Huazhu Group Limited (NASDAQ: HTHT) (“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, 2018.
Fourth Quarter of 2018
Operational Highlights
- During the fourth quarter of 2018,
Huazhu opened 214 hotels, including 9 leased
(“leased-and-operated”) hotels and 205 manachised
(“franchised-and-managed”) hotels and franchised hotels.
- The Company closed a total of 39
hotels, which included 8 leased hotels and 31 manachised and
franchised hotels, during the fourth quarter of 2018. This was
mainly due to:a) The Company's strategic focus to upgrade the
quality of the product and service. The Company closed 15 hotels
for brand upgrade purposes and permanently removed 10 hotels from
its network for their non-compliance with the brand and operating
standards. These hotels were mainly under HanTing and Elan brands.
By removing hotels of lower quality, the Company is able to provide
a more consistent customer experience, which will help enhance both
the brands and future profitability.b) Property related
issues, including rezoning and returning of military-owned
properties, and expiry of leases, which resulted in the closure of
9 hotels.c) Operating losses from hotels located mainly in
selected 3rd or lower tier cities which resulted in the closure of
5 hotels.
- The ADR, which is defined as the
average daily rate for all hotels in operation, was RMB230 in the
fourth quarter of 2018, compared with RMB211 in the fourth quarter
of 2017 and RMB239 in the previous quarter. The year-over-year
increase of 9.2% was due to both an increase in ADR of the mature
hotels, as well as an increase in the proportion of mid- and
up-scale hotels with higher ADR in the Company’s brand mix. The
sequential decrease resulted mainly from seasonality.
- The occupancy rate for all hotels
in operation was 85.2% in the fourth quarter of 2018, compared with
86.0% in the fourth quarter of 2017 and 90.7% in the previous
quarter. The year-over-year decrease of 0.9 percentage point was
due to the soft macro economy and a dilutive impact from
newly-opened hotels. The sequential decrease resulted mainly from
seasonality.
- Blended RevPAR, defined as revenue
per available room for all hotels in operation, was RMB196 in the
fourth quarter of 2018, compared with RMB181 in the fourth quarter
of 2017 and RMB217 in the previous quarter. The year-over-year
increase of 8.1% was attributable to higher ADR. The sequential
decrease resulted mainly from seasonality.
- For all hotels which had been in
operation for at least 18 months, the same-hotel RevPAR was RMB189
for the fourth quarter of 2018, representing a 3.9% increase from
RMB182 for the fourth quarter of 2017, with a 4.9% increase in ADR
and a 0.8-percentage-point decrease in occupancy rate. The economy
hotels registered a 4.1% same-hotel RevPAR improvement. The
midscale and upscale hotels registered a 3.7% same-hotel RevPAR
improvement.
Operational Highlights of full
year 2018
- For the full year of 2018, the
company opened 53 leased hotels and 670 manachised hotels and
franchised hotels, and closed 25 leased hotels and 214 manachised
and franchised hotels. As of December 31, 2018, the Company had 699
leased hotels, 3,309 manachised hotels, and 222 franchised hotels
in operation in 403 cities. The number of hotel rooms in
operation totaled 422,747, an increase of 11.3% from a year
ago.
- As of December 31, 2018, the
Company had a total number of 1,105 hotels contracted or under
construction, including 42 leased hotels and 1,063 manachised and
franchised hotels. The pipeline represented 26.1% of the number of
hotels in operation as end of 2018.
- For the full year of 2018, the ADR
for all hotels in operation was RMB226, increasing 11.2%
year-over-year from RMB203 in 2017. The occupancy rate for all
hotels in operation was 87.3%, compared with 88.3% in 2017. As a
result, the blended RevPAR for all hotels in operation was RMB197
in 2018, a 10.0% increase from RMB180 in 2017.
- The same-hotel RevPAR was RMB189 in
2018, a 5.5% increase from RMB179 in 2017, with a 6.3% increase in
ADR and a 0.6-percentage-point decrease in occupancy rate. In 2018,
the economy hotels and the midscale and upscale hotels posted an
increase of 5.6% and 5.2% in same-hotel RevPAR, respectively.
- As of December 31, 2018, the
Company’s loyalty program had approximately 122 million members,
who contributed approximately 76% of room nights sold during the
full year of 2018 and approximately 86% of room nights were sold
through the Company’s own direct channels.
“We are pleased to announce that Huazhu
delivered a strong set of results in 2018. Our hotel
turnover increased by 23% in 2018, thanks to a 13% growth in
hotel network and a 10% increase in blended RevPAR. At the end of
2018, our hotel pipeline was at a record high of 1,105 hotels, or
26% of hotels in operation. Therefore, we expect our hotel network
expansion to further accelerate in 2019. Our hotel network
expansion will be primarily driven by midscale hotel openings,”
commented Ms. Jenny Zhang, Chief Executive Officer of Huazhu
Group.
“We are also pleased to see the remarkable
growth for our midscale brands at their respective development
stage. JI, our flagship midscale brand, is expected to reach 1,000
hotels by 2020 supported by its operational excellence and strong
pipeline. The other younger brands also see significant increase in
their hotel pipelines and, and thus are poised to take off.
Furthermore, our innovation in upscale segment is well on track.
After we acquired Blossom Hill in 2018, we have been working on
bringing this upscale lifestyle and resort brand from the typical
remote scenic spots to higher tier cities. This year, we will open
two new urban Blossom Hill hotels in Shanghai and Beijing. The
Beijing Blossom Hill Hotel is a conversion from our VUE hotel
located at Beijing Hou Hai,” Jenny added. “Looking into 2019, we
will continue to focus on fast and quality expansion, hotel
technology to further improve guest experiences and operating
efficiencies, and innovation for our upscale brands. We remain
optimistic about long-term growth prospects for the lodging market
in China. Huazhu is well positioned to deliver high return to
franchisees and shareholders.”
Fourth Quarter and Full
Year of 2018 Financial ResultsSince the
first quarter of 2018, the Company adopted new revenue recognition
standards and all prior year numbers are restated using the new
standards. Please see the “Adoption of New Revenue Recognition
Accounting Standards” section of this release for more
information.
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(RMB in
thousands) |
Q4 2017 |
Q3 2018 |
Q4 2018 |
2017FY |
2018FY |
Revenues: |
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|
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|
Leased
and owned hotels |
1,716,259 |
2,052,581 |
1,942,225 |
6,338,119 |
7,470,490 |
Manachised and franchised hotels |
495,851 |
699,223 |
702,999 |
1,850,525 |
2,526,990 |
Others |
13,032 |
15,757 |
38,071 |
40,257 |
65,880 |
Net
revenues |
2,225,142 |
2,767,561 |
2,683,295 |
8,228,901 |
10,063,360 |
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Net revenues for the fourth
quarter of 2018 were RMB2,683.3 million (US$390.3 million),
representing a 20.6% year-over-year increase and a 3.0% sequential
decrease. The year-over-year increase was primarily attributable to
our hotel network expansion and RevPAR growth, the sequential
decrease was due to seasonality.
Net revenues for the full year of 2018 were
RMB10,063.4 million (US$1,463.7 million), representing an increase
of 22.3% from the full year of 2017.
Net revenues from leased and owned
hotels for the fourth quarter of 2018 were RMB1,942.2
million (US$282.5 million), representing a 13.2% year-over-year
increase and a 5.4% sequential decrease.
For the full year of 2018, net revenues from
leased and owned hotels were RMB7,470.5 million (US$1,086.5
million), representing a 17.9% year-over-year increase.
Net revenues from manachised and
franchised hotels for the fourth quarter of 2018 were
RMB703.0 million (US$102.2 million), representing a 41.8%
year-over-year increase and a 0.5% sequential increase.
For the full year of 2018, net revenues from
manachised and franchised hotels were RMB2,527.0 million (US$367.5
million), representing a 36.6% year-over-year increase. It accounts
for 25.1% of net revenues, compared to 22.5% of net revenues for
the full year of 2017.
Other revenues represent
revenues generated from businesses other than the hotel operation,
which mainly include revenues from the provision of IT products and
services to hotels and from Huazhu mall, totaling RMB38.1 million
(US$5.5 million) in the fourth quarter of 2018, compared to RMB13.0
million in the fourth quarter of 2017 and RMB15.8 million in the
previous quarter.
For the full year of 2018, other revenues were
RMB65.9 million (US$9.6 million), compared to RMB40.3 million in
2017.
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(RMB in
thousands) |
Q4 2017 |
Q3 2018 |
Q4 2018 |
2017FY |
2018FY |
Operating costs and expenses: |
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Hotel
operating costs |
1,623,449 |
1,657,803 |
1,737,390 |
5,674,780 |
6,476,327 |
Other
operating costs |
6,836 |
1,685 |
7,896 |
17,324 |
14,560 |
Selling
and marketing expenses |
98,464 |
91,322 |
107,841 |
284,900 |
348,080 |
General
and administrative expenses |
236,213 |
233,353 |
269,285 |
690,970 |
850,904 |
Pre-opening expenses |
71,575 |
59,894 |
53,853 |
206,454 |
254,629 |
Total
operating costs and expenses |
2,036,537 |
2,044,057 |
2,176,265 |
6,874,428 |
7,944,500 |
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Hotel operating costs for the
fourth quarter of 2018 were RMB1,737.4 million (US$252.7 million),
compared to RMB1,623.4 million in the fourth quarter of 2017 and
RMB1,657.8 million in the previous quarter, representing a 7.0%
year-over-year increase and a 4.8% sequential increase. Total hotel
operating costs excluding share-based compensation expenses
(non-GAAP) for the fourth quarter of 2018 were RMB1,728.8 million
(US$251.4 million), representing 64.4% of net revenues, compared to
72.7% for the fourth quarter in 2017 and 59.7% for the previous
quarter. The year-over-year decrease in the percentage was mainly
attributable to the improved blended RevPAR and the increased
portion of manachised-and-franchised hotels. The sequential
increase in the percentage was mainly due to seasonality.
