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: March 2013
 
Commission File Number: 001-34656
 
China Lodging Group, Limited
 
(Exact name of registrant as specified in its charter)
 
No. 2266 Hongqiao Road
Changning District
Shanghai 200336
People’s Republic of China
(86) 21 6195-2011
 
(Address of principal executive office)
 
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

 

 
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/ Qi Ji	
 	Name: Qi Ji	
 	Title:   Chief Executive Officer	
Date: March 7, 2013	 	

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EXHIBIT INDEX
 	 	 	
Exhibit Number	 	Description	
 	 	 	
Exhibit 99.1	 	China Lodging Group, Limited Reports Fourth Quarter and Full Year 2012 Financial Results	

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EXHIBIT 99.1
 
Contact Information
Ida Yu
Investor Relations Manager
Tel:  +86 (21) 6195 9561
Email: ir@htinns.com
http://ir.htinns.com

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

x  	Net Revenues increased 35.7% year-over-year for the fourth quarter and 43.3% for the full year of 2012, exceeding the high end of previously announced guidance.	

x  	Adjusted EBITDA from operating hotels (non-GAAP)1 increased 23.8% for the fourth quarter and 43.6% for the full year of 2012.	

x  	Net income attributable to China Lodging Group, Limited was RMB18.2 million (US$2.9 million)2 for the fourth quarter and RMB174.9 million (US$28.1 million) for the full year of 2012.  Diluted net earnings per ADS3 for the year were RMB2.83 (US$0.45); adjusted diluted net earnings per ADS (non-GAAP) for the year were RMB3.17 (US$0.51), representing a growth of 49.5% from prior year.	

x  	A total of 1,035 hotels or 113,650 hotel rooms in operation as of December 31, 2012	

x  	The Company provided guidance for full year 2013 net revenues growth of 26% to 29% and Q1 net revenue growth of 30% to 32%.	

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

Fourth Quarter 2012 Operational Highlights
•	During the fourth quarter of 2012, the Company opened 50 leased (“leased-and- operated”) hotels and 70 net manachised (“franchised-and-managed”) hotels.	

•	The occupancy rate for all hotels in operation (excluding franchised Starway hotels) was 92% in the fourth quarter of 2012, compared with 93% in the fourth quarter of 2011 and 97% in the previous quarter. The slight year-over-year decrease was mainly because our fast expansion led to a higher percentage of manachised hotels at the ramping-up stage during the fourth quarter of 2012, compared to a year ago. The sequential decrease resulted mainly from seasonality.	
 
____________________________
1 Defined as EBITDA before pre-opening expenses and share-based compensation expenses.
2 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB6.2301 on December 31, 2012 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
3 Each ADS represents four of the Company’s ordinary shares.
 
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• 	The ADR, which is defined as the average daily rate for all hotels in operation (excluding franchised Starway hotels), was RMB176 in the fourth quarter of 2012, compared with RMB179 in the fourth quarter of 2011 and RMB183 in the previous quarter. The year-over-year decrease was mainly attributable to the city mix shifting toward lower-tier cities, partially offset by an increase in same-hotel ADR. The sequential decrease resulted mainly from seasonality.	

•	RevPAR, defined as revenue per available room for all hotels in operation (excluding franchised Starway hotels), was RMB162 in the fourth quarter of 2012, compared with RMB167 in the fourth quarter of 2011 and RMB178 in the previous quarter.  RevPAR for leased hotels was RMB167 in the fourth quarter of 2012, compared with RMB170 in the fourth quarter of 2011, and RMB183 in the previous quarter.	

•	For all hotels which had been in operation for at least 18 months (excluding franchised Starway hotels), the same-hotel RevPAR was RMB179 for the fourth quarter of 2012, a 2% increase from RMB175 for the fourth quarter of 2011, with a 1% increase in ADR and a one percentage-point increase in occupancy rate.	

Full Year 2012 Operational Highlights
•	For the full year of 2012, the Company opened 121 net new leased hotels and 221 net new manachised hotels, a total of 342 hotels, exceeding our previously announced guidance. As of December 31, 2012, the Company had 465 leased hotels, 516 manachised hotels, and 54 franchised Starway hotels in operation in 171 cities. The leased and manachised hotel rooms in operation increased by 35% and 72%, respectively, from a year ago.	
 
•	As of December 31, 2012, the Company had a total pipeline of 410 new hotels, including 80 leased hotels and 330 manachised hotels.	
 
•	For the full year of 2012, the occupancy rate for all hotels in operation (excluding franchised Starway hotels) was 94%, two percentage points higher than 2011.	
 
•	For the full year of 2012, the ADR was RMB178, compared to RMB180 in 2011. The decrease was primarily due to the shift of city mix of hotels toward lower-tier cities, partially offset by an increase in same-hotel ADR.	
 
•	For the full year of 2012, the RevPAR for all hotels in operation, excluding franchised Starway hotels, was RMB168, a 2% increase from RMB165 in 2011.  RevPAR for leased hotel was RMB 173, a 4% increase from RMB167 in 2011.	
 
•	For all the hotels which had been in operation for at least 18 months, excluding franchised Starway hotels, the same-hotel RevPAR was RMB186 in 2012, a 6% increase from RMB176 in 2011, with a 2% increase in ADR and a three percentage-point increase in occupancy rate.	
 
