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 2012
 
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 8, 2012	 	

 

 
EXHIBIT INDEX

Exhibit Number	 	Description	
 	 	 	
Exhibit 99.1	 	China Lodging Group, Limited Reports Fourth Quarter and Full Year 2011 Financial Results	

 
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 2011 Financial Results

x	Net Revenues increased 43.8% year-over-year for the fourth quarter and 29.4% for the full year of 2011, within the guidance previously announced.	

x	Adjusted EBITDA from operating hotels (non-GAAP)1 was RMB164.4 million (US$26.1 million) for the fourth quarter and RMB577.2 million (US$91.7 million) for the full year of 2011.	

x	Net income attributable to China Lodging Group, Limited was RMB30.3 million (US$4.8 million) 2 for the fourth quarter and RMB114.8 million (US$18.2 million) for the full year of 2011.Diluted net earnings per ADS 3  for the year were RMB1.87 (US$0.30); adjusted diluted net earnings per ADS (non-GAAP) for the year were RMB2.12 (US$0.34).	

x	201 net new hotels added in 2011, bringing the total hotel count to 639.	

x	The Company provided guidance for full year 2012 net revenues growth of 34.5% to 37.5% and Q1 net revenue growth of 43% to 46%	

Shanghai, China, March 7, 2012– China Lodging Group, Limited (NASDAQ: HTHT) (“China Lodging Group” or the “Company”), a leading and high-growth economy hotel chain operator in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2011.

Fourth Quarter 2011 Operational Highlights
 
_________________ 
1 The following non-GAAP financial measures is used in this press release: 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. See “Use of Non-GAAP Financial Measures” and “Unaudited Reconciliation of GAAP and Non-GAAP Results” below for more information about the non-GAAP financial measures included in this press release.
 
2 The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6. 2939 on December 30, 2011 as set forth in H.10 statistical release of the Federal Reserve Board.
 
3 Each ADS represents four of the Company’s ordinary shares.

1

 
•	During the fourth quarter of 2011, the Company opened 59 new hotels, including 30   leased-and-operated hotels and 29 franchised-and-managed hotels.	

•	The ADR, or average daily rate, for all hotels, was RMB179 in the fourth quarter of 2011, compared with RMB194 in the fourth quarter of 2010 and RMB183 in the previous quarter. The year-over-year decrease was mainly attributable to the absence of one-time favorable impact from the Shanghai Expo. In Shanghai, the ADR was RMB181 in the fourth quarter of 2011, compared with RMB242 in the fourth quarter of 2010. The sequential decrease resulted mainly from the Company’s seasonal price adjustment.	

•	The occupancy rate for all hotels in operation was 93% in the fourth quarter of 2011, compared with 87% in the fourth quarter of 2010, and 97% in the previous quarter. The year-over-year improvement was mainly attributable to a 22% occupancy increase in Shanghai, which experienced a low occupancy in November and December of 2010 after the Shanghai Expo. The sequential decrease resulted mainly from seasonality.	

•	RevPAR, defined as revenue per available room, was RMB167 in the fourth quarter of 2011, compared with RMB168 in the fourth quarter of 2010 and RMB177 in the previous quarter. The stable year-over-year RevPAR performance was a mixed result of a higher occupancy offset by a lower ADR mainly due to price increase during, and occupancy drop after, the Shanghai Expo. Outside of Shanghai, RevPAR increased 1% year-over-year.	

•	For all the hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB184 for the fourth quarter of 2011, a 5% increase from RMB175 for the fourth quarter of 2010.  Outside of Shanghai, the same-hotel RevPAR increased by 7%, with a 3% increase in ADR and a 4% increase in occupancy.	

Full Year 2011 Operational Highlights
 
•	For the full year of 2011, the Company opened 201 net new hotels in total, including 101 net new leased-and-operated hotels and 100 net new franchised-and-managed hotels. As of December 31, 2011, the Company had 639 hotels in operation, consisting of 344 leased-and-operated hotels and 295 franchised-and-managed hotels. Hotels in operation covered 100 cities in China as of December 31, 2011, compared with 65 cities at the end of 2010. As of December 31, 2011, the Company had 22 Seasons Hotels and 28 Hi Inns in operation.	

•	As of December 31, 2011, the Company had a total pipeline of 278 hotels under development, including 93 leased-and-operated hotels and 185 franchised-and-managed hotels.	

•	For the full year of 2011, the ADR was RMB180, compared to RMB197 in 2010. The decrease was primarily due to the absence of one-time favorable impact from the Shanghai Expo, a higher percentage of new hotels in ramp-up stage, and the shift of city mix of hotels toward lower tier cities, partially offset by an increase in same-hotel ADR.	

2

 
x	For the full year of 2011, the occupancy rate for all hotels in operation was 92%, compared with 93% in 2010. During 2011, 201 net new hotels were opened. The Company believes that the achievement of 92% occupancy, during a year with 46% year-over-year hotel count growth, reflected the wide popularity of Hanting’s products and services and the fast-growing demand in China for reliable, reasonably-priced lodging products.	
 
x	For the full year of 2011, the RevPAR was RMB165, compared with RMB183 in 2010. The decrease was mainly driven by a lower ADR as noted above.	
 
x	For all the hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB183 in 2011, compared to RMB189 in 2010, mainly due to the absence of one-time favorable impact from the Shanghai Expo. Outside of Shanghai, the same-hotel RevPAR increased by 4% for the full year, with a 4% increase in ADR and a stable occupancy.	
 
x	As of December 31, 2011, HanTing Club had more than 4.4 million individual members, a 68% increase from the end of 2010. The individual members contributed 66% of room nights sold during the full year of 2011, improving from 61% of room nights sold in 2010. The Company’s corporate members contributed another 10% of room nights sold. In 2011, 96% of room nights were sold through the Company’s own channels.	
 
“We are delighted that we made solid progress in 2011, growing our hotel count by 46% and city coverage by 54%. Our proven brand strength and well-established hotel management platform continued to attract a growing number of franchisees. We remain committed to optimizing our products and hotel service procedures to maintain outstanding operational and financial performance,” said Mr. Qi Ji, founder, executive Chairman and Chief Executive Officer of China Lodging Group. “Our rapid and high-quality expansion leads to a fast-growing customer base and a robust pipeline of hotels under development, which will support our future growth.”

Fourth Quarter and full year of 2011 Financial Results
 
Total revenues for the fourth quarter of 2011 were RMB689.9 million (US$109.6million), representing a 44.2% year-over-year increase and a 3.8% sequential increase. The year-over-year and sequential increases were primarily due to the increase in the number of hotels.

Total revenues for the year of 2011 were RMB2,385.6 million (US$379.0 million), representing an increase of 29.8% from the year of 2010.

Total revenues from leased-and-operated hotels for the fourth quarter of 2011 were RMB626.7 million (US$99.6 million), representing a 43.1% year-over-year increase and a 3.4% sequential increase.

3

 
For the year of 2011, total revenues from leased-and-operated hotels were RMB2,172.9 million (US$345.2 million), representing a 27.2% year over year increase. As of December 31, 2011, the Company had 344 leased-and-operated hotels in operation, compared with 243 at the end of 2010.