For the full year of 2018, hotel operating costs
were RMB6,476.3 million (US$941.9 million), compared to RMB5,674.8
million in 2017. Excluding share-based compensation, hotel
operating costs (non-GAAP) were RMB6,449.2 million (US$938.0
million), representing 64.1% of net revenues, compared to 68.8% in
2017.
Selling and marketing expenses
for the fourth quarter of 2018 were RMB107.8 million (US$15.7
million), compared to RMB98.5 million in the fourth quarter of 2017
and RMB91.3 million in the previous quarter. Selling and marketing
expenses excluding share-based compensation expenses (non-GAAP) for
the fourth quarter of 2018 were RMB107.2 million (US$15.6 million),
or 4.0% of net revenues, compared to 4.4% for the fourth quarter of
2017 and 3.3% for the previous quarter. The year-over-year decrease
were mainly attributable to timing of certain brand building and
marketing activities that occurred in earlier quarters in 2018
compared to 2017.
For the full year of 2018, selling and marketing
expenses were RMB348.1 million (US$50.6 million), compared to
RMB284.9 million in 2017. Selling and marketing expenses excluding
share-based compensation expenses (non-GAAP) were RMB345.5 million
(US$50.3 million), representing 3.5% of net revenues, both in 2018
and 2017.
General and administrative
expenses for the fourth quarter of 2018 were RMB269.3
million (US$39.2 million), compared to RMB236.2 million in the
fourth quarter of 2017 and RMB233.4 million in the previous
quarter. General and administrative expenses excluding share-based
compensation expenses (non-GAAP) for the fourth quarter of 2018
were RMB251.8 million (US$36.6 million), representing 9.3% of net
revenues, compared with 10.0% of net revenues in the fourth quarter
of 2017 and 7.9% in the previous quarter. The year-over-year
decrease in the percentage was mainly due to the amount of RMB32.7
million for long-term profit-sharing bonus for full year 2017 was
accrued in the fourth quarter of 2017 when we established the plan,
while the amount for the year of 2018 was accrued in each quarter.
The long-term profit-sharing bonus accrued in the fourth quarter of
2018 was approximately RMB19.0 million.
For the full year of 2018, general and
administrative expenses were RMB850.9 million (US$123.8 million),
compared to RMB691.0 million in 2017. General and administrative
expenses excluding share-based compensation expenses (non-GAAP)
were RMB797.7 million (US$116.0 million), representing 8.0% of net
revenues, compared to 7.9% in 2017.
Pre-opening expenses for the
fourth quarter of 2018 were RMB53.9 million (US$7.8 million),
representing a 24.8% year-over-year decrease and a 10.1% sequential
decrease.
Pre-opening expenses for the full year of 2018
were RMB254.6 million (US$37.0 million), compared to RMB206.5
million in 2017, representing a year-over-year increase of 23.3%.
The increase in pre-opening expenses was mainly attributable to
more leased mid-and-upscale hotels opened or under construction in
2018 than in 2017. The pre-opening expenses as a percentage of net
revenues was 2.5% in both 2018 and 2017.
Other operating income, net for
the fourth quarter of 2018 were RMB85.0 million (US$12.4 million)
mainly related to subsidy income and gains related to compensation
from the landlords on termination of certain leased hotels,
compared to RMB42.6 million in the fourth quarter of 2017 and
RMB51.3 million in the previous quarter.
Other operating income, net for the full year of
2018 were RMB225.6 million (US$32.8 million), compared to RMB71.2
million in 2017. Other operating income, net in 2018 mainly
comprised of subsidy income of RMB105.8 million, compensations
received or reversal of losses related to termination of certain
lease hotels of RMB92.6 million, as well as the compensation of
RMB35.0 million received from the selling shareholders of Crystal
Orange as the final settlement of the sales and purchase
transaction. The subsidy income recorded in 2018 included
approximately RMB16 million of subsidy that were related to
2017.
Income from operations for the
fourth quarter of 2018 was RMB592.0 million (US$86.1 million),
compared to RMB231.2 million in the fourth quarter of 2017 and
RMB774.8 million in the previous quarter. Excluding share-based
compensation expenses, adjusted income from operations (non-GAAP)
for the fourth quarter of 2018 was RMB618.8 million (US$90.0
million), compared to RMB250.4 million for the fourth quarter of
2017 and RMB795.2 million for the previous quarter. The adjusted
operating margin, defined as adjusted income from operations
(non-GAAP) as percentage of net revenues, for the fourth quarter of
2018 was 23.1%, compared with 11.3% in the fourth quarter of 2017
and 28.7% in the previous quarter. The year-over-year improved
operating margin was mainly due to our improved blended RevPAR,
asset-light strategy and decreased impairment loss in the fourth
quarter of 2018.
Income from operations for the full year of 2018
was RMB2,344.4 million (US$341.0 million), compared to RMB1,425.6
million in 2017. Excluding share-based compensation expenses,
adjusted income from operations (non-GAAP) for the full year of
2018 was RMB2,427.3 million (US$353.0 million), compared to
RMB1,492.0 million for the full year of 2017. The adjusted
operating margin (non-GAAP) for the year of 2018 was 24.1%,
compared with 18.0% for the full year of 2017. The improvement of
the adjusted operating margin was mainly attributable to the higher
blended RevPAR and the increased portion of
manachised-and-franchised hotels in 2018.
Other income, net for the
fourth quarter of 2018 was RMB0.7 million (US$0.1 million),
compared to other expense, net of RMB12.9 million for the fourth
quarter of 2017 and other income, net of RMB16.3 million for the
previous quarter.
Other income, net for the full year of 2018 was
RMB203.1 million (US$29.5 million), compared to RMB128.1 million in
2017. The increase was mainly due to gross dividends received from
AccorHotels of RMB103.8 million in the second quarter of 2018.
Unrealized losses from fair value
changes of equity securities for the fourth quarter of
2018 was RMB755.9 million (US$109.9 million), compared to
unrealized gains from fair value changes of equity securities of
RMB24.1 million in the fourth quarter of 2017 and unrealized gains
from fair value changes of equity securities of RMB179.2 million in
the previous quarter.
For the full year of 2018, unrealized losses
from fair value changes of equity securities was RMB914.1 million
(US$133.0 million), compared to unrealized gains from fair value
changes of equity securities of RMB35.5 million in 2017. Unrealized
gains (losses) from fair value changes of equity securities mainly
represents the unrealized gains (losses) from our investment in
equity securities with readily determinable fair values, such as
AccorHotels.
Income tax expense for the
fourth quarter of 2018 was RMB106.1 million (US$15.4 million),
compared to RMB17.7 million in the same period of 2017 and RMB254.8
million in the previous quarter. For the full year of 2018, income
tax expense was RMB568.9 million (US$82.8 million), compared to
RMB357.0 million in 2017. The change in our effective tax rate
primarily reflected certain non-taxable loss of the fair value
changes in equity securities investments.
Net loss attributable to Huazhu Group
Limited for the fourth quarter of 2018 was RMB418.5
million (US$60.9 million), compared to net income attributable to
Huazhu Group Limited of RMB225.7 million in the fourth quarter of
2017 and RMB667.8 million in the previous quarter. Excluding
share-based compensation expenses and the unrealized gains (losses)
from fair value changes of equity securities, adjusted net income
attributable to Huazhu Group Limited (non-GAAP) for the fourth
quarter of 2018 was RMB364.1 million (US$53.0 million),
representing a 64.9% year-over-year increase and a 28.5% sequential
decrease.
Net income attributable to Huazhu Group Limited
for the full year of 2018 was RMB716.2 million (US$104.2 million),
compared to RMB1,228.3 million in 2017. Excluding share-based
compensation expenses and the unrealized gains (losses) from fair
value changes of equity securities, adjusted net income
attributable to Huazhu Group Limited (non-GAAP) for the full year
of 2018 was RMB1,713.2 million (US$249.2 million), compared to
RMB1,259.1 million in 2017. The increase of 36.1% was mainly
attributable to the expanded hotel network, improved blended RevPAR
and the proportion of manachised and franchised hotels.
Basic and diluted earnings per
share/ADS. For the fourth quarter of 2018, basic and
diluted losses per share were RMB1.48 (US$0.22). For the fourth
quarter of 2018, excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, adjusted basic earnings per share (non-GAAP) were
RMB1.29 (US$0.19) and adjusted diluted earnings per share
(non-GAAP) were RMB1.23 (US$0.17).
For the full year of 2018, basic earnings per
share were RMB2.54 (US$0.37) and diluted earnings per share were
RMB2.49 (US$0.36). For the full year of 2018, excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities, adjusted basic earnings per share
(non-GAAP) were RMB6.08 (US$0.88), while adjusted diluted earnings
per share (non-GAAP) were RMB5.77 (US$0.84).
