UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16
OR 15d-16 UNDER THE SECURITIES
EXCHANGE ACT OF 1934
For the month of:
May 2010
Commission File Number:
001-34656
China
Lodging Group, Limited
(Exact
name of registrant as specified in its charter)
5th Floor, Block 57, No. 461
Hongcao Road
Xuhui District
Shanghai 200233
People’s Republic of China
(86) 21 5153-9477
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form 20-F
þ
Form 40-F o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): o
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No þ
If “Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
China
Lodging Group, Limited
|
|||
|
By:
|
/s/
Tuo (Matthew) Zhang
|
||
|
Name:
Tuo (Matthew) Zhang
|
|||
|
Title: Chief
Executive Officer
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|
Date:
May 11, 2010
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EXHIBIT INDEX
|
Exhibit
Number
|
Description
|
|
|
Exhibit 99.1
|
China
Lodging Group, Limited Reports First Quarter of 2010 Financial
Results
|
Exhibit
99.1
Contact
Information
Ida Yu
Investor Relations
Manager
Tel: 86 (21) 5153
9463
Email: ir@htinns.com
http://ir.htinns.com
China
Lodging Group, Limited Reports First Quarter of 2010 Financial
Results
|
Ÿ
|
Net
Revenues for the first quarter increased 34.5% year-over-year to RMB340.9
million (US$49.9 million)
|
|
Ÿ
|
Despite
of being the low season during the year, the first quarter saw a net
profit attributable to China Lodging Group, Limited of RMB12.4 million
(US$1.8 million), compared with a net loss of RMB27.5 million (US$4.0
million) in the first quarter of
2009
|
|
Ÿ
|
Occupancy rate reached 93% and
average daily rate (“ADR”) RMB173, resulting in revenue per
available room
(“RevPAR”) of
RMB161
|
|
Ÿ
|
282
Hotels were in Operation and 144 Hotels under Development as of March 31,
2010
|
Shanghai, China,
May 10, 2010 (GLOBE NEWSWIRE) – China Lodging Group, Limited (NASDAQ: HTHT)
(“HanTing Inns and Hotels” or the “Company”), a leading economy hotel chain
operator in China, today announced its unaudited financial results for the
quarter ended March 31, 2010.
First
Quarter of 2010 Operational Highlights
• During the first quarter of
2010, the Company opened 46 net new hotels, including 5
net leased-and-operated hotels and 41 net
franchised-and-managed hotels. As of March 31, 2010, the Company had 282 hotels
in operation, consisting of 178 leased-and-operated hotels and 104
franchised-and-managed hotels. Our hotels in operation covered 47 cities in
China as of March 31, 2010, compared with 39 cities at the end of the previous
quarter.
• As of March 31, 2010, the
Company had a total pipeline of 144 hotels under development, including 32
leased-and-operated hotels and 112 franchised-and-managed hotels.
• The occupancy rate for all
hotels in operation was 93% in the first quarter of 2010, compared with 85% in
the first quarter of 2009, and 95% in the previous quarter. The year-over-year
increase was mainly due to stronger demand. The sequential decline was due to
seasonality as the first quarter is typically the lowest season for hotel
industry in China.
• The ADR, or
average daily rate, was RMB173 in the first quarter of 2010, compared with
RMB169 in the first quarter of 2009 and RMB177 in the previous quarter. The
year-over-year increase was mainly attributable to price increase in response to
the economy recovery and the
1
strengthening of
our brand. The sequential decrease was mainly due to seasonality as we conducted
sales promotions to increase occupancy rate during the low season.
• RevPAR, defined
as revenue per available room, was RMB161 in the first quarter of 2010, compared
with RMB144 in the first quarter of 2009 and RMB168 in the previous quarter. The
year-over-year increase was attributable to the higher occupancy rate and higher
ADR. The sequential decline was mainly due to seasonality.
• RevPAR for the hotels which
had been in operation for at least 18 months was RMB168 for the first quarter of
2010, compared with RMB150 for the first quarter of 2009 for the same group of
hotels. The improvement was caused by both higher occupancy rate and
higher ADR, as the economy recovered and our brand strengthened.
“The prime location
of our hotels and the high quality of our products and service have enabled us
to establish a premium brand, which attracted an increasing number of frequent
travelers to experience our hotels and join HanTing Club, our customer loyalty
program. As of March 31, 2010, our HanTing Club had approximately 1.75 million
individual members,” said Mr. Matthew Zhang, Chief Executive Officer of HanTing
Inns and Hotels. “We are also delighted to see the healthy growth across all the
three hotel products introduced by HanTing. In the first quarter of 2010, we
added 42 HanTing Express Hotels, two HanTing Seasons Hotels, and two HanTing Hi
Inns. Our multi-product strategy allows us to target a wide spectrum of
customers.”
First
Quarter of 2010 Financial Results
Total revenues for the quarter
increased 34.3% year-over-year to RMB360.7 million (US$52.8 million) primarily
as a result of our enlarged network and higher RevPAR. Comparing to the fourth
quarter of 2009, the revenue decreased 2.6% due to seasonality.
