March 14, 2017

China Lodging Group, Limited Reports Fourth Quarter and Full Year 2016 Financial Results

  • A total of 3,269 hotels or 331,347 hotel rooms in operation as of December 31, 2016.
  • Net revenues increased 10.9% year-over-year to RMB1,669.9 million (US$240.5 million) 1 for the fourth quarter and 13.2% to RMB6,538.6 million (US$941.8 million) for the full year of 2016, in line with the guidance previously announced.
  • Adjusted EBITDA (non-GAAP) increased 18.4% year-over-year to RMB379.3 million (US$54.6 million) for the fourth quarter and increased 34.9% to RMB1,785.8 million (US$257.2 million) for the full year of 2016. 
  • Net income attributable to China Lodging Group, Limited was RMB125.9 million (US$18.1 million) for the fourth quarter and RMB804.6 million (US$115.9 million) for the full year of 2016, increasing 77.9% year-over-year for the fourth quarter and increasing 84.3% for the full year of 2016. 
  • Basic earnings per ADS2 were RMB1.81 (US$0.26) for the fourth quarter of 2016 and RMB11.70 (US$1.68) for the full year of 2016. Diluted earnings per ADS were RMB1.76 (US$0.25) for the fourth quarter of 2016 and RMB11.38 (US$1.64) for the full year of 2016. Excluding share-based compensation expenses, adjusted basic earnings per ADS (non-GAAP) were RMB1.99 (US$0.29) for the fourth quarter of 2016 and RMB12.50 (US$1.80) for the full year of 2016 and adjusted diluted earnings per ADS (non-GAAP) were RMB1.94 (US$0.28) for the fourth quarter of 2016 and RMB12.16 (US$1.75) for the full year of 2016.
  • The Company provided guidance for Q1 2017 net revenues growth of 7.2% to 8.4% and full year 2017 net revenues growth of 8% to 12%.

SHANGHAI, China, March 15, 2017 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (NASDAQ:HTHT) ("China Lodging Group", "Huazhu" or the "Company"), a leading and fast-growing multi-brand hotel group in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2016.

Operational Highlights of Fourth Quarter 2016

  • During the fourth quarter of 2016, the Company opened 10 leased ("leased-and-owned") hotels and 138 manachised ("franchised-and-managed") and franchised hotels, and closed 11 leased hotels and 66 manachised and franchised hotels.

  • The ADR, which is defined as the average daily rate for all hotels in operation (excluding certain franchised Starway hotels), was RMB186 in the fourth quarter of 2016, compared with RMB177 in the fourth quarter of 2015 and RMB194 in the previous quarter. The year-over-year increase of 5.2% was mainly attributable to more favorable brand mix with an increased proportion of midscale and upscale hotels in operation. The sequential decrease resulted mainly from seasonality.

  • The occupancy rate for all hotels in operation (excluding certain franchised Starway hotels) was 84.7% in the fourth quarter of 2016, compared with 84.3% in the fourth quarter of 2015 and 88.9% in the previous quarter. The slight year-over-year increase was mainly due to improved occupancy in mature hotels. The sequential decrease resulted mainly from seasonality.

  • RevPAR, defined as revenue per available room for all hotels in operation (excluding certain franchised Starway hotels), was RMB158 in the fourth quarter of 2016, compared with RMB149 in the fourth quarter of 2015 and RMB173 in the previous quarter. The year-over-year increase was a result of higher ADR and higher occupancy rate. The sequential decrease resulted mainly from seasonality.

  • For all hotels which had been in operation for at least 18 months (excluding certain franchised Starway hotels), the same-hotel RevPAR was RMB157 for the fourth quarter of 2016, a 2.5% increase from RMB153 for the fourth quarter of 2015, with a 1.6% increase in ADR and a 0.7-percentage-point increase in occupancy rate. The midscale and upscale hotels registered an 8.9% same-hotel RevPAR improvement, with a 7.6% increase in ADR and 1-percentage-point increase in occupancy rate.

Operational Highlights of Full Year 2016

  • For the full year of 2016, the Company opened 33 leased hotels and 704 manachised and franchised hotels, and closed 25 leased hotels and 206 manachised and franchised hotels. As of December 31, 2016, the Company had 624 leased hotels, 2,471 manachised hotels, and 174 franchised hotels in operation in 367 cities. The number of hotel rooms in operation totaled 331,347, an increase of 18.8% from a year ago.

  • As of December 31, 2016, the Company had 15 leased hotels and 427 manachised and franchised hotels contracted or under construction.

  • For the full year of 2016, the ADR for all hotels in operation (excluding certain franchised Starway hotels) was RMB185, compared to RMB179 in 2015.

  • For the full year of 2016, the occupancy rate for all hotels in operation (excluding certain franchised Starway hotels) was 84.9%, compared with 85.3% in 2015. The slight decline in occupancy rate was due to lower occupancy of our new brands, and partially offset by improved occupancy in mature hotels.

  • For the full year of 2016, the RevPAR for all hotels in operation (excluding certain franchised Starway hotels), was RMB157, a 2.7% increase from RMB153 in 2015. The increase was a result of higher ADR.

  • For all the hotels which had been in operation for at least 18 months (excluding certain franchised Starway hotels), the same-hotel RevPAR was RMB158 in 2016, a 0.4% increase from RMB157 in 2015, with a 0.5% increase in ADR and a 0.1-percentage-point drop in occupancy rate. In 2016, the midscale and upscale hotels registered an 8.3% same-hotel RevPAR improvement, with a 5.4% increase in ADR and 2.3-percentage-point increase in occupancy rate.

  • As of December 31, 2016, the Company's loyalty program had more than 78 million members, who contributed 80% of room nights sold during the full year of 2016. In 2016, more than 88% of room nights were sold through the Company's own channels.

"We are encouraged by our accelerated blended RevPAR growth this quarter. The year-over-year growth of 5.7% was fueled by the improved blended RevPAR of HanTing hotels thanks to upgrade to HanTing 2.0, coupled with continuously-growing demand for our midscale hotels. In the fourth quarter, the blended RevPAR of HanTing hotels increased by 3% year-over-year, with 31% of rooms under HanTing 2.0 model. We will continue the upgrade program of economy hotels in the next three years, so as to revitalize our flagship brand to attract more customers and franchisees," said Ms. Jenny Zhang, Chief Executive Officer of China Lodging Group.