EBITDA (non-GAAP) for the
fourth quarter of 2018 was negative RMB45.2 million (US$6.6
million), compared with EBITDA (non-GAAP) of RMB445.8 million in
the fourth quarter of 2017 and RMB1,165.6 million in the previous
quarter. Excluding share-based compensation expenses and unrealized
gains (losses) from fair value changes of equity securities,
adjusted EBITDA (non-GAAP) for the fourth quarter of 2018 was
RMB737.4 million (US$107.3 million), compared with RMB440.9 million
for the fourth quarter of 2017 and RMB1,006.8 million for the
previous quarter.
EBITDA (non-GAAP) for the full year of 2018 was
RMB2,271.9 million (US$330.4 million), compared to RMB2,349.2
million in 2017. Excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, adjusted EBITDA (non-GAAP) for the full year of 2018
was RMB3,268.9 million (US$475.4 million), compared with RMB2,380.0
million in 2017, representing a 37.3% 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 the proportion of
manachised and franchised hotels. The adjusted EBITDA margin
(non-GAAP) for the year of 2018 was 32.5%, compared with 28.9% for
the full year of 2017.
Cash flow. Operating cash
inflow for the fourth quarter of 2018 was RMB574.3 million (US$83.5
million). Investing cash outflow for the fourth quarter was
RMB733.2 million (US$106.6 million).
Operating cash inflow for the full year of 2018
was RMB3,048.6 million (US$443.4 million), representing an increase
of 24.3% from 2017. Investing cash outflow for the full year of
2018 was RMB6,345.3 million (US$922.9 million), compared to
RMB6,235.4 million in 2017.
Cash and cash equivalents and Restricted
cash. As of December 31, 2018, the Company had a total
balance of cash and cash equivalents, restricted cash of RMB4,884.3
million (US$710.4 million).
Debt financing. As of December
31, 2018, the Company had a total loan balance of RMB9,759.3
million (US$1,419.4 million) and the unutilized credit facility
available to the Company was RMB689.4 million.
Adoption of New Revenue Recognition
Accounting StandardsThe Company adopted Accounting
Standards Update 2014-09, Revenue from Contracts with Customers
(Topic 606) on January 1, 2018 on a full retrospective basis in the
condensed consolidated financial statements. As such, prior period
results have been adjusted to reflect the adoption of ASU
2014-09.
The most meaningful impacts of the adoption of
ASU 2014-09 are as follows:
Under previous guidance, initial one-time
franchise fee was recognized when the hotels opened for business
and the Company had fulfilled its commitments and obligations. Upon
adoption of new revenue standards, the one-time franchise fee will
be recognized over the term of the franchise contract.
Under previous guidance, the Company adopted the
incremental cost model to account for customer loyalty program. The
estimated incremental costs, net of the reimbursement received from
the franchisees, are accrued and recorded as accruals for customer
loyalty program as members accumulate points and are recognized as
cost and expense in the accompanying consolidated statements of
comprehensive income. Under new revenue standards, loyalty program
is considered a separate performance obligation and the
consideration allocated to the loyalty program will be recognized
as revenue upon point redemption, net of any cost paid to the
franchisees and other third parties.
Guidance In the first quarter
of 2019, the Company expects net revenues to grow 13% to 15%
year-over-year. For the full year 2019, the Company expects net
revenues to grow 15% to 17% from 2018.
The Company anticipates the gross opening of
800-900 hotels in 2019, about 75% of which are midscale and upscale
hotels.
The above forecast reflects the Company’s
current and preliminary view, which is subject to change.
Conference CallHuazhu’s
management will host a conference call at 9 p.m. ET, Thursday,
March 14, 2019 (or 9 a.m. on Friday, March 15, 2019 in the
Shanghai/Hong Kong time zone) following the announcement. To
participate in the event by telephone, please dial +1 (845) 675
0438 (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 9697413. 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, 2019. 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
9697413.
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
MeasuresTo 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 and
marketing expenses excluding share-based compensation expenses;
adjusted income from operations excluding share-based compensation
expenses; adjusted net income attributable to Huazhu Group Limited
excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities; adjusted
basic and diluted earnings per share/ADS excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities; EBITDA; and adjusted EBITDA excluding
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities. 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 and unrealized gains (losses) from fair value
changes of equity securities 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 and unrealized gains
(losses) from fair value changes of equity securities is that
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities have been and will
continue to be significant and recurring 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 and unrealized gains
(losses) from fair value changes of equity securities, to assess
operating results of the hotels in operation. The Company believes
that the exclusion of share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities helps facilitate year-on-year comparison of the results
of operations as the share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities may not be indicative of Company operating
performance.
The Company believes that unrealized gains and
losses from changes in fair value of equity securities are
generally meaningless in understanding our reported results or
evaluating our economic performance of our businesses. These gains
and losses have caused and will continue to cause significant
volatility in periodic earnings.
Therefore, the Company believes adjusted EBITDA
more closely reflects the performance capability of hotels. 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 and unrealized gains (losses) from fair value
changes of equity securities 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 unrealized gains (losses) from fair
value changes of equity securities 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 Huazhu Group
LimitedHuazhu Group Limited is a leading hotel operator
and franchisor in China. As of December 31, 2018, the Company had
4,230 hotels or 422,747 rooms in operation. With a primary focus on
economy and midscale hotel segments, Huazhu’s brands include Hi
Inn, Elan Hotel, HanTing Hotel, HanTing Premium Hotel, JI Hotel,
Starway Hotel, Manxin Hotel, Joya Hotel, Crystal Orange Hotel,
Orange Hotel Select, Orange Hotel and Blossom Hill. 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 and
owned, manachised and franchised models. Under the lease and
ownership model, the Company directly operates hotels typically