Total revenues from franchised-and-managed hotels for the fourth quarter of 2011 were RMB63.2 million (US$10.0 million), representing a 55.6% year-over-year increase and an 8.2% sequential increase.

For the year of 2011, total revenues from franchised-and-managed hotels were RMB 212.6 million (US$33.8 million), representing a year-over-year increase of 62.8%, or 8.9% of total revenues, compared to 7.1% of total revenues for the year of 2010.  As of December 31, 2011, the Company had 295 franchised-and-managed hotels in operation, compared with 195 at the end of 2010.

Net revenues for the fourth quarter of 2011 were RMB650.7 million (US$103.4 million), representing a year-over-year increase of 43.8% and a sequential increase of 3.8%.

Net revenues for the full year of 2011 were RMB2,249.6 million (US$357.4 million), representing a year-over-year increase of 29.4%.

Hotel operating costs for the fourth quarter of 2011 were RMB493.8 million (US$78.5 million), compared to RMB323.3 million (US$49.0 million) in the fourth quarter of 2010 and RMB452.6 million (US$71.0 million) in the previous quarter, representing a 52.8% and a 9.1% increase, respectively.  The Company’s hotel network expansion, especially the growth in leased-and-operated hotels, was the main driver for the increase in hotel operating costs. The average number of leased-and-operated hotels in operation 4  during the fourth quarter of 2011 increased 48.5% from the same period of 2010 and 10.6% sequentially. Total hotel operating costs excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2011 were RMB493.3 million (US$78.4 million), representing 75.8% of net revenues, compared to 71.3% for the fourth quarter in 2010 and 72.1% in the previous quarter. The year-over-year increase in percentage was mainly caused by higher percentage of new leased-and-operated hotels in ramp-up stage, and the absence of one-time favorable impact from the Shanghai Expo. The sequential increase in percentage was primarily due to lower RevPAR as a result of seasonality.

For the full year of 2011, total hotel operating costs were RMB1,703.3 million (US$270.6 million), compared to RMB1,180.2 million (US$178.8 million) in 2010. Excluding share-based compensation, the hotel operating costs (non-GAAP) were RMB1,701.2 million (US$270.3 million), representing 75.6% of net revenues, compared to 67.8% in 2010. The year-over-year increase in percentage was mainly driven by a higher percentage of new leased-and-operated hotels in ramp-up stage, and the absence of one-time favorable impact from the Shanghai Expo. During 2011, leased-and-operated hotels in operation less than six months contributed 18% of leased-and-operated hotel room nights available for sale, compared with only 7% in 2010.
 
______________
 
4 Calculated as the average of the number of leased-and-operated hotels in operation at the beginning of the quarter and the number of leased-and-operated hotels in operation at the end of the quarter.

4

 
Selling and marketing expenses for the fourth quarter of 2011 were RMB29.3 million (US$4.7 million), compared to RMB19.2 million (US$2.9 million) in the fourth quarter of 2010 and RMB24.9 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 2011 were RMB29.1 million (US$4.6 million), or 4.5% of net revenues, compared to 4.2% for the fourth quarter in 2010 and 4.0% for the previous quarter.  The increase in percentage resulted from an increase in sales promotions in the fourth quarter.

For the full year of 2011, total selling and marketing expenses were RMB94.8 million (US$15.1 million), compared to RMB70.8 million (US$10.7 million) in 2010. Selling and marketing expenses excluding share-based compensation expenses (non-GAAP) were RMB94.0 million (US$14.9 million), representing 4.2% of net revenues, compared to 4.1% in 2010, mainly due to a revenue base favorably impacted by the Shanghai Expo in 2010.

General and administrative expenses for the fourth quarter of 2011 were RMB43.8 million (US$7.0 million), compared to RMB33.4 million (US$5.1 million) in the fourth quarter of 2010 and RMB39.4 million (US$6.2 million) in the previous quarter.  General and administrative expenses excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2011 were RMB41.6 million (US$6.6 million), representing 6.4% of net revenues, compared with 6.8% of net revenues in the fourth quarter of 2010 and 5.6% in the previous quarter. The year-over-year decrease in percentage was mainly due to a larger revenue base.

General and administrative expenses were RMB160.1 million (US$25.4 million) for the year of 2011, compared to RMB120.0 million (US$18.2 million) in 2010.General and administrative expenses excluding share-based compensation expenses were RMB147.5 million (US$23.4 million), representing 6.5% of net revenues, compared to 6.3% in 2010, mainly due to a revenue base favorably impacted by the Shanghai Expo in 2010.

Pre-opening expenses for the fourth quarter of 2011 were RMB49.5 million (US$7.9 million), compared to RMB45.9 million (US$7.0 million) in the fourth quarter of 2010 and RMB54.0 million (US$8.5 million) in the previous quarter.  The pre-opening expenses were primarily driven by the number of leased-and-operated hotels under conversion during the period. 30 leased-and-operated hotels were opened during this quarter and another 93 were in the pipeline at the end of the quarter, compared to 43 opened and 69 in the pipeline during the same quarter in 2010, and 33 opened and 88 in the pipeline for the previous quarter.

5

 
Pre-opening expenses for the full year of 2011 were RMB184.3 million (US$29.3 million), compared to RMB111.2 million (US$16.9 million) in 2010, representing a year-over-year increase of 65.7%. The increase in pre-opening expenses was mainly a result of our acceleration of leased-and-operated hotel opening from 70 in 2010 to 101 in 2011, and the expansion of leased-and-operated hotel pipeline from 69 at the end of 2010 to 93 at the end of 2011. In addition, the extended conversion period as a result of regulatory changes in new hotel license approval process also led to increased pre-opening expenses in 2011.

Income from operations for the fourth quarter of 2011 was RMB34.4 million (US$5.5 million), compared to RMB30.9 million (US$4.7 million) in the fourth quarter of 2010 and RMB55.9 million (US$8.8 million) in the previous quarter.  Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the fourth quarter of 2011 was RMB37.2 million (US$5.9 million).

Income from operations for the year was RMB107.1 million (US$17.0 million), compared to RMB256.3 million (US$38.8 million) in 2010. Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the year of 2011 was RMB122.6 million (US$19.5 million).

Net income attributable to China Lodging Group, Limited for the fourth quarter of 2011 was RMB30.3 million (US$4.8 million), compared to RMB34.9 million (US$5.3 million) in the fourth quarter of 2010 and RMB58.2 million (US$9.1 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 2011 was RMB33.2 million (US$5.3 million), compared to RMB38.4 million (US$5.8 million) in the fourth quarter of 2010 and RMB63.2 million (US$9.9 million) in the previous quarter. The sequential decrease in net income was mainly due to seasonality.

