    As of 
                            December 31,      September 30,     December 31,
                            2011              2012              2012
Total hotels in operation:   639               938               1,035
Ji Hotel (previously         22               26                32
Seasons Hotel)
Hanting Hotel                589              795               898
Hi Inn                       28               35                40
Starway Hotel                --               82                65
                                                                 
                            For the quarter ended
                            December 31,      September 30,     December 31,
                            2011              2012              2012
Occupancy rate (as a                                             
percentage)
 Leased hotels              92%               97%               92%
 Manachised hotels          95%               98%               92%
 Blended                    93%               97%               92%
Average daily room rate (in                                      
RMB)
 Leased hotels              184               188               182
 Manachised hotels          173               177               170
 Blended                    179               183               176
RevPAR (in RMB)                                                  
 Leased hotels              170               183               167
 Manachised hotels          164               173               157
 Blended                    167               178               162
                                                                 
                                                                 
Like-for-like performance for leased and manachised hotels opened for at least
18 months during the current quarter
                                                                 
                            As of and for the quarter ended      
                            December 31,                         
                            2011              2012               
Total                        508               508               
 Leased hotels               278               278               
 Manachised hotels           230               230               
Total                        59,313            59,313            
 Leased hotels               34,431            34,431            
 Manachised hotels           24,882            24,882            
Occupancy rate (as a        96%               97%                
percentage)
Average daily rate (in RMB) 182               185                
RevPAR (in RMB)             175               179                

CONTACT: Ida Yu
         Investor Relations Manager
         Tel:  +86 (21) 6195 9561
         Email: ir@htinns.com
         http://ir.htinns.com
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