"In 2017, our focus remains on product quality. In addition to our economy hotels upgrade program, we have also strengthened the brand and operating standards for our existing hotels by removing a number of hotels that failed to comply with our standards. We have also increased the proportion of midscale and upscale hotels in the portfolio. For the full year 2016, midscale and upscale brands accounted for 29% of our net new openings, and 40% of our pipeline as of December 31, 2016. We believe our continued focus on quality and powerful brand portfolio will lead to better operational performance and financial results in the coming quarters," Jenny added.

Fourth Quarter and Full Year of 2016 Financial Results

(RMB in thousands)Q4 2015 Q3 2016 Q4 2016 2015 FY 2016 FY
Revenues:         
Leased and owned hotels 1,287,714   1,390,334  1,290,575  4,986,872   5,212,405 
Manachised and franchised hotels  305,573    373,239   367,983  1,123,979   1,411,156 
Others  -    10,233   11,365   -    31,219 
Total revenues 1,593,287   1,773,806  1,669,923  6,110,851   6,654,780 
Less: business tax and related surcharges  (86,972)   -   -   (336,227)   (116,149)
Net revenues 1,506,315   1,773,806  1,669,923  5,774,624   6,538,631 
Net revenues from leased and owned hotels 1,217,422   1,390,334  1,290,575  4,712,488   5,121,431 
Net revenues from manachised and franchised hotels  288,893    373,239   367,983  1,062,136   1,386,526 
Others  -    10,233   11,365   -    30,674 
             
Note: Value-added tax ("VAT") has been implemented for hospitality industry to replace business tax in China effective May 1, 2016. For comparison purpose, the net revenue for each business in Q4 2015 and full year of 2015 and 2016 are calculated with proportional allocation of business tax and related surcharges. 

Net revenues for the fourth quarter of 2016 were RMB1,669.9 million (US$240.5 million), representing a 10.9% year-over-year increase and a 5.9% sequential decrease. The year-over-year increase was primarily attributable to our hotel network expansion and improved blended RevPAR. The sequential decrease was due to seasonality.

Net revenues for the full year of 2016 were RMB6,538.6 million (US$941.8 million), representing an increase of 13.2% from the full year of 2015.

Net revenues from leased and owned hotels for the fourth quarter of 2016 were RMB1,290.6 million (US$185.9 million), representing a 6.0% year-over-year increase and a 7.2% sequential decrease.

For the full year of 2016, net revenues from leased and owned hotels were RMB5,121.4 million (US$737.6 million), representing a 8.7% year-over-year increase.

Net revenues from manachised and franchised hotels for the fourth quarter of 2016 were RMB368.0 million (US$53.0 million), representing a 27.4% year-over-year increase and a 1.4% sequential decrease.

For the full year of 2016, net revenues from manachised and franchised hotels were RMB 1,386.5 million (US$199.7 million), representing a 30.5% year-over-year increase. It accounts for 21.2% of net revenues, compared to 18.4% of net revenues for the year of 2015.

Other revenues represent revenues generated from other than the operation of hotel businesses, which mainly include revenues from Hua Zhu mall and the provision of IT products and services to hotels, totaling RMB11.4 million (US$1.6 million) in the fourth quarter of 2016.

For the full year of 2016, net revenues from other businesses were RMB30.7 million (US$4.5 million).

(RMB in thousands)Q4 2015 Q3 2016 Q4 2016 2015 FY 2016 FY
Operating costs and expenses:         
Hotel operating costs 1,198,604  1,249,701  1,264,602  4,512,147  4,932,173
Other operating costs  -   2,258   2,319   -   7,606
Selling and marketing expenses  46,791   31,264   46,142   179,568   146,525
General and administrative expenses   128,233   123,233   143,434   403,008   492,141
Pre-opening expenses  16,216   16,710   19,747   110,011   71,847
Total operating costs and expenses 1,389,844  1,423,166  1,476,244  5,204,734  5,650,292
          

Hotel operating costs for the fourth quarter of 2016 were RMB1,264.6 million (US$182.1 million), compared to RMB1,198.6 million in the fourth quarter of 2015 and RMB1,249.7 million in the previous quarter, representing a 5.5% year-over-year increase and a 1.2% sequential increase. Total hotel operating costs excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2016 were RMB1,260.9 million (US$181.6 million), representing 75.5% of net revenues, compared to 79.4% for the fourth quarter in 2015 and 70.3% for the previous quarter. The year-over-year decrease in the percentage was mainly attributable to the improved blended RevPAR and VAT deductions. The sequential increase in the percentage was mainly due to seasonality.

For the full year of 2016, hotel operating costs were RMB4,932.2 million (US$710.4 million), compared to RMB4,512.1 million in 2015. Excluding share-based compensation, hotel operating costs (non-GAAP) were RMB4,918.6 million (US$708.4 million), representing 75.2% of net revenues, compared to 77.9% in 2015.

Selling and marketing expenses for the fourth quarter of 2016 were RMB46.1 million (US$6.6 million), compared to RMB46.8 million in the fourth quarter of 2015 and RMB31.3 million in the previous quarter. Selling and marketing expenses excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2016 were RMB46.1 million (US$6.6 million), or 2.8% of net revenues, compared to 3.1% for the fourth quarter of 2015 and 1.8% for the previous quarter. The year-over-year decrease was mainly attributable to the adjustment related to membership point cost in the fourth quarter of 2016. The sequential increase in the percentage was mainly due to more marketing activities occurred at the year-end.

For the full year of 2016, selling and marketing expenses were RMB146.5 million (US$21.1 million), compared to RMB179.6 million in 2015. Selling and marketing expenses excluding share-based compensation expenses (non-GAAP) were RMB145.7 million (US$21.0 million), representing 2.2% of net revenues, compared to 3.1% in 2015. The year-over-year decrease was mainly attributable to the adjustment related to membership point cost in 2016.

