Home Inns Reports First Quarter of 2009 Financial Results

Quarterly Revenues increased over 49% year-over-year to RMB 532 million

Home Inns Chain Consisted of 522 Hotels in Operation as of March 31, 2009

SHANGHAI, May 8 /PRNewswire-Asia/ -- Home Inns & Hotels Management Inc. (Nasdaq: HMIN), a leading economy hotel chain in China, today announced its unaudited financial results for the first quarter ended March 31, 2009.

First Quarter 2009 Financial Highlights

-- Total revenues for the quarter increased 49.1% year-over-year to RMB

532.2 million (US$ 77.9 million).

-- Net income attributable to shareholders for the quarter was RMB 0.5

million (US$ 0.07 million), including share-based compensation expenses

of RMB 8.1 million (US$ 1.2 million), gain on buy-back of its own

convertible bonds of RMB 16.4 million (US$ 2.4 million), and RMB 0.04

million (US$ 0.01 million) foreign exchange gain. This compares to a

net loss attributable to shareholders of RMB 50.3 million in the first

quarter of 2008, which included share based compensation of RMB 4.0

million (US$ 0.6 million) and foreign exchange losses of RMB 50.0

million (US$ 7.1 million).

-- Loss from operations was RMB 17.1 million (US$ 2.5 million) for the

quarter. Loss from operations excluding share-based compensation

expenses (non-GAAP) was RMB 9.0 million (US$ 1.3 million) for the

quarter. This compares with a loss from operations of RMB 7.8 million

(US$ 1.1 million) and a loss excluding share-based compensation

expenses (non-GAAP) of RMB 3.8 million (US$ 0.5 million) in the same

period of 2008. Higher depreciation and amortization costs to revenue

ratio had a negative impact on this year's figure.

-- EBITDA (non-GAAP) was RMB 68.8 million (US$ 10.1 million). Excluding

foreign exchange gain, share-based compensation expenses, and gain on

buy-back of convertible bonds, adjusted EBITDA (non-GAAP) was RMB 60.4

million (US$ 8.8 million), an increase of 49.9% year-over-year, as

EBITDA was not impacted by the depreciation and amortization costs to

revenue ratio as in the case for loss from operations.

-- Diluted loss per ADS was RMB 0.39 (US$ 0.06). Adjusted diluted loss per

ADS (Non-GAAP) was RMB 0.22 (US$ 0.03). As used in this press release,

adjusted basic and diluted earnings per ADS (non-GAAP) both exclude

foreign exchange gain, share-based compensation expenses and gain on

buy-back of convertible bonds. Please refer to "Reconciliations of GAAP

and Non-GAAP Results" at the end of this press release.

"Home Inns further expanded with 51 new hotels and entered into 7 new markets during the first quarter of 2009. Meanwhile the quarter was challenging as seasonally slow travel activities that we normally experience during the Chinese New Year period were further reduced this year by the general economic downturn," remarked Mr. David Sun, Home Inns' Chief Executive Officer. "The economic downturn eased a bit towards the end of the quarter, and revenues turned out to be slightly higher than our expectations with occupancy stabilizing. However, we will continue to exercise financial prudence and strike a balance between growth and profitability."

Operational Highlights

-- During the first quarter of 2009, Home Inns opened 51 net new hotels,

including 28 net leased-and-operated hotels and 23 net

franchised-and-managed hotels. As of March 31, 2009, the Home Inns

hotel chain consisted of 522 hotels in operation with an average of 117

rooms per hotel in operation. Our hotels in operation cover 101 cities

in China and consist of 354 leased-and-operated hotels, including one H

Hotel (our premium brand hotel), and 168 franchised-and-managed hotels,

which include one H Hotel as well.

-- As of March 31, 2009, Home Inns had an additional 28

leased-and-operated hotels and 35 franchised-and-managed hotels

contracted and under development.

-- The occupancy rate for hotels in operation in the whole chain was 82.6%

in the first quarter of 2009, compared with 81.4% in the same period in

2008, and 84.1% in the previous quarter.

