omniture

Homeinns Hotel Group Reports Fourth Quarter and Full Year 2014 Financial Results

2,609 Hotels in Operation in 335 Cities in China
Adjusted Net Margin (Non-GAAP)[1] Improved Year over Year for the Ninth Consecutive Quarter
2015-03-12 05:01 1783

SHANGHAI, March 12, 2015 /PRNewswire/ -- Homeinns Hotel Group (NASDAQ: HMIN) ("Homeinns" or "the Company"), a leading economy hotel chain in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2014.

Fourth Quarter and Full Year 2014 Financial Highlights

  • Total revenues increased 1.6% year over year to RMB 1.64 billion (US$263.6 million) for the fourth quarter of 2014 and increased 5.2% to RMB 6.68 billion (US$1.08 billion) for the full year 2014, which was within the guidance range.
  • Net income attributable to ordinary shareholders increased 558.0% year over year to RMB 84.6 million (US$13.6 million) for the fourth quarter of 2014 and increased 161.5% to RMB 513.1 million (US$82.7 million) for the full year 2014. Adjusted net income attributable to ordinary shareholders (non-GAAP) increased 20.8% year over year to RMB 110.9 million (US$17.9 million) for the fourth quarter of 2014 and increased 26.7% to RMB 535.8 million (US$86.4 million) for the full year 2014.
  • EBITDA (non-GAAP) increased 30.8% year over year to RMB 333.4 million (US$53.7 million) for the fourth quarter of 2014 and increased 32.7% to RMB 1.55 billion (US$249.3 million) for the full year 2014. Adjusted EBITDA (non-GAAP) increased 7.8% year over year to RMB 359.8 million (US$58.0 million) for the fourth quarter of 2014 and increased 12.8% to RMB 1.57 billion (US$253.0 million) for the full year 2014.
  • Net operating cash inflow increased 22.8% year over year to RMB 348.1 million (US$56.1 million) for the fourth quarter of 2014 and increased 12.8% to RMB 1.35 billion (US$216.8 million) for the full year 2014.

"We are very gratified that despite sustained market challenges, we met our previously provided revenue expectations for the fourth quarter and achieved year-over-year adjusted net margin improvement for the ninth consecutive quarterly period," said Mr. David Sun, the Company's chief executive officer. "Performance of our mature economy hotels remained relatively resilient despite the market softness. Our franchise focused strategy, effective cost control and productivity enhancement initiatives did a great deal to help protect our margin and bottom line. We are also very pleased with the positive development and performance of our mid-scale Yitel hotels."

Key Financial Results








(RMB in Millions except RMB per ADS)

4Q2014

4Q2013

V%


FY14

FY13

V%

Total Revenues

1,635.3

1,609.7

1.6%


6,682.7

6,353.0

5.2%

Income from Operations

102.5

105.5

-2.9%


640.6

524.6

22.1%


Adj. Income from Operations*

125.6

127.2

-1.2%


736.3

625.6

17.7%

Net Income

84.6

12.9

558.0%


513.1

196.2

161.5%


Adj. Net Income*

110.9

91.8

20.8%


535.8

422.8

26.7%

EBITDA*

333.4

254.9

30.8%


1,546.8

1,165.6

32.7%


Adj. EBITDA*

359.8

333.9

7.8%


1,569.5

1,391.2

12.8%

Diluted earnings per ADS

1.77

0.27

549.7%


9.10

4.20

116.5%


Adj. Diluted Earnings per ADS*

2.26

1.91

18.4%


10.85

8.83

22.9%










"V%" represents year-over-year percentage change in amounts
* Indicates a non-GAAP financial measure (see commentary at the end of this earnings release for full details).

Fourth Quarter and Full Year 2014 Operational Highlights

  • Homeinns Hotel Group added a net of 113 hotels in the fourth quarter of 2014, including the opening of 129 new hotels and the closure of 16 hotels. During the full year, Homeinns Hotel Group added a net of 429 hotels, including the opening of 486 new hotels and the closure of 57 hotels. As of December 31, 2014, Homeinns Hotel Group operated 2,609 hotels across 335 cities in China under four brands. There were a total of 401 hotel projects in the development pipeline as of December 31, 2014, including 201 hotels contracted or under construction (173 of which were franchised-and-managed hotels) and 200 hotels under due diligence (all of which were for franchised-and-managed hotels), demonstrating continued strong interest from franchise partners in all of the Company's hotel brands.


Hotels in Operations and Pipeline


Openings

Closures



Group

Homeinn

Motel

Fairyland

Yitel

Homeinn
Plus*


4Q14

FY14

4Q14

FY14

Total Number of Hotels

2,609

2,135

402

31

41



129

486

16

57


Leased-and-Operated

914

705

167

24

18



5

50

1

6


Franchised-and-Managed

1,695

1430

235

7

23



124

436

15

51

Contracted or under Construction

201

139

31

5

20

6







Leased-and-Operated

28

7

5

2

11

3







Franchised-and-Managed

173

132

26

3

9

3






Under Due Diligence

200

169

24

0

5

2






* "Homeinn Plus " is a new mid-scale brand expected to be launched soon.
Note: There were two transfers of leased-and-operated hotel to franchised-and-managed hotel under "Homeinn" brand in 2014.

  • As of December 31, 2014, Homeinns Hotel Group had a total of 23.0 million unique active non-corporate members under its frequent guests program.

Operating Metrics







4Q2014

3Q2014

4Q2013

FY2014

FY2013

Occupancy Rate

79.6%

86.7%

84.0%

83.6%

86.1%

Average Daily Rate (ADR, RMB)

163

174

163

165

165

Revenue per Available Room (RevPAR, RMB)

130

151

137

138

142

  • For the fourth quarter of 2014, occupancy rate decreased by 4.4 percentage points while ADR remained stable, resulting in a year-over-year decrease of 5.1% in RevPAR. The decrease in occupancy rate was mainly due to continued soft macroeconomic conditions in the fourth quarter of 2014. Sequentially, RevPAR decreased by 13.9% mainly due to seasonality.
  • For the full year 2014, occupancy rate decreased by 2.5 percentage points while ADR remained stable resulting in a year-over-year decrease of 2.8% in RevPAR. The decrease in occupancy was mainly due to the soft macroeconomic conditions throughout the year.

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





4Q2014

4Q2013

FY2014

FY2013

Total Hotels in operation:

1,899

1,899

1,899

1,899


Leased-and-operated hotels

844

846

844

846


Franchised-and-managed hotels

1,055

1,053

1,055

1,053


Occupancy rate

81.8%

85.3%

85.9%

87.8%


Average daily rate (ADR, RMB)

164

163

166

166


Revenue per Available Room (RevPAR, RMB)

134

139

143

146

As of December 31, 2014, a total of 1,899 hotels were in operation for at least 18 months. These hotels' ADR increased year over year slightly from RMB 163 to RMB 164, while occupancy rate declined year over year from 85.3% to 81.8%, resulting in a decrease in RevPAR by 3.6% from RMB 139 to RMB 134 during the fourth quarter of 2014. For the full year, the same group of hotels' ADR remained flat year over year, while occupancy rate declined year over year from 87.8% to 85.9%, resulting in a decrease in RevPAR by 2.1% from RMB 146 to RMB 143. The decrease in occupancy rate for both the fourth quarter and full year 2014 was mainly due to the soft market conditions, and was in line with industry performance.