General and administrative expenses for the fourth quarter of 2016 were RMB143.4 million (US$20.7 million), compared to RMB128.2 million in the fourth quarter of 2015 and RMB123.2 million in the previous quarter. General and administrative expenses excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2016 were RMB134.7 million (US$19.4 million), representing 8.1% of net revenues, compared with 7.7% of net revenues in the fourth quarter of 2015 and 6.5% in the previous quarter. The year-over-year and sequential increase in the percentage was mainly due to the increase of personnel costs and professional fees.

For the full year of 2016, general and administrative expenses were RMB492.1 million (US$70.9 million), compared to RMB403.0 million in 2015. General and administrative expenses excluding share-based compensation expenses (non-GAAP) were RMB451.1 million (US$65.0 million), representing 6.9% of net revenues, compared to 6.3% in 2015.

Pre-opening expenses for the fourth quarter of 2016 were RMB19.7 million (US$2.8 million), representing a 21.8% year-over-year increase and an 18.2% sequential increase. The increase was mainly due to more leased and owned hotels are under construction in the fourth quarter of 2016.

Pre-opening expenses for the full year of 2016 were RMB71.8 million (US$10.3 million), compared to RMB110.0 million in 2015, representing a year-over-year decrease of 34.7%. The decrease in pre-opening expenses was mainly attributable to fewer leased hotel opened or under construction in 2016 than in 2015. The pre-opening expenses as a percentage of net revenues decreased to 1.1% in 2016 from 1.9% in 2015.

Income from operations for the fourth quarter of 2016 was RMB185.7 million (US$26.7 million), compared to RMB130.6 million in the fourth quarter of 2015 and RMB351.0 million in the previous quarter. Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the fourth quarter of 2016 was RMB198.2 million (US$28.6 million), compared to adjusted income from operation (non-GAAP) of RMB144.5 million for the fourth quarter of 2015 and RMB362.9 million for the previous quarter. The adjusted operating margin,defined as adjusted operating income (non-GAAP) as percentage of net revenues, for the fourth quarter of 2016 was 11.8%, compared with 9.7% in the fourth quarter of 2015 and 20.4% in the previous quarter. The improved year-over-year adjusted operating margin was mainly attributable to improved blended RevPAR and VAT deductions. The sequential decrease in the margin was due to seasonality.

Income from operations for the full year of 2016 was RMB870.9 million (US$125.4 million), compared to RMB601.2 million in 2015. Excluding share-based compensation expenses, adjusted income from operations (non-GAAP) for the year of 2016 was RMB926.3 million (US$133.4 million), compared to RMB653.7 million for the year of 2015. The adjusted operating margin (non-GAAP) for the year of 2016 was 14.1%, compared with 11.4% for the year of 2015. The improvement of 2.7-percentage-points in the adjusted operating margin was mainly attributable to the higher blended RevPAR and VAT deductions in 2016.

Net income attributable to China Lodging Group, Limited for the fourth quarter of 2016 was RMB125.9 million (US$18.1 million), compared to RMB70.8 million in the fourth quarter of 2015 and RMB293.9 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 2016 was RMB138.4 million (US$19.9 million), representing a 63.4% year-over-year increase and a 54.7% sequential decrease.

Net income attributable to China Lodging Group, Limited for the full year of 2016 was RMB804.6 million (US$115.9 million), compared to RMB436.6 million in 2015. Excluding share-based compensation expenses, adjusted net income attributable to China Lodging Group (non-GAAP) for the full year of 2016 was RMB860.1 million (US$123.9 million), compared to RMB489.1 million in 2015. The year-over-year increase of 75.8% was mainly attributable to the expanded hotel network, improved blended RevPAR, and investment gain in 2016.

Basic and diluted earnings per share/ADS.  For the fourth quarter of 2016, basic earnings per share were RMB0.45 (US$0.07) and diluted earnings per share were RMB0.44 (US$0.06); basic earnings per ADS were RMB1.81 (US$0.26) and diluted earnings per ADS were RMB1.76 (US$0.25). For the fourth quarter of 2016, excluding share-based compensation expenses, adjusted basic earnings per share (non-GAAP) were RMB0.50 (US$0.07) and adjusted diluted earnings per share (non-GAAP) were RMB0.48 (US$0.07); adjusted basic earnings per ADS (non-GAAP) were RMB1.99 (US$0.29) and adjusted diluted earnings per ADS (non-GAAP) were RMB1.94 (US$0.28).

For the full year of 2016, basic earnings per share were RMB2.92 (US$0.42) and diluted earnings per share were RMB2.84 (US$0.41); basic earnings per ADS were RMB11.70 (US$1.68), while diluted earnings per ADS were RMB11.38 (US$1.64). For the full year of 2016, excluding share-based compensation expenses, adjusted basic earnings per share (non-GAAP) were RMB3.13 (US$0.45), while adjusted diluted earnings per share (non-GAAP) were RMB3.04 (US$0.44), and adjusted basic earnings per ADS (non-GAAP) were RMB12.50 (US$1.80), while adjusted diluted earnings per ADS (non-GAAP) were RMB12.16 (US$1.75).

EBITDA (non-GAAP) for the fourth quarter of 2016 was RMB366.8 million (US$52.8 million), compared with RMB 306.5 million in the fourth quarter of 2015 and RMB546.7 million in the previous quarter. Excluding share-based compensation expenses, adjusted EBITDA (non-GAAP) for the fourth quarter of 2016 was RMB379.3 million (US$54.6 million), compared with RMB320.4 million for the fourth quarter of 2015 and RMB558.5 million for the previous quarter.

EBITDA (non-GAAP) for the full year of 2016 was RMB1,730.3 million (US$249.2 million), compared to RMB1,271.7 million in 2015. Excluding share-based compensation expenses, adjusted EBITDA (non-GAAP) for the full year of 2016 was RMB1,785.8 million (US$257.2 million), compared with RMB1,324.2 million in 2015, representing a 34.9% year-over-year increase. The year-over-year increase was mainly due to the expansion of the Company's hotel network, the improved RevPAR and investment gain in 2016. The adjusted EBITDA margin (non-GAAP) for the year of 2016 was 27.3%, compared with 22.9% for the year of 2015.

Cash flow. Operating cash inflow for the fourth quarter of 2016 was RMB442.5 million (US$63.7 million). Investing cash outflow for the fourth quarter was RMB240.7 million (US$34.7 million).