Total revenues from
leased-and-operated hotels for the first quarter of 2010 were RMB339.2
million (US$49.7 million), representing a 29.2% increase year-over-year as both
the number of leased-and-operated hotels and the revenue per leased-and-operated
hotel increased. As of March 31, 2010, we had 178 leased-and-operated hotels in
operation, compared with 151 a year ago.
Total revenues from
franchised-and-managed hotels for the first quarter of 2010 were RMB21.6
million (US$3.2 million), representing a 258.1% increase year-over-year mainly
due to the enlarged base of franchised-and-managed hotels. As of March 31, 2010,
we had 104 franchised-and-managed hotels in operation, compared with 30 a year
ago.
Net
revenues for the first quarter of 2010 were
RMB340.9 million (US$49.9 million), representing an increase of 34.5%
year-over-year and a decrease of 2.7% sequentially.
Total operating costs and
expenses for the first quarter of 2010 were RMB323.7 million (US$47.4
million), compared with RMB285.3 million (US$41.8 million) in the same quarter
of 2009 and RMB317.1 million (US$46.5 million) in the previous
quarter. Total operating costs and expenses
2
excluding
share-based compensation expenses (non-GAAP) for the quarter were RMB320.3
million (US$46.9 million), representing a 12.8% increase year-over-year mainly
due to expansion of network, and a 2.1% increase sequentially mainly due to
seasonal increase of utility costs. Major components of operating
costs and expenses are described and discussed in more detail
below.
Hotel operating costs for the
first quarter of 2010 were RMB272.2 million (US$39.9 million), compared with
RMB241.7 million (US$35.4 million) in the same quarter of 2009 and RMB267.5
million (US$39.2 million) in the previous quarter. Total hotel
operating costs excluding share-based compensation expenses (non-GAAP) were
RMB271.9 million (US$39.8 million), representing 79.7% of net revenues, compared
with 95.3% for the same quarter in 2009 and 76.3% in the previous
quarter. The decrease in hotel operating costs as a percentage of net
revenues year-over-year was primarily due to higher revenue per hotel during the
quarter as a majority of our costs are relatively fixed. The sequential increase
was due to seasonality, which impacted both revenue and utility
cost.
Selling and marketing expenses
for the first quarter of 2010 were RMB14.5 million (US$2.1 million), compared
with RMB8.8 million (US$1.3 million) in the same quarter of 2009 and RMB14.1
million (US$2.1 million) in the previous quarter. Selling and marketing expenses
excluding share-based compensation expenses (non-GAAP) were RMB14.3 million
(US$2.1 million), representing 4.2% of net revenues, compared with 3.5% for the
same quarter in 2009 and 4.0% in the previous quarter. The selling
and marketing expenses fluctuated from quarter to quarter mainly due to timing
of marketing programs and changes relating to customer loyalty
program.
General and administrative
expenses for the first quarter of 2010 were RMB25.8 million (US$3.8
million), compared with RMB19.8 million (US$2.9 million) in the same quarter of
2009 and RMB27.9 million (US$4.1 million) in the previous
quarter. General and administrative expenses excluding share-based
compensation expenses (non-GAAP) were RMB23.0 million (US$3.4 million), or 6.7%
of the net revenues, compared with 7.4% of the net revenues in the same period
of 2009 and 7.2% in the previous quarter.
Pre-opening expenses for the
first quarter of 2010 were RMB11.2 million (US$1.6 million), representing a
decrease of 25.0% year-over-year and an increase of 47.1%
sequentially. The fluctuation of pre-opening expenses was mainly
driven by the number of leased-and-operated hotels under
construction.
Income from operations for the
quarter was RMB17.2 million (US$2.5 million), compared with loss from operations
of RMB31.7 million (US$4.6 million) in the same quarter of 2009 and income from
operations of RMB33.1 million (US$4.9 million) in the previous
quarter. Excluding share-based compensation expenses, adjusted income
from operations (non-GAAP) for the quarter was RMB20.6 million (US$3.0 million).
This compares to adjusted loss from operations (non-GAAP) of RMB30.5 million
(US$4.5 million) in the same quarter of 2009, and adjusted income from
operations (non-GAAP) of RMB36.4 million (US$5.3 million) in the previous
quarter.
3
Net income attributable to China
Lodging Group, Limited for the quarter was RMB12.4 million (US$1.8
million), compared with net loss attributable to China Lodging Group, Limited of
RMB27.5 million (US$4.0 million) in the same quarter of 2009, and net income
attributable to China Lodging Group, Limited of RMB19.8 million (US$2.9 million)
in the previous quarter. Excluding share-based compensation expenses,
adjusted net income attributable to the China Lodging Group, Limited (non-GAAP)
for the quarter was RMB15.9 million (US$2.3 million). This compares to adjusted
net loss attributable to China Lodging Group, Limited (non-GAAP) of RMB26.3
million (US$3.8 million) in the same quarter of 2009, and adjusted net income
attributable to China Lodging Group, Limited (non-GAAP) of RMB23.1 million
(US$3.4 million) in the previous quarter. The year-over-year improvement on
profit was mainly attributable to the improved RevPAR as a result of
strengthening of the economy and our brand and the increased number of
franchised-and-managed hotels. The sequential decrease in profit was
mainly driven by seasonality.