located on leased or owned 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, 2018, Huazhu Group operates 21
percent of its hotel rooms under lease and ownership model, 79
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 brands, trends and competition in the lodging
industry, the expected growth of the lodging market in China and
other factors and risks outlined in the Company’s filings with the
Securities and Exchange Commission, including its annual report on
Form 20-F and other filings. These factors may cause the Company’s
actual results to differ materially from any forward-looking
statement. In addition, new factors emerge from time to time and it
is not possible for the Company to predict all factors that may
cause actual results to differ materially from those contained in
any forward-looking statements. Any projections in this release are
based on limited information currently available to the Company,
which is subject to change. This release also contains statements
or projections that are based upon information available to the
public, as well as other information from sources which the Company
believes to be reliable, but it is not guaranteed by the Company to
be accurate, nor does the Company purport it to be complete. The
Company disclaims any obligation to publicly update any
forward-looking statements to reflect events or circumstances after
the date of this document, except as required by applicable
law.
---Financial Tables and Operational Data
Follow—
|
Huazhu Group Limited |
Unaudited Condensed Consolidated Balance
Sheets |
|
December 31, 2017 |
|
December 31, 2018 |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
3,474,719 |
|
|
4,262,010 |
|
|
619,884 |
|
Restricted cash |
481,348 |
|
|
622,308 |
|
|
90,511 |
|
Short-term investments |
129,911 |
|
|
89,010 |
|
|
12,946 |
|
Accounts
receivable, net |
162,910 |
|
|
194,417 |
|
|
28,277 |
|
Loan
receivables |
380,580 |
|
|
93,957 |
|
|
13,665 |
|
Amounts
due from related parties |
118,537 |
|
|
176,235 |
|
|
25,632 |
|
Prepaid
rent |
659,973 |
|
|
955,000 |
|
|
138,899 |
|
Inventories |
24,006 |
|
|
40,651 |
|
|
5,912 |
|
Other
current assets |
329,140 |
|
|
539,928 |
|
|
78,530 |
|
Total
current assets |
5,761,124 |
|
|
6,973,516 |
|
|
1,014,256 |
|
|
|
|
|
Property and equipment, net |
4,522,878 |
|
|
5,017,790 |
|
|
729,807 |
|
Intangible assets, net |
1,643,972 |
|
|
1,834,235 |
|
|
266,778 |
|
Land
use rights |
140,108 |
|
|
220,099 |
|
|
32,012 |
|
Long-term investments |
2,361,969 |
|
|
6,152,140 |
|
|
894,792 |
|
Goodwill |
2,264,758 |
|
|
2,629,611 |
|
|
382,461 |
|
Loan
receivables |
42,330 |
|
|
188,673 |
|
|
27,441 |
|
Other
assets |
364,660 |
|
|
471,630 |
|
|
68,597 |
|
Deferred tax assets |
405,975 |
|
|
504,814 |
|
|
73,422 |
|
Total
assets |
17,507,774 |
|
|
23,992,508 |
|
|
3,489,566 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Short-term debt |
130,815 |
|
|
947,810 |
|
|
137,853 |
|
Accounts
payable |
766,565 |
|
|
890,486 |
|
|
129,516 |
|
Amounts
due to related parties |
36,890 |
|
|
75,252 |
|
|
10,945 |
|
Salary
and welfare payables |
427,070 |
|
|
520,829 |
|
|
75,751 |
|
Deferred
revenue |
942,651 |
|
|
1,004,747 |
|
|
146,134 |
|
Accrued
expenses and other current liabilities |
1,249,032 |
|
|
1,606,673 |
|
|
233,682 |
|
Dividends
payable |
- |
|
|
658,007 |
|
|
95,703 |
|
Income
tax payable |
218,238 |
|
|
265,546 |
|
|
38,622 |
|
Total
current liabilities |
3,771,261 |
|
|
5,969,350 |
|
|
868,206 |
|
|
|
|
|
Long-term debt |
4,921,774 |
|
|
8,811,511 |
|
|
1,281,581 |
|
Deferred
rent |
1,380,484 |
|
|
1,507,303 |
|
|
219,228 |
|
Deferred
revenue |
398,303 |
|
|
458,280 |
|
|
66,654 |
|
Other
long-term liabilities |
380,578 |
|
|
452,420 |
|
|
65,802 |
|
Deferred
tax liabilities |
422,090 |
|
|
474,641 |
|
|
69,034 |
|
Total
liabilities |
11,274,490 |
|
|
17,673,505 |
|
|
2,570,505 |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
Ordinary
shares |
212 |
|
|
214 |
|
|
31 |
|
Treasury
shares |
(107,331 |
) |
|
(107,331 |
) |
|
(15,611 |
) |
Additional paid-in capital |
3,624,135 |
|
|
3,712,988 |
|
|
540,032 |
|
Retained
earnings |
2,512,719 |
|
|
2,610,200 |
|
|
379,638 |
|
Accumulated other comprehensive income (loss) |
167,965 |
|
|
(41,634 |
) |
|
(6,055 |
) |
Total
Huazhu Group Limited shareholders' equity |
6,197,700 |
|
|
6,174,437 |
|
|
898,035 |
|
Noncontrolling interest |
35,584 |
|
|
144,566 |
|
|
21,026 |
|
Total
equity |
6,233,284 |
|
|
6,319,003 |
|
|
919,061 |
|
Total
liabilities and equity |
17,507,774 |
|
|
23,992,508 |
|
|
3,489,566 |
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Unaudited Condensed Consolidated Statements of
Comprehensive Income |
|
Quarter Ended |
|
Year Ended |
|
December31, 2017 |
|
September30, 2018 |
|
December31, 2018 |
|
December31, 2017 |
|
December31, 2018 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands, except per share and per ADS
data) |
Revenues: |
|
|
|
|
|
|
|
Leased and owned
hotels |
1,716,259 |
|
|
2,052,581 |
|
|
1,942,225 |
|
|
282,485 |
|
|
6,338,119 |
|
|
7,470,490 |
|
|
1,086,538 |
|
Manachised and franchised hotels |
495,851 |
|
|
699,223 |
|
|
702,999 |
|
|
102,247 |
|
|
1,850,525 |
|
|
2,526,990 |
|
|
367,535 |
|
Others |
13,032 |
|
|
15,757 |
|
|
38,071 |
|
|
5,537 |
|
|
40,257 |
|
|
65,880 |
|
|
9,582 |
|
Net
revenues |
2,225,142 |
|
|
2,767,561 |
|
|
2,683,295 |
|
|
390,269 |
|
|
8,228,901 |
|
|
10,063,360 |
|
|
1,463,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
Hotel
operating costs: |
|
|
|
|
|
|
|
Rents |
(560,178 |
) |
|
(594,593 |
) |
|
(661,698 |
) |
|
(96,240 |
) |
|
(2,058,954 |
) |
|
(2,405,946 |
) |
|
(349,930 |
) |
Utilities |
(89,418 |
) |
|
(110,019 |
) |
|
(87,588 |
) |
|
(12,739 |
) |
|
(365,507 |
) |
|
(399,404 |
) |
|
(58,091 |
) |
Personnel
costs |
(412,990 |
) |
|
(428,924 |
) |
|
(436,205 |
) |
|
(63,443 |
) |
|
(1,388,355 |
) |
|
(1,662,638 |
) |
|
(241,821 |
) |
Depreciation and amortization |
(204,147 |
) |
|
(215,942 |
) |
|
(222,954 |
) |
|
(32,427 |
) |
|
(773,202 |
) |
|
(869,129 |
) |
|
(126,410 |
) |
Consumables, food and beverage |
(154,454 |
) |
|
(179,414 |
) |
|
(178,894 |
) |
|
(26,019 |
) |
|
(550,664 |
) |
|
(672,632 |
) |
|
(97,830 |
) |
Others |
(202,262 |
) |
|
(128,911 |
) |
|
(150,051 |
) |
|
(21,824 |
) |
|
(538,098 |
) |
|
(466,578 |
) |
|
(67,861 |
) |
Total
hotel operating costs |
(1,623,449 |
) |
|
(1,657,803 |
) |
|
(1,737,390 |
) |
|
(252,692 |
) |
|
(5,674,780 |
) |
|
(6,476,327 |
) |
|
(941,943 |
) |
Other
operating costs |
(6,836 |
) |
|
(1,685 |
) |
|
(7,896 |
) |
|
(1,148 |
) |
|
(17,324 |
) |
|
(14,560 |
) |
|
(2,118 |
) |
Selling
and marketing expenses |
(98,464 |
) |
|
(91,322 |
) |
|
(107,841 |
) |
|
(15,685 |
) |
|
(284,900 |
) |
|
(348,080 |
) |
|
(50,626 |
) |
General
and administrative expenses |
(236,213 |
) |
|
(233,353 |
) |
|
(269,285 |
) |
|
(39,167 |
) |
|
(690,970 |
) |
|
(850,904 |
) |
|
(123,759 |
) |
Pre-opening expenses |
(71,575 |
) |
|
(59,894 |
) |
|
(53,853 |
) |
|
(7,833 |
) |
|
(206,454 |
) |
|
(254,629 |
) |
|
(37,034 |
) |
Total
operating costs and expenses |
(2,036,537 |
) |
|
(2,044,057 |
) |
|
(2,176,265 |
) |
|
(316,525 |
) |
|
(6,874,428 |
) |
|
(7,944,500 |