Operating cash inflow for the full year of 2016 was RMB2,047.7 million (US$294.9 million), representing an increase of 17.0% from 2015. The significant growth was mainly due to the Company's fast network expansion with manachise and franchise models. Investing cash inflow for the full year of 2016 was RMB183.8 million (US$26.5 million), compared to investing cash outflow of RMB 1,550.4 million in 2015. The fluctuation was mainly attributable to cash from business acquisition, the maturity and sale of short-term investment like Home Inn, and decrease in restricted cash.

Cash and cash equivalents and Restricted cash. As of December 31, 2016, the Company had a total balance of cash and cash equivalents, restricted cash of RMB3,235.5 million (US$466.0 million).

Debt financing. As of December 31, 2016, the Company had a short-term loan balance of RMB298.3 million (US$43.0 million) and the total credit facility available to the Company was RMB250.0 million.

Business Outlook and Guidance for 2016
"We remain positive about the long-term prospects about China travel industry. In 2017, we continue our consistent execution of asset-light and multiple-brand strategy. We plan to add about 450-500 hotels, with approximately 40% for midscale and upscale hotels. The manachised and franchised hotels continue to be the vast majority of our new openings in 2017, which is similar to 2016," commented Mr. Ji.

In the first quarter of 2017, the Company expects net revenues to grow 7.2% to 8.4% year-over-year. For the full year 2017, the Company expects net revenues to grow 8% to 12% from 2016.

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

Conference Call
China Lodging Group's management will host a conference call at 9 p.m. ET, Tuesday, March 14, 2017 (or 9 a.m. on Wednesday, March 15, 2017 in the Shanghai/Hong Kong time zone) following the announcement. To participate in the event by telephone, please dial +1 (855) 500 8701 (for callers in the US), +86 400 120 0654 (for callers in China Mainland), +852 3018 6776 (for callers in Hong Kong) or +65 6713 5440 (for callers outside of the US, China Mainland, and Hong Kong) and enter pass code 7256 4976.  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 22, 2017. Please dial +1 (855) 452 5696 (for callers in the US) or +61 2 9003 4211 (for callers outside the US) and entering pass code 7256 4976.

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

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

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

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

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

Reconciliations of the Company's non-GAAP financial measures, including EBITDA and adjusted EBITDA, 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 hotel operator and franchisor in China under 12 brand names. As of December 31, 2016, the Company had 3,269 hotels or 331,347 rooms in operation in 367 cities. With a primary focus on economy and midscale hotel segments, China Lodging Group's brands include Hi Inn, HanTing Hotel, Elan Hotel, JI Hotel, Starway Hotel, Joya Hotel, and Manxin Hotels & Resorts. The Company also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region.

The Company's business includes leased, manachised and franchised models. Under the lease model, the Company directly operates hotels typically located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers it appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees but does not appoint on-site hotel managers. The Company applies a consistent standard and platform across all of its hotels. As of December 31, 2016, China Lodging Group operates 24 percent of its hotel rooms under lease model, 76 percent under manachise and franchise models.

For more information, please visit the Company's website: http://ir.huazhu.com.

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

1 The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.9430 on December 31, 2016 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.

2 Each ADS represents four of the Company's ordinary shares.

—Financial Tables and Operational Data Follow—

China Lodging Group, Limited 
Unaudited Condensed Consolidated Balance Sheets
 December 31, 2015 December 31, 2016
 RMB RMB US$
 (in thousands)
ASSETS     
Current assets:     
Cash and cash equivalents  1,237,838    3,235,007    465,938 
Restricted cash  360,500    500    72 
Short-term investments  506,407    -     -  
Accounts receivable, net  93,956    141,649    20,402 
Loan receivables  26,808    22,410    3,228 
Amounts due from related parties  16,157    98,453    14,180 
Prepaid rent  429,588    446,127    64,256 
Inventories  24,529    21,606    3,112 
Other current assets  167,995    208,929    30,091 
Total current assets  2,863,778    4,174,681    601,279 
      
Property and equipment, net  3,805,886    3,710,468    534,419 
Intangible assets, net  144,812    342,694    49,358 
Land use right  -     145,521    20,959 
Long-term investments  344,242    1,064,321    153,294 
Goodwill  108,344    171,504    24,702 
Loan receivables  12,336    7,269    1,047 
Other assets  195,446    200,492    28,877 
Deferred tax assets  218,677    176,414    25,409 
Total assets  7,693,521    9,993,364    1,439,344 
      
LIABILITIES AND EQUITY     
Current liabilities:     
Short-term debt  324,680    298,291    42,963 
Accounts payable  585,347    584,731    84,219 
Amounts due to related parties  7,653    11,058    1,593 
Salary and welfare payable  210,955    274,259    39,501 
Deferred revenue  705,607    749,793    107,993 
Accrued expenses and other current liabilities  576,160    895,837    129,027 
Dividends payable  276,261    -     -  
Income tax payable  102,810    152,112    21,909 
Total current liabilities  2,789,473    2,966,081    427,205 
      
Deferred rent  945,192    1,023,843    147,464 
Deferred revenue  180,861    166,963    24,048 
Other long-term liabilities  275,954    323,991    46,664 
Deferred tax liabilities  61,293    96,329    13,874 
Total liabilities  4,252,773    4,577,207    659,255 
      
Equity:     
Ordinary shares  186    204    29 
Treasury shares  (107,331)   (107,331)   (15,459)
Additional paid-in capital  2,470,099    3,699,056    532,776 
Retained earnings  1,007,559    1,812,174    261,007 
Accumulated other comprehensive income (loss)  59,596    (4,503)   (649)
Total China Lodging Group, Limited shareholders' equity  3,430,109    5,399,600    777,704 
Noncontrolling interest  10,639    16,557    2,385 
Total equity  3,440,748    5,416,157    780,089 
Total liabilities and equity  7,693,521    9,993,364    1,439,344 
      


