EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling

EXHIBIT 99.1

China Lodging Group, Limited Reports Fourth Quarter and Full Year 2015 Financial Results

  • A total of 2,763 hotels or 278,843 hotel rooms in operation as of December 31, 2015
  • Net revenues increased 16.2% year-over-year to RMB1,506.3 million (US$232.5 million)1 for the fourth quarter and 16.3% to RMB5,774.6 million (US$891.4 million) for the full year of 2015, in line with the guidance previously announced.
  • Adjusted EBITDA (non-GAAP) increased 55.4% year-over-year to RMB320.4 million (US$49.5 million) for the fourth quarter and increased 32.2% to RMB1,324.2 million (US$204.4 million) for the full year of 2015.
  • Net income attributable to China Lodging Group, Limited was RMB70.8 million (US$10.9 million) for the fourth quarter and RMB436.6 million (US$67.4 million) for the full year of 2015, increasing 51.1% year-over-year for the fourth quarter and increasing 42.1% for the full year of 2015.
  • Basic earnings per ADS2 were RMB1.13 (US$0.18) for the fourth quarter of 2015 and RMB6.97 (US$1.08) for the full year of 2015. Diluted earnings per ADS were RMB1.10 (US$0.17) for the fourth quarter of 2015 and RMB6.82 (US$1.05) for the full year of 2015. Excluding share-based compensation expenses, adjusted basic earnings per ADS (non-GAAP) were RMB1.36 (US$0.21) for the fourth quarter of 2015 and RMB7.81 (US$1.21) for the full year of 2015 and adjusted diluted earnings per ADS (non-GAAP) were RMB1.32 (US$0.20) for the fourth quarter of 2015 and RMB7.64 (US$1.18) for the full year of 2015.
  • For full year of 2015, the Company repurchased 0.77 million ADS for $17.5 million; the Company also declared cash dividend of $0.68 per ADS in 2015 which was paid in early 2016.
  • The Company provided guidance for Q1 2016 net revenues growth of 14% to 15% and full year 2016 net revenues growth of 12% to 15%.

SHANGHAI, China, March 10, 2016 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (NASDAQ:HTHT) (“China Lodging Group”, “Huazhu” 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, 2015.

Operational Highlights of Fourth Quarter 2015

  • During the fourth quarter of 2015, the Company opened 4 leased (“leased-and-operated”) hotels and 192 manachised (“franchised-and-managed”) and franchised hotels, and closed 7 leased hotels and 14 manachised and franchised hotels.

  • The ADR, which is defined as the average daily rate for all hotels in operation (excluding certain franchised Starway hotels), was RMB177 in the fourth quarter of 2015, compared with RMB176 in the fourth quarter of 2014 and RMB188 in the previous quarter. The year-over-year increase of 0.4% was mainly attributable to more favorable brand mix with an increased number of midscale hotels, which was partially offset by the city mix shifting toward lower-tier cities. The sequential decrease resulted mainly from seasonality.

  • The occupancy rate for all hotels in operation (excluding certain franchised Starway hotels) was 84.3% in the fourth quarter of 2015, compared with 86.5% in the fourth quarter of 2014 and 89.2% in the previous quarter. The year-over-year decrease was mainly due to soft macro economy and a dilutive impact from newly-opened hotels in lower-tier cities. The sequential decrease resulted mainly from seasonality.

  • RevPAR, defined as revenue per available room for all hotels in operation (excluding certain franchised Starway hotels), was RMB149 in the fourth quarter of 2015, compared with RMB153 in the fourth quarter of 2014 and RMB167 in the previous quarter. The year-over-year decrease was a result of lower occupancy rate. The sequential decrease resulted mainly from seasonality.

  • For all hotels which had been in operation for at least 18 months (excluding certain franchised Starway hotels), the same-hotel RevPAR was RMB154 for the fourth quarter of 2015, a 2.9% decrease from RMB158 for the fourth quarter of 2014, with a flattish ADR and a 2.6-percentage-point decrease in occupancy rate. The midscale and upscale hotels registered a 7.8% same-hotel RevPAR improvement, with a 4.7% increase in ADR and 2.4-percentage-point increase in occupancy rate.

Operational Highlights of Full Year 2015

  • For the full year of 2015, the Company opened 22 leased hotels and 813 manachised and franchised hotels, and closed 17 leased hotels and 50 manachised and franchised hotels. As of December 31, 2015, the Company had 616 leased hotels, 2,067 manachised hotels, and 80 franchised hotels in operation in 352 cities. The number of hotel rooms in operation totaled 278,843, an increase of 33% from a year ago.

  • As of December 31, 2015, the Company had 21 leased hotels and 656 manachised and franchised hotels contracted or under construction.

  • For the full year of 2015, the ADR for all hotels in operation (excluding certain franchised Starway hotels) was RMB179, compared to RMB179 in 2014.

  • For the full year of 2015, the occupancy rate for all hotels in operation (excluding certain franchised Starway hotels) was 85.3%, compared with 89.0% in 2014. The decline in occupancy rate was mainly due to soft macro economy and a dilutive impact from newly-opened hotels in lower-tier cities.

  • For the full year of 2015, the RevPAR for all hotels in operation (excluding certain franchised Starway hotels), was RMB153, a 4.1% decrease from RMB159 in 2014. The decrease was a result of lower occupancy rate.

  • For all the hotels which had been in operation for at least 18 months (excluding certain franchised Starway hotels), the same-hotel RevPAR was RMB159 in 2015, a 3.6% decrease from RMB165 in 2014, with a 0.3% increase in ADR and a 3.5-percentage-point drop in occupancy rate. In 2015, the midscale and upscale hotels registered a 6.5% same-hotel RevPAR improvement, with a 5.5% increase in ADR and 0.8-percentage-point increase in occupancy rate.

  • As of December 31, 2015, the Company’s loyalty program had more than 49 million members, who contributed more than 80% of room nights sold during the full year of 2015. In 2015, more than 90% of room nights were sold through the Company’s own channels.

Mr. Qi Ji, founder and executive Chairman of China Lodging Group, said, “Our business continues to perform well in 2015, with strong unit growth and improved margin. Our brands have a growing popularity among customers and franchisees. In 2015, we added a total of 68,888 rooms bringing our network to more than 278,000 rooms, about 73% under manachise and franchise models. In spite of the soft Chinese macro economy, our comparable mature hotels (in operation at least 18 months) achieved occupancy rate of 88%. In particular, our midscale and upscale hotels registered a 6.5% same-hotel RevPAR improvement.

