×

China Lodging Group, Limited Reports Fourth Quarter and Full Year 2014 Financial Results

  • A total of 1,995 hotels or 209,955 hotel rooms in operation as of December 31, 2014
  • Net revenues increased 15.7% year-over-year to RMB1,296.2 million (US$208.9 million) 1 for the fourth quarter and 19.1% to RMB4,964.7million (US$800.2 million) for the full year of 2014, in line with the guidance previously announced.
  • Adjusted EBITDA (non-GAAP) decreased 4.8% year-over-year to RMB206.2 million (US$33.2 million)for the fourth quarter and increased 14.8% to RMB1,001.5 million (US$161.4 million)for the full year of 2014.
  • Net income attributable to China Lodging Group, Limited was RMB46.8 million (US$7.5 million) for the fourth quarter and RMB307.3million (US$49.5 million) for the full year of 2014, decreasing 20.0% year-over-year for the fourth quarter and increasing 9.8% for the full year of 2014.
  • Basic earnings per ADS 2 were RMB0.75 (US$0.12) for the fourth quarter of 2014 and RMB4.94 (US$0.80) for the full year of 2014. Diluted earnings per ADS were RMB0.74 (US$0.12) for the fourth quarter of 2014 and RMB4.86 (US$0.78) for the full year of 2014. Excluding share-based compensation expenses, adjusted basic earnings per ADS were RMB0.79 (US$0.13) for the fourth quarter of 2014 and RMB5.45 (US$0.88) for the full year of 2014 and adjusted diluted earnings per ADS (non-GAAP) were RMB0.77 (US$0.12) for the fourth quarter of 2014 and RMB5.36 (US$0.86) for the full year of 2014.
  • Operating cash flow for the full year of 2014 increased 36% to RMB1,454.0 million (US$234.3 million). Free cash flow turned positive.
  • The Company provided guidance for Q1 2015 net revenues growth of 12% to 14% and full year 2015 net revenue growth of 7.5% to 11.5%.

SHANGHAI, China, March 10, 2015 (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, 2014.

Operational Highlights of Fourth Quarter 2014

  • During the fourth quarter of 2014, the Company opened 7 net leased ("leased-and- operated") hotels and 139 net manachised ("franchised-and-managed") hotels.
  • 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 2014, compared with RMB178 in the fourth quarter of 2013 and RMB187 in the previous quarter. The year-over-year decrease of 1% was mainly attributable to the city mix shifting toward lower-tier cities, partially offset by a 0.3% increase in same-hotel ADR. The sequential decrease resulted mainly from seasonality.
  • The occupancy rate for all hotels in operation (excluding franchised Starway hotels) was 86.5% in the fourth quarter of 2014, compared with 90.0% in the fourth quarter of 2013 and 92.5% in the previous quarter. The year-over-year decrease was mainly due to soft macro economy, and a higher percentage of newly-opened hotels in lower-tier cities as a result of the Company's accelerated growth in manachise business nationwide. The sequential decrease resulted mainly from seasonality.
  • RevPAR, defined as revenue per available room for all hotels in operation (excluding franchised Starway hotels), was RMB153 in the fourth quarter of 2014, compared with RMB160 in the fourth quarter of 2013 and RMB173 in the previous quarter. The year-over-year decrease was a result of both lower ADR and lower occupancy rate. The sequential decrease resulted mainly from seasonality.
  • For all hotels which had been in operation for at least 18 months (excluding franchised Starway hotels), the same-hotel RevPAR was RMB161 for the fourth quarter of 2014, a 3% decrease from RMB165 for the fourth quarter of 2013, with a 0.3% increase in ADR and a three-percentage-point decrease in occupancy rate. The increase in same-hotel ADR was driven by price increase to enhance yield. The decrease in same-hotel occupancy rate was mainly due to a temporary drop in demand caused by APEC in Beijing, and the soft macro economy.

Operational Highlights of Full Year 2014

  • For the full year of 2014, the Company opened 46 net new leased hotels and 541 net new manachised hotels, exceeding the Company's previously announced guidance. As of December 31, 2014, the Company had 611 leased hotels, 1,376 manachised hotels, and 8 franchised Starway hotels in operation in 300 cities. The number of hotel rooms in operation totaled 209,955, an increase of 37% from 2013. The rooms of leased and manachised hotel in operation increased by 10% and 62%, respectively, from a year ago.
  • As of December 31, 2014, the Company had 29 leased hotels and 644 manachised hotels contracted or under construction.
  • For the full year of 2014, the ADR was RMB179, compared to RMB180 in 2013. The year-over-year decrease of 0.5% was primarily due to the city mix shifting toward lower-tier cities; partially offset by a 0.6% increase in same-hotel ADR.
  • For the full year of 2014, the occupancy rate for all hotels in operation (excluding franchised Starway hotels) was 89.0%, compared with 90.7% in 2013. The decline in occupancy rate was mainly due to soft macro economy, and a higher percentage of newly-opened hotels in lower-tier cites as a result of the Company's accelerated growth in manachise business nationwide.
  • For the full year of 2014, the RevPAR for all hotels in operation, excluding franchised Starway hotels, was RMB159, a 2% decrease from RMB163 in 2013. The decrease was a result of both lower occupancy rate and lower ADR.
  • For all the hotels which had been in operation for at least 18 months, excluding franchised Starway hotels, the same-hotel RevPAR was RMB170 in 2014, a 1% decrease from RMB171 in 2013, with a 1% increase in ADR and a two-percentage-point drop in occupancy rate. On average, those hotels achieved an occupancy of 92.8% for the full year of 2014.
  • As of December 31, 2014, the Company's loyalty program had more than 31 million members, who contributed more than 85% of room nights sold during the full year of 2014. In 2014, more than 90% of room nights were sold through the Company's own channels.

