HOME INNS & HOTELS MANAGEMENT INC. 
By SHANGHAI, March 12, 2014 /PRNewswire/ -- Home Inns & Hotels Management Inc. (NASDAQ: HMIN) ("Home Inns Group" or "the Company"), a leading economy hotel chain in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2013.
Fourth Quarter and Full Year 2013 Financial Highlights
-- Total revenues increased 9.8% to RMB 1.61 billion (US$265.9 million) for
the fourth quarter of 2013 and increased 10.1% to RMB 6.35 billion
(US$1.05 billion) for the full year of 2013, which was within the
guidance range.
-- EBITDA (non-GAAP) increased 35.5% to RMB 254.9 million (US$42.1 million)
for the fourth quarter of 2013 and increased 37.2% to RMB 1,165.6
million (US$192.6 million) for the full year of 2013. Adjusted EBITDA
(non-GAAP) increased 28.2% to RMB 333.9 million (US$55.2 million) for
the fourth quarter of 2013 and increased 22.7% to RMB 1.39 billion
(US$229.8 million) for the full year of 2013.
Key Financial Results
(RMB in Millions except RMB per ADS) 4Q13 4Q12 V% FY13 FY12 V%
----------------------------------- ---- ---- --- ---- ---- ---
Total Revenues 1,609.7 1,465.7 9.8% 6,353.0 5,769.7 10.1%
Income from Operations 105.5 36.3 191.1% 524.6 273.7 91.6%
Adj. Income from Operations* 127.2 79.2 60.5% 625.6 464.1 34.8%
Net Income 12.9 6.3 104.7% 196.2 (26.8) F
Adj. Net Income* 91.8 80.6 13.9% 422.8 300.3 40.8%
EBITDA 254.9 188.2 35.5% 1,165.6 849.5 37.2%
Adj. EBITDA* 333.9 260.5 28.2% 1,391.2 1,133.4 22.7%
Diluted Earnings per ADS 0.27 0.14 92.9% 4.20 (0.59) F
Adj. Diluted Earnings per ADS* 1.91 1.74 9.8% 8.83 6.62 33.4%
Note: Consolidation of Motel 168 financial results started on October 1, 2011
"V%" represents year-over-year percentage change in amounts
"F" denotes a favourable change when the prior period amount was negative
* Indicates a non-GAAP financial measure which excludes share-based compensation expenses, integration expenses, upfront fee amortization of term loans, accelerated fee amortization on early
extinguishment of Term Loan, gain or loss on change in fair value of convertible notes, gain or loss on change in fair value of interest swap transaction and net foreign exchange gain or loss (see
commentary at the end of this earnings release for full details).
Fourth Quarter and Full Year 2013 Operational Highlights
-- Home Inns Group opened 437 new hotels in 2013 and operated 2,180 hotels
across 287 cities in China under its three brands as of December 31,
2013. There were a total of 417 viable hotel projects in the
development pipeline at the end of 2013, including 161 hotels contracted
or under construction (136 of which were franchised-and-managed hotels)
and 256 hotels under due diligence (all of which were
franchised-and-managed hotels), demonstrating continued strong interest
in the three hotel brands within Home Inns Group.
Hotels Count Openings Closures
------------ -------- --------
Group Home Inn Motel 168 Yitel 4Q13 FY13 4Q13 FY13
----- -------- --------- ----- ---- ---- ---- ----
Total number of Hotels 2,180 1,784 378 18 139 437 10 29
Leased-and-Operated 872 696 163 13 22 77 2 8
Franchised-and-Managed 1,308 1,088 215 5 117 360 8 21
Contracted/under
Construction 161 135 19 7
Leased-and-Operated 25 17 7 1
Franchised-and-Managed 136 118 12 6
Under Due Diligence 256 228 23 5
-- As of December 31, 2013, Home Inns Group had a total of 16.9 million
unique active non-corporate members under its frequent guests program.
Operating Metrics
4Q2013 3Q2013 4Q2012 FY2013 FY2012
------ ------ ------ ------ ------
Occupancy Rate 84.0% 89.4% 83.8% 86.1% 86.1%
Average Daily Rate (ADR, RMB) 163 173 165 165 168
Revenue per Available Room (RevPAR, RMB) 137 154 138 142 144
-- For the fourth quarter of 2013, occupancy rate increased by 0.2% while
ADR decreased by 1.2%, resulting in a year-over-year decrease of 0.7% in
RevPAR. The decrease in ADR was mainly due to soft market conditions
and absence of pricing opportunities in the fourth quarter of 2013. The
sequential decrease in RevPAR was due to seasonality.
-- For the full year of 2013, occupancy rate remained stable, while ADR
decreased by 1.8%, resulting in a year-over-year decrease of 1.4% in
RevPAR. The year-over-year decrease in ADR has narrowed compared to a
year ago as market conditions stabilized and the hotels in lower tier
cities continued to ramp up towards maturity.
"Despite the weak market environment, our revenue results are within expectations, and the Company achieved continued margin expansion for the fourth consecutive quarter in 2013," said Mr. David Sun, the Company's chief executive officer. "We exceeded our new hotel opening target, achieved stable performance from our mature hotels, and delivered improved earnings and profitability through the growth of our franchised-and-managed business, operational improvement from Motel 168 hotels, and effective cost control initiatives and productivity gains."
"While we are experiencing near term challenges in the macro environment, we continue to believe in the long-term growth prospects of China's travel and lodging industry," Mr Sun continued. "In the earlier years, we operated predominantly with the leased-and-operated business model while delivering rapid revenue growth. Today, the Company has transformed into a franchise-focused growth portfolio enabling continued unit growth to strengthen its leadership in market presence. As a result, , we expect a more moderate revenue growth going forward, but we feel confident in the underlying business structure we have built to deliver stable margin expansion, meaningful earnings growth and increasing cash generation to create greater value for our shareholders."