“Our healthy balance sheet has allowed us to make investments in our business, while at the same time returning capital to shareholders. Our increasing unit growth and solid operational performance should continue to fuel improving margin, growing cash flow and steady returns to shareholders in the long term.” Mr. Ji added.

Fourth Quarter and Full Year of 2015 Financial Results

(RMB in thousands)Q4 2014 Q3 2015 Q4 2015 2014 FY 2015 FY
Revenues:         
Leased hotels 1,160,852   1,374,492   1,287,714   4,522,431   4,986,872 
Manachised and franchised hotels 212,059   318,864   305,573   742,797   1,123,979 
Total revenues 1,372,911   1,693,356   1,593,287   5,265,228   6,110,851 
Less: business tax and related surcharges (76,674)  (93,176)  (86,972)  (300,500)  (336,227)
Net revenues 1,296,237   1,600,180   1,506,315   4,964,728   5,774,624 
                    

Total revenues for the fourth quarter of 2015 were RMB1,593.3 million (US$246.0 million), representing a 16.1% year-over-year increase and a 5.9% sequential decrease. The year-over-year increase was primarily due to our hotel network expansion. The sequential decrease was due to seasonality.

Total revenues for the full year of 2015 were RMB6,110.9 million (US$943.4 million), representing an increase of 16.1% from the full year of 2014.

Total revenues from leased hotels for the fourth quarter of 2015 were RMB1,287.7 million (US$198.8 million), representing a 10.9% year-over-year increase and a 6.3% sequential decrease.

For the full year of 2015, total revenues from leased hotels were RMB4,986.9 million (US$769.8 million), representing a 10.3% year-over-year increase.

Total revenues from manachised and franchised hotels for the fourth quarter of 2015 were RMB305.6 million (US$47.2 million), representing a 44.1% year-over-year increase and a 4.2% sequential decrease.

For the full year of 2015, total revenues from manachised and franchised hotels were RMB 1,124.0 million (US$173.5 million), representing a 51.3% year-over-year increase. It accounts for 18.4% of total revenues, compared to 14.1% of total revenues for the year of 2014.

Net revenues for the fourth quarter of 2015 were RMB1,506.3 million (US$232.5 million), representing a 16.2% year-over-year increase and a 5.9% sequential decrease.

Net revenues for the full year of 2015 were RMB5,774.6 million (US$891.4 million), representing a 16.3% year-over-year increase.

          
(RMB in thousands)Q4 2014 Q3 2015 Q4 2015 2014 FY 2015 FY
Operating costs and expenses:         
Hotel operating costs1,048,926 1,166,759 1,198,604 3,878,027 4,512,147
Selling and marketing expenses65,179 42,383 46,791 187,435 179,568
General and administrative expenses102,985 101,426 128,233 342,128 403,008
Pre-opening expenses43,246 27,649 16,216 186,325 110,011
Total operating costs and expenses1,260,336 1,338,217 1,389,844 4,593,915 5,204,734
          

Hotel operating costs for the fourth quarter of 2015 were RMB1,198.6 million (US$185.0 million), compared to RMB1,048.9 million in the fourth quarter of 2014 and RMB1,166.8 million in the previous quarter, representing a 14.3% year-over-year increase and a 2.7% sequential increase. Total hotel operating costs excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2015 were RMB1,196.3 million (US$184.7 million), representing 79.4% of net revenues, compared to 80.7% for the fourth quarter in 2014 and 72.7% for the previous quarter. The year-over-year decrease in the percentage was mainly attributable to the increased proportion of revenues from manachised and franchised hotels. The sequential increase in the percentage was mainly due to the increased impairment loss from a few under-performing leased hotels.

For the full year of 2015, hotel operating costs were RMB4,512.1 million (US$696.6 million), compared to RMB3,878.0 million in 2014. Excluding share-based compensation, hotel operating costs (non-GAAP) were RMB4,503.3 million (US$695.2 million), representing 77.9% of net revenues, compared to 78.0% in 2014.

Selling and marketing expenses for the fourth quarter of 2015 were RMB46.8 million (US$7.2 million), compared to RMB65.2 million in the fourth quarter of 2014 and RMB42.4 million in the previous quarter. Selling and marketing expenses excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2015 were RMB46.7 million (US$7.2 million), or 3.1% of net revenues, compared to 5.0% for the fourth quarter of 2014 and 2.6% for the previous quarter. The year-over-year decrease was mainly attributable to lower marketing spending. The sequential increase was mainly due to increased cost associated with membership points in the fourth quarter.

For the full year of 2015, selling and marketing expenses were RMB179.6 million (US$27.7 million), compared to RMB187.4 million in 2014. Selling and marketing expenses excluding share-based compensation expenses (non-GAAP) were RMB178.7 million (US$27.6 million), representing 3.1% of net revenues, compared to 3.8% in 2014. The year-over-year decrease was mainly attributable to lower marketing spending.

General and administrative expenses for the fourth quarter of 2015 were RMB128.2 million (US$19.8 million), compared to RMB103.0 million in the fourth quarter of 2014 and RMB101.4 million in the previous quarter. General and administrative expenses excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2015 were RMB116.8 million (US$18.0 million), representing 7.7% of net revenues, compared with 7.9% of net revenues in the fourth quarter of 2014 and 5.7% in the previous quarter. The sequential increase in the percentage was mainly due to increased professional fees, personnel cost and decreased revenue base.

For the full year of 2015, general and administrative expenses were RMB403.0 million (US$62.2 million), compared to RMB342.1 million in 2014. General and administrative expenses excluding share-based compensation expenses (non-GAAP) were RMB360.2 million (US$55.6 million), representing 6.3% of net revenues, compared to 6.4% in 2014.

Pre-opening expenses for the fourth quarter of 2015 were RMB16.2 million (US$2.5 million), representing a 62.5% year-over-year decrease and a 41.4% sequential decrease. The decrease was mainly due to fewer leased hotels opened and in the pipeline in the fourth quarter of 2015.

Pre-opening expenses for the full year of 2015 were RMB110.0 million (US$17.0 million), compared to RMB186.3 million in 2014, representing a year-over-year decrease of 41.0%. The decrease in pre-opening expenses was mainly due to fewer leased hotel opened and in the pipeline in 2015. The pre-opening expenses as a percentage of net revenues decreased to 1.9% in 2015 from 3.8% in 2014.