) |
|
(1,155,480 |
) |
Other
operating income (expense), net |
42,563 |
|
|
51,268 |
|
|
84,997 |
|
|
12,363 |
|
|
71,175 |
|
|
225,562 |
|
|
32,807 |
|
Income
from operations |
231,168 |
|
|
774,772 |
|
|
592,027 |
|
|
86,107 |
|
|
1,425,648 |
|
|
2,344,422 |
|
|
340,982 |
|
Interest
income |
40,713 |
|
|
41,870 |
|
|
32,449 |
|
|
4,719 |
|
|
112,645 |
|
|
147,511 |
|
|
21,455 |
|
Interest
expense |
(34,295 |
) |
|
(63,306 |
) |
|
(70,210 |
) |
|
(10,212 |
) |
|
(87,320 |
) |
|
(243,801 |
) |
|
(35,459 |
) |
Other
(expense) income, net |
(12,939 |
) |
|
16,286 |
|
|
665 |
|
|
97 |
|
|
128,138 |
|
|
203,105 |
|
|
29,540 |
|
Unrealized gains (losses) from fair value changes of equity
securities |
24,134 |
|
|
179,229 |
|
|
(755,916 |
) |
|
(109,943 |
) |
|
35,540 |
|
|
(914,129 |
) |
|
(132,955 |
) |
Foreign
exchange (loss) gain |
(2,341 |
) |
|
(433 |
) |
|
(41,908 |
) |
|
(6,095 |
) |
|
(18,128 |
) |
|
(143,975 |
) |
|
(20,940 |
) |
Income
(Loss) before income taxes |
246,440 |
|
|
948,418 |
|
|
(242,893 |
) |
|
(35,327 |
) |
|
1,596,523 |
|
|
1,393,133 |
|
|
202,623 |
|
Income
tax expense |
(17,747 |
) |
|
(254,843 |
) |
|
(106,059 |
) |
|
(15,426 |
) |
|
(356,992 |
) |
|
(568,942 |
) |
|
(82,750 |
) |
(Loss)
from equity method investments |
(2,871 |
) |
|
(18,432 |
) |
|
(64,146 |
) |
|
(9,330 |
) |
|
(11,783 |
) |
|
(96,801 |
) |
|
(14,079 |
) |
Net
income (loss) |
225,822 |
|
|
675,143 |
|
|
(413,098 |
) |
|
(60,083 |
) |
|
1,227,748 |
|
|
727,390 |
|
|
105,794 |
|
Net
(income) loss attributable to noncontrolling interest |
(116 |
) |
|
(7,391 |
) |
|
(5,443 |
) |
|
(791 |
) |
|
555 |
|
|
(11,229 |
) |
|
(1,633 |
) |
Net
income (loss) attributable to Huazhu Group Limited |
225,706 |
|
|
667,752 |
|
|
(418,541 |
) |
|
(60,874 |
) |
|
1,228,303 |
|
|
716,161 |
|
|
104,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
Unrealized securities holding gains, net of tax |
11,400 |
|
|
- |
|
|
- |
|
|
- |
|
|
868 |
|
|
- |
|
|
- |
|
Reclassification of gains realized to net income, net of tax |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(5,282 |
) |
|
- |
|
|
- |
|
Foreign
currency translation adjustments, net of tax |
58,502 |
|
|
(147,736 |
) |
|
20,349 |
|
|
2,960 |
|
|
176,882 |
|
|
(168,958 |
) |
|
(24,574 |
) |
Comprehensive income (loss) |
295,724 |
|
|
527,407 |
|
|
(392,749 |
) |
|
(57,123 |
) |
|
1,400,216 |
|
|
558,432 |
|
|
81,220 |
|
Comprehensive (income) loss attributable to noncontrolling
interest |
(116 |
) |
|
(7,391 |
) |
|
(5,443 |
) |
|
(791 |
) |
|
555 |
|
|
(11,229 |
) |
|
(1,633 |
) |
Comprehensive income (loss) attributable to Huazhu Group
Limited |
295,608 |
|
|
520,016 |
|
|
(398,192 |
) |
|
(57,914 |
) |
|
1,400,771 |
|
|
547,203 |
|
|
79,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(Losses) per share/ADS1: |
|
|
|
|
|
|
|
Basic |
0.81 |
|
|
2.37 |
|
|
(1.48 |
) |
|
(0.22 |
) |
|
4.40 |
|
|
2.54 |
|
|
0.37 |
|
Diluted |
0.77 |
|
|
2.23 |
|
|
(1.48 |
) |
|
(0.22 |
) |
|
4.21 |
|
|
2.49 |
|
|
0.36 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computation: |
|
|
|
|
|
Basic |
279,861 |
|
|
282,149 |
|
|
282,500 |
|
|
282,500 |
|
|
279,272 |
|
|
281,717 |
|
|
281,717 |
|
Diluted |
298,903 |
|
|
303,605 |
|
|
282,500 |
|
|
282,500 |
|
|
293,074 |
|
|
303,606 |
|
|
303,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
Quarter Ended |
|
Year Ended |
|
December31, 2017 |
|
September30,
2018 |
|
December31, 2018 |
|
December31, 2017 |
|
December31, 2018 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands) |
Operating activities: |
|
|
|
|
|
|
|
Net income (loss) |
225,822 |
|
|
675,143 |
|
|
(413,098 |
) |
|
(60,083 |
) |
|
1,227,748 |
|
|
727,390 |
|
|
105,794 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
Share-based compensation |
19,245 |
|
|
20,397 |
|
|
26,746 |
|
|
3,890 |
|
|
66,367 |
|
|
82,902 |
|
|
12,058 |
|
Depreciation and amortization |
208,756 |
|
|
221,552 |
|
|
229,486 |
|
|
33,377 |
|
|
789,252 |
|
|
890,524 |
|
|
129,521 |
|
Amortization of issuance cost of convertible senior notes |
2,598 |
|
|
6,852 |
|
|
6,962 |
|
|
1,013 |
|
|
2,598 |
|
|
28,226 |
|
|
4,105 |
|
Deferred
taxes |
(82,338 |
) |
|
4,332 |
|
|
(97,461 |
) |
|
(14,175 |
) |
|
(79,203 |
) |
|
(90,887 |
) |
|
(13,219 |
) |
Bad debt
expenses |
1,434 |
|
|
788 |
|
|
8,356 |
|
|
1,215 |
|
|
2,446 |
|
|
10,426 |
|
|
1,516 |
|
Deferred
rent |
103,688 |
|
|
(5,959 |
) |
|
93,160 |
|
|
13,550 |
|
|
209,074 |
|
|
140,264 |
|
|
20,401 |
|
Loss
(Gain) from disposal of property and equipment |
(2,795 |
) |
|
7,933 |
|
|
(1,554 |
) |
|
(226 |
) |
|
12,884 |
|
|
157 |
|
|
23 |
|
Impairment loss |
92,480 |
|
|
10,818 |
|
|
24,269 |
|
|
3,530 |
|
|
169,213 |
|
|
35,087 |
|
|
5,103 |
|
Loss from
equity method investments, net of dividends |
2,871 |
|
|
18,432 |
|
|
124,102 |
|
|
18,050 |
|
|
11,783 |
|
|
156,756 |
|
|
22,799 |
|
Investment (income) loss |
(44,403 |
) |
|
(192,796 |
) |
|
797,824 |
|
|
116,040 |
|
|
(159,974 |
) |
|
1,009,394 |
|
|
146,810 |
|
Changes in operating assets and liabilities, net of effect of
acquisitions: |
Accounts receivable |
10,735 |
|
|
21,849 |
|
|
(8,803 |
) |
|
(1,280 |
) |
|
4,207 |
|
|
(36,281 |
) |
|
(5,277 |
) |
Prepaid rent |
(131,592 |
) |
|
2,777 |
|
|
(383,928 |
) |
|
(55,840 |
) |
|
(188,653 |
) |
|
(283,227 |
) |
|
(41,194 |
) |
Inventories |
3,684 |
|
|
(6,697 |
) |
|
(1,514 |
) |
|
(220 |
) |
|
2,766 |
|
|
(14,371 |
) |
|
(2,090 |
) |
Amounts
due from related parties |
(23,967 |
) |
|
(21,927 |
) |
|
(10,143 |
) |
|
(1,475 |
) |
|
(31,151 |
) |
|
(31,678 |
) |
|
(4,607 |
) |
Other current assets |
(56,720 |
) |
|
(34,568 |
) |
|
(1,283 |
) |
|
(187 |
) |
|
(76,320 |
) |
|
(56,282 |
) |
|
(8,186 |
) |
Other assets |
4,691 |
|
|
3,375 |
|
|
(37,620 |
) |
|
(5,472 |
) |
|
(54,411 |
) |
|
(32,145 |
) |
|
(4,675 |
) |
Accounts payable |
35,417 |
|
|
(14,372 |
) |
|
27,816 |
|
|
4,046 |
|
|
8,141 |
|
|
10,748 |
|
|
1,563 |
|
Amounts due to related parties |
4,234 |
|
|
(5,051 |
) |
|
25,495 |
|
|
3,708 |
|
|
3,093 |
|
|
38,361 |
|
|
5,579 |
|
Salary and welfare payables |
223,455 |
|
|
(19,666 |
) |
|
192,123 |
|
|
27,943 |
|
|
133,142 |
|
|
90,510 |
|
|
13,164 |
|
Deferred revenue |
23,014 |
|
|
53,559 |
|
|
(33,984 |
) |
|
(4,943 |
) |
|
26,178 |
|
|
113,719 |
|
|
16,540 |
|
Accrued expenses and other current liabilities |
(44,280 |
) |
|
38,876 |
|
|
(52,189 |
) |
|
(7,592 |
) |
|
277,888 |
|
|
139,759 |
|
|
20,328 |
|
Income tax payable |
(39,224 |
) |
|
114,238 |
|
|
25,678 |
|
|
3,735 |
|
|
44,688 |
|
|
47,755 |
|
|
6,946 |
|
Other long-term liabilities |
17,386 |
|
|
14,220 |
|
|
33,833 |
|
|
4,921 |
|
|
50,840 |
|
|
71,481 |
|
|
10,397 |
|
Net
cash provided by operating activities |
554,191 |
|
|
914,105 |
|
|
574,273 |
|
|
83,525 |
|
|
2,452,596 |
|
|
3,048,588 |
|
|
443,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
Purchases
of property and equipment |
(267,332 |
) |
|
(271,615 |
) |
|
(312,129 |
) |
|
(45,397 |
) |
|
(819,523 |
) |
|
(1,115,276 |
) |
|
(162,210 |
) |
Purchases
of intangibles |
(4,079 |
) |
|
(2,020 |
) |
|
(326 |
) |
|
(47 |
) |
|
(7,854 |
) |
|
(3,787 |
) |
|
(551 |
) |
Purchases
of land use rights |
- |