Net income attributable to China Lodging Group, Limited for the full year of 2011 was RMB114.8 million (US$18.2 million), compared to RMB215.8 million (US$32.7 million) in 2010. Excluding share-based compensation expenses, adjusted net income attributable to China Lodging Group (non-GAAP) for the full year of 2011 was RMB130.3 million (US$20.7 million), compared to RMB 228.9million (US$34.7 million) in 2010.  The year-over-year decrease was mainly attributable to the absence of one-time favorable impact from the Shanghai Expo, more leased-and-operated hotels in ramp-up stage and higher pre-opening expenses as a result of expansion in 2011, partially offset by a higher profit from the expanded base of franchised-and-managed hotels and mature leased-and-operated hotels outside of Shanghai, a higher interest income and foreign exchange gain, and lower interest expenses and income tax.

Basic and diluted net earnings per share/ADS.  For the fourth quarter of 2011, basic net earnings per share and diluted net earnings per share were RMB0.12 (US$0.02); basic net earnings per ADS was RMB0.50 (US$0.08) and diluted net earnings per ADS was RMB0.49 (US$0.08).  For the fourth quarter of 2011, excluding share-based compensation expenses, adjusted basic net earnings per share (non-GAAP) was RMB0.14 (US$0.02) and adjusted diluted net earnings per share (non-GAAP) was RMB0.13 (US$0.02), adjusted basic net earnings per ADS (non-GAAP) was RMB0.55 (US$0.09) and adjusted diluted net earnings per ADS (non-GAAP) was RMB0.54 (US$0.09).

6

 
For the full year of 2011, basic net earnings per share and diluted net earnings per share was RMB0.47 (US$0.08); basic net earnings per ADS was RMB1.90 (US$0.30), while diluted net earnings per share was RMB1.87 (US$0.30). For the full year of 2011, excluding share-based compensation expenses, adjusted net earnings per share (non-GAAP) was RMB0.54 (US$0.09), while adjusted diluted net earnings per share (non-GAAP) was RMB0.53 (US$0.08), and adjusted net earnings per ADS (non-GAAP) was RMB2.15 (US$0.34), while adjusted diluted net earnings per ADS (non-GAAP) was RMB2.12 (US$0.34).

EBITDA (non-GAAP) for the fourth quarter of 2011 was RMB112.0 million (US$17.8 million), compared with RMB92.9 million (US$14.1 million) in the fourth quarter of 2010 and RMB125.1 million (US$19.6 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 2011 was RMB164.4 million (US$26.1 million), compared with RMB142.2 million (US$21.5 million) for the fourth quarter of 2010 and RMB184.2 million (US$28.9 million) for the previous quarter.  The year-over-year increase was mainly due to the expansion of the Company’s network. The sequential decrease was mainly due to seasonality.

EBITDA (non-GAAP) for the full year of 2011 was RMB377.4 million (US$60.0 million), compared to RMB447.2 million (US$67.8 million) in 2010. Excluding pre-opening expenses and share-based compensation expenses, adjusted EBITDA from operating hotels (non-GAAP) for the full year of 2011 was RMB577.2 million (US$91.7 million), compared with RMB571.6 million (US$86.6 million) in 2010. The growth of adjusted EBITDA were mainly driven by the expanded base of franchised-and-managed hotels and mature leased-and-operated hotels outside of Shanghai, partially offset by the absence of one-time favorable impact from the Shanghai Expo, and a higher percentage of leased-and-operated hotels in ramp-up stage.

Hotel income (non-GAAP), which is the difference between net revenues and hotel operating costs, was RMB156.9 million (US$24.9 million) for the fourth quarter of 2011, compared with RMB129.4 million (US$19.6 million) in the fourth quarter of 2010 and RMB174.1 million (US$27.3 million) in the previous quarter. The year-over-year increase of hotel income (non-GAAP) was mainly attributable to the enlarged franchised-and-managed hotel network and increased number of mature leased-and-operated hotels in the portfolio. For leased-and-operated hotels in operation for at least six months, the hotel income (non-GAAP) was RMB112.2 million (US$17.8 million) during the fourth quarter of 2011, or 21% of net revenues derived from those hotels. Leased-and-operated hotels in operation for less than six months accounted for 15% of leased-and-operated room nights available for sale in the fourth quarter of 2011. Those hotels derived a hotel loss (non-GAAP) of RMB5.6 million (US$0.9 million), or 9% of net revenues derived from those hotels this quarter, mainly due to lower revenue achievement of those hotels during their ramp-up stage. For franchised-and-managed hotels, the hotel income (non-GAAP) was RMB50.4 million (US$8.0 million), or 85% of net revenue derived from those hotels. As an increasing number of leased-and-operated hotels reach maturity and the franchised-and-managed hotel network grows, the Company expects the profit base to expand steadily.

7

 
Hotel income (non-GAAP) for the full year of 2011 was RMB546.3 million (US$86.8 million), compared with RMB558.3 million (US$84.6 million) for 2010. The slight year-over-year decrease was mainly due to the absence of one-time benefit from Expo and more new hotels in operation, partially offset by higher hotel income generated from the expanded network of franchised-and-managed hotels and mature leased-and-operated hotels outside of Shanghai. For leased-and-operated hotels in operation for at least six months, the hotel income (non-GAAP) was RMB420.9 million (US$66.9 million) during 2011, or 23% of net revenues derived from those hotels. Leased-and-operated hotels in operation for less than six months derived a hotel loss (non-GAAP) of RMB42.2 million (US$6.7 million), or 18% of net revenues derived from those hotels in 2011. For franchised-and-managed hotels, the hotel income (non-GAAP) was RMB167.6 million (US$26.6 million), or 84% of net revenue derived from those hotels.

Cash flow.  Net operating cash flow for the fourth quarter of 2011 was RMB143.2 million (US$22.8 million).  Cash spent on the purchase of property and equipment, purchase of intangible assets and acquisitions, which are part of investing cash flow, was RMB231.3 million (US$36.8 million).

Net operating cash flow for the full year of 2011 was RMB467.1 million (US$74.2 million). Cash spent on the purchase of property and equipment, purchase of intangible and acquisitions was RMB841.3 million (US$133.7 million).

Cash and cash equivalents, Restricted cash, and Short-term investment. As of December 31, 2011, the Company had a total balance of cash and cash equivalents, restricted cash and short-term investment of RMB783.1 million (US$124.4 million).

Business Outlook and Guidance for 2012
 
“We remain optimistic on the growing trend of travelling demand in China. Leading hotel chains are expanding market share through consolidating existing stand-alone hotels and converting non-hotel properties into hotels. We continued to see tremendous growth opportunities in future years. Hanting’s wide brand recognition and strong performance record made Hanting an attractive choice for franchisees, who in turn helped us accelerate our network expansion.” commented Mr. Ji.

8

 
“We envision, in the next five years, Hanting to grow into a large-scale, multi-brand hotel group and to become an undisputed market leader across the mid-scale, economy and budget hotel segments.” added Mr. Ji.

The Company expects to achieve net revenues in the range of RMB605 to 620 million in the first quarter of 2012, representing a 43% to 46% growth year-over-year. For the full year 2012, the Company expects net revenues to grow 34.5% to 37.5%.

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

Corporate Presentation
The latest corporate presentation is available on China Lodging Group’s investor relations website, http://ir.htinns.com .

