0001104659-23-002415 | 6-K | XBRL Viewer

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Cover Page	9 Months Ended
Cover Page	Sep. 30, 2022
Document and Entity Information
Document Type	6-K
Document Period End Date	Sep. 30, 2022
Entity Registrant Name	H World Group Limited
Entity Central Index Key	0001483994
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS ¥ in Millions, $ in Millions	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 5,177	$ 728	¥ 5,116
Restricted cash	40	6	25
Short-term investments measured at fair value	1,915	269	2,589
Accounts receivable, net of allowance of RMB50 and RMB62 as of December 31, 2021 and September 30, 2022, respectively	1,231	173	521
Loan receivables - current, net of allowance of RMB2 and RMB2 as of December 31, 2021 and September 30, 2022 respectively	161	23	218
Amounts due from related parties, net of allowance of RMB38 and RMB18 as of December 31, 2021 and September 30, 2022 respectively	177	25	149
Inventories	83	12	88
Other current assets, net of allowance of RMB5 and RMB1 as of December 31, 2021 and September 30, 2022, respectively	779	109	847
Total current assets	9,563	1,345	9,553
Property and equipment, net	6,804	957	7,056
Intangible assets, net	5,240	737	5,385
Operating lease right-of-use assets	28,610	4,022	29,942
Finance lease right-of-use assets	2,372	333	2,235
Land use rights, net	201	28	206
Long-term investments	1,865	262	1,965
Goodwill	5,069	713	5,132
Amounts due from a related party, net of RMB0 and RMB0 as of December 31, 2021 and September 30, 2022 respectively	6	1	1
Loan receivables, net of RMB3 and RMB2 as of December 31, 2021 and September 30, 2022 respectively	115	16	98
Other assets, net of allowance of RMB1 and RMB1 as of December 31, 2021 and September 30, 2022, respectively	696	98	834
Deferred tax assets	846	119	862
Total assets	61,387	8,631	63,269
Current liabilities:
Short-term debt	5,144	723	6,232
Accounts payable	810	114	968
Amounts due to related parties	85	12	197
Salary and welfare payables	459	64	591
Deferred revenue	1,280	180	1,366
Operating lease liabilities, current	3,732	525	3,628
Finance lease liabilities, current	45	6	41
Accrued expenses and other current liabilities	2,054	289	1,838
Income tax payable	126	18	418
Total current liabilities	13,735	1,931	15,279
Long-term debt	6,091	856	3,565
Operating lease liabilities, non-current	27,216	3,826	28,012
Finance lease liabilities, non-current	2,857	402	2,684
Deferred revenue	822	116	785
Other long-term liabilities	967	136	903
Retirement benefit obligations	138	19	144
Deferred tax liabilities	798	112	853
Total liabilities	52,624	7,398	52,225
Commitments and contingencies
Equity:
Ordinary shares (US$0.00001 par value per share; 80,000,000,000 shares authorized; 3,255,971,250 and 3,262,285,720 shares issued as of December 31, 2021 and September 30, 2022, 3,120,746,090 and 3,109,265,860 shares outstanding as of December 31, 2021 and September 30, 2022, respectively)	0	0	0
Treasury shares (30,974,040 and 48,768,740 shares as of December 31, 2021 and September 30, 2022, respectively)	(441)	(62)	(107)
Additional paid-in capital	10,127	1,424	9,964
Retained earnings	(1,076)	(151)	1,037
Accumulated other comprehensive income	70	10	41
Total H World Group Limited shareholders' equity	8,680	1,221	10,935
Noncontrolling interest	83	12	109
Total equity	8,763	1,233	11,044
Total liabilities and equity	¥ 61,387	$ 8,631	¥ 63,269

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Millions	Sep. 30, 2022 CNY (¥) shares	Dec. 31, 2021 CNY (¥) shares
Accounts receivable, allowance	¥ 62	¥ 50
Loan receivables - current, net of allowance	53	48
Amounts due from related parties current, net of allowance	37	17
Other current assets, net of allowance	5	6
Amounts due from related parties , net of allowance	0	0
Loan receivables, net of allowance	6	4
Other assets, net of allowance	¥ 1	¥ 1
Ordinary shares, shares authorized \| shares	80,000,000,000	80,000,000,000
Ordinary shares, shares issued \| shares	3,262,285,720	3,255,971,250
Ordinary shares, shares outstanding \| shares	3,109,265,860	3,120,746,090
Treasury shares, shares \| shares	48,768,740	30,974,040

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥) ¥ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 CNY (¥) ¥ / shares shares
Revenues:
Total revenues	¥ 10,156	$ 1,428	¥ 9,437
Operating costs and expenses:
Hotel operating costs	8,830	1,242	8,087
Other operating costs	39	5	38
Selling and marketing expenses	445	63	457
General and administrative expenses	1,235	174	1,108
Pre-opening expenses	82	12	52
Total operating costs and expenses	10,631	1,496	9,742
Other operating income, net	275	39	431
Income (loss) from operations	(200)	(29)	126
Interest income	60	8	64
Interest expense	(292)	(41)	(313)
Other income (expense), net	74	10	205
Unrealized gains (losses) from fair value changes of equity securities	(499)	(70)	120
Foreign exchange (loss) gain	(822)	(116)	(204)
Loss before income taxes	(1,679)	(238)	(2)
Income tax expense (benefit)	4	1	(3)
Loss from equity method investments	39	5	18
Net loss	(1,722)	(244)	(17)
Less: net loss attributable to noncontrolling interest	(25)	(4)	(10)
Net loss attributable to H World Group Limited	(1,697)	(240)	(7)
Other comprehensive income (loss)
Gain (loss) arising from defined benefit plan, net of tax of RMB0 and RMB0 for the nine months ended September 30, 2021 and 2022, respectively	0	0	0
Foreign currency translation adjustments, net of tax of nil for the nine months ended September 30, 2021 and 2022, respectively	29	4	(106)
Comprehensive loss	(1,693)	(240)	(123)
Less: comprehensive loss attributable to the noncontrolling interest	(25)	(4)	(10)
Comprehensive loss attributable to H World Group Limited	¥ (1,668)	$ (236)	¥ (113)
Losses per share:
Basic \| (per share)	¥ (0.55)	$ (0.08)	¥ 0.00
Diluted \| (per share)	¥ (0.55)	$ (0.08)	¥ 0.00
Weighted average number of shares used in computation:
Basic (in shares)	3,111,759,089	3,111,759,089	3,112,910,313
Diluted (in shares)	3,111,759,089	3,111,759,089	3,112,910,313
Leased and owned hotels
Revenues:
Total revenues	¥ 6,698	$ 942	¥ 6,025
Manachised and franchised hotels
Revenues:
Total revenues	3,247	456	3,300
Others
Revenues:
Total revenues	¥ 211	$ 30	¥ 112

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Gain arising from defined benefit plan, tax	¥ 0	¥ 0
Foreign currency translation adjustments, tax	¥ 0	¥ 0

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ¥ in Millions, $ in Millions	Ordinary Shares CNY (¥) shares	Treasury Shares CNY (¥) shares	Additional Paid-in Capital CNY (¥)	Retained Earnings CNY (¥)	Accumulated Other Comprehensive (Loss) Income CNY (¥)	Noncontrolling Interest CNY (¥)	CNY (¥) shares	USD ($) shares
Balance at beginning issued (in shares) at Dec. 31, 2020 \| shares	3,243,644,440
Balance at beginning outstanding (in shares) at Dec. 31, 2020 \| shares	3,108,425,680
Balance at beginning at Dec. 31, 2020	¥ 0		¥ 9,808	¥ 1,502	¥ 127	¥ 102	¥ 11,432
Treasury shares, balance (in shares) at Dec. 31, 2020 \| shares		30,967,640
Treasury shares, balance at Dec. 31, 2020		¥ (107)
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks	¥ 0		0				0
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks (in shares) \| shares	8,465,600
Conversion of Convertible Senior Notes due 2022 (In shares) \| shares	1,340
Conversion of Convertible Senior Notes due 2022	¥ 0		0				0
Share-based compensation			94				94
Net loss				(7)		(10)	(17)
Dividends paid to noncontrolling interest holders						(1)	(1)
Capital contribution from noncontrolling interest holders						1	1
Acquisition of noncontrolling interest			(3)			(7)	(10)
Foreign currency translation adjustments					(106)		(106)
Net settlement on shares repurchased for withholding taxes related to share-based awards			50				50
Noncontrolling interest recognized in connection with acquisitions						21	21
Income arising from defined benefit plan, net of tax					0		0
Balance at ending issued (in shares) at Sep. 30, 2021 \| shares	3,252,111,380
Balance at ending outstanding (in shares) at Sep. 30, 2021 \| shares	3,116,892,620
Balance at ending at Sep. 30, 2021	¥ 0		9,949	1,495	21	106	¥ 11,464
Treasury shares, balance (in shares) at Sep. 30, 2021 \| shares		30,967,640
Treasury shares, balance at Sep. 30, 2021		¥ (107)
Balance at beginning issued (in shares) at Dec. 31, 2021 \| shares	3,255,971,250						3,255,971,250	3,255,971,250
Balance at beginning outstanding (in shares) at Dec. 31, 2021 \| shares	3,120,746,090						3,120,746,090	3,120,746,090
Balance at beginning at Dec. 31, 2021	¥ 0		9,964	1,037	41	109	¥ 11,044
Treasury shares, balance (in shares) at Dec. 31, 2021 \| shares		30,974,040					30,974,040	30,974,040
Treasury shares, balance at Dec. 31, 2021		¥ (107)					¥ (107)
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks	¥ 0						0
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks (in shares) \| shares	6,314,470
Share-based compensation			77				77
Net loss				(1,697)		(25)	(1,722)	$ (244)
Dividends paid to noncontrolling interest holders						(1)	(1)
Capital contribution from noncontrolling interest holders						0	0
Acquisition of noncontrolling interest			0			(1)	(1)
Foreign currency translation adjustments					29		29	4
Repurchase of shares, Value		¥ (334)					(334)
Repurchase of shares (in ordinary shares) \| shares	(17,794,700)
Repurchase of shares (in Treasury Shares) \| shares		17,794,700
Cash dividends declared				(416)			(416)
Noncontrolling interest recognized in connection with acquisitions						1	1
Income arising from defined benefit plan, net of tax					0		0	$ 0
Termination of Capped Call			86				¥ 86
Balance at ending issued (in shares) at Sep. 30, 2022 \| shares	3,262,285,720						3,262,285,720	3,262,285,720
Balance at ending outstanding (in shares) at Sep. 30, 2022 \| shares	3,109,265,860						3,109,265,860	3,109,265,860
Balance at ending at Sep. 30, 2022	¥ 0		¥ 10,127	¥ (1,076)	¥ 70	¥ 83	¥ 8,763	$ 1,233
Treasury shares, balance (in shares) at Sep. 30, 2022 \| shares		48,768,740					48,768,740	48,768,740
Treasury shares, balance at Sep. 30, 2022		¥ (441)					¥ (441)	$ (62)

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical)	Sep. 30, 2022 shares
ADS Lending Arrangement
Share issued but not outstanding	104,251,120

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Operating activities:
Net loss	¥ (1,722)	$ (244)	¥ (17)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation	77	11	94
Depreciation and amortization and other	1,143	161	1,126
Impairment loss	101	14	60
Loss from equity method investments, net of dividends received	88	12	22
Investment loss (income)	434	61	(354)
Foreign currency exchange loss	590	83	175
Noncash lease expense	1,940	273	1,604
Changes in operating assets and liabilities	(2,167)	(305)	(2,103)
Others	36	6	(134)
Changes in operating assets and liabilities, net of effect of acquisitions:
Net cash provided by operating activities	520	72	473
Investing activities:
Capital expenditures	(824)	(116)	(1,207)
Acquisitions, net of cash received	(59)	(8)	(741)
Purchases of investments	(377)	(53)	(472)
Proceeds from maturity/sale and return of investments	568	80	1,430
Loan advances	(152)	(21)	(85)
Loan collections	172	24	149
Others	2	0	27
Net cash used in investing activities	(670)	(94)	(899)
Financing activities:
Net proceeds from issuance of ordinary shares			1
Payment of share repurchase	(334)	(47)
Proceeds from debt	4,813	677	2,217
Repayment of debt	(4,111)	(578)	(3,403)
Dividend paid	(416)	(58)
Cash received for the termination of Capped Call	86	12
Others	(32)	(4)	(17)
Net cash provided by (used in) financing activities	6	2	(1,202)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	220	31	(51)
Net change in cash, cash equivalents and restricted cash	76	11	(1,679)
Cash, cash equivalents and restricted cash at the beginning of the period	5,141	723	7,090
Cash, cash equivalents and restricted cash at the end of the period	5,217	734	5,411
Supplemental disclosure of cash flow information:
Cash and cash equivalents	5,177		5,385
Restricted cash	40		26
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	5,217		5,411
Interest paid, net of amounts capitalized	150	21	203
Income taxes paid	319	45	377
Cash paid for amounts included in the measurement of operating lease liabilities	2,393	336	2,895
Cash paid for amounts included in the measurement of finance lease liabilities	75	10	71
Non-cash right-of-use assets obtained in exchange for operating lease liabilities	802	113	1,604
Non-cash right-of-use assets obtained in exchange for finance lease liabilities	259	36
Non-cash right-of-use assets obtained in acquisition for operating lease	173	5	1,710
Non-cash lease liabilities obtained in acquisition for operating lease	144	20	1,692
Supplemental schedule of non-cash investing and financing activities:
Purchases of property and equipment included in payables	433	61	431
Consideration payable for business acquisition	¥ 35	$ 5	85
Purchase of intangible assets included in payables			¥ 2

ORGANIZATION AND PRINCIPAL ACTIVITIES

9 Months Ended

Sep. 30, 2022

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

1.ORGANIZATION AND PRINCIPAL ACTIVITIES

H World Group Limited (the “Company”), formerly, Huazhu Group Limited was incorporated in the Cayman Islands under the laws of the Cayman Islands on January 4, 2007. The principal business activities of the Company and its subsidiaries and consolidated variable interest entities (the “Group”) are to develop leased and owned, manachised and franchised hotels mainly in the People’s Republic of China(“PRC”).