China Lodging Group, Limited 
Unaudited Condensed Consolidated Statements of Comprehensive Income
 Quarter Ended Year Ended
 December 31, 2015 September 30, 2016 December 31, 2016 December 31, 2015 December 31, 2016
 RMB RMB RMB US$ RMB RMB US$
 (in thousands, except per share and per ADS data)
Revenues:             
Leased and owned hotels  1,287,714    1,390,334    1,290,575    185,881    4,986,872    5,212,405    750,743 
Manachised and franchised hotels  305,573    373,239    367,983    53,001    1,123,979    1,411,156    203,249 
Others  -     10,233    11,365    1,637    -     31,219    4,496 
Total revenues  1,593,287    1,773,806    1,669,923    240,519    6,110,851    6,654,780    958,488 
Less: business tax and related surcharges  (86,972)   -     -     -     (336,227)   (116,149)   (16,729)
Net revenues  1,506,315    1,773,806    1,669,923    240,519    5,774,624    6,538,631    941,759 
              
Operating costs and expenses:             
Hotel operating costs:             
Rents  (470,567)   (458,946)   (461,112)   (66,414)   (1,804,532)   (1,870,879)   (269,463)
Utilities  (85,288)   (85,953)   (78,451)   (11,299)   (341,620)   (345,615)   (49,779)
Personnel costs  (232,662)   (282,911)   (272,706)   (39,278)   (919,555)   (1,088,380)   (156,759)
Depreciation and amortization   (164,890)   (171,089)   (169,350)   (24,391)   (645,058)   (676,996)   (97,508)
Consumables, food and beverage   (130,017)   (122,071)   (127,864)   (18,416)   (485,099)   (494,764)   (71,261)
Others  (115,180)   (128,731)   (155,119)   (22,342)   (316,283)   (455,539)   (65,611)
Total hotel operating costs  (1,198,604)   (1,249,701)   (1,264,602)   (182,140)   (4,512,147)   (4,932,173)   (710,381)
Other operating costs  -     (2,258)   (2,319)   (334)   -     (7,606)   (1,095)
Selling and marketing expenses  (46,791)   (31,264)   (46,142)   (6,646)   (179,568)   (146,525)   (21,104)
General and administrative expenses   (128,233)   (123,233)   (143,434)   (20,659)   (403,008)   (492,141)   (70,883)
Pre-opening expenses  (16,216)   (16,710)   (19,747)   (2,844)   (110,011)   (71,847)   (10,348)
Total operating costs and expenses  (1,389,844)   (1,423,166)   (1,476,244)   (212,623)   (5,204,734)   (5,650,292)   (813,811)
Other operating income (expense), net  14,111    399    (7,961)   (1,147)   31,264    (17,440)   (2,512)
Income from operations  130,582    351,039    185,718    26,749    601,154    870,899    125,436 
Interest income  9,007    19,154    22,939    3,304    26,712    67,366    9,703 
Interest expense  (1,606)   (2,158)   (2,289)   (329)   (3,854)   (11,056)   (1,592)
Other income  2,855    11,577    (3,207)   (462)   6,979    133,755    19,265 
Foreign exchange gain  4,533    1,800    10,341    1,489    7,814    16,481    2,373 
Income before income taxes  145,371    381,412    213,502    30,751    638,805    1,077,445    155,185 
Income tax expense  (73,742)   (94,204)   (87,745)   (12,638)   (196,529)   (287,120)   (41,354)
Income (Loss) from equity method investments  (791)   2,277    3,734    538    (2,896)   6,157    886 
Net income  70,838    289,485    129,491    18,651    439,380    796,482    114,717 
Less: net  loss (income) attributable to noncontrolling interests  (78)   4,384    (3,633)   (524)   (2,780)   8,133    1,171 
Net income attributable to China Lodging Group, Limited  70,760    293,869    125,858    18,127    436,600    804,615    115,888 
Other comprehensive income             
Unrealized securities holding gains (losses), net of tax  106,600    10,395    3,278    472    68,069    16,449    2,369 
Reclassification adjustment of unrealized securities holding gains, net of tax, for gain included in net income  -     -     -     -     -     (67,921)   (9,783)
Foreign currency translation adjustments, net of tax   3,342    (1,547)   (6,911)   (995)   3,535    (12,627)   (1,819)
Comprehensive income  180,780    298,333    125,858    18,128    510,984    732,383    105,484 
Comprehensive loss (income) attributable to the noncontrolling interest  (78)   4,384    (3,633)   (524)   (2,780)   8,133    1,171 
Comprehensive income attributable to China Lodging Group, Limited  180,702    302,717    122,225    17,604    508,204    740,516    106,655 
              
Earnings per share:             
Basic  0.28    1.06    0.45    0.07    1.74    2.92    0.42 
Diluted  0.28    1.03    0.44    0.06    1.70    2.84    0.41 
              
Earnings per ADS:             
Basic  1.13    4.24    1.81    0.26    6.97    11.70    1.68 
Diluted  1.10    4.12    1.76    0.25    6.82    11.38    1.64 
              
Weighted average number of shares used in computation:             
Basic  249,674    277,169    277,473    277,473    250,533    275,139    275,139 
Diluted  256,546    285,426    285,887    285,887    256,104    282,889    282,889 
              


China Lodging Group, Limited 
Unaudited Condensed Consolidated Statements of Cash Flows
 Quarter Ended Year Ended 
 December 31, 2015 September 30, 2016 December 31, 2016 December 31, 2015 December 31, 2016 
 RMB RMB RMB US$ RMB RMB US$ 
 (in thousands)
Operating activities:              
Net income  70,838    289,485    129,491    18,651    439,380    796,482    114,717  
Adjustments to reconcile net income to net cash provided by operating activities:              
Share-based compensation  13,909    11,813    12,527    1,805    52,535    55,436    7,984  
Depreciation and amortization  169,355    175,637    173,826    25,036    661,404    694,894    100,086  
Deferred taxes  (42,673)   6,426    30,809    4,437    (50,149)   33,446    4,817  
Bad debt expenses  1,909    (964)   1,200    173    1,997    1,082    156  
Deferred rent  32,440    20,923    29,764    4,287    130,301    103,322    14,881  
Loss (gain) from disposal of property and equipment  (5,519)   1,252    1,240    179    (5,519)   9,333    1,344  
Impairment loss  50,368    51,457    62,669    9,026    95,608    153,741    22,143  
Loss (Income) from equity method investments  791    (2,277)   (3,734)   (538)   2,896    (6,157)   (887) 
Investment loss (gain)  (2,766)   1,989    -    -    (2,767)   (116,763)   (16,817) 
Excess tax benefit from share-based compensation  (7,833)   (3,656)   (11,470)   (1,652)   (12,838)   (18,645)   (2,685) 
               
