So they're actually going to stretch the story of The Hobbit across three movies? I dunno, I thought two might have already been pushing it. But there's no rule saying that these movies have to be three hours (or more) long like the LOTR films were. Still, if they were going to do a third movie, I thought they'd do the bridge film instead.
They are doing the Hobbit and mix it in with material found in the LOTR appendices.