-- RevPAR, defined as revenue per available room, was RMB130 in the first

quarter of 2009, compared with RMB140 in the same period in 2008 and

RMB141 in the previous quarter. The RevPAR decline was primarily due to

a decrease in ADR, or average daily rate. The decline in ADR was, to

some extent, as was the case in previous quarters, expected as Home

Inns opens an increased proportion of hotels in lower tier cities,

where room rates are lower. In addition, a chain-wide promotion during

the first quarter of 2009 also contributed to the decline in ADR. The

promotion program allowed repeat customers to apply certain room

vouchers earned during the quarter towards additional stays in the

quarter. This program ended on March 31, 2009.

-- RevPAR during the quarter for Home Inns' hotels which had been in

operation for at least 18 months was RMB 153 for the first quarter of

2009, compared to RevPAR of RMB 167 for the first quarter of 2008. The

decline was caused by both lower occupancy rates, resulting from slower

travel activities due to the economic downturn, and lower ADR resulting

from the promotion during the quarter as mentioned above.

"Although we were not immune to the economic downturn, our business is relatively resilient as evidenced by the somewhat modest reduction in our operational metrics, which was within our expectations. As we entered into the seasonally stronger second quarter, we believe the impact from the slower economy will become more manageable," continued Mr. Sun. "Although our planned expansion into lower tier cities will continue to put pressure on our RevPAR, especially at an economically challenging time, we see this as a necessary strategy for our long term growth, and believe that as these cities continue to experience economic and population growth, Home Inns will be ideally positioned to benefit as the established leader in economy hotels in China.

First Quarter of 2009 Financial Results

For the first quarter of 2009, Home Inns' total revenues increased by 49.1% year-over-year to RMB 532.2 million (US$ 77.9 million).

Total revenues from leased-and-operated hotels for the first quarter of 2009 were RMB 501.7 million (US$ 73.4 million), representing a 47.4% increase year-over-year and a 1.1% decrease sequentially. Home Inns opened a net of 28 new leased-and-operated hotels during the first quarter of 2009.

Total revenues from franchised-and-managed hotels for the first quarter of 2009 were RMB 30.5 million (US$ 4.4 million), representing an 84.0% increase year-over-year and a 4.1% decrease sequentially. Home Inns opened a net of 23 new franchised-and-managed hotels during the first quarter of 2009.

Total operating costs and expenses for the first quarter of 2009 were RMB 516.6 million (US$ 75.6 million). Total operating costs and expenses excluding share-based compensation expenses (non-GAAP) for the quarter were RMB 508.6 million (US$ 74.4 million), or 95.6% of total revenues, representing a 50.2% increase year-over-year, and a 5.6% increase sequentially. Major components of operating costs and expenses are described and discussed in more detail below.

Total leased-and-operated hotel costs for the first quarter of 2009 were RMB 470.0 million (US$ 68.8 million), representing 93.7% of the leased-and-operated hotel revenues. Total leased-and-operated hotel costs represented 89.1% of the leased-and-operated hotel revenues for the same quarter in 2008 and 86.7% for the previous quarter. Leased-and-operated hotel costs increased generally in line with the increase in number of lease-and-operated hotels in operation as well as under construction. The increase in leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenue year-over-year as well as sequentially was primarily due to lower RevPAR, and hence lower revenue per hotel during the quarter as a majority of our costs are fixed.

Sales and marketing expenses for the first quarter of 2009 were RMB 8.7 million (US$ 1.3 million), an increase of 86.0% year-over-year and a decrease of 10.1% sequentially. The year-over-year increase was due to both larger hotel and member bases which resulted in higher advertisement costs and membership related costs. The quarter-over-quarter decrease was due to certain increased sales and marketing spending at the end of the year.

General and administrative expenses for the first quarter of 2009 were RMB 38.0 million (US$ 5.6 million). General and administrative expenses excluding share-based compensation expenses (non-GAAP) were RMB 30.0 million (US$ 4.4 million), or 5.6% of the total revenues, compared with 8.6% of the total revenues in the same period of 2008 and 6.0% in the previous quarter.