Conference Call
China Lodging group’s management will host a conference call at 8 p.m. EST, Wednesday, March 7, 2012 (or 9 a.m. on Thursday, March 8, 2012 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 4824 9658.  Please dial in approximately 10 minutes before the scheduled time of the call.

A recording of the conference call will be available after the conclusion of the conference call through March 14, 2012. Please dial +1 (866) 214 5335 (for callers in the US) or +61 2 8235 5000 (for callers outside the US) and entering pass code 4824 9658.

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 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 its performance by excluding share-based compensation 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 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 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.

9

 
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 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.

10

 
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 this 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.

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 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 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 December 31, 2011, the Company had 639 hotels and 71,621 rooms in 100 cities across China.

11

 
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.

--Financial Tables and Operational Data Follow—

 
12

 
China Lodging Group, Limited	 	
Unaudited Condensed Consolidated Balance Sheets	 	
 	 	
 	 	December 31, 2010	 	 	September 30, 2011	 	 	December 31, 2011	 	
 	 	RMB	 	 	RMB	 	 	RMB	 	 	US$	 	
 	 	(in thousands)	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	
  Cash and cash equivalents	 	 	1,060,067	 	 	 	837,101	 	 	 	781,601	 	 	 	124,184	 	
  Restricted cash	 	 	1,275	 	 	 	5,500	 	 	 	1,500	 	 	 	238	 	
  Short-term Investment	 	 	100,000	 	 	 	30,000	 	 	 	-	 	 	 	-	 	
  Accounts receivable, net	 	 	21,536	 	 	 	33,154	 	 	 	37,416	 	 	 	5,945	 	
  Amount due from related parties	 	 	3,267	 	 	 	-	 	 	 	-	 	 	 	-	 	
  Prepaid rent	 	 	152,267	 	 	 	193,646	 	 	 	228,087	 	 	 	36,239	 	
  Inventories	 	 	18,290	 	 	 	26,347	 	 	 	31,232	 	 	 	4,962	 	
  Income tax receivables	 	 	-	 	 	 	19,757	 	 	 	-	 	 	 	-	 	
  Other current assets	 	 	40,177	 	 	 	37,659	 	 	 	53,862	 	 	 	8,559	 	
  Deferred tax assets	 	 	17,940	 	 	 	17,940	 	 	 	40,119	 	 	 	6,374	 	
  Total current assets	 	 	1,414,819	 	 	 	1,201,104	 	 	 	1,173,817	 	 	 	186,501	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property and equipment, net	 	 	1,422,432	 	 	 	1,811,416	 	 	 	2,095,794	 	 	 	332,988	 	
Intangible assets, net	 	 	57,348	 	 	 	56,906	 	 	 	69,779	 	 	 	11,087	 	
Goodwill	 	 	41,373	 	 	 	41,373	 	 	 	42,536	 	 	 	6,758	 	
Other assets	 	 	79,953	 	 	 	102,231	 	 	 	102,056	 	 	 	16,215	 	
Deferred tax assets	 	 	28,155	 	 	 	28,155	 	 	 	40,968	 	 	 	6,509	 	
Total assets	 	 	3,044,080	 	 	 	3,241,185	 	 	 	3,524,950	 	 	 	560,058	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities and equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  Accounts payable	 	 	283,203	 	 	 	274,915	 	 	 	417,605	 	 	 	66,351	 	
  Amount due to related parties	 	 	855	 	 	 	1,320	 	 	 	1,030	 	 	 	164	 	
  Salary and welfare payable	 	 	57,638	 	 	 	42,549	 	 	 	80,266	 	 	 	12,753	 	
  Deferred revenue	 	 	68,599	 	 	 	117,905	 	 	 	138,148	 	 	 	21,950	 	
  Accrued expenses and other current liabilities	 	 	148,926	 	 	 	144,771	 	 	 	142,146	 	 	 	22,585	 	
  Income tax payable	 	 	15,121	 	 	 	-	 	 	 	14,148	 	 	 	2,248	 	
  Total current liabilities	 	 	574,342	 	 	 	581,460	 	 	 	793,343	 	 	 	126,051	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deferred rent	 	 	237,427	 	 	 	302,388	 	 	 	329,774	 	 	 	52,396	 	
Deferred revenue	 	 	48,445	 	 	 	65,393	 	 	 	71,698	 	 	 	11,392	 	
Other long-term liabilities	 	 	46,619	 	 	 	57,714	 	 	 	61,574	 	 	 	9,782	 	
Deferred tax liabilities	 	 	11,937	 	 	 	11,937	 	 	 	12,677	 	 	 	2,014	 	
Total liabilities	 	 	918,770	 	 	 	1,018,892	 	 	 	1,269,066	 	 	 	201,635	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  Ordinary shares	 	 	178	 	 	 	179	 	 	 	179	 	 	 	28	 	
  Additional paid-in capital	 	 	2,168,364	 	 	 	2,195,035	 	 	 	2,199,954	 	 	 	349,538	 	
  Retained earnings (Accumulated deficit)	 	 	(29,705	)	 	 	54,827	 	 	 	85,127	 	 	 	13,525	 	
  Accumulated other comprehensive loss	 	 	(22,703	)	 	 	(36,325	)	 	 	(39,166	)	 	 	(6,223	)	
Total China Lodging Group, Limited equity	 	 	2,116,134	 	 	 	2,213,716	 	 	 	2,246,094	 	 	 	356,868	 	
  Noncontrolling interest	 	 	9,176	 	 	 	8,577	 	 	 	9,790	 	 	 	1,555	 	
Total equity	 	 	2,125,310	 	 	 	2,222,293	 	 	 	2,255,884	 	 	 	358,423	 	
Total liabilities and equity	 	 	3,044,080	 	 	 	3,241,185	 	 	 	3,524,950	 	 	 	560,058	 	

13

 
 	 	China Lodging Group, Limited
Unaudited Condensed Consolidated Statements of Operations	 	
 	 	 	 	 	 	 	
