MIAMI, July 31, 2015 /PRNewswire/ -- Royal
Caribbean Cruises Ltd. (NYSE, OSE: RCL) today reported a 26%
increase in second quarter earnings and said it expects full year
earnings to be almost 40% above last year.
KEY HIGHLIGHTS
Overall, the year will be another solid step towards the
Double-Double. Commercially, the business continues
to perform as expected and the biggest drivers of our increased
guidance are better foreign exchange and fuel rates.
Second Quarter 2015 results:
- Net Yields were up 4.2% on a Constant-Currency basis (down 0.2%
As-Reported), modestly better than guidance mostly driven by
strength in the Caribbean and
China.
- Net Cruise Costs ("NCC") excluding fuel were up 3.4% on a
Constant-Currency basis (down 0.1% As-Reported), better than
guidance mainly due to timing.
- Adjusted Net Income of $185.0
million, or $0.84 per share,
versus $146.7 million, or
$0.66 per share in 2014.
- US GAAP Net Income was $185.0
million or $0.84 per share,
versus $137.7 million, or
$0.62 per share in 2014.
Full Year 2015 forecast:
- Net Yields are expected to increase in the range of 2.9% to
3.9% on a Constant-Currency basis (down 1.1% to 0.1%
As-Reported).
- NCC excluding fuel are expected to be better than flat on a
Constant-Currency basis (down approximately 2.5% As-Reported),
including some increased investment in marketing activities.
- Adjusted EPS is expected to be in the range of $4.65 to $4.75 per share, a $0.15 increase from the mid-point of the
company's previous guidance, driven by beneficial currency and fuel
rates.
"The Double-Double introduced demanding but
achievable targets for our organization, and I am proud of our
company's focus on delivering this program," said Richard D. Fain, chairman and chief executive
officer. "We continue to focus on the strength of our brands to
drive these improving results."
SECOND QUARTER RESULTS
Adjusted Net Income for the second quarter of 2015 was
$185.0 million, or $0.84 per share, compared to Adjusted Net Income
of $146.7 million, or $0.66 per share, in the second quarter of 2014,
representing a 26% increase over the same quarter last year. US
GAAP Net Income for the second quarter 2015 was $185.0 million or $0.84 per share, compared to $137.7 million or $0.62 per share in 2014.
While currency and fuel were the biggest drivers of the earnings
increase versus guidance, Net Yields on a Constant-Currency basis
also increased 4.2%. Yields were better than expected, mainly
driven by close-in pricing in the Caribbean and China. Constant-Currency NCC excluding fuel
increased 3.4%, which is 110 basis points better than guidance,
mainly due to the timing of shipboard projects.
Bunker pricing net of hedging for the second quarter was
$599 per metric ton and consumption
was 338,000 metric tons.
FULL YEAR 2015
The company has updated full year Adjusted EPS guidance to a
range of $4.65 to $4.75. The
$0.15 increase versus April guidance
is driven by beneficial currency and fuel rates. Better than
expected performance in the Caribbean and China in Q2, and a modest increase in costs
are essentially offsetting each other and are neutral to earnings.
The cost increase in the second half of the year is for some
additional marketing activities focused on 2016.
Constant-Currency Net Revenue Yields are now expected to
increase in the range of 2.9% to 3.9%, versus previous guidance of
2.5% to 4.0%, and Net Cruise Costs excluding fuel are expected to
be better than flat, versus previous guidance of flat to down
1%.
Bookings since the April earnings call have been healthy and the
company continues to be booked ahead of last year in both load
factor and APD. A solid Caribbean
environment is more than off-setting softness on Latin American
sailings associated with our Pullmantur brand.
Taking into account current fuel pricing, interest rates,
currency exchange rates and the factors detailed above, the company
expects 2015 Adjusted EPS to be in the range of $4.65 to $4.75 per share.
"Momentum in the Caribbean
continues at a solid pace, and our strong booked position in the
third and fourth quarters gives us confidence as we move through
the second half of 2015," said Jason T.