Basic and diluted net earnings per
share/ADS. For the first quarter of 2010, basic net earnings
per share was RMB0.07 (US$0.01) and diluted net earnings per share was RMB0.06
(US$0.01), while basic net earnings per ADS was RMB0.26 (US$0.04), and diluted
net earnings per ADS was RMB0.25 (US$0.04). Excluding share-based
compensation expenses, adjusted basic and diluted net earnings per share
(non-GAAP) was RMB0.08 (US$0.01), and adjusted basic net earnings per ADS
(non-GAAP) was RMB0.33 (US$0.05), while adjusted diluted net earnings per ADS
(non-GAAP) was RMB0.32 (US$0.05).
EBITDA (non-GAAP) for the
first quarter of 2010 was RMB54.9 million (US$8.0 million), compared with RMB2.3
million (US$0.3 million) in the same quarter of 2009 and RMB69.3 million
(US$10.2 million) in the previous quarter. EBITDA from operating
hotels (non-GAAP) was RMB66.1 million (US$9.7 million), an increase of 282.3%
from the same period of 2009 but a decrease of 14.1% sequentially. The
year-over-year increase in EBITDA and EBITDA from operating hotels was primarily
due to the substantial expansion of hotels and improvement in profitability
during the period. The sequential decrease was mainly due to
seasonality.
Cash flow. Net
operating cash flow for the first quarter of 2010 was RMB87.2 million (US$12.8
million). Cash spent on the purchase of property and equipment, which
is part of investing cash flow, was RMB65.0 million (US$9.5
million).
Cash and cash
equivalents. As of March 31, 2010, the Company had cash and
cash equivalents of RMB258.4 million (US$37.9 million). In March 2010, the
Company completed its initial public offering and a private placement to Ctrip,
raising approximately US$140 million, in total, after underwriting fees and
expenses. The proceeds from the IPO and the private placement were received in
April, and thus not included in the cash balance as of March 31,
2010.
Business Outlook
“Thanks to China’s
strengthening economy, the demand for affordable accommodation with quality
continues to grow. We are on track in executing our hotel network expansion
plan. We
4
plan to add 180 to
200 hotels in 2010, with 60-70 leased-and-operated hotels and 120-130
franchised-and-managed hotels,” added Mr. Zhang.
Second
Quarter and Full Year 2010 Guidance
We expect to
achieve net revenues in the range of RMB 395 to 415 million in the second
quarter of 2010. We expect our full year net revenues to grow 33% to 35% from
2009. The above forecast
reflects the Company’s current and preliminary view, which is subject to
change.
Conference
Call
HanTing Inns and
Hotels’ management will host a conference call at 9 p.m. EDT, Monday, May 10,
2010 (or 9 a.m. on Tuesday, May 11, 2010 in the Shanghai/Hong Kong time zone)
following the announcement. To participate in the event by telephone, please
dial +1 (888) 830 9551 (for callers in the US), +86 10 800 152 1039 (for callers
in China Mainland), +852 3002 1675 (for callers in Hong Kong) or +1 (408) 961
6560 (for callers outside of the US, China Mainland, and Hong Kong) and entering
pass code HTHT. Please dial in approximately 10 minutes before the
scheduled time of the call.
A recording of the
conference call will be available after the conclusion of the conference call
through May 18, 2010. Please dial +1 877 482
6144 (for callers in the US) or +1 617 213 4164 (for callers outside the US) and
entering pass code 16805913.
The conference call
will also be webcast live over the Internet and can be accessed by all
interested parties at the Company’s Web site, http://ir.htinns.com.
Use
of Non-GAAP Financial Measures
To supplement the
Company's unaudited consolidated financial results presented in accordance with
U.S. GAAP, the Company uses the following non-GAAP measures defined as non-GAAP
financial measures by the SEC: hotel operating costs excluding share-based
compensation expenses, general and administrative expenses excluding share-based
compensation expenses, selling expenses excluding share-based compensation
expenses, adjusted income/(loss) from operations excluding share-based
compensation expenses, adjusted net income/(loss) attributable to China Lodging
Group, Limited excluding share-based compensation expenses, adjusted basic and
diluted net earnings per share and per ADS excluding share-based compensation
expenses, EBITDA and EBITDA from operating hotels. The presentation
of these non-GAAP financial measures is not intended to be considered in
isolation or as a substitute for the financial information prepared and
presented in accordance with U.S. GAAP. For more information on these
non-GAAP financial measures, please see the table captioned “Reconciliations of
GAAP and non-GAAP results” set forth at the end of this release. The
Company believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance by excluding share-based
expenses that may not be indicative of its operating performance. The
Company believes that both management and investors benefit from referring to
these non-GAAP financial measures in assessing its performance and when planning
and forecasting future periods. These non-GAAP financial
5
measures also
facilitate management’s internal comparisons to the Company's historical
performance. The Company believes these non-GAAP financial measures
are useful to investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and operational
decision making. A limitation of using non-GAAP financial measures
excluding share-based compensation expenses is that share-based compensation
expenses have been and will continue to be a significant recurring expense in
our business. Management compensates for these limitations by
providing specific information regarding the GAAP amounts excluded from each
non-GAAP measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures that are most directly
comparable to non-GAAP financial measures.
