EX-99.2 6 a20-30284_3ex99d2.htm EX-99.2

Exhibit 99.2

Huazhu Group Limited

Unaudited Condensed Consolidated Balance Sheets

(RMB in millions, except share and per share data, unless otherwise stated)

|  | As of December 31, 2019 |  | As of June 30, 2020 |
|  |  |  |  |  | (US$ in millions) |
|  |  |  | (Unaudited) |
ASSETS |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |
Cash and cash equivalents |  | 3,234 |  | 3,699 |  | 524 |
Restricted cash |  | 10,765 |  | 1,368 |  | 194 |
Short-term investments |  | 2,908 |  | 1,504 |  | 213 |
Account receivable, net |  | 218 |  | 426 |  | 60 |
Loan receivables, net |  | 193 |  | 238 |  | 34 |
Amounts due from related parties |  | 182 |  | 182 |  | 26 |
Inventories |  | 57 |  | 92 |  | 13 |
Income tax receivables |  | — |  | 3 |  | 0 |
Other current assets, net |  | 699 |  | 854 |  | 121 |
Total current assets |  | 18,256 |  | 8,366 |  | 1,185 |
Property and equipment, net |  | 5,854 |  | 6,568 |  | 930 |
Intangible assets, net |  | 1,662 |  | 5,928 |  | 839 |
Operating lease right-of-use assets |  | 20,875 |  | 29,321 |  | 4,150 |
Finance lease right-of-use assets |  | — |  | 1,792 |  | 254 |
Land use rights, net |  | 215 |  | 211 |  | 30 |
Long-term investments |  | 1,929 |  | 1,888 |  | 267 |
Goodwill |  | 2,657 |  | 5,402 |  | 765 |
Loan receivables, net |  | 280 |  | 270 |  | 38 |
Other assets, net |  | 707 |  | 740 |  | 105 |
Deferred tax assets |  | 548 |  | 857 |  | 121 |
Total assets |  | 52,983 |  | 61,343 |  | 8,684 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |
Short-term debt |  | 8,499 |  | 5,821 |  | 824 |
Accounts payable |  | 1,176 |  | 1,343 |  | 190 |
Amounts due to related parties |  | 95 |  | 92 |  | 13 |
Salary and welfare payables |  | 491 |  | 505 |  | 72 |
Deferred revenue |  | 1,179 |  | 1,280 |  | 181 |
Operating lease liabilities, current |  | 3,082 |  | 3,452 |  | 489 |
Finance lease liabilities, current |  | — |  | 27 |  | 4 |
Accrued expenses and other current liabilities |  | 1,856 |  | 1,700 |  | 241 |
Dividends payable |  | 678 |  | - |  | - |
Income tax payable |  | 231 |  | 131 |  | 18 |
Total current liabilities |  | 17,287 |  | 14,351 |  | 2,032 |
Long-term debt |  | 8,084 |  | 9,240 |  | 1,308 |
Operating lease liabilities, non-current |  | 18,496 |  | 27,553 |  | 3,900 |
Finance lease liabilities, non-current |  | — |  | 2,210 |  | 313 |
Deferred revenue |  | 559 |  | 553 |  | 78 |
Other long-term liabilities |  | 566 |  | 687 |  | 97 |
Retirement benefit obligations |  | — |  | 123 |  | 17 |
Deferred tax liabilities |  | 491 |  | 1,820 |  | 258 |
Total liabilities |  | 45,483 |  | 56,537 |  | 8,003 |
Equity: |  |  |  |  |  |  |
Ordinary shares |  | 0 |  | 0 |  | 0 |
Treasury shares |  | (107 | ) | (107 | ) | (15 | )
Additional paid-in capital |  | 3,834 |  | 3,901 |  | 552 |
Retained earnings |  | 3,701 |  | 1,011 |  | 144 |
Accumulated other comprehensive income (loss) |  | (49 | ) | (69 | ) | (10 | )
Total Huazhu Group Limited shareholders’ equity |  | 7,379 |  | 4,736 |  | 671 |
Noncontrolling interest |  | 121 |  | 70 |  | 10 |
Total equity |  | 7,500 |  | 4,806 |  | 681 |
Total liabilities and equity |  | 52,983 |  | 61,343 |  | 8,684 |

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Huazhu Group Limited

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

(RMB in millions, except share and per share data, unless otherwise stated)

