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eLong Reports Fourth Quarter and Full Year 2011 Unaudited Financial Results
Feb 23, 2012 (04:02 PM EST)


BEIJING, Feb. 23, 2012 /PRNewswire-Asia/ -- eLong, Inc. (Nasdaq: LONG), a leading online travel service provider in China, today reported unaudited financial results for the fourth quarter and full year ended December 31, 2011.

(Logo: http://photos.prnewswire.com/prnh/20041118/ELONGLOGO)

Highlights - Fourth Quarter 2011

  • Hotel room nights booked through eLong in the fourth quarter increased 50% to 2.6 million room nights compared to 1.7 million in the prior year period.
  • Net revenues for the fourth quarter increased 27% to RMB158.2 million (US$25.1 million), compared to RMB124.1 million (US$18.8 million) in the fourth quarter of 2010.
  • Net income for the fourth quarter increased to RMB15.0 million (US$2.4 million), compared to RMB4.2 million (US$0.6 million) in the fourth quarter of 2010.
  • Domestic hotel coverage network expanded 48% to over 25,500 domestic hotels as of December 31, 2011, compared to 17,200 as of December 31, 2010. In addition, eLong offers almost 149,000 international hotels through a direct connection to Expedia.
  • Online hotel bookings in the fourth quarter were approximately 63% of total hotel bookings, compared to 45% in the same period in 2010.
  • In December 2011, monthly room nights booked through eLong's group buy channel exceeded 100,000 for the first time. 
  • Received China's 2011 Best Online Travel Service Provider award as selected through an online poll organized by Sohu and Ipsos.

Highlights – Full Year 2011

  • Net revenues in 2011 increased 22% year-on-year to RMB586.2 million (US$93.1 million), compared to RMB481.9 million (US$73.0 million).
  • Net income in 2011 increased 90% year-on-year to RMB39.3 million (US$6.2 million), compared to RMB20.6 million (US$3.1 million).
  • Hotel room nights booked through eLong in 2011 increased 44% to 9.2 million room nights compared to 6.4 million in the prior year.

"We continue to execute on our online hotel-focused strategy and customers are enthusiastically responding. During the quarter, we launched customer enhancements to both our award-winning online and developing mobile channels driving additional customers to our rapidly increasing supply of hotels, including over 25,500 domestic and almost 149,000 international hotels," said Guangfu Cui, Chief Executive Officer of eLong.

Business Results

Revenues

Total revenues by product for the fourth quarter of 2011 as compared to the same period in 2010 were as follows (in RMB million):

 

 

Q4 2011

 

%

 

Q4 2010

 

%

 

Y/Y

Total

Total

Growth

Hotel reservations

 

126.6

 

76%

 

91.2

 

69%

 

39%

Air ticketing

29.0

 

17%

 

30.1

 

23%

 

(4%)

Other

 

12.6

 

7%

 

10.5

 

8%

 

20%

Total revenues

 

168.2

 

100%

 

131.8

 

100%

 

28%

 

Total revenues by product for the full year 2011 as compared to 2010 were as follows (in RMB million):

 

 

2011

 

%

 

2010

 

%

 

Y/Y

Total

Total

Growth

Hotel reservations

 

447.9

 

72%

 

346.4

 

68%

 

29%

Air ticketing

125.1

 

20%

 

123.1

 

24%

 

2%

Other

 

52.0

 

8%

 

42.5

 

8%

 

22%

Total revenues

 

625.0

 

100%

 

512.0

 

100%

 

22%

 

Hotel Reservations

Hotel commission revenue increased 39% for the fourth quarter of 2011 compared to 2010, primarily due to higher volume, partially offset by lower commission per room night. Room nights booked through eLong in the fourth quarter increased 50% year-on-year to 2.6 million. Commission per room night decreased 7% year-on-year, primarily due to the growth of lower average daily rate hotels and group buy room nights, an increase in the number of room nights booked using our coupon program and the prior year higher average daily rates during the 2010 Shanghai World Expo. Hotel commission revenue grew to 76% of total revenues from 69% in the prior year quarter.

Hotel commission revenue benefitted from the release of RMB5.9 million of deferred revenue due to the elimination of the minimum threshold formerly required for customers to redeem cash rebates under our coupon program. Without this accounting impact, hotel revenue grew by 32% in the fourth quarter of 2011 compared to the same period in the prior year.

