LONG Elong ADS Representing 2 Ordinary Shares (MM)

BEIJING, Nov. 13 /Xinhua-PRNewswire/ -- eLong, Inc. (NASDAQ:LONG), a leading online travel service provider in China, today reported un-audited financial results for the third quarter ended September 30, 2007. Business Highlights for the Third Quarter 2007. -- Travel revenues before business tax and surcharges comprised of hotel, air and other travel product and service revenues, increased 12% to RMB80.9 million for the third quarter 2007 compared with the prior year period. -- Travel revenues before business tax and surcharges by product line for the third quarters of 2007 and 2006 were as follows (figures in RMB 000's): Y/Y Q3 2007 % Total Q3 2006 % Total Growth Hotel commissions 64,417 80 % 57,412 80 % 12 % Air ticketing commissions 15,585 19 % 11,045 15 % 41 % Other travel revenue 869 1 % 3,860 5 % -77 % Total travel revenue 80,871 100 % 72,317 100 % 12 % -- The Company recorded an operating loss of RMB 9.3 million for the third quarter, compared with an operating income of RMB1.7 million for the third quarter of 2006, primarily due to greater sales and marketing expense and consulting expenses partially offset by higher revenue. -- The Company recorded a net loss of RMB 7.4 million for the third quarter, compared with net income of RMB2.7 million for the third quarter of 2006. Net income decreased RMB 10.1 million primarily due to current quarter sales and marketing expenses of RMB 36.9 million, which is RMB11.5 million more than the same quarter of prior year. -- As of September 30, 2007 cash and cash equivalents were RMB1.2 billion (US$158 million), consistent with December 31, 2006. "The third quarter was a mixed quarter for eLong. Revenue growth was in line with our expectations and we have, managed to stabilize the decline in growth rates. However, we believe that eLong is not yet executing to its full potential and we are working hard to change that. We are very happy with the appointment of Mr. Guangfu Cui as CEO of eLong and believe he will be instrumental in improving eLong's performance going forward", said Henrik Kjellberg, Chairman and former Interim Chief Executive of eLong. "I am delighted to be part of the eLong team. We are facing a challenging situation but eLong is structurally well positioned to achieve great results in the market place," said Chief Executive Officer, Cui Guangfu. "While we are keenly aware of the need for fiscal discipline, we believe eLong needs to make investments to re-accelerate its growth," said Chris Chan, eLong's Chief Financial Officer. "We remain confident in the long-term opportunity of China's online travel market, and over time we seek to turn the operations to top-rate customer service and higher operating leverage." Business Results Total gross revenues and travel revenues both increased 12% for the third quarter of 2007 compared with the prior year period, reflecting continued growth in our core hotel commissions business and the 41% increase in air ticketing commissions. Hotel Hotel commission revenue increased 12% year-over-year primarily due to higher room volume. Room nights booked through eLong increased 13% to 1,009,000, while commission per room night remained unchanged as RMB64. eLong has grown its hotel offering over 29% since third quarter 2006, and now features discounted rates at more than 4,700 hotels in over 300 cities across China. Air Air ticketing commission revenue increased 41% primarily due to a 36% increase in air segments to 370,000, as well as a 4% increase in commission per air ticket to RMB42. Profitability Gross margin in the third quarter was 74%, a decrease of 200 basis points compared with 76% in the prior year period. Gross margin decreased due to the increased mix of lower margin air commissions and increased compensation expense in our call center. Operating expenses for the third quarter of 2007 and 2006 were as follows (figures in RMB 000's): Q3 % Net % Net Y/Y 2007(2) Revenue Q3 2006(1) Revenue Growth Service development 12,196 15 % 10,718 15 % 14 % Sales and marketing 36,858 47 % 25,331 36 % 46 % General and administrative 18,277 23 % 15,376 22 % 19 % Amortization of intangibles 265 0 % 265 0 % 0 % Total operating expenses 67,596 85 % 51,690 73 % 31 % Note 