Detailed Overview of Financial Results for Fourth Quarter and Full Year 2013
Total Revenues
(RMB/USD in Millions) Fourth Quarter 2013 Full Year 2013
--------------------- ------------------- --------------
RMB USD V% RMB USD V%
--- --- --- --- --- ---
Leased-and-Operated Hotels 1,401.6 231.5 7.4% 5,587.5 923.0 8.2%
Franchised-and-Managed Hotels 208.0 34.4 29.4% 765.5 126.5 26.5%
----- ---- ---- ----- ----- ----
Total Revenues 1,609.7 265.9 9.8% 6,353.0 1,049.4 10.1%
Less: Business Taxes and Related Surcharges -98.5 -16.3 9.3% -391.8 -64.7 10.9%
----- ----- --- ------ ----- ----
Net Revenues 1,511.2 249.6 9.9% 5,961.2 984.7 10.1%
======= ===== === ======= ===== ====
Note: "V%" represents year-over-year percentage change in amounts
-- The year-over-year increases in total revenues from both
leased-and-operated and franchised-and-managed hotels in the fourth
quarter and full year of 2013 were mainly driven by an increase in the
number of hotels in operation. The Company continues to focus on the
franchised-and-managed business model which it expects will represent
the majority of new hotel openings over the next few years.
Total Operating Costs and Expenses / Total Operating Income
(RMB/USD in Millions) Fourth Quarter 2013
-------------------
Adjusted
GAAP Results Reconciliation Non-GAAP Results
RMB USD Vpts RMB_ USD RMB __USD Vpts
--- --- ---- ---- --- --- ----- ----
Leased-and-Operated Hotel Costs 1,246.0 205.8 -5.1pts 3.5 0.6 1,242.5 205.2 -3.8pts
Franchised-and-Managed Hotel Personnel Costs 31.9 5.3 0.3pts 2.7 0.5 29.1 4.8 0.3pts
Sales and Marketing Expenses 47.0 7.8 1.2pts 0.4 0.1 46.6 7.7 1.2pts
General and Administrative Expenses 81.4 13.4 -0.6pts 15.0 2.5 66.4 11.0 -0.3pts
---- ---- ------- ---- --- ---- ---- -------
Total Operating Costs and Expenses 1,406.3 232.3 -4.1pts 21.6 3.6 1,384.7 228.7 -2.6pts
Total Operating Income 105.5 17.4 4.1pts 21.6 3.6 127.2 21.0 2.5pts
===== ==== ====== ==== === ===== ==== ======
(RMB/USD in Millions) Full Year 2013
--------------
Adjusted
GAAP Results Reconciliation Non-GAAP Results
RMB USD Vpts RMB_ USD RMB __USD Vpts
--- --- ---- ---- --- --- ----- ----
Leased-and-Operated Hotel Costs 4,867.0 804.0 -3.9pts 21.7 3.6 4,845.3 800.4 -2.6pts
Franchised-and-Managed Hotel Personnel Costs 157.3 26.0 0.3pts 11.0 1.8 146.3 24.2 0.3pts
Sales and Marketing Expenses 109.9 18.2 0.4pts 1.5 0.3 108.4 17.9 0.4pts
General and Administrative Expenses 313.5 51.8 -0.6pts 66.9 11.0 246.6 40.7 -0.1pts
----- ---- ------- ---- ---- ----- ---- -------
Total Operating Costs and Expenses 5,447.7 899.9 -3.6pts 101.1 16.7 5,346.6 883.2 -1.9pts
Total Operating Income 524.6 86.7 3.6pts 101.1 16.7 625.6 103.3 1.8pts
===== ==== ====== ===== ==== ===== ===== ======
Note: "Vpts" represents year-over-year change in percentage points of total revenues
Total operating costs and expenses were RMB 1.41 billion (US$232.3 million) for the fourth quarter of 2013, representing 87.4% of total revenues for the quarter, and RMB 5.45 billion (US$ 899.9 million) for the full year of 2013, representing 85.8% of total revenues for the year. Total operating costs and expenses excluding any share-based compensation expenses and acquisition and integration costs (non-GAAP) for the fourth quarter of 2013 were 86.0% of total revenues, compared to 88.6% in the same period a year ago, and 84.2% for the full year of 2013 compared to 86.1% for the full year of 2012.
-- Total leased-and-operated hotel costs were RMB 1.25 billion (US$205.8
million) for the fourth quarter of 2013, representing 88.9% of the
leased-and-operated hotel revenues for the quarter compared to 92.6% in
the same period a year ago, and RMB 4.87 billion (US$804.0 million) for
the full year of 2013, representing 87.1% of the leased-and-operated
revenues for the year compared to 89.9% for the full year of 2012.
Total leased-and-operated hotel costs excluding any share-based
compensation expenses and acquisition and integration costs (non-GAAP)
were 88.6% of the leased-and-operated hotel revenues in the fourth
quarter of 2013 compared to 91.0% in the same period a year ago, and
86.7% for the full year of 2013 compared to 88.1% for the full year of
2012. The year-over-year decreases in total leased-and-operated hotel
costs as a percentage of leased-and-operated hotel revenues for both the
fourth quarter and the full year of 2013 were mainly due to continued
productivity gains at the hotel operational level.
Pre-opening cost was RMB 13.5 million (US$2.2 million) for the fourth quarter of 2013 and RMB 77.9 million (US$12.9 million) for the full year of 2013.
-- Personnel costs of franchised-and-managed hotels were RMB 31.9 million
(US$5.3 million) for the fourth quarter of 2013, representing 15.3% of
the franchised-and-managed hotel revenues for the quarter, which was
unchanged from the same period a year ago, and RMB 157.3 million
(US$26.0 million) for the full year of 2013, representing 20.6% of the
franchised-and-managed revenues for the year compared to 20.7% for the
full year of 2012. Personnel costs of franchised-and-managed hotels
excluding share-based compensation expenses (non-GAAP) were 14.0% of
franchised-and-managed hotel revenues in the fourth quarter of 2013,
compared to 13.8% in the same period of 2012, and 19.1% for the full
year of 2013, which was unchanged from the full year of 2012.