The Company
believes that EBITDA is a useful financial metric to assess the operating and
financial performance before the impact of investing and financing transactions
and income taxes. Given the significant investments that the Company
has made in leasehold improvements, depreciation and amortization expense
comprises a significant portion of the cost structure. In addition,
the Company believes that EBITDA is widely used by other companies in the
lodging industry and may be used by investors as a measure of financial
performance. The Company believes that EBITDA will provide investors
with a useful tool for comparability between periods because it eliminates
depreciation and amortization expense attributable to capital expenditures. The
Company also uses EBITDA from operating hotels, which is defined as EBITDA
before pre-opening expenses, to assess operating results of the hotels in
operation. The Company believe that the exclusion of pre-opening expenses, a
portion of which is non-cash rental expenses, helps facilitate year-on-year
comparison of the results of operations as the number of hotels in the
development stage may vary significantly from year to
year. Therefore, the Company believes EBITDA from operating hotels
more closely reflects the performance capability of hotels currently in
operation. The calculation of EBITDA and EBITDA from operating hotels
does not deduct interest income. The presentation of EBITDA and
EBITDA from operating hotels should not be construed as an indication that our
future results will be unaffected by other charges and gains considered to be
outside the ordinary course of the business.
The use of EBITDA
and EBITDA from operating hotels has certain
limitations. Depreciation and amortization expense for various
long-term assets, income tax and interest expense have been and will be incurred
and are not reflected in the presentation of EBITDA. Pre-opening expenses have
been and will be incurred and are not reflected in the presentation of EBITDA
from operating hotels. Each of these items should also be considered
in the overall evaluation of the results. The Company compensates for
these limitations by providing the relevant disclosure of the depreciation and
amortization, interest expense, income tax expense, pre-opening expenses and
other relevant items both in the reconciliations to the U.S. GAAP financial
measures and in the consolidated financial statements, all of which should be
considered when evaluating the performance.
The terms EBITDA
and EBITDA from operating hotels are not defined under U.S. GAAP, and neither
EBITDA nor EBITDA from operating hotels is a measure of net income, operating
income, operating performance or liquidity presented in accordance with U.S.
GAAP. When assessing
6
the operating and
financial performance, you should not consider this data in isolation or as a
substitute for our net income, operating income or any other operating
performance measure that is calculated in accordance with U.S.
GAAP. In addition, the Company's EBITDA or EBITDA from operating
hotels may not be comparable to EBITDA or EBITDA from operating hotels or
similarly titled measures utilized by other companies since such other companies
may not calculate EBITDA or EBITDA from operating hotels in the same manner as
the Company does.
Reconciliations of
the Company's non-GAAP financial measures, including EBITDA and EBITDA from
operating hotels, to consolidated statement of operations information are
included at the end of this press release.
About
China Lodging Group, Limited
China Lodging
Group, Limited (“HanTing Inns and Hotels” or the “Company”) is a leading economy
hotel chain operator in China. The Company provides business and leisure
travelers with high-quality, and conveniently-located hotel products under three
brands, namely, HanTing Seasons Hotel, HanTing Express Hotel, and HanTing Hi
Inn. As of March 31, 2010, the Company had 282 hotels and 33,650 rooms in 47
cities across China.
Safe Harbor
Statement Under the Private Securities Litigation Reform Act of 1995: The
information in this release contains forward-looking statements which involve
risks and uncertainties, including statements regarding the Company’s capital
needs, business strategy and expectations. Any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements, which may be identified by terminology such as “may,” “should,”
“will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,”
“predict,” “potential,” “forecast,” “project,” or “continue,” the negative of
such terms or other comparable terminology. Readers should not rely on
forward-looking statements as predictions of future events or results. Any or
all of the Company’s forward-looking statements may turn out to be wrong. They
can be affected by inaccurate assumptions, risks and uncertainties and other
factors which could cause actual events or results to be materially different
from those expressed or implied in the forward-looking statements. In evaluating
these statements, readers should consider various factors, including the risks
described in “Risk Factors” beginning on page 13 and elsewhere in the
Company’s registration
statement on Form F-1. These factors may cause the Company’s actual
results to differ materially from any forward-looking statement. In addition,
new factors emerge from time to time and it is not possible for the Company to
predict all factors that may cause actual results to differ materially from
those contained in any forward-looking statements. Any projections in this release are
based on limited information currently available to the Company, which is
subject to change. The Company disclaims any obligation to publicly
update any forward-looking statements to reflect events or circumstances after
the date of this document, except as required by applicable law.