Detailed Overview of Financial Results for Fourth Quarter and Full Year 2014

Total Revenues

(RMB/USD in Millions)

Fourth Quarter 2014


Full Year 2014



RMB


USD


V%


RMB


USD


V%


Leased-and-Operated Hotels

1,391.1


224.2


-0.8%


5,741.8


925.4


2.8%


Franchised-and-Managed Hotels

244.2


39.4


17.4%


940.9


151.7


22.9%

Total Revenues

1,635.3


263.6


1.6%


6,682.7


1,077.1


5.2%

Less: Business Taxes

-100.3


-16.2


1.9%


-411.1


-66.3


4.9%

Net Revenues

1,535.0


247.4


1.6%


6,271.6


1,010.8


5.2%














Note: "V%" represents year-over-year percentage change in amounts

  • The year-over-year decrease in total revenues from leased-and-operated hotels in the fourth quarter 2014 was due to the decrease of RevPAR. The year-over-year increase in total revenues from franchised-and-managed hotels in the fourth quarter 2014 was mainly driven by an increase in the number of hotels and hotel rooms in operation, partially offset by a decrease in RevPAR.
  • The year-over-year increases in total revenues from both leased-and-operated and franchised-and-managed hotels in the full year 2014 were mainly driven by an increase in the number of hotels and hotel rooms in operation, partially offset by a decrease in RevPAR.

Total Operating Costs and Expenses / Total Operating Income

(RMB/USD in Millions)

Fourth Quarter 2014












Adjusted


GAAP Results


Reconciliation


Non-GAAP Results


RMB


USD


Vpts


RMB


USD


RMB


USD


Vpts

Leased-and-Operated Hotel Costs

1,298.5


209.3


2.0pts


3.3


0.5


1,295.2


208.7


2.0pts

















Franchised-and-Managed Hotel Personnel Costs

34.3


5.5


0.1pts


3.5


0.6


30.8


5.0


0.1pts

Sales and Marketing Expenses

22.7


3.7


-1.5pts


0.2


0.0


22.5


3.6


-1.5pts

General and Administrative Expenses

77.4


12.5


-0.3pts


16.1


2.6


61.3


9.9


-0.4pts

















Total Operating Costs and Expenses

1,432.9


230.9


0.3pts


23.1


3.7


1,409.8


227.2


0.2pts

















Total Operating Income

102.5


16.5


-0.3pts


23.1


3.7


125.6


20.2


-0.2pts

















(RMB/USD in Millions)

Full Year 2014












Adjusted


GAAP Results


Reconciliation


Non-GAAP Results


RMB


USD


Vpts


RMB


USD


RMB


USD


Vpts

Leased-and-Operated Hotel Costs

5,023.1


809.6


-1.4pts


13.7


2.2


5,009.4


807.4


-1.3pts

















Franchised-and-Managed Hotel Personnel Costs

201.2


32.4


0.5pts


13.2


2.1


188.1


30.3


0.5pts

Sales and Marketing Expenses

109.8


17.7


-0.1pts


0.8


0.1


109.0


17.6


-0.1pts

General and Administrative Expenses

312.0


50.3


-0.3pts


68.0


11.0


244.0


39.3


-0.2pts

















Total Operating Costs and Expenses

5,646.2


910.0


-1.3pts


95.7


15.4


5,550.5


894.6


-1.1pts

















Total Operating Income

640.6


103.3


1.3pts


95.7


15.4


736.3


118.7


1.2pts

















Note: "Vpts" represents year-over-year change in percentage points of total revenues

Total operating costs and expenses were RMB 1.43 billion (US$230.9 million) for the fourth quarter of 2014, representing 87.6% of total revenues for the quarter. Total operating costs and expenses excluding any share-based compensation expenses and integration costs (non-GAAP) for the fourth quarter of 2014 were 86.2% of total revenues, compared to 86.0% in the same period a year ago.

Total operating costs and expenses were RMB 5.65 billion (US$910.0 million) for the full year 2014, representing 84.5% of total revenues for the year. Total operating costs and expenses excluding any share-based compensation expenses and acquisition and integration costs (non-GAAP) were 83.1% of total revenues for the full year 2014 compared to 84.2% for the full year 2013.

  • Total leased-and-operated hotel costs were RMB 1.30 billion (US$209.3 million) for the fourth quarter of 2014, representing 93.3% of the leased-and-operated hotel revenues for the quarter compared to 88.9% in the same period a year ago. Total leased-and-operated hotel costs excluding any share-based compensation expenses and integration costs (non-GAAP) were 93.1% of the leased-and-operated hotel revenues in the fourth quarter of 2014 compared to 88.6% in the same period a year ago.
    Total leased-and-operated hotel costs were RMB 5.02 billion (US$809.6 million) for the full year 2014, representing 87.5% of the leased-and-operated hotels revenues for the year compared to 87.1% for the full year 2013. Total leased-and-operated hotel costs excluding any share-based compensation expenses and acquisition and integration costs (non-GAAP) were 87.2% of the leased-and-operated hotel revenues for the full year 2014 compared to 86.7% for the full year 2013.
    The year-over-year increase in total leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenues for both the fourth quarter and full year 2014 were mainly due to the decreased RevPAR resulting in a lower revenue base per hotel while a significant portion of the hotel cost was fixed.
    Pre-opening cost was RMB 18.5 million (US$3.0 million) for the fourth quarter of 2014 compared to RMB 13.5 million in the fourth quarter of 2013, and RMB 44.6 million (US$ 7.2 million) for the full year 2014 compared to RMB 77.9 million for the full year 2013.
  • Franchised-and-managed hotels personnel costs were RMB 34.3 million (US$5.5 million) for the fourth quarter of 2014, representing 14.0% of the franchised-and-managed hotel revenues for the quarter, compared to 15.3% in the same period a year ago. Franchised-and-managed hotels personnel costs excluding share-based compensation expenses (non-GAAP) were 12.6% of franchised-and-managed hotel revenues in the fourth quarter of 2014, compared to 14.0% in the same period of 2013. The year-over-year decrease in franchised-and-managed hotels personnel costs as a percentage of franchised-and-managed hotel revenues for the fourth quarter was mainly due to the lower year-end bonuses.
    Franchised-and-managed hotels personnel costs were RMB 201.2 million (US$32.4 million) for the full year 2014, representing 21.4% of the franchised-and-managed hotel revenues for the year, compared to 20.6% for the full year 2013. Franchised-and-managed hotels personnel costs excluding share-based compensation expenses (non-GAAP) were 20.0% of franchised-and-managed hotel revenues for the full year 2014, compared to 19.1% for the full year 2013. The year-over-year increase in franchised-and-managed hotel personnel costs as a percentage of franchised-and-managed hotel revenues was mainly due to a lower revenue base per hotel resulting from a decreased RevPAR in 2014.
  • Sales and marketing expenses were RMB 22.7 million (US$3.7 million) for the fourth quarter of 2014, representing 1.4% of total revenues for the quarter compared to 2.9% in the same period a year ago. Sales and marketing expenses excluding share-based compensation expenses (non-GAAP) were 1.4% of total revenues for the fourth quarter of 2014 compared to 2.9% in the same period of 2013. The year-over-year decrease in sales and marketing expenses as a percentage of total revenues for the fourth quarter was mainly due to the timing of certain branding initiatives and promotional programs. Due to the soft market condition, we did not invest heavily in such initiatives and programs in the fourth quarter of 2014.
    Sales and marketing expenses were RMB 109.8 million (US$17.7 million) for the full year 2014, representing 1.6% of total revenues for the year compared to 1.7% for the full year 2013. Sales and marketing expenses excluding share-based compensation expenses (non-GAAP) were 1.6% of total revenues for the full year 2014 compared to 1.7% for the full year 2013. The company remained the consistent on-going marketing efforts to support brand building and revenue growth.
  • General and administrative expenses were RMB 77.4 million (US$12.5 million) for the fourth quarter of 2014, representing 4.7% of total revenues compared to 5.1% in the same period a year ago. General and administrative expenses excluding share-based compensation expenses and integration costs (non-GAAP) were 3.7% of total revenues for the quarter compared to 4.1% in the same period of 2013.
    General and administrative expenses were RMB 312.0 million (US$50.3 million) for the full year 2014, representing 4.7% of total revenues compared to 4.9% for the full year 2013. General and administrative expenses excluding share-based compensation expenses and acquisition and integration costs (non-GAAP) were 3.7% of total revenues for the full year 2014 compared to 3.9% for the full year 2013.
    The year-over-year decreases in general and administrative expenses as a percentage of total revenues for both the fourth quarter and full year 2014 were driven by effective cost control at headquarters and continued leverage from economy of scale.