-- Sales and marketing expenses were RMB 47.0 million (US$7.8 million) for
the fourth quarter of 2013, representing 2.9% of total revenues for the
quarter compared to 1.7% in the same period a year ago, and 109.9
million (US$18.2 million) for the full year of 2013, representing 1.7%
of total revenues compared to 1.3% for the full year of 2012. Sales and
marketing expenses excluding share-based compensation expenses
(non-GAAP) were 2.9% of total revenues for the fourth of quarter 2013
compared to 1.7% in the same period of 2012, and 1.7% of total revenues
for the full year of 2013 compared to 1.3% of total revenues in 2012.
Both year-over-year increases in the sales and marketing expenses as a
percentage of total revenues for the fourth quarter and full year were
mainly due to increased spending on marketing programs including mobile
apps development and implementation in support of Home Inns Group's
multi-brand strategy and increased cost associated with the Company's
member rewards program. The Company's on-going marketing efforts
remained cost-effective to support steady revenue expansion.
-- General and administrative expenses were RMB 81.4 million (US$13.4
million) for the fourth quarter of 2013, representing 5.1% of total
revenues compared to 5.7% in the same period a year ago, and RMB 313.5
million (US$51.8 million) for the full year of 2013, representing 4.9%
of total revenues compared to 5.5% for the full year of 2012. General
and administrative expenses excluding any share-based compensation
expenses, and acquisition and integration costs (non-GAAP) were 4.1% of
total revenues for the quarter compared to 4.5% in the same period of
2012, and 3.9% of total revenues for the full year of 2013 compared to
4.0% for the full year of 2012. The year-over-year decreases in general
and administrative expenses as a percentage of total revenues in both
the fourth quarter and full year of 2013 were driven by effective cost
control initiatives at headquarters with continued leverage from
economies of scale.
Income from Operations was RMB 105.5 million (US$17.4 million) for the fourth quarter of 2013 and RMB 524.6 million (US$86.7 million) for the full year of 2013. Income from operations excluding share-based compensation expenses and integration cost (non-GAAP) for the fourth quarter of 2013 was RMB 127.2 million (US$21.0 million), or 7.9% of total revenues, compared to RMB 79.2 million, or 5.4% of total revenues, in the same period of 2012. Income from operations excluding share-based compensation expenses and integration cost (non-GAAP) for 2013 was RMB 625.6 million (US$103.3 million), or 9.8% of total revenues, compared to RMB 464.1 million, or 8.0% of total revenues, in 2012. The year-over-year increases in the income from operations margin rate for both the fourth quarter and full year of 2013 were mainly driven by the increasing higher-margin revenue contribution from franchised-and-managed operations, continued operational improvements from Motel 168 hotels, and meaningful cost control savings and productivity gains from both the hotel level and corporate headquarters.
EBITDA (non-GAAP)
(RMB/USD in Millions) Fourth Quarter 2013 Full Year 2013
------------------- --------------
RMB USD %Rev V% RMB USD %Rev V%
--- --- ---- --- --- --- ---- ---
EBITDA (Non-GAAP) 254.9 42.1 15.8% 35.5% 1,165.6 192.6 18.3% 37.2%
Net Foreign Exchange (Gain) / Loss -13.6 -2.2 -0.8% -49.8 -8.2 -0.8%
Share-Based Compensation Expenses 19.6 3.2 1.2% 86.0 14.2 1.4%
Accelerated Fee Amortization due to Early
Extinguishment of Term Loan - - - 41.9 6.9 0.7%
Integration Cost 2.0 0.3 0.1% 15.0 2.5 0.2%
Non-Operating Income - - - -0.9 -0.2 0.0%
Loss on Fair Value Change in Convertible Notes 70.9 11.7 4.4% 133.4 22.0 2.1%
---- ---- --- ----- ---- ---
Adjusted EBITDA (Non-GAAP) 333.9 55.2 20.7% 28.2% 1,391.2 229.8 21.9% 22.7%
===== ==== ==== ==== ======= ===== ==== ====
Note: "%Rev" represents amount as a percentage of total revenues
"V%" represents year-over-year percentage change in amounts
Consolidated Net Income Attributable to Home Inns Group's Shareholders
(RMB/USD in Millions) Fourth Quarter 2013 Full Year 2013
------------------- --------------
RMB USD %Rev V% RMB USD %Rev V%
--- --- ---- --- --- --- ---- ---
Net Income (GAAP) 12.9 2.1 0.8% 104.7% 196.2 32.4 3.1% F
Net Foreign Exchange (Gain) / Loss -13.6 -2.2 -0.8% -49.8 -8.2 -0.8%
Share-Based Compensation Expenses 19.6 3.2 1.2% 86.0 14.2 1.4%
Integration Cost 2.0 0.3 0.1% 15.0 2.5 0.2%
Amortization of Upfront Fees on Term Loan - - - 1.0 0.2 0.0%
Accelerated Fee Amortization on Early
Extinguishment of Term Loan Interest - - - 41.9 6.9 0.7%
Non-Operating Income - - - -0.9 -0.2 0.0%
Loss on Fair Value Change in Convertible Notes 70.9 11.7 4.4% 133.4 22.0 2.1%
---- ---- --- ----- ---- ---
Adjusted Net Income (Non-GAAP) 91.8 15.2 5.7% 13.9% 422.8 69.8 6.7% 40.8%
==== ==== === ==== ===== ==== === ====
Note: "%Rev" represents amount as a percentage of total revenues
"V%" represents year-over-year percentage change in amounts
"F" denotes favourable changes when the prior period amount was negative
Basic and Diluted Earnings Per Ordinary Share and Per ADS
Fourth Quarter 2013 Full Year 2013
------------------- --------------
Ordinary ADS Share Ordinary
Share Share ADS Share
RMB USD RMB USD RMB USD RMB USD
--- --- --- --- --- --- --- ---
Basic 0.14 0.02 0.27 0.05 2.12 0.35 4.23 0.70
Diluted 0.14 0.02 0.27 0.04 2.10 0.35 4.20 0.69
Adjusted
Basic
(Non-
GAAP) 0.98 0.16 1.96 0.32 4.56 0.75 9.12 1.51
Adjusted
Diluted
(Non-
GAAP) 0.96 0.16 1.91 0.32 4.41 0.73 8.83 1.46
Cash Flow
Net operating cash flow for the fourth quarter of 2013 was RMB 276.8 million (US$45.7 million), compared to RMB 217.7 million in the same period of 2012. Capitalized expenditures for the fourth quarter of 2013 were RMB 320.6 million (US$53.0 million), while related cash paid for capital expenditures during the quarter was RMB 271.4 million (US$44.8 million).