Loss from operations for the quarter was RMB 17.1 million (US$ 2.5 million). Loss from operations excluding share-based compensation expenses (non-GAAP) was RMB 9.0 million (US$ 1.3 million). This compares to a loss from operations excluding share-based compensation expenses (non-GAAP) of RMB 3.8 million (US$ 0.5 million) in the same period of 2008, and income from operations excluding share based compensation expenses (non-GAAP) of RMB 25.3 million (US$ 3.7 million) in the previous quarter. This was primarily caused by a higher ratio of leased-and-operated hotel costs as discussed above.

EBITDA (non-GAAP) for the first quarter of 2009 was RMB 68.8 million (US$ 10.1 million). Excluding foreign exchange gain, share-based compensation expenses and gain on buy-back of convertible bonds, adjusted EBITDA (non-GAAP) was RMB 60.4 million (US$ 8.8 million), an increase of 49.9% from the same period a year ago but a decrease of 29.8% sequentially. EBITDA was not impacted by the increased depreciation and amortization costs as a percentage of leased-and-operated hotel revenue, which negatively impacted loss from operations.

Net income attributable to shareholders for the quarter was RMB 0.5 million (US$ 0.07 million). Excluding foreign exchange gain, share-based compensation expenses and gain on buy-back of convertible bonds, adjusted net loss attributable to shareholders (non-GAAP) for the first quarter of 2009 was RMB 7.9 million (US$ 1.2 million).

For the first quarter of 2009, basic earnings per share were RMB 0.01 (US$ 0.001), while diluted loss per share was RMB 0.20 (US$ 0.03), and basic earnings per ADS were RMB 0.01 (US$ 0.002), while diluted loss per ADS was RMB 0.39 (US$ 0.06). The large difference between basic and diluted earnings per share and per ADS is caused by the exclusion of the large gain on buy-back of convertible bonds in the diluted earnings calculation as per US GAAP, while this gain was included in the basic earnings per share and per ADS calculation. Excluding foreign exchange gain, share-based compensation expenses and gain on buy-back of convertible bonds, adjusted basic and diluted loss per share (non-GAAP) were both RMB 0.11 (US$ 0.02), and adjusted basic and diluted loss per ADS (non-GAAP) were both RMB 0.22 (US$ 0.03).

Net operating cash flow for the first quarter of 2009 was RMB 54.5 million (US$ 8.0 million). Capital expenditures for the quarter were RMB 100.2 million (US$ 14.7 million), of which RMB 212.8 million (US$ 31.1 million) was cash spent for the purchase of property and equipment, resulting in a decrease in payables of RMB 114.1 million (US$ 16.7 million).

As of March 31, 2009, Home Inns had cash and cash equivalents of RMB 500.0 million (US$ 73.2 million). The company had RMB 841.4 (US$ 123.1 million) convertible bonds outstanding, including principal and accrued interest. These are zero coupon bonds issued on December 10, 2007, with a maturity of five years, and a yield of 0.50% per annum. The bonds have a non-call and non-put period of three years from the issuance date. For the first quarter of 2009, Home Inns bought back and retired RMB 55.0 million of these convertible bonds for total cash consideration of RMB 38.1 million (US$ 5.6 million), and recognized a gain of RMB 16.4 million (US$ 2.4 million) from this repurchase.

Outlook for Second Quarter of 2009

Home Inns expects its total revenues in the second quarter of 2009 to be in the range of RMB 610 million (US$ 89.3 million) to RMB 630 million (US$ 92.2 million). This forecast reflects Home Inns' current and preliminary view, which is subject to change.

Conference Call Information

Home Inns' management will hold an earnings conference call at 9PM on

May 7, 2009 U.S. Eastern Daylight Time (9AM on May 8, 2009 Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

China Mainland (toll free): +10-800-130-0399

Hong Kong: +852-3002-1672

U.S. (toll free): +1-866-271-0675

U.S. and International: +1-617-213-8892

Pass code for all regions: Home Inns

A replay of the conference call may be accessed by phone at the following numbers until 11PM on May 14, 2009 U.S. Eastern Daylight Time.

U.S. toll free: +1-888-286-8010

International: +1-617-801-6888

Passcode: 587-55-428

Additionally, a live and archived webcast of this conference call will be available at http://english.homeinns.com .