Income from Operations was RMB 102.5 million (US$16.5 million) for the fourth quarter of 2014, representing 6.3% of total revenues compared to 6.6% in the same period a year ago. Income from operations excluding share-based compensation expenses and integration costs (non-GAAP) for the fourth quarter of 2014 was RMB 125.6 million (US$20.2 million), or 7.7% of total revenues, compared to RMB 127.2 million, or 7.9% of total revenues, in the same period of 2013. The year-over-year decrease in income from operations margin rate for the quarter was mainly due to lower revenue base per hotel, which was partially offset by the increased mix of higher-margin revenue contribution from franchised-and-managed operations, as well as to higher pre-opening cost, which was mainly due to timing of new leased and operated hotel development, and to a certain extent, accelerated Yitel development.

Income from operations was RMB 640.6 million (US$103.3 million) for the full year 2014, representing 9.6% of total revenues compared to 8.3% in the same period a year ago. Income from operations excluding share-based compensation expenses and acquisition and integration costs (non-GAAP) for the full year 2014 was RMB 736.3 million (US$118.7 million), or 11.0% of total revenues, compared to 9.8% of total revenues for full year 2013. The year-over-year increase in income from operations margin rate for the full year 2014 was mainly driven by the increased mix of higher-margin revenue contribution from franchised-and-managed operations, productivity gains and continual cost control initiatives.

EBITDA (non-GAAP)

(RMB/USD in Millions)

Fourth Quarter 2014


Fourth Quarter 2013



RMB


USD


%Rev


V%


RMB


USD


%Rev

EBITDA (Non-GAAP)

333.4


53.7


20.4%


30.8%


254.9


41.1


15.8%


Net Foreign Exchange (Gain)

-4.6


-0.7


-0.3%




-13.6


-2.2


-0.8%


Share-Based Compensation Expenses

21.3


3.4


1.3%




19.6


3.2


1.2%


Integration Cost

1.8


0.3


0.1%




2.0


0.3


0.1%


Loss on Fair Value Change in Convertible Notes

7.9


1.3


0.5%




70.9


11.4


4.4%

Adjusted EBITDA (Non-GAAP)

359.8


58.0


22.0%


7.8%


333.9


53.8


20.7%
















(RMB/USD in Millions)

Full Year 2014


Full Year 2013



RMB


USD


%Rev


V%


RMB


USD


%Rev

EBITDA (Non-GAAP)

1,546.8


249.3


23.1%


32.7%


1,165.6


187.9


18.3%


Net Foreign Exchange Loss/(Gain)

11.5


1.9


0.2%




-49.8


-8.0


-0.8%


Share-Based Compensation Expenses

87.7


14.1


1.3%




86.0


13.9


1.4%


Accelerated fee amortization on early extinguishment of Term Loan

-


-


-




41.9


6.7


0.7%


Acquisition expenses

0.7


0.1


0.0%




-


-


-


Integration Cost

7.3


1.2


0.1%




15.0


2.4


0.2%


Gain on waived liability related with Motel acquisition

-11.9


-1.9


-0.2%




-


-


-


Gain on buy-back of convertible notes

-0.7


-0.1


0.0%




-


-


-


(Gain) on change in fair value of interest swap transaction

-


-


-




-0.9


-0.1


0.0%


(Gain)/Loss on Fair Value Change in Convertible Notes

-71.9


-11.6


-1.1%




133.4


21.5


2.1%

Adjusted EBITDA (Non-GAAP)

1,569.5


253.0


23.5%


12.8%


1,391.2


224.2


21.9%



Note:

"%Rev" represents amount as a percentage of total revenues


"V%" represents year-over-year percentage change in amounts
















Consolidated Net Income Attributable to Homeinns Hotel Group's Shareholders

(RMB/USD in Millions)

Fourth Quarter 2014


Fourth Quarter 2013



RMB


USD


%Rev


V%


RMB


USD


%Rev

Net Income (GAAP)

84.6


13.6


5.2%


558.0%


12.9


2.1


0.8%


Net Foreign Exchange Loss / (Gain)

-4.6


-0.7


-0.3%




-13.6


-2.2


-0.8%


Share-Based Compensation Expenses

21.3


3.4


1.3%




19.6


3.2


1.2%


Integration Cost

1.8


0.3


0.1%




2.0


0.3


0.1%


Loss on Fair Value Change in Convertible Notes

7.9


1.3


0.5%




70.9


11.4


4.4%

Adjusted Net Income (Non-GAAP)

110.9


17.9


6.8%


20.8%


91.8


14.8


5.7%
















(RMB/USD in Millions)

Full Year 2014


Full Year 2013



RMB


USD


%Rev


V%


RMB


USD


%Rev

Net Income (GAAP)

513.1


82.7


7.7%


161.5%


196.2


31.6


3.1%


Net Foreign Exchange Loss / (Gain)