Income from operations for the fourth quarter of 2015 was RMB130.6 million (US$20.2 million), compared to RMB48.8 million in the fourth quarter of 2014 and RMB281.7 million in the previous quarter. Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the fourth quarter of 2015 was RMB144.5 million (US$22.3 million), compared to adjusted income from operation (non-GAAP) of RMB51.0 million for the fourth quarter of 2014 and RMB294.6 million for the previous quarter. The adjusted operating margin, defined as adjusted operating income (non-GAAP) as percentage of net revenues, for the fourth quarter of 2015 was 9.7%, compared with 4.0% in the fourth quarter of 2014 and 18.4% in the previous quarter. The improved year-over-year adjusted operating margin was mainly due to a higher proportion of manachised and franchised business and cost control efforts. The sequential decrease in the margin was due to seasonality.

Income from operations for the full year of 2015 was RMB601.2 million (US$92.8 million), compared to RMB389.4 million in 2014. Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the year of 2015 was RMB653.7 million (US$100.9 million), compared to RMB421.3 million for the year of 2014. The growth in income from operations was mainly attributable to increased contribution from manachised and franchised hotels in 2015. The adjusted operating margin (non-GAAP) for the year of 2015 was 11.4%, compared with 8.5% for the year of 2014. The improvement of 2.9-percentage-points in the adjusted operating margin was mainly due to a higher proportion of manachised and franchised business and cost control efforts in 2015.

Net income attributable to China Lodging Group, Limited for the fourth quarter of 2015 was RMB70.8 million (US$10.9 million), compared to RMB46.8 million in the fourth quarter of 2014 and RMB223.6 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 2015 was RMB84.7 million (US$13.1 million), representing a 72.7% year-over-year increase and a 64.2% sequential decrease.

Net income attributable to China Lodging Group, Limited for the full year of 2015 was RMB436.6 million (US$67.4 million), compared to RMB307.3 million in 2014. Excluding share-based compensation expenses, adjusted net income attributable to China Lodging Group (non-GAAP) for the full year of 2015 was RMB489.1 million (US$75.5 million), compared to RMB339.3 million in 2014. The year-over-year increase of 44.2% was mainly attributable to the expanded hotel network, increased contribution from manachised and franchised business and lower pre-opening expenses, as a result of the Company’s continued asset-light strategy.

Basic and diluted earnings per share/ADS.  For the fourth quarter of 2015, basic and diluted earnings per share were RMB0.28 (US$0.04); basic earnings per ADS were RMB1.13 (US$0.18) and diluted earnings per ADS were RMB1.10 (US$0.17). For the fourth quarter of 2015, excluding share-based compensation expenses, adjusted basic earnings per share (non-GAAP) were RMB0.34 (US$0.05) and adjusted diluted earnings per share (non-GAAP) were RMB0.33 (US$0.05); adjusted basic earnings per ADS (non-GAAP) were RMB1.36 (US$0.21) and adjusted diluted earnings per ADS (non-GAAP) were RMB1.32 (US$0.20).

For the full year of 2015, basic earnings per share were RMB1.74 (US$0.27) and diluted earnings per share were RMB1.70 (US$0.26); basic earnings per ADS were RMB6.97 (US$1.08), while diluted earnings per ADS were RMB6.82 (US$1.05). For the full year of 2015, excluding share-based compensation expenses, adjusted basic earnings per share (non-GAAP) were RMB1.95 (US$0.30), while adjusted diluted earnings per share (non-GAAP) were RMB1.91 (US$0.29), and adjusted basic earnings per ADS (non-GAAP) were RMB7.81 (US$1.21), while adjusted diluted earnings per ADS (non-GAAP) were RMB7.64 (US$1.18).

EBITDA (non-GAAP) for the fourth quarter of 2015 was RMB306.5 million (US$47.3 million), compared with RMB204.0 million in the fourth quarter of 2014 and RMB451.9 million in the previous quarter. Excluding share-based compensation expenses, adjusted EBITDA (non-GAAP) for the fourth quarter of 2015 was RMB320.4 million (US$49.5 million), compared with RMB206.2 million for the fourth quarter of 2014 and RMB464.8 million for the previous quarter.

EBITDA (non-GAAP) for the full year of 2015 was RMB1,271.7 million (US$196.3 million), compared to RMB969.5 million in 2014. Excluding share-based compensation expenses, adjusted EBITDA (non-GAAP) for the full year of 2015 was RMB1,324.2 million (US$204.4 million), compared with RMB1,001.5 million in 2014, representing a 32.2% year-over-year increase. The year-over-year increase was mainly due to the expansion of the Company’s hotel network. The adjusted EBITDA margin (non-GAAP) for the year of 2015 was 22.9%, compared with 20.2% for the year of 2014. The improvement of 2.7-percentage-points in adjusted EBITDA margin was mainly due to a higher proportion of manachised and franchised business in 2015.

Hotel income (non-GAAP), which is the difference between net revenues and hotel operating costs, was RMB307.7 million (US$47.5 million) for the fourth quarter of 2015, compared with RMB247.3 million in the fourth quarter of 2014 and RMB433.4 million in the previous quarter. The hotel income from the leased hotels was RMB87.3 million (US$13.5 million) during the fourth quarter of 2015. The hotel income from the manachised and franchised hotels was RMB220.4 million (US$34.0 million) during the fourth quarter of 2015, or accounting for approximately 71.6% of total hotel income.

Hotel income (non-GAAP) for the full year of 2015 was RMB1,262.5 million (US$194.9 million), compared with RMB1,086.7 million for 2014. The hotel income from the leased hotels was RMB456.0 million (US$70.4 million) for the full year of 2015. The hotel income from the manachised and franchised hotels was RMB806.5 million (US$124.5 million) during the full year of 2015, or accounting for approximately 63.9% of total hotel income.

Cash flow. Operating cash inflow for the fourth quarter of 2015 was RMB578.3 million (US$89.3 million). Investing cash inflow for the fourth quarter was RMB114.3 million (US$17.7 million).

Operating cash inflow for the full year of 2015 was RMB1,749.7 million (US$270.1 million), representing an increase of 20.3% from 2014. The significant growth was mainly due to the Company’s fast network expansion with manachise and franchise models. Investing cash outflow for the full year of 2015 was RMB1,550.4 million (US$239.3 million), representing an increase of 45.8% from 2014. The increase was mainly attributable to the purchase of Home Inns ADS from the open market in the second and third quarter of 2015.

Cash and cash equivalents and Restricted cash. As of December 31, 2015, the Company had a total balance of cash and cash equivalents, restricted cash of RMB1,598.3 million (US$246.7 million).