|
|
(75,850 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(75,850 |
) |
|
(11,032 |
) |
Amount
received as a result of government zoning |
2,593 |
|
|
- |
|
|
- |
|
|
- |
|
|
2,593 |
|
|
7,188 |
|
|
1,045 |
|
Acquisitions, net of cash received |
(330 |
) |
|
(430,890 |
) |
|
(26,951 |
) |
|
(3,920 |
) |
|
(3,745,588 |
) |
|
(496,882 |
) |
|
(72,268 |
) |
Proceeds
from disposal of subsidiary and branch, net of cash disposed |
13,684 |
|
|
- |
|
|
2,555 |
|
|
372 |
|
|
13,684 |
|
|
8,408 |
|
|
1,223 |
|
Purchases
of long-term investments |
(856,682 |
) |
|
(651,309 |
) |
|
(365,564 |
) |
|
(53,169 |
) |
|
(1,327,508 |
) |
|
(4,959,526 |
) |
|
(721,333 |
) |
Proceeds
from maturity/sale and return of long-term investments |
1,857 |
|
|
66,238 |
|
|
3,757 |
|
|
545 |
|
|
128,174 |
|
|
177,383 |
|
|
25,799 |
|
Payment
for shareholder loan to equity investees |
(6,079 |
) |
|
- |
|
|
(1,000 |
) |
|
(145 |
) |
|
(113,206 |
) |
|
(7,240 |
) |
|
(1,053 |
) |
Collection of shareholder loan from equity investees |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
119,855 |
|
|
- |
|
|
- |
|
Purchases
of short-term investments |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(95,802 |
) |
|
- |
|
|
- |
|
Payment
for the origination of loan receivables |
(319,500 |
) |
|
(76,930 |
) |
|
(54,440 |
) |
|
(7,918 |
) |
|
(445,892 |
) |
|
(313,040 |
) |
|
(45,530 |
) |
Proceeds
from collection of loan receivables |
20,303 |
|
|
47,448 |
|
|
20,876 |
|
|
3,036 |
|
|
55,662 |
|
|
433,319 |
|
|
63,024 |
|
Net cash
used in investing activities |
(1,415,565 |
) |
|
(1,394,928 |
) |
|
(733,222 |
) |
|
(106,643 |
) |
|
(6,235,405 |
) |
|
(6,345,303 |
) |
|
(922,886 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
Net
proceeds from issuance of ordinary shares upon exercise of
options |
1,875 |
|
|
398 |
|
|
1,297 |
|
|
189 |
|
|
9,073 |
|
|
13,702 |
|
|
1,993 |
|
Proceeds
from short-term bank borrowings |
- |
|
|
268,405 |
|
|
369,893 |
|
|
53,798 |
|
|
136,488 |
|
|
928,298 |
|
|
135,015 |
|
Repayment
of short-term bank borrowings |
- |
|
|
(90 |
) |
|
- |
|
|
- |
|
|
(294,677 |
) |
|
(128,378 |
) |
|
(18,672 |
) |
Proceeds
from long-term bank borrowings |
- |
|
|
343,960 |
|
|
480,424 |
|
|
69,875 |
|
|
3,633,174 |
|
|
4,275,036 |
|
|
621,778 |
|
Repayment
of long-term bank borrowings |
(1,650,916 |
) |
|
- |
|
|
(291,654 |
) |
|
(42,419 |
) |
|
(1,650,917 |
) |
|
(798,861 |
) |
|
(116,190 |
) |
Funds
advanced from noncontrolling interest holders |
34,972 |
|
|
30,520 |
|
|
- |
|
|
- |
|
|
83,573 |
|
|
36,150 |
|
|
5,258 |
|
Repayment
of funds advanced from noncontrolling interest holders |
- |
|
|
(2,500 |
) |
|
(2,000 |
) |
|
(291 |
) |
|
(8,730 |
) |
|
(8,430 |
) |
|
(1,226 |
) |
Acquisition of noncontrolling interest |
- |
|
|
(7,000 |
) |
|
(74,586 |
) |
|
(10,848 |
) |
|
(3,750 |
) |
|
(83,677 |
) |
|
(12,170 |
) |
Proceeds
from amounts due to related parties |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
103,158 |
|
|
15,004 |
|
Repayment
of amounts due to related parties |
- |
|
|
(112,964 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(112,964 |
) |
|
(16,430 |
) |
Contribution from noncontrolling interest holders |
17,743 |
|
|
23,267 |
|
|
792 |
|
|
115 |
|
|
25,575 |
|
|
28,886 |
|
|
4,201 |
|
Dividends
paid to noncontrolling interest holders |
(240 |
) |
|
(2,309 |
) |
|
(762 |
) |
|
(111 |
) |
|
(2,810 |
) |
|
(4,900 |
) |
|
(713 |
) |
Dividends
paid |
(306,343 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(306,343 |
) |
|
- |
|
|
- |
|
Proceeds
from issuance of convertible senior notes, net of issuance cost and
capped call option |
2,925,203 |
|
|
- |
|
|
- |
|
|
- |
|
|
2,925,203 |
|
|
- |
|
|
- |
|
Debt
financing costs paid |
(9,763 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(9,763 |
) |
|
- |
|
|
- |
|
Proceeds
from ADS Lending |
7 |
|
|
- |
|
|
- |
|
|
- |
|
|
7 |
|
|
- |
|
|
- |
|
Net
cash provided by financing activities |
1,012,538 |
|
|
541,687 |
|
|
483,404 |
|
|
70,308 |
|
|
4,536,103 |
|
|
4,248,020 |
|
|
617,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents, and
restricted cash |
(21,717 |
) |
|
(334 |
) |
|
12,423 |
|
|
1,807 |
|
|
(32,733 |
) |
|
(23,054 |
) |
|
(3,352 |
) |
Net
increase in cash and cash equivalents, and restricted cash |
129,447 |
|
|
60,530 |
|
|
336,878 |
|
|
48,997 |
|
|
720,561 |
|
|
928,251 |
|
|
135,009 |
|
Cash,
cash equivalents and restricted cash at the beginning of the
period |
3,826,620 |
|
|
4,486,910 |
|
|
4,547,440 |
|
|
661,398 |
|
|
3,235,506 |
|
|
3,956,067 |
|
|
575,386 |
|
Cash,
cash equivalents and restricted cash at the end of the period |
3,956,067 |
|
|
4,547,440 |
|
|
4,884,318 |
|
|
710,395 |
|
|
3,956,067 |
|
|
4,884,318 |
|
|
710,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended December 31, 2018 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
Hotel operating
costs |
1,737,390 |
|
|
64.7 |
% |
|
8,551 |
|
|
0.3 |
% |
|
1,728,839 |
|
|
64.4 |
% |
Other
operating costs |
7,896 |
|
|
0.3 |
% |
|
- |
|
|
0.0 |
% |
|
7,896 |
|
|
0.3 |
% |
Selling and marketing expenses |
107,841 |
|
|
4.0 |
% |
|
669 |
|
|
0.0 |
% |
|
107,172 |
|
|
4.0 |
% |
General and administrative expenses |
269,285 |
|
|
10.0 |
% |
|
17,526 |
|
|
0.7 |
% |
|
251,759 |
|
|
9.3 |
% |
Pre-opening expenses |
53,853 |
|
|
2.0 |
% |
|
- |
|
|
0.0 |
% |
|
53,853 |
|
|
2.0 |
% |
Total
operating costs and expenses |
2,176,265 |
|
|
81.0 |
% |
|
26,746 |
|
|
1.0 |
% |
|
2,149,519 |
|
|
80.0 |
% |
Income from operations |
592,027 |
|
|
22.1 |
% |
|
26,746 |
|
|
1.0 |
% |
|
618,773 |
|
|
23.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2018 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
|
|
(in thousands) |
Hotel
operating costs |
252,692 |
|
|
64.7 |
% |
|
1,244 |
|
|
0.3 |
% |
|
251,448 |
|
|
64.4 |
% |
Other
operating costs |
1,148 |
|
|
0.3 |
% |
|
- |
|
|
0.0 |
% |
|
1,148 |
|
|
0.3 |
% |
Selling and marketing expenses |
15,685 |
|
|
4.0 |
% |
|
97 |
|
|
0.0 |
% |
|
15,588 |
|
|
4.0 |
% |
General and administrative expenses |
39,167 |
|
|
10.0 |
% |
|
2,549 |
|
|
0.7 |
% |
|
36,618 |
|
|
9.3 |
% |
Pre-opening expenses |
7,833 |
|
|
2.0 |
% |
|
- |
|
|
0.0 |
% |
|
7,833 |
|
|
2.0 |
% |
Total
operating costs and expenses |
316,525 |
|
|
81.0 |
% |
|
3,890 |
|
|
1.0 |
% |
|
312,635 |
|
|
80.0 |
% |
Income from operations |
86,107 |
|
|
22.1 |
% |
|
3,890 |
|
|
1.0 |
% |
|
89,997 |
|
|
23.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2018 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
Hotel
operating costs |
1,657,803 |
|
|
59.9 |
% |
|
6,607 |
|
|
0.2 |
% |
|
1,651,196 |
|
|
59.7 |
% |
Other
operating costs |
1,685 |
|
|
0.1 |
% |
|
- |
|
|
0.0 |
% |
|
1,685 |
|
|
0.1 |
% |
Selling and marketing expenses |
91,322 |
|
|
3.3 |
% |
|
472 |
|
|
0.0 |
% |
|
90,850 |
|
|
3.3 |
% |
General and administrative expenses |
233,353 |
|
|
8.4 |
% |
|
13,318 |
|
|
0.5 |
% |
|
220,035 |
|
|
7.9 |
% |
Pre-opening expenses |
59,894 |
|
|
2.2 |
% |
|
- |
|
|
0.0 |
% |
|
59,894 |
|
|
2.2 |
% |
Total
operating costs and expenses |
2,044,057 |
|
|
73.9 |
% |
|
20,397 |
|
|
0.7 |
% |
|
2,023,660 |
|
|
73.2 |
% |