 	 	Quarter Ended	 	 	Year Ended	 	
 	 	December 31, 2010	 	 	September 30, 2011	 	 	December 31, 2011	 	 	December 31, 2010	 	 	December 31, 2011	 	
 	 	RMB	 	 	RMB	 	 	RMB	 	 	US$	 	 	RMB	 	 	RMB	 	 	US$	 	
 	 	(in thousands, except per share and per ADS data)	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Leased-and-operated hotels	 	 	437,989	 	 	 	606,073	 	 	 	626,738	 	 	 	99,579	 	 	 	1,707,771	 	 	 	2,172,934	 	 	 	345,244	 	
Franchised-and-managed hotels	 	 	40,619	 	 	 	58,406	 	 	 	63,183	 	 	 	10,039	 	 	 	130,579	 	 	 	212,644	 	 	 	33,786	 	
Total revenues	 	 	478,608	 	 	 	664,479	 	 	 	689,921	 	 	 	109,618	 	 	 	1,838,350	 	 	 	2,385,578	 	 	 	379,030	 	
Less: business tax and related surcharges	 	 	(25,977	)	 	 	(37,793	)	 	 	(39,184	)	 	 	(6,226	)	 	 	(99,857	)	 	 	(135,981	)	 	 	(21,605	)	
Net revenues	 	 	452,631	 	 	 	626,686	 	 	 	650,737	 	 	 	103,392	 	 	 	1,738,493	 	 	 	2,249,597	 	 	 	357,425	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  Hotel operating costs	 	 	(323,252	)	 	 	(452,579	)	 	 	(493,819	)	 	 	(78,461	)	 	 	(1,180,202	)	 	 	(1,703,337	)	 	 	(270,633	)	
  Selling and marketing expenses	 	 	(19,212	)	 	 	(24,857	)	 	 	(29,307	)	 	 	(4,656	)	 	 	(70,786	)	 	 	(94,754	)	 	 	(15,055	)	
  General and administrative expenses	 	 	(33,389	)	 	 	(39,359	)	 	 	(43,792	)	 	 	(6,958	)	 	 	(119,989	)	 	 	(160,062	)	 	 	(25,431	)	
  Pre-opening expenses	 	 	(45,901	)	 	 	(54,015	)	 	 	(49,460	)	 	 	(7,858	)	 	 	(111,210	)	 	 	(184,298	)	 	 	(29,282	)	
Total operating costs and expenses	 	 	(421,754	)	 	 	(570,810	)	 	 	(616,378	)	 	 	(97,933	)	 	 	(1,482,187	)	 	 	(2,142,451	)	 	 	(340,401	)	
Income from operations	 	 	30,877	 	 	 	55,876	 	 	 	34,359	 	 	 	5,459	 	 	 	256,306	 	 	 	107,146	 	 	 	17,024	 	
Interest income	 	 	8,523	 	 	 	4,490	 	 	 	5,199	 	 	 	826	 	 	 	15,945	 	 	 	18,111	 	 	 	2,877	 	
Interest expenses	 	 	(272	)	 	 	(213	)	 	 	(213	)	 	 	(34	)	 	 	(2,682	)	 	 	(882	)	 	 	(140	)	
Other income	 	 	1,758	 	 	 	427	 	 	 	753	 	 	 	120	 	 	 	2,564	 	 	 	2,649	 	 	 	421	 	
Foreign exchange gain	 	 	3,244	 	 	 	5,770	 	 	 	2,734	 	 	 	434	 	 	 	6,923	 	 	 	15,930	 	 	 	2,531	 	
Income before income tax	 	 	44,130	 	 	 	66,350	 	 	 	42,832	 	 	 	6,805	 	 	 	279,056	 	 	 	142,954	 	 	 	22,713	 	
Income tax expense	 	 	(8,093	)	 	 	(7,174	)	 	 	(11,192	)	 	 	(1,778	)	 	 	(57,262	)	 	 	(24,816	)	 	 	(3,943	)	
Net income	 	 	36,037	 	 	 	59,176	 	 	 	31,640	 	 	 	5,027	 	 	 	221,794	 	 	 	118,138	 	 	 	18,770	 	
Net income attributable to noncontrolling interests	 	 	(1,117	)	 	 	(999	)	 	 	(1,340	)	 	 	(213	)	 	 	(6,043	)	 	 	(3,306	)	 	 	(525	)	
Net income attributable to China Lodging Group, Limited	 	 	34,920	 	 	 	58,177	 	 	 	30,300	 	 	 	4,814	 	 	 	215,751	 	 	 	114,832	 	 	 	18,245	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	0.14	 	 	 	0.24	 	 	 	0.12	 	 	 	0.02	 	 	 	1.05	 	 	 	0.47	 	 	 	0.08	 	
— Diluted	 	 	0.14	 	 	 	0.24	 	 	 	0.12	 	 	 	0.02	 	 	 	0.92	 	 	 	0.47	 	 	 	0.08	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings per ADS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	0.58	 	 	 	0.96	 	 	 	0.50	 	 	 	0.08	 	 	 	4.19	 	 	 	1.90	 	 	 	0.30	 	
— Diluted	 	 	0.57	 	 	 	0.94	 	 	 	0.49	 	 	 	0.08	 	 	 	3.68	 	 	 	1.87	 	 	 	0.30	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average ordinary shares outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	241,087	 	 	 	242,264	 	 	 	242,461	 	 	 	242,461	 	 	 	198,517	 	 	 	241,928	 	 	 	241,928	 	
— Diluted	 	 	246,623	 	 	 	246,272	 	 	 	245,896	 	 	 	245,896	 	 	 	234,481	 	 	 	246,181	 	 	 	246,181	 	

14

 
China Lodging Group, Limited	 	
Unaudited Condensed Consolidated Statements of Cash Flows	 	
 	 	