--Financial Tables
and Operational Data Follow--
7
China Lodging
Group, Limted
Unaudited
Consolidated Balance Sheet
|
December
31, 2009
|
March 31,
2010
|
|||||||||||
|
RMB
|
RMB
|
US$
|
||||||||||
|
(in
thousands)
|
||||||||||||
|
Assets
|
||||||||||||
|
Current
assets:
|
||||||||||||
|
Cash and cash
equivalents
|
270,587 | 258,374 | 37,853 | |||||||||
|
Restricted
cash
|
500 | 1,000 | 147 | |||||||||
|
Accounts
receivable
|
15,158 | 20,946 | 3,069 | |||||||||
|
Amount due
from related parties
|
4,632 | 4,086 | 599 | |||||||||
|
Prepaid
rent
|
69,618 | 62,771 | 9,196 | |||||||||
|
Inventories
|
8,883 | 7,818 | 1,145 | |||||||||
|
Other current
assets
|
28,976 | 37,381 | 5,476 | |||||||||
|
Deferred tax
assets
|
18,272 | 18,272 | 2,677 | |||||||||
|
Total current
assets
|
416,626 | 410,648 | 60,162 | |||||||||
|
Property and
equipment, net
|
1,028,267 | 1,048,778 | 153,649 | |||||||||
|
Intangible
assets, net
|
20,395 | 20,389 | 2,987 | |||||||||
|
Goodwill
|
18,452 | 18,452 | 2,703 | |||||||||
|
Other
assets
|
61,170 | 62,285 | 9,125 | |||||||||
|
Deferred tax
assets
|
36,222 | 37,442 | 5,485 | |||||||||
|
Total
assets
|
1,581,132 | 1,597,994 | 234,111 | |||||||||
|
Liabilities,
mezzanine equity and equity
|
||||||||||||
|
Current
liabilities:
|
||||||||||||
|
Long-term
debt, current portion
|
57,000 | 12,140 | 1,779 | |||||||||
|
Accounts
payable
|
141,571 | 137,657 | 20,167 | |||||||||
|
Amount due to
related parties
|
928 | 1,021 | 150 | |||||||||
|
Salary and
welfare payable
|
29,597 | 23,529 | 3,447 | |||||||||
|
Deferred
revenue
|
43,203 | 50,423 | 7,387 | |||||||||
|
Accrued
expenses and other current liabilities
|
89,383 | 90,118 | 13,201 | |||||||||
|
Income tax
payable
|
3,869 | 4,195 | 615 | |||||||||
|
Total current
liabilities
|
365,551 | 319,083 | 46,746 | |||||||||
|
Long-term
debt
|
80,000 | 57,360 | 8,403 | |||||||||
|
Deferred
rent
|
174,775 | 183,351 | 26,861 | |||||||||
|
Deferred
revenue
|
31,558 | 36,374 | 5,329 | |||||||||
|
Other
long-term liabilities
|
20,453 | 23,106 | 3,386 | |||||||||
|
Deferred tax
liabilities
|
6,538 | 6,538 | 958 | |||||||||
|
Total
liabilities
|
678,875 | 625,812 | 91,683 | |||||||||
|
Mezzanine
equity
|
||||||||||||
|
Series B
convertible redeemable preferred shares
|
796,803 | - | - | |||||||||
|
Equity
|
||||||||||||
|
Ordinary
shares
|
46 | 178 | 26 | |||||||||
|
Series A
convertible preferred shares
|
34 | - | - | |||||||||
|
Additional
paid-in capital
|
351,994 | 2,165,156 | 317,202 | |||||||||
|
Subscription
receivables
|
- | (955,477 | ) | (139,980 | ) | |||||||
|
Accumulated
deficit
|
(245,457 | ) | (233,010 | ) | (34,137 | ) | ||||||
|
Accumulated
other comprehensive loss
|
(12,528 | ) | (12,537 | ) | (1,837 | ) | ||||||
|
Total China
Lodging Group, Limited shareholders' equity
|
94,089 | 964,310 | 141,274 | |||||||||
|
Noncontrolling
interest
|
11,365 | 7,872 | 1,154 | |||||||||
|
Total
equity
|
105,454 | 972,182 | 142,428 | |||||||||
|
Total
liabilities, mezzanine equity and equity
|
1,581,132 | 1,597,994 | 234,111 | |||||||||
Note 1: The
conversion of Renminbi ("RMB") into United States dollars ("US$") is based on
the exchange rate of US$1.00=RMB6.8258 on March 31, 2010 as set forth in H.10
statistical release of the Federal Reserve Board.