"We are excited about our rapid build-up of hotel network in 2014, largely driven by our solid growth in manachise business and wide choice of brands. A record high of net 570 hotels were added into our system in a single year, more than 90% of which are under manachise model and more than 25% are under new brands." said Mr. Qi Ji, founder, executive Chairman and Chief Executive Officer of China Lodging Group.

Mr. Ji continued, "On the front of digital innovation, we have implemented the proprietary Cloud-based HPMS across our entire hotel network, and introduced new functionalities on Huazhu.com and Huazhu mobile apps. These digital initiatives will enable us to further enhance customer experience and improve hotel operational efficiency on a large scale. Looking ahead, we are confident to fortify our leading position as a hotel management group in China by executing our strategies."

"In the fourth quarter, we signed agreements to form a strategic alliance with Accor. Under the agreements, Accor's economy and midscale hotel platform will become part of our network. We will receive the exclusive rights as a master franchisee for brands, including Grand Mercure, Novotel, Mercure, Ibis and Ibis Styles, in mainland China, Taiwan region and Mongolia. We believe the collaboration will create the most successful hotel business in China, and make the Accor-Huazhu alliance an unprecedented success." Mr. Ji added.

Fourth Quarter and Full Year of 2014 Financial Results

(RMB in thousands) Q4 2013 Q3 2014 Q4 2014 2013 FY 2014 FY
Revenues:
Leased hotels 1,036,650 1,256,926 1,160,852 3,870,887 4,522,431
Manachised and franchised hotels 151,736 214,577 212,059 549,958 742,797
Total revenues 1,188,386 1,471,503 1,372,911 4,420,845 5,265,228
Less: business tax and related surcharges (68,172) (84,002) (76,674) (252,216) (300,500)
Net revenues 1,120,214 1,387,501 1,296,237 4,168,629 4,964,728

Total revenues for the fourth quarter of 2014 were RMB1,372.9 million (US$221.3 million), representing a 15.5% year-over-year increase and an 6.7% 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 2014 were RMB5,265.2 million (US$848.6 million), representing an increase of 19.1% from the full year of 2013.

Total revenues from leased hotels for the fourth quarter of 2014 were RMB1,160.9 million (US$187.1 million), representing a 12.0% year-over-year increase and a 7.6% sequential decrease.

For the full year of 2014, total revenues from leased hotels were RMB4,522.4 million (US$728.9 million), representing a 16.8% year-over-year increase.

Total revenues from manachised and franchised hotels for the fourth quarter of 2014 were RMB212.1 million (US$34.2 million), representing a 39.8% year-over-year increase and a 1.2% sequential decrease.

For the full year of 2014, total revenues from manachised and franchised hotels were RMB 742.8 million (US$119.7 million), representing a 35.1% year-over-year increase. It accounts for 14.1% of total revenues, compared to 12.4% of total revenues for the year of 2013.

Net revenues for the fourth quarter of 2014 were RMB1,296.2 million (US$208.9 million), representing a 15.7% year-over-year increase and a 6.6% sequential decrease.

Net revenues for the full year of 2014 were RMB4,964.7 million (US$800.2 million), representing a 19.1% year-over-year increase.

(RMB in thousands) Q4 2013 Q3 2014 Q4 2014 2013 FY 2014 FY
Operating costs and expenses:
Hotel operating costs 876,713 983,259 1,048,926 3,181,666 3,878,027
Selling and marketing expenses 45,088 53,610 65,179 138,129 187,435
General and administrative expenses 80,765 99,520 102,985 284,756 342,128
Pre-opening expenses 48,999 44,983 43,246 211,284 186,325
Total operating costs and expenses 1,051,565 1,181,372 1,260,336 3,815,835 4,593,915

Hotel operating costs for the fourth quarter of 2014 were RMB1,048.9 million (US$169.1 million), compared to RMB876.7 million (US$144.8 million) in the fourth quarter of 2013 and RMB983.3 million (US$160.2 million) in the previous quarter, representing a 19.6% year-over-year increase and a 6.7% sequential increase. The Company's hotel network expansion, especially the increased number of midscale leased hotel rooms which incurred a significant amount of rental and depreciation costs, was the main driver for the increase in hotel operating costs. Total hotel operating costs excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2014 were RMB1,046.9 million (US$168.7 million), representing 80.7% of net revenues, compared to 78.2% for the fourth quarter in 2013 and 70.7% for the previous quarter. The year-over-year increase in the percentage was mainly attributable to the decrease of RevPAR and the cost inflation. The sequential increase in the percentage was mainly due to seasonality.

For the full year of 2014, total hotel operating costs were RMB3,878.0 million (US$625.0 million), compared to RMB3,181.7 million (US$525.6 million) in 2013. Excluding share-based compensation, hotel operating costs (non-GAAP) were RMB3,871.2 million (US$623.9 million), representing 78.0% of net revenues, compared to 76.2% in 2013. The year-over-year increase was mainly driven by the decrease in RevPAR and the cost inflation.

Selling and marketing expenses for the fourth quarter of 2014 were RMB65.2 million (US$10.5 million), compared to RMB45.1 million (US$7.4 million) in the fourth quarter of 2013 and RMB53.6 million (US$8.7 million) in the previous quarter. Selling and marketing expenses excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2014 were RMB64.9 million (US$10.5 million), or 5.0% of net revenues, compared to 4.0% for the fourth quarter of 2013 and 3.9% for the previous quarter. The year-over-year and sequential increase was mainly due to various promotional activities to attract more new members. During the fourth quarter of 2014, the Company acquired 6.9 million new members, compared with 2.0 million in the fourth quarter of 2013 and 4.9 million in the previous quarter.