Hotel commission revenue for full year 2011 increased 29% compared to 2010, primarily due to higher volume, which was partially offset by lower commission per room night. Room nights booked through eLong in 2011 increased 44% year-on-year to 9.2 million. Commission per room night decreased 10% year-on-year, primarily due to the growth of lower average daily rate hotels and group buy room nights, an increase in the number of room nights booked using our coupon program and the higher average daily rates during the 2010 Shanghai World Expo. Hotel commission revenue grew to 72% of total revenues from 68% in the prior year.

Air Ticketing

Air ticketing commission revenue decreased 4% for the fourth quarter of 2011 compared to the prior year quarter, driven by a 4% decrease in commission per segment, partially offset by a 1% increase in air segments to 571,000. Commission per segment decreased due to a lower air commission rate, which was partially offset by a 4% increase in average ticket price compared to the same quarter of the prior year.

Air ticketing commission revenue for full year 2011 increased 2% compared to 2010, driven by a 7% increase in commission per segment, partially offset by a 5% decrease in air segments to 2.3 million. Commission per segment increased due to a 5% increase in average ticket price and an increase in air commission rates compared to 2010.

Other

Other revenue is primarily derived from advertising and travel insurance. Other revenue increased 20% year-on-year for the fourth quarter of 2011. Other revenue decreased to 7% of total revenues from 8% in the prior year quarter.

Other revenue for full year 2011 increased 22% compared to 2010, mainly driven by increased advertising and travel insurance revenues. Other revenue was 8% of total revenues, which was flat compared to the prior year.

Profitability

Gross margin in both the fourth quarter of 2011 and full year 2011 was 74%, compared to 72% in both the fourth quarter of 2010 and full year 2010. Gross margin improvements from mix shift to hotel and online bookings were partially offset by higher personnel expenses and lower hotel commission revenue per room night.

Operating expenses for the fourth quarter of 2011 as compared to the same period in 2010 were as follows (in RMB million):

 

 

Q4 2011

 

% of Net Revenue

 

Q4 2010

 

% of Net Revenue

 

Y/Y Growth

Service development

 

27.5

 

17%

 

21.8

 

18%

 

26%

Sales and marketing

 

63.5

 

40%

 

40.7

 

33%

 

56%

General and administrative

 

14.6

 

9%

 

14.2

 

11%

 

3%

Amortization of  intangible assets

0.1

 

-

 

(0.1)

 

-

 

N/M

Total operating expenses

 

105.7

 

66%

 

76.6

 

62%

 

38%

Operating expenses for full year 2011 as compared to 2010 were as follows (in RMB million):

 

 

2011

 

% Net Revenue

 

2010

 

% Net Revenue

 

Y/Y Growth

Service development

 

97.1

 

17%

 

80.0

 

17%

 

21%

Sales and marketing

 

230.9

 

39%

 

167.3

 

35%

 

38%

General and administrative

 

53.2

 

9%

 

50.0

 

10%

 

7%

Amortization of  intangible assets

0.5

 

-

 

0.6

 

-

 

(15%)

Charges related to property and equipment

 

0.2

 

-

 

-

 

-

 

N/M

Total operating expenses

 

381.9

 

65%

 

297.9

 

62%

 

28%

Total operating expenses increased 38% for the fourth quarter of 2011 compared to the fourth quarter of 2010. Total operating expenses increased to 66% of net revenues in the fourth quarter of 2011 from 62% in the prior year quarter.

Total operating expenses increased 28% for full year 2011 compared to 2010. Total operating expenses increased to 65% of net revenues in 2011 from 62% in the prior year.

Service development expenses consist of expenses related to technology and our product offering, including our websites, platforms and other system development, as well as our supplier relations function. Service development expenses increased 26% compared to the prior year quarter, mainly driven by higher personnel expenses. Service development expenses decreased to 17% of net revenues in the fourth quarter of 2011 from 18% in the prior year quarter.

Service development expenses for full year 2011 increased 21% over full year 2010, mainly driven by higher personnel expenses. Service development expenses were 17% of net revenues, consistent with 2010.

Sales and marketing expenses for the fourth quarter of 2011 increased 56% over the prior year quarter, mainly driven by increased hotel commission payments to third-party online affiliates and distribution partners, and increased search engine and other online marketing expenses. Sales and marketing expenses increased to 40% of net revenues in the fourth quarter of 2011 from 33% in the same quarter of 2010.