Debt financing. As of December 31, 2015, the Company had a short-term loan balance of RMB324.7 million and the total credit facility available to the Company was RMB499.3 million.

Accor-Huazhu Alliance Transaction

In January 2016, China Lodging Group completed the transaction of strategic alliance with AccorHotels. The Company has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region. China Lodging Group takes a non-controlling stake of 29.3% and two board seats in a joint venture for AccorHotels Luxury and Upscale hotel operating platform in Greater China. AccorHotels has a 10.8% stake in of China Lodging Group, including newly issued 24,895,543 ordinary shares at a price of $6.6375 per ordinary share (or 9.0% of China Lodging Group’s outstanding shares after issuance; 4 ordinary shares=1 American depositary shares) and the Company’s American depositary shares purchased by AccorHotels from the open market. Sebastien Bazin, Chaiman and CEO of AccorHotels, has been appointed to China Lodging Group’s Board of Directors.

Business Outlook and Guidance for 2016

“We remain positive about the long-term prospects about China travel industry. In 2016, we continue our consistent execution of asset-light and multiple-brand strategy. We plan to open 750 to 800 hotels, with 80% for economy hotels and 20% for midscale and upscale hotels. The manachised and franchised hotels continue to be the vast majority of our new openings in 2016, which is similar to 2015.” commented Mr. Ji.

In the first quarter of 2016, the Company expects net revenues to grow 14% to 15% year-over-year. For the full year 2016, the Company expects net revenues to grow 12% to 15% from 2015.

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. ET, Thursday, March 10, 2016 (or 9 a.m. on Friday, March 11, 2016 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 3018 6776 (for callers in Hong Kong) or +65 6713 5440 (for callers outside of the US, China Mainland, and Hong Kong) and entering pass code 5380 2516.  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 18, 2016. Please dial +1 (855) 452 5696 (for callers in the US) or +61 2 9003 4211 (for callers outside the US) and entering pass code 5380 2516.

The conference call will also be webcast live over the Internet and can be accessed by all interested parties at the Company’s Web site, http://ir.huazhu.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 operating margin excluding share-based compensation expenses; adjusted net income attributable to China Lodging Group, Limited excluding share-based compensation expenses; adjusted basic and diluted earnings per share and per ADS excluding share-based compensation expenses; EBITDA; adjusted EBITDA excluding share-based compensation expenses; adjusted EBITDA margin excluding 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, which is defined as EBITDA before share-based compensation expenses, to assess operating results of the hotels in operation. The Company believes that the exclusion of share-based compensation expenses helps facilitate year-on-year comparison of the results of operations as the share-based compensation expenses may not be indicative of Company operating performance. Therefore, the Company believes adjusted EBITDA more closely reflects the performance capability of hotels currently in operation. The presentation of EBITDA and adjusted EBITDA 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 of business.

The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets, income tax, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Share-based compensation expenses 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 the results. The Company compensates for these limitations by providing the relevant disclosure of the depreciation and amortization, interest income, interest expense, income tax expense, 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 are not defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA 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 may not be comparable to EBITDA or adjusted EBITDA – or similarly titled measures utilized by other companies – since such other companies may not calculate EBITDA or adjusted EBITDA 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, 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 hotel operator and franchisor in China under 12 brand names. As of December 31, 2015, the Company had 2,763 hotels or 278,843 rooms in operation in 352 cities. With a primary focus on economy and midscale hotel segments, China Lodging Group’s brands include Hi Inn, HanTing Hotel, Elan Hotel, JI Hotel, Starway Hotel, Joya Hotel, and Manxin Hotels & Resorts. The Company also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region.

The Company’s business includes leased, manachised and franchised models. Under the lease model, the Company directly operates hotels typically located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers it appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees but does not appoint on-site hotel managers. The Company applies a consistent standard and platform across all of its hotels. As of December 31, 2015, China Lodging Group operates 27 percent of its hotel rooms under lease model, 73 percent under manachise and franchise models.

For more information, please visit the Company’s website: http://ir.huazhu.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 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB6.4778 on December 31, 2015 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.

2 Each ADS represents four of the Company’s ordinary shares.

—Financial Tables and Operational Data Follow—

 
China Lodging Group, Limited 
Unaudited Condensed Consolidated Balance Sheets
 December 31, 2014 September 30, 2015 December 31, 2015
 RMB RMB RMB US$
 (in thousands)
ASSETS       
Current assets:       
Cash and cash equivalents 808,865   799,228   1,237,838   191,089 
Restricted cash -   580,000   360,500   55,652 
Short-term investments 26,615   471,863   533,215   82,314 
Accounts receivable, net 89,243   89,516   93,956   14,504 
Amounts due from related parties 16,293   16,023   16,157   2,494 
Prepaid rent 385,158   450,779   429,588   66,317 
Inventories 29,882   25,818   24,529   3,787 
Other current assets 160,582   143,869   167,995   25,934 
Deferred tax assets 80,026   80,026   98,200   15,160 
Total current assets 1,596,664   2,657,122   2,961,978   457,251 
        
Property and equipment, net 3,907,343   3,795,565   3,805,886   587,527 
Intangible assets, net 104,537   110,162   144,812   22,355 
Long-term investments 229,005   301,376   356,578   55,046 
Goodwill 64,654   64,654   108,344   16,726 
Other assets 197,233   201,991   195,446   30,172 
Deferred tax assets 83,470   83,470   120,477   18,598 
Total assets 6,182,906   7,214,340   7,693,521   1,187,675 
        
LIABILITIES AND EQUITY       
Current liabilities:       
Short-term debt -   594,812   324,680   50,122 
Accounts payable 640,691   535,183   585,347   90,362 
Amounts due to related parties 6,403   8,362   7,653   1,181 
Salary and welfare payable 186,051   130,593   210,955   32,566 
Deferred revenue 514,268   629,748   705,607   108,927 
Accrued expenses and other current liabilities 313,017   375,795   576,160   88,944 
Dividends payable -   -   276,261   42,647 
Income tax payable 59,630   44,795   102,810   15,871 
Deferred tax liabilities 701   701   1,465   226 
Total current liabilities 1,720,761   2,319,989   2,790,938   430,846 
        
Deferred rent 830,414   922,542   945,192   145,912 
Deferred revenue 155,395   176,485   180,861   27,920 
Amounts due to related parties 4,083   2,042   -   - 
Other long-term liabilities 215,762   262,057   275,954   42,600 
Deferred tax liabilities 37,778   37,778   59,828   9,237 
Total liabilities 2,964,193   3,720,893   4,252,773   656,515 
        