11.5


1.9


0.2%




-49.8


-8.0


-0.8%


Share-Based Compensation Expenses

87.7


14.1


1.3%




86.0


13.9


1.4%


Acquisition expenses

0.7


0.1


0.0%




-


-


-


Integration Cost

7.3


1.2


0.1%




15.0


2.4


0.2%


Interest expenses -- Upfront fee amortization of term loans

-


-


-




1.0


0.2


0.0%


Accelerated fee amortization on early extinguishment of Term Loan

-


-


-




41.9


6.7


0.7%


Gain on waived liability related with Motel acquisition

-11.9


-1.9


-0.2%




-


-


-


Gain on buy-back of convertible notes

-0.7


-0.1


0.0%




-


-


-


(Gain)/loss on change in fair value of interest swap transaction

-


-


-




-0.9


-0.1


0.0%


(Gain)/loss on Fair Value Change in Convertible Notes

-71.9


-11.6


-1.1%




133.4


21.5


2.1%

Adjusted Net Income (Non-GAAP)

535.8


86.4


8.0%


26.7%


422.8


68.1


6.7%



Note:

"%Rev" represents amount as a percentage of total revenues


"V%" represents year-over-year percentage change in amounts

Adjusted Net Income Attributable to Ordinary Shareholders (Non-GAAP) increased year over year by 20.8% to RMB 110.9 million (US$17.9million) for the fourth quarter of 2014, representing 6.8% of total revenues compared to 5.7% in the same period a year ago, and increased 26.7% to RMB 535.8m (US$86.4millon) for the full year, representing 8.0% of total revenues compared to 6.7% in the same period a year ago. The year-over-year increases in adjusted net margin rate for both the quarter and full year were mainly due to lower interest expense benefited from operating cash inflow and higher non-operating income.

Basic and Diluted Earnings Per Ordinary Share and Per ADS





Fourth Quarter 2014


Full Year 2014


Ordinary Share

ADS Share


Ordinary Share

ADS Share


RMB

USD

RMB

USD


RMB

USD

RMB

USD

Basic

0.88

0.14

1.77

0.28


5.38

0.87

10.76

1.73

Diluted

0.88

0.14

1.77

0.28


4.55

0.73

9.10

1.47











Adjusted Basic (Non-GAAP)

1.16

0.19

2.32

0.37


5.62

0.91

11.24

1.81

Adjusted Diluted (Non-GAAP)

1.13

0.18

2.26

0.36


5.43

0.87

10.85

1.75

Cash Flow

Net operating cash inflow for the fourth quarter of 2014 was RMB 348.1 million (US$56.1 million), compared to RMB 283.5 million in the same period of 2013. Capitalized expenditures for the fourth quarter of 2014 were RMB 187.5 million (US$30.2 million), while related cash paid for capital expenditures during the quarter was RMB 181.2 million (US$29.2 million).

For the full year 2014, net operating cash inflow was RMB 1.35 billion (US$216.8 million), compared to RMB 1.19 billion for the full year 2013. Capitalized expenditures for the full year 2014 were RMB 606.5 million (US$97.7 million), while related cash paid for capital expenditures during the full year 2014 was RMB 612.8 million (US$98.8 million).

Balance Sheet

As of December 31, 2014, Homeinns Hotel Group had cash and cash equivalents of RMB 949.7 million (US$153.1 million). The outstanding balance of convertible notes issued in December 2010 (measured at fair value) was RMB 1.03 billion (US$165.9 million).

Other Recent Events

In a separate press release issued today, the Company announced that its Board of Directors has approved a share repurchase program of up to $35million, effective for one year from March 11, 2015. Under the program, the Company is authorized to repurchase up to $35 million worth of outstanding American depositary shares and ordinary shares of the Company from time to time depending on market conditions and other factors and in accordance with relevant rules under United States securities regulations. The repurchase program does not obligate Homeinns to make repurchases at any specific time. Homeinns' Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size accordingly. The share repurchase program will be funded by the Company's available cash balance.

Outlook for First Quarter and Full Year 2015

Homeinns Hotel Group targets to open no fewer than 400 new hotels in 2015, including approximately 10% as leased-and-operated hotels and 90% as franchised-and-managed hotels.

Homeinns Hotel Group expects total revenues for the Company for 2015 to be in the range of RMB 6,800 million to RMB 7,000 million. Total revenues for the Company in the first quarter of 2015 are expected to be in the range of RMB 1,445 million to RMB 1,475 million.

These forecasts reflect the Company's current and preliminary views and are subject to change.

Mr. Sun continued, "As we look ahead into 2015, we are not expecting a quick market rebound and therefore we will be careful in balancing the speed of new hotel development with profitability and will also take the opportunity to fine-tune our focus for hotel expansion. The success of our multi-branded platform has given us the confidence to devote more resources to the mid-scale hotel segment by further accelerating Yitel development and rolling out our new brand, Homeinn Plus. Meanwhile, we will focus intently on internal programs to further enhance customer service and the customer experience and improve operating efficiency and cost control effectiveness. On top of this, we will also continue to drive new initiatives such as the online retail platform and the Home Alliance program to capture new opportunities with innovation and technology improvements. Taken together, we believe that all of these initiatives will leave us well placed in 2015 to navigate the market and take full advantage of the market recovery when it arrives. We remain confident about the long-term prospects of the travel and lodging market in China and about our ability to deliver value to shareholders."

This announcement contains translations of certain RMB amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.2046 to US$1.00, the noon buying rate for December 31, 2014 set forth in the H.10 statistical release of the Federal Reserve Board.

Conference Call Information

Management will hold an earnings conference call at 9 PM U.S. Eastern Time on Wednesday, March 11, 2015 (9 AM Beijing/Hong Kong Time on Thursday, March 12, 2015).

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

U.S.:

1855 298 3404 or +1 631 5142 526

China mainland:

4001 200 539

Hong Kong:

800 905 927 or +852 5808 3202

U.K.:

0800 015 9725 or +44 (0) 20 3078 7622

Australia:

1800 801 825 or +61 2 8524 5042

Taiwan:

0080 161 5189 or +886 2 7708 3282

International:

+852 5808 3202



Passcode for all regions:

Homeinns

A replay of the conference call may be accessed by phone at the following numbers until the end of March 18, 2015 U.S. Eastern Time.



U.S.:

1866 846 0868

China mainland:

4001 842 240

Hong Kong:

800 966 697

U.K.:

0800 169 7301

Australia:

1800 008 585 or +61 2 9641 7900

International:

+61 2 9641 7900



Replay Passcode:

1192819

Live and archived webcasts of this conference call will be available at http://english.homeinns.com.

About Homeinns Hotel Group

Homeinns Hotel Group is a leading economy hotel chain in China based on number of hotels and hotel rooms as well as geographic coverage of the hotel chain. Since the Company commenced operations in 2002, it has built Homeinn as one of the best-known economy hotel brands in China. In October of 2011, the Company acquired Motel 168, another well-known hotel chain in China, as its second economy hotel brand. Homeinns Hotel Group aims to offer a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Homeinns Hotel Group's ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Select Market under the symbol "HMIN." For more information about Homeinns Hotel Group, please visit http://english.homeinns.com.