Income from operations |
774,772 |
|
|
28.0 |
% |
|
20,397 |
|
|
0.7 |
% |
|
795,169 |
|
|
28.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2017 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
Hotel
operating costs |
1,623,449 |
|
|
73.0 |
% |
|
6,091 |
|
|
0.3 |
% |
|
1,617,358 |
|
|
72.7 |
% |
Other
operating costs |
6,836 |
|
|
0.3 |
% |
|
- |
|
|
0.0 |
% |
|
6,836 |
|
|
0.3 |
% |
Selling and marketing expenses |
98,464 |
|
|
4.4 |
% |
|
551 |
|
|
0.0 |
% |
|
97,913 |
|
|
4.4 |
% |
General and administrative expenses |
236,213 |
|
|
10.6 |
% |
|
12,603 |
|
|
0.6 |
% |
|
223,610 |
|
|
10.0 |
% |
Pre-opening expenses |
71,575 |
|
|
3.2 |
% |
|
- |
|
|
0.0 |
% |
|
71,575 |
|
|
3.2 |
% |
Total
operating costs and expenses |
2,036,537 |
|
|
91.5 |
% |
|
19,245 |
|
|
0.9 |
% |
|
2,017,292 |
|
|
90.6 |
% |
Income from operations |
231,168 |
|
|
10.4 |
% |
|
19,245 |
|
|
0.9 |
% |
|
250,413 |
|
|
11.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2018 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
Hotel operating
costs |
6,476,327 |
|
|
64.4 |
% |
|
27,158 |
|
|
0.3 |
% |
|
6,449,169 |
|
|
64.1 |
% |
Other
operating costs |
14,560 |
|
|
0.1 |
% |
|
- |
|
|
0.0 |
% |
|
14,560 |
|
|
0.1 |
% |
Selling and marketing expenses |
348,080 |
|
|
3.5 |
% |
|
2,583 |
|
|
0.0 |
% |
|
345,497 |
|
|
3.5 |
% |
General and administrative expenses |
850,904 |
|
|
8.5 |
% |
|
53,161 |
|
|
0.5 |
% |
|
797,743 |
|
|
8.0 |
% |
Pre-opening expenses |
254,629 |
|
|
2.5 |
% |
|
- |
|
|
0.0 |
% |
|
254,629 |
|
|
2.5 |
% |
Total
operating costs and expenses |
7,944,500 |
|
|
79.0 |
% |
|
82,902 |
|
|
0.8 |
% |
|
7,861,598 |
|
|
78.2 |
% |
Income from operations |
2,344,422 |
|
|
23.3 |
% |
|
82,902 |
|
|
0.8 |
% |
|
2,427,324 |
|
|
24.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2018 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
|
|
(in thousands) |
Hotel operating
costs |
941,943 |
|
|
64.4 |
% |
|
3,950 |
|
|
0.3 |
% |
|
937,993 |
|
|
64.1 |
% |
Other
operating costs |
2,118 |
|
|
0.1 |
% |
|
- |
|
|
0.0 |
% |
|
2,118 |
|
|
0.1 |
% |
Selling and marketing expenses |
50,626 |
|
|
3.5 |
% |
|
376 |
|
|
0.0 |
% |
|
50,250 |
|
|
3.5 |
% |
General and administrative expenses |
123,759 |
|
|
8.5 |
% |
|
7,732 |
|
|
0.5 |
% |
|
116,027 |
|
|
8.0 |
% |
Pre-opening expenses |
37,034 |
|
|
2.5 |
% |
|
- |
|
|
0.0 |
% |
|
37,034 |
|
|
2.5 |
% |
Total
operating costs and expenses |
1,155,480 |
|
|
79.0 |
% |
|
12,058 |
|
|
0.8 |
% |
|
1,143,422 |
|
|
78.2 |
% |
Income from operations |
340,982 |
|
|
23.3 |
% |
|
12,058 |
|
|
0.8 |
% |
|
353,040 |
|
|
24.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2017 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
Hotel operating
costs |
5,674,780 |
|
|
69.0 |
% |
|
19,725 |
|
|
0.2 |
% |
|
5,655,055 |
|
|
68.8 |
% |
Other
operating costs |
17,324 |
|
|
0.2 |
% |
|
- |
|
|
0.0 |
% |
|
17,324 |
|
|
0.2 |
% |
Selling and marketing expenses |
284,900 |
|
|
3.5 |
% |
|
1,530 |
|
|
0.0 |
% |
|
283,370 |
|
|
3.5 |
% |
General and administrative expenses |
690,970 |
|
|
8.4 |
% |
|
45,112 |
|
|
0.5 |
% |
|
645,858 |
|
|
7.9 |
% |
Pre-opening expenses |
206,454 |
|
|
2.5 |
% |
|
- |
|
|
0.0 |
% |
|
206,454 |
|
|
2.5 |
% |
Total
operating costs and expenses |
6,874,428 |
|
|
83.6 |
% |
|
66,367 |
|
|
0.7 |
% |
|
6,808,061 |
|
|
82.9 |
% |
Income from operations |
1,425,648 |
|
|
17.3 |
% |
|
66,367 |
|
|
0.7 |
% |
|
1,492,015 |
|
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended |
|
Year Ended |
|
December31, 2017 |
|
September30,2018 |
|
December31, 2018 |
|
December31, 2017 |
|
December31, 2018 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands, except per share and per ADS
data) |
Net income (loss)
attributable to Huazhu Group Limited (GAAP) |
225,706 |
|
|
667,752 |
|
|
(418,541 |
) |
|
(60,874 |
) |
|
1,228,303 |
|
|
716,161 |
|
|
104,161 |
|
Share-based compensation expenses |
19,245 |
|
|
20,397 |
|
|
26,746 |
|
|
3,890 |
|
|
66,367 |
|
|
82,902 |
|
|
12,058 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
(24,134 |
) |
|
(179,229 |
) |
|
755,916 |
|
|
109,943 |
|
|
(35,540 |
) |
|
914,129 |
|
|
132,955 |
|
Adjusted net income attributable to Huazhu Group Limited
(non-GAAP) |
220,817 |
|
|
508,920 |
|
|
364,121 |
|
|
52,959 |
|
|
1,259,130 |
|
|
1,713,192 |
|
|
249,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Losses) per share/ADS (GAAP) |
|
|
|
|
|
|
Basic |
0.81 |
|
|
2.37 |
|
|
(1.48 |
) |
|
(0.22 |
) |
|
4.40 |
|
|
2.54 |
|
|
0.37 |
|
Diluted |
0.77 |
|
|
2.23 |
|
|
(1.48 |
) |
|
(0.22 |
) |
|
4.21 |
|
|
2.49 |
|
|
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings (losses) per share/ADS
(non-GAAP) |
|
|
|
|
|
Basic |
0.79 |
|
|
1.80 |
|
|
1.29 |
|
|
0.19 |
|
|
4.51 |
|
|
6.08 |
|
|
0.88 |
|
Diluted |
0.75 |
|
|
1.71 |
|
|
1.23 |
|
|
0.17 |
|
|
4.31 |
|
|
5.77 |
|
|
0.84 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computation |
|
|
|
|
|
Basic |
279,861 |
|
|
282,149 |
|
|
282,500 |
|
|
282,500 |
|
|
279,272 |
|
|
281,717 |
|
|
281,717 |
|
Diluted |
298,903 |
|
|
303,605 |
|
|
303,162 |
|
|
303,162 |
|
|
293,074 |
|
|
303,606 |
|
|
303,606 |
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
|
December31, 2017 |
|
September30,2018 |
|
December31, 2018 |
|
December31, 2017 |
|
December31, 2018 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands, except per share and per ADS
data) |
Net income (loss) attributable to Huazhu Group Limited
(GAAP) |
225,706 |
|
|
667,752 |
|
|
(418,541 |
) |
|
(60,874 |
) |
|
1,228,303 |
|
|
716,161 |
|
|
104,161 |
|
Interest income |
(40,713 |
) |
|
(41,870 |
) |
|
(32,449 |
) |
|
(4,719 |
) |
|
(112,645 |
) |
|
(147,511 |
) |
|
(21,455 |
) |
Interest expense |
34,295 |
|
|
63,306 |
|
|
70,210 |
|
|
10,212 |
|
|
87,320 |
|
|
243,801 |
|
|
35,459 |
|
Income tax expense |
17,747 |
|
|
254,843 |
|
|
106,059 |
|
|
15,426 |
|
|
356,992 |
|
|
568,942 |
|
|
82,750 |
|
Depreciation and amortization |
208,756 |
|
|
221,552 |
|
|
229,486 |
|
|
33,377 |
|
|
789,252 |
|
|
890,524 |
|
|
129,521 |
|
EBITDA (non-GAAP) |
445,791 |
|
|
1,165,583 |
|
|
(45,235 |
) |
|
(6,578 |
) |
|
2,349,222 |
|
|
2,271,917 |
|
|
330,436 |
|
Share-based compensation |
19,245 |
|
|
20,397 |
|
|
26,746 |
|
|
3,890 |
|
|
66,367 |
|
|
82,902 |
|
|
12,058 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
(24,134 |
) |
|
(179,229 |
) |
|
755,916 |
|
|
109,943 |
|
|
(35,540 |
) |
|
914,129 |
|
|
132,955 |
|
Adjusted EBITDA (non-GAAP) |
440,902 |
|
|
1,006,751 |
|
|
737,427 |
|
|
107,255 |
|
|
2,380,049 |
|
|
3,268,948 |
|
|
475,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Operational
Data |
|
|
|
|
As of |
|
December
31, |
|
September 30, |
|
December
31, |
|
2017 |
|
2018 |
|
2018 |
Total hotels in
operation: |
3,746 |
|
|
4,055 |
|
|
4,230 |
|
Leased
hotels |
671 |
|
|
698 |
|
|
699 |
|
Manachised hotels |
2,874 |
|
|
3,139 |
|
|
3,309 |
|
Franchised hotels |
201 |
|
|
218 |
|
|
222 |
|
Total hotel rooms in
operation |
379,675 |
|
|
409,516 |
|
|
422,747 |
|
Leased
hotels |
85,018 |
|
|
86,825 |
|
|
86,787 |
|
Manachised hotels |
275,065 |
|
|
301,451 |
|
|
314,932 |
|
Franchised hotels |
19,592 |
|
|
21,240 |
|
|