Equity:       
Ordinary shares 184   185   186   29 
Treasury share -   (107,332)  (107,331)  (16,569)
Additional paid-in capital 2,381,568   2,435,661   2,470,099   381,318 
Retained earnings 847,220   1,213,062   1,007,559   155,540 
Accumulated other comprehensive income (loss) (12,008)  (50,346)  59,596   9,200 
Total China Lodging Group, Limited shareholders' equity 3,216,964   3,491,230   3,430,109   529,518 
Noncontrolling interest 1,749   2,217   10,639   1,642 
Total equity 3,218,713   3,493,447   3,440,748   531,160 
Total liabilities and equity 6,182,906   7,214,340   7,693,521   1,187,675 
        

 

 
China Lodging Group, Limited 
Unaudited Condensed Consolidated Statements of Comprehensive Income
 Quarter Ended Year Ended
 December 31, 2014 September 30, 2015 December 31, 2015
 December 31, 2014 December 31, 2015
 RMB RMB RMB US$ RMB RMB US$
 (in thousands, except per share and per ADS data)
Revenues:             
Leased hotels 1,160,852   1,374,492   1,287,714   198,789   4,522,431   4,986,872   769,840 
Manachised and franchised hotels 212,059   318,864   305,573   47,172   742,797   1,123,979   173,512 
Total revenues 1,372,911   1,693,356   1,593,287   245,961   5,265,228   6,110,851   943,352 
Less: business tax and related surcharges (76,674)  (93,176)  (86,972)  (13,426)  (300,500)  (336,227)  (51,904)
Net revenues 1,296,237   1,600,180   1,506,315   232,535   4,964,728   5,774,624   891,448 
              
Operating costs and expenses:             
Hotel operating costs:             
Rents (414,525)  (459,805)  (470,567)  (72,643)  (1,543,651)  (1,804,532)  (278,572)
Utilities (83,723)  (82,475)  (85,288)  (13,166)  (323,837)  (341,620)  (52,737)
Personnel costs (210,210)  (247,161)  (232,662)  (35,917)  (788,973)  (919,555)  (141,955)
Depreciation and amortization (152,386)  (161,178)  (164,890)  (25,455)  (558,833)  (645,058)  (99,580)
Consumables, food and beverage (121,754)  (125,703)  (130,017)  (20,071)  (454,795)  (485,099)  (74,886)
Others (66,328)  (90,437)  (115,180)  (17,781)  (207,938)  (316,283)  (48,826)
Total hotel operating costs (1,048,926)  (1,166,759)  (1,198,604)  (185,033)  (3,878,027)  (4,512,147)  (696,556)
Selling and marketing expenses (65,179)  (42,383)  (46,791)  (7,223)  (187,435)  (179,568)  (27,720)
General and administrative expenses (102,985)  (101,426)  (128,233)  (19,796)  (342,128)  (403,008)  (62,214)
Pre-opening expenses (43,246)  (27,649)  (16,216)  (2,503)  (186,325)  (110,011)  (16,983)
Total operating costs and expenses (1,260,336)  (1,338,217)  (1,389,844)  (214,555)  (4,593,915)  (5,204,734)  (803,473)
Other operating income 12,947   19,718   14,111   2,178   18,551   31,264   4,827 
Income from operations 48,848   281,681   130,582   20,158   389,364   601,154   92,802 
Interest income 7,872   6,277   9,007   1,390   23,162   26,712   4,124 
Interest expense (173)  (1,908)  (1,606)  (248)  (1,533)  (3,854)  (595)
Other income (expense) (417)  (766)  2,064   319   4,749   4,083   630 
Foreign exchange gain (loss) (17)  6,793   4,533   700   (246)  7,814   1,206 
Income before income taxes 56,113   292,077   144,580   22,319   415,496   635,909   98,167 
Income tax expense (8,755)  (67,290)  (73,742)  (11,384)  (113,105)  (196,529)  (30,339)
Net income 47,358   224,787   70,838   10,935   302,391   439,380   67,828 
Less: net  loss (income) attributable to noncontrolling interests (517)  (1,138)  (78)  (12)  4,957   (2,780)  (429)
Net income attributable to China Lodging Group, Limited 46,841   223,649   70,760   10,923   307,348   436,600   67,399 
Other comprehensive income             
Unrealized securities holding gains (losses), net of tax (30,847)  (68,357)  106,600   16,456   28,458   68,069   10,508 
Foreign currency translation adjustments, net of tax (1,126)  1,789   3,342   516   (1,082)  3,535   546 
Comprehensive income 15,385   158,219   180,780   27,907   329,767   510,984   78,882 
Comprehensive loss (income) attributable to the noncontrolling interest (517)  (1,138)  (78)  (12)  4,957   (2,780)  (429)
Comprehensive income attributable to China Lodging Group, Limited 14,868   157,081   180,702   27,895   334,724   508,204   78,453 
              
Earnings per share:             
Basic 0.19   0.89   0.28   0.04   1.23   1.74   0.27 
Diluted 0.18   0.87   0.28   0.04   1.21   1.70   0.26 
              
Earnings per ADS:             
Basic 0.75   3.58   1.13   0.18   4.94   6.97   1.08 
Diluted 0.74   3.49   1.10   0.17   4.86   6.82   1.05 
              
Weighted average number of shares used in computation:             
Basic 249,642   249,956   249,674   249,674   248,958   250,533   250,533 
Diluted 253,906   256,083   256,546   256,546   253,004   256,104   256,104 
              


 
China Lodging Group, Limited 
Unaudited Condensed Consolidated Statements of Cash Flows
 Quarter Ended Year Ended
 December 31, 2014 September 30, 2015 December 31, 2015 December 31, 2014 December 31, 2015
 RMB RMB RMB US$ RMB RMB US$
 (in thousands)
Operating activities:             
Net income 47,358   224,787   70,838   10,935   302,391   439,380   67,828 
Adjustments to reconcile net income to net cash provided by operating activities:             
Share-based compensation 2,199   12,938   13,909   2,147   31,937   52,535   8,110 
Depreciation and amortization 156,096   165,302   169,355   26,144   570,722   661,404   102,103 
Deferred taxes (42,391)  -   (42,673)  (6,588)  (42,391)  (50,149)  (7,742)
Bad debt expenses 3,022   348   1,909   295   4,770   1,997   308 
Deferred rent 58,172   37,482   32,440   5,008   182,580   130,301   20,115 
Loss (gain) from disposal of property and equipment (522)  -   (5,519)  (852)  803   (5,519)  (852)
Impairment loss 13,868   34,735   50,368   7,776   27,391   95,608   14,759 
Investment loss (income) 898   477   (1,975)  (305)  (4,902)  129   20 
Excess tax benefit from share-based compensation (2,867)  (1,790)  (7,833)  (1,209)  (11,697)  (12,838)  (1,982)
              