Safe Harbor

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Any statements in this press release that are not historical facts are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brands; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the Securities and Exchange Commission. This press release also contains statements or projections that are based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by us to be accurate, nor does it purport to be complete. We undertake no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Non-GAAP Financial Measures

To supplement Homeinns Hotel Group's unaudited consolidated financial results presented in accordance with U.S. GAAP, Homeinns Hotel Group uses the following non-GAAP measures:

  1. total operating costs and expenses excluding share-based compensation expenses and acquisition and integration costs
  2. total leased-and-operated hotel costs excluding share-based compensation expenses and integration costs
  3. personnel costs of franchised-and-managed hotels excluding share-based compensation expenses
  4. sales and marketing expenses excluding share-based compensation expenses
  5. general and administrative expenses excluding share-based compensation expenses and acquisition and integration costs
  6. income from operations excluding share-based compensation expenses and acquisition and integration costs
  7. adjusted net income attributable to shareholders excluding any share-based compensation expenses, foreign exchange gain or loss, acquisition and integration cost, upfront fee amortization of term loan, gain or loss from fair value change of convertible notes and interest swap derivatives and other non-operating expenses
  8. adjusted basic and diluted earnings per ADS and per share excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration cost, non-operating expenses and upfront fee amortization of term loan, and
  9. adjusted EBITDA excluding foreign exchange gain or loss, share-based compensation expenses, gain on buy-back of convertible bonds, issuance costs for convertible notes, gain or loss from fair value change of convertible notes, acquisition and integration costs, non-operating expenses and upfront fee amortization of term loan

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.

Homeinns Hotel Group believes that, used in conjunction with GAAP financial measures, these non-GAAP financial measures provide meaningful supplemental information regarding the Group's performance, and both management and investors benefit from referring to these non-GAAP financial measures in assessing the Group's performance and when planning and forecasting future periods. Management believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization, is a useful financial metric to assess Homeinns Hotel Group's operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, management believes that EBITDA is widely used by other companies in the lodging industry and may be used as an analysis tool by both management and investors to measure and compare Homeinns Hotel Group's operational and financial performance with industry peers.

One of the limitations of using non-GAAP income from operations, EBITDA, adjusted EBITDA and non-GAAP net income attributable to shareholders is that they do not include all items that impact Homeinns Hotel Group's net income (loss) for the period. These non-GAAP measures exclude share-based compensation expenses, foreign exchange gain or loss and gain or loss from fair value change of convertible notes, which have been and will continue to be a significant recurring expense in Homeinns Hotel Group's business. In addition, Homeinns Hotel Group's EBITDA and adjusted EBITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as Homeinns Hotel Group does. Management compensates for this and other limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. Homeinns Hotel Group computes the non-GAAP financial measures using the same consistent method from quarter to quarter. Reconciliations of GAAP and non-GAAP results are included at the end of this press release. The non-GAAP adjustment items do not include the tax impact.

The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that Homeinns Hotel Group's future results will be unaffected by other charges and gains Homeinns Hotel Group considers to be outside the ordinary course of its business.

Homeinns Hotel Group completed its acquisition of 100% equity interest in Motel, and took control of Motel effective on October 1, 2011. Homeinns Hotel Group has consolidated Motel's operating and financial results since October 1, 2011. Homeinns Hotel Group has presented certain separated financial data of Motel in this earning release for the purpose of providing more information to investors. Homeinns Hotel Group had substantially completed Motel's integration as of the third quarter of 2013 and ceased to present separate operating metrics and revenues for Motel.

For investor and media inquiries, please contact:

Ethan Ruan
Homeinns Hotel Group
Tel: +86-21-3337-3333*3872
Email: zjruan@homeinns.com

Cara O'Brien
FTI Consulting
Tel: +852-3768-4537
Email: cara.obrien@fticonsulting.com

[1] "Adjusted net margin (non-GAAP)" is defined as adjusted net income (non-GAAP) as a percentage of total revenues.

Homeinns Hotel Group







Unaudited Condensed Consolidated Balance Sheet





















December 31, 2013


December 31, 2014



RMB '000


RMB '000


US$ '000








ASSETS







Current assets:







Cash and cash equivalents


1,156,743


949,690


153,062

Restricted cash


173,276


12,726


2,051

Accounts receivable, net


99,964


95,501


15,392

Receivables from related parties


5,509


3,476


560

Consumables


41,231


44,446


7,163

Prepayments and other current assets


181,232


171,703


27,674

Deferred tax assets


78,839


129,685


20,901








Total current assets


1,736,794


1,407,227


226,803





























Investment


5,833


11,709


1,887

Property and equipment, net


4,049,337


4,000,041


644,690

Goodwill


2,254,631


2,323,241


374,438

Intangible assets, net


1,112,499


1,126,636


181,581

Other assets


86,027


90,995


14,666

Non-current deferred tax assets


407,564


434,847


70,085








Total assets


9,652,685


9,394,696


1,514,150








LIABILITIES







Current liabilities:







Accounts payable


89,170


86,949


14,014

Payables to related parties


3,029


4,166


671

Financial liability, current portion[2]


-


1,029,577


165,938

Finance lease liabilities


1,376


-


-

Salaries and welfare payable


222,865


228,127


36,767

Income tax payable


88,551


117,830


18,991

Other taxes payable


31,344


34,074


5,492

Deferred revenues


202,949


225,417


36,331

Other unpaid and accruals


228,881


255,460


41,173

Other payables


911,642


742,853


119,725

Deferred tax liability


52,155


60,764


9,793















Total current liabilities


1,831,962


2,785,217


448,895








Long term loans


713,337


-


-

Deferred rental


691,456


705,284


113,671

Deferred revenues


54,075


51,289


8,266

Deposits due to franchisees


115,351


144,892


23,352

Other long term payables


20,537


13,018


2,098

Unfavorable lease liabilities


337,627


331,282


53,393

Financial liabilities[2]


1,157,295


-


-

Deferred tax liabilities


283,522


292,575


47,155








Total liabilities


5,205,162


4,323,557


696,830















Commitments and contingencies














Shareholders' equity







Ordinary shares (US$0.005 par value; 200,000,000 shares authorized, 94,814,866 and 95,703,960 shares issued and outstanding as of December 31, 2013 and December 31 2014, respectively)


3,671


3,698


596








Additional paid-in capital


3,080,596


3,191,076


514,308

Statutory reserves


206,892


256,013


41,262








Retained earnings


1,140,252


1,604,246


258,558








Total Home Inns shareholders' equity


4,431,411


5,055,033


814,724








Noncontrolling interests


16,112


16,106


2,596








Total shareholders' equity


4,447,523


5,071,139


817,320








Total liabilities and shareholders' equity


9,652,685


9,394,696


1,514,150



-


-


-








Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2046 on December 31, 2014, representing the certificated exchange rate published by the Federal Reserve Board.

Note 2: Financial liabilities represent convertible notes measured at fair value.