For the full year of 2014, total selling and marketing expenses were RMB187.4 million (US$30.2 million), compared to RMB138.1 million (US$22.8 million) in 2013. Selling and marketing expenses excluding share-based compensation expenses (non-GAAP) were RMB186.5 million (US$30.1 million), representing 3.8% of net revenues, compared to 3.3% in 2013. The year-over-year increase in the percentage was mainly due to various promotional activities to attract more new members and higher portion of reservations through third-party agencies from new brands.

General and administrative expenses for the fourth quarter of 2014 were RMB103.0 million (US$16.6 million), compared to RMB80.8 million (US$13.3 million) in the fourth quarter of 2013 and RMB99.5 million (US$16.2 million) in the previous quarter. General and administrative expenses excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2014 were RMB103.2 million (US$16.6 million), representing 7.9% of net revenues, compared with 6.8% of net revenues in the fourth quarter of 2013 and 6.2% in the previous quarter. The year-over-year increase in the percentage was mainly attributable to our investments in technology for digital related initiatives and new brands and a significant growth in the number of manachised hotels.

General and administrative expenses were RMB342.1 million (US$55.1 million) for the year of 2014, compared to RMB284.8 million (US$47.0 million) in 2013. General and administrative expenses excluding share-based compensation expenses (non-GAAP) were RMB318.0 million (US$51.2 million), representing 6.4% of net revenues, compared to 6.2% in 2013. The year-over-year increase in the percentage was mainly attributable to our investments in technology personnel for digital related initiatives and new brands and a significant growth in the number of manachised hotels.

Pre-opening expenses for the fourth quarter of 2014 were RMB43.2 million (US$7.0 million), representing an 11.7% year-over-year decrease and a 3.9% sequential decrease. The decrease was mainly due to fewer leased hotels opened and in the pipeline in the fourth quarter of 2014.

Pre-opening expenses for the full year of 2014 were RMB186.3 million (US$30.0 million), compared to RMB211.3 million (US$34.9 million) in 2013, representing a year-over-year decrease of 11.8%. The decrease in pre-opening expenses was mainly due to fewer leased hotel opened and in the pipeline in 2014. The pre-opening expenses as a percentage of net revenues decreased to 3.8% in 2014 from 5.1% in 2013.

Income from operations for the fourth quarter of 2014 was RMB48.8 million (US$7.9 million), compared to RMB85.2 million (US$14.1 million) in the fourth quarter of 2013 and RMB202.1 million (US$32.9 million) in the previous quarter. Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the fourth quarter of 2014 was RMB51.0 million (US$8.2 million), compared to adjusted income from operation (non-GAAP) of RMB91.4 million (US$15.1 million) for the fourth quarter of 2013 and RMB218.0 million (US$35.5 million) for the previous quarter. The adjusted operating margin for the fourth quarter of 2014 was 4.0%, compared with 8.1% in the fourth quarter of 2013 and 15.8% in the previous quarter.

Income from operations for the year was RMB389.4 million (US$62.8 million), compared to RMB380.5 million (US$62.9 million) in 2013. Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the year of 2014 was RMB421.3 million (US$67.9 million), compared to RMB411.0 million (US$67.9 million) for the year of 2013. The growth in income from operations was attributable to rapid expansion of our hotel network and lower pre-opening expenses in 2014. The adjusted operating margin (non-GAAP) for the year of 2014 was 8.5%, compared with 9.8% for the year of 2013.

Net income attributable to China Lodging Group, Limited for the fourth quarter of 2014 was RMB46.8 million (US$7.5 million), compared to RMB58.5 million (US$9.7 million) in the fourth quarter of 2013 and RMB149.6 million (US$24.4 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 2014 was RMB49.0 million (US$7.9 million), representing a 24.3% year-over-year decrease and a 70.4% sequential decrease.

Net income attributable to China Lodging Group, Limited for the full year of 2014 was RMB307.3 million (US$49.5 million), compared to RMB279.9 million (US$46.2 million) in 2013. Excluding share-based compensation expenses, adjusted net income attributable to China Lodging Group (non-GAAP) for the full year of 2014 was RMB339.3 million (US$54.7 million), compared to RMB310.3 million (US$51.3 million) in 2013. The year-over-year increase of 9.3% was mainly attributable to the expansion of our hotel network and lower pre-opening expenses.

Basic and diluted earnings per share/ADS. For the fourth quarter of 2014, basic earnings per share were RMB0.19 (US$0.03) and diluted earnings per share were RMB0.18 (US$0.03); basic earnings per ADS were RMB0.75 (US$0.12) and diluted earnings per ADS were RMB0.74 (US$0.12). For the fourth quarter of 2014, excluding share-based compensation expenses, adjusted basic earnings per share were RMB0.20 (US$0.03) and adjusted diluted earnings per share (non-GAAP) were RMB0.19 (US$0.03); adjusted basic earnings per ADS (non-GAAP) were RMB0.79 (US$0.13) and adjusted diluted earnings per ADS (non-GAAP) were RMB0.77 (US$0.12).

For the full year of 2014, basic earnings per share were RMB1.23 (US$0.20) and diluted earnings per share were RMB1.21 (US$0.20); basic earnings per ADS were RMB4.94 (US$0.80), while diluted earnings per ADS were RMB4.86 (US$0.78). For the full year of 2014, excluding share-based compensation expenses, adjusted basic earnings per share (non-GAAP) were RMB1.36 (US$0.22), while adjusted diluted earnings per share (non-GAAP) were RMB1.34 (US$0.22), and adjusted basic earnings per ADS (non-GAAP) were RMB5.45 (US$0.88), while adjusted diluted earnings per ADS (non-GAAP) were RMB5.36 (US$0.86).

EBITDA (non-GAAP) for the fourth quarter of 2014 was RMB204.0 million (US$32.9 million), compared with RMB210.5 million (US$34.8 million) in the fourth quarter of 2013 and RMB349.5 million (US$56.9 million) in the previous quarter. Excluding share-based compensation expenses, adjusted EBITDA (non-GAAP) for the fourth quarter of 2014 was RMB206.2 million (US$33.2 million), compared with RMB216.7 million (US$35.8 million) for the fourth quarter of 2013 and RMB365.4 million (US$59.5 million) for the previous quarter.