Changes in operating assets and liabilities, net of effect of acquisitions:             
Accounts receivable 9,119   4,159   (5,419)  (836)  (18,773)  (5,749)  (888)
Prepaid rent (13,353)  (30,510)  21,191   3,271   (21,577)  (44,430)  (6,859)
Inventories 2,876   1,553   1,888   291   4,130   5,952   919 
Amounts due from related parties -   -   -   -   256   -   - 
Other current assets 11,669   (481)  (27,515)  (4,248)  (42,369)  (15,518)  (2,395)
Other assets (6,861)  (4)  6,544   1,010   (13,220)  1,787   276 
Accounts payable 4,045   (7,763)  8,187   1,264   18,016   14,194   2,191 
Amounts due to related parties (554)  (1,574)  1,332   206   810   1,250   193 
Salary and welfare payables 83,441   (29,622)  79,990   12,348   38,813   24,532   3,787 
Deferred revenue 63,235   54,260   80,235   12,386   253,562   216,805   33,469 
Accrued expenses and other current liabilities 24,380   26,481   58,797   9,077   58,995   121,502   18,757 
Income tax payable and receivable 17,693   11,075   58,255   8,993   45,274   56,019   8,647 
Other long-term liabilities 25,949   10,642   13,968   2,156   68,494   60,481   9,337 
Net cash provided by operating activities 457,472   512,495   578,272   89,269   1,454,015   1,749,673   270,101 
              
Investing activities:             
Purchases of property and equipment (219,024)  (128,910)  (119,380)  (18,429)  (930,922)  (640,222)  (98,833)
Purchases of intangibles (5,629)  (444)  (1,182)  (182)  (10,423)  (8,818)  (1,361)
Amount received as a result of government zoning -   -   5,721   883   10,557   6,721   1,038 
Acquisitions, net of cash received (2,160)  (460)  (3,633)  (561)  (16,050)  (19,153)  (2,957)
Proceeds from disposal of subsidiary and branch 1,000   2,500   2,500   386   18,484   5,000   772 
Purchase of long-term investments (14,789)  (72,437)  (36,168)  (5,583)  (191,064)  (137,707)  (21,258)
Proceeds from sale of long-term investments 4,345   4,007   19,007   2,934   88,266   29,139   4,498 
Payment for shareholder loan to joint venture (734)  -   (134)  (21)  (15,640)  (1,386)  (214)
Collection of shareholder loan from joint venture -   773   -   -   -   1,522   235 
Purchase of short-term investments (19,710)  (207,916)  -   -   (75,210)  (455,811)  (70,365)
Proceeds from sales of short-term investments 55,499   885   28,109   4,339   55,499   30,858   4,764 
Decrease (increase) in restricted cash -   (580,000)  219,500   33,885   3,317   (360,500)  (55,652)
Net cash provided by (used in) investing activities (201,202)  (982,002)  114,340   17,651   (1,063,186)  (1,550,357)  (239,333)
              
Financing activities:             
Net proceeds from issuance of ordinary shares upon exercise of option 12,624   1,917   10,970   1,694   20,985   22,619   3,492 
Payment of share repurchase -   (107,331)  -   -   -   (107,331)  (16,569)
Proceeds from short-term debt -   489,376   -   -   300,000   589,376   90,984 
Repayment of short-term debt (300,000)  (13,581)  (269,424)  (41,592)  (300,000)  (283,516)  (43,767)
Funds advanced from noncontrolling interest holders -   -   5,432   839   -   5,432   839 
Repayment of funds advanced from noncontrolling interest holders (340)  (100)  (120)  (19)  (1,559)  (900)  (139)
Acquisition of noncontrolling interest (2,042)  (2,042)  (2,042)  (315)  (4,083)  (4,083)  (630)
Contribution from noncontrolling interest holders (7,000)  -   200   31   -   2,450   378 
Dividend paid to noncontrolling interest holders (1,333)  (475)  (120)  (19)  (5,357)  (4,604)  (711)
Excess tax benefit from share-based compensation 2,867   1,790   7,833   1,209   11,697   12,838   1,982 
Net cash provided by (used in) financing activities (295,224)  369,554   (247,271)  (38,172)  21,683   232,281   35,859 
              
Effect of exchange rate changes on cash and cash equivalents (1,703)  5,705   (6,731)  (1,039)  (1,082)  (2,624)  (405)
              
Net increase (decrease) in cash and cash equivalents (40,657)  (94,248)  438,610   67,709   411,430   428,973   66,222 
Cash and cash equivalents at the beginning of the period 849,522   893,476   799,228   123,380   397,435   808,865   124,867 
Cash and cash equivalents at the end of the period 808,865   799,228   1,237,838   191,089   808,865   1,237,838   191,089 
              

 

 
China Lodging Group, Limited 
Unaudited Reconciliation of GAAP and Non-GAAP Results
 Quarter Ended December 31, 2015
 GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
 RMB   RMB   RMB  
 (in thousands)
            
Hotel operating costs1,198,604  79.6%  2,352   0.2% 1,196,252  79.4%
Selling and marketing expenses46,791  3.1%  100   0.0% 46,691  3.1%
General and administrative expenses128,233  8.5%  11,457   0.8% 116,776  7.7%
Pre-opening expenses16,216  1.1%  -   0.0% 16,216  1.1%
Total operating costs and expenses1,389,844  92.3%  13,909   1.0% 1,375,935  91.3%
Income from operations130,582  8.7%  13,909   1.0% 144,491  9.7%
            
 Quarter Ended December 31, 2015
 GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
 US$    US$   US$  
 (in thousands)
            
Hotel operating costs185,033  79.6%  363   0.2% 184,670  79.4%
Selling and marketing expenses7,223  3.1%  15   0.0% 7,208  3.1%
General and administrative expenses19,796  8.5%  1,769   0.8% 18,027  7.7%
Pre-opening expenses2,503  1.1%  -   0.0% 2,503  1.1%
Total operating costs and expenses214,555  92.3%  2,147   1.0% 212,408  91.3%
Income from operations20,158  8.7%  2,147   1.0% 22,305  9.7%
            
 Quarter Ended September 30, 2015
 GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
 RMB   RMB   RMB  
 (in thousands)
            