8
China
Lodging Group, Limited
Unaudited
Consolidated Statement of Operations
| Quarter Ended | ||||||||||||||||
|
March
31, 2009
|
December
31, 2009
|
March
31, 2010
|
||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
| (in thousands, except per share and per ADS data) | ||||||||||||||||
|
Revenues:
|
|
|||||||||||||||
|
Leased-and-operated
hotels
|
262,482 | 355,100 | 339,161 | 49,688 | ||||||||||||
|
Franchised-and-managed
hotels
|
6,024 | 15,334 | 21,569 | 3,160 | ||||||||||||
|
Total
revenues
|
268,506 | 370,434 | 360,730 | 52,848 | ||||||||||||
|
Less:
business tax and related surcharges
|
(14,970 | ) | (20,184 | ) | (19,785 | ) | (2,899 | ) | ||||||||
|
Net
revenues
|
253,536 | 350,250 | 340,945 | 49,949 | ||||||||||||
|
Operating
costs and expenses:
|
||||||||||||||||
|
Hotel
operating costs
|
(241,650 | ) | (267,464 | ) | (272,202 | ) | (39,878 | ) | ||||||||
|
Selling and
marketing expenses
|
(8,847 | ) | (14,120 | ) | (14,511 | ) | (2,126 | ) | ||||||||
|
General and
administrative expenses
|
(19,814 | ) | (27,902 | ) | (25,808 | ) | (3,781 | ) | ||||||||
|
Pre-opening
expenses
|
(14,963 | ) | (7,622 | ) | (11,216 | ) | (1,643 | ) | ||||||||
|
Total
operating costs and expenses
|
(285,274 | ) | (317,108 | ) | (323,737 | ) | (47,428 | ) | ||||||||
|
Income/(Loss)
from operations
|
(31,738 | ) | 33,142 | 17,208 | 2,521 | |||||||||||
|
Interest
income
|
271 | 763 | 663 | 97 | ||||||||||||
|
Interest
expenses
|
(1,338 | ) | (2,534 | ) | (1,545 | ) | (226 | ) | ||||||||
|
Foreign
exchange loss
|
(3 | ) | (77 | ) | (29 | ) | (4 | ) | ||||||||
|
Income/(Loss)
before income tax
|
(32,808 | ) | 31,294 | 16,297 | 2,388 | |||||||||||
|
Income tax
benefit/(expense)
|
5,577 | (8,377 | ) | (2,626 | ) | (385 | ) | |||||||||
|
Net
income/(loss)
|
(27,231 | ) | 22,917 | 13,671 | 2,003 | |||||||||||
|
Net
loss/(income) attributable to noncontrolling
|
||||||||||||||||
|
interests
|
(276 | ) | (3,076 | ) | (1,223 | ) | (179 | ) | ||||||||
|
Net
income/(loss) attributable to China Lodging
|
||||||||||||||||
|
Group,
Limited
|
(27,507 | ) | 19,841 | 12,448 | 1,824 | |||||||||||
|
Net earnings/
(loss) per share
|
||||||||||||||||
|
—
Basic
|
(0.51 | ) | 0.11 | 0.07 | 0.01 | |||||||||||
|
—
Diluted
|
(0.51 | ) | 0.11 | 0.06 | 0.01 | |||||||||||
|
Net earnings/
(loss) per ADS
|
||||||||||||||||
|
—
Basic
|
(2.03 | ) | 0.43 | 0.26 | 0.04 | |||||||||||
|
—
Diluted
|
(2.03 | ) | 0.42 | 0.25 | 0.04 | |||||||||||
|
Weighted
average ordinary shares outstanding
|
||||||||||||||||
|
—
Basic
|
54,071 | 60,948 | 68,582 | 68,582 | ||||||||||||
|
—
Diluted
|
54,071 | 188,528 | 196,751 | 196,751 |
Note 1: The
conversion of Renminbi ("RMB") into United States dollars ("US$") is based on
the exchange rate of US$1.00=RMB6.8258 on March 31, 2010 as set forth in
H.10 statistical release of the Federal Reserve Board.