For the full year of 2013, net operating cash flow was RMB 1.19 billion (US$195.8 million), compared to RMB 747.8 million in 2012. Capitalized expenditures for 2013 were RMB 929.5 million (US$153.5 million), while related cash paid for capital expenditures during the year was RMB 897.5 million (US$148.3 million).
Balance Sheet
As of December 31, 2013, Home Inns Group had cash and cash equivalents of RMB 1.16 billion (US$191.1 million). The outstanding balance of convertible notes issued in December 2010 (measured at fair value) was RMB 1.16 billion (US$191.2 million). The outstanding balance of the U.S. dollar-denominated three-year term loan was RMB 713.3 million (US$117.8 million).
Outlook for First Quarter and Full Year 2014
Home Inns Group targets to open no less than 450 new hotels in 2014, including approximately 70 to 90 leased-and-operated hotels and 360 to 380 franchised-and-managed hotels.
Home Inns Group expects total revenues for the group for 2014 to be in the range of RMB 6,800 million to RMB 7,000 million, representing a growth of 7.0% to 10.2% over 2013. Total revenues for the group in the first quarter of 2014 are expected to be in the range of RMB 1,460 million to RMB 1,490 million.
These forecasts reflect our current and preliminary views and are subject to change.
This announcement contains translations of certain RMB amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.0537 to US$1.00, the noon buying rate for December 31, 2013 set forth in the H.10 statistical release of the Federal Reserve Board.
Key Personnel Change
Huiping Yan will be resigning as chief financial officer effective April 30, 2014, in pursuit of opportunities outside of the Company. Ms. Yan joined the Company in July 2009 as the senior vice president of finance and strategy and was later promoted to chief financial officer on May 1, 2010. A search for a replacement has commenced and May Wu, our current chief strategy officer and former chief financial officer, will be acting CFO effective from May 1, 2014, until a suitable candidate comes on board.
Conference Call Information
Management will hold an earnings conference call at 9 PM U.S. Eastern Time on Wednesday, March 12, 2014 (9 AM Beijing/Hong Kong Time on Thursday, March 13, 2014).
Dial-in details for the earnings conference call are as follows:
U.S. (toll free): 1.866.519.4004
U.S.: 1.845.675.0437
China Mainland: 800.819.0121 or 400.620.8038
Hong Kong (toll free): 800.930.346
Hong Kong: 852.2475.0994
U.K. (toll free): 080.8234.6646
U.K.: 44.2030.598.139
Australia (toll free): 1.800.457.076
Taiwan (toll free): 008.0112.6920
International: 65.6723.9381
Pass code for all regions: Home Inns
A replay of the conference call may be accessed by phone at the following numbers until the end of Thursday, March 20, 2014 U.S. Eastern Time.
U.S. toll free: 1.855.452.5696
China toll free: 800.870.0205 or 400.602.2065
Hong Kong toll free: 800.963.117
International: 61.2.8199.0299
Conference ID number: 90487869
Live and archived webcasts of this conference call will be available at http://english.homeinns.com.
About Home Inns Group
Home Inns Group is a leading economy hotel chain in China based on number of hotels and hotel rooms as well as geographic coverage of the hotel chain. Since the Company commenced operations in 2002, it has built Home Inns as one of the best-known economy hotel brands in China. In October of 2011, the Company acquired Motel 168, another well-known hotel chain in China, as its second economy hotel brand. Home Inns Group aims to offer a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Home Inns Group's ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Select Market under the symbol "HMIN." For more information about Home Inns Group, please visit http://english.homeinns.com.
Safe Harbor
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Any statements in this press release that are not historical facts are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; our expected successful consolidation and integration of Motel 168 with our existing operations; and other factors and risks detailed in our filings with the Securities and Exchange Commission. This press release also contains statements or projections that are based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by us to be accurate, nor does it purport to be complete. We undertake no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
Non-GAAP Financial Measures
To supplement Home Inns Group's unaudited consolidated financial results presented in accordance with U.S. GAAP, Home Inns Group uses the following non-GAAP measures:
(a) total operating costs and expenses excluding share-based compensation expenses and acquisition and integration costs
(b) total leased-and-operated hotel costs excluding share-based compensation expenses and integration costs
(c) personnel costs of franchised-and-managed hotels excluding share-based compensation expenses
(d) sales and marketing expenses excluding share-based compensation expenses
(e) general and administrative expenses excluding share-based compensation expenses and acquisition and integration costs
(f) income from operations excluding share-based compensation expenses and acquisition and integration costs
(g) adjusted net income attributable to shareholders excluding any share-based compensation expenses, foreign exchange gain or loss, acquisition and integration cost, upfront fee amortization of term loan, gain or loss from fair value change of convertible notes and interest swap derivatives and other non-operating expenses
(h) adjusted basic and diluted earnings per ADS and per share excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration cost, non-operating expenses and upfront fee amortization of term loan, and
(i) adjusted EBITDA excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration costs, non-operating expenses and upfront fee amortization of term loan
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 press release.
Home Inns Group believes that, used in conjunction with GAAP financial measures, these non-GAAP financial measures provide meaningful supplemental information regarding the Group's performance, and both management and investors benefit from referring to these non-GAAP financial measures in assessing the Group's performance and when planning and forecasting future periods. Management believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization, is a useful financial metric to assess Home Inns Group's operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, management believes that EBITDA is widely used by other companies in the lodging industry and may be used as an analysis tool by both management and investors to measure and compare Home Inns Group's operational and financial performance with industry peers.