EBITDA (non-GAAP) for the full year of 2014 was RMB969.5 million (US$156.3 million), compared to RMB841.8 million (US$139.1 million) in 2013. Excluding share-based compensation expenses, adjusted EBITDA (non-GAAP) for the full year of 2014 was RMB1,001.5 million (US$161.4 million), compared with RMB872.2 million (US$144.1 million) in 2013, representing a 14.8% year-on-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 2014 was 20.2%, compared with 20.9% for the year of 2013.

Hotel income (non-GAAP), which is the difference between net revenues and hotel operating costs, was RMB247.3 million (US$39.9 million) for the fourth quarter of 2014, compared with RMB243.5 million (US$40.2 million) in the fourth quarter of 2013 and RMB404.2 million (US$65.9 million) in the previous quarter. The hotel income from the leased hotels was RMB93.2 million (US$15.0 million) during the fourth quarter of 2014. The hotel income from the manachised and franchised hotels was RMB154.1 million (US$24.9 million) during the fourth quarter of 2014, or accounting for approximately 62% of total hotel income.

Hotel income (non-GAAP) for the full year of 2014 was RMB1,086.7 million (US$175.1 million), compared with RMB987.0 million (US$163.0 million) for 2013. The hotel income from the leased hotels was RMB548.4 million (US$88.4 million) for the full year of 2014. The hotel income from the manachised and franchised hotels was RMB538.3 million (US$86.7 million) during the full year of 2014, or accounting for approximately 50% of total hotel income.

Cash flow. Operating cash inflow for the fourth quarter of 2014 was RMB457.5 million (US$73.7 million). Investing cash outflow for the fourth quarter was RMB201.2 million (US$32.4 million).

Operating cash inflow for the full year of 2014 was RMB1,454.0 million (US$234.3 million), representing an increase of 36% from 2013. The significant growth was mainly due to the Company's fast network expansion with manachise model. Investing cash outflow for the full year of 2014 was RMB1,063.2 million (US$171.4 million), representing a decrease of 8% from 2013. The Company's free cash flow turned positive.

Cash and cash equivalents. As of December 31, 2014, the Company had a total balance of cash and cash equivalents of RMB808.9 million (US$130.4 million).

Debt financing

In the fourth quarter of 2014, the company repaid the loan of RMB300 million. As of December 31, 2014, the Company had a total credit facility of RMB898.3 million available and had not drawn down any of the credit facility.

Business Outlook and Guidance for 2015

"We remain confident about the long-term growth potential of travel demand in China. We will continue to invest in our new brands to meet diversified needs. In 2015, we plan to add 680 to 730 leased and manachised hotels, with 20 to 30 leased hotels and 660 to 700 manachised and franchised hotels. Among these new hotels, 80% will be economy hotels, and 20% will be midscale and upscale hotels." commented Mr. Ji.

In the first quarter of 2015, the Company expects net revenues to grow 12% to 14% year-over-year. For the full year 2015, the Company expects net revenues to grow 7.5% to 11.5% from 2014.

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 9 p.m. ET, Tuesday, March 10, 2015 (or 9 a.m. on Wednesday, March 11, 2015 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 6723 9385 (for callers outside of the US, China Mainland, and Hong Kong) and entering pass code 8517 6017. 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, 2015. 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 8517 6017.