Changes in operating assets and liabilities, net of effect of acquisitions:              
Accounts receivable  (5,419)   (4,114)   922    133    (5,749)   (46,211)   (6,656) 
Prepaid rent  21,191    (22,304)   (43,153)   (6,215)   (44,430)   (25,380)   (3,655) 
Inventories  1,888    (565)   167    24    5,952    3,923    565  
Amounts due from related parties  -    1    (4,537)   (653)   -    (9,314)   (1,341) 
Other current assets  (27,515)   (21,681)   (11,803)   (1,700)   (15,518)   (40,813)   (5,878) 
Other assets  6,544    (6,451)   5,362    772    1,787    (5,046)   (727) 
Accounts payable  8,187    (1,107)   39,690    5,717    14,194    59,129    8,516  
Amounts due to related parties  1,332    1,764    1,796    259    1,250    7,489    1,079  
Salary and welfare payables  79,990    (27,150)   111,005    15,988    24,532    60,669    8,738  
Deferred revenue  80,235    (42,477)   (89,742)   (12,926)   216,805    19,529    2,813  
Accrued expenses and other current liabilities  58,797    126,971    3,665    528    121,502    202,351    29,145  
Income tax payable and receivable  58,255    54,895    (11,563)   (1,665)   56,019    64,087    9,230  
Other long-term liabilities  13,968    10,319    14,339    2,065    60,481    51,072    7,356  
Net cash provided by operating activities   578,272    620,186    442,470    63,731    1,749,673   2,047,656    294,924  
               
Investing activities:              
Purchases of property and equipment  (119,380)   (108,719)   (109,231)   (15,733)   (640,222)   (503,136)   (72,467) 
Purchases of intangibles  (1,182)   (5,122)   (3,517)   (507)   (8,818)   (13,557)   (1,953) 
Amount received as a result of government zoning  5,721    -    -    -    6,721    2,099    302  
Acquisitions, net of cash received  (3,633)   (2,926)   (1,683)   (242)   (19,153)   131,501    18,940  
Proceeds from disposal of subsidiary and branch, net of cash disposed  2,500    -    -    -    5,000    (20,668)   (2,977) 
Purchase of long-term investments  (31,168)   (17,130)   (152,321)   (21,939)   (105,707)   (293,125)   (42,219) 
Proceeds from maturity/sale of long-term investments  14,410    4,553    -    -    14,410    14,842    2,138  
Payment for shareholder loan to joint venture  (134)   (81)   (1,214)   (175)   (1,386)   (39,387)   (5,673) 
Collection of shareholder loan from joint venture  -    9,285    -    -    1,522    9,285    1,337  
Purchase of short-term investments  -    -    -    -    (434,811)   -    -  
Proceeds from sale of short-term investment  -    -    -    -    -    526,443    75,824  
Payment for the origination of loan receivables  (5,000)   (3,020)   -    -    (53,000)   (36,420)   (5,246) 
Proceeds from collection of loan receivables  32,706    5,401    25,622    3,690    45,587    45,885    6,609  
Decrease (increase) in restricted cash  219,500    358,343    1,657    239    (360,500)   360,000    51,851  
Net cash provided by (used in) investing activities  114,340    240,584    (240,687)   (34,667)   (1,550,357)   183,762    26,466  
               
Financing activities:              
Net proceeds from issuance of ordinary shares upon exercise of option  10,970    3,299    3,668    528    22,619    12,206    1,759  
Payment of share repurchase  -    -    -    -    (107,331)   -    -  
Proceeds from short-term debt  -    -    -    -    589,376    281,719    40,576  
Repayment of short-term debt  (269,424)   (332,555)   -    -    (283,516)   (332,555)   (47,898) 
Funds advanced from noncontrolling interest holders  5,432    -    7,453    1,073    5,432    11,453    1,650  
Repayment of funds advanced from noncontrolling interest holders  (120)   -    (400)   (58)   (900)   (600)   (86) 
Acquisition of noncontrolling interest  (2,042)   -    (4,083)   (588)   (4,083)   (4,083)   (588) 
Contribution from noncontrolling interest holders  200    800    10,500    1,512    2,450    45,604    6,568  
Dividend paid to noncontrolling interest holders  (120)   (1,935)   (612)   (88)   (4,604)   (3,677)   (530) 
Dividend paid  -    -    -    -    -    (276,261)   (39,790) 
Excess tax benefit from share-based compensation  7,833    3,656    11,470    1,652    12,838    18,645    2,685  
Net cash provided by (used in) financing activities  (247,271)   (326,735)   27,996    4,031    232,281    (247,549)   (35,654) 
               
Effect of exchange rate changes on cash and cash equivalents  (6,731)   1,444    3,397    489    (2,624)   13,300    1,916  
               
Net increase in cash and cash equivalents  438,610    535,479    233,176    33,584    428,973   1,997,169    287,652  
Cash and cash equivalents at the beginning of the period  799,228    2,466,352   3,001,831    432,354    808,865   1,237,838    178,286  
Cash and cash equivalents at the end of the period  1,237,838    3,001,831   3,235,007    465,938    1,237,838   3,235,007    465,938  
               


China Lodging Group, Limited 
Unaudited Reconciliation of GAAP and Non-GAAP Results
 Quarter Ended December 31, 2016
 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 1,264,602 75.7%   3,738 0.2%  1,260,864 75.5%
Other operating costs  2,319 0.1%   - 0.0%   2,319 0.1%
Selling and marketing expenses  46,142 2.8%   52 0.0%   46,090 2.8%
General and administrative expenses  143,434 8.6%   8,737 0.5%   134,697 8.1%
Pre-opening expenses  19,747 1.2%   - 0.0%   19,747 1.2%
Total operating costs and expenses 1,476,244 88.4%   12,527 0.7%  1,463,717 87.7%
Income from operations  185,718 11.1%   12,527 0.7%   198,245 11.8%
            