1: Effective third quarter 2006, prior period service development and sales and marketing, have been restated to exclude expenses related to our discontinued operations Note 2: Effective from third quarter 2007, business tax expense and related surcharges have been presented on a net basis (excluded from revenues). The Company believes the net presentation is preferable accounting principle because the revenue amount after deduction of business tax expense and related surcharge represents the benefit to be retained by the Company. Amounts for all prior periods presented have been reclassified for comparative purpose. For impact of this change on prior quarters, please refer to appendix "Business tax presentation change effect". The total of service development, sales and marketing, general and administrative expense increased 31% during the third quarter; total operating expenses increased 31% as well. Service development expense is composed of expenses related to technology and product offering, including our website, the platform and the Company's air and hotel products. Third quarter service development expense increased 14% over the prior year period and service development expense as a percentage of net revenue increased 22 basis points to 15% as we maintained the pace of investment in our air booking and online payment platforms, and invested in website and hotel product enhancements. Sales and marketing expense increased 46% over the prior year period, and increased 11% as a percentage of net revenue to 47%. The increased expense was due to higher advertising and promotion spending as well as increased sales commissions in line with revenue growth. General and administrative expense increased 19% over the prior year period mainly due to increases in consulting and recruiting fees. General and administrative expenses as a percentage of net revenue increased 131 basis points to 23% in the third quarter. Operating loss was RMB9.3 million as compared to an operating income of RMB1.7 million in the third quarter of 2006, an increased loss of RMB11.0 million primarily due to higher spending in sales and marketing and consulting fees offset partially by higher revenue. Other income, which represents interest income, unrealized exchange gains/losses and other income/expense, was RMB1.1 million in the third quarter of 2007, primarily due to an unrealized foreign exchange loss of RMB13.7 million resulting from appreciation in the Renminbi compared with the prior year. This exchange loss was partially offset by interest income of RMB14.4 million in the third quarter of 2007. The company recorded a net loss of RMB7.4 million for the third quarter compared to a net income of RMB2.7 million in the prior year period, an increased loss of RMB10.1 million primarily due to RMB11.5 million in higher sales and marketing expenses in the third quarter of 2007. Our US GAAP diluted loss per ADS for the third quarter of 2007 was RMB0.30 compared to a diluted income per ADS of RMB0.10 in the prior year period. Management Appointment eLong is pleased to welcome Guangfu Cui as Chief Executive Officer as of October 8th, 2007. Prior to joining eLong, Mr. Cui was the Managing Director for FedEx Kinko's China. Mr. Cui positioned the company as a market leader in the digital printing industry in China, with 16 centers and 300 employees within four years after his joining. Prior to FedEx Kinko's, Mr. Cui worked for Procter & Gamble China for over 12 years, including two and a half years working in the United States. He was instrumental in building Procter & Gamble China's distribution network and retail coverage system. Guangfu Cui is 38 years old, holds an MBA from Kellogg School of Management at Northwestern University in Evanston, Illinois, and a BA in Law from Peking University. Business Outlook eLong expects total net revenues for the fourth quarter of 2007 within the range of RMB73.0 million to RMB80.0 million, an increase of 12% to 22% from the fourth quarter of 2006. Note to the Un-audited Interim Consolidated Financial Statements Financial information in this press release from eLong's un-audited financial statements was prepared in accordance with generally accepted accounting principles in the United States. Safe