Homeinns Hotel Group















Unaudited Condensed Consolidated Statement of Operations















Quarter Ended


Year Ended



December 31, 2013


September 30, 2014


December 31, 2014


December 31,2013


December 31,2014



RMB '000


RMB '000


RMB '000


US$ '000


RMB '000


RMB '000


US$ '000

Revenues:














Leased-and-operated hotels


1,401,635


1,612,027


1,391,084


224,202


5,587,480


5,741,804


925,411

Franchised-and-managed hotels


208,048


264,358


244,219


39,361


765,491


940,944


151,653















Total revenues


1,609,683


1,876,385


1,635,303


263,563


6,352,971


6,682,748


1,077,064

Less: Business tax and related surcharges


(98,490)


(111,943)


(100,323)


(16,169)


(391,821)


(411,118)


(66,260)















Net revenues


1,511,193


1,764,442


1,534,980


247,394


5,961,150


6,271,630


1,010,804















Operating costs and expenses:














Leased-and-operated hotel costs -














Rents and utilities


(533,188)


(539,156)


(564,347)


(90,956)


(2,108,924)


(2,172,804)


(350,192)

Personnel costs


(256,064)


(279,158)


(256,033)


(41,265)


(1,073,754)


(1,075,222)


(173,294)

Depreciation and amortization


(180,503)


(188,102)


(187,816)


(30,270)


(692,945)


(742,886)


(119,731)

Consumables, food and beverage


(92,034)


(108,793)


(97,864)


(15,773)


(343,029)


(362,760)


(58,466)

Others


(184,221)


(180,919)


(192,474)


(31,021)


(648,299)


(669,441)


(107,894)















Total leased-and-operated hotel costs


(1,246,010)


(1,296,128)


(1,298,534)


(209,285)


(4,866,951)


(5,023,113)


(809,577)















Personnel costs of Franchised-and-managed hotels


(31,855)


(71,131)


(34,280)


(5,525)


(157,314)


(201,244)


(32,435)

Sales and marketing expenses


(47,040)


(31,375)


(22,700)


(3,659)


(109,935)


(109,813)


(17,699)

General and administrative expenses


(81,406)


(81,457)


(77,426)


(12,479)


(313,480)


(312,008)


(50,287)















Total operating costs and expenses


(1,406,311)


(1,480,091)


(1,432,940)


(230,948)


(5,447,680)


(5,646,178)


(909,998)















Other income


637


139


448


72


11,089


15,193


2,449
















Income from operations


105,519


284,490


102,488


16,518


524,559


640,645


103,255















Interest income


2,331


2,864


3,777


609


6,216


9,295


1,498

Interest expenses


(11,958)


(11,040)


(5,674)


(914)


(54,149)


(41,759)


(6,730)

Accelerated fee amortization on early extinguishment of Term Loan


-


-


-


-


(41,872)


-


-

Loss from equity investment


(466)


(10)


(193)


(31)


(792)


(324)


(52)

(Loss)/gain on change in fair value of convertible notes


(70,870)


29,304


(7,851)


(1,265)


(133,404)


71,945


11,595

Gain on buy-back of convertible notes


-


650


-


-


-


650


105

Non-operating income


20,879


27,073


41,400


6,672


53,663


81,739


13,174

Non-operating expenses


-


-


-


-


(1,000)


-


-

Foreign exchange gain/(loss), net


13,551


(841)


4,606


742


49,830


(11,500)


(1,853)















Income before income tax expenses and noncontrolling interests


58,986


332,490


138,553


22,331


403,051


750,691


120,992
















Income tax expense


(46,374)


(84,384)


(53,064)


(8,552)


(206,997)


(231,323)


(37,283)















Net income


12,612


248,106


85,489


13,779


196,054


519,368


83,709















Less: Net loss/(income) attributable to noncontrolling interests


241


(2,594)


(918)


(148)


168


(6,253)


(1,008)






























Net income attributable to ordinary shareholders


12,853


245,512


84,571


13,631


196,222


513,115


82,701
















Earnings per share














- Basic


0.14


2.57


0.88


0.14


2.12


5.38


0.87















- Diluted


0.14


2.15


0.88


0.14


2.10


4.55


0.73















Weighted average ordinary shares outstanding














- Basic


93,880


95,556


95,655


95,655


92,676


95,345


95,345















- Diluted


94,440


103,025


95,655


95,655


93,418


102,814


102,814















Share-based compensation expense was included in the statement of operations as follows:














Leased-and-operated hotel costs - Personnel costs


1,789


1,525


1,856


299


7,904


7,702


1,241

Personnel costs of Franchised-and-managed hotels


2,743


2,679


3,479


561


11,013


13,152


2,120

Sales and marketing expenses


431


246


179


29


1,514


832


134

General and administrative expenses


14,656


13,663


15,810

2,548


65,584


66,020


10,640
















Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2046 on December 31, 2014, representing the certificated exchange rate published by the Federal Reserve Board.







Homeinns Hotel Group

















Reconciliation of GAAP and Non-GAAP Results






































































Quarter Ended December 31, 2014



GAAP
Result


% of Total
Revenue


Share-based
Compensation


Acquisition
expenses


Integration
cost


% of Total
Revenue


Non-GAAP
Result


% of Total
Revenue



RMB '000




RMB '000


RMB '000


RMB '000




RMB '000





(unaudited)




(unaudited)


(unaudited)


(unaudited)




(unaudited)




















Leased-and-operated hotel costs


(1,298,534)


79.4%


1,856


-


1,478


0.2%


(1,295,200)


79.2%

Personnel costs of Franchised-and-managed hotels


(34,280)


2.1%


3,479


-


-


0.2%


(30,801)


1.9%

Sales and marketing expenses


(22,700)


1.4%


179


-


-


0.0%


(22,521)


1.4%

General and administrative expenses


(77,426)


4.7%


15,810


-


317


1.0%


(61,299)


3.7%

















Total operating costs and expenses


(1,432,940)


87.6%


21,324


-


1,795


1.4%


(1,409,821)


86.2%

















Income from operations


102,488


6.3%


21,324


-


1,795


1.4%


125,607


7.7%






















































Quarter Ended December 31, 2014



GAAP
Result


% of Total
Revenue


Share-based
Compensation


Acquisition
expenses


Integration
cost


% of Total
Revenue


Non-GAAP Result


% of Total
Revenue



US$ '000




US$ '000


US$ '000


US$ '000




US$ '000





(unaudited)




(unaudited)


(unaudited)


(unaudited)




(unaudited)




















Leased-and-operated hotel costs


(209,285)


79.4%


299


-


238


0.2%


(208,748)


79.2%

Personnel costs of Franchised-and-managed hotels


(5,525)


2.1%


561


-


-


0.2%


(4,964)


1.9%

Sales and marketing expenses


(3,659)


1.4%


29


-


-


0.0%


(3,630)


1.4%

General and administrative expenses


(12,479)


4.7%


2,548


-


51


1.0%


(9,880)


3.7%

















Total operating costs and expenses


(230,948)


87.6%


3,437


-


289


1.4%


(227,222)


86.2%

















Income from operations


16,518


6.3%


3,437


-


289


1.4%


20,244


7.7%





















































Quarter Ended September 30, 2014



GAAP
Result


% of Total
Revenue


Share-based
Compensation


Acquisition
expenses


Integration
cost


%o f Total
Revenue


Non-GAAP Result


% of Total
Revenue



RMB '000




RMB '000


RMB '000


RMB '000




RMB '000





(unaudited)