About Home Inns

Home Inns is a leading economy hotel chain in China based on the number of hotels and hotel rooms, as well as the geographic coverage of the hotel chain. Since Home Inns commenced operations in 2002, it has become one of the best-known economy hotel brands in China. Home Inns offers a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Home Inns' ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Market under the symbol "HMIN." For more information about Home Inns, please visit http://english.homeinns.com .

Safe Harbor

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the outlook for the second quarter of full year 2009 and quotations from management in this announcement, as well as Home Inns' strategic and operational plans, contain forward-looking statements. Home Inns may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to first parties. Statements that are not historical facts, including statements about Home Inns' beliefs and expectations, are forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our anticipated growth strategies; our future business development, results of operations and financial condition; expected changes in our revenues and certain cost or expense items; economic downturn in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; our ability to hire, train and retain qualified managerial and other employees; our ability to develop new hotels at desirable locations in a timely and cost-effective manner; the expected growth of the Chinese economy hotel market; and Chinese governmental policies relating to private managers and operators of hotels and applicable tax rates.

Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the SEC. Home Inns does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of May 7, 2009, and Home Inns undertakes no duty to update such information, except as required under applicable law.

Non-GAAP Financial Measures

To supplement Home Inns' unaudited consolidated financial results presented in accordance with U.S. GAAP, Home Inns uses the following non-GAAP measures defined as non-GAAP financial measures by the SEC: total operating expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, income from operations excluding share-based expenses, adjusted net income attributable to shareholders excluding foreign exchange gain or loss, share-based compensation and gain on buy-back of convertible bonds, adjusted basic and diluted earnings and ADS per share excluding foreign exchange gain or loss, share-based compensation and gain on buy-back of convertible bonds, EBITDA and adjusted EBITDA excluding foreign exchange gain or loss,

share-based compensation and gain on buy-back of convertible bonds. 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.

Home Inns believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective and by excluding foreign exchange gain or loss which may not be indicative of its operating performance. Home Inns believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Home Inns' historical performance and liquidity. Home Inns computes its non-GAAP financial measures using the same consistent method from quarter to quarter. Home Inns believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP financial measures excluding share-based compensation expenses is that share-based compensation expenses have been and will continue to be a significant recurring expense in our 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.

Home Inns' management also believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, Home Inns' management believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of our financial performance. Given the significant investments that Home Inns has made in property, plant and equipment, depreciation and amortization expense comprises a meaningful portion of our cost structure. Home Inns' management 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 presentation of EBITDA should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets, income tax expense, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Further, foreign exchange gain or loss and share-based compensation expenses and gain on buy-back of convertible bonds, 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 our financial results. Additionally, EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. Home Inns compensates for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense and interest income, income tax expense, capital expenditures and other relevant items both in our reconciliations to the U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance. The term EBITDA or adjusted EBITDA is not defined under U.S. GAAP, and EBITDA or adjusted EBITDA is not a measure of net income attributable to shareholders, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income attributable to shareholders, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our EBITDA and adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as we do.

Reconciliations of Home Inns' non-GAAP financial measures, including EBITDA and adjusted EBITDA, to consolidated statement of operations information are included at the end of this press release.

For investor and media inquiries, please contact:

Home Inns & Hotels Management Inc.

Ethan Ruan

Tel: +86-21-3401-9898 x2004

Email: zjruan@homeinns.com

FD Beijing

Peter Schmidt

Tel: +86-10-8591-1953

Email: peter.schmidt@fd.com

Home Inns & Hotels Management Inc.

Consolidated Balance Sheet Information

December

31, 2008 March 31, 2009

RMB '000 RMB '000 US$ '000

(audited) (unaudited) (unaudited)

ASSETS

Current assets:

Cash and cash equivalents 608,445 500,011 73,177

Short-term investment 100,000 -- --

Accounts receivable 23,263 28,212 4,129

Receivables from related parties 1,617 2,012 294

Consumables 26,885 24,515 3,588

Prepayments and other current assets,

net of allowance 63,904 44,294 6,482

Deferred tax assets, current 41,824 50,104 7,333

Total current assets 865,938 649,148 95,003

Property and equipment, net 1,950,900 1,991,906 291,517

Goodwill 390,882 390,882 57,206

Intangible assets, net 44,977 45,056 6,594

Other assets 33,177 33,828 4,951

Deferred tax assets, non-current 77,580 83,690 12,248

Total assets 3,363,454 3,194,510 467,519

LIABILITIES

Current liabilities:

Accounts payable 22,438 21,852 3,198

Payables to related parties 6,668 6,428 941

Salaries and welfare payable 69,635 43,985 6,437

Income tax payable 52,458 52,011 7,612

Other taxes payable 12,691 14,371 2,103

Deferred revenues 38,082 39,086 5,720

Accruals for customer reward program 8,587 10,418 1,525

Other unpaid and accruals 52,220 59,905 8,767

Other payables 376,739 254,537 37,252

Total current liabilities 639,518 502,593 73,555

Deferred rental 136,825 144,303 21,119

Deferred revenues, non-current 22,697 26,581 3,890

Deposits from franchised-and-managed

hotels 13,741 15,041 2,201

Unfavorable lease liability 16,017 15,659 2,292

Convertible bond 895,696 841,443 123,146

Deferred tax liability, non-current 12,279 12,068 1,766

Total liabilities 1,736,773 1,557,688 227,969

Commitments and contingencies

Shareholders' equity

Ordinary shares (US$0.005 par value;

200,000,000 shares authorized,

71,212,795 and 71,413,781 shares

issued and outstanding as of

December 31, 2008 and March 31,

2009, respectively) 2,899 2,906 425

Additional paid-in capital 1,393,905 1,403,047 205,337

Statutory reserves 49,994 49,994 7,317

Retained earnings 160,810 161,262 23,601

Noncontrolling interest 19,073 * 19,613 2,870

Total shareholders' equity 1,626,681 1,636,822 239,550

Total liabilities and shareholders'

equity 3,363,454 3,194,510 467,519

* Reflects implementation of SFAS No.160 Noncontrolling Interest in

Consolidated Financial Statements-an amendment of ARB No.51

Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)

is based on the noon buying rate of US$1.00=RMB6.8329 on March 31,

2009 in The City of New York for cable transfers of RMB as

certified for customs purpose by Federal Reserve Bank of New York.

Home Inns & Hotels Management Inc.

Consolidated Statement of Operations Information

Quarter Ended

March December

31, 2008 31, 2008 March 31, 2009

RMB '000 RMB '000 RMB '000 US$ '000

(unaudited)(unaudited)(unaudited)(unaudited)

Revenues:

Leased-and-operated hotels 340,422 507,363 501,735 73,429

Franchised-and-managed hotels 16,561 31,789 30,472 4,460

Total revenues 356,983 539,152 532,207 77,889

Less: Business tax and related

surcharges (22,136) (32,222) (32,674) (4,782)

Net revenues 334,847 506,930 499,533 73,107

Operating costs and expenses:

Leased-and-operated hotel costs -

Rents and utilities (135,084) (188,309) (205,827) (30,123)

Personnel costs* (69,161) (92,892) (108,965) (15,947)

Depreciation and amortization (38,970) (57,630) (67,499) (9,878)

Consumables, food and beverage (27,685) (42,201) (37,720) (5,520)

Others (32,532) (58,608) (49,961) (7,312)

Total leased-and-operated hotel

costs (303,432) (439,641) (469,972) (68,780)

Sales and marketing expenses (4,660) (9,641) (8,668) (1,269)

General and administrative

expenses* (34,579) (41,131) (37,970) (5,557)

Total operating costs and

expenses (342,671) (490,413) (516,610) (75,606)

(Loss)/income from operations (7,824) 16,517 (17,077) (2,499)

Interest income 15,614 6,878 3,254 476

Interest expense (10,199) (4,703) (4,052) (593)

Gain on buy-back of convertible

bond -- 103,291 16,406 2,401

Other non-operating income 4,453 1,730 446 65

Foreign exchange (loss)/gain, net (50,020) 597 44 6

(Loss)/income before income tax

expense and noncontrolling

interests (47,976) 124,309 (979) (144)