Harbor Statement It is currently expected that the Business Outlook will not be updated until the release of eLong's next quarterly earnings announcement; however, eLong reserves the right to update its Business Outlook at any time for any reason. Statements in this press release concerning eLong's future business, operating results and financial condition are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they related to the Company are intended to identify such forward-looking statements, but are not the exclusive means of doing so. These forward looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Factors that could affect the Company's actual results and cause actual results to differ materially from those included in any forward-looking statement include, but are not limited to, eLong's historical operating losses, its limited operating history, declines or disruptions in the travel industry, the recurrence of SARS, an outbreak of bird flu, eLong's reliance on having good relationships with hotel suppliers and airline ticket suppliers, our reliance on the Travelsky GDS system for our air business, the possibility that eLong will be unable to timely comply with Section 404 of the Sarbanes-Oxley Act of 2002, the risk that eLong will not be successful in competing against new and existing competitors, risks associated with Expedia, Inc.'s (NASDAQ:EXPE) majority ownership interest in eLong and the integration of eLong's business with that of Expedia's, subsequent revaluations of the Chinese currency, changes in eLong's management team and other key personnel and other risks outlined in eLong's filings with the U.S. Securities and Exchange Commission (or SEC), including eLong's Form 20-F filed with the SEC in connection with the Company's fiscal year 2006 results. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of their dates. Conference Call eLong will host a conference call to discuss its third quarter and fiscal 2007 earnings at November 13, 2007, 7:00 pm Eastern (Beijing/Hong Kong time: November 14, 2007 at 8:00 am). The management team will be on the call to discuss quarterly results and highlights and to answer questions. The toll- free number for U.S. participants is +1-800-365-8460. The dial-in number for Hong Kong participants is +852-2258-4000. International participants can dial +1-210-795-0492. Pass code: ELONG. A replay of conference call will be available for one day starting from 8:30 pm Eastern Time on November 13, 2007. US toll-free dial-in number: +1- 800-454-0219, Hong Kong dial in number: +852-2802-5151, international dial-in number: +1-203-369-4623. Pass code: 712100. Additionally, a live and archived web cast of this call will be available on the Investor Relations section of the eLong web site at http://ir.elong.net/ for three months. About eLong, Inc. eLong, Inc. (NASDAQ:LONG) is a leading online travel company in China. Headquartered in Beijing, eLong has a national presence across China. eLong uses web-based distribution technologies and a 24-hour call center to provide consumers with access to travel reservation services. Aiming to enrich people's lives through the freedom of independent travel, eLong empowers consumers to make informed choices by providing a one-stop travel solution and consolidated travel tools and information such as maps, virtual tours and user ratings. eLong has the capacity to fulfill air ticket reservations in over 70 major cities across China. In addition to choice of a wide hotel selection in the Greater China region, eLong offers Chinese consumers the ability to make bookings at international hotels in over 140 destinations worldwide. eLong operates the websites http://www.elong.comandhttp//www.elong.net . eLong, Inc. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS) IN LOCAL CURRENCY Three Months Ended Nine Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2007 2007 2006 2007 2006 RMB RMB RMB RMB RMB Revenues Hotel commissions 64,417 60,162 57,412 173,458 153,250 Air ticketing commissions 15,585 13,850 11,045 41,484 28,694 Other travel revenue 869 1,400 3,860 4,346 6,945 Travel 80,871 75,412 72,317 219,288 188,889 Other 2,991 3,019 2,263 8,286 5,936 Gross revenues 83,862 78,431 74,580 227,574 194,825 Business tax and surcharges (4,776) (4,026) (4,064) (12,477) (10,720) Net revenues 79,086 74,405 70,516 215,097 184,105 Cost of services (20,807) (20,701) (17,124) (59,209) (45,594) Gross profit 58,279 53,704 53,392 155,888 138,511 Operating expenses Service development (12,196) (12,257) (10,718) (35,049) (31,353) Sales and marketing (36,858) (29,313) (25,331) (93,188) (72,534) General and administrative (18,277) (13,540) (15,376) (43,005) (49,067) Amortization of intangibles (265) (265) (265) (795) (795) Write-down of property and equipment and intangibles -- (526) -- (526) -- Total operating expenses (67,596) (55,901) (51,690) (172,563) (153,749) Income/(loss) from operations (9,317) (2,197) 1,702 (16,675) (15,238) Other income/(loss) 1,055 (1,053) 3,353 4,330 16,114 Income/(loss) from continuing operations before income tax expense (8,262) (3,250) 5,055 (12,345) 876 Income tax benefit/(expense ) 861 1,433 (2,199) 2,242 (2,986) Income/(loss) from continuing operations (7,401) (1,817) 2,856 (10,103) (2,110) Discontinued operations Income from discontinued operations -- -- (204) 112 (91) Income tax expense of discontinued operations -- -- 15 (8) (27) Gain on sale of discontinued operations -- -- -- -- 2,650 Total discontinued operations -- -- (189) 104 2,532 Net income/(loss) before cumulative effect of change in accounting principles (7,401) (1,817) 2,667 (9,999) 422 Cumulative effect of change in accounting principles -- -- -- -- 282 Net income/(loss) (7,401) (1,817) 2,667 (9,999) 704 Basic income/(loss) per share Continuing operations (0.15) (0.04) 0.06 (0.20) (0.04) Discontinued operations 0.00 0.00 0.00 0.00 0.05 Cumulative effect of change in accounting principles 0.00 0.00 0.00 0.00 0.00 Basic income/(loss) per share (0.15) (0.04) 0.06 (0.20) 0.01 Diluted income/(loss) per share Continuing operations (0.15) (0.04) 0.05 (0.20) (0.03) Discontinued operations 0.00 0.00 0.00 0.00 0.05 Cumulative effect of change in accounting principles 0.00 0.00 0.00 0.00 0.00 Diluted income/(loss) per share (0.15) (0.04) 0.05 (0.20) 0.02 Basic income/(loss) per ADS Continuing operations (0.30) (0.08) 0.12 (0.40) (0.08) Discontinued operations 0.00 0.00 0.00 0.00 0.10 Cumulative effect of change in accounting principles 0.00 0.00 0.00 0.00 0.00 Basic income/(loss) per ADS (0.30) (0.08) 0.12 (0.40) 0.02 Diluted income/(loss) per ADS Continuing operations (0.30) (0.08) 0.10 (0.40) (0.06) Discontinued operations 0.00 0.00 0.00 0.00 0.10 Cumulative effect of change in accounting principles 0.00 0.00 0.00 0.00 0.00 Diluted income/(loss) per ADS (0.30) (0.08) 0.10 (0.40) 0.04 Shares used in computing basic net income/(loss) per share 50,766 50,732 50,374 50,728 50,368 Shares used in computing diluted net income/(loss) per share 50,766 50,732 53,878 50,728 53,837 Note that 1ADS = 2 shares * Share-based compensation charges included are as follows: 3,012 1,760 2,341 7,541 9,094 Cost of services 89 29 32 139 138 Service development 901 569 607 2,146 2,044 Sales and marketing 354 83 113 638 446 General and administrative 1,668 1,079 1,589 4,618 6,466 * Un-realized foreign exchange losses 13,696 15,421 11,357 38,730 20,904 eLong, Inc. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS) IN U.S. DOLLARS Three Months Ended Nine Months Ended Sept. June Sept. Sept. Sept. 30, 30, 30, 30, 30, 2007 2007 2006 2007 2006 US$ US$ US$ US$ US$ Revenues Hotel commissions 8,597 7,904 7,264 23,150 19,389 Air ticketing commissions 2,080 1,819 1,397 5,536 3,630 Other travel revenue 116 184 488 580 879 Total travel revenue 10,793 9,907 9,149 29,266 23,898 Other 399 397 286 1,106 751 Gross revenues 11,192 10,304 9,435 30,372 24,649 Business tax and surcharges (637) (529) (514) (1,665) (1,356) Net revenues 10,555 9,775 8,922 28,707 23,293 Cost of services (2,777) (2,720) (2,166) (7,902) (5,768) Gross profit 7,778 7,055 6,755 20,805 17,525 Operating expenses Service development (1,628) (1,610) (1,356) (4,678) (3,967) Sales and marketing (4,919) (3,851) (3,205)(12,437) (9,177) General and administrative (2,439) (1,779) (1,945) (5,740) (6,208) Amortization of intangibles (35) (35) (34) (106) (101) Write-down of property and equipment and intangibles -- (69) -- (70) -- Total operating expenses (9,021) (7,344) (6,541)(23,030)(19,453) Income/(loss) from operations (1,244) (289) 