 Quarter Ended December 31, 2016
 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  182,140 75.7%   538 0.2%   181,602 75.5%
Other operating costs  334 0.1%   - 0.0%   334 0.1%
Selling and marketing expenses  6,646 2.8%   8 0.0%   6,638 2.8%
General and administrative expenses  20,659 8.6%   1,259 0.5%   19,400 8.1%
Pre-opening expenses  2,844 1.2%   - 0.0%   2,844 1.2%
Total operating costs and expenses  212,623 88.4%   1,805 0.7%   210,818 87.7%
Income from operations  26,749 11.1%   1,805 0.7%   28,554 11.8%
            
 Quarter Ended September 30, 2016
 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 1,249,701 70.5%   3,866 0.2%  1,245,835 70.3%
Other operating costs  2,258 0.1%   - 0.0%   2,258 0.1%
Selling and marketing expenses  31,264 1.8%   244 0.0%   31,020 1.8%
General and administrative expenses  123,233 6.9%   7,703 0.4%   115,530 6.5%
Pre-opening expenses  16,710 0.9%   - 0.0%   16,710 0.9%
Total operating costs and expenses 1,423,166 80.2%   11,813 0.6%  1,411,353 79.6%
Income from operations  351,039 19.8%   11,813 0.6%   362,852 20.4%
            
 Quarter Ended December 31, 2015
 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 1,198,604 79.6%   2,352 0.2%  1,196,252 79.4%
Other operating costs  - 0.0%   - 0.0%   - 0.0%
Selling and marketing expenses  46,791 3.1%   100 0.0%   46,691 3.1%
General and administrative expenses  128,233 8.5%   11,457 0.8%   116,776 7.7%
Pre-opening expenses  16,216 1.1%   - 0.0%   16,216 1.1%
Total operating costs and expenses 1,389,844 92.3%   13,909 1.0%  1,375,935 91.3%
Income from operations  130,582 8.7%   13,909 1.0%   144,491 9.7%
            
 Year Ended December 31, 2016
 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 4,932,173 75.4%   13,603 0.2%  4,918,570 75.2%
Other operating costs  7,606 0.1%   - 0.0%   7,606 0.1%
Selling and marketing expenses  146,525 2.2%   811 0.0%   145,714 2.2%
General and administrative expenses  492,141 7.5%   41,022 0.6%   451,119 6.9%
Pre-opening expenses  71,847 1.1%   - 0.0%   71,847 1.1%
Total operating costs and expenses 5,650,292 86.3%   55,436 0.8%  5,594,856 85.5%
Income from operations  870,899 13.3%   55,436 0.8%   926,335 14.1%
            
 Year Ended December 31, 2016
 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  710,381 75.4%   1,959 0.2%   708,422 75.2%
Other operating costs  1,095 0.1%   - 0.0%   1,095 0.1%
Selling and marketing expenses  21,104 2.2%   117 0.0%   20,987 2.2%
General and administrative expenses  70,883 7.5%   5,908 0.6%   64,975 6.9%
Pre-opening expenses  10,348 1.1%   - 0.0%   10,348 1.1%
Total operating costs and expenses  813,811 86.3%   7,984 0.8%   805,827 85.5%
Income from operations  125,436 13.3%   7,984 0.8%   133,420 14.1%
            
 Year Ended December 31, 2015
 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 4,512,147 78.1%   8,835 0.2%  4,503,312 77.9%
Other operating costs  - 0.0%   - 0.0%   - 0.0%
Selling and marketing expenses  179,568 3.1%   907 0.0%   178,661 3.1%
General and administrative expenses  403,008 7.0%   42,793 0.7%   360,215 6.3%
Pre-opening expenses  110,011 1.9%   - 0.0%   110,011 1.9%
Total operating costs and expenses 5,204,734 90.1%   52,535 0.9%  5,152,199 89.2%
Income from operations  601,154 10.5%   52,535 0.9%   653,689 11.4%
            


China Lodging Group, Limited 
 Unaudited Reconciliation of GAAP and Non-GAAP Results 
 Quarter Ended Year Ended
 December 31, 2015 September 30, 2016 December 31, 2016 December 31, 2015 December 31, 2016
 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)  70,760    293,869    125,858    18,127    436,600    804,615    115,888 
Share-based compensation expenses  13,909    11,813    12,527    1,805    52,535    55,436    7,984 
Adjusted net income attributable to China Lodging Group, Limited (non-GAAP)  84,669    305,682    138,385    19,932    489,135    860,051    123,872 
              
Earnings per share (GAAP)             
Basic  0.28    1.06    0.45    0.07    1.74    2.92    0.42 
Diluted  0.28    1.03    0.44    0.06    1.70    2.84    0.41 
              
Earnings per ADS (GAAP)             
Basic  1.13    4.24    1.81    0.26    6.97    11.70    1.68 
Diluted  1.10    4.12    1.76    0.25    6.82    11.38    1.64 
              
Adjusted earnings per share (non-GAAP)             
Basic  0.34    1.10    0.50    0.07    1.95    3.13    0.45 
Diluted  0.33    1.07    0.48    0.07    1.91    3.04    0.44 
              
Adjusted earnings per ADS (non-GAAP)             
Basic  1.36    4.41    1.99    0.29    7.81    12.50    1.80 
Diluted  1.32    4.28    1.94    0.28    7.64    12.16    1.75 
              
Weighted average number of shares used in computation             
Basic  249,674    277,169    277,473    277,473    250,533    275,139    275,139 
Diluted  256,546    285,426    285,887    285,887    256,104    282,889    282,889 
              
 Quarter Ended Year Ended
 December 31, 2015 September 30, 2016 December 31, 2016 December 31, 2015 December 31, 2016
 RMB RMB RMB US$ RMB RMB US$
 (in thousands)      
              
Net income attributable to China Lodging Group, Limited (GAAP)  70,760    293,869    125,858    18,127    436,600    804,615    115,888 
Interest income  (9,007)   (19,154)   (22,939)   (3,304)   (26,712)   (67,366)   (9,703)
Interest expenses  1,606    2,158    2,289    329    3,854    11,056    1,592 
Income tax expense  73,742    94,204    87,745    12,638    196,529    287,120    41,354 
Depreciation and amortization  169,355    175,637    173,826    25,036    661,404    694,894    100,086 
EBITDA (non-GAAP)  306,456    546,714    366,779    52,826    1,271,675  1,730,319    249,217 
Share-based Compensation  13,909    11,813    12,527    1,805    52,535    55,436    7,984 
Adjusted EBITDA (non-GAAP)  320,365    558,527    379,306    54,631    1,324,210  1,785,755    257,201 
              