On January 2, 2020, the Group completed the acquisition of 100% equity interest of Steigenberger Hotels Aktiengesellschaft Germany (“Deutsche Hospitality” or “DH”). Deutsche Hospitality was engaged in the business of leasing, franchising, operating and managing hotels under five brands in the midscale and upscale market in Europe, the Middle East and Africa. After the acquisition, “legacy DH” refers to Deutsche Hospitality and its subsidiaries and “legacy Huazhu” refers to the Group excluding Deutsche Hospitality.

The Group completed public offering in Hong Kong in September 2020 with proceeds of RMB6,018 and the trading of ordinary shares on the Hong Kong Stock Exchange commenced on September 22, 2020 under the stock code “1179”.

In June 2021, the Company effected a share split that each issued and unissued ordinary share of the Company with a par value of US$0.0001 was sub-divided into 10 ordinary shares with a par value of US$0.00001 each. The ratio of ADS to ordinary share was adjusted from one (1) ADS representing one (1) ordinary share to one (1) ADS representing ten (10) ordinary shares. Except otherwise stated, the share split has been retrospectively applied for all periods presented

In June 2022, the English name of the Company was changed from “Huazhu Group Limited” to “H World Group Limited”.

Leased and owned hotels

The Group leases hotel properties from property owners or purchases properties directly and is responsible for all aspects of hotel operations and management, including hiring, training and supervising the managers and employees required to operate the hotels. In addition, the Group is responsible for hotel development and customization to conform to the standards of the Group brands at the beginning of the lease or the construction, as well as repairs and maintenance, operating expenses and management of properties over the term of the lease or the land and building certificate.

As of December 31, 2021 and September 30, 2022, the Group had 738 and 710 leased and owned hotels in operation, respectively.

Manachised and franchised hotels

Typically the Group enters into certain franchise and management arrangements with franchisees for which the Group is responsible for providing branding, quality assurance, training, reservation, hiring and appointing of the hotel general manager and various other support services relating to the hotel renovation and operation. Those hotels are classified as manachised hotels. Under typical franchise and management agreements, the franchisee is required to pay an initial franchise fee and ongoing franchise and management service fees, the majority of which are equal to a certain percentage of the revenues of the hotel. The franchisee is responsible for the costs of hotel development, renovation and the costs of its operations. The term of the franchise and management agreements are typically 8 to 10 years for legacy Huazhu and 15 to 20 years for manachised hotels and 10 to 15 years for franchised hotels under legacy DH and are renewable upon mutual agreement between the Group and the franchisee. The Group also has some franchised hotels in which cases the Group does not provide a hotel general manager. As of December 31, 2021 and September 30, 2022, the Group had 6,824 and 7,459 manachised hotels in operation and 268 and 233 franchised hotels in operation, respectively.

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

2.SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Regarding interim financial reporting of the securities and Exchange Commission and applicable rules and regulations, certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the financial statements, accounting policies and notes thereto included in the Company’s audited consolidated financial statements for the year ended December 31, 2021. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the results for the full years.

The accompanying unaudited interim condensed consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group’s ability to generate cash flows from operations, and the Group’s ability to arrange adequate financing arrangements, to support its working capital requirements.

The Group’s businesses have been significantly impacted by the global outbreak of COVID-19 since year 2020 and still incurred net losses during the nine months ended September 30, 2022. As of September 30, 2022, the Group’s total current liabilities exceeded its total current assets by RMB4,172 (US$586 million). These conditions may raise substantial doubt about the Group’s ability to continue as a going concern within one year after the date that the financial statements are issued. The financial statements do not include any adjustments that might be necessary if the Group is unable to continue as a going concern.

However, the management has evaluated the significance of the above conditions and regards the going concern assumption as appropriate based on the following considerations:

●The Group generated positive cash flow from operations for several consecutive years with a net operating cash inflow of RMB520 for the nine months ended September 30, 2022;

●The Group has performed a review of its cash flow forecasts for the twelve month period after the date that the unaudited interim condensed consolidated financial statements are issued.

Management believes the relevant conditions that raise substantial doubt on going concern are mitigated by the following plans and actions:

●The Group has the ability to sell its short-term investments that can be readily convertible into cash, the fair value of which was approximately RMB1,915 as of September 30, 2022;

●As of September 30, 2022, the Company had unused facilities of approximately RMB2.9 billion including a revolving credit facility of EUR70 million. The revolving credit facility was subsequently used to redeem the convertible senior notes due on November 1, 2022. Based on the Company’s historical experience, normal course of business funding requests will be approved and provided that the Company submits the required supporting documents, and the amount is within the credit limit granted.

Based on the above factors, management believes that adequate sources of liquidity exist to fund the Group’s working capital and capital expenditures requirements, and to meet its other liabilities and commitments as they become due for at least twelve months from the issuance of these consolidated financial statements.

Basis of consolidation

The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its majority-owned subsidiaries and consolidated variable interest entities (the “VIEs”). All intercompany transactions and balances are eliminated on consolidation.

The Group evaluates the need to consolidate certain variable interest entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support.

The Group is deemed as the primary beneficiary of and consolidates variable interest entities when the Group has the power to direct the activities that most significantly impact the economic success of the entities and effectively assumes the obligation to absorb losses and has the rights to receive benefits that are potentially significant to the entities.

The Group evaluates its business activities and arrangements with the entities that operate the manachised and franchised hotels to identify potential variable interest entities. Generally, these entities qualify for the business scope exception, therefore consolidation is not appropriate under the variable interest entity consolidation guidance.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group’s consolidated financial statements include the impairment of property and equipment, right-of-use assets and intangible assets with definite lives, valuation allowance of deferred tax assets, purchase price allocation, impairment of investment, goodwill and intangible assets without definite lives and incremental borrowing rate used to measure lease liabilities.

Intangible assets, net

Intangible assets consist primarily of brand name, master brand agreement, non-compete agreements, franchise or manachise agreements, favorable leases and purchased software. For its indefinite-lives intangible assets of legacy Huazhu and legacy DH, there was no impairment loss recognized for the nine months ended September 30, 2021 and 2022.

Impairment of long-lived assets

The Group evaluates its long-lived assets including property and equipment, net, right-of-use assets and finite lived intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss equal to the difference between the carrying amount and fair value of these assets.

The Group performed a recoverability test of its long-lived assets associated with certain hotels due to the continued underperformance relative to the projected operating results, of which the carrying amount of the long-lived assets exceeded the future undiscounted net cash flows, and recognized an impairment loss of RMB60 and RMB101 during the nine months ended September 30, 2021 and 2022, respectively.

Fair value of the long-lived assets was determined by the Group based on the income approach using the discounted cash flow associated with the underlying assets, which incorporated certain assumptions including projected hotels’ revenue, growth rates and projected operating costs based on current economic condition, expectation of management and projected trends of current operating results.

Leases

As a lessee

ASU 2016-02, Leases (Topic 842) generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All of the Group’s leases were classified under ASC Topic 842 as operating leases upon this adoption and there are both capital lease and operating lease under legacy DH since the acquisition of DH. The Group elected the practical expedients under ASU 2016-02 which includes the use of hindsight in determining the lease term and the practical expedient package to not reassess whether any expired or existing contracts are or contain leases, to not reassess the classification of any expired or existing leases, and to not reassess initial direct costs for any existing leases.

The Group recognizes a lease liability for future fixed lease payments and variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date and a ROU asset representing the right to use the underlying asset for the lease term. Lease liabilities are recognized at commencement date based on the present value of fixed lease payments and variable lease payments that depend on an index or a rate (initially measured using the index or rate as at the commencement date) over the lease term using the rate implicit in the lease, if available, or the Group’s incremental borrowing rate. As its leases do not provide an implicit borrowing rate, the Group uses an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. Upon adoption of ASU 2016-02, the Group elected to use the remaining lease term as of January 1, 2019 in the estimation of the applicable discount rate for leases that were in place at adoption. For the initial measurement of the lease liability for leases commencing after January 1, 2019, the Group uses the discount rate as of the commencement date of the lease, incorporating the entire lease term. Current maturities of operating lease liabilities and finance lease liabilities are classified as operating lease liabilities, current and finance lease liabilities, current, respectively, in the Group’s consolidated balance sheets. Long-term portions of operating lease liabilities and finance lease liabilities are classified as operating lease liabilities, non-current and finance lease liabilities, non-current, respectively, in the Group’s consolidated balance sheets. Most leases have initial terms ranging from 10 to 20 years for legacy Huazhu, and from 20 to 25 years for legacy DH. The lease term includes lessee options to extend the lease and periods occurring after a lessee early termination option, only to the extent it is reasonably certain that the Group will exercise such extension options and not exercise such early termination options, respectively. The Group’s lease agreements may include nonlease components, mainly common area maintenance, which are combined with the lease components as the Group elects to account for these components as a single lease component, as permitted. The Group elected the practical expedient of not to separate land components outside PRC from leases of specified property and equipment at the ASC842 transition date. Besides, the Group’s lease payments are generally fixed and certain agreements contain variable lease payments based on the operating performance of the leased property and the changes in the index of consumer pricing index (“CPI”). Almost all the lease agreements with variable lease payments based on the changes in CPI are held by legacy DH. For operating leases, the Group recognizes lease expense on a straight-line basis over the lease term and variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period in which the obligation for those payments is incurred. The operating lease expense is recognized as hotel operating costs, general and administrative expenses and pre-opening expenses in the consolidated statements of comprehensive income. For finance lease, lease expense is generally front-loaded as the finance lease ROU asset is depreciated on a straight-line basis over the shorter of the lease term or useful life of the underlying asset within hotel operating costs in the consolidated statements of comprehensive income, but interest expense on the lease liability is recognized in interest expense in the consolidated statements of comprehensive income using the effective interest method which results in more expense during the early years of the lease. Additionally, the Group elected not to recognize leases with lease terms of 12 months or less at the commencement date. Lease payments on short-term leases are recognized as an expense on a straight-line basis over the lease term, not included in lease liabilities. The Group’s lease agreements do not contain any significant residual value guarantees or restricted covenants.

The ROU assets are measured at the amount of the lease liabilities with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred by the Group, deferred rent and lease incentives, and any off-market terms (that is, favorable or unfavorable terms) present in the lease when the Group acquired leases in a business combination in which the acquiree acts as a lessee. The Group evaluates the carrying value of ROU assets if there are indicators of impairment and reviews the recoverability of the related asset group. The Group excludes the lease obligation from the carrying value of the asset group. Accordingly, the lease payments (both principal and interest) don’t reduce the undiscounted expected future cash flows used to test the asset group for recoverability. If the carrying value of the asset group cannot be recoverable and is in excess of the estimated fair value, the Group records an impairment loss in the consolidated statements of comprehensive income. Noncash lease expense are used as the noncash add-back for the amortization of the operating ROU assets to the operating section of the consolidated statements of cash flow.

The Group reassesses of a contract is or contains a leasing arrangement and re-measures ROU assets and liabilities upon modification of the contract. The Group will derecognize ROU assets and liabilities, with difference recognized in the consolidated statements of comprehensive income on the contract termination.

In April 2020, the FASB released a Q&A which allows lessees and lessors to make an election to either apply the lease modification guidance or the variable rents guidance under ASC 840 and ASC 842 for lease concessions related to COVID-19 as long as the total cash flows as a result of the concession are substantially the same or less than those in the contract before the concession. A preparer can make this election without the need to determine whether a force majeure clause exists in the lease. The Group has elected to account for the lease concessions as variable lease expenses.

The favorable lease agreements and unfavorable lease agreements in which the Group acts as a lessee were reclassified to operating lease right-of-use assets on January 1, 2019, upon adoption of ASC 842, Leases, which are amortized combining with right-of-use assets over remaining operating lease terms. These estimated useful lives are generally as follows:


Favorable lease agreements acquired before the adoption of ASC 842		Remaining lease terms from 1 to 20 years
Unfavorable lease agreements		Remaining lease terms from 3 to 13 years

Sublease

The Group subleases property which are not suitable to operate hotels to third parties under operating leases. In accordance with the provisions of ASC 842, since the Group has not been relieved as the primary obligor of the head lease, the Group cannot net the sublease income against its lease payment to calculate the lease liability and ROU asset. The Group’s practice has been, and will continue to, straight-line the sub-lease income over the term of the sublease.

Income taxes

Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations.

Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of the Group, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. For a particular tax-paying component of an entity and within a particular tax jurisdiction, all deferred tax liabilities and assets, as well as any related valuation allowance, shall be offset and presented as a single noncurrent amount. However, an entity shall not offset deferred tax liabilities and assets attributable to different tax-paying components of the entity or to different tax jurisdictions.

According to ASC 740-270 Interim Reporting, an estimated annual effective tax rate (AETR) on full year estimated ordinary income should first be determined by the Company and the estimated AETR is then applied to year-to-date ordinary income to compute the interim tax provision on ordinary income.

Foreign currency translation

The reporting currency of the Group is the Renminbi (“RMB”). The functional currency of the Company is the United States dollar (“US$”). Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured in functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing on the day transactions occurred. Transaction gains and losses are recognized in the statements of comprehensive income.

Assets and liabilities are translated into RMB at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of comprehensive income.

The financial records of the Group’s subsidiaries are maintained in local currencies, which are the functional currencies.

Fair value

The Group defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs may be used to measure fair value include:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group measures fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates. The Group’s financial instruments include cash and cash equivalent, restricted cash, structured financial products, loan receivables current and non-current portion, receivables, payables, short-term debts, long-term debts. The carrying amounts of these short-term financial instruments approximates their fair value due to their short-term nature. The long-term debts and long-term loan receivables approximate their fair values, because the bearing interest rate approximates market interest rate, and market interest rates have not fluctuated significantly since the commencement of loan contracts signed. The carrying amounts of convertible senior notes were RMB6,186 and RMB6,899 and the corresponding fair value estimated based on quoted market price were RMB6,681 and RMB7,224, as of December 31, 2021 and September 30, 2022, respectively.

As of December 31, 2021 and September 30, 2022, information about inputs into the fair value measurements of the Group’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
As of			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2021	Equity securities with readily determinable fair value	2,589	2,589	—	—
2021	Available-for-sale debt securities	220	—	220	—
2021	Employee benefit plan assets	5	5	—	—


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
As of			Assets	Observable Inputs	Inputs
September 30,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2022	Equity securities with readily determinable fair value	1,615	1,615	—	—
2022	Available-for-sale debt securities	220	—	220	—
2022	Employee benefit plan assets	8	8	—	—
2022	Structured financial product	300	—	300	—

The following table presents the Group’s assets measured at fair value on a non-recurring basis as of December 31, 2021 and September 30, 2022:

Fair Value Measurements at Reporting Date Using

Quoted Prices

in Active

Significant

Markets for

Other

Significant

Identical

Observable

Unobservable

Total

As of

Assets

Inputs

Loss for

December 31,

Description

Fair Value

(Level 1)

(Level 2)

(Level 3)

the Year

2021

Property and equipment

—

2021

Operating lease right-of-use assets

—

2021

Intangible assets

2,556

—

2,556

245

2021

Long-term investment

—

Fair Value Measurements at Reporting Date Using

Quoted Prices

in Active

Significant

Markets for

Other

Significant

Total

Identical

Observable

Unobservable

Loss for

As of

Assets

Inputs

the Nine Months

September 30,

Description

Fair Value

(Level 1)

(Level 2)

(Level 3)

Ended

2022

Property and equipment

—

2022

Operating lease right-of-use assets

—

2022

Intangible assets

141

—

141

Share-based compensation

The Group recognizes share-based compensation in the consolidated statements of comprehensive income based on the fair value of equity awards on the date of the grant, with compensation expenses recognized over the period in which the grantee is required to provide service to the Group in exchange for the equity award. Vesting of certain equity awards are based on the performance conditions for a period of time following the grant date. Share-based compensation expense is recognized according to the Group’s judgement of likely future performance and will be adjusted in future periods based on the actual performance. The share-based compensation expenses have been categorized as either hotel operating costs, general and administrative expenses or selling and marketing expenses, depending on the job functions of the grantees. For the nine months ended September 30, 2021 and 2022, the Group recognized share-based compensation expenses of RMB94 and RMB77, respectively, which were classified as follows:


	Nine Months Ended September 30,
	2021	2022
Hotel operating costs	32	29
Selling and marketing expenses	3	4
General and administrative expenses	59	44
Total	94	77

Earnings (losses) per share

Basic earnings (losses) per share is computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted earnings (losses) per share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares, which consist of the ordinary shares issuable upon the conversion of the convertible senior notes (using the if-converted method) and ordinary shares issuable upon the exercise of stock options and vest of nonvested restricted stocks (using the treasury stock method).

The loaned shares under the ADS lending agreement are excluded from both the basic and diluted earnings (losses) per share calculation unless default of the ADS lending arrangement occurs which the Group considered the possibility is remote.

Translation into United States Dollars

The financial statements of the Group are stated in RMB. Translations of amounts from RMB into United States dollars are solely for the convenience of the reader and were calculated at the rate of US$1 = RMB7.1135, on September 30, 2022, as set forth in H.10 statistical release of the Federal Reserve Board. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into United States dollars at that rate on September 30, 2022, or at any other rate.

ACQUISITIONS

9 Months Ended

Sep. 30, 2022

ACQUISITIONS

ACQUISITIONS

3.ACQUISITIONS

Citigo Acquisition

On April 30,2021, the Group completed the acquisition of 100% equity interest of CitiGO hotels from Cjia Group, a related party of the Group. CitiGO brand is a light luxury and social hotel brand, which are mainly distributed in first and second-tier cities in China. The aggregated consideration was RMB783, among which RMB749 was paid in cash as of September 30, 2021.

Other acquisitions

During the nine months ended September 30, 2021 and 2022, the Group acquired another three and seven individual companies for total cash consideration of RMB51 and RMB9, respectively. The business acquisitions were accounted for under purchase accounting. The assets and liabilities of these hotels and companies acquired in the nine months ended September 30, 2021 and 2022 were immaterial to the consolidated financial statements.

REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2022

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

4.REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregated Revenues

The following tables present the Group’s revenues disaggregated by the nature of the product or service:


	Nine Months Ended
	September 30,
	2021	2022
Room revenues	5,228	5,612
Food and beverage revenues	475	752
Others	322	334
Leased and owned hotels revenue	6,025	6,698
Initial one-time franchise fee	81	79
On-going management and service fees	1,105	1,002
Central reservation system usage fees, other system maintenance and support fees	1,048	940
Reimbursements for hotel manager fees	684	806
Other fees	382	420
Manachised and franchised hotels revenue	3,300	3,247
Other revenues	112	211
Total revenues	9,437	10,156

Contract Balances

The Group’s contract assets are insignificant at December 31, 2021 and September 30, 2022.


	As of
	December 31,	September 30,
	2021	2022
Current contract liabilities	1,366	1,280
Long-term contract liabilities	785	822
Total contract liabilities	2,151	2,102

The contract liabilities balances above which are classified as deferred revenue on the consolidated balance sheet, as of December 31, 2021 and September 30, 2022 were comprised of the following:


	As of
	December 31,	September 30,
	2021	2022
Initial fees received from franchisees owners	1,074	1,047
Cash received for membership fees and not recognized as revenue	519	517
Advances received from customers	505	484
Deferred revenue related to the loyalty program	53	54
Total	2,151	2,102

The Group recognized revenues that were previously deferred as contract liabilities of RMB494 and RMB510 during the nine months ended September 30, 2021 and 2022, respectively.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

PROPERTY AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

5.PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following:


	As of
	December 31,	September 30,
	2021	2022
Cost:
Buildings	305	305
Leasehold improvements	10,467	10,741
Furniture, fixtures and equipment	2,348	2,402
Motor vehicles	3	3
	13,123	13,451
Less: Accumulated depreciation	6,845	7,500
	6,278	5,951
Construction in progress	778	853
Property and equipment, net	7,056	6,804

Depreciation expense was RMB970 and RMB985 for the nine months ended September 30, 2021 and 2022, respectively.

The Group occasionally demolishes certain leased hotels due to local government zoning requirements, which typically results in receiving compensation from the government.

The Group performed a recoverability test of its hotels property and equipment with certain hotels due to the continued underperformance relative to the projected operating results, of which the carrying amount of the hotels property and equipment exceeded the future undiscounted net cash flows, and recognized an impairment loss of RMB9 and RMB39 during the nine months ended September 30, 2021 and 2022, respectively.

INTANGIBLE ASSETS, NET

9 Months Ended

Sep. 30, 2022

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS, NET

6.INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following:


	As of
	December 31,	September 30,
	2021	2022
Intangible assets with indefinite lives:
Brand names	5,010	4,896
Master brand agreement	192	192
Intangible assets with finite lives:
Franchise or manachise agreements	366	353
Favorable lease agreements from sublease	11	5
Purchased software	142	129
Other intangible assets	70	72
Total	5,791	5,647
Less: Accumulated amortization	163	168
Less: Accumulated impairment loss	243	239
Total	5,385	5,240

The values of favorable lease agreements were determined based on the estimated present value of the amount the Group has avoided paying as a result of entering into the lease agreements.

Amortization expense of intangible assets for the nine months ended September 30, 2021 and 2022 amounted to RMB48 and RMB32, respectively.

The Group recorded an impairment charge of RMB48 and RMB3 related to the franchise or manachise agreements and other intangible assets of legacy DH for the nine months ended September 30, 2021 and 2022, respectively.

The estimated amortization expense for the above intangible assets excluding brand names and master brand agreement for the following years is as follows:


		Amortization for Intangible Assets
Remainder of 2022		8
2023		35
2024		32
2025		31
2026		28
Thereafter		173
Total		307

INVESTMENTS

9 Months Ended

Sep. 30, 2022

INVESTMENTS.

INVESTMENTS

7.INVESTMENTS

The investments as of December 31, 2021 and September 30, 2022 were as follows:


	As of
	December 31, 2021	September 30, 2022
Equity securities with readily determinable fair values:
Accor	2,508	1,540
Other marketable securities	81	75
Equity securities without readily determinable fair values:
Cjia/Cjia Group	168	136
OYO	54	54
Other equity securities without readily determinable fair values	71	71
Equity-method investments:
AAPC LUB	525	487
Hotel related funds	488	448
China Hospitality JV	99	56
Commerz Real Institute	85	80
Other investments	255	313
Available-for-sale debt securities:
Cjia/Cjia Group	220	220
Debt securities:
Structured financial product	—	300
Total	4,554	3,780

During the nine months ended September 30, 2022, the Group sold 2,017,078 of Accor shares for a cash consideration of RMB478 with a gain of RMB64 realized upon disposal. As of September 30, 2022, the Group accumulatively hold 10,195,474 shares of Accor, which accounts for less than 5% of Accor total outstanding shares where the Group does not have the ability to significantly influence the operations of this entity. The Group recognized unrealized gains and loss from fair value changes of Accor of RMB127 and RMB485, respectively for the nine months ended September 30, 2021 and 2022.

The Group recognized investment loss of RMB18 and RMB32 for its equity method investment in Cjia Group in income (loss) from equity method investments respectively for the nine months ended September 30, 2021 and 2022. The Group received cash dividend from AAPC LUB of nil and RMB47 for the nine months ended September 30, 2021 and 2022, which was recognized as return on investment. During the nine months ended September 30, 2022, the Group received RMB54 cash dividend from China Hospitality JV, Ltd., which was recognized as return of investment. Among “other investments”, the Group further increased investments in Azure Hospitality Fund I Limited Partnership of RMB64 during the nine months ended September 30, 2022.

The structured financial products are mainly deposits due within 3 months with secured principal and variable interest rates and are restricted as to withdrawal before maturity. The Company elects to adopt the fair value option in accordance with ASC 825 Financial Instruments for such financial products. Changes in the fair value of the investments are recorded as interest income in the consolidated statements of operations, and immaterial for the nine months ended September 30, 2022.

DEBT

9 Months Ended

Sep. 30, 2022

DEBT

DEBT

8.DEBT

The short-term and long-term debt as of December 31, 2021 and September 30, 2022 were as follows:


	As of
	December 31,	September 30,
	2021	2022
Short-term debt:
Long-term bank borrowings, current portion	2,464	193
Short-term bank borrowings	692	1,535
Convertible senior notes, current portion	3,029	3,372
FF&E liability, current portion	47	44
Total	6,232	5,144

Long-term debt:
Long-term bank borrowings, non-current portion	211	2,332
Convertible senior notes, non-current portion	3,158	3,527
FF&E liability, non-current portion	180	217
Others	16	15
Total	3,565	6,091

Bank borrowings

In December 2019, the Group entered into a EUR440 million term facility and US$500 million revolving credit facility agreement with several banks. As of December 31, 2021, the outstanding loan amount was EUR338 million and had been reclassified to long-term bank borrowings, current portion. As of September 30, 2022, the outstanding loan amount of EUR338 million has been fully paid off.

In January 2021, the Group entered into a twelve-year RMB650 syndicated loan contract expiring in December 2032. The loan is used for the construction project of the Group’s headquarters buildings. The interest rate resets every year, and is based on the People’s Bank of China five-year benchmark LPR minus 24 basis points on the pricing date. The mortgage ratio covenant is related to this facility. The Group was fully in compliance with the further amended covenants as of September 30, 2022. As of December 31, 2021 and September 30, 2022, the outstanding loan amount is RMB53 and RMB53 respectively. The weighted average interest rate of borrowings drawn under this agreement was 4.21%. The interest was fully capitalized and with the amount of RMB1 and RMB2 for the nine months ended September 30, 2021 and 2022, respectively.