One of the limitations of using non-GAAP income from operations, EBITDA, adjusted EBITDA and non-GAAP net income attributable to shareholders is that they do not include all items that impact Home Inns Group's net income (loss) for the period. These non-GAAP measures exclude share-based compensation expenses, foreign exchange gain or loss and gain or loss from fair value change of convertible notes, which have been and will continue to be a significant recurring expense in Home Inns Group's business. In addition, Home Inns Group's EBITDA and adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as Home Inns Group does. Management compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. Home Inns Group computes the non-GAAP financial measures using the same consistent method from quarter to quarter. Reconciliations of GAAP and non-GAAP results are included at the end of this press release. The non-GAAP adjustment items do not include the tax impact.
The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that Home Inns Group's future results will be unaffected by other charges and gains Home Inns Group considers to be outside the ordinary course of its business.
Home Inns Group completed its acquisition of 100% equity interest in Motel 168, and took control of Motel 168 effective on October 1, 2011. Home Inns Group has consolidated Motel 168's operating and financial results since October 1, 2011. Home Inns Group has presented certain separated financial data of Motel 168 in this earning release for the purpose of providing more information to investors. Home Inns Group had substantially completed Motel 168's integration as of the third quarter of 2013 and ceased to present separate operating metrics and revenues for Motel 168.
For investor and media inquiries, please contact:
Johnny Wang
Home Inns & Hotels Management Inc.
Tel: +86-21-3337-3333*3870
Email: johnnywang@homeinns.com
Cara O'Brien
FTI Consulting
Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com
Home Inns & Hotels Management Inc.
Unaudited Condensed Consolidated Balance Sheet
December 31, 2012 December 31, 2013
----------------- -----------------
RMB '000 RMB '000 US$ '000
ASSETS
Current assets:
Cash and cash equivalents 663,156 1,156,743 191,080
Restricted cash 205,739 173,276 28,623
Accounts receivable, net 98,176 99,964 16,513
Receivables from related parties 6,818 5,509 910
Consumables 41,600 41,231 6,811
Prepayments and other current assets 172,534 181,232 29,937
Deferred tax assets 80,369 78,839 13,023
------ ------ ------
Total current assets 1,268,392 1,736,794 286,897
--------- --------- -------
Investment in a jointly controlled entity 6,625 5,832 963
Property and equipment, net 3,846,835 4,049,337 668,903
Goodwill 2,254,631 2,254,631 372,439
Intangible assets, net 1,149,419 1,112,499 183,772
Other assets 117,350 86,027 14,211
Non-current deferred tax assets 310,762 407,564 67,325
------- ------- ------
Total assets 8,954,014 9,652,684 1,594,510
========= ========= =========
LIABILITIES
Current liabilities:
Accounts payable 76,825 89,170 14,730
Payables to related parties 3,798 3,029 500
Short term loans 12,571 - -
Finance lease liabilities 6,660 1,376 227
Salaries and welfare payable 215,569 222,865 36,815
Income tax payable 76,382 88,551 14,628
Other taxes payable 27,761 31,344 5,178
Deferred revenues 202,874 202,949 33,525
Other unpaid and accruals 165,886 228,881 37,808
Other payables 925,134 911,641 150,593
Deferred tax liability 29,439 52,155 8,615
------ ------ -----
Total current liabilities 1,742,899 1,831,961 302,619
--------- --------- -------
Long term loans 735,404 713,337 117,835
Deferred rental 631,618 691,456 114,220
Deferred revenues 45,089 54,075 8,933
Finance lease liabilities 1,620 - -
Deposits due to franchisees 91,462 115,351 19,055
Other long term payables 10,620 20,537 3,392
Unfavorable lease liabilities 370,548 337,627 55,772
Financial liabilities (2) 1,066,771 1,157,295 191,172
Deferred tax liabilities 288,321 283,522 46,834
------- ------- ------
Total liabilities 4,984,352 5,205,161 859,832
--------- --------- -------
Commitments and contingencies
Shareholders' equity
Ordinary shares (US$0.005 par value; 3,574 3,671 606
200,000,000 shares authorized,
91,672,320 and 94,814,866 shares issued
and outstanding as of December 31, 2012
and December 31 2013, respectively)
Additional paid-in capital 2,802,905 3,080,596 508,878
Statutory reserves 158,417 206,892 34,176
Retained earnings 992,505 1,140,252 188,356
------- --------- -------
Total Home Inns shareholders' equity 3,957,401 4,431,411 732,016
--------- --------- -------
Noncontrolling interests 12,261 16,112 2,662
------ ------ -----
Total shareholders' equity 3,969,662 4,447,523 734,678
--------- --------- -------
Total liabilities and shareholders' equity 8,954,014 9,652,684 1,594,510
========= ========= =========
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.0537 on December 31, 2013, representing the certificated exchange rate published by the Federal
Reserve Board.
Note 2?Financial liabilities represent convertible notes measured at fair value.
Home Inns & Hotels Management Inc.