Liberty, chief financial officer. "The trajectory of our
brands is firmly on course for another record year of earnings,
with healthy trends extending into the first quarter of 2016."
While it is too early to provide a detailed picture for 2016,
first quarter bookings are running well ahead of last year at
higher prices, with improvements in the Caribbean continuing at a robust pace.
THIRD QUARTER 2015
Constant-Currency Net Yields are expected to be up in the range
of 3.5% to 4.0% in the third quarter of 2015. NCC excluding fuel
are expected to be down 1.5% to 1.0% on a Constant-Currency
basis.
Based on current fuel pricing, interest rates and currency
exchange rates and the factors detailed above, the company expects
third quarter Adjusted EPS to be approximately $2.70 per share.
FUEL EXPENSE AND SUMMARY OF KEY GUIDANCE STATS
Fuel Expense
The company does not forecast fuel prices, and its fuel cost
calculations are based on current at-the-pump prices, net of
hedging impacts. Based on today's fuel prices the company has
included $210 million and
$818 million of fuel expense in its
third quarter and full year 2015 guidance, respectively.
Forecasted consumption is 53% hedged via swaps for the remainder
of 2015 and 65%, 60%, 40% and 10% hedged for 2016, 2017, 2018 and
2019, respectively. For the same five-year period, the average cost
per metric ton of the hedge portfolio is approximately $630, $538, $501, $462 and $417, respectively.
The company provided the following fuel statistics for the third
quarter and full year 2015:
FUEL
STATISTICS
|
Third Quarter
2015
|
Full Year
2015
|
Fuel Consumption
(metric tons)
|
340,000
|
1,367,000
|
Fuel
Expenses
|
$210
million
|
$818
million
|
Percent Hedged
(fwd consumption)
|
48%
|
53%
|
Impact of 10%
change in fuel prices
|
$7.8
million
|
$13.9
million
|
In summary, the company provided the following guidance for the
third quarter and full year of 2015:
GUIDANCE
|
As-Reported
Constant-Currency
|
|
|
Third Quarter
2015
|
|
Net
Yields
|
(0.7%) to
(0.2%)
|
3.5% to
4.0%
|
|
Net Cruise Costs
per APCD
|
Approx.
(6.0%)
|
Approx.
(4.0%)
|
|
Net Cruise Costs
per APCD
excluding
Fuel
|
(3.8%) to
(3.3%)
|
(1.5%) to
(1.0%)
|
|
|
|
|
|
Full Year
2015
|
|
Net
Yields
|
(1.1%) to
(0.1%)
|
2.9% to
3.9%
|
|
Net Cruise Costs
per APCD
|
Approx.
(6.0%)
|
Approx.
(4.0%)
|
|
Net Cruise Costs
per APCD
excluding
Fuel
|
Approx.
(2.5%)
|
Better than
flat
|
|
|
|
|
|
|
Third Quarter
2015
|
Full Year
2015
|
|
Capacity
Increase
|
6.7%
|
5.4%
|
|
Depreciation and
Amortization
|
$209 to $214
million
|
$830 to $835
million
|
|
Interest Expense,
net
|
$60 to $70
million
|
$260 to $270
million
|
|
Adjusted
EPS
|
Approx.
$2.70
|
$4.65 to
$4.75
|
|
|
|
|
|
1% Change in
Currency
|
$5 million
|
$8 million
|
|
1% Change in Net
Yield
|
$19
million
|
$34
million
|
|
1% Change in NCC x
fuel
|
$9 million
|
$17
million
|
|
1% Change in
LIBOR
|
$10
million
|
$23
million
|
|
|
|
Exchange rates
used in guidance calculations
|
|
|
Current –
July
|
Previous –
April
|
|
GBP
|
$1.55
|
$1.46
|
|
CAD
|
$0.79
|
$0.80
|
|
AUD
|
$0.74
|
$0.77
|
|
BRL
|
$0.32
|
$0.33
|
|
CNY
|
$0.16
|
$0.16
|
|
LIQUIDITY AND FINANCING ARRANGEMENTS
As of June 30, 2015, liquidity was
$1.0 billion, including cash and the
undrawn portion of the company's unsecured revolving credit
facilities. The company noted that scheduled debt maturities
for the remainder of 2015, 2016, 2017, 2018 and 2019 are
$0.5 billion, $0.9 billion, $0.9
billion, $2.0 billion, and
$0.6 billion, respectively.