In August 2022, the Group entered into a 3-year long-term facility of EUR220 million and RMB-equivalent of EUR110 million term facility, and EUR70 million revolving credit facility agreement with several banks. The EUR70 million revolving credit facility is available for 35 months after the date of the agreement. The interest rate on the loan for each interest period is the aggregate of the applicable Margin and EURIBOR or one-year benchmark LPR. The margin for each loan depends on the currency of loan, a loan denominated in EUR means 1.55% per annum and a loan denominated in RMB means -0.15% per annum. There are some financial covenants including interest cover, leverage and book equity related to this facility. As of September 30, 2022, the Group had drawn down EUR220 million and RMB equivalent of EUR110 million under the facility agreement and repaid nil. For the nine months ended September 30, 2022, the weighted average interest rate of borrowings drawn under this agreement was 2.58% and 3.55% for the EUR220 million term facility and RMB equivalent of EUR110 million term facility respectively.

Convertible Senior Notes due 2022

On November 3, 2017, the Group issued US$475 million of Convertible Senior Notes (the “2022 Notes”). The 2022 Notes mature on November 1, 2022 and bear interest at a rate of 0.375% per annum, payable in arrears semi-annually on May 1 and November 1, beginning May 1, 2018. The Group had subsequently redeemed US$475 million of 2022 Notes on November 1, 2022 through utilizing the revolving facility of EUR70 million and its cash and cash equivalents on hand.

Capped Call Options

In connection with the issuance of the 2022 Notes, the Group entered into capped call option transactions with some of the initial purchasers or their affiliates (the “Option Counterparties”) to reduce the potential dilution to existing shareholders of the Group upon conversion of the 2022 Notes. In June 2022, the Group and Option Counterparties terminated these capped call transactions before the conversion date of convertible notes on November 1, 2022 with the settlement amount of US$12.8 million, which was received by the Group in July 2022. The settlement amount of US$12.8 million was recorded as an increase to additional paid-in capital.

Debt Maturities

The contractual maturities of the Group’s debt as of September 30, 2022 were as follows:


		Principle Amounts
Remainder of 2022		3,547
2023		1,704
2024		3,791
2025		2,091
2026		27
Thereafter		97
Total		11,257

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

9 Months Ended

Sep. 30, 2022

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

9.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


	As of
	December 31,	September 30,
	2021	2022
Payable to franchisees	710	297
Other payables	535	955
Accrued rental, utilities and other accrued expenses	209	359
Liabilities related to customer loyalty program	135	156
Value-added tax, other tax and surcharge payables	132	193
Payable to noncontrolling interest holders	117	94
Total	1,838	2,054

Payable to franchisees mainly represents room charges received on behalf of franchisees and are payable within one year. From time to time, the Group receives cash advances from noncontrolling interest holders of entities that are not wholly owned by the Group. Such advances are non-interest bearing and are payable within one year or on demand.

HOTEL OPERATING COSTS

9 Months Ended

Sep. 30, 2022

HOTEL OPERATING COSTS.

HOTEL OPERATING COSTS

10.HOTEL OPERATING COSTS

Hotel operating costs include all direct costs incurred in the operation of the leased and owned hotels, manachised and franchised hotels and consist of the following:


	Nine Months Ended
	September 30,
	2021	2022
Rents	2,903	2,973
Utilities	384	441
Personnel costs	2,180	2,701
Depreciation and amortization	1,047	1,063
Consumable, food and beverage	688	737
Others	885	915
Total	8,087	8,830

SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2022

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

11.SHARE-BASED COMPENSATION

In February 2007, the Group adopted the 2007 Global Share Plan which allows the Group to offer incentive awards to employees, officers, directors and consultants or advisors (the “Participants”). Under the 2007 Global Share Plan, the Group may issue incentive awards to the Participants to purchase not more than 100,000,000 ordinary shares. In June 2007, the Group adopted the 2008 Global Share Plan which allows the Group to offer incentive awards to Participants to purchase up to 30,000,000 ordinary shares. In October 2008, the Group increased the maximum number of incentive awards available under the 2008 Global Share Plan to 70,000,000. In September 2009, the Group adopted the 2009 Share Incentive Plan which allows the Group to offer incentive awards to Participants. Under the 2009 Share Incentive Plan, the Group may issue incentive awards to purchase up to 30,000,000 ordinary shares. In August 2010, the Group increased the maximum number of incentive awards available under the 2009 Share Incentive Plan to 150,000,000. In March 2015, the Group increased the maximum number of incentive awards available under the 2009 Share Incentive Plan to 430,000,000. The 2007 and 2008 Global Share Plans and 2009 Share Incentive Plan (collectively, the “Incentive Award Plans”) contain the same terms and conditions. The incentive awards granted under the Incentive Award Plans typically have a maximum life of ten years and vest in typical ways as listed below:

a.)Vest 50% on the second anniversary of the stated vesting commencement date with the remaining 50% vesting ratably over the following two years;

b.)Vest over a period of ten years in equal yearly installments;

As of September 30, 2022, the Group had granted 245,776,690 options and 280,351,030 nonvested restricted stocks, which were subject to adjustment on performance condition.

Share options

No share options were granted during the nine months ended September 30, 2021 and 2022.

As of September 30, 2022, total unrecognized compensation expense related to the option arrangements was nil.

Nonvested restricted stocks

The fair value of nonvested restricted stock with service conditions or performance conditions is based on the fair market value of the underlying ordinary shares on the date of grant.

During the nine months ended September 30, 2022, the Group granted 37,291,960 nonvested restricted stocks to certain officers and employees with no consideration. 50% vests on the second anniversary of the vesting commencement date with the remaining 50% vesting ratably over the following two years.

The following table summarized the Group’s nonvested restricted stock activities during the nine months ended September 30, 2022.


		Weighted Average Grant
	Number of Restricted	Date
	Stocks	Fair Value
		US$
Nonvested restricted stocks outstanding at January 1, 2022	53,696,490	1.20
Granted	37,291,960	2.50
Forfeited	(1,904,140)	1.21
Vested	(6,314,470)	1.73
Nonvested restricted stocks outstanding at September 30, 2022	82,769,840	1.74

As of September 30, 2022, there was RMB862 in unrecognized compensation costs, net of estimated forfeitures, related to unvested restricted stocks, which is expected to be recognized over a weighted-average period of 3.66 years.

The total fair value of nonvested restricted stocks vested was RMB279 and RMB143 for the nine months ended September 30, 2021 and September 30, 2022 respectively.

LOSSES PER SHARE

9 Months Ended

Sep. 30, 2022

LOSSES PER SHARE

LOSSES PER SHARE

12.LOSSES PER SHARE

The following table sets forth the computation of basic and diluted losses per share for the nine months ended September 30, 2021 and 2022 indicated:


	Nine Months Ended September 30,
	2021	2022
Net loss attributable to ordinary shareholders — basic	(7)	(1,697)
Net loss attributable to ordinary shareholders — diluted	(7)	(1,697)
Weighted average ordinary shares outstanding — basic and diluted	3,112,910,313	3,111,759,089
Basic and diluted losses per share	(0.00)	(0.55)

For the nine months ended September 30, 2021 and 2022, the Group had securities which could potentially dilute basic earnings per share in the future, but which were excluded from the computation of diluted earnings per share as their effects would have been anti-dilutive. Such outstanding securities consist of the following at non-weighted basis:


	As of
	September 30,	September 30,
	2021	2022
Outstanding employee options and nonvested restricted stocks	60,278,930	82,769,840
Shares of convertible senior notes	226,827,410	228,239,310
Total	287,106,340	311,009,150

SEGMENT

9 Months Ended

Sep. 30, 2022

SEGMENT

SEGMENT

13.SEGMENT

The Group identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The Group’s chief operating decision maker has been identified as the chief executive officer. After the acquisition of DH, CODM regularly reviews the operating data and EBITDA, which is defined as earnings before interest income, interest expense, income tax expense (benefit) and depreciation and amortization, a financial measure for legacy Huazhu and legacy DH separately to evaluate their performance. Therefore, the group operates in two operating segments which are legacy Huazhu and legacy DH. In identifying its reportable segments, the Group assesses nature of operating segments and evaluates the operating results of each reporting segments. Both operating segments meet the quantitative thresholds and should be considered as two reportable segments.

The following table provides a summary of the Group’s reportable segment results for the nine months ended September 30, 2021 and 2022.


	Nine Months Ended September 30,
	2021			2022
	Legacy			Legacy
	Huazhu	Legacy DH	Total	Huazhu	Legacy DH	Total
Total revenues	8,471	966	9,437	7,899	2,257	10,156
Operating costs and expenses	7,736	2,006	9,742	8,023	2,608	10,631
Income (loss) from operations	830	(704)	126	54	(254)	(200)
Net (loss) income attributable to H World Group Limited	571	(578)	(7)	(1,336)	(361)	(1,697)
Income tax expense (benefit)	213	(216)	(3)	36	(32)	4
Interest income	64	—	64	60	—	60
Interest expense	226	87	313	194	98	292
Depreciation and amortization	903	179	1,082	917	179	1,096
EBITDA	1,849	(528)	1,321	(249)	(116)	(365)

The following table presents total assets for operating segments, reconciled to consolidated amounts:

As of

December 31, 2021

September 30, 2022

Legacy

Huazhu

Legacy DH

Total

Huazhu

Legacy DH

Total

Total assets

45,353

17,916

63,269

44,002

17,385

61,387

The following tables represent revenues and property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill by geographical region.


Revenues：	Nine Months Ended September 30,
	2021	2022
China	8,459	7,881
Germany	799	1,717
All others	179	558
Total	9,437	10,156

Property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill:


	As of
	December 31, 2021	September 30, 2022
China	33,143	31,902
Germany	13,884	13,424
All others	2,929	2,970
Total	49,956	48,296

Other than China and Germany, there were no countries that individually represented more than 10% of the total revenue and certain long lived assets for the nine months ended September 30, 2021 and 2022.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Cash Dividend

9 Months Ended

Sep. 30, 2022

Cash Dividend

Cash Dividend

14.Cash Dividend

The Group did not declare cash dividend to its shareholders in 2021.

On March 03, 2022, the Group approved and declared a cash dividend of US$0.021 per ordinary share on its outstanding shares as of the close of trading on March 24, 2022. Such dividend of US$68 million was fully paid in April 2022.

LEASES

9 Months Ended

Sep. 30, 2022

LEASES

LEASES

15.LEASES

The Group’s leases mainly related to building and the rights to use the land. The total expense related to short-term leases were insignificant for the nine months ended September 30, 2021 and 2022, and sublease income of the Group which is recognized in revenues in the unaudited interim consolidated statements of comprehensive income were RMB100 and RMB89 for the nine months ended September 30, 2021 and 2022, respectively. For lease concession related to the Covid-19, the Group recognizes a negative lease expense of RMB52 and RMB199 for the nine months ended September 30, 2021 and 2022 under the relief as the Group elects using the variable lease expense approach.

The Group recorded an impairment charge of the operating lease right-of-use assets of RMB3 and RMB59 for the nine months ended September 30, 2021 and 2022, respectively.

A summary of supplemental information related to operating leases in the nine months ended September 30, 2021 and 2022 is as follows:


	Nine Months Ended September 30,
	2021		2022
Lease cost:
Operating fixed lease cost	2,999		3,165
Finance lease cost
— Amortization of ROU assets	59		69
— Interest on lease liabilities	72		86
Short term lease cost	0		0
Operating variable lease cost	(12)		(87)
Total lease cost	3,118		3,233

Other information:
Weighted average remaining lease term
Operating leases	13	years	13	years
Finance leases	28	years	28	years
Weighted average discount rate
Operating leases	6.22	%	6.31	%
Finance leases	3.97	%	3.98	%

As of September 30, 2022, the maturities of lease liabilities in accordance with ASC 842 in each of the next five years and thereafter are as follows:


	Total Operating Leases	Total Finance Leases
Remainder of 2022	1,097	39
2023	4,099	162
2024	4,146	167
2025	3,924	166
2026	3,724	168
Thereafter	27,070	4,143

Total minimum lease payments	44,060	4,845

Less: amount representing interest	13,112	1,943

Present value of minimum lease payments	30,948	2,902

As of September 30, 2022, the Group has entered 32 lease contracts that the Group expects to account for as operating or finance leases, the future undiscounted lease payments for these non-cancellable lease contracts are RMB9,040, which is not reflected in the consolidated balance sheets.

EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2022

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

16.EMPLOYEE BENEFIT PLANS

Full time employees of the Group in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. The total contribution for such employee benefits were RMB388 and RMB479 for the nine months ended September 30, 2021 and 2022

Retirement benefit obligation result all from the German pension plan after the completion of the acquisition of DH as this pension plan is the most significant defined benefit plan in the Group. The following table presents the amount of net periodic benefit cost recognized for the nine months ended September 30, 2021 and 2022 for legacy DH：


	Nine Months Ended September 30,
	Pension benefits		Other benefits
	2021	2022	2021	2022
Service cost	8	6	0	0
Interest cost	2	1	—	—
Expected return on plan assets	(0)	(0)	—	—
Amortization of net loss	3	4	—	—
Regular Net Periodic Pension Cost	13	11	0	0

Total Recognized in Net Periodic Pension Cost	13	11	0	0

Furthermore, the Group pays contribution to governmental and private pension insurance organizations based on legal regulations in some countries out of China. The contributions are recognized as expense and amount RMB37 and RMB52 for the nine months ended September 30, 2021 and 2022.