 	 	Quarter Ended	 	 	Year Ended	 	
 	 	December 31, 2010	 	 	September 30, 2011	 	 	December 31, 2011	 	 	December 31, 2010	 	 	December 31, 2011	 	
 	 	RMB	 	 	RMB	 	 	RMB	 	 	US$	 	 	RMB	 	 	RMB	 	 	US$	 	
 	 	(in thousands)	 	
Operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	36,037	 	 	 	59,176	 	 	 	31,640	 	 	 	5,027	 	 	 	221,794	 	 	 	118,138	 	 	 	18,770	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Share-based compensation	 	 	3,319	 	 	 	5,046	 	 	 	2,858	 	 	 	454	 	 	 	13,113	 	 	 	15,483	 	 	 	2,460	 	
Depreciation and amortization	 	 	49,587	 	 	 	59,583	 	 	 	70,328	 	 	 	11,174	 	 	 	171,539	 	 	 	236,857	 	 	 	37,633	 	
Deferred taxes	 	 	10,448	 	 	 	-	 	 	 	(35,714	)	 	 	(5,674	)	 	 	9,228	 	 	 	(35,714	)	 	 	(5,674	)	
Bad debt expenses	 	 	(174	)	 	 	(92	)	 	 	554	 	 	 	88	 	 	 	103	 	 	 	667	 	 	 	106	 	
Deferred rent	 	 	22,689	 	 	 	25,548	 	 	 	27,966	 	 	 	4,443	 	 	 	70,761	 	 	 	92,927	 	 	 	14,765	 	
Impairment loss	 	 	-	 	 	 	-	 	 	 	710	 	 	 	113	 	 	 	-	 	 	 	710	 	 	 	113	 	
Changes in operating assets and liabilities, net of effect of acquisitions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	850	 	 	 	(1,817	)	 	 	(4,669	)	 	 	(742	)	 	 	(6,481	)	 	 	(16,401	)	 	 	(2,606	)	
Prepaid rent	 	 	(29,274	)	 	 	(25,596	)	 	 	(34,442	)	 	 	(5,472	)	 	 	(82,649	)	 	 	(75,820	)	 	 	(12,047	)	
Inventories	 	 	(7,755	)	 	 	(4,637	)	 	 	(4,736	)	 	 	(752	)	 	 	(9,407	)	 	 	(12,792	)	 	 	(2,032	)	
Amount due from related parties	 	 	273	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,365	 	 	 	3,267	 	 	 	519	 	
Other current assets	 	 	(8,572	)	 	 	(867	)	 	 	(14,701	)	 	 	(2,336	)	 	 	(13,404	)	 	 	(15,684	)	 	 	(2,492	)	
Other assets	 	 	(3,029	)	 	 	(12,713	)	 	 	176	 	 	 	28	 	 	 	(17,841	)	 	 	(22,102	)	 	 	(3,512	)	
Accounts payable	 	 	(4,670	)	 	 	4,255	 	 	 	(627	)	 	 	(100	)	 	 	3,478	 	 	 	3,435	 	 	 	546	 	
Amount due to related parties	 	 	(724	)	 	 	217	 	 	 	(290	)	 	 	(46	)	 	 	(72	)	 	 	175	 	 	 	28	 	
Salary and welfare payables	 	 	18,363	 	 	 	(12,156	)	 	 	37,718	 	 	 	5,993	 	 	 	28,042	 	 	 	22,628	 	 	 	3,595	 	
Deferred revenue	 	 	7,982	 	 	 	26,212	 	 	 	26,549	 	 	 	4,218	 	 	 	42,283	 	 	 	92,803	 	 	 	14,745	 	
Accrued expenses and other current liabilities	 	 	(3,697	)	 	 	1,082	 	 	 	169	 	 	 	27	 	 	 	16,290	 	 	 	34,246	 	 	 	5,441	 	
Income tax payable and receivable	 	 	(22,239	)	 	 	(4,052	)	 	 	34,290	 	 	 	5,448	 	 	 	11,252	 	 	 	7,350	 	 	 	1,168	 	
Other long-term liabilities	 	 	5,098	 	 	 	4,813	 	 	 	5,469	 	 	 	869	 	 	 	9,732	 	 	 	16,891	 	 	 	2,684	 	
Net cash provided by operating activities	 	 	74,512	 	 	 	124,002	 	 	 	143,248	 	 	 	22,760	 	 	 	469,126	 	 	 	467,064	 	 	 	74,210	 	
Investing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(156,366	)	 	 	(222,267	)	 	 	(208,746	)	 	 	(33,166	)	 	 	(397,252	)	 	 	(768,756	)	 	 	(122,143	)	
Purchases of intangibles	 	 	(3,553	)	 	 	(563	)	 	 	(13,037	)	 	 	(2,071	)	 	 	(7,630	)	 	 	(14,674	)	 	 	(2,331	)	
Amount received as a result of government zoning	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	6,900	 	 	 	1,096	 	
Acquisitions, net of cash received	 	 	(9,653	)	 	 	(3,740	)	 	 	(9,540	)	 	 	(1,516	)	 	 	(9,653	)	 	 	(57,822	)	 	 	(9,187	)	
Purchase of short term investment	 	 	(430,000	)	 	 	(30,000	)	 	 	-	 	 	 	-	 	 	 	(430,000	)	 	 	(30,000	)	 	 	(4,767	)	
Proceeds from sales of short-term investments	 	 	330,000	 	 	 	-	 	 	 	30,000	 	 	 	4,767	 	 	 	330,000	 	 	 	130,000	 	 	 	20,655	 	
Decrease (increase) in restricted cash	 	 	11,000	 	 	 	(1,724	)	 	 	4,000	 	 	 	636	 	 	 	(775	)	 	 	(225	)	 	 	(36	)	
Net cash used in investing activities	 	 	(258,572	)	 	 	(258,294	)	 	 	(197,323	)	 	 	(31,350	)	 	 	(515,310	)	 	 	(734,577	)	 	 	(116,713	)	
Financing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net proceeds from issuance of ordinary shares	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	959,104	 	 	 	-	 	 	 	-	 	
Ordinary share issuance costs, net of exisiting shareholder reimbursements	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	3,930	 	 	 	-	 	 	 	-	 	
Net proceeds from exercise of warrants	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	17,873	 	 	 	-	 	 	 	-	 	
Net proceeds from issuance of ordinary shares upon exercise of option	 	 	21	 	 	 	918	 	 	 	2,076	 	 	 	330	 	 	 	41,125	 	 	 	7,285	 	 	 	1,157	 	
Proceeds from long-term bank loans	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	70,000	 	 	 	-	 	 	 	-	 	
Repayment of long term debt	 	 	(24,000	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(207,000	)	 	 	-	 	 	 	-	 	
Funds advanced from noncontrolling shareholders	 	 	739	 	 	 	2,000	 	 	 	-	 	 	 	-	 	 	 	2,778	 	 	 	3,485	 	 	 	554	 	
Repayment of funds advanced from noncontrolling interest holders	 	 	(1,483	)	 	 	(252	)	 	 	(533	)	 	 	(85	)	 	 	(23,715	)	 	 	(2,568	)	 	 	(408	)	
Acquisition of non controlling interests	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(17,100	)	 	 	-	 	 	 	-	 	
Proceeds from sales of partial ownership interest in one subsidiary	 	 	1,130	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,130	 	 	 	-	 	 	 	-	 	
Contribution from noncontrolling interest holders	 	 	-	 	 	 	234	 	 	 	-	 	 	 	-	 	 	 	10	 	 	 	459	 	 	 	73	 	
Dividend paid to noncontrolling interest holders	 	 	-	 	 	 	(192	)	 	 	(127	)	 	 	(20	)	 	 	(2,299	)	 	 	(3,151	)	 	 	(501	)	
Net cash provided by (used in)  financing activities	 	 	(23,593	)	 	 	2,708	 	 	 	1,416	 	 	 	225	 	 	 	845,836	 	 	 	5,510	 	 	 	875	 	
Effect of exchange rate changes on cash and cash equivalents	 	 	(3,990	)	 	 	(6,016	)	 	 	(2,841	)	 	 	(453	)	 	 	(10,172	)	 	 	(16,463	)	 	 	(2,616	)	
Net increase (decrease) in cash and cash equivalents	 	 	(211,643	)	 	 	(137,600	)	 	 	(55,500	)	 	 	(8,818	)	 	 	789,480	 	 	 	(278,466	)	 	 	(44,244	)	
Cash and cash equivalents, beginning of period	 	 	1,271,710	 	 	 	974,701	 	 	 	837,101	 	 	 	133,002	 	 	 	270,587	 	 	 	1,060,067	 	 	 	168,428	 	
Cash and cash equivalents, end of period	 	 	1,060,067	 	 	 	837,101	 	 	 	781,601	 	 	 	124,184	 	 	 	1,060,067	 	 	 	781,601	 	 	 	124,184	 	

15

 
China Lodging Group, Limited	 	
Unaudited reconciliation of GAAP and Non-GAAP Results	 	
 	 	