9
China
Lodging Group, Limited
Reconciliation
of GAAP and Non-GAAP Results
| Quarter Ended March 31, 2010 | ||||||||||||||||||||||||
|
GAAP
Result
|
%
of Net Revenues
|
Share-based
Compensation
|
%
of Net Revenues
|
Non-GAAP
Result
|
%
of Net Revenues
|
|||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
|
|||||||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
|
Hotel
operating costs
|
272,202 | 79.8% | 341 | 0.1% | 271,861 | 79.7% | ||||||||||||||||||
|
Selling and
marketing expenses
|
14,511 | 4.3% | 218 | 0.1% | 14,293 | 4.2% | ||||||||||||||||||
|
General and
administrative expenses
|
25,808 | 7.6% | 2,846 | 0.8% | 22,962 | 6.7% | ||||||||||||||||||
|
Pre-opening
expenses
|
11,216 | 3.3% | - | 0.0% | 11,216 | 3.3% | ||||||||||||||||||
|
Total
operating costs and expenses
|
323,737 | 95.0% | 3,405 | 1.0% | 320,332 | 94.0% | ||||||||||||||||||
|
Income from
operations
|
17,208 | 5.0% | 3,405 | 1.0% | 20,613 | 6.0% | ||||||||||||||||||
| Quarter Ended March 31, 2010 | ||||||||||||||||||||||||
|
GAAP
Result
|
%
of Net Revenues
|
Share-based
Compensation
|
%
of Net Revenues
|
Non-GAAP
Result
|
%
of Net Revenues
|
|||||||||||||||||||
|
US$
|
US$
|
US$
|
||||||||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
|
Hotel
operating costs
|
39,878 | 79.8% | 50 | 0.1% | 39,828 | 79.7% | ||||||||||||||||||
|
Selling and
marketing expenses
|
2,126 | 4.3% | 32 | 0.1% | 2,094 | 4.2% | ||||||||||||||||||
|
General and
administrative expenses
|
3,781 | 7.6% | 417 | 0.8% | 3,364 | 6.7% | ||||||||||||||||||
|
Pre-opening
expenses
|
1,643 | 3.3% | - | 0.0% | 1,643 | 3.3% | ||||||||||||||||||
|
Total
operating costs and expenses
|
47,428 | 95.0% | 499 | 1.0% | 46,929 | 94.0% | ||||||||||||||||||
|
Income from
operations
|
2,521 | 5.0% | 499 | 1.0% | 3,020 | 6.0% | ||||||||||||||||||
| Quarter Ended December 31, 2009 | ||||||||||||||||||||||||
|
GAAP
Result
|
%
of Net Revenues
|
Share-based
Compensation
|
%
of Net Revenues
|
Non-GAAP
Result
|
%
of Net Revenues
|
|||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
||||||||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
|
Hotel
operating costs
|
267,464 | 76.4% | 334 | 0.1% | 267,130 | 76.3% | ||||||||||||||||||
|
Selling and
marketing expenses
|
14,120 | 4.0% | 207 | 0.1% | 13,913 | 4.0% | ||||||||||||||||||
|
General and
administrative expenses
|
27,902 | 8.0% | 2,741 | 0.8% | 25,161 | 7.2% | ||||||||||||||||||
|
Pre-opening
expenses
|
7,622 | 2.2% | - | 0.0% | 7,622 | 2.2% | ||||||||||||||||||
|
Total
operating costs and expenses
|
317,108 | 90.5% | 3,282 | 0.9% | 313,826 | 89.6% | ||||||||||||||||||
|
Income from
operations
|
33,142 | 9.5% | 3,282 | 0.9% | 36,424 | 10.4% | ||||||||||||||||||
| Quarter Ended March 31, 2009 | ||||||||||||||||||||||||
|
GAAP
Result
|
%
of Net Revenues
|
Share-based
Compensation
|
%
of Net Revenues
|
Non-GAAP
Result
|
%
of Net Revenues
|
|||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
||||||||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
|
Hotel
operating costs
|
241,650 | 95.3% | 43 | 0.0% | 241,607 | 95.3% | ||||||||||||||||||
|
Selling and
marketing expenses
|
8,847 | 3.5% | 51 | 0.0% | 8,796 | 3.5% | ||||||||||||||||||
|
General and
administrative expenses
|
19,814 | 7.8% | 1,157 | 0.5% | 18,657 | 7.4% | ||||||||||||||||||
|
Pre-opening
expenses
|
14,963 | 5.9% | - | 0.0% | 14,963 | 5.9% | ||||||||||||||||||
|
Total
operating costs and expenses
|
285,274 | 112.5% | 1,251 | 0.5% | 284,023 | 112.0% | ||||||||||||||||||
|
Loss from
operations
|
(31,738 | ) | -12.5% | 1,251 | 0.5% | (30,487 | ) | -12.0% | ||||||||||||||||
|
|
||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
|
March
31, 2009
|
December
31, 2009
|
March
31, 2010
|
||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||||||
| (in thousands, except per share and per ADS data) | ||||||||||||||||||||
|
Net
income/(loss) attributable to China Lodging Group, Limited
(GAAP)
|
(27,507 | ) | 19,841 | 12,448 | 1,824 | |||||||||||||||
|
Share-based
compensation expenses
|
1,251 | 3,282 | 3,405 | 499 | ||||||||||||||||
|
Adjusted net
income/(loss) attributable to China
|
||||||||||||||||||||
|
Lodging Group,
Limited (non-GAAP)
|