(unaudited)


(unaudited)


(unaudited)




(unaudited)




















Leased-and-operated hotel costs


(1,296,128)


69.1%


1,525


-


1,427


0.2%


(1,293,176)


68.9%

Personnel costs of Franchised-and-managed hotels


(71,131)


3.8%


2,679


-


-


0.1%


(68,452)


3.6%

Sales and marketing expenses


(31,375)


1.7%


246


-


-


0.0%


(31,129)


1.7%

General and administrative expenses


(81,457)


4.3%


13,663


-


317


0.7%


(67,477)


3.6%

















Total operating costs and expenses


(1,480,091)


78.9%


18,113


-


1,744


1.1%


(1,460,234)


77.8%

















Income from operations


284,490


15.2%


18,113


-


1,744


1.1%


304,347


16.2%






















































Quarter Ended December 31, 2013



GAAP
Result


% of Total
Revenue


Share-based
Compensation


Acquisition
expenses


Integration
cost


% of Total
Revenue


Non-GAAP Result


% of Total
Revenue



RMB '000




RMB '000


RMB '000


RMB '000




RMB '000





(unaudited)




(unaudited)


(unaudited)


(unaudited)




(unaudited)




















Leased-and-operated hotel costs


(1,246,010)


77.4%


1,789


-


1,704


0.2%


(1,242,517)


77.2%

Personnel costs of Franchised-and-managed hotels


(31,855)


2.0%


2,743


-


-


0.2%


(29,112)


1.8%

Sales and marketing expenses


(47,040)


2.9%


431


-


-


0.0%


(46,609)


2.9%

General and administrative expenses


(81,406)


5.1%


14,656


-


317


0.9%


(66,433)


4.1%

















Total operating costs and expenses


(1,406,311)


87.4%


19,619


-


2,021


1.3%


(1,384,671)


86.0%

















Income from operations


105,519


6.6%


19,619


-


2,021


1.3%


127,159


7.9%





















































Year Ended December 31, 2014



GAAP
Result


% of Total
Revenue


Share-based
Compensation


Acquisition
expenses


Integration
cost


% of Total
Revenue


Non-GAAP Result


% of Total
Revenue



RMB '000




RMB '000


RMB '000


RMB '000




RMB '000





(unaudited)




(unaudited)


(unaudited)


(unaudited)




(unaudited)




















Leased-and-operated hotel costs


(5,023,113)


75.2%


7,702


-


6,017


0.2%


(5,009,394)


75.0%

Personnel costs of Franchised-and-managed hotels


(201,244)


3.0%


13,152


-


-


0.2%


(188,092)


2.8%

Sales and marketing expenses


(109,813)


1.6%


832


-


-


0.0%


(108,981)


1.6%

General and administrative expenses


(312,008)


4.7%


66,020


691


1,268


1.0%


(244,029)


3.7%

















Total operating costs and expenses


(5,646,178)


84.5%


87,706


691


7,285


1.4%


(5,550,496)


83.1%

















Income from operations


640,645


9.6%


87,706


691


7,285


1.4%


736,327


11.0%






















































Year Ended December 31, 2014



GAAP
Result


% of Total
Revenue


Share-based
Compensation


Acquisition
expenses


Integration
cost


% of Total
Revenue


Non-GAAP Result


% of Total
Revenue



US$ '000




US$ '000


US$ '000


US$ '000




US$ '000





(unaudited)




(unaudited)


(unaudited)


(unaudited)




(unaudited)




















Leased-and-operated hotel costs


(809,577)


75.2%


1,241


-


970


0.2%


(807,366)


75.0%

Personnel costs of Franchised-and-managed hotels


(32,435)


3.0%


2,120


-


-


0.2%


(30,315)


2.8%

Sales and marketing expenses


(17,699)


1.6%


134


-


-


0.0%


(17,565)


1.6%

General and administrative expenses


(50,287)


4.7%


10,640


111


204


1.0%


(39,332)


3.7%

















Total operating costs and expenses


(909,998)


84.5%


14,135


111


1,174


1.4%


(894,578)


83.1%

















Income from operations


103,255


9.6%


14,135


111


1,174


1.4%


118,675


11.0%





















































Year Ended December 31, 2013



GAAP
Result


% of Total
Revenue


Share-based
Compensation


Acquisition
expenses


Integration
cost


% of Total
Revenue


Non-GAAP Result


% of Total
Revenue



RMB '000




RMB '000


RMB '000


RMB '000




RMB '000





(unaudited)




(unaudited)


(unaudited)


(unaudited)




(unaudited)




















Leased-and-operated hotel costs


(4,866,951)


76.6%


7,904


-


13,761


0.3%


(4,845,286)


76.3%

Personnel costs of Franchised-and-managed hotels


(157,314)


2.5%


11,013


-


-


0.2%


(146,301)


2.3%

Sales and marketing expenses


(109,935)


1.7%


1,514


-


-


0.0%


(108,421)


1.7%

General and administrative expenses


(313,480)


4.9%


65,584


-


1,286


1.1%


(246,610)


3.9%

















Total operating costs and expenses


(5,447,680)


85.8%


86,015


-


15,047


1.6%


(5,346,618)


84.2%

















Income from operations


524,559


8.3%


86,015


-


15,047


1.6%


625,621


9.8%




















































Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2046 on December 31, 2014, representing the certificated exchange rate published by the Federal Reserve Board.


















Homeinns Hotel Group

















Reconciliation of GAAP and Non-GAAP Results (continued)



















































Quarter Ended


Year Ended





December 31, 2013

September 30, 2014

December 31, 2014


December 31, 2013


December 31, 2014





RMB '000


RMB '000


RMB '000


US$ '000


RMB '000


RMB '000


US$ '000





(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)





































Net income attributable to ordinary shareholders (GAAP)


12,853


245,512


84,571


13,631


196,222


513,115


82,701



Foreign exchange (gain)/loss, net


(13,551)


841


(4,606)


(742)


(49,830)


11,500


1,853



Share-based compensation


19,619


18,113


21,324


3,437


86,015


87,706


14,135



Acquisition expenses


-


-


-


-


-


691


111



Integration cost


2,021


1,744


1,795


289


15,047


7,285


1,174



Interest expenses -- Upfront fee amortization of term loans


-


-


-


-


959


-


-



Accelerated fee amortization on early extinguishment of Term Loan


-


-


-


-


41,872


-


-



Gain on waived liability related with Motel acquisition


-


(11,919)


-


-


-


(11,919)


(1,921)



Gain on buy-back of convertible notes


-


(650)


-


-


-


(650)


(105)



Non-operating income-- Gain on change in fair value of interest swap transaction


-


-


-


-


(912)


-


-



Loss/(gain) on change in fair value of convertible notes


70,870


(29,304)


7,851


1,265


133,404


(71,945)


(11,595)





































Adjusted net income attributable to ordinary shareholders (Non-GAAP)