Hotel operating costs1,166,759  72.9%  2,910   0.2% 1,163,849  72.7%
Selling and marketing expenses42,383  2.6%  246   0.0% 42,137  2.6%
General and administrative expenses101,426  6.3%  9,782   0.6% 91,644  5.7%
Pre-opening expenses27,649  1.7%  -   0.0% 27,649  1.7%
Total operating costs and expenses1,338,217  83.5%  12,938   0.8% 1,325,279  82.7%
Income from operations281,681  17.6%  12,938   0.8% 294,619  18.4%
            
 Quarter Ended December 31, 2014
 GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
 RMB   RMB   RMB  
 (in thousands)
            
Hotel operating costs1,048,926  80.9%  2,075   0.2% 1,046,851  80.7%
Selling and marketing expenses65,179  5.0%  289   0.0% 64,890  5.0%
General and administrative expenses102,985  7.9%  (165)  0.0% 103,150  7.9%
Pre-opening expenses43,246  3.3%  -   0.0% 43,246  3.3%
Total operating costs and expenses1,260,336  97.1%  2,199   0.2% 1,258,137  96.9%
Income from operations48,848  3.8%  2,199   0.2% 51,047  4.0%
            
 Year Ended December 31, 2015
 GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
 RMB   RMB   RMB  
 (in thousands)
            
Hotel operating costs4,512,147  78.1%  8,835   0.2% 4,503,312  77.9%
Selling and marketing expenses179,568  3.1%  907   0.0% 178,661  3.1%
General and administrative expenses403,008  7.0%  42,793   0.7% 360,215  6.3%
Pre-opening expenses110,011  1.9%  -   0.0% 110,011  1.9%
Total operating costs and expenses5,204,734  90.1%  52,535   0.9% 5,152,199  89.2%
Income from operations601,154  10.5%  52,535   0.9% 653,689  11.4%
            
 Year Ended December 31, 2015
 GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
 US$    US$    US$   
 (in thousands)
Hotel operating costs696,556  78.1%  1,364   0.2% 695,192  77.9%
Selling and marketing expenses27,720  3.1%  140   0.0% 27,580  3.1%
General and administrative expenses62,214  7.0%  6,606   0.7% 55,608  6.3%
Pre-opening expenses16,983  1.9%  -   0.0% 16,983  1.9%
Total operating costs and expenses803,473  90.1%  8,110   0.9% 795,363  89.2%
Income from operations92,802  10.5%  8,110   0.9% 100,912  11.4%
            
 Year Ended December 31, 2014
 GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
 RMB   RMB   RMB  
 (in thousands)
Hotel operating costs3,878,027  78.1%  6,830   0.1% 3,871,197  78.0%
Selling and marketing expenses187,435  3.8%  939   0.0% 186,496  3.8%
General and administrative expenses342,128  6.9%  24,168   0.5% 317,960  6.4%
Pre-opening expenses186,325  3.8%  -   0.0% 186,325  3.8%
Total operating costs and expenses4,593,915  92.6%  31,937   0.6% 4,561,978  92.0%
Income from operations389,364  7.9%  31,937   0.6% 421,301  8.5%
            

 

 
China Lodging Group, Limited 
 Unaudited Reconciliation of GAAP and Non-GAAP Results 
 Quarter Ended Year Ended
 December 31, 2014 September 30, 2015 December 31, 2015 December 31, 2014 December 31, 2015
 RMB RMB RMB US$ RMB RMB US$
 (in thousands, except per share and per ADS data)      
              
Net income attributable to China Lodging Group, Limited (GAAP) 46,841   223,649   70,760   10,923   307,348   436,600   67,399 
Share-based compensation expenses 2,199   12,938   13,909   2,147   31,937   52,535   8,110 
Adjusted net income attributable to China Lodging Group, Limited (non-GAAP) 49,040   236,587   84,669   13,070   339,285   489,135   75,509 
              
Earnings per share (GAAP)             
Basic 0.19   0.89   0.28   0.04   1.23   1.74   0.27 
Diluted 0.18   0.87   0.28   0.04   1.21   1.70   0.26 
              
Earnings per ADS (GAAP)             
Basic 0.75   3.58   1.13   0.18   4.94   6.97   1.08 
Diluted 0.74   3.49   1.10   0.17   4.86   6.82   1.05 
              
Adjusted earnings per share (non-GAAP)             
Basic 0.20   0.95   0.34   0.05   1.36   1.95   0.30 
Diluted 0.19   0.92   0.33   0.05   1.34   1.91   0.29 
              
Adjusted earnings per ADS (non-GAAP)             
Basic 0.79   3.79   1.36   0.21   5.45   7.81   1.21 
Diluted 0.77   3.70   1.32   0.20   5.36   7.64   1.18 
              
Weighted average number of shares used in computation             
Basic 249,642   249,956   249,674   249,674   248,958   250,533   250,533 
Diluted 253,906   256,083   256,546   256,546   253,004   256,104   256,104 
              
 Quarter Ended Year Ended
 December 31, 2014 September 30, 2015 December 31, 2015
 December 31, 2014 December 31, 2015
 RMB RMB RMB US$ RMB RMB US$
 (in thousands)      
              
Net income attributable to China Lodging Group, Limited (GAAP) 46,841   223,649   70,760   10,923   307,348   436,600   67,399 
Interest income (7,872)  (6,277)  (9,007)  (1,390)  (23,162)  (26,712)  (4,124)
Interest expenses 173   1,908   1,606   248   1,533   3,854   595 
Income tax expense 8,755   67,290   73,742   11,384   113,105   196,529   30,339 
Depreciation and amortization 156,096   165,302   169,355   26,144   570,722   661,404   102,103 
EBITDA (non-GAAP) 203,993   451,872   306,456   47,309   969,546   1,271,675   196,312 
Share-based Compensation 2,199   12,938   13,909   2,147   31,937   52,535   8,110 
Adjusted EBITDA (non-GAAP) 206,192   464,810   320,365   49,456   1,001,483   1,324,210   204,422 
              
 Quarter Ended Year Ended
 December 31, 2014 September 30, 2015 December 31, 2015 December 31, 2014 December 31, 2015
 RMB RMB RMB US$   RMB US$
 (in thousands)      
              
Net revenues (GAAP) 1,296,237   1,600,180   1,506,315   232,535   4,964,728   5,774,624   891,448 
Less:  Hotel operating costs (1,048,926)  (1,166,759)  (1,198,604)  (185,033)  (3,878,027)  (4,512,147)  (696,556)
Hotel income (non-GAAP) 247,311   433,421   307,711   47,502   1,086,701   1,262,477   194,892 
              