- Definition

The entire disclosure for retirement benefits.

+ References

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-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

+ Details

RELATED PARTY TRANSACTIONS AND BALANCES

9 Months Ended

Sep. 30, 2022

RELATED PARTY TRANSACTIONS AND BALANCES

17.RELATED PARTY TRANSACTIONS AND BALANCES

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

The following entities are considered to be related parties to the Group. The related parties mainly act as service providers and service recipients to the Group. The Group is not obligated to provide any type of financial support to these related parties.


Related Party	Nature of the Party	Relationship with the Group
Trip.com Group Limited (“Trip.com”)	Online travel services provider	Mr. Qi Ji is a director
Sheen Star Group Limited (“Sheen Star”)	Investment holding company	Equity method investee of the Group, controlled by Mr. Qi Ji
Accor Hotels (“Accor”)	Hotel Group	Shareholder of the Group
China Cjia Group Limited (“Cjia Group”)	Apartment Management Group	Equity method investee of the Group
Shanghai Zhuchuang Enterprise Management Co., Ltd. (“Zhuchuang”)	Staged office space company	Equity method investee of the Group
China Hospitality JV, Ltd. (“China Hospitality JV”)	Property management company	Equity method investee of the Group
Smart Lodging Group (Cayman) Limited (“Smart Lodging”)	Hotel chain	Equity method investee of the Group
Shanghai Lianquan Hotel Management Co., Ltd. (“Lianquan”)	Hotel management company	Equity method investee of the Group
Suzhou Huali Jinshi Construction Decoration Co., Ltd. ( “Huali Jinshi”)	Building decoration company	Equity method investee of the Group
Shenzhen Hitone Investment Fund Partnership (LLP) ( “Hitone”)	Fund	Equity method investee of the Group
AZURE Hospitality Fund I Limited Partnership ( “AZURE”)	Fund	Equity method investee of the Group
AAPC Hotel Management Co., Ltd. ( “AAPC”)	Hotel management company	Equity method investee of the Group

Accor ceased to be related parties of the Group from December 2021.

Huali Jinshi ceased to be related parties of the Group from August 2022.

(a) Related party balances

Amounts due from related parties were mainly comprised of shareholder loans to Sheen Star, Cjia Group, Zhuchuang and Lianquan, which are short-term in nature and mainly payable on demand, service fee and room charges withheld by Trip.com and long-term shareholder loan to one equity method investee. The Group recorded credit losses of RMB17 and RMB37 for the nine months ended September 30, 2021 and 2022.


	As of
	December 31,	September 30,
	2021	2022
Sheen Star	33	31
Zhuchuang	27	27
Trip.com	17	71
Cjia Group	29	29
Lianquan	49	44
Others	12	18
Allowance for expected credit losses	(17)	(37)
Total	150	183

Amounts due to related parties were mainly comprised of payables for reservation fee and other service fee to Trip.com, acquisition consideration, consultation fee to and cash received on behalf of Cjia Group and payables for construction service fee to Huali Jinshi, which are short-term in nature and payable on demand.


	As of
	December 31,	September 30,
	2021	2022
Trip.com	44	51
Cjia Group	101	27
Huali Jinshi	47	—
Others	5	7
Total	197	85

(b) Related party transactions

During the nine months ended September 30, 2021 and September 30, 2022, significant related party transactions were as follows:


	Nine Months Ended September 30,
	2021	2022
Commission expenses to Trip.com	78	43
Lease expenses to Trip.com	14	14
Lease expenses to Cjia Group	—	25
Service fee to Huali Jinshi	10	—
Service fee to AAPC	—	3
Brand use fee, reservation fee and other related service fee to Accor	15	—
Goods sold and service provided to Cjia Group	10	—
Loan payment to Hitone	5	—
Service fee from Trip.com	52	49
Service fee from AAPC	3	2
Service fee from China Hospitality JV	2	1
Service fee from Sheen Star	3	3
Service fee from AZURE	—	3
Sublease income from Lianquan	8	9
Sublease income from Cjia Group	5	4
Business acquisition of CitiGO from Cjia Group	783	—
Business acquisition of one individual company from Cjia Group	51	—

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

18.	COMMITMENTS AND CONTINGENCIES

(a) Commitments

As of September 30, 2022, the Group’s commitments related to leasehold improvements and installation of equipment for hotel operations was RMB371, which is expected to be incurred within one to two years.

(b) Contingencies

The Group is subject to periodic legal or administrative proceedings in the ordinary course of the Group’s business, including lease contract terminations and disputes, and management agreement disputes. The Group does not believe that any currently pending legal or administrative proceeding to which the Group is a party will have a material adverse effect on the financial statements. As of September 30, 2022, there are no accrued contingent liabilities from such proceedings.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2022

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

19.SUBSEQUENT EVENTS

In October 2022, the Group entered into a one-year USD dominated facility agreement that it could draw down no more than RMB1,000 with interest rate to be determined case-by-case, and another one-year US$123 million facility agreement with 5.4% fixed rate per annum.

As disclosed in Note 8, the Group had subsequently redeemed US$475 million of 2022 Notes on November 1, 2022.

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2022

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Basis of presentation

However, the management has evaluated the significance of the above conditions and regards the going concern assumption as appropriate based on the following considerations:

●The Group generated positive cash flow from operations for several consecutive years with a net operating cash inflow of RMB520 for the nine months ended September 30, 2022;

●The Group has performed a review of its cash flow forecasts for the twelve month period after the date that the unaudited interim condensed consolidated financial statements are issued.

Management believes the relevant conditions that raise substantial doubt on going concern are mitigated by the following plans and actions:

●The Group has the ability to sell its short-term investments that can be readily convertible into cash, the fair value of which was approximately RMB1,915 as of September 30, 2022;

Basis of consolidation

Use of estimates

Intangible assets, net

Impairment of long-lived assets

Leases

As a lessee


Favorable lease agreements acquired before the adoption of ASC 842		Remaining lease terms from 1 to 20 years
Unfavorable lease agreements		Remaining lease terms from 3 to 13 years

Sublease

Income taxes

Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations.

Foreign currency translation

The financial records of the Group’s subsidiaries are maintained in local currencies, which are the functional currencies.

Fair value

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
As of			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2021	Equity securities with readily determinable fair value	2,589	2,589	—	—
2021	Available-for-sale debt securities	220	—	220	—
2021	Employee benefit plan assets	5	5	—	—


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
As of			Assets	Observable Inputs	Inputs
September 30,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2022	Equity securities with readily determinable fair value	1,615	1,615	—	—
2022	Available-for-sale debt securities	220	—	220	—
2022	Employee benefit plan assets	8	8	—	—
2022	Structured financial product	300	—	300	—

The following table presents the Group’s assets measured at fair value on a non-recurring basis as of December 31, 2021 and September 30, 2022:

Fair Value Measurements at Reporting Date Using

Quoted Prices

in Active

Significant

Markets for

Other

Significant

Identical

Observable

Unobservable

Total

As of

Assets

Inputs

Loss for

December 31,

Description

Fair Value

(Level 1)

(Level 2)

(Level 3)

the Year

2021

Property and equipment

—

2021

Operating lease right-of-use assets

—

2021

Intangible assets

2,556

—

2,556

245

2021

Long-term investment

—

Fair Value Measurements at Reporting Date Using

Quoted Prices

in Active

Significant

Markets for

Other

Significant

Total

Identical

Observable

Unobservable

Loss for

As of

Assets

Inputs

the Nine Months

September 30,

Description

Fair Value

(Level 1)

(Level 2)

(Level 3)

Ended

2022

Property and equipment

—

2022

Operating lease right-of-use assets

—

2022

Intangible assets

141

—

141

Share-based compensation


	Nine Months Ended September 30,
	2021	2022
Hotel operating costs	32	29
Selling and marketing expenses	3	4
General and administrative expenses	59	44
Total	94	77

Earnings (losses) per share

Translation into United States Dollars

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2022

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Schedule of estimated useful life of lease agreements


Favorable lease agreements acquired before the adoption of ASC 842		Remaining lease terms from 1 to 20 years
Unfavorable lease agreements		Remaining lease terms from 3 to 13 years

Schedule of information about inputs into the fair value measurements of the assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
As of			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2021	Equity securities with readily determinable fair value	2,589	2,589	—	—
2021	Available-for-sale debt securities	220	—	220	—
2021	Employee benefit plan assets	5	5	—	—


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
As of			Assets	Observable Inputs	Inputs
September 30,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2022	Equity securities with readily determinable fair value	1,615	1,615	—	—
2022	Available-for-sale debt securities	220	—	220	—
2022	Employee benefit plan assets	8	8	—	—
2022	Structured financial product	300	—	300	—

Schedule of assets measured at fair value on a non-recurring basis

Fair Value Measurements at Reporting Date Using

Quoted Prices

in Active

Significant

Markets for

Other

Significant

Identical

Observable

Unobservable

Total

As of

Assets

Inputs

Loss for

December 31,

Description

Fair Value

(Level 1)

(Level 2)

(Level 3)

the Year

2021

Property and equipment

—

2021

Operating lease right-of-use assets

—

2021

Intangible assets

2,556

—

2,556

245

2021

Long-term investment

—

Fair Value Measurements at Reporting Date Using

Quoted Prices

in Active

Significant

Markets for

Other

Significant

Total

Identical

Observable

Unobservable

Loss for

As of

Assets

Inputs

the Nine Months

September 30,

Description

Fair Value

(Level 1)

(Level 2)

(Level 3)

Ended

2022

Property and equipment

—

2022

Operating lease right-of-use assets

—

2022

Intangible assets

141

—

141

Schedule of share-based compensation expense recognized


	Nine Months Ended September 30,
	2021	2022
Hotel operating costs	32	29
Selling and marketing expenses	3	4
General and administrative expenses	59	44
Total	94	77

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

9 Months Ended

Sep. 30, 2022

REVENUE FROM CONTRACTS WITH CUSTOMERS

Schedule of disaggregated revenues


	Nine Months Ended
	September 30,
	2021	2022
Room revenues	5,228	5,612
Food and beverage revenues	475	752
Others	322	334
Leased and owned hotels revenue	6,025	6,698
Initial one-time franchise fee	81	79
On-going management and service fees	1,105	1,002
Central reservation system usage fees, other system maintenance and support fees	1,048	940
Reimbursements for hotel manager fees	684	806
Other fees	382	420
Manachised and franchised hotels revenue	3,300	3,247
Other revenues	112	211
Total revenues	9,437	10,156

Schedule of contract balances

The Group’s contract assets are insignificant at December 31, 2021 and September 30, 2022.


	As of
	December 31,	September 30,
	2021	2022
Current contract liabilities	1,366	1,280
Long-term contract liabilities	785	822
Total contract liabilities	2,151	2,102

The contract liabilities balances above which are classified as deferred revenue on the consolidated balance sheet, as of December 31, 2021 and September 30, 2022 were comprised of the following:


	As of
	December 31,	September 30,
	2021	2022
Initial fees received from franchisees owners	1,074	1,047
Cash received for membership fees and not recognized as revenue	519	517
Advances received from customers	505	484
Deferred revenue related to the loyalty program	53	54
Total	2,151	2,102

PROPERTY AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment, net


	As of
	December 31,	September 30,
	2021	2022
Cost:
Buildings	305	305
Leasehold improvements	10,467	10,741
Furniture, fixtures and equipment	2,348	2,402
Motor vehicles	3	3
	13,123	13,451
Less: Accumulated depreciation	6,845	7,500
	6,278	5,951
Construction in progress	778	853
Property and equipment, net	7,056	6,804

INTANGIBLE ASSETS, NET (Tables)

9 Months Ended

Sep. 30, 2022

INTANGIBLE ASSETS, NET

Schedule of intangible assets with indefinite life


	As of
	December 31,	September 30,
	2021	2022
Intangible assets with indefinite lives:
Brand names	5,010	4,896
Master brand agreement	192	192
Intangible assets with finite lives:
Franchise or manachise agreements	366	353
Favorable lease agreements from sublease	11	5
Purchased software	142	129
Other intangible assets	70	72
Total	5,791	5,647
Less: Accumulated amortization	163	168
Less: Accumulated impairment loss	243	239
Total	5,385	5,240

Schedule of estimated amortization expense


		Amortization for Intangible Assets
Remainder of 2022		8
2023		35
2024		32
2025		31
2026		28
Thereafter		173
Total		307

INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2022

INVESTMENTS.