21,028 |
|
Number of cities |
378 |
|
|
391 |
|
|
403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
2017 |
|
2018 |
|
2018 |
Average daily room
rate (in RMB) |
|
|
|
Leased
and owned hotels |
251 |
|
|
279 |
|
|
275 |
|
Manachised hotels |
197 |
|
|
226 |
|
|
216 |
|
Franchised hotels |
232 |
|
|
264 |
|
|
248 |
|
Blended |
211 |
|
|
239 |
|
|
230 |
|
Occupancy rate (as a
percentage) |
|
|
|
Leased
and owned hotels |
87.2 |
% |
|
92.0 |
% |
|
86.7 |
% |
Manachised hotels |
86.6 |
% |
|
91.1 |
% |
|
85.5 |
% |
Franchised hotels |
72.1 |
% |
|
80.7 |
% |
|
74.5 |
% |
Blended |
86.0 |
% |
|
90.7 |
% |
|
85.2 |
% |
RevPAR (in
RMB) |
|
|
|
Leased
and owned hotels |
219 |
|
|
257 |
|
|
238 |
|
Manachised hotels |
170 |
|
|
205 |
|
|
185 |
|
Franchised hotels |
167 |
|
|
213 |
|
|
185 |
|
Blended |
181 |
|
|
217 |
|
|
196 |
|
|
|
|
|
|
For the full year ended |
|
|
|
December
31, |
|
December
31, |
|
|
|
2017 |
|
2018 |
|
|
Occupancy rate (as a
percentage) |
|
|
|
Leased
and owned hotels |
89.0 |
% |
|
89.0 |
% |
|
|
Manachised hotels |
89.1 |
% |
|
87.6 |
% |
|
|
Franchised hotels |
73.1 |
% |
|
75.8 |
% |
|
|
Blended |
88.3 |
% |
|
87.3 |
% |
|
|
Average daily room rate
(in RMB) |
|
|
|
Leased
and owned hotels |
237 |
|
|
267 |
|
|
|
Manachised hotels |
191 |
|
|
213 |
|
|
|
Franchised hotels |
216 |
|
|
248 |
|
|
|
Blended |
203 |
|
|
226 |
|
|
|
RevPAR (in RMB) |
|
|
|
Leased
and owned hotels |
211 |
|
|
237 |
|
|
|
Manachised hotels |
171 |
|
|
186 |
|
|
|
Franchised hotels |
158 |
|
|
188 |
|
|
|
Blended |
180 |
|
|
197 |
|
|
|
|
|
|
|
|
|
|
|
|
Same-hotel Operational Data: like-for-like performance for
leased, manachised and franchised hotels opened for at least 18
months during the current quarter and full year |
|
|
|
|
As of and for the quarter ended |
|
December
31, |
|
2017 |
|
2018 |
Total |
2,980 |
|
|
2,980 |
|
Leased
and owned hotels |
545 |
|
|
545 |
|
Manachised hotels |
2,435 |
|
|
2,435 |
|
Occupancy rate (as a
percentage) |
88.3 |
% |
|
87.5 |
% |
Average daily room rate
(in RMB) |
206 |
|
|
216 |
|
RevPAR (in RMB) |
182 |
|
|
189 |
|
|
|
|
|
As of and for full year ended |
|
December
31, |
|
2017 |
|
2018 |
Total |
2,980 |
|
|
2,980 |
|
Leased
and owned hotels |
545 |
|
|
545 |
|
Manachised hotels |
2,435 |
|
|
2,435 |
|
Occupancy rate (as a
percentage) |
90.4 |
% |
|
89.8 |
% |
Average daily room rate
(in RMB) |
198 |
|
|
211 |
|
RevPAR (in RMB) |
179 |
|
|
189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel breakdown
by segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Hotels in Operation |
|
Number of Hotel Rooms in
Operation |
|
As of December 31, 2018 |
|
As of December 31, 2018 |
Economy
hotels |
2,892 |
|
|
261,037 |
|
HanTing
Hotel |
2,283 |
|
|
220,646 |
|
Hi
Inn |
402 |
|
|
25,403 |
|
Elan
Hotel |
200 |
|
|
14,266 |
|
Orange
Hotel |
7 |
|
|
722 |
|
Midscale and upscale hotels |
1,338 |
|
|
161,710 |
|
JI
Hotel |
553 |
|
|
72,370 |
|
Starway
Hotel |
212 |
|
|
18,878 |
|
Joya
Hotel |
6 |
|
|
1,250 |
|
Manxin
Hotels & Resorts |
24 |
|
|
1,901 |
|
HanTing
Premium Hotel |
74 |
|
|
6,656 |
|
Ibis
Hotel |
137 |
|
|
16,575 |
|
Ibis
Styles Hotel |
34 |
|
|
4,279 |
|
Mercure
Hotel |
39 |
|
|
8,510 |
|
Novotel
Hotel |
7 |
|
|
2,512 |
|
Grand
Mercure |
6 |
|
|
1,304 |
|
Orange
Select |
172 |
|
|
19,863 |
|
Crystal
Orange |
56 |
|
|
7,150 |
|
Blossom
Hill |
18 |
|
|
462 |
|
Total |
4,230 |
|
|
422,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-hotel operational data by segment |
|
|
|
|
|
|
|
|
|
|
Number of hotels in operation |
|
Same-hotel RevPAR |
|
|
Same-hotel ADR |
|
|
Same-hotel Occupancy |
|
|
|
As of |
|
For the quarter ended |
|
|
For the quarter ended |
|
|
For the quarter ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
December 31, |
|
|
|
December 31, |
|
|
|
2017 |
|
2018 |
|
2017 |
|
2018 |
|
yoychange |
|
2017 |
|
2018 |
|
yoychange |
|
2017 |
|
2018 |
|
yoychange(p.p.) |
Economy
hotels |
2,454 |
|
2,454 |
|
157 |
|
164 |
|
4.1 |
% |
|
174 |
|
183 |
|
5.3 |
% |
|
90.5 |
% |
|
89.4 |
% |
|
(1.1 |
) |
Leased
hotels |
440 |
|
440 |
|
165 |
|
177 |
|
7.7 |
% |
|
186 |
|
198 |
|
6.7 |
% |
|
88.6 |
% |
|
89.4 |
% |
|
0.8 |
|
Manachised and franchised hotels |
2,014 |
|
2,014 |
|
155 |
|
160 |
|
3.0 |
% |
|
171 |
|
179 |
|
4.8 |
% |
|
91.0 |
% |
|
89.4 |
% |
|
(1.6 |
) |
Midscale and upscale hotels |
526 |
|
526 |
|
255 |
|
264 |
|
3.7 |
% |
|
311 |
|
322 |
|
3.9 |
% |
|
82.1 |
% |
|
82.0 |
% |
|
(0.1 |
) |
Leased
and owned hotels |
105 |
|
105 |
|
316 |
|
325 |
|
3.0 |
% |
|
367 |
|
384 |
|
4.4 |
% |
|
86.0 |
% |
|
84.8 |
% |
|
(1.2 |
) |
Manachised and franchised hotels |
421 |
|
421 |
|
229 |
|
238 |
|
4.2 |
% |
|
284 |
|
295 |
|
3.7 |
% |
|
80.4 |
% |
|
80.8 |
% |
|
0.3 |
|
Total |
2,980 |
|
2,980 |
|
182 |
|
189 |
|
3.9 |
% |
|
206 |
|
216 |
|
4.9 |
% |
|
88.3 |
% |
|
87.5 |
% |
|
(0.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of hotels in operation |
|
Same-hotel RevPAR |
|
|
Same-hotel ADR |
|
|
Same-hotel Occupancy |
|
|
|
As of |
|
For the year ended |
|
|
For the year ended |
|
|
For the year ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
December 31, |
|
|
|
December 31, |
|
|
|
2017 |
|
2018 |
|
2017 |
|
2018 |
|
yoychange |
|
2017 |
|
2018 |
|
yoychange |
|
2017 |
|
2018 |
|
yoychange(p.p.) |
Economy hotels |
2,454 |
|
2,454 |
|
159 |
|
168 |
|
5.6 |
% |
|
172 |
|
184 |
|
6.7 |
% |
|
92.5 |
% |
|
91.6 |
% |
|
(1.0 |
) |
Leased
hotels |
440 |
|
440 |
|
165 |
|
181 |
|
9.3 |
% |
|
182 |
|
197 |
|
8.3 |
% |
|
90.6 |
% |
|
91.4 |
% |
|
0.8 |
|
Manachised and franchised hotels |
2,014 |
|
2,014 |
|
158 |
|
165 |
|
4.5 |
% |
|
169 |
|
180 |
|
6.1 |
% |
|
93.1 |
% |
|
91.6 |
% |
|
(1.5 |
) |
Midscale and upscale hotels |
526 |
|
526 |
|
250 |
|
263 |
|
5.2 |
% |
|
301 |
|
314 |
|
4.6 |
% |
|
83.1 |
% |
|
83.6 |
% |
|
0.5 |
|
Leased
hotels |
105 |
|
105 |
|
307 |
|
321 |
|
4.6 |
% |
|
350 |
|
367 |
|
4.8 |
% |
|
87.7 |
% |
|
87.5 |
% |
|
(0.2 |
) |
Manachised and franchised hotels |
421 |
|
421 |
|
226 |
|
239 |
|
5.5 |
% |
|
279 |
|
291 |
|
4.5 |
% |
|
81.2 |
% |
|
82.0 |
% |
|
0.8 |
|
Total |
2,980 |
|
2,980 |
|
179 |
|
189 |
|
5.5 |
% |
|
198 |
|
211 |
|
6.3 |
% |
|
90.4 |
% |
|
89.8 |
% |
|
(0.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________________________1 Hotel turnover, refers to
total transaction value of room and non-room revenues from Huazhu
hotels (i.e., leased and operate, manachised and franchised
hotels).2 The conversion of Renminbi (“RMB”) into United States
dollars (“US$”) is based on the exchange rate of US$1.00=RMB6.8755
on December 31, 2018 as set forth in H.10 statistical release of
the U.S. Federal Reserve Board and available at
http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.3 As
of May 25, 2018, the company changed its ADS to its ordinary share
ratio from one ADS representing four ordinary shares to one ADS
representing one ordinary share. Therefore, the company
recalculated earnings per ADS of the previous quarter using the new
ratio.
Contact InformationInvestor RelationsTel: +86 (21) 6195
9561Email: ir@huazhu.comhttp://ir.huazhu.com
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