Income tax (expense)/benefit (1,363) (8,007) 1,971 288

Net (loss)/income (49,339) 116,302 992 144

Noncontrolling interest (951) (1,715) (540) (79)

Net (loss)/income attributable to

shareholders (50,290) 114,588 452 65

Earnings per share

- Basic (0.71) 1.61 0.01 0.001

- Diluted (0.71) 0.16 (0.20) (0.03)

Weighted average ordinary shares

outstanding

- Basic 70,658 71,075 71,338 71,338

- Diluted 70,658 77,113 76,376 76,376

* Share-based compensation expense

was included in the statement of

operations as follows:

Leased-and-operated hotel costs -

Personnel costs 3 3 -- --

General and administrative expenses 4,040 8,775 8,053 1,179

Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)

is based on the noon buying rate of US$1.00=RMB6.8329 on March 31,

2009 in The City of New York for cable transfers of RMB as

certified for customs purpose by Federal Reserve Bank of New York.

Home Inns & Hotels Management Inc.

Reconciliation of GAAP and Non-GAAP Results

Quarter Ended March 31, 2009

Share-

%of based %of %of

GAAP Total Compen- Total Non-GAAP Total

Result Revenue sation Revenue Result Revenue

RMB '000 RMB '000 RMB '000

(unaudited) (unaudited) (unaudited)

Leased-and-

operated hotel

costs (469,972) 88.3% -- 0.0% (469,972) 88.3%

Sales and

marketing

expenses (8,668) 1.6% -- 0.0% (8,668) 1.6%

General and

administrative

expenses (37,970) 7.1% 8,053 1.5% (29,917) 5.6%

Total operating

costs and

expenses (516,610) 97.0% 8,053 1.5% (508,557) 95.6%

(Loss)/income from

operations (17,077) 3.2% 8,053 1.5% (9,024) 1.7%

Quarter Ended March 31, 2009

Share-

%of based %of %of

GAAP Total Compen- Total Non-GAAP Total

Result Revenue sation Revenue Result Revenue

US$ '000 US$ '000 US$ '000

(unaudited) (unaudited) (unaudited)

Leased-and-

operated hotel

costs (68,780) 88.3% -- 0.0% (68,780) 88.3%

Sales and

marketing

expenses (1,269) 1.6% -- 0.0% (1,269) 1.6%

General and

administrative

expenses (5,557) 7.1% 1,179 1.5% (4,378) 5.6%

Total operating

costs and

expenses (75,606) 97.0% 1,179 1.5% (74,427) 95.6%

(Loss)/income from

operations (2,499) 3.2% 1,179 1.5% (1,320) 1.7%

Quarter Ended December 31, 2008

Share-

%of based %of %of

GAAP Total Compen- Total Non-GAAP Total

Result Revenue sation Revenue Result Revenue

RMB '000 RMB '000 RMB '000

(unaudited) (unaudited) (unaudited)

Leased-and-

operated hotel

costs (439,641) 81.5% 3 0.0% (439,638) 81.5%

Sales and

marketing

expenses (9,641) 1.8% -- 0.0% (9,641) 1.8%

General and

administrative

expenses (41,131) 7.6% 8,775 1.6% (32,356) 6.0%

Total operating

costs and

expenses (490,413) 90.9% 8,778 1.6% (481,635) 89.3%

Income from

Operations 16,517 3.1% 8,778 1.6% 25,294 4.7%

Quarter Ended March 31, 2008

Share-

%of based %of %of

GAAP Total Compen- Total Non-GAAP Total

Result Revenue sation Revenue Result Revenue

RMB '000 RMB '000 RMB '000

(unaudited) (unaudited) (unaudited)

Leased-and-

operated hotel

costs (303,432) 85.0% 3 0.0% (303,429) 85.0%

Sales and

marketing

expenses (4,660) 1.3% -- 0.0% (4,660) 1.3%

General and

administrative

expenses (34,579) 9.7% 4,040 1.1% (30,539) 8.6%

Total operating

costs and

expenses (342,671) 96.0% 4,043 1.1% (338,628) 94.9%

(Loss)/income from

operations (7,824) 2.2% 4,043 1.1% (3,781) 1.1%

Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)

is based on the noon buying rate of US$1.00=RMB6.8329 on March 31,

2009 in The City of New York for cable transfers of RMB as

certified for customs purpose by Federal Reserve Bank of New York.