 

 
China Lodging Group, Limited
Operational Data    
 As of 
  December 31,  September 30,  December 31, 
  2014  2015  2015 
Total hotels in operation: 1,995  2,588  2,763 
Leased hotels 611  619  616 
Manachised hotels 1,376  1,899  2,067 
Franchised hotels 8  70  80 
Total hotel rooms in operation 209,955  264,076  278,843 
Leased hotels 72,335  75,384  75,436 
Manachised hotels 136,689  182,663  196,737 
Franchised hotels 931  6,029  6,670 
Number of cities 300  342  352 
    
    
    
 For the quarter ended
 December 31, September 30,December 31, 
  2014  2015  2015 
Occupancy rate (as a percentage)   
Leased hotels 87.2% 90.5% 85.8%
Manachised hotels 86.2% 89.0% 84.2%
Franchised hotels N/A  73.3% 67.4%
Blended 86.5% 89.2% 84.3%
Average daily room rate (in RMB)   
Leased hotels 190  207  201 
Manachised hotels 169  179  167 
Franchised hotels N/A  187  172 
Blended 176  188  177 
RevPAR (in RMB)   
Leased hotels 166  188  172 
Manachised hotels 145  159  141 
Franchised hotels N/A  137  116 
Blended 153  167  149 
    
 For the full year ended 
 December 31, December 31,  
  2014  2015  
Occupancy rate (as a percentage)   
Leased hotels 88.9% 86.6% 
Manachised hotels 89.0% 85.0% 
Franchised hotels N/A  70.1% 
Blended 89.0% 85.3% 
Average daily room rate (in RMB)   
Leased hotels 190  198  
Manachised hotels 172  170  
Franchised hotels N/A  177  
Blended 179  179  
RevPAR (in RMB)   
Leased hotels 169  172  
Manachised hotels 153  145  
Franchised hotels N/A  124  
Blended 159  153  
        

Same-hotel Operational Data: like-for-like performance for leased and manachised hotels opened for at least 18 months during the current quarter and full year

   
 As of and for the quarter ended
 December 31, 
  2014  2015 
Total 1,612  1,612 
Leased hotels 568  568 
Manachised hotels 1,044  1,044 
Occupancy rate (as a percentage) 89.0% 86.4%
Average daily room rate (in RMB) 178  178 
RevPAR (in RMB) 158  154 
   
 As of and for full year ended
 December 31, 
  2014  2015 
Total 1,612  1,612 
Leased hotels 568  568 
Manachised hotels 1,044  1,044 
Occupancy rate (as a percentage) 91.4% 87.9%
Average daily room rate (in RMB) 181  181 
RevPAR (in RMB) 165  159 
       


        
Hotel breakdown by segment
        
         
  Number of Hotels in Operation Number of Hotel Rooms in Operation Number of Hotels 
 Number of Rooms 
  As of December 31, 2015 As of December 31, 2015 Net Added in 2015
 Net Added in 2015
Economy hotels   2,453    238,156     634      52,197  
Hanting Hotel 2,003 205,577  355   33,236 
Leased hotels 495 57,277  (7)  (29)
Manachised hotels 1,508 148,300  362   33,265 
Hi Inn 302 21,340  144   8,789 
Leased hotels 38 3,698  (3)  (197)
Manachised hotels 251 16,725  134   8,069 
Franchised hotels 13 917  13   917 
Elan Hotel 148 11,239  135   10,172 
Manachised hotels 128 9,837  115   8,770 
Franchised hotels 20 1,402  20   1,402 
Midscale and upscale hotels   310    40,687     134      16,691  
JI Hotel 186 27,559  69   10,507 
Leased hotels 75 13,195  13   2,935 
Manachised hotels 111 14,364  56   7,572 
Starway Hotel 118 12,138  63   5,817 
Leased hotels 4 604  1   153 
Manachised hotels 67 7,183  23   2,244 
Franchised hotels 47 4,351  39   3,420 
Joya Hotel 3 515  -   - 
Leased hotels 2 315  -   - 
Manachised hotels 1 200  -   - 
Manxin Hotels & Resorts 2 236  1   128 
Leased hotels 1 108  -   - 
Manachised hotels 1 128  1   128 
Mercure Hotel 1 239  1   239 
Leased hotels 1 239  1   239 
Total   2,763    278,843     768      68,888  
        

 

         
Same-hotel operational data by segment
 Number of hotels in operationSame-hotel RevPAR Same-hotel ADR Same-hotel Occupancy 
 As ofFor the quarter ended For the quarter ended For the quarter ended 
 December 31,December 31,yoy changeDecember 31,yoy changeDecember 31,yoy change
 2014201520142015 20142015  2014  2015  
Economy hotels1,4911,491152145 -4.6%169167 -1.2% 90% 87% -3.1%
Leased hotels510510156147 -5.3%175173 -0.9% 89% 85% -4.0%
Manachised and franchised hotels981981149143 -4.2%166163 -1.5% 90% 87% -2.5%
Midscale and upscale hotels121121224241 7.8%270282 4.7% 83% 85% 2.4%
Leased hotels5858245276 12.5%291308 5.8% 84% 90% 5.3%
Manachised and franchised hotels6363195196 0.4%240245 2.4% 81% 80% -1.6%
Total1,6121,612158154 -2.9%178178 0.0% 89% 86% -2.6%
            
            
 Number of hotels in operationSame-hotel RevPAR Same-hotel ADR Same-hotel Occupancy 
 As ofFor the year ended For the year ended For the year ended 
 December 31,December 31,yoy changeDecember 31,yoy changeDecember 31,yoy change
 2014201520142015 20142015  2014  2015  
Economy hotels1,4911,491159152 -4.9%173172 -0.8% 92% 88% -3.9%
Leased hotels510510162154 -4.7%178177 -0.5% 91% 87% -3.9%
Manachised and franchised hotels981981158150 -5.1%170169 -1.0% 93% 89% -3.8%
Midscale and upscale hotels121121232247 6.5%275290 5.5% 84% 85% 0.8%
Leased hotels5858253277 9.2%295314 6.5% 86% 88% 2.2%
Manachised and franchised hotels6363202204 1.2%246252 2.8% 82% 81% -1.2%
Total1,6121,612165159 -3.6%181181 0.3% 91% 88% -3.5%
 


Contact Information
Ida Yu
Sr. Manager of Investor Relations
Tel:  +86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com