Unaudited Condensed Consolidated Statement of Operations
Quarter Ended Year Ended
December 31, 2012 September 30, 2013 December 31, 2013 December 31,2012 December 31,2013
RMB '000 RMB '000 RMB '000 US$ '000 RMB '000 RMB '000 US$ '000
Revenues:
Leased-and-operated hotels 1,304,958 1,535,082 1,401,635 231,534 5,164,799 5,587,480 922,986
Franchised-and-managed hotels 160,724 204,078 208,048 34,367 604,936 765,491 126,450
------- ------- ------- ------ ------- ------- -------
Total revenues 1,465,682 1,739,160 1,609,683 265,901 5,769,735 6,352,971 1,049,436
Less: Business tax and related surcharges (90,149) (106,150) (98,490) (16,269) (353,418) (391,821) (64,724)
------- -------- ------- ------- -------- -------- -------
Net revenues 1,375,533 1,633,010 1,511,193 249,632 5,416,317 5,961,150 984,712
--------- --------- --------- ------- --------- --------- -------
Operating costs and expenses:
Leased-and-operated hotel costs -
Rents and utilities (514,213) (533,571) (533,188) (88,076) (1,953,243) (2,108,924) (348,369)
Personnel costs (245,909) (273,501) (256,064) (42,299) (1,037,371) (1,073,754) (177,372)
Depreciation and amortization (158,078) (172,918) (180,503) (29,817) (612,789) (692,945) (114,466)
Consumables, food and beverage (99,834) (89,792) (92,034) (15,203) (351,338) (343,029) (56,664)
Others (190,804) (172,590) (184,221) (30,431) (687,254) (648,299) (107,091)
-------- -------- -------- ------- -------- -------- --------
Total leased-and-operated hotel costs (1,208,838) (1,242,372) (1,246,010) (205,826) (4,641,995) (4,866,951) (803,962)
Personnel costs of Franchised-and-managed hotels (24,581) (54,120) (31,855) (5,262) (125,031) (157,314) (25,986)
Sales and marketing expenses (24,793) (24,193) (47,040) (7,770) (76,878) (109,935) (18,160)
General and administrative expenses (83,408) (86,745) (81,406) (13,447) (315,235) (313,480) (51,783)
------- ------- ------- ------- -------- -------- -------
Total operating costs and expenses (1,341,620) (1,407,430) (1,406,311) (232,305) (5,159,139) (5,447,680) (899,891)
---------- ---------- ---------- -------- ---------- ---------- --------
Other income 2,341 1,272 637 105 16,558 11,089 1,832
Income from operations 36,254 226,852 105,519 17,432 273,736 524,559 86,653
------ ------- ------- ------ ------- ------- ------
Interest income 861 2,151 2,331 385 11,874 6,216 1,027
Interest expenses (17,393) (12,687) (11,958) (1,975) (119,416) (54,149) (8,945)
Accelerated fee amortization on early - - - - - (41,872) (6,917)
extinguishment of Term Loan
(Loss)/gain from equity investment (493) 84 (466) (77) (2,305) (792) (131)
Loss on change in fair value of convertible notes (45,356) (57,275) (70,870) (11,707) (87,099) (133,404) (22,037)
Non-operating income 19,683 19,019 20,879 3,450 43,248 53,663 8,864
Non-operating expenses - (1,000) - - (6,665) (1,000) (165)
Foreign exchange gain, net 14,974 8,576 13,551 2,238 217 49,830 8,231
------ ----- ------ ----- --- ------ -----
Income before income tax expenses and noncontrolling interests 8,530 185,720 58,986 9,746 113,590 403,051 66,580
----- ------- ------ ----- ------- ------- ------
Income tax expense (964) (78,157) (46,374) (7,660) (136,305) (206,997) (34,193)
Net income/(loss) 7,566 107,563 12,612 2,086 (22,715) 196,054 32,387
----- ------- ------ ----- ------- ------- ------
Less:Net (income)/loss attributable to (1,286) 440 241 40 (4,061) 168 28
noncontrolling interests
Net income/(loss) attributable to ordinary shareholders 6,280 108,003 12,853 2,126 (26,776) 196,222 32,415
===== ======= ====== ===== ======= ======= ======
Earnings per share
- Basic 0.07 1.16 0.14 0.02 (0.29) 2.12 0.35
==== ==== ==== ==== ===== ==== ====
- Diluted 0.07 1.16 0.14 0.02 (0.29) 2.10 0.35
==== ==== ==== ==== ===== ==== ====
Weighted average ordinary shares outstanding
- Basic 91,027 92,790 93,880 93,880 90,805 92,676 92,676
====== ====== ====== ====== ====== ====== ======
- Diluted 92,445 93,398 94,440 94,440 90,805 93,418 93,418
====== ====== ====== ====== ====== ====== ======
Share-based compensation expense was included in the statement of operations as follows:
Leased-and-operated hotel costs - Personnel costs 2,038 1,887 1,789 296 8,199 7,904 1,306
Personnel costs of Franchised-and-managed hotels 2,476 2,700 2,743 453 9,578 11,013 1,819
Sales and marketing expenses 354 343 431 71 1,535 1,514 250
General and administrative expenses 17,620 16,153 14,656 2,421 74,064 65,584 10,834
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.0537 on December 31, 2013, representing the certificated exchange rate published by the Federal Reserve Board.
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results
Quarter Ended December 31, 2013
-------------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation cost Revenue Revenue
------ ------- ------------ ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,246,010) 77.4% 1,789 1,704 0.2% (1,242,517) 77.2%
Personnel costs of Franchised-and-managed hotels (31,855) 2.0% 2,743 - 0.2% (29,112) 1.8%
Sales and marketing expenses (47,040) 2.9% 431 - 0.0% (46,609) 2.9%
General and administrative expenses (81,406) 5.1% 14,656 317 0.9% (66,433) 4.1%
------- ------ --- -------
Total operating costs and expenses (1,406,311) 87.4% 19,619 2,021 1.3% (1,384,671) 86.0%
========== ====== ===== ==========
Income from operations 105,519 6.6% 19,619 2,021 1.3% 127,159 7.9%
======= ====== ===== =======
Quarter Ended December 31, 2013
-------------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation cost Revenue Revenue
------ ------- ------------ ---- ------- -------
US$ '000 US$ '000 US$ '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (205,826) 77.4% 296 281 0.2% (205,249) 77.2%
Personnel costs of Franchised-and-managed hotels (5,262) 2.0% 453 - 0.2% (4,809) 1.8%
Sales and marketing expenses (7,770) 2.9% 71 - 0.0% (7,699) 2.9%
General and administrative expenses (13,447) 5.1% 2,421 52 0.9% (10,974) 4.1%
------- ----- --- -------
Total operating costs and expenses (232,305) 87.4% 3,241 333 1.3% (228,731) 86.0%
======== ===== === ========
Income from operations 17,432 6.6% 3,241 333 1.3% 21,006 7.9%
====== ===== === ======
Quarter Ended September 30, 2013
--------------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation cost Revenue Revenue
------ ------- ------------ ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,242,372) 71.4% 1,887 2,818 0.3% (1,237,667) 71.2%