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; 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 and interest expense 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 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 seven brands, namely, Joya Hotel, Manxin Hotels & Resorts, JI Hotel, Starway Hotel, HanTing Hotel, Elan Hotel and Hi Inn. 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=RMB6.2046 on December 31, 2014 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, 2013 September 30, 2014 December 31, 2014
RMB RMB RMB US$
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents 397,435 849,522 808,865 130,365
Restricted cash 3,317 -- -- --
Short-term investments -- 60,900 26,615 4,290
Accounts receivable, net 74,646 101,196 89,243 14,384
Amounts due from related parties 658 15,560 16,293 2,626
Prepaid rent 363,581 371,804 385,158 62,076
Inventories 34,013 32,758 29,882 4,816
Other current assets 116,979 171,339 160,582 25,881
Deferred tax assets 51,759 51,759 80,026 12,898
Total current assets 1,042,388 1,654,838 1,596,664 257,336
Property and equipment, net 3,634,039 3,860,165 3,907,343 629,749
Intangible assets, net 101,845 101,962 104,537 16,848
Long-term investments 90,517 242,325 229,005 36,909
Goodwill 64,842 64,842 64,654 10,421
Other assets 184,013 190,372 197,233 31,788
Deferred tax assets 67,408 67,408 83,470 13,453
Total assets 5,185,052 6,181,912 6,182,906 996,504
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt -- 300,000 -- --
Accounts payable 677,305 641,216 640,691 103,261
Amounts due to a related party 5,593 6,957 6,403 1,032
Salary and welfare payable 147,238 102,610 186,051 29,986
Deferred revenue 297,284 459,361 514,268 82,885
Accrued expenses and other current liabilities 249,185 288,798 313,017 50,449
Income tax payable 26,053 45,636 59,630 9,610
Deferred tax liabilities 151 151 701 113
Total current liabilities 1,402,809 1,844,729 1,720,761 277,336
Deferred rent 653,831 774,581 830,414 133,838
Deferred revenue 118,818 147,068 155,395 25,046
Amounts due to a related party 8,167 6,125 4,083 658
Other long-term liabilities 147,565 189,888 215,762 34,774
Deferred tax liabilities 26,071 26,071 37,778 6,089
Total liabilities 2,357,261 2,988,462 2,964,193 477,741
Equity:
Ordinary shares 182 183 184 30
Additional paid-in capital 2,315,083 2,362,780 2,381,568 383,839
Retained earnings 539,872 800,380 847,221 136,547
Accumulated other comprehensive income (loss) (39,384) 20,543 (12,008) (1,935)
Total China Lodging Group, Limited shareholders' equity 2,815,753 3,183,886 3,216,965 518,481
Noncontrolling interest 12,038 9,564 1,748 282
Total equity 2,827,791 3,193,450 3,218,713 518,763
Total liabilities and equity 5,185,052 6,181,912 6,182,906 996,504
China Lodging Group, Limited
Unaudited Condensed Consolidated Statements of Comprehensive Income
Quarter Ended Year Ended
December 31, 2013 September 30, 2014 December 31, 2014 December 31, 2013 December 31, 2014
RMB RMB RMB US$ RMB RMB US$
(in thousands, except per share and per ADS data)
Revenues:
Leased hotels 1,036,650 1,256,926 1,160,852 187,095 3,870,887 4,522,431 728,884
Manachised and franchised hotels 151,736 214,577 212,059 34,178 549,958 742,797 119,717
Total revenues 1,188,386 1,471,503 1,372,911 221,273 4,420,845 5,265,228 848,601
Less: business tax and related surcharges (68,172) (84,002) (76,674) (12,358) (252,216) (300,500) (48,432)
Net revenues 1,120,214 1,387,501 1,296,237 208,915 4,168,629 4,964,728 800,169
Operating costs and expenses:
Hotel operating costs:
Rents (350,073) (382,417) (414,525) (66,809) (1,255,663) (1,543,651) (248,791)
Utilities (69,941) (78,692) (83,723) (13,494) (273,314) (323,837) (52,193)
Personnel costs (171,673) (206,731) (210,210) (33,880) (638,511) (788,973) (127,159)
Depreciation and amortization (124,077) (142,767) (152,386) (24,560) (453,062) (558,833) (90,068)
Consumables, food and beverage (108,758) (119,572) (121,754) (19,623) (391,715) (454,795) (73,300)
Others (52,191) (53,080) (66,328) (10,690) (169,401) (207,938) (33,514)
Total hotel operating costs (876,713) (983,259) (1,048,926) (169,056) (3,181,666) (3,878,027) (625,025)
Selling and marketing expenses (45,088) (53,610) (65,179) (10,505) (138,129) (187,435) (30,209)
General and administrative expenses (80,765) (99,520) (102,985) (16,598) (284,756) (342,128) (55,141)
Pre-opening expenses (48,999) (44,983) (43,246) (6,970) (211,284) (186,325) (30,030)
Total operating costs and expenses (1,051,565) (1,181,372) (1,260,336) (203,129) (3,815,835) (4,593,915) (740,405)
Other operating income 16,553 (4,018) 12,947 2,087 27,750 18,551 2,990
Income from operations 85,202 202,111 48,848 7,873 380,544 389,364 62,754
Interest income 2,319 5,798 7,872 1,269 6,856 23,162 3,733
Interest expense (197) (631) (173) (28) (813) (1,533) (247)
Other income (expense) 22 (316) (417) (67) 1,907 4,749 765
Foreign exchange gain (loss) (40) (25) (17) (3) 21 (246) (39)
Income before income taxes 87,306 206,937 56,113 9,044 388,515 415,496 66,966
Income tax expense (27,348) (59,512) (8,755) (1,411) (104,820) (113,105) (18,229)
Net income 59,958 147,425 47,358 7,633 283,695 302,391 48,737
Less: net loss (income) attributable to noncontrolling interests (1,418) 2,174 (517) (84) (3,837) 4,957 799