Sales and marketing expenses for full year 2011 increased 38% over 2010, mainly driven by increased hotel commission payments to third-party online affiliates and distribution partners, and increased search engine and other online marketing expenses. Sales and marketing expenses increased to 39% of net revenues in 2011 from 35% in 2010.

General and administrative expenses for the fourth quarter of 2011 increased 3% compared to the prior year quarter, mainly driven by higher personnel expenses. General and administrative expenses decreased to 9% of net revenues in the fourth quarter of 2011 from 11% in the prior year quarter.

General and administrative expenses for full year 2011 increased 7% over full year 2010, mainly driven by higher share-based compensation charges. General and administrative expenses decreased to 9% of net revenues in 2011 from 10% in 2010.

Other income/(expense) represents interest income, foreign exchange losses and other income/(expense). Other income was RMB6.3 million in the fourth quarter of 2011 compared to other expense of RMB10.2 million in the fourth quarter of 2010, primarily driven by an increase in interest income and a decrease in foreign exchange losses. Interest income in the fourth quarter of 2011 increased to RMB8.6 million, compared to RMB2.8 million in the fourth quarter of 2010, due to higher interest rates and interest on the proceeds from the May 2011 issuance and sale of shares to Tencent and Expedia. Foreign exchange losses on our cash and cash equivalents and short-term investments decreased to RMB2.3 million in the fourth quarter of 2011, from RMB12.4 million in the fourth quarter of 2010 as we held a smaller percentage of our cash and cash equivalents, short-term investments and restricted cash in US dollars than in the prior year quarter.

Other income was RMB1.3 million in full year 2011 compared to other expense of RMB19.6 million in 2010, driven primarily by an increase in interest income and a decrease in foreign exchange losses, which were partially offset by increased other expense recognized on changes in the fair value of contingent consideration arrangements. Interest income in 2011 increased to RMB25.6 million compared to RMB6.8 million in 2010 and foreign exchange losses decreased to RMB19.5 million in 2011 from RMB25.9 million in 2010 for the same reasons as in the fourth quarter of 2011. Other expense recognized on changes in the fair value of contingent consideration arrangements increased to RMB4.8 million in 2011, from RMB1.6 million in 2010.

As of December 31, 2011, eLong held cash and cash equivalents, short-term investments and restricted cash of RMB1,907 million (US$303 million), of which 86% was held in Renminbi and 14% was held in US dollars, compared to total cash and cash equivalents, short-term investments and restricted cash of RMB1,022 million (US$155 million), of which 68% was held in Renminbi and 32% held in US dollars as of December 31, 2010. In February 2012, eLong converted US$37 million from US dollars to Renminbi, and accordingly, as of February 15, 2012, 98% of cash and cash equivalents, short-term investments and restricted cash held by eLong was held in Renminbi and 2% was held in US dollars.

Net income for the fourth quarter of 2011 was RMB15.0 million, compared to net income of RMB4.2 million during the prior year quarter.

Net income for full year 2011 was RMB39.3 million, compared to net income of RMB20.6 million in 2010.

Net income per ADS and diluted net income per ADS for the fourth quarter of 2011 were each RMB0.44 (US$0.08), compared to net income per ADS and diluted net income per ADS of RMB0.18 (US$0.02) and RMB0.16 (US$0.02) respectively in the prior year quarter.

Net income per ADS and diluted net income per ADS for full year 2011 were RMB1.30 (US$0.20) and RMB1.26 (US$0.20) respectively, compared to net income per ADS and diluted net income per ADS of RMB0.86 (US$0.14) and RMB0.80 (US$0.12) respectively in full year 2010.

Business Outlook

eLong currently expects net revenues for the first quarter of 2012 to increase by 15% to 25% compared to the first quarter of 2011.

Safe Harbor Statement

It is currently expected that the Business Outlook will not be updated until the release of eLong's next quarterly earnings announcement; however, eLong reserves the right to update its Business Outlook at any time for any reason.