Personnel costs of Franchised-and-managed hotels (54,120) 3.1% 2,700 - 0.2% (51,420) 3.0%
Sales and marketing expenses (24,193) 1.4% 343 - 0.0% (23,850) 1.4%
General and administrative expenses (86,745) 5.0% 16,153 335 0.9% (70,257) 4.0%
------- ------ --- -------
Total operating costs and expenses (1,407,430) 80.9% 21,083 3,153 1.4% (1,383,194) 79.5%
========== ====== ===== ==========
Income from operations 226,852 13.0% 21,083 3,153 1.4% 251,088 14.4%
======= ====== ===== =======
Quarter Ended December 31, 2012
-------------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation cost Revenue Revenue
------ ------- ------------ ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (1,208,838) 82.5% 2,038 19,933 1.5% (1,186,867) 81.0%
Personnel costs of Franchised-and-managed hotels (24,581) 1.7% 2,476 - 0.2% (22,105) 1.5%
Sales and marketing expenses (24,793) 1.7% 354 - 0.0% (24,439) 1.7%
General and administrative expenses (83,408) 5.7% 17,620 558 1.2% (65,230) 4.5%
------- ------ --- -------
Total operating costs and expenses (1,341,620) 91.5% 22,488 20,491 2.9% (1,298,641) 88.6%
========== ====== ====== ==========
Income from operations 36,254 2.5% 22,488 20,491 2.9% 79,233 5.4%
====== ====== ====== ======
Year Ended December 31, 2013
----------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation cost Revenue Revenue
------ ------- ------------ ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (4,866,951) 76.6% 7,904 13,761 0.3% (4,845,286) 76.3%
Personnel costs of Franchised-and-managed hotels (157,314) 2.5% 11,013 - 0.2% (146,301) 2.3%
Sales and marketing expenses (109,935) 1.7% 1,514 - 0.0% (108,421) 1.7%
General and administrative expenses (313,480) 4.9% 65,584 1,286 1.1% (246,610) 3.9%
-------- ------ -----
Total operating costs and expenses (5,447,680) 85.8% 86,015 15,047 1.6% (5,346,618) 84.2%
========== ====== ====== ==========
Income from operations 524,559 8.3% 86,015 15,047 1.6% 625,621 9.8%
Year Ended December 31, 2013
----------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation cost Revenue Revenue
------ ------- ------------ ---- ------- -------
US$ '000 US$ '000 US$ '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (803,962) 76.6% 1,306 2,273 0.3% (800,383) 76.3%
Personnel costs of Franchised-and-managed hotels (25,986) 2.5% 1,819 - 0.2% (24,167) 2.3%
Sales and marketing expenses (18,160) 1.7% 250 - 0.0% (17,910) 1.7%
General and administrative expenses (51,783) 4.9% 10,834 212 1.1% (40,737) 3.9%
------- ------ ---
Total operating costs and expenses (899,891) 85.7% 14,209 2,486 1.6% (883,197) 84.2%
======== ====== ===== ========
Income from operations 86,653 8.3% 14,209 2,486 1.6% 103,347 9.8%
Year Ended December 31, 2012
----------------------------
GAAP %of Total Share-based Integration %of Total Non-GAAP Result %of Total
Result Revenue Compensation cost Revenue Revenue
------ ------- ------------ ---- ------- -------
RMB '000 RMB '000 RMB '000 RMB '000
(unaudited) (unaudited) (unaudited) (unaudited)
Leased-and-operated hotel costs (4,641,995) 80.5% 8,199 83,744 1.6% (4,550,052) 78.9%
Personnel costs of Franchised-and-managed hotels (125,031) 2.2% 9,578 - 0.2% (115,453) 2.0%
Sales and marketing expenses (76,878) 1.3% 1,535 48 0.0% (75,295) 1.3%
General and administrative expenses (315,235) 5.5% 74,064 13,160 1.5% (228,011) 4.0%
-------- ------ ------ --------
Total operating costs and expenses (5,159,139) 89.4% 93,376 96,952 3.3% (4,968,811) 86.1%
========== ====== ====== ==========
Income from operations 273,736 4.7% 93,376 96,952 3.3% 464,064 8.0%
======= ====== ====== =======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.0537 on December 31, 2013, representing the certificated exchange rate published by the Federal Reserve Board.
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended Year Ended
------------- ----------
December 31, 2012 September 30, 2013 December 31, 2013 December 31, 2012 December 31, 2013
----------------- ------------------ ----------------- ----------------- -----------------
RMB '000 RMB '000 RMB '000 US$ '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Net income attributable to ordinary shareholders (GAAP) 6,280 108,003 12,853 2,126 (26,776) 196,222 32,415
Foreign exchange gain, net (14,974) (8,576) (13,551) (2,238) (217) (49,830) (8,231)
Share-based compensation 22,488 21,083 19,619 3,241 93,376 86,015 14,209
Integration cost 20,491 3,153 2,021 334 96,952 15,047 2,486
Interest expenses -- Upfront fee amortization of term loans 2,013 - - - 43,250 959 154
Accelerated fee amortization on early extinguishment of Term Loan - - - - - 41,872 6,917
Non-operating (income)/expenses-- (Gain)/loss on change in fair value of interest swap transaction (1,049) - - - 6,665 (912) (151)
Loss on change in fair value of convertible notes 45,356 57,275 70,870 11,707 87,099 133,404 22,037
------ ------ ------ ------ ------ ------- ------
Adjusted net income attributable to ordinary shareholders 80,605 180,938 91,812 15,170 300,349 422,777 69,836
(Non-GAAP)
Quarter Ended Year Ended
------------- ----------
December 31, 2012 September 30, 2013 December 31, 2013 December 31, 2012 December 31, 2013
----------------- ------------------ ----------------- ----------------- -----------------
RMB '000 RMB '000 RMB '000 US$ '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Earnings per share (GAAP)
- Basic 0.07 1.16 0.14 0.02 (0.29) 2.12 0.35
==== ==== ==== ==== ===== ==== ====
- Diluted 0.07 1.16 0.14 0.02 (0.29) 2.10 0.35
==== ==== ==== ==== ===== ==== ====
Weighted average ordinary shares outstanding
- Basic 91,027 92,790 93,880 93,880 90,805 92,676 92,676
====== ====== ====== ====== ====== ====== ======
- Diluted 92,445 93,398 94,440 94,440 90,805 93,418 93,418
====== ====== ====== ====== ====== ====== ======
Adjusted earnings per share (Non-GAAP)
- Basic 0.89 1.95 0.98 0.16 3.31 4.56 0.75
==== ==== ==== ==== ==== ==== ====
- Diluted 0.87 1.85 0.96 0.16 3.31 4.41 0.73
==== ==== ==== ==== ==== ==== ====
Weighted average ordinary shares outstanding
- Basic 91,027 92,790 93,880 93,880 90,805 92,676 92,676
====== ====== ====== ====== ====== ====== ======
- Diluted 92,445 100,852 101,894 101,894 90,805 100,872 100,872
====== ======= ======= ======= ====== ======= =======
Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.0537 on December 31, 2013, representing the certificated exchange rate published by the Federal Reserve Board.