CAPITAL EXPENDITURES AND CAPACITY GUIDANCE
Based upon current ship orders, projected capital expenditures
for full year 2015, 2016, 2017, 2018 and 2019 are $1.6 billion, $2.3
billion, $0.5 billion,
$2.4 billion and $1.3 billion, respectively.
Capacity increases for 2015, 2016, 2017, 2018 and 2019 are
expected to be 5.4%, 6.7%, 2.4%, 4.6% and 6.4%, respectively.
These figures do not include potential ship sales or additions that
we may elect to make in the future.
CONFERENCE CALL SCHEDULED
The company has scheduled a conference call at 10 a.m. Eastern Daylight Time today to discuss
its earnings. This call can be heard, either live or on a
delayed basis, on the company's investor relations web site at
www.rclinvestor.com.
Selected Operational and Financial Metrics
Adjusted Net Income
Adjusted Net Income represents net income excluding certain items
that we believe adjusting for is meaningful when assessing our
performance on a comparative basis. For the periods
presented, these items included restructuring charges, other costs
related to our profitability initiatives, and the estimated impact
of the divested Pullmantur non-core businesses for periods prior to
the sales transaction. The estimated impact of the divested
Pullmantur non-core businesses was arrived at by adjusting the net
income (loss) of these businesses for the ownership percentage we
retained as well as for intercompany transactions that are no
longer eliminated in our consolidated statements of comprehensive
income (loss) subsequent to the sales transaction.
Adjusted Earnings Per Share ("Adjusted EPS")
Represents Adjusted Net Income divided by the diluted shares
outstanding at the end of the reporting period. We believe this
measure is meaningful when assessing our performance on a
comparative basis.
Available Passenger Cruise Days ("APCD")
APCD is our measurement of capacity and represents double occupancy
per cabin multiplied by the number of cruise days for the
period. We use this measure to perform capacity and rate
analysis to identify the main non-capacity drivers that cause our
cruise revenues and expenses to vary.
Constant-Currency
We believe Net Yields, Net Cruise Costs and Net Cruise Costs
Excluding Fuel are our most relevant financial measures.
However, a significant portion of our revenue and expenses are
denominated in currencies other than the US Dollar. Because
our reporting currency is the US Dollar, the value of these
revenues and expenses in US Dollars will be affected by changes in
currency exchange rates. Although such changes in local
currency prices are just one of many elements impacting our
revenues and expenses, it can be an important element. For
this reason, we also monitor Net Yields, Net Cruise Costs, and Net
Cruise Costs Excluding Fuel on a "Constant-Currency" basis – i.e.
as if the current period's currency exchange rates had remained
constant with the comparable prior period's rates. We
calculate "Constant-Currency" by applying the average prior year
period exchange rates for each of the corresponding months of the
reported and/or forecasted period, so as to calculate what the
results would have been had exchange rates been the same throughout
both periods. We do not make predictions about future
exchange rates and use current exchange rates for calculations of
future periods. It should be emphasized that the use of
Constant-Currency is primarily used by us for comparing short-term
changes and/or projections. Changes in guest sourcing and
shifting the amount of purchases between currencies can change the
impact of the purely currency-based fluctuations.
Gross Cruise Costs
Gross Cruise Costs represent the sum of total cruise operating
expenses plus marketing, selling and administrative expenses.
Gross Yields
Gross Yields represent total revenues per APCD.
Net Cruise Costs ("NCC") and Net Cruise Costs ("NCC") Excluding
Fuel
Represent Gross Cruise Costs excluding commissions, transportation
and other expenses and onboard and other expenses and, in the case
of Net