|  | For the three months ended June 30 |
|  | 2019 |  | 2020 |
|  |  |  |  |  | (US$ in millions) |
|  | (Unaudited) |  | (Unaudited) |
Revenue |  |  |  |  |  |  |
Leased and owned hotels |  | 2,001 |  | 1,236 |  | 175 |
Manachised and franchised hotels |  | 803 |  | 676 |  | 96 |
Others |  | 55 |  | 41 |  | 6 |
Net revenues |  | 2,859 |  | 1,953 |  | 277 |
Operating costs and expenses: |  |  |  |  |  |  |
Hotel operating costs: |  |  |  |  |  |  |
Rents |  | 646 |  | 833 |  | 118 |
Utilities |  | 79 |  | 91 |  | 13 |
Personnel costs |  | 453 |  | 508 |  | 72 |
Depreciation and amortization |  | 237 |  | 320 |  | 45 |
Consumables, food and beverage |  | 201 |  | 185 |  | 26 |
Others |  | 127 |  | 198 |  | 28 |
Total hotel operating costs |  | 1,743 |  | 2,135 |  | 302 |
Other operating costs |  | 17 |  | 7 |  | 1 |
Selling and marketing expenses |  | 102 |  | 107 |  | 15 |
General and administrative expenses |  | 247 |  | 263 |  | 37 |
Pre-opening expenses |  | 122 |  | 99 |  | 14 |
Total operating costs and expenses |  | 2,231 |  | 2,611 |  | 369 |
Other operating income, net |  | 29 |  | 164 |  | 23 |
Income (Loss) from operations |  | 657 |  | (494 | ) | (69 | )
Interest income |  | 41 |  | 26 |  | 4 |
Interest expense |  | (83 | ) | (142 | ) | (20 | )
Other income, net |  | 135 |  | 21 |  | 3 |
Unrealized gains (losses) from fair value changes of equity securities |  | 149 |  | (34 | ) | (5 | )
Foreign exchange gain (loss) |  | 35 |  | 34 |  | 5 |
Income (Loss) before income taxes |  | 934 |  | (589 | ) | (82 | )
Income tax (expense) benefit |  | (286 | ) | 68 |  | 10 |
(Loss) from equity method investments |  | (43 | ) | (33 | ) | (5 | )
Net income (loss) |  | 605 |  | (554 | ) | (77 | )
Net loss attributable to noncontrolling interest |  | 8 |  | 6 |  | 1 |
Net income (loss) attributable our Company |  | 613 |  | (548 | ) | (76 | )
Other comprehensive income: |  |  |  |  |  |  |
Gain arising from defined benefit plan, net of tax |  | — |  | 4 |  | 1 |
Foreign currency translation adjustments, net of tax |  | (64 | ) | 43 |  | 6 |
Comprehensive income (loss) |  | 541 |  | (507 | ) | (70 | )
Comprehensive loss attributable to noncontrolling interest |  | 8 |  | 6 |  | 1 |
Comprehensive income (loss) attributable to Huazhu Group Limited |  | 549 |  | (501 | ) | (69 | )
Earnings (Losses) per share/ADS: |  |  |  |  |  |  |
Basic |  | 2.16 |  | (1.91 | ) | (0.27 | )
Diluted |  | 2.05 |  | (1.91 | ) | (0.27 | )
Weighted average number of shares used in computation: |  |  |  |  |  |  |
Basic |  | 284,029,267 |  | 286,473,344 |  | 286,473,344 |
Diluted |  | 304,526,084 |  | 286,473,344 |  | 286,473,344 |

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Huazhu Group Limited

Unaudited Condensed Consolidated Statements of Cash Flows

(RMB in millions, except share and per share data, unless otherwise stated)

|  | For the three months ended June 30 |
|  | 2019 |  | 2020 |
|  |  |  |  |  | (In millions of US$) |
|  | (Unaudited) |  | (Unaudited) |
Operating activities: |  |  |  |  |  |  |
Net income (loss) |  | 605 |  | (554 | ) | (77 | )
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |  |  |  |  |
Share-based compensation |  | 31 |  | 38 |  | 5 |
Depreciation and amortization, and other |  | 252 |  | 359 |  | 51 |
Impairment loss |  | — |  | 16 |  | 2 |
Loss from equity method investments, net of dividends |  | 43 |  | 33 |  | 5 |
Investment (income) loss |  | (194 | ) | (11 | ) | (1 | )
Changes in operating assets and liabilities |  | 382 |  | 470 |  | 66 |
Other |  | 42 |  | 161 |  | 23 |
Net cash provided by operating activities |  | 1,161 |  | 512 |  | 74 |
Investing activities: |  |  |  |  |  |  |
Capital expenditures |  | (301 | ) | (339 | ) | (48 | )
Acquisitions, net of cash received |  | (25 | ) | (0 | ) | (0 | )
Purchase of long-term investments |  | (148 | ) | (0 | ) | (0 | )
Proceeds from maturity/sale of long-term investments |  | — |  | 35 |  | 5 |
Loan advances |  | (149 | ) | (24 | ) | (3 | )
Loan collections |  | 66 |  | 47 |  | 6 |
Other |  | 4 |  | — |  | — |
Net cash used in investing activities |  | (553 | ) | (281 | ) | (40 | )
Financing activities: |  |  |  |  |  |  |
Net proceeds from issuance of ordinary shares upon exercise of options |  | 7 |  | 0 |  | 0 |
Proceeds from debt |  | 1,682 |  | 4,291 |  | 607 |
Repayment of debt |  | (2,756 | ) | (2,930 | ) | (414 | )
Dividend paid |  | — |  | — |  | — |
Other |  | 13 |  | (12 | ) | (2 | )
Net cash provided by (used in) financing activities |  | (1,054 | ) | 1,349 |  | 191 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |  | 54 |  | 12 |  | 2 |
Net (decrease) increase in cash, cash equivalents and restricted cash |  | (392 | ) | 1,592 |  | 227 |
Cash, cash equivalents and restricted cash at the beginning of the period |  | 4,457 |  | 3,475 |  | 491 |
Cash, cash equivalents and restricted cash at the end of the period |  | 4,065 |  | 5,067 |  | 718 |

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