Schedule of investments


	As of
	December 31, 2021	September 30, 2022
Equity securities with readily determinable fair values:
Accor	2,508	1,540
Other marketable securities	81	75
Equity securities without readily determinable fair values:
Cjia/Cjia Group	168	136
OYO	54	54
Other equity securities without readily determinable fair values	71	71
Equity-method investments:
AAPC LUB	525	487
Hotel related funds	488	448
China Hospitality JV	99	56
Commerz Real Institute	85	80
Other investments	255	313
Available-for-sale debt securities:
Cjia/Cjia Group	220	220
Debt securities:
Structured financial product	—	300
Total	4,554	3,780

DEBT (Tables)

9 Months Ended

Sep. 30, 2022

DEBT

Schedule of short-term and long-term debt


	As of
	December 31,	September 30,
	2021	2022
Short-term debt:
Long-term bank borrowings, current portion	2,464	193
Short-term bank borrowings	692	1,535
Convertible senior notes, current portion	3,029	3,372
FF&E liability, current portion	47	44
Total	6,232	5,144

Long-term debt:
Long-term bank borrowings, non-current portion	211	2,332
Convertible senior notes, non-current portion	3,158	3,527
FF&E liability, non-current portion	180	217
Others	16	15
Total	3,565	6,091

Schedule of contractual maturities of the group's long-term debt


		Principle Amounts
Remainder of 2022		3,547
2023		1,704
2024		3,791
2025		2,091
2026		27
Thereafter		97
Total		11,257

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2022

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	As of
	December 31,	September 30,
	2021	2022
Payable to franchisees	710	297
Other payables	535	955
Accrued rental, utilities and other accrued expenses	209	359
Liabilities related to customer loyalty program	135	156
Value-added tax, other tax and surcharge payables	132	193
Payable to noncontrolling interest holders	117	94
Total	1,838	2,054

HOTEL OPERATING COSTS (Tables)

9 Months Ended

Sep. 30, 2022

HOTEL OPERATING COSTS.

Schedule of hotel operating costs


	Nine Months Ended
	September 30,
	2021	2022
Rents	2,903	2,973
Utilities	384	441
Personnel costs	2,180	2,701
Depreciation and amortization	1,047	1,063
Consumable, food and beverage	688	737
Others	885	915
Total	8,087	8,830

SHARE-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2022

SHARE-BASED COMPENSATION

Summary of the Group's nonvested restricted stock activity


		Weighted Average Grant
	Number of Restricted	Date
	Stocks	Fair Value
		US$
Nonvested restricted stocks outstanding at January 1, 2022	53,696,490	1.20
Granted	37,291,960	2.50
Forfeited	(1,904,140)	1.21
Vested	(6,314,470)	1.73
Nonvested restricted stocks outstanding at September 30, 2022	82,769,840	1.74

LOSSES PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

LOSSES PER SHARE

Schedule of computation of basic and diluted losses per share


	Nine Months Ended September 30,
	2021	2022
Net loss attributable to ordinary shareholders — basic	(7)	(1,697)
Net loss attributable to ordinary shareholders — diluted	(7)	(1,697)
Weighted average ordinary shares outstanding — basic and diluted	3,112,910,313	3,111,759,089
Basic and diluted losses per share	(0.00)	(0.55)

Schedule of outstanding securities excluded from the computation of diluted earnings per share


	As of
	September 30,	September 30,
	2021	2022
Outstanding employee options and nonvested restricted stocks	60,278,930	82,769,840
Shares of convertible senior notes	226,827,410	228,239,310
Total	287,106,340	311,009,150

SEGMENT (Tables)

9 Months Ended

Sep. 30, 2022

SEGMENT

Summary of reportable segment results


	Nine Months Ended September 30,
	2021			2022
	Legacy			Legacy
	Huazhu	Legacy DH	Total	Huazhu	Legacy DH	Total
Total revenues	8,471	966	9,437	7,899	2,257	10,156
Operating costs and expenses	7,736	2,006	9,742	8,023	2,608	10,631
Income (loss) from operations	830	(704)	126	54	(254)	(200)
Net (loss) income attributable to H World Group Limited	571	(578)	(7)	(1,336)	(361)	(1,697)
Income tax expense (benefit)	213	(216)	(3)	36	(32)	4
Interest income	64	—	64	60	—	60
Interest expense	226	87	313	194	98	292
Depreciation and amortization	903	179	1,082	917	179	1,096
EBITDA	1,849	(528)	1,321	(249)	(116)	(365)

Schedule of total assets for operating segments, reconciled to consolidated amounts

As of

December 31, 2021

September 30, 2022

Legacy

Huazhu

Legacy DH

Total

Huazhu

Legacy DH

Total

Total assets

45,353

17,916

63,269

44,002

17,385

61,387

Schedule of revenues and property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill by geographical region


Revenues：	Nine Months Ended September 30,
	2021	2022
China	8,459	7,881
Germany	799	1,717
All others	179	558
Total	9,437	10,156


	As of
	December 31, 2021	September 30, 2022
China	33,143	31,902
Germany	13,884	13,424
All others	2,929	2,970
Total	49,956	48,296

LEASES (Tables)

9 Months Ended

Sep. 30, 2022

LEASES

Schedule of supplemental information related to operating leases


	Nine Months Ended September 30,
	2021		2022
Lease cost:
Operating fixed lease cost	2,999		3,165
Finance lease cost
— Amortization of ROU assets	59		69
— Interest on lease liabilities	72		86
Short term lease cost	0		0
Operating variable lease cost	(12)		(87)
Total lease cost	3,118		3,233

Other information:
Weighted average remaining lease term
Operating leases	13	years	13	years
Finance leases	28	years	28	years
Weighted average discount rate
Operating leases	6.22	%	6.31	%
Finance leases	3.97	%	3.98	%

Schedule of maturities of operating and finance lease liabilities


	Total Operating Leases	Total Finance Leases
Remainder of 2022	1,097	39
2023	4,099	162
2024	4,146	167
2025	3,924	166
2026	3,724	168
Thereafter	27,070	4,143

Total minimum lease payments	44,060	4,845

Less: amount representing interest	13,112	1,943

Present value of minimum lease payments	30,948	2,902

EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Sep. 30, 2022

EMPLOYEE BENEFIT PLANS

Schedule of net periodic benefit cost recognized


	Nine Months Ended September 30,
	Pension benefits		Other benefits
	2021	2022	2021	2022
Service cost	8	6	0	0
Interest cost	2	1	—	—
Expected return on plan assets	(0)	(0)	—	—
Amortization of net loss	3	4	—	—
Regular Net Periodic Pension Cost	13	11	0	0

Total Recognized in Net Periodic Pension Cost	13	11	0	0

RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of related parties


Related Party	Nature of the Party	Relationship with the Group
Trip.com Group Limited (“Trip.com”)	Online travel services provider	Mr. Qi Ji is a director
Sheen Star Group Limited (“Sheen Star”)	Investment holding company	Equity method investee of the Group, controlled by Mr. Qi Ji
Accor Hotels (“Accor”)	Hotel Group	Shareholder of the Group
China Cjia Group Limited (“Cjia Group”)	Apartment Management Group	Equity method investee of the Group
Shanghai Zhuchuang Enterprise Management Co., Ltd. (“Zhuchuang”)	Staged office space company	Equity method investee of the Group
China Hospitality JV, Ltd. (“China Hospitality JV”)	Property management company	Equity method investee of the Group
Smart Lodging Group (Cayman) Limited (“Smart Lodging”)	Hotel chain	Equity method investee of the Group
Shanghai Lianquan Hotel Management Co., Ltd. (“Lianquan”)	Hotel management company	Equity method investee of the Group
Suzhou Huali Jinshi Construction Decoration Co., Ltd. ( “Huali Jinshi”)	Building decoration company	Equity method investee of the Group
Shenzhen Hitone Investment Fund Partnership (LLP) ( “Hitone”)	Fund	Equity method investee of the Group
AZURE Hospitality Fund I Limited Partnership ( “AZURE”)	Fund	Equity method investee of the Group
AAPC Hotel Management Co., Ltd. ( “AAPC”)	Hotel management company	Equity method investee of the Group

Schedule of amounts due from related parties


	As of
	December 31,	September 30,
	2021	2022
Sheen Star	33	31
Zhuchuang	27	27
Trip.com	17	71
Cjia Group	29	29
Lianquan	49	44
Others	12	18
Allowance for expected credit losses	(17)	(37)
Total	150	183

Schedule of amounts due to related party


	As of
	December 31,	September 30,
	2021	2022
Trip.com	44	51
Cjia Group	101	27
Huali Jinshi	47	—
Others	5	7
Total	197	85

Schedule of significant related party transactions


	Nine Months Ended September 30,
	2021	2022
Commission expenses to Trip.com	78	43
Lease expenses to Trip.com	14	14
Lease expenses to Cjia Group	—	25
Service fee to Huali Jinshi	10	—
Service fee to AAPC	—	3
Brand use fee, reservation fee and other related service fee to Accor	15	—
Goods sold and service provided to Cjia Group	10	—
Loan payment to Hitone	5	—
Service fee from Trip.com	52	49
Service fee from AAPC	3	2
Service fee from China Hospitality JV	2	1
Service fee from Sheen Star	3	3
Service fee from AZURE	—	3
Sublease income from Lianquan	8	9
Sublease income from Cjia Group	5	4
Business acquisition of CitiGO from Cjia Group	783	—
Business acquisition of one individual company from Cjia Group	51	—

ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) ¥ in Millions	1 Months Ended		9 Months Ended
	Jun. 30, 2021 $ / shares	Sep. 30, 2020 CNY (¥)	Sep. 30, 2022 item $ / shares	Sep. 30, 2021 CNY (¥)	Dec. 31, 2021 item $ / shares	May 31, 2021 $ / shares	Jan. 02, 2020
Organization and presentation activities
Proceeds from issuance of ordinary shares \| ¥		¥ 6,018		¥ 1
Ordinary shares, par value (in dollars per share) \| $ / shares	$ 0.00001		$ 0.00001		$ 0.00001	$ 0.0001
Share split conversion ratio	10
Legacy Huazhu \| Minimum
Organization and presentation activities
Term of franchise and management agreement			8 years
Legacy Huazhu \| Maximum
Organization and presentation activities
Term of franchise and management agreement			10 years
Leased and owned hotels
Organization and presentation activities
Number of hotels			710		738
Manachised hotels
Organization and presentation activities
Number of hotels			7,459		6,824
Manachised hotels \| Legacy DH \| Minimum
Organization and presentation activities
Term of franchise and management agreement			15 years
Manachised hotels \| Legacy DH \| Maximum
Organization and presentation activities
Term of franchise and management agreement			20 years
Franchised hotels
Organization and presentation activities
Number of hotels			233		268
Franchised hotels \| Legacy DH \| Minimum
Organization and presentation activities
Term of franchise and management agreement			10 years
Franchised hotels \| Legacy DH \| Maximum
Organization and presentation activities
Term of franchise and management agreement			15 years
Deutsche Hospitality
Organization and presentation activities
Percent of ownership acquired (as percent)							100.00%

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Basis of presentation- Debt (Details) € in Millions, ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 EUR (€)	Dec. 31, 2021 CNY (¥)
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
Working capital deficit	¥ 4,172			$ 586
Unused facilities \| ¥	2,900
Net Cash Provided by (Used in) Operating Activities	520	$ 72	¥ 473
Equity securities with readily determinable fair value	¥ 1,915			$ 269		¥ 2,589
Revolving credit facility [Member]
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
Unused facilities \| €					€ 70

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Intangible assets (Details) - CNY (¥) ¥ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Impairment loss on intangible assets			¥ 245
Legacy DH [Member]
Finite-Lived Intangible Assets [Line Items]
Impairment loss on intangible assets	¥ 0	¥ 0
Minimum \| Favorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	1 year
Minimum \| Unfavorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	3 years
Maximum \| Favorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	20 years
Maximum \| Unfavorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	13 years

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Land use rights (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Accounting policies
Long-lived asset impairment loss	¥ 101	¥ 60
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration]	Hotel Operating Cost	Hotel Operating Cost
Net revenues	¥ 10,156	¥ 9,437
Minimum \| Legacy Huazhu
Accounting policies
Initial lease term	10 years
Minimum \| Legacy DH
Accounting policies
Initial lease term	20 years
Maximum \| Legacy Huazhu
Accounting policies
Initial lease term	20 years
Maximum \| Legacy DH
Accounting policies
Initial lease term	25 years

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Fair value (Details) ¥ in Millions, $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2022 USD ($)
Fair value
Equity securities with readily determinable fair value	¥ 1,915		¥ 2,589	$ 269
Structured financial product	300
Property and equipment	39
Intangible assets	3
Operating lease right-of-use assets	59
Operating lease right-of-use assets	28,610		29,942	$ 4,022
Intangible assets carrying value	307
Impairment charge of intangible assets			245
Property and equipment, impairment loss			24
Long-term investment, impairment loss			63
Operating lease right-of-use assets, impairment loss			48
Long-lived asset impairment loss	101	¥ 60
Operating lease, impairment loss	59	3
Franchise or manachise agreements
Fair value
Impairment charge of intangible assets		¥ 48
Other intangible assets of legacy DH
Fair value
Impairment charge of intangible assets	3
Convertible Debt
Fair value
Long-term bank borrowings, current portion	3,372		3,029
Carrying amounts of convertible senior notes	6,899		6,186
Fair value of convertible senior notes	7,224		6,681
Recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value
Equity securities with readily determinable fair value	1,615		2,589
Employee benefit plan assets	8		5
Recurring basis \| Significant Other Observable Inputs (Level 2)
Fair value
Available-for-sale debt securities	220		220
Structured financial product	300
Non-recurring basis
Fair value
Property and equipment	8		33
Intangible assets	141		2,556
Operating lease right-of-use assets	40		88
Non-recurring basis \| Significant Unobservable Inputs (Level 3)
Fair value
Property and equipment	8		33
Intangible assets	141		2,556
Operating lease right-of-use assets	40		88
Fair value \| Recurring basis
Fair value
Equity securities with readily determinable fair value	1,615		2,589
Available-for-sale debt securities	220		220
Employee benefit plan assets	8		¥ 5
Structured financial product	¥ 300