215 (2,225) (1,928) Other income/(loss) 141 (138) 424 578 2,039 Income/(loss) from continuing operations before income tax expense (1,103) (427) 639 (1,647) 111 Income tax benefit/(expense ) 115 188 (278) 299 (378) Income/(loss) from continuing operations (988) (239) 361 (1,348) (267) Discontinued operations Income from discontinued operations -- -- (26) 15 (11) Income tax expense of discontinued operations -- -- 2 (1) (3) Gain on sale of discontinued operations -- -- -- -- 335 Total discontinued operations -- -- (24) 14 321 Net income/(loss) before cumulative effect of change in accounting principles (988) (239) 337 (1,334) 54 Cumulative effect of change in accounting principles -- -- -- -- 36 Net income/(loss) (988) (239) 337 (1,334) 90 Basic income/(loss) per share Continuing operations (0.020) (0.005) 0.008 (0.027) (0.005) Discontinued operations 0.000 0.000 0.000 0.000 0.006 Cumulative effect of change in accounting principles 0.000 0.000 0.000 0.000 0.000 Basic income/(loss) per share (0.020) (0.005) 0.008 (0.027) 0.001 Diluted income/(loss) per share Continuing operations (0.020) (0.005) 0.006 (0.027) (0.004) Discontinued operations 0.000 0.000 0.000 0.000 0.006 Cumulative effect of change in accounting principles 0.000 0.000 0.000 0.000 0.000 Diluted income/(loss) per share (0.020) (0.005) 0.006 (0.027) 0.002 Basic income/(loss) per ADS Continuing operations (0.040) (0.011) 0.015 (0.053) (0.010) Discontinued operations 0.000 0.000 0.000 0.000 0.013 Cumulative effect of change in accounting principles 0.000 0.000 0.000 0.000 0.000 Basic income/(loss) per ADS (0.040) (0.011) 0.015 (0.053) 0.003 Diluted income/(loss) per ADS Continuing operations (0.040) (0.011) 0.013 (0.053) (0.008) Discontinued operations 0.000 0.000 0.000 0.000 0.013 Cumulative effect of change in accounting principles 0.000 0.000 0.000 0.000 0.000 Diluted income/(loss) per ADS (0.040) (0.011) 0.013 (0.053) 0.005 Shares used in computing basic net income/(loss) per share 50,766 50,732 50,374 50,728 50,368 Shares used in computing diluted net income/(loss) per share 50,766 50,732 53,878 50,728 53,837 Note that 1ADS = 2 shares * Share-based compensation charges included are as follows: 402 231 296 1,006 1,151 Cost of services 12 4 4 18 17 Service development 120 75 77 286 259 Sales and marketing 47 11 14 85 56 General and administrative 223 142 201 616 818 * Un-realized foreign exchange losses 1,828 2,026 1,437 5,169 2,645 Note 1: The conversions of Renminbi (RMB) into United States dollars (USD) as at the reporting dates are based on the noon buying rate of USD1.00=RMB7.4928 on September 28, 2007, USD1.00=RMB7.6120 on June 29, 2007 and USD1.00 = RMB7.904 on September 30, 2006 in the City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve. No representation is intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on the reporting dates. eLong, Inc. CONSOLIDATED SUMMARY BALANCE SHEET DATA (UNAUDITED, IN THOUSANDS) Sept. 30, Dec. 31, Sept. 30, Dec. 31, 2007 2006 2007 2006 RMB RMB US$ US$ ASSETS Current assets: Cash and cash equivalents 1,184,056 1,199,323 158,026 153,679 Restricted cash 11,456 -- 1,529 -- Short-term investment 10,041 -- 1,340 -- Accounts receivable, net 40,124 28,237 5,355 3,618 Due from related parties 61 2,099 8 269 Deferred income taxes, net 2,244 708 299 91 Prepaid expenses and other current assets 12,547 10,384 1,675 1,330 Total current assets 1,260,529 1,240,751 168,232 158,987 Property and equipment, net 40,021 37,809 5,341 4,845 Goodwill 30,000 30,000 4,004 3,844 Intangible assets, net 2,951 3,746 394 480 Deferred income taxes, net 671 982 90 126 Other non-current assets 21,954 22,029 2,930 2,823 Total assets 1,356,126 1,335,318 180,991 171,105 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 57,361 32,753 7,656 4,197 Income taxes payable 1,491 16,757 199 2,147 Due to related parties 3,786 3,374 505 432 Accrued expenses and other current liabilities 93,624 81,541 12,495 10,449 Total current liabilities 156,262 134,425 20,855 17,225 Other long-term liabilities -- 980 -- 126 Deferred income taxes 132 132 18 17 Total liabilities 156,394 135,537 20,873 17,368 Shareholders' equity Ordinary shares 4,205 4,192 561 537 Additional paid-in capital 1,311,095 1,301,312 174,981 166,747 Accumulated other comprehensive income (loss) 124 (29) 17 (4) Accumulated deficit (115,692) (105,694) (15,441) (13,543) Total shareholders' equity 1,199,732 1,199,781 160,118 153,737 Total liabilities and shareholders' equity 1,356,126 1,335,318 180,991 171,105 Business Tax Presentation Change Effect (Appendix-1) As Originally Q1 2007 Reported As Adjusted Effect of Change Three months end Three months end Three months end Mar.31, Mar.31, Mar.31, Mar.31, Mar.31, Mar.31, 2007 2006 2007 2006 2007 2006 RMB RMB RMB RMB RMB RMB ('000) ('000) ('000) ('000) ('000) ('000) Gross revenues 65,281 53,453 65,281 53,453 -- -- Business tax and surcharges -- -- (3,675) (3,013)(3,675) (3,013) Net revenues 65,281 53,453 61,606 50,440 (3,675) (3,013) Cost of services (17,701) (13,173) (17,701) (13,173) -- -- Gross profit 47,580 40,280 43,905 37,267 (3,675) (3,013) Operating expenses Service development (10,594) (10,475) (10,594) (10,475) -- -- Sales and marketing (27,020) (21,849) (27,020) (21,849) -- -- General and administrative (11,188) (20,185) (11,188) (20,185) -- -- Amortization of intangibles (265) (265) (265) (265) -- -- Business tax and surcharges (3,675) (3,013) -- -- 3,675 3,013 Total operating expenses (52,742) (55,787) (49,067) (52,774) 3,675 3,013 Income/(loss) from operations (5,162) (15,507) (5,162) (15,507) -- -- Business Tax Presentation Change Effect (Appendix-2) Q2 2007 As Originally Reported Three months end Six months end Jun. 30 Jun. 30 Jun. 30 Jun. 30 2007 2006 2007 2006 RMB('000) RMB('000) RMB('000) RMB('000) Gross revenues 78,431 66,793 143,713 120,247 Business tax and surcharges -- -- -- -- Net revenues 78,431 66,793 143,713 120,247 Cost of services (20,701) (15,285) (38,403) (28,470) Gross profit 57,730 51,508 105,310 91,777 Operating expenses Service development (12,257) (10,094) (22,852) (20,635) Sales and marketing (29,313) (25,302) (56,331) (47,207) General and administrative (13,540) (13,355) (24,728) (33,690) Amortization of intangibles (265) (265) (530) (530) Write-down of property and equipment and intangibles (526) -- (526) -- Business tax and surcharges (4,026) (3,643) (7,701) (6,656) Total operating expenses (59,927) (52,659) (112,668) (108,718) Income/(loss) from operations (2,197) (1,151) (7,358) (16,941) Business Tax Presentation Change Effect (Appendix-2) Q2 2007 As Adjusted Three months end Six months end Jun. 30 Jun. 30 Jun. 30 Jun. 30 2007 2006 2007 2006 RMB('000) RMB('000) RMB('000) RMB('000) Gross revenues 78,431 66,793 143,713 120,247 Business tax and surcharges (4,026) (3,643) (7,701) (6,656) Net revenues 74,405 63,150 136,012 113,591 Cost of services (20,701) (15,285) (38,403) (28,470) Gross profit 53,703 47,865 97,609 85,121 Operating expenses Service development (12,257) (10,094) (22,852) (20,635) Sales and marketing (29,313) (25,302) (56,331) (47,207) General and administrative (13,540) (13,355) (24,728) (33,690) Amortization of intangibles (265) (265) (530) (530) Write-down of property and equipment and intangibles (526) -- (526) -- Business tax and surcharges -- -- -- -- Total operating expenses (55,902) (49,016) (104,968) (102,063) Income/(loss) from operations (2,197) (1,151) (7,358) (16,941) Business Tax Presentation Change Effect (Appendix-2) Q2 2007 Effect of Change Three months end Six months end Jun. 30 Jun. 30 Jun. 30 Jun. 30 2007 2006 2007 2006 RMB('000) RMB('000) RMB('000) RMB('000) Gross revenues -- -- -- -- Business tax and surcharges (4,026) (3,643) (7,701) (6,656) Net revenues (4,026) (3,643) (7,701) (6,656) Cost of services -- -- -- -- Gross profit (4,026) (3,643) (7,701) (6,656) Operating expenses Service development -- -- -- -- Sales and marketing -- -- -- -- General and administrative -- -- -- -- Amortization of intangibles -- -- -- -- Write-down of property and equipment and intangibles -- -- -- -- Business tax and surcharges 4,026 3,643 7,701 6,656 Total operating expenses 4,026 3,643 7,701 6,656 Income/(loss) from operations -- -- -- -- For more information, please contact: eLong, Inc. Investor Relations Tel: +86-10-5860-2288 x6606 Email: DATASOURCE: eLong, Inc. CONTACT: Investor Relations of eLong, Inc., +86-10-5860-2288 x6606, or Web site: http://www.elong.com/ http://ir.elong.net/ http://www.elong.net/

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