 	 	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	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Quarter Ended December 31, 2011	 	
 	 	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	 	 	78,461	 	 	 	75.9	%	 	 	85	 	 	 	0.1	%	 	 	78,376	 	 	 	75.8	%	
Selling and marketing expenses	 	 	4,656	 	 	 	4.5	%	 	 	28	 	 	 	0.0	%	 	 	4,628	 	 	 	4.5	%	
General and administrative expenses	 	 	6,958	 	 	 	6.7	%	 	 	341	 	 	 	0.3	%	 	 	6,617	 	 	 	6.4	%	
Pre-opening expenses	 	 	7,858	 	 	 	7.6	%	 	 	-	 	 	 	0.0	%	 	 	7,858	 	 	 	7.6	%	
Total operating costs and expenses	 	 	97,933	 	 	 	94.7	%	 	 	454	 	 	 	0.4	%	 	 	97,479	 	 	 	94.3	%	
Income from operations	 	 	5,459	 	 	 	5.3	%	 	 	454	 	 	 	0.4	%	 	 	5,913	 	 	 	5.7	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Quarter Ended September 30, 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	 	 	452,579	 	 	 	72.2	%	 	 	549	 	 	 	0.1	%	 	 	452,030	 	 	 	72.1	%	
Selling and marketing expenses	 	 	24,857	 	 	 	4.0	%	 	 	216	 	 	 	0.0	%	 	 	24,641	 	 	 	4.0	%	
General and administrative expenses	 	 	39,359	 	 	 	6.3	%	 	 	4,282	 	 	 	0.7	%	 	 	35,077	 	 	 	5.6	%	
Pre-opening expenses	 	 	54,015	 	 	 	8.6	%	 	 	-	 	 	 	0.0	%	 	 	54,015	 	 	 	8.6	%	
Total operating costs and expenses	 	 	570,810	 	 	 	91.1	%	 	 	5,047	 	 	 	0.8	%	 	 	565,763	 	 	 	90.3	%	
Income from operations	 	 	55,876	 	 	 	8.9	%	 	 	5,047	 	 	 	0.8	%	 	 	60,923	 	 	 	9.7	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Quarter Ended December 31, 2010	 	
 	 	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	 	 	323,252	 	 	 	71.4	%	 	 	425	 	 	 	0.1	%	 	 	322,827	 	 	 	71.3	%	
Selling and marketing expenses	 	 	19,212	 	 	 	4.2	%	 	 	138	 	 	 	0.0	%	 	 	19,074	 	 	 	4.2	%	
General and administrative expenses	 	 	33,389	 	 	 	7.4	%	 	 	2,874	 	 	 	0.6	%	 	 	30,515	 	 	 	6.8	%	
Pre-opening expenses	 	 	45,901	 	 	 	10.1	%	 	 	-	 	 	 	0.0	%	 	 	45,901	 	 	 	10.1	%	
Total operating costs and expenses	 	 	421,754	 	 	 	93.1	%	 	 	3,437	 	 	 	0.7	%	 	 	418,317	 	 	 	92.4	%	
Income from operations	 	 	30,877	 	 	 	6.9	%	 	 	3,437	 	 	 	0.7	%	 	 	34,314	 	 	 	7.6	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	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	 	 	 	4.1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year Ended December 31, 2011	 	
 	 	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	 	 	270,633	 	 	 	75.7	%	 	 	336	 	 	 	0.1	%	 	 	270,297	 	 	 	75.6	%	
Selling and marketing expenses	 	 	15,055	 	 	 	4.2	%	 	 	124	 	 	 	0.0	%	 	 	14,931	 	 	 	4.2	%	
General and administrative expenses	 	 	25,431	 	 	 	7.1	%	 	 	2,000	 	 	 	0.6	%	 	 	23,431	 	 	 	6.5	%	
Pre-opening expenses	 	 	29,282	 	 	 	8.2	%	 	 	-	 	 	 	0.0	%	 	 	29,282	 	 	 	8.2	%	
Total operating costs and expenses	 	 	340,401	 	 	 	95.2	%	 	 	2,460	 	 	 	0.7	%	 	 	337,941	 	 	 	94.5	%	
Income from operations	 	 	17,024	 	 	 	4.8	%	 	 	2,460	 	 	 	0.7	%	 	 	19,484	 	 	 	4.1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year Ended December 31, 2010	 	
 	 	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	 	 	1,180,202	 	 	 	67.9	%	 	 	1,555	 	 	 	0.1	%	 	 	1,178,647	 	 	 	67.8	%	
Selling and marketing expenses	 	 	70,786	 	 	 	4.1	%	 	 	778	 	 	 	0.0	%	 	 	70,008	 	 	 	4.1	%	
General and administrative expenses	 	 	119,989	 	 	 	6.9	%	 	 	10,780	 	 	 	0.6	%	 	 	109,209	 	 	 	6.3	%	
Pre-opening expenses	 	 	111,210	 	 	 	6.4	%	 	 	-	 	 	 	0.0	%	 	 	111,210	 	 	 	6.4	%	
Total operating costs and expenses	 	 	1,482,187	 	 	 	85.3	%	 	 	13,113	 	 	 	0.8	%	 	 	1,469,074	 	 	 	84.5	%	
Income from operations	 	 	256,306	 	 	 	14.7	%	 	 	13,113	 	 	 	0.8	%	 	 	269,419	 	 	 	13.9	%	

16

 
China Lodging Group, Limited	 	
Unaudited reconciliation of GAAP and Non-GAAP Results	 	
 	 	