Net income attributable to China Lodging Group, Limited 58,540 149,599 46,841 7,549 279,858 307,348 49,536
Other comprehensive income
Unrealized securities holding gains (losses), net of tax -- 32,223 (30,847) (4,972) -- 28,458 4,587
Foreign currency translation adjustments, net of tax 113 (606) (1,126) (181) (976) (1,082) (175)
Comprehensive income 60,071 179,042 15,385 2,480 282,719 329,767 53,149
Comprehensive loss (income) attributable to the noncontrolling interest (1,418) 2,174 (517) (84) (3,837) 4,957 799
Comprehensive income attributable to China Lodging Group, Limited 58,653 181,216 14,868 2,396 278,882 334,724 53,948
Earnings per share:
Basic 0.24 0.60 0.19 0.03 1.14 1.23 0.20
Diluted 0.23 0.59 0.18 0.03 1.12 1.21 0.20
Earnings per ADS:
Basic 0.95 2.40 0.75 0.12 4.57 4.94 0.80
Diluted 0.93 2.36 0.74 0.12 4.49 4.86 0.78
Weighted average number of shares used in computation:
Basic 246,162 249,552 249,642 249,642 245,187 248,958 248,958
Diluted 250,748 253,608 253,906 253,906 249,486 253,004 253,004
China Lodging Group, Limited
Unaudited Condensed Consolidated Statements of Cash Flows
Quarter Ended Year Ended
December 31, 2013 September 30, 2014 December 31, 2014 December 31, 2013 December 31, 2014
RMB RMB RMB US$ RMB RMB US$
(in thousands)
Operating activities:
Net income (loss) 59,958 147,425 47,358 7,633 283,695 302,391 48,737
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation 6,211 15,891 2,199 354 30,468 31,937 5,147
Depreciation and amortization 126,700 145,568 156,096 25,158 463,146 570,722 91,984
Deferred taxes (22,619) -- (42,391) (6,832) (22,619) (42,391) (6,832)
Bad debt expenses 281 754 3,022 487 4,573 4,770 769
Deferred rent 41,709 35,514 58,172 9,375 187,214 182,580 29,427
Gain (loss) from disposal of property and equipment (10,734) 2,836 (522) (84) (10,734) 803 129
Impairment loss 7,965 10,820 13,868 2,235 7,965 27,391 4,415
Investment income (loss) 308 666 898 145 430 (4,902) (790)
Excess tax benefit from share-based compensation (11,473) (3,305) (2,867) (462) (14,582) (11,697) (1,885)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable 1,379 (10,057) 9,119 1,470 (28,270) (18,773) (3,026)
Prepaid rent (2,637) 12,543 (13,353) (2,152) (42,276) (21,577) (3,478)
Inventories (2,817) (3,373) 2,876 463 4,043 4,130 665
Amounts due from related parties (658) -- -- -- (658) 256 41
Other current assets (13,223) (27,262) 11,669 1,881 (26,400) (42,369) (6,829)
Other assets (901) 3,299 (6,861) (1,106) (50,228) (13,220) (2,131)
Accounts payable 7,913 11,243 4,045 652 3,605 18,016 2,904
Amounts due to a related party (1,856) 514 (554) (89) 708 810 131
Salary and welfare payables 70,124 (28,417) 83,441 13,448 28,768 38,813 6,256
Deferred revenue 37,272 72,265 63,235 10,192 115,787 253,562 40,867
Accrued expenses and other current liabilities 17,450 12,399 24,380 3,929 62,545 58,995 9,508
Income tax payable and receivable 17,591 23,778 17,693 2,851 17,493 45,274 7,297
Other long-term liabilities 17,898 15,946 25,949 4,182 55,496 68,494 11,039
Net cash provided by operating activities 345,841 439,047 457,472 73,730 1,070,169 1,454,015 234,345
Investing activities:
Purchases of property and equipment (285,973) (225,314) (219,024) (35,300) (1,072,647) (930,922) (150,037)
Purchases of intangibles (3,395) (1,513) (5,629) (907) (4,290) (10,423) (1,680)
Amount received as a result of government zoning 12,530 4,004 -- -- 15,030 10,557 1,701
Acquisitions, net of cash received -- (460) (2,160) (348) (34,070) (16,050) (2,587)
Proceeds from disposal of subsidiary and branch -- 17,484 1,000 161 -- 18,484 2,979
Purchase of long-term investments (54,314) (20,000) (14,789) (2,384) (54,744) (191,064) (30,794)
Payment for shareholder loan to joint venture -- (699) (734) (118) -- (15,640) (2,521)
Proceeds from sale of long-term investments -- 1,135 4,345 700 -- 88,266 14,226
Purchase of short-term investments 4,314 (55,499) (19,710) (3,177) -- (75,210) (12,122)
Proceeds from sales of short-term investments -- -- 55,499 8,945 -- 55,499 8,945
Increase in restricted cash 930 755 -- -- (1,527) 3,317 535
Net cash used in investing activities (325,908) (280,107) (201,202) (32,428) (1,152,248) (1,063,186) (171,355)
Financing activities:
Net proceeds from issuance of ordinary shares upon exercise of option 18,834 1,427 12,624 2,035 28,122 20,985 3,382
Proceeds from short-term debt -- -- -- -- 105,796 300,000 48,351
Repayment of short-term debt (1,256) -- (300,000) (48,351) (105,796) (300,000) (48,351)
Funds advanced from noncontrolling interest holders -- -- -- -- 1,945 -- --
Repayment of funds advanced from noncontrolling interest holders (1,105) (580) (340) (55) (6,564) (1,560) (251)
Acquisition of noncontrolling interest (4,210) -- (2,042) (329) (4,210) (4,083) (658)
Contribution from noncontrolling interest holders -- 7,000 (7,000) (1,128) 200 -- --
Repayment to noncontrolling interest holders -- -- -- -- (200) -- --
Dividend paid to noncontrolling interest holders (177) (2,813) (1,333) (215) (3,229) (5,356) (863)
Excess tax benefit from share-based compensation 11,473 3,305 2,867 462 14,582 11,697 1,885
Net cash provided by (used in) financing activities 23,559 8,339 (295,224) (47,581) 30,646 21,683 3,495