91,812


224,337


110,935


17,880


422,777


535,783


86,353
























































Quarter Ended


Year Ended





December 31, 2013

September 30, 2014

December 31, 2014


December 31, 2013


December 31, 2014





RMB '000


RMB '000


RMB '000


US$ '000


RMB '000


RMB '000


US$ '000





(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)




















Earnings per share (GAAP)
















- Basic


0.14


2.57


0.88


0.14


2.12


5.38


0.87



















- Diluted


0.14


2.15


0.88


0.14


2.10


4.55


0.73




















Weighted average ordinary shares outstanding

















- Basic


93,880


95,556


95,655


95,655


92,676


95,345


95,345




















- Diluted


94,440


103,025


95,655


95,655


93,418


102,814


102,814



Adjusted earnings per share (Non-GAAP)
















- Basic


0.98


2.35


1.16


0.19


4.56


5.62


0.91



















- Diluted


0.96


2.23


1.13


0.18


4.41


5.43


0.87




















Weighted average ordinary shares outstanding

















- Basic


93,880


95,556


95,655


95,655


92,676


95,345


95,345




















- Diluted


101,894


103,025


102,704


102,704


100,872


102,814


102,814






















































Note 1: The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on rate of US$1.00=RMB6.2046 on December 31, 2014, representing the certificated exchange rate published by the Federal Reserve Board.

Note 2: The non-GAAP adjustment items do not include the tax impact.




















Homeinns Hotel Group

















Reconciliation of GAAP and Non-GAAP Results (continued)



















































Quarter Ended


Year Ended





December 31, 2013

September 31, 2014

December 31, 2014


December 31, 2013

December 31, 2014





RMB '000


RMB '000


RMB '000


US$ '000


RMB '000


RMB '000


US$ '000





(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)





































Net income attributable to ordinary shareholders


12,853


245,512


84,571


13,631


196,222


513,115


82,701



Interest income


(2,331)


(2,864)


(3,777)


(609)


(6,216)


(9,295)


(1,498)



Interest expenses


11,958


11,040


5,674


914


54,149


41,759


6,730



Income tax expense


46,374


84,384


53,064


8,552


206,997


231,323


37,283



Depreciation and amortization


186,061


198,086


193,863


31,245


714,482


769,911


124,087




















EBITDA (Non-GAAP)


254,915


536,158


333,395


53,733


1,165,634


1,546,813


249,303




















Foreign exchange (gain)/loss, net


(13,551)


841


(4,606)


(742)


(49,830)


11,500


1,853



Share-based compensation


19,619


18,113


21,324


3,437


86,015


87,706


14,135



Accelerated fee amortization on early extinguishment of Term Loan




-


-


-


41,872


-


-



Acquisition expenses




-


-


-


-


691


111



Integration cost


2,021


1,744


1,795


289


15,047


7,285


1,174



Gain on waived liability related with Motel acquisition




(11,919)


-


-


-


(11,919)


(1,921)



Gain on buy-back of convertible notes




(650)


-


-


-


(650)


(105)



Non-operating income-- Gain on change in fair value of interest swap transaction










(912)


-


-



Loss/(gain) on change in fair value of convertible notes


70,870


(29,304)


7,851


1,265


133,404


(71,945)


(11,595)




















Adjusted EBITDA (Non-GAAP)


333,874


514,983


359,759


57,982


1,391,230


1,569,481


252,955




















%of total revenue


20.7%


27.4%


22.0%


22.0%


21.9%


23.5%


23.5%




















Note 1: The "Depreciation and amortization expense" includes the depreciation and amortization expenses of the Group.







The depreciation and amortization expenses of all leased-and-operated hotels are included in "Operating costs and expenses".





The depreciation and amortization expenses of administrative long-term assets are included in "General and administrative expenses".







Homeinns Hotel Group

Operating Data



As of and for the quarter ended


As of and for the year ended



December 31, 2013


September 30, 2014


December 31, 2014


December 31, 2013


December 31, 2014



Group


Motel 168


excluding
Motel 168


Group


Motel 168


excluding
Motel 168


Group


Motel 168


excluding
Motel 168


Group


Motel 168


excluding
Motel 168


Group


Motel 168


excluding
Motel 168

Total Hotels in operation:


2,180


378


1,802


2,496


392


2,104


2,609


402


2,207


2,180


378


1,802


2,609


402


2,207

Leased-and-operated hotels


872


163


709


910


167


743


914


167


747


872


163


709


914


167


747

Franchised-and-managed hotels


1,308


215


1,093


1,586


225


1,361


1,695


235


1,460


1,308


215


1,093


1,695


235


1,460
































Total rooms


256,555


52,889


203,666


286,012


52,942


233,070


296,075


53,699


242,376


256,555


52,889


203,666


296,075


53,699


242,376
































Occupancy rate (as a percentage)


84.0%


80.8%


84.8%


86.7%


83.9%


87.6%


79.6%


77.1%


80.1%


86.1%


81.3%


87.3%


83.6%


80.4%


84.3%
































Average daily rate (in RMB)


163


161


164


174


168


176


163


163


163


165


160


167


165


162


166
































RevPAR (in RMB)


137


130


139


151


141


154


130


125


131


142


130


146


138


130


140
































Like-for-like performance for hotels opened for at least 18 months during the current quarter and the full year




As of and for the quarter ended


As of and for the year ended









December 31, 2013


December 31, 2014


December 31, 2013


December 31, 2014









Group


Motel 168


excluding
Motel 168


Group


Motel 168


excluding
Motel 168


Group


Motel 168


excluding
Motel 168


Group


Motel 168


excluding
Motel 168







Total Hotels in operation:


1,899


334


1,565


1,899


334


1,565


1,899


334


1,565


1,899


334


1,565







Leased-and-operated hotels


846


180


666


844


180


664


846


180


666


844


180


664







Franchised-and-managed hotels


1,053


154


899


1,055


154


901


1,053


154


899


1,055


154


901






































Total rooms


222,830


44,378


178,452


221,376


43,168


178,208


222,830


44,378


178,452


221,376


43,168


178,208






































Occupancy rate (as a percentage)


85.3%


82.0%


86.1%


81.8%


79.8%


82.3%


87.8%


82.7%


89.2%


85.9%


82.5%


86.8%






































Average daily rate (in RMB)


163


159


164


164


163


164


166


159


168


166


162


167






































RevPAR (in RMB)


139


130


141


134


130


135


146


132


150


143


134


145






































Two homeinn Leased-and-operated hotels were legally converted into Franchised-and-managed hotels in 2014.

"Occupancy rate" refers to the total number of occupied rooms divided by the total number of available rooms in a given period.

"Average daily rate" refers to total hotel room revenues divided by the total number of occupied rooms in a given period.

"RevPAR" represents revenue per available room, which is calculated by dividing total hotel room revenues by the total number of available rooms in a given period, or by multiplying average daily rates and occupancy rates in a given period.

The operating data of multi-brand conversion hotels were included in "Motel 168".

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/homeinns-hotel-group-reports-fourth-quarter-and-full-year-2014-financial-results-300049129.html

Source: Homeinns
collection