 	 	Quarter Ended	 	 	Year Ended	 	
 	 	December 31, 2010	 	 	September 30, 2011	 	 	December 31, 2011	 	 	December 31, 2010	 	 	December 31, 2011	 	
 	 	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)	 	 	34,920	 	 	 	58,177	 	 	 	30,300	 	 	 	4,814	 	 	 	215,751	 	 	 	114,832	 	 	 	18,245	 	
Share-based compensation expenses	 	 	3,437	 	 	 	5,047	 	 	 	2,858	 	 	 	454	 	 	 	13,113	 	 	 	15,483	 	 	 	2,460	 	
Adjusted net income attributable to China Lodging Group, Limited (non-GAAP)	 	 	38,357	 	 	 	63,224	 	 	 	33,158	 	 	 	5,268	 	 	 	228,864	 	 	 	130,315	 	 	 	20,705	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings per share (GAAP)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	0.14	 	 	 	0.24	 	 	 	0.12	 	 	 	0.02	 	 	 	1.05	 	 	 	0.47	 	 	 	0.08	 	
— Diluted	 	 	0.14	 	 	 	0.24	 	 	 	0.12	 	 	 	0.02	 	 	 	0.92	 	 	 	0.47	 	 	 	0.08	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings per ADS (GAAP)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	0.58	 	 	 	0.96	 	 	 	0.50	 	 	 	0.08	 	 	 	4.19	 	 	 	1.90	 	 	 	0.30	 	
— Diluted	 	 	0.57	 	 	 	0.94	 	 	 	0.49	 	 	 	0.08	 	 	 	3.68	 	 	 	1.87	 	 	 	0.30	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net earnings per share (non-GAAP)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	0.16	 	 	 	0.26	 	 	 	0.14	 	 	 	0.02	 	 	 	1.15	 	 	 	0.54	 	 	 	0.09	 	
— Diluted	 	 	0.16	 	 	 	0.26	 	 	 	0.13	 	 	 	0.02	 	 	 	0.98	 	 	 	0.53	 	 	 	0.08	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net earnings per ADS (non-GAAP)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	0.64	 	 	 	1.04	 	 	 	0.55	 	 	 	0.09	 	 	 	4.61	 	 	 	2.15	 	 	 	0.34	 	
— Diluted	 	 	0.62	 	 	 	1.03	 	 	 	0.54	 	 	 	0.09	 	 	 	3.90	 	 	 	2.12	 	 	 	0.34	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average ordinary shares outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
— Basic	 	 	241,087	 	 	 	242,264	 	 	 	242,461	 	 	 	242,461	 	 	 	198,517	 	 	 	241,928	 	 	 	241,928	 	
— Diluted	 	 	246,623	 	 	 	246,272	 	 	 	245,896	 	 	 	245,896	 	 	 	234,481	 	 	 	246,181	 	 	 	246,181	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Quarter Ended	 	 	Year Ended	 	
 	 	December 31, 2010	 	 	September 30, 2011	 	 	December 31, 2011	 	 	December 31, 2010	 	 	December 31, 2011	 	
 	 	RMB	 	 	RMB	 	 	RMB	 	 	US$	 	 	RMB	 	 	RMB	 	 	US$	 	
 	 	(in thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to China Lodging Group, Limited (GAAP)	 	 	34,920	 	 	 	58,177	 	 	 	30,300	 	 	 	4,814	 	 	 	215,751	 	 	 	114,832	 	 	 	18,245	 	
Interest expenses	 	 	272	 	 	 	213	 	 	 	213	 	 	 	34	 	 	 	2,682	 	 	 	882	 	 	 	140	 	
Income tax expense	 	 	8,093	 	 	 	7,174	 	 	 	11,192	 	 	 	1,778	 	 	 	57,262	 	 	 	24,816	 	 	 	3,943	 	
Depreciation and amortization	 	 	49,587	 	 	 	59,583	 	 	 	70,328	 	 	 	11,174	 	 	 	171,539	 	 	 	236,857	 	 	 	37,633	 	
EBITDA (non-GAAP)	 	 	92,872	 	 	 	125,147	 	 	 	112,033	 	 	 	17,800	 	 	 	447,234	 	 	 	377,387	 	 	 	59,961	 	
Pre-opening expenses	 	 	45,901	 	 	 	54,015	 	 	 	49,460	 	 	 	7,858	 	 	 	111,210	 	 	 	184,298	 	 	 	29,282	 	
Share-based Compensation	 	 	3,437	 	 	 	5,047	 	 	 	2,858	 	 	 	454	 	 	 	13,113	 	 	 	15,483	 	 	 	2,460	 	
Adjusted EBITDA from operating hotels (non-GAAP)	 	 	142,210	 	 	 	184,209	 	 	 	164,351	 	 	 	26,112	 	 	 	571,557	 	 	 	577,168	 	 	 	91,703	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Quarter Ended	 	 	Year Ended	 	
 	 	December 31, 2010	 	 	September 30, 2011	 	 	December 31, 2011	 	 	December 31, 2010	 	 	December 31, 2011	 	
 	 	RMB	 	 	RMB	 	 	RMB	 	 	US$	 	 	RMB	 	 	RMB	 	 	US$	 	
 	 	(in thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net revenues (GAAP)	 	 	452,631	 	 	 	626,686	 	 	 	650,737	 	 	 	103,392	 	 	 	1,738,493	 	 	 	2,249,597	 	 	 	357,425	 	
Less:  Hotel operating costs	 	 	(323,252	)	 	 	(452,579	)	 	 	(493,819	)	 	 	(78,461	)	 	 	(1,180,202	)	 	 	(1,703,337	)	 	 	(270,633	)	
Hotel income (non-GAAP)	 	 	129,379	 	 	 	174,107	 	 	 	156,918	 	 	 	24,931	 	 	 	558,291	 	 	 	546,260	 	 	 	86,792	 	

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China Lodging Group, Limited	 	
Operational Data	 	 	 	 	 	 	 	 	 	
 	 	As of	 	
 	 	December 31,	 	 	September 30,	 	 	December 31,	 	
 	 	2010	 	 	2011	 	 	2011	 	
Total hotels in operation:	 	 	438	 	 	 	580	 	 	 	639	 	
  Leased-and-operated hotels	 	 	243	 	 	 	314	 	 	 	344	 	
  Franchised-and-managed hotels	 	 	195	 	 	 	266	 	 	 	295	 	
Total Hotel rooms in operation	 	 	50,438	 	 	 	65,524	 	 	 	71,621	 	
  Leased-and-operated hotels	 	 	29,888	 	 	 	37,229	 	 	 	40,514	 	
  Franchised-and-managed hotels	 	 	20,550	 	 	 	28,295	 	 	 	31,107	 	
Number of cities	 	 	65	 	 	 	92	 	 	 	100	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	For the quarter ended	 	
 	 	December 31,	 	 	September 30,	 	 	December 31,	 	
 	 	 	2010	 	 	 	2011	 	 	 	2011	 	
Occupancy rate (as a percentage)	 	 	 	 	 	 	 	 	 	
  Leased-and-operated hotels	 	 	87	%	 	 	95	%	 	 	92	%	
  Franchised-and-managed hotels	 	 	86	%	 	 	99	%	 	 	95	%	
  Total hotels in operation	 	 	87	%	 	 	97	%	 	 	93	%	
Average daily room rate (in RMB)	 	 	 	 	 	 	 	 	 	
  Leased-and-operated hotels	 	 	200	 	 	 	187	 	 	 	184	 	
  Franchised-and-managed hotels	 	 	186	 	 	 	178	 	 	 	173	 	
  Total hotels in operation	 	 	194	 	 	 	183	 	 	 	179	 	
RevPAR (in RMB)	 	 	 	 	 	 	 	 	 	 	 	 	
  Leased-and-operated hotels	 	 	174	 	 	 	178	 	 	 	170	 	
  Franchised-and-managed hotels	 	 	160	 	 	 	175	 	 	 	164	 	
  Total hotels in operation	 	 	168	 	 	 	177	 	 	 	167	 	

Like-for-like performance for hotels opened for at least 18 months during the current quarter	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	As of and for the quarter ended	 	 	 	 	 	
 	 	December 31,	 	 	 	 	 	
 	 	 	2010	 	 	 	2011	 	 	 	 	 	
Total hotels in operation:	 	 	325	 	 	 	325	 	 	 	 	 	
  Leased-and-operated hotels	 	 	186	 	 	 	186	 	 	 	 	 	
  Franchised-and-managed hotels	 	 	139	 	 	 	139	 	 	 	 	 	
Total Hotel rooms in operation	 	 	37,669	 	 	 	37,669	 	 	 	 	 	
  Leased-and-operated hotels	 	 	22,951	 	 	 	22,951	 	 	 	 	 	
  Franchised-and-managed hotels	 	 	14,718	 	 	 	14,718	 	 	 	 	 	
Occupancy rate (as a percentage)	 	 	90	%	 	 	98	%	 	 	 	 	
Average daily rate (in RMB)	 	 	195	 	 	 	188	 	 	 	 	 	
RevPAR (in RMB)	 	 	175	 	 	 	184	 	 	 	 	 	

18