Statements in this press release concerning eLong's future business, operating results and financial condition are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to our company are intended to identify such forward-looking statements, but are not the exclusive means of doing so. These forward-looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause our actual performance and results to differ materially from those discussed in the forward-looking statements. Factors that could affect our actual results and cause our actual results to differ materially from those referred in any forward-looking statement include, but are not limited to, eLong's losses sustained in prior years, declines or disruptions in the travel industry, the international financial crises, slowdown in the PRC economy, damage or interruption to our systems or service due to natural disasters or man-made causes, an outbreak of bird flu, H1N1 flu, SARS or other disease, eLong's reliance on having good relationships with, and stable hotel and air inventory from, hotel suppliers and airline ticket suppliers, our reliance on the TravelSky GDS system for our air business and Baidu for our search engine marketing, the possibility that eLong will be unable to continue timely compliance the requirements of the Sarbanes-Oxley Act, the risk that eLong will not be successful in competing against new and existing competitors, risks associated with Expedia, Inc.'s (Nasdaq: EXPE) majority ownership interest and Tencent's strategic investment in eLong, fluctuations in the value of the Renminbi, changes in eLong's management team and other personnel, risks relating to uncertainties in the PRC legal system, including but not limited to, risks relating to our variable-interest operating entities and risks relating to the application of preferential tax policies, and other risks mentioned in eLong's filings with the US Securities and Exchange Commission, including eLong's Annual Report on Form 20-F.

Investors should not rely upon forward-looking statements as predictions of future events. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained in this press release are qualified by reference to this cautionary statement.

Conference Call

eLong will host a conference call to discuss its fourth quarter 2011 unaudited financial results on February 24, 2012 at 8:00 am Beijing time (February 23, 2012, 7:00 pm ET). The management team will be on the call to discuss the quarterly results and to answer questions. The toll-free number for U.S. participants is +1-866-844-9413. The dial-in number for Hong Kong participants is +852-3001-3802. International participants can dial +1-210-795-0512. Pass code: eLong.

Additionally, an archived web cast of this call will be available on the Investor Relations section of the eLong web site at http://www.elong.net/AboutUs/conference.html for one year.

About eLong, Inc.

eLong, Inc. (Nasdaq: LONG) is a leading online travel service provider in China. Headquartered in Beijing, eLong empowers consumers to make informed travel decisions by providing convenient online, mobile (via iPhone and Android applications and m.eLong.com) and 24-hour call center hotel and air ticket booking services as well as easy to use tools such as maps, destination guides, photographs, virtual tours and user reviews. eLong offers consumers the largest directly-bookable hotel product portfolio in China with a selection of more than 25,500 hotels in China and almost 149,000 international hotels in more than 100 countries worldwide, as well as the ability to fulfill domestic and international air ticket reservations in cities across China. eLong's largest shareholders are Expedia, Inc. (Nasdaq: EXPE) and Tencent Holdings Ltd. (HKSE: 0700).

eLong operates websites including www.elong.com, www.elong.net and www.xici.net.

eLong, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS EXCEPT PER SHARE AND PER ADS AMOUNTS)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

Dec. 31,
2010

Sep. 30,
2011

Dec. 31,
2011

Dec. 31,
2011

 

Dec. 31,
2010

Dec. 31,
2011

Dec. 31,
2011

 

 

RMB

RMB

RMB

USD(1)

 

RMB

RMB

USD(1)

 

 

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

 

 

(Unaudited)

(Unaudited)

Revenues:

 

 

 

 

 

 

 

 

 

Hotel reservations

 

91,241

126,043

126,631

20,120

 

346,449

447,877

71,160

Air ticketing

 

30,083

33,681

29,002

4,608

 

123,092

125,095

19,876

Other

 

10,491

15,444

12,556

1,995

 

42,478

52,028

8,266

Total revenues

 

131,815

175,168

168,189

26,723

 

512,019

625,000

99,302

Business tax and surcharges

 

(7,686)

(10,822)

(10,037)

(1,595)

 

(30,102)

(38,822)

(6,168)

Net revenues

 

124,129

164,346

158,152

25,128

 

481,917

586,178

93,134

    Cost of services

 

(34,850)

(44,319)

(40,449)

(6,427)

 

(136,890)

(154,864)

(24,605)

Gross profit

 

89,279

120,027

117,703

18,701

 

345,027

431,314

68,529

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Service development

 

(21,802)

(26,347)

(27,502)

(4,370)

 

(80,046)

(97,097)

(15,427)

Sales and marketing

 

(40,741)

(68,993)

(63,449)

(10,080)

 

(167,323)

(230,946)

(36,694)

General and administrative

 