Note 2: The non-GAAP adjustment items do not include the tax impact.
Home Inns & Hotels Management Inc.
Reconciliation of GAAP and Non-GAAP Results (continued)
Quarter Ended Year Ended
------------- ----------
December 31, 2012 Septembe 30, 2013 December 31, 2013 December 31, 2012 December 31, 2013
----------------- ----------------- ----------------- ----------------- -----------------
RMB '000 RMB '000 RMB '000 US$ '000 RMB '000 RMB '000 US$ '000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Net income attributable to ordinary shareholders 6,280 108,003 12,853 2,126 (26,776) 196,222 32,415
Interest income (861) (2,151) (2,331) (385) (11,874) (6,216) (1,027)
Interest expenses 17,393 12,687 11,958 1,975 119,416 54,149 8,945
Income tax expense 964 78,157 46,374 7,660 136,305 206,997 34,193
Depreciation and amortization 164,376 178,001 186,061 30,735 632,468 714,482 118,024
------- ------- ------- ------ ------- ------- -------
EBITDA (Non-GAAP) 188,152 374,697 254,915 42,111 849,539 1,165,634 192,550
------- ------- ------- ------ ------- --------- -------
Foreign exchange gain, net (14,974) (8,576) (13,551) (2,238) (217) (49,830) (8,231)
Share-based compensation 22,488 21,083 19,619 3,241 93,376 86,015 14,209
Accelerated fee amortization on early extinguishment of Term Loan - - - - - 41,872 6,917
Integration cost 20,491 3,153 2,021 333 96,952 15,047 2,486
Non-operating (income)/expenses -- (Gain)/loss on change in fair value of interest swap transaction (1,049) - - - 6,665 (912) (151)
Loss on change in fair value of convertible notes 45,356 57,275 70,870 11,707 87,099 133,404 22,037
------ ------ ------ ------ ------ ------- ------
Adjusted EBITDA (Non-GAAP) 260,464 447,632 333,874 55,154 1,133,414 1,391,230 229,817
======= ======= ======= ====== ========= ========= =======
%of total revenue 17.8% 25.7% 20.7% 20.7% 19.6% 21.9% 21.9%
Note 1: The "Depreciation and amortization expense" includes the depreciation and amortization expenses of the Group.
The depreciation and amortization expenses of all leased-and-operated hotels are included in "Operating costs and expenses".
The depreciation and amortization expenses of administrative long-term assets are included in "General and administrative expenses".
Home Inns & Hotels Management Inc.
Operating Data
As of and for the quarter ended As of and for the year ended
------------------------------- ----------------------------
December 31, 2012 September 30, 2013 December 31, 2013 December 31, 2012 December 31, 2013
----------------- ------------------ ----------------- ----------------- -----------------
Group Motel 168 excluding Motel 168 Group Motel 168 excluding Motel 168 Group Motel 168 excluding Motel 168 Group Motel 168 excluding Motel 168 Group Motel 168 excluding Motel 168
Total Hotels in operation: 1,772 334 1,438 2,051 355 1,696 2,180 378 1,802 1,772 334 1,438 2,180 378 1,802
Leased-and-operated hotels 803 151 652 852 156 696 872 163 709 803 151 652 872 163 709
Franchised-and-managed hotels 969 183 786 1,199 199 1,000 1,308 215 1,093 969 183 786 1,308 215 1,093
Total rooms 214,070 49,745 164,325 243,459 50,874 192,585 256,555 52,889 203,666 214,070 49,745 164,325 256,555 52,889 203,666
Occupancy rate (as a percentage) 83.8% 77.4% 85.6% 89.4% 85.1% 90.5% 84.0% 80.8% 84.8% 86.1% 78.0% 88.7% 86.1% 81.3% 87.3%
Average daily rate (in RMB) 165 160 166 173 163 175 163 161 164 168 160 170 165 160 167
RevPAR (in RMB) 138 124 143 154 139 159 137 130 139 144 125 151 142 130 146
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, 2012 December 31, 2013
----------------- -----------------
Group Motel 168 excluding Motel 168 Group Motel 168 excluding Motel 168
Total Hotels in operation: 1,563 327 1,236 1,563 327 1,236
Leased-and-operated hotels 749 170 579 750 171 579
Franchised-and-managed hotels 814 157 657 813 156 657
Total rooms 187,805 46,161 141,644 186,345 44,293 142,052
Occupancy rate (as a percentage) 86.6% 78.3% 89.4% 86.5% 82.4% 87.9%
Average daily rate (in RMB) 166 162 167 166 162 167
RevPAR (in RMB) 144 126 150 144 133 147
One Motel 168 Franchised-and-managed hotel was legally converted into Leased-and-operated hotels in 2012.
* "Occupancy rate" refers to the total number of occupied rooms divided by the total number of available rooms in a given period.
"Average daily rate" refers to total hotel room revenues divided by the total number of occupied rooms in a given period.
"RevPAR" represents revenue per available room, which is calculated by dividing total hotel room revenues by the total number of available rooms in a given period, or by multiplying average daily rates and occupancy rates in a given period.
The operating data of multi-brand conversion hotels were included in "Motel 168".
SOURCE Home Inns & Hotels Management Inc.