China Lodging Group, Limited
Operational Data    
 As of 
 December 31, September 30,December 31, 
 201520162016
Total hotels in operation:  2,763   3,198   3,269 
Leased hotels  616   625   624 
Manachised hotels  2,067   2,399   2,471 
Franchised hotels  80   174   174 
Total hotel rooms in operation  278,843   322,785   331,347 
Leased hotels  75,436   77,158   78,160 
Manachised hotels  196,737   229,565   237,094 
Franchised hotels  6,670   16,062   16,093 
Number of cities  352 365   367 
    
 For the quarter ended
 December 31,September 30,December 31,
 201520162016
Occupancy rate (as a percentage)   
Leased hotels85.8%90.0%85.5%
Manachised hotels84.2%89.3%85.4%
Franchised hotels67.4%74.1%68.1%
Blended84.3%88.9%84.7%
Average daily room rate (in RMB)   
Leased hotels201 217 211 
Manachised hotels167 186 178 
Franchised hotels172 194 180 
Blended177 194 186 
RevPAR (in RMB)   
Leased hotels172 195 181 
Manachised hotels141 166 152 
Franchised hotels116 144 123 
Blended149 173 158 
    
 For the full year ended 
 December 31,December 31, 
 20152016 
Occupancy rate (as a percentage)   
Leased hotels86.6%86.1% 
Manachised hotels85.0%85.3% 
Franchised hotels70.1%68.9% 
Blended85.3%84.9% 
Average daily room rate (in RMB)   
Leased hotels198 208  
Manachised hotels170 177  
Franchised hotels177 182  
Blended179 185  
RevPAR (in RMB)   
Leased hotels172 179  
Manachised hotels145 151  
Franchised hotels124 125  
Blended153 157  


Same-hotel Operational Data: like-for-like performance for leased and manachised hotels opened for at least 18 months during the current quarter and full year
   
 As of and for the quarter ended
 December 31, 
 20152016
Total   2,205   2,205 
Leased hotels  583   583 
Manachised hotels  1,622   1,622 
Occupancy rate (as a percentage)86.4%87.1%
Average daily room rate (in RMB)177 180 
RevPAR (in RMB)153 157 
   
 As of and for full year ended
 December 31, 
 20152016
Total   2,205   2,205 
Leased hotels  583   583 
Manachised hotels  1,622   1,622 
Occupancy rate (as a percentage)87.4%87.4%
Average daily room rate (in RMB)180 181 
RevPAR (in RMB)157 158 


Hotel breakdown by segment  
   
 Number of hotels in operationNumber of Rooms
 As of As of 
 December 31, 2016December 31, 2016
Economy hotels2,813270,808
HanTing Hotel2,181221,157
Leased hotels48656,491
Manachised hotels1,694164,602
Franchised hotels164
Hi Inn37525,600
Leased hotels363,411
Manachised hotels29419,361
Franchised hotels452,828
Elan Hotel18513,800
Manachised hotels14911,121
Franchised hotels362,679
ibis Hotel7210,251
Leased hotels142,572
Manachised hotels121,753
Franchised hotels465,926
Midscale and upscale hotels45660,539
JI Hotel28439,664
Leased hotels8114,314
Manachised hotels20125,201
Franchised hotels2149
Starway Hotel13613,206
Leased hotels2386
Manachised hotels969,577
Franchised hotels383,243
Joya Hotel61,131
Leased hotels3523
Manachised hotels3608
Manxin Hotels & Resorts278
Leased hotels  
Manachised hotels278
ibis Styles Hotel 101,614
Manachised hotels 71,202
Franchised hotels 3412
Mercure Hotel154,026
Leased hotels2463
Manachised hotels123,285
Franchised hotels1278
Novotel Hotel2629
Manachised hotels1306
Franchised hotels1323
Grand Mercure 1191
Franchised hotels1191
Total3,269331,347
   


Same-hotel operational data by segment          
 Number of hotels in operationSame-hotel RevPAR Same-hotel ADR Same-hotel Occupancy 
 As ofFor the quarter ended For the quarter ended For the quarter ended 
 December 31,December 31,yoy
change
December 31,yoy
change
December 31,yoy
change
 2015201620152016201520162015 2016 
Economy hotels  1,999  1,999  143  1441.0%  165  1650.2%87%87%0.7%
Leased hotels  511  5111491510.9%1751750.3%86%86%0.5%
Manachised and franchised hotels  1,488  1,4881401411.1%1601610.2%87%88%0.8%
Midscale and upscale hotels  206  206  231  2518.9%  274  2957.6%84%85%1.0%
Leased hotels  72  722763019.3%3073369.4%90%90%-0.1%
Manachised and franchised hotels  134  1341952118.2%2452595.8%79%81%1.9%
Total  2,205  2,2051531572.5%1771801.6%86%87%0.7%
            
            
 Number of hotels in operationSame-hotel RevPAR Same-hotel ADR Same-hotel Occupancy 
 As ofFor the year ended For the year ended For the year ended 
 December 31,December 31,yoy
change
December 31,yoy
change
December 31,yoy
change
 2015201620152016201520162015 2016 
Economy hotels  1,999  1,999148147-1.2%169167-0.7%88%88%-0.4%
Leased hotels  511  511154151-1.6%176175-0.5%87%86%-1.0%
Manachised and franchised hotels  1,488  1,488146145-0.9%165164-0.8%88%88%-0.1%
Midscale and upscale hotels  206  2062292488.3%2752905.4%83%86%2.3%
Leased hotels  72  7226429110.0%3043246.5%87%90%2.8%
Manachised and franchised hotels  134  1341952075.9%2452533.5%80%82%1.8%
Total  2,205  2,205  1571580.4%1801810.5%87%87%-0.1%


Contact Information
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Email: ir@huazhu.com
http://ir.huazhu.com


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