(14,209)

(12,936)

(14,598)

(2,319)

 

(49,945)

(53,239)

(8,459)

Amortization of intangible assets

101

(137)

(137)

(22)

 

(642)

(547)

(87)

Charges related to property and equipment

-

(7)

(4)

(1)

 

-

(152)

(24)

 Total operating expenses

 

(76,651)

(108,420)

(105,690)

(16,792)

 

(297,956)

(381,981)

(60,691)

 

 

 

 

 

 

 

 

 

 

Income from operations

 

12,628

11,607

12,013

1,909

 

47,071

49,333

7,838

 

 

 

 

 

 

 

 

 

 

Other income/(expenses):

 

 

 

 

 

 

 

 

 

Interest income

 

2,757

7,166

8,587

1,364

 

6,792

25,648

4,075

Foreign exchange losses

 

(12,412)

(5,923)

(2,314)

(368)

 

(25,933)

(19,503)

(3,099)

Other

 

(522)

(337)

24

4

 

(409)

(4,830)

(767)

Total other income/(expense), net

(10,177)

906

6,297

1,000

 

(19,550)

1,315

209

Income before income tax expense

 

2,451

12,513

18,310

2,909

 

27,521

50,648

8,047

    Income tax benefit/(expense)

 

1,735

(2,921)

(2,790)

(443)

 

(6,892)

(10,746)

(1,707)

    Equity in net loss of affiliates

-

(156)

(516)

(82)

 

-

(631)

(100)

Net income

 

4,186

9,436

15,004

2,384

 

20,629

39,271

6,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

0.09

0.14

0.22

0.04

 

0.43

0.65

0.10

Diluted net income per share

 

0.08

0.14

0.22

0.04

 

0.40

0.63

0.10

 

 

 

 

 

 

 

 

 

 

Net income per ADS(2)(3)

 

0.18

0.28

0.44

0.08

 

0.86

1.30

0.20

Diluted net income per ADS(2)(3)

0.16

0.28

0.44

0.08

 

0.80

1.26

0.20

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income per share:

 

 

 

 

 

 

         Basic

 

49,158

67,831

68,389

68,389

 

48,378

60,456

60,456

         Diluted

 

52,463

69,547

69,080

69,080

 

51,655

62,298

62,298

 

 

 

 

 

 

 

 

 

 

Share-based compensation charges included in:

 

5,398

5,886

5,620

893

 

18,544

21,922

3,483

        Cost of services

 

301

393

290

46

 

1,192

1,374

218

        Service development

 

1,855

2,239

2,112

336

 

6,534

7,626

1,212

        Sales and marketing

 

824

1,114

943

150

 

3,395

3,620

575

        General and administrative

 

2,418

2,140

2,275

361

 

7,423

9,302

1,478

 

 

 

 

 

 

 

 

 

 

Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB6.2939 on December 31, 2011 in the City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve. No representation is made that the RMB amounts could have been, or could be, converted or settled into USD at the rates stated herein on the reporting dates, at any other rates or at all.

Note 2: 1 ADS = 2 shares.

Note 3: Non-GAAP financial measures

 

 

 

 

 

 

 

 

 

 

eLong, Inc.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

 

 

 

 

 

 

 

 

 

 

Dec. 31, 2010

 

Dec. 31, 2011

 

Dec. 31, 2011

 

 

 

RMB

 

RMB

 

USD

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

381,426

 

411,676

 

65,409

 

Short-term investments

 

580,005

 

1,433,425

 

227,748

 

Restricted cash

 

60,600

 

61,400

 

9,756

 

Accounts receivable, net

 

58,891

 

83,311

 

13,237

 

Amounts due from related parties

 

1,240

 

11,632

 

1,848

 

Prepaid expenses

 

11,429

 

18,223

 

2,895

 

Other current assets

 

24,210

 

33,761

 

5,365

 

Total current assets

 

1,117,801

 

2,053,428

 

326,258

 

Property and equipment, net

 

41,896

 

44,230

 

7,027

 

Investment in equity affiliates

 

12,680

 

15,549

 

2,470

 

Goodwill

 

61,061

 

61,061

 

9,702

 

Intangible assets, net

 

5,855

 

5,308

 

843

 

Other non-current assets

 

29,904

 

31,142

 

4,948

 

Total assets

 

1,269,197

 

2,210,718

 