Effect of exchange rate changes on cash and cash equivalents 140 (29) (1,703) (274) (976) (1,082) (175)
Net increase in cash and cash equivalents 43,632 167,250 (40,657) (6,553) (52,409) 411,430 66,310
Cash and cash equivalents at the beginning of the period 353,803 682,272 849,522 136,918 449,844 397,435 64,055
Cash and cash equivalents at the end of the period 397,435 849,522 808,865 130,365 397,435 808,865 130,365
China Lodging Group, Limited
Unaudited reconciliation of GAAP and Non-GAAP Results
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 costs 1,048,926 80.9% 2,075 0.2% 1,046,851 80.7%
Selling and marketing expenses 65,179 5.0% 289 0.0% 64,890 5.0%
General and administrative expenses 102,985 7.9% (165) 0.0% 103,150 7.9%
Pre-opening expenses 43,246 3.3% -- 0.0% 43,246 3.3%
Total operating costs and expenses 1,260,336 97.1% 2,199 0.2% 1,258,137 96.9%
Income from operations 48,848 3.8% 2,199 0.2% 51,047 4.0%
Quarter Ended December 31, 2014
GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
US$ US$ US$
(in thousands)
Hotel operating costs 169,056 80.9% 334 0.2% 168,722 80.7%
Selling and marketing expenses 10,505 5.0% 47 0.0% 10,458 5.0%
General and administrative expenses 16,598 7.9% (27) 0.0% 16,625 7.9%
Pre-opening expenses 6,970 3.3% -- 0.0% 6,970 3.3%
Total operating costs and expenses 203,129 97.1% 354 0.2% 202,775 96.9%
Income from operations 7,873 3.8% 354 0.2% 8,227 4.0%
Quarter Ended September 30, 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 costs 983,259 70.9% 2,142 0.2% 981,117 70.7%
Selling and marketing expenses 53,610 3.9% 286 0.0% 53,324 3.9%
General and administrative expenses 99,520 7.2% 13,463 1.0% 86,057 6.2%
Pre-opening expenses 44,983 3.2% -- 0.0% 44,983 3.2%
Total operating costs and expenses 1,181,372 85.2% 15,891 1.2% 1,165,481 84.0%
Income from operations 202,111 14.6% 15,891 1.2% 218,002 15.8%
Quarter Ended December 31, 2013
GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
RMB RMB RMB
(in thousands)
Hotel operating costs 876,713 78.3% 1,443 0.1% 875,270 78.2%
Selling and marketing expenses 45,088 4.0% 203 0.0% 44,885 4.0%
General and administrative expenses 80,765 7.2% 4,565 0.4% 76,200 6.8%
Pre-opening expenses 48,999 4.4% -- 0.0% 48,999 4.4%
Total operating costs and expenses 1,051,565 93.9% 6,211 0.5% 1,045,354 93.4%
Income from operations 85,202 7.6% 6,211 0.5% 91,413 8.1%
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 costs 3,878,027 78.1% 6,830 0.1% 3,871,197 78.0%
Selling and marketing expenses 187,435 3.8% 939 0.0% 186,496 3.8%
General and administrative expenses 342,128 6.9% 24,168 0.5% 317,960 6.4%
Pre-opening expenses 186,325 3.8% -- 0.0% 186,325 3.8%
Total operating costs and expenses 4,593,915 92.6% 31,937 0.6% 4,561,978 92.0%
Income from operations 389,364 7.9% 31,937 0.6% 421,301 8.5%
Year Ended December 31, 2014
GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
US$ US$ US$
(in thousands)
Hotel operating costs 625,025 78.1% 1,101 0.1% 623,924 78.0%
Selling and marketing expenses 30,209 3.8% 151 0.0% 30,058 3.8%
General and administrative expenses 55,141 6.9% 3,895 0.5% 51,246 6.4%
Pre-opening expenses 30,030 3.8% -- 0.0% 30,030 3.8%
Total operating costs and expenses 740,405 92.6% 5,147 0.6% 735,258 92.0%
Income from operations 62,754 7.9% 5,147 0.6% 67,901 8.5%
Year Ended December 31, 2013
GAAP Result % of Net Revenues Share-based Compensation % of Net Revenues Non-GAAP Result % of Net Revenues
RMB RMB RMB
(in thousands)
Hotel operating costs 3,181,666 76.3% 4,948 0.1% 3,176,718 76.2%
Selling and marketing expenses 138,129 3.3% 973 0.0% 137,156 3.3%
General and administrative expenses 284,756 6.8% 24,547 0.6% 260,209 6.2%
Pre-opening expenses 211,284 5.1% -- 0.0% 211,284 5.1%
Total operating costs and expenses 3,815,835 91.5% 30,468 0.7% 3,785,367 90.8%
Income from operations 380,544 9.1% 30,468 0.7% 411,012 9.8%
China Lodging Group, Limited
Unaudited reconciliation of GAAP and Non-GAAP Results
Quarter Ended Year Ended
December 31, 2013 September 30, 2014 December 31, 2014 December 31, 2013 December 31, 2014
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) 58,540 149,599 46,841 7,549 279,858 307,348 49,536
Share-based compensation expenses 6,211 15,891 2,199 354 30,468 31,937 5,147
Adjusted net income attributable to China Lodging Group, Limited (non-GAAP) 64,751 165,490 49,040 7,903 310,326 339,285 54,683
Earnings per share (GAAP)
Basic 0.24 0.60 0.19 0.03 1.14 1.23 0.20
Diluted 0.23 0.59 0.18 0.03 1.12 1.21 0.20
Earnings per ADS (GAAP)
Basic 0.95 2.40 0.75 0.12 4.57 4.94 0.80
Diluted 0.93 2.36 0.74 0.12 4.49 4.86 0.78
Adjusted earnings per share (non-GAAP)
Basic 0.26 0.66 0.20 0.03 1.27 1.36 0.22
Diluted 0.26 0.65 0.19 0.03 1.24 1.34 0.22
Adjusted earnings per ADS (non-GAAP)
Basic 1.05 2.65 0.79 0.13 5.06 5.45 0.88
Diluted 1.03 2.61 0.77 0.12 4.98 5.36 0.86
Weighted average number of shares used in computation
Basic 246,162 249,552 249,642 249,642 245,187 248,958 248,958
Diluted 250,748 253,608 253,906 253,906 249,486 253,004 253,004
Quarter Ended Year Ended
December 31, 2013 September 30, 2014 December 31, 2014 December 31, 2013 December 31, 2014
RMB RMB RMB US$ RMB RMB US$
(in thousands)
Net income attributable to China Lodging Group, Limited (GAAP) 58,540 149,599 46,841 7,549 279,858 307,348 49,536