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•	As of December 31, 2012, the Company’s loyalty program had more than 8 million members, who contributed more than 80% of room nights sold during the full year of 2012. In 2012, 96% of room nights were sold through the Company’s own channels.	
 
“We are delighted that we concluded 2012 with a strong result, exceeding 1,000 hotels and covering 171 cities,” said Mr. Qi Ji, founder, executive Chairman and Chief Executive Officer of China Lodging Group.  He continued:  “Our blended hotel occupancy and RevPAR both improved even though we expanded scale and penetrated our business into lower-tier cities. Our same-hotel RevPAR for the full year improved by 6%, thanks to our strong brands, highly-motivated work force and well-established management system. In 2012, we made remarkable progress in executing our multi-brand strategy and proudly changed our Chinese name from Hanting to Hua Zhu. From Hi Inn to Joya Hotel, our product offerings now cover price range from RMB 100 to RMB 1000. We expect each of our brands to serve as a successful consolidator in its respective segment. We expect those successes, in whole, will make Hua Zhu a major force in the large and fast-growing China lodging market.”

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

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

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

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

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

For the year of 2012, total revenues from manachised and franchised hotels were RMB 349.9 million (US$56.1 million), representing a year-over-year increase of 64.5%, and accounting for 10.2% of total revenues, compared to 8.9% of total revenues for the year of 2011.  As of December 31, 2012, the Company had 516 manachised hotels and 54 franchised Starway hotels in operation, compared with 295 manachised hotels at the end of 2011.

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

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

Hotel operating costs for the fourth quarter of 2012 were RMB694.1 million (US$111.4 million), compared to RMB493.8 million (US$78.5 million) in the fourth quarter of 2011 and RMB630.0 million (US$100.2 million) in the previous quarter, representing 40.6% and 10.2% increases, respectively. The Company’s hotel network expansion, especially the growth in leased hotels, was the main driver for the increase in hotel operating costs. The average number of leased hotels in operation4 during the fourth quarter of 2012 increased 33.7% from the same period of 2011 and 9.6% sequentially. Total hotel operating costs excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2012 were RMB693.8 million (US$111.4 million), representing 78.6% of net revenues, compared to 75.8% for the fourth quarter in 2011 and 70.4% in the previous quarter. The year-over-year increase in cost percentage was mainly due to cost inflation. Although our cost structure is largely fixed, the blended cost inflation in the fourth quarter of 2012 exceeded our same-hotel RevPAR growth of 2%. On top of that, a large number of 77 leased hotels opened in the third and fourth quarter of 2012 added to the hotel operating cost but contributed very low revenue during their early stage of ramping-up. The sequential increase in cost percentage was primarily due to seasonally-lower RevPAR affecting the percentage calculation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties, including statements regarding the Company’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project,” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results. Any or all of the Company’s forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions, risks and uncertainties and other factors which could cause actual events or results to be materially different from those expressed or implied in the forward-looking statements. In evaluating these statements, readers should consider various factors, including the anticipated growth strategies of the Company, the future results of operations and financial condition of the Company, the economic conditions of China, the regulatory environment in China, the Company’s ability to attract customers and leverage its brand, trends and competition in the lodging industry, the expected growth of the lodging market in China and other factors and risks outlined in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 20-F and other filings. These factors may cause the Company’s actual results to differ materially from any forward-looking statement. In addition, new factors emerge from time to time and it is not possible for the Company to predict all factors that may cause actual results to differ materially from those contained in any forward-looking statements. Any projections in this release are based on limited information currently available to the Company, which is subject to change. This release also contains statements or projections that are based upon information available to the public, as well as other information from sources which the Company believes to be reliable, but it is not guaranteed by the Company to be accurate, nor does the Company purport it to be complete. The Company disclaims any obligation to publicly update any forward-looking statements to reflect events or circumstances after the date of this document, except as required by applicable law.
 
Page 11 of 18

 
--Financial Tables and Operational Data Follow—
 
Page 12 of 18

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

Page 13 of 18

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

Page 14 of 18

 

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

Page 15 of 18

 

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

Page 16 of 18

 

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

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

Like-for-like performance for leased and manachised hotels opened for at least 18 months during the current quarter	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	As of and for the quarter ended	 	 	 	 	 	
 	 	December 31,	 	 	 	 	 	
 	 	 	2011	 	 	 	2012	 	 	 	 	 	
Total	 	 	508	 	 	 	508	 	 	 	 	 	
Leased hotels	 	 	278	 	 	 	278	 	 	 	 	 	
Manachised hotels	 	 	230	 	 	 	230	 	 	 	 	 	
Total	 	 	59,313	 	 	 	59,313	 	 	 	 	 	
Leased hotels	 	 	34,431	 	 	 	34,431	 	 	 	 	 	
Manachised hotels	 	 	24,882	 	 	 	24,882	 	 	 	 	 	
Occupancy rate (as a percentage)	 	 	96	%	 	 	97	%	 	 	 	 	
Average daily rate (in RMB)	 	 	182	 	 	 	185	 	 	 	 	 	
RevPAR (in RMB)	 	 	175	 	 	 	179	 	 	 	 	 	

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