351,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

54,364

 

60,899

 

9,676

 

Income taxes payable

 

5,002

 

7,009

 

1,114

 

Amounts due to related parties

 

1,872

 

2,624

 

417

 

Deferred revenue

 

14,478

 

20,880

 

3,318

 

Accrued expenses and other current liabilities

 

97,183

 

111,787

 

17,761

 

Total current liabilities

 

172,899

 

203,199

 

32,286

 

Other liabilities

 

1,430

 

1,536

 

244

 

Total liabilities

 

174,329

 

204,735

 

32,530

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

Ordinary shares

 

1,991

 

2,864

 

455

 

High-vote ordinary shares

 

2,363

 

2,691

 

428

 

Treasury stock

 

(96,153)

 

(75,494)

 

(11,995)

 

Additional paid-in capital

 

1,352,427

 

2,209,469

 

351,049

 

Accumulated deficit

 

(165,760)

 

(133,547)

 

(21,219)

 

Total shareholders' equity

 

1,094,868

 

2,005,983

 

318,718

 

Total liabilities and shareholders' equity

 

1,269,197

 

2,210,718

 

351,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eLong, Inc.

TRENDED OPERATIONAL METRICS

(IN THOUSANDS)

 

 

 

The metrics below are intended as a supplement to the financial statements found in this press release and in our filings with the SEC. In the event of discrepancies between amounts in these tables and our historical financial statements, readers should rely on our filings with the SEC and financial statements in our most recent press release.

We intend to periodically review and refine the definition, methodology and appropriateness of each of our supplemental metrics. As a result, metrics are subject to removal and/or change, and such changes could be material.

 

 

 

 

 

 

 

 

 

 

 

 

2010 (Unaudited)

2011 (Unaudited)

 

 Q1

Q2

Q3

Q4

2010

 Q1

 Q2

 Q3

Q4

2011

 

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

 

 

 

 

 

 

 

 

 

 

 

OIBA

10,319

20,769

16,196

17,403

64,687

13,968

18,058

17,298

18,433

67,757

 

 

 

 

 

 

 

 

 

 

 

Hotel Reservations

 

 

 

 

 

 

 

 

 

 

Room Nights

1,206

1,549

1,898

1,725

6,378

1,700

2,217

2,702

2,583

9,202

Room Night Y/Y

32%

58%

60%

39%

49%

41%

43%

42%

50%

44%

Average Daily Rate Y/Y

(2%)

5%

7%

4%

4%

(1%)

(9%)

(9%)

(8%)

(7%)

Commission/Room Night Y/Y

(7%)

(9%)

(9%)

(10%)

(9%)

(7%)

(15%)

(12%)

(7%)

(10%)

Hotel Commissions Y/Y

23%

44%

46%

25%

35%

31%

22%

25%

39%

29%

 

 

 

 

 

 

 

 

 

 

 

Air Ticketing

 

 

 

 

 

 

 

 

 

 

Air Segments

653

591

629

568

2,441

587

568

591

571

2,317

Air Segments Y/Y

29%

16%

4%

(3%)

11%

(10%)

(4%)

(6%)

1%

(5%)

Average Ticket Value Y/Y

8%

25%

21%

16%

17%

11%

7%

0%

4%

5%

Commission/Segment Y/Y

7%

21%

26%

12%

16%

14%

10%

8%

(4%)

7%

Air Commissions Y/Y

38%

40%

31%

8%

28%

2%

6%

2%

(4%)

2%

Non-GAAP Financial Measures

To supplement the financial measures calculated in accordance with generally accepted accounting principles in the United States, or GAAP, this press release includes certain non-GAAP financial measures including net income per ADS, diluted net income per ADS, Operating Income Before Amortization ("OIBA"), Adjusted Earnings Before Interests, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), Adjusted Net Income ("ANI") and Adjusted Net Income Per Share. We believe these non-GAAP financial measures may help investors understand eLong's current financial performance and compare business trends among different reporting periods. These non-GAAP financial measures should be considered in addition to financial measures presented in accordance with GAAP, but should not be considered as a substitute for, or superior to, financial measures presented in accordance with GAAP. We seek to compensate for the limitations of the non-GAAP measures presented by also providing the comparable GAAP measures, GAAP financial statements, and descriptions of the reconciling items and adjustments, to derive the non-GAAP measures. 