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Share-based compensation and Treasury shares (Details) ¥ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥) segment $ / ¥	Sep. 30, 2021 CNY (¥)
Share-based compensation
Recognized share-based compensation expenses	¥ 77	¥ 94
Number of operating segments \| segment	2
Translation into United States Dollars
Foreign exchange rate used to translate amounts denominated in RMB to US dollar \| $ / ¥	7.1135
Hotel operating costs
Share-based compensation
Recognized share-based compensation expenses	¥ 29	32
Selling and marketing expenses
Share-based compensation
Recognized share-based compensation expenses	4	3
General and administrative expenses
Share-based compensation
Recognized share-based compensation expenses	¥ 44	¥ 59

ACQUISITIONS - Citigo acuquisition and Other acquisitions (Details) - CNY (¥) ¥ in Millions		5 Months Ended	9 Months Ended
	Apr. 30, 2021	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CitiGo Hotels
Acquisitions
Percentage of ownership interest acquired	100.00%
Aggregated consideration	¥ 783
Cash consideration		¥ 749
Other acquisitions
Acquisitions
Cash consideration			¥ 9	¥ 51

REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregated Revenues (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Disaggregated Revenues
Total revenues	¥ 10,156	¥ 9,437
Leased and owned hotels
Disaggregated Revenues
Total revenues	6,698	6,025
Room Revenues
Disaggregated Revenues
Total revenues	5,612	5,228
Food and Beverage Revenues
Disaggregated Revenues
Total revenues	752	475
Others
Disaggregated Revenues
Total revenues	334	322
Manachised and franchised hotels
Disaggregated Revenues
Total revenues	3,247	3,300
Initial one-time franchise fee
Disaggregated Revenues
Total revenues	79	81
On-going management and service fees
Disaggregated Revenues
Total revenues	1,002	1,105
Central reservation system usage fees, other system maintenance and support fees
Disaggregated Revenues
Total revenues	940	1,048
Reimbursements for hotel manager fees
Disaggregated Revenues
Total revenues	806	684
Other fees
Disaggregated Revenues
Total revenues	420	382
Others
Disaggregated Revenues
Total revenues	¥ 211	¥ 112

REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances (Details) ¥ in Millions, $ in Millions	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Contract with Customer, Liability
Current contract liabilities	¥ 1,280	$ 180	¥ 1,366
Long-term contract liabilities	822	$ 116	785
Total contract liabilities	¥ 2,102		¥ 2,151

REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances - Contract liabilities (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Contract with Customer, Liability
Initial fees received from franchisees owners	¥ 1,047		¥ 1,074
Cash received for membership fees and not recognized as revenue	517		519
Advances received from customers	484		505
Deferred revenue related to the loyalty program	54		53
Total contract liabilities	2,102		¥ 2,151
Revenue recognized	¥ 510	¥ 494

PROPERTY AND EQUIPMENT, NET - Schedule (Details) ¥ in Millions, $ in Millions	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Cost:
Property and equipment, gross	¥ 13,451		¥ 13,123
Less: Accumulated depreciation	7,500		6,845
Property and equipment net excluding construction in process	5,951		6,278
Construction in progress	853		778
Property and equipment, net	6,804	$ 957	7,056
Buildings
Cost:
Property and equipment, gross	305		305
Leasehold improvements
Cost:
Property and equipment, gross	10,741		10,467
Furniture, fixtures and equipment
Cost:
Property and equipment, gross	2,402		2,348
Motor vehicles
Cost:
Property and equipment, gross	¥ 3		¥ 3

PROPERTY AND EQUIPMENT, NET - Narrative (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
PROPERTY AND EQUIPMENT, NET
Depreciation expense	¥ 985	¥ 970
Long-lived asset impairment loss	¥ 39	¥ 9

INTANGIBLE ASSETS, NET - Schedule (Details) ¥ in Millions, $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2021 CNY (¥)	Sep. 30, 2022 USD ($)
Intangible assets, net
Intangible assets, gross	¥ 5,647		¥ 5,791
Less: Accumulated amortization	168		163
Less: Accumulated impairment loss	239		243
Total	5,240		5,385	$ 737
Unfavorable lease
Amortization expense of intangible assets	32	¥ 48
Impairment loss on intangible assets			245
Manachised and franchised hotels
Intangible assets, net
Intangible assets, gross	353		366
Favorable lease agreements
Intangible assets, net
Intangible assets, gross	5		11
Purchased software
Intangible assets, net
Intangible assets, gross	129		142
Other intangible assets
Intangible assets, net
Intangible assets, gross	72		70
Brand names
Intangible assets, net
Intangible assets, gross	4,896		5,010
Franchise or manachise agreements
Unfavorable lease
Impairment loss on intangible assets		¥ 48
Other intangible assets
Unfavorable lease
Impairment loss on intangible assets	3
Master brand agreement
Intangible assets, net
Intangible assets, gross	¥ 192		¥ 192

INTANGIBLE ASSETS, NET - Amortization for Intangible Assets (Details) ¥ in Millions	Sep. 30, 2022 CNY (¥)
Estimated amortization expense
Remainder of 2022	¥ 8
2023	35
2024	32
2025	31
2026	28
Thereafter	173
Total	¥ 307

INVESTMENTS - Schedule (Details) ¥ in Millions, $ in Millions	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
INVESTMENTS
Equity securities with readily determinable fair values:	¥ 1,915	$ 269	¥ 2,589
Structured financial product	300
Investments	3,780		4,554
Accor
INVESTMENTS
Equity securities with readily determinable fair values:	1,540		2,508
Other marketable securities
INVESTMENTS
Equity securities with readily determinable fair values:	75		81
Cjia Group
INVESTMENTS
Equity securities without readily determinable fair values:	136		168
Available-for-sale debt securities:	220		220
OYO
INVESTMENTS
Equity securities without readily determinable fair values:	54		54
Other equity securities without readily determinable fair values
INVESTMENTS
Equity securities without readily determinable fair values:	71		71
AAPC LUB
INVESTMENTS
Equity-method investments:	487		525
Hotel related funds
INVESTMENTS
Equity-method investments:	448		488
China Hospitality JV
INVESTMENTS
Equity-method investments:	56		99
Commerz Real Institute
INVESTMENTS
Equity-method investments:	80		85
Other investments
INVESTMENTS
Equity-method investments:	¥ 313		¥ 255

INVESTMENTS - Equity securities with readily determinable fair values (Details) ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥) shares	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 CNY (¥)
Equity securities with readily determinable fair values
Unrealized gain (loss) from fair value	¥ (499)	$ (70)	¥ 120
Accor
Equity securities with readily determinable fair values
Number of ordinary shares acquired	2,017,078	2,017,078
Number of ordinary shares sold	478	478
Gain (loss) realized \| ¥	¥ 64
Number of shares held in investment	10,195,474	10,195,474
Investment in equity securities (in percentage)	5.00%	5.00%
Unrealized gain (loss) from fair value \| ¥	¥ 485		¥ 127

INVESTMENTS - Equity-method investments (Details) ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
Equity-method investments
Income (Loss) from Equity Method Investments	¥ (39)	$ (5)	¥ (18)
Investment income (loss)	(39)	$ (5)	(18)
AAPC LUB
Equity-method investments
Received cash dividend	47
China Hospitality JV
Equity-method investments
Received cash dividend	54
Azure Hospitality Fund I Limited Partnership
Equity-method investments
Increased investments	64
China Cjia Group Limited [Member]
Equity-method investments
Income (Loss) from Equity Method Investments	32		18
Investment income (loss)	¥ 32		¥ 18

DEBT - Components (Details) € in Millions, ¥ in Millions, $ in Millions	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 EUR (€)
DEBT
Short-term Debt	¥ 5,144	$ 723	¥ 6,232
Total	5,144		6,232
Long-term debt, non-current portion	6,091	$ 856	3,565
Long-term debt	6,091		3,565	€ 338
Bank borrowings
DEBT
Long-term debt, current portion	193		2,464
Long-term debt, non-current portion	2,332		211
Convertible Debt [Member]
DEBT
Long-term debt, current portion	3,372		3,029
Long-term debt, non-current portion	3,527		3,158
FF&E liability
DEBT
Long-term debt, current portion	44		47
Long-term debt, non-current portion	217		180
Others
DEBT
Long-term debt, non-current portion	15		16
Bank borrowings
DEBT
Short-term Debt	¥ 1,535		¥ 692

DEBT - Bank borrowings (Details) € in Millions, ¥ in Millions, $ in Millions			1 Months Ended		9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 EUR (€)	Aug. 31, 2022 CNY (¥)	Jan. 31, 2021 CNY (¥)	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 EUR (€)	Aug. 31, 2022 EUR (€)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 EUR (€)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 EUR (€)
Debt
Long-term debt, non-current portion	¥ 6,091				¥ 6,091			$ 856			¥ 3,565
Long-term debt	6,091				6,091						3,565	€ 338
Outstanding loan paid off					¥ 4,111	$ 578	¥ 3,403
Euro
Debt
Maximum borrowing amount									€ 220
Percentage points added to the reference rate			1.55%
Weighted average interest rate (as a percent)					2.58%	2.58%
Credit facility drawn down amount		€ 220
RMB
Debt
Maximum borrowing amount \| ¥	110		¥ 110		¥ 110
Percentage points added to the reference rate			(0.15%)
Weighted average interest rate (as a percent)					3.55%	3.55%
Credit facility drawn down amount \| ¥	110
Repayment of line of credit facility \| ¥					¥ 0
Term facility
Debt
Maximum borrowing amount										€ 220
Term of debt instrument			35 months
Revolving credit facility
Debt
Term of debt instrument			35 months
Revolving credit facility \| Euro
Debt
Maximum borrowing amount										70
Term of debt instrument			3 years
Term Facility Expiring December 2022
Debt
Maximum borrowing amount														€ 440
Long-term debt												€ 338
Revolving Credit Facility Expiring December 2022
Debt
Maximum borrowing amount \| $													$ 500
Revolving Credit Facility Expiring December 2022 \| Euro
Debt
Maximum borrowing amount										€ 70
Five Year Term Facility
Debt
Maximum borrowing amount									€ 338
Syndicated Loan Facility Expiring in December 2032
Debt
Maximum borrowing amount \| ¥				¥ 650
Long-term debt \| ¥	¥ 53				¥ 53						¥ 53
Term of debt instrument				12 years
Weighted average interest rate (as a percent)					4.21%	4.21%
Interest capitalized amount \| ¥							¥ 1
Syndicated Loan Facility Expiring in December 2032 \| Prime Rate
Debt
Percentage points added to the reference rate				0.24%
Syndicated Loan Facility Expiring in December 2032 \| RMB
Debt
Interest capitalized amount \| ¥					¥ 2

DEBT - Capped Call Options (Details) - Call Option $ in Millions	1 Months Ended
	Jul. 31, 2022 USD ($)
DEBT
Settlement amount of call option	$ 12.8
Increase of additional paid in capital by settlement of capped call option	$ 12.8

DEBT - Convertible Senior Notes (Details) - Convertible Debt - Convertible Senior Notes Due 2022 € in Millions, $ in Millions	Nov. 01, 2022 USD ($)	Nov. 01, 2022 EUR (€)	Nov. 03, 2017 USD ($)
DEBT
Aggregate principal amount			$ 475
Fixed interest rate (as a percent)			0.375%
Note repurchased	$ 475
Utilizing revolving facility \| €		€ 70

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

DEBT - Schedule of contractual maturities of the group's long-term debt (Details) ¥ in Millions	Sep. 30, 2022 CNY (¥)
Contractual maturities
Remainder of 2022	¥ 3,547
2023	1,704
2024	3,791
2025	2,091
2026	27
Thereafter	97
Total	¥ 11,257

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Payable to franchisees	¥ 297		¥ 710
Other payables	955		535
Accrued rental, utilities and other accrued expenses	359		209
Liabilities related to customer loyalty program	156		135
Value-added tax, other tax and surcharge payables	193		132
Payable to noncontrolling interest holders	94		117
Total	¥ 2,054	$ 289	¥ 1,838
Additional disclosures
Payable to franchisees, term (in years)	1 year
Payable to noncontrolling interest holders, term (in years)	1 year

HOTEL OPERATING COSTS (Details) ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
HOTEL OPERATING COSTS.
Rents	¥ 2,973		¥ 2,903
Utilities	441		384
Personnel costs	2,701		2,180
Depreciation and amortization	1,063		1,047
Consumable, food and beverage	737		688
Others	915		885
Total	¥ 8,830	$ 1,242	¥ 8,087

SHARE-BASED COMPENSATION - Plan (Details) - shares	9 Months Ended
SHARE-BASED COMPENSATION - Plan (Details) - shares	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2015	Aug. 31, 2010	Sep. 30, 2009	Oct. 31, 2008	Jun. 30, 2007	Feb. 28, 2007
Share options
Share based compensation
Granted (in shares)	0	0
Restricted stocks
Share based compensation
Vesting period	2 years
Incentive Award Plans
Share based compensation
Vesting period	10 years
Incentive Award Plans \| Maximum [Member]
Share based compensation
Share-based payment award, contractual term	10 years
Incentive Award Plans \| Share options
Share based compensation
Share-based payment award, option granted (in shares)	245,776,690
Incentive Award Plans \| Restricted stocks
Share based compensation
Share-based payment award, nonvested restricted stocks (in shares)	280,351,030
Incentive Award Plans \| Second anniversary of the stated vesting commencement date
Share based compensation
Share-based payment award, vesting percentage	50.00%
Incentive Award Plans \| Vesting ratably over the following two years
Share based compensation
Share-based payment award, vesting percentage	50.00%
Vesting period	2 years
2007 Global Share Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)								100,000,000
2008 Global Share Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)						70,000,000	30,000,000
2009 Global Share Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)			430,000,000	150,000,000	30,000,000