Interest income (2,319) (5,798) (7,872) (1,269) (6,856) (23,162) (3,733)
Interest expenses 197 631 173 28 813 1,533 247
Income tax expense 27,348 59,512 8,755 1,411 104,820 113,105 18,229
Depreciation and amortization 126,700 145,568 156,096 25,158 463,146 570,722 91,984
EBITDA (non-GAAP) 210,466 349,512 203,993 32,877 841,781 969,546 156,263
Share-based Compensation 6,211 15,891 2,199 354 30,468 31,937 5,147
Adjusted EBITDA (non-GAAP) 216,677 365,403 206,192 33,231 872,249 1,001,483 161,410
Quarter Ended Year Ended
December 31, 2013 September 30, 2014 December 31, 2014 December 31, 2013 December 31, 2014
RMB RMB RMB US$ RMB RMB US$
(in thousands)
Net revenues (GAAP) 1,120,214 1,387,501 1,296,237 208,915 4,168,629 4,964,728 800,169
Less: Hotel operating costs (876,713) (983,259) (1,048,926) (169,056) (3,181,666) (3,878,027) (625,025)
Hotel income (non-GAAP) 243,501 404,242 247,311 39,859 986,963 1,086,701 175,144
China Lodging Group, Limited
Operational Data
As of
December 31, September 30, December 31,
2013 2014 2014
Total hotels in operation: 1,425 1,849 1,995
Leased hotels 565 604 611
Manachised hotels 835 1,237 1,376
Franchised hotels* 25 8 8
Total hotel rooms in operation 152,879 197,674 209,955
Leased hotels 65,836 71,999 72,335
Manachised hotels 84,437 124,744 136,689
Franchised hotels* 2,606 931 931
Number of cities 249 282 300
* refers to franchised Starway hotels
For the quarter ended
December 31, September 30, December 31,
2013 2014 2014
Occupancy rate (as a percentage)
Leased hotels 89.2% 92.7% 87.2%
Manachised hotels 90.6% 92.4% 86.2%
Blended 90.0% 92.5% 86.5%
Average daily room rate (in RMB)
Leased hotels 187 198 190
Manachised hotels 171 180 169
Blended 178 187 176
RevPAR (in RMB)
Leased hotels 166 184 166
Manachised hotels 155 166 145
Blended 160 173 153
For the full year ended
December 31, December 31,
2013 2014
Occupancy rate (as a percentage)
Leased hotels 89.5% 88.9%
Manachised hotels 91.6% 89.0%
Blended 90.7% 89.0%
Average daily room rate (in RMB)
Leased hotels 187 190
Manachised hotels 174 172
Blended 180 179
RevPAR (in RMB)
Leased hotels 168 169
Manachised hotels 159 153
Blended 163 159
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,
2013 2014
Total 1,178 1,178
Leased hotels 505 505
Manachised hotels 673 673
Total 84,496 84,496
Leased hotel rooms 45,574 45,574
Manachised hotel rooms 38,922 38,922
Occupancy rate (as a percentage) 92.6% 89.7%
Average daily room rate (in RMB) 179 179
RevPAR (in RMB) 165 161
As of and for full year ended
December 31,
2013 2014
Total 1,178 1,178
Leased hotels 505 505
Manachised hotels 673 673
Total 84,496 84,496
Leased hotel rooms 45,574 45,574
Manachised hotel rooms 38,922 38,922
Occupancy rate (as a percentage) 94.3% 92.8%
Average daily room rate (in RMB) 182 183
RevPAR (in RMB) 171 170
Hotel breakdown by segment
Number of Hotels in Operation Number of Hotel Rooms in Operation Number of Hotels
As of December 31, 2014 As of December 31, 2014 Net Added in 2014
Economy hotels 1,819 185,959 510
Hanting Hotel 1,648 172,341 422
Leased hotels 502 57,306 29
Manachised hotels 1,146 115,035 393
Hi Inn 158 12,551 75
Leased hotels 41 3,895 --
Manachised hotels 117 8,656 75
Elan Hotel 13 1,067 13
Leased hotels -- -- --
Manachised hotels 13 1,067 13
Midscale and upscale hotels 176 23,996 60
JI Hotel 117 17,052 49
Leased hotels 62 10,260 14
Manachised hotels 55 6,792 35
Starway Hotel 55 6,321 9
Leased hotels 3 451 2
Manachised hotels 44 4,939 24
Franchised hotels 8 931 -17
Joya Hotel 3 515 2
Leased hotels 2 315 1
Manachised hotels 1 200 1
Manxin Hotels & Resorts 1 108 --
Leased hotels 1 108 --
Total 1,995 209,955 570
Same-hotel operational data by segment
Number of hotels in operation Same-hotel RevPAR Same-hotel ADR Same-hotel Occupancy
As of For the quarter ended For the quarter ended For the quarter ended
December 31, December 31, December 31, December 31,
2013 2014 2013 2014 yoy
change
2013 2014 yoy
change
2013 2014 yoy
change
Economy hotels 1,117 1,117 161 155 -4% 173 173 0% 93% 90% -3%
Leased hotels 473 473 163 158 -3% 178 176 -1% 92% 90% -2%
Manachised hotels 644 644 159 153 -4% 170 170 0% 94% 90% -4%
Midscale hotels 61 61 241 251 4% 273 288 6% 88% 87% -1%
Leased hotels 32 32 270 278 3% 291 312 7% 93% 89% -4%
Manachised hotels 29 29 201 212 5% 245 251 2% 82% 85% 2%
Total 1,178 1,178 165 161 -3% 179 179 0% 93% 90% -3%
Number of hotels in operation Same-hotel RevPAR Same-hotel ADR Same-hotel Occupancy
As of For the full year ended For the full year ended For the full year ended
December 31, December 31, December 31, December 31,
2013 2014 2013 2014 yoy
change
2013 2014 yoy
change
2013 2014 yoy
change
Economy hotels 1,117 1,117 167 164 -2% 177 177 0% 95% 93% -2%
Leased hotels 473 473 168 165 -2% 180 179 -1% 93% 92% -1%
Manachised hotels 644 644 167 164 -2% 174 175 1% 96% 94% -2%
Midscale hotels 61 61 251 272 8% 279 296 6% 90% 92% 2%
Leased hotels 32 32 270 297 10% 292 316 8% 92% 94% 2%
Manachised hotels 29 29 211 221 5% 249 252 1% 85% 87% 3%
Total 1,178 1,178 171 170 -1% 182 183 1% 94% 93% -2%

CONTACT: Ida Yu Sr. Manager of Investor Relations Tel: +86 (21) 6195 9561 Email: ir@huazhu.com http://ir.huazhu.comSource:China Lodging Group, Limited