Operating Income Before Amortization ("OIBA") is defined as income from operations plus: (1) share-based compensation charges; (2) acquisition-related impacts, including (i) amortization of intangible assets and impairment of goodwill and intangible assets, and (ii) gains or losses recognized on changes in the fair value of contingent consideration arrangements; and (3) certain items, including restructuring charges. We exclude the items listed above from OIBA because we believe doing so may provide investors greater insight into management decision making at eLong. We believe OIBA is useful to investors because it is one of the primary internal metrics by which management evaluates the performance of our business as a whole and our individual business segments, on which internal budgets are based, and by which management and employees, including our Chief Executive Officer, are compensated. We believe that investors should have access to the same set of tools that management uses to analyze our performance. In addition, we believe that by excluding certain items, such as share-based compensation charges and acquisition-related impacts, OIBA corresponds more closely to the cash operating income generated from our business and allows investors to gain additional understanding of factors and trends affecting the ongoing cash earning capabilities of our business, from which capital investments are made. Although depreciation is also a non-cash expense, it is included in OIBA because it is driven directly by the capital expenditure decisions made by management. OIBA also has certain limitations in that it does not take into account the impact of certain expenses to our consolidated statements of operations.

Operating Income Before Amortization should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP measures. We present a reconciliation of this non-GAAP financial measure to GAAP below.

 

eLong, Inc.

TABULAR RECONCILIATION FOR NON-GAAP MEASURE

Operating Income Before Amortization

(IN THOUSANDS)

 

 

 

 

 

 

 

 

 

 

 

 

2010 (Unaudited)

2011 (Unaudited)

 

Q1

Q2

Q3

Q4

2010

Q1

Q2

Q3

Q4

2011

 

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

 

 

 

 

 

 

 

 

 

 

 

OIBA

10,319

20,769

16,196

17,403

64,687

13,968

18,058

17,298

18,433

67,757

Share-based compensation charges

(4,130)

(4,549)

(4,467)

(5,398)

(18,544)

(4,779)

(5,637)

(5,886)

(5,620)

(21,922)

Amortization of intangible assets

(185)

(237)

(322)

101

(643)

(136)

(137)

(137)

(137)

(547)

Other

253

163

633

522

1,571

4,176

200

332

(663)

4,045

Income from operations

6,257

16,146

12,040

12,628

47,071

13,229

12,484

11,607

12,013

49,333

 

Adjusted EBITDA is defined as net income plus (1) interest expense (income); (2) income tax expense; (3) depreciation; (4) amortization of intangible assets; (5) share-based compensation charges; (6) foreign exchange losses (gains); (7) acquisition-related impacts, including (i) goodwill and intangible asset impairment, and (ii) losses (gains) recognized on noncontrolling investment basis adjustments when we acquire controlling interests; and (8) certain other items, including restructuring charges and equity in net loss (income) of affiliate. We believe Adjusted EBITDA is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions, if any, and income tax expense. Since share-based compensation charges are non-cash expenses, we believe excluding them from our calculation of Adjusted EBITDA allows us to provide investors with a more useful tool for assessing our operating and financial performance. In addition, we believe that Adjusted EBITDA is used by other companies and may be used by investors as a measure of our financial performance. The presentation of Adjusted EBITDA should not be construed as an indication that eLong's future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business. The use of Adjusted EBITDA has certain limitations. Amortization and depreciation expenses for various non-current assets, share-based compensation charges, other income/(expenses), and income tax expense 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 results. Additionally, Adjusted EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of eLong's liquidity. We seek to compensate for these limitations by providing the relevant disclosure of our amortization and depreciation expenses, and share-based compensation charges in the reconciliations to the GAAP financial measure. The term Adjusted EBITDA is not defined under GAAP, and Adjusted EBITDA is not measure of net income, income from operations, operating performance or liquidity presented in accordance with GAAP. In addition, eLong's Adjusted EBITDA may not be comparable to Adjusted EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA in the same manner as we do.

Adjusted EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP measures. We present a reconciliation of this non-GAAP financial measure to GAAP below.

eLong, Inc.

TABULAR RECONCILIATION FOR NON-GAAP MEASURE

Adjusted EBITDA and Operating Income Before Amortization

(IN THOUSANDS)

 

 

 

 

 

 

 

 

 

 

 

 

2010 (Unaudited)

2011 (Unaudited)

 

Q1