(26,256 | ) | 23,123 | 15,853 | 2,323 | |||||||||||||||
|
Net
earnings/(loss) per share (GAAP)
|
||||||||||||||||||||
|
—
Basic
|
(0.51 | ) | 0.11 | 0.07 | 0.01 | |||||||||||||||
|
—
Diluted
|
(0.51 | ) | 0.11 | 0.06 | 0.01 | |||||||||||||||
|
Net
earnings/(loss) per ADS (GAAP)
|
||||||||||||||||||||
|
—
Basic
|
(2.03 | ) | 0.43 | 0.26 | 0.04 | |||||||||||||||
|
—
Diluted
|
(2.03 | ) | 0.42 | 0.25 | 0.04 | |||||||||||||||
|
Adjusted net
earnings/(loss) per share (non-GAAP)
|
||||||||||||||||||||
|
—
Basic
|
(0.49 | ) | 0.13 | 0.08 | 0.01 | |||||||||||||||
|
—
Diluted
|
(0.49 | ) | 0.12 | 0.08 | 0.01 | |||||||||||||||
|
Adjusted net
earnings/(loss) per ADS (non-GAAP)
|
||||||||||||||||||||
|
—
Basic
|
(1.94 | ) | 0.51 | 0.33 | 0.05 | |||||||||||||||
|
—
Diluted
|
(1.94 | ) | 0.49 | 0.32 | 0.05 | |||||||||||||||
|
Weighted
average ordinary shares outstanding
|
||||||||||||||||||||
|
—
Basic
|
54,071 | 60,948 | 68,582 | 68,582 | ||||||||||||||||
|
—
Diluted
|
54,071 | 188,528 | 196,751 | 196,751 | ||||||||||||||||
|
Quarter
Ended
|
|||||||||||||||||||
|
March
31, 2009
|
December
31, 2009
|
March
31, 2010
|
|||||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$
|
||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||||
|
(in
thousands)
|
|||||||||||||||||||
|
Net
income/(loss) attributable to China Lodging Group, Limited
(GAAP)
|
(27,507 | ) | 19,841 | 12,448 | 1,824 | ||||||||||||||
|
Interest
expenses
|
1,338 | 2,534 | 1,545 | 226 | |||||||||||||||
|
Income tax
expense /(benefit)
|
(5,577 | ) | 8,377 | 2,626 | 385 | ||||||||||||||
|
Depreciation
and amortization
|
34,070 | 38,550 | 38,246 | 5,603 | |||||||||||||||
|
EBITDA
(non-GAAP)
|
2,324 | 69,302 | 54,865 | 8,038 | |||||||||||||||
|
Pre-opening
expenses
|
14,963 | 7,622 | 11,216 | 1,643 | |||||||||||||||
|
EBITDA
from operating hotels (non-GAAP)
|
17,287 | 76,924 | 66,081 | 9,681 | |||||||||||||||
Note 1: The conversion of Renminbi
("RMB") into United States dollars ("US$") is based on the exchange rate of
US$1.00=RMB6.8258 on March 31, 2010 as
set forth in H.10 statistical release of the Federal Reserve
Board.
10
China
Lodging Group, Limited
|
Operational
Data
|
||||||||||||
|
As
of
|
||||||||||||
|
March
31, 2009
|
December
31, 2009
|
March
31, 2010
|
||||||||||
|
Total hotels
in operation:
|
181 | 236 | 282 | |||||||||
|
Leased-and-operated
hotels
|
151 | 173 | 178 | |||||||||
|
Franchised-and-managed
hotels
|
30 | 63 | 104 | |||||||||
|
Total Hotel
rooms in operation
|
22,744 | 28,360 | 33,650 | |||||||||
|
Leased-and-operated
hotels
|
19,223 | 21,658 | 22,334 | |||||||||
|
Franchised-and-managed
hotels
|
3,521 | 6,702 | 11,316 | |||||||||
|
Number of
cities
|
36 | 39 | 47 | |||||||||
|
For
the quarter ended
|
||||||||||||
|
March
31, 2009
|
December
31, 2009
|
March
31, 2010
|
||||||||||
|
Occupancy
rate (as a percentage)
|
||||||||||||
|
Leased-and-operated
hotels
|
86% | 96% | 95% | |||||||||
|
Franchised-and-managed
hotels
|
80% | 91% | 88% | |||||||||
|
Total hotels
in operation
|
85% | 95% | 93% | |||||||||
|
Average daily
room rate (in RMB)
|
||||||||||||
|
Leased-and-operated
hotels
|
169 | 178 | 175 | |||||||||
|
Franchised-and-managed
hotels
|
170 | 173 | 167 | |||||||||
|
Total hotels
in operation
|
169 | 177 | 173 | |||||||||
|
RevPAR (in
RMB)
|
||||||||||||
|
Leased-and-operated
hotels
|
145 | 171 | 166 | |||||||||
|
Franchised-and-managed
hotels
|
136 | 158 | 147 | |||||||||
|
Total hotels
in operation
|
144 | 168 | 161 | |||||||||
|
Like-for-like
performance for hotels opened for at least 18 months during the current
quarter
|
||||||||||||
|
As
of and for the quarter ended
|
||||||||||||
|
March
31, 2009
|
March
31, 2010
|
|||||||||||
|
Total hotels
in operation:
|
144 | 144 | ||||||||||
|
Leased-and-operated
hotels
|
128 | 128 | ||||||||||
|
Franchised-and-managed
hotels
|
16 | 16 | ||||||||||
|
Total Hotel
rooms in operation
|
17,972 | 17,972 | ||||||||||
|
Leased-and-operated
hotels
|
16,091 | 16,091 | ||||||||||
|
Franchised-and-managed
hotels
|
1,881 | 1,881 | ||||||||||
|
Occupancy
rate (as a percentage)
|
89% | 96% | ||||||||||
|
Average daily
rate (in RMB)
|
169 | 175 | ||||||||||
|
RevPAR (in
RMB)
|
150 | 168 | ||||||||||
###
11