SHARE-BASED COMPENSATION - Nonvested restricted stocks (Details) ¥ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥) shares	Sep. 30, 2022 CNY (¥) $ / shares	Sep. 30, 2021 CNY (¥)
Weighted Average Grant Date Fair Value
Total fair value of nonvested restricted stocks, vested \| ¥	¥ 143
Restricted stocks
Share based compensation
Period for remaining percentage vested	2 years
Number of Restricted Stocks
Nonvested restricted stocks outstanding at the beginning of the period (in shares) \| shares	53,696,490
Granted (in shares) \| shares	37,291,960
Forfeited (in shares) \| shares	(1,904,140)
Vested (in shares) \| shares	(6,314,470)
Nonvested restricted stocks outstanding at the end of the period (in shares) \| shares	82,769,840
Weighted Average Grant Date Fair Value
Nonvested restricted stocks outstanding at the beginning of the period (in dollars per shares) \| $ / shares		$ 1.20
Granted (in dollars per shares) \| $ / shares		2.50
Forfeited (in dollars per shares) \| $ / shares		1.21
Vested (in dollars per shares) \| $ / shares		1.73
Nonvested restricted stocks outstanding at the end of the period (in dollars per shares) \| $ / shares		$ 1.74
Total unrecognized compensation expense \| ¥	¥ 862	$ 862
Weighted-average period for recognition of unrecognized compensation costs	3 years 7 months 28 days
Total fair value of nonvested restricted stocks, vested \| ¥			¥ 279
Restricted stocks \| Vesting on the second anniversary
Share based compensation
Share-based payment award, vesting percentage	50.00%
Restricted stocks \| Vesting ratably over the following two years
Share based compensation
Share-based payment award, vesting percentage	50.00%
Share options
Weighted Average Grant Date Fair Value
Total unrecognized compensation expense \| ¥	¥ 0	$ 0

LOSSES PER SHARE (Details) ¥ / shares in Units, ¥ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥) ¥ / shares shares	Sep. 30, 2022 $ / shares	Sep. 30, 2021 CNY (¥) ¥ / shares shares
LOSSES PER SHARE
Net loss attributable to ordinary shareholders - basic \| ¥	¥ (1,697)		¥ (7)
Net loss attributable to ordinary shareholders - diluted \| ¥	¥ (1,697)		¥ (7)
Weighted average ordinary shares outstanding - basic \| shares	3,111,759,089		3,112,910,313
Weighted average ordinary shares outstanding - diluted \| shares	3,111,759,089		3,112,910,313
Basic losses per share \| (per share)	¥ (0.55)	$ (0.08)	¥ 0.00
Diluted losses per share \| (per share)	¥ (0.55)	$ (0.08)	¥ 0.00

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

LOSSES PER SHARE - Computation of diluted earnings (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
EARNINGS (LOSSES) PER SHARE
Securities which could potentially dilute basic earnings per share which were excluded from the computation of diluted earnings per share	311,009,150	287,106,340
Outstanding employee options and nonvested restricted stocks
EARNINGS (LOSSES) PER SHARE
Securities which could potentially dilute basic earnings per share which were excluded from the computation of diluted earnings per share	82,769,840	60,278,930
Shares of convertible senior notes
EARNINGS (LOSSES) PER SHARE
Securities which could potentially dilute basic earnings per share which were excluded from the computation of diluted earnings per share	228,239,310	226,827,410

SEGMENT (Details)	9 Months Ended
SEGMENT (Details)	Sep. 30, 2022 segment
SEGMENT
Number of Operating Segments	2
Number of Reportable Segments	2

SEGMENT - Group's reportable segment results (Details) ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)
SEGMENT
Total revenues	¥ 10,156	$ 1,428	¥ 9,437
Operating costs and expenses	10,631	1,496	9,742
Income (loss) from operations	(200)	(29)	126
Net (loss) income attributable to H World Group Limited	(1,697)	(240)	(7)
Income tax expense (benefit)	4	1	(3)
Interest income	60	8	64
Interest expense	292	$ 41	313
Depreciation and amortization	1,096		1,082
EBITDA	(365)		1,321
Legacy Huazhu
SEGMENT
Total revenues	7,899		8,471
Operating costs and expenses	8,023		7,736
Income (loss) from operations	54		830
Net (loss) income attributable to H World Group Limited	(1,336)		571
Income tax expense (benefit)	36		213
Interest income	60		64
Interest expense	194		226
Depreciation and amortization	917		903
EBITDA	(249)		1,849
Legacy DH
SEGMENT
Total revenues	2,257		966
Operating costs and expenses	2,608		2,006
Income (loss) from operations	(254)		(704)
Net (loss) income attributable to H World Group Limited	(361)		(578)
Income tax expense (benefit)	(32)		(216)
Interest expense	98		87
Depreciation and amortization	179		179
EBITDA	¥ (116)		¥ (528)

SEGMENT - Total assets for operating segments (Details) ¥ in Millions, $ in Millions	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
SEGMENT
Total assets	¥ 61,387	$ 8,631	¥ 63,269
Legacy Huazhu
SEGMENT
Total assets	44,002		45,353
Legacy DH
SEGMENT
Total assets	¥ 17,385		¥ 17,916

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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+ Details

SEGMENT - Property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill (Details) ¥ in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 CNY (¥)	Dec. 31, 2021 CNY (¥)
SEGMENT
Total	¥ 10,156	$ 1,428	¥ 9,437
Total	48,296			¥ 49,956
China
SEGMENT
Total	7,881		8,459
Total	31,902			33,143
Germany
SEGMENT
Total	1,717		799
Total	13,424			13,884
All others
SEGMENT
Total	558		¥ 179
Total	¥ 2,970			¥ 2,929

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Cash Dividend (Details) $ / shares in Units, $ in Millions	Mar. 03, 2022 USD ($) $ / shares
Cash dividends declared (per share) \| $ / shares	$ 0.021
Dividends payable \| $	$ 68

LEASES - Supplemental Information Related to Operating Leases (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Lease cost:
Operating fixed lease cost	¥ 3,165	¥ 2,999
- Amortization of ROU assets	69	59
- Interest on lease liabilities	86	72
Short term lease cost	0	0
Operating variable lease cost	(87)	(12)
Total lease cost	¥ 3,233	¥ 3,118
Other information:
Weighted average remaining lease term, Operating leases	13 years	13 years
Weighted average remaining lease term, Finance leases	28 years	28 years
Weighted average discount rate, Operating leases	6.31%	6.22%
Weighted average discount rate, Finance leases	3.98%	3.97%

LEASES - Schedule Of Maturities Of Lease Liabilities (Details) ¥ in Millions	Sep. 30, 2022 CNY (¥)
Total Operating Leases
Remainder of 2022	¥ 1,097
2023	4,099
2024	4,146
2025	3,924
2026	3,724
Thereafter	27,070
Total minimum lease payments	44,060
Less: amount representing interest	13,112
Present value of minimum lease payments	30,948
Total Finance Leases
Remainder of 2022	39
2023	162
2024	167
2025	166
2026	168
Thereafter	4,143
Total minimum lease payments	4,845
Less: amount representing interest	1,943
Present value of minimum lease payments	¥ 2,902

LEASES - Schedule Of Future Minimum Payments (Details) ¥ in Millions	Sep. 30, 2022 CNY (¥)
Total Operating Leases
2022	¥ 4,099
2023	4,146
2024	3,924
2025	3,724
Total minimum lease payments	44,060
Less: amount representing interest	13,112
Present value of minimum lease payments	30,948
Total Finance Leases
2022	162
2023	167
2024	166
2025	168
Total minimum lease payments	4,845
Less: amount representing interest	1,943
Present value of minimum lease payments	¥ 2,902

LEASES - Narrative (Details) ¥ in Millions	9 Months Ended
LEASES - Narrative (Details) ¥ in Millions	Sep. 30, 2022 CNY (¥) contract	Sep. 30, 2021 CNY (¥)
LEASES
Sublease income	¥ 89	¥ 100
Negative lease expense recognized under the relief using variable lease expense approach	199	52
Impairment charge of the operating lease right-of-use assets	¥ 59	¥ 3
Number of lease contracts \| contract	32
Non-cancellable lease contracts not reflected in consolidate balance sheets	¥ 9,040

EMPLOYEE BENEFIT PLANS - Net periodic benefit cost recognized (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Pension benefits
EMPLOYEE BENEFIT PLANS
Service cost	¥ 6	¥ 8
Interest cost	1	2
Expected return on plan assets	0	0
Amortization of net loss	4	3
Regular Net Periodic Pension Cost	11	13
Total Recognized in Net Periodic Pension Cost	11	13
Other benefits
EMPLOYEE BENEFIT PLANS
Service cost	0	0
Regular Net Periodic Pension Cost	0	0
Total Recognized in Net Periodic Pension Cost	¥ 0	¥ 0

EMPLOYEE BENEFIT PLANS - Additional information (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
EMPLOYEE BENEFIT PLANS
Total contribution for employee benefits	¥ 479	¥ 388
Contributions recognized as expense	¥ 52	¥ 37

RELATED PARTY TRANSACTIONS AND BALANCES (Details) - CNY (¥) ¥ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
RELATED PARTY TRANSACTIONS AND BALANCES
Allowance for expected credit losses	¥ (37)		¥ (17)
Total	183		150
Due to related party	85		197
Sheen Star
RELATED PARTY TRANSACTIONS AND BALANCES
Amounts due from related parties	31		33
Sheen Star \| Service fee
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related parties	3	¥ 3
Zhuchuang
RELATED PARTY TRANSACTIONS AND BALANCES
Amounts due from related parties	27		27
Trip.com
RELATED PARTY TRANSACTIONS AND BALANCES
Amounts due from related parties	71		17
Due to related party	51		44
Trip.com \| Commission expenses
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties	43	78
Trip.com \| Lease expenses
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties	14	14
Trip.com \| Service fee
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related parties	49	52
Cjia Group
RELATED PARTY TRANSACTIONS AND BALANCES
Amounts due from related parties	29		29
Due to related party	27		101
Cjia Group \| Lease expenses
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties	25
Cjia Group \| Goods sold and service provided
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related parties		10
Cjia Group \| Sublease income
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related parties	4	5
Cjia Group \| Business acquisition of CitiGO
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties		783
Cjia Group \| Business acquisition
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties		51
Lianquan
RELATED PARTY TRANSACTIONS AND BALANCES
Amounts due from related parties	44		49
Lianquan \| Sublease income
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related parties	9	8
Others
RELATED PARTY TRANSACTIONS AND BALANCES
Amounts due from related parties	18		12
Due to related party	7		5
Huali Jinshi
RELATED PARTY TRANSACTIONS AND BALANCES
Due to related party			¥ 47
Huali Jinshi \| Service fee
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties		10
AAPC \| Service fee
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties	3
Revenue from related parties	2	3
Accor \| Brand use fee, reservation fee and other related service fee
RELATED PARTY TRANSACTIONS AND BALANCES
Expenses with related parties		15
Hitone
RELATED PARTY TRANSACTIONS AND BALANCES
Loan payment		5
China Hospitality JV \| Service fee
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related parties	1	2
AZURE \| Service fee
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related parties	3
ASU 2016-13
RELATED PARTY TRANSACTIONS AND BALANCES
Credit losses	¥ 37	¥ 17

COMMITMENTS AND CONTINGENCIES (Details) ¥ in Millions	Sep. 30, 2022 CNY (¥)
COMMITMENTS AND CONTINGENCIES
Purchase commitments expected to be incurred within one year related to leasehold improvements and installation of equipment for hotel operations	¥ 371
Accrued contingencies	¥ 0
Minimum
COMMITMENTS AND CONTINGENCIES
Purchase obligation expectation period	1 year
Maximum
COMMITMENTS AND CONTINGENCIES
Purchase obligation expectation period	2 years

SUBSEQUENT EVENTS (Details) € in Millions, ¥ in Millions, $ in Millions		1 Months Ended
	Nov. 01, 2022 USD ($)	Oct. 31, 2022 CNY (¥)	Nov. 01, 2022 EUR (€)	Oct. 31, 2022 USD ($)	Nov. 03, 2017
Convertible Senior Notes Due 2022 \| Convertible Debt
SUBSEQUENT EVENTS
Fixed interest rate (as a percent)					0.375%
Note repurchased	$ 475
Utilizing revolving facility \| €			€ 70
Subsequent Event \| One year term facility
SUBSEQUENT EVENTS
Term of debt instrument		1 year
Maximum borrowing amount		¥ 1,000		$ 123
Fixed interest rate (as a percent)		5.40%		5.40%
Subsequent Event \| Convertible Senior Notes Due 2022 \| Convertible Debt
SUBSEQUENT EVENTS
Note repurchased	$ 475