Home Inns & Hotels Management Inc.

Reconciliation of GAAP and Non-GAAP Results (continued)

Quarter Ended

March December

31, 2008 31, 2008 March 31, 2009

RMB '000 RMB '000 RMB '000 US$ '000

(unaudited)(unaudited)(unaudited)(unaudited)

Net (loss)/income

attributable to

shareholders (GAAP) (50,290) 114,588 452 65

Foreign exchange loss/

(gain), net 50,020 (597) (44) (6)

Share-based compensation 4,043 8,778 8,053 1,179

Gain on buy-back of

convertible bond -- (103,291) (16,406) (2,401)

Adjusted net income/(loss)

attributable to shareholders

excluding foreign exchange

gain or loss, share-based

compensation and gain on

buy-back of convertible bond 3,773 19,478 (7,945) (1,163)

Quarter Ended

March December

31, 2008 31, 2008 March 31, 2009

RMB '000 RMB '000 RMB '000 US$ '000

(unaudited)(unaudited)(unaudited)(unaudited)

Earnings per share (GAAP)

- Basic (0.71) 1.61 0.01 0.001

- Diluted (0.71) 0.16 (0.20) (0.03)

Weighted average ordinary shares

outstanding

- Basic 70,658 71,075 71,338 71,338

- Diluted 70,658 77,113 76,376 76,376

Earnings per share excluding foreign

exchange gain or loss, share-based

compensation and gain on buy-back of

convertible bond

- Basic 0.05 0.27 (0.11) (0.02)

- Diluted 0.05 0.27 (0.11) (0.02)

Weighted average ordinary shares

outstanding

- Basic 70,658 71,075 71,338 71,338

- Diluted 72,840 77,113 71,338 71,338

Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)

is based on the noon buying rate of US$1.00=RMB6.8329 on March 31,

2009 in The City of New York for cable transfers of RMB as

certified for customs purpose by Federal Reserve Bank of New York.

Home Inns & Hotels Management Inc.

Reconciliation of GAAP and Non-GAAP Results (continued)

Quarter Ended

March December

31, 2008 31, 2008 March 31, 2009

RMB '000 RMB '000 RMB '000 US$ '000

(unaudited)(unaudited)(unaudited)(unaudited)

Net (loss)/income attributable

to shareholders (50,290) 114,588 452 65

Interest income (15,614) (6,878) (3,254) (476)

Interest expenses 10,199 4,703 4,052 593

Income tax expense/(benefit) 1,363 8,007 (1,971) (288)

Depreciation and amortization 40,593 60,761 69,564 10,181

EBITDA (Non-GAAP) (13,749) 181,181 68,843 10,075

Foreign exchange loss/

(gain), net 50,020 (597) (44) (6)

Share-based compensation 4,043 8,778 8,053 1,179

Gain on buy-back of convertible

bond -- (103,291) (16,406) (2,401)

EBITDA excluding foreign

exchange gain or loss,

share-based compensation and

gain on buy-back of

convertible bond 40,314 86,071 60,446 8,847

%of total revenue 11.3% 16.0% 11.4% 11.4%

Home Inns & Hotels Management Inc.

Operating Data

As of and for the quarter ended

March 31, December 31, March 31,

2008 2008 2009

Total Hotels in operation: 299 471 522

Lease-and operated hotels 220 326 354

Franchised-and-managed hotels 79 145 168

Total rooms 36,442 55,631 61,045

Occupancy rate (as a percentage) 81.4% 84.1% 82.6%

Average daily rate (in RMB) 172 167 158

RevPAR (in RMB) 140 141 130

Like-for-like performance for hotels opened for at least 18 months during

the current quarter

As of and for the quarter ended

March 31, 2008 March 31, 2009

Total Hotels in operation: 200 200

Lease-and-operated hotels 145 145

Franchised-and-managed hotels 55 55

Total rooms 24,074 24,074

Occupancy rate (as a percentage) 93.3% 89.9%

Average daily rate (in RMB) 178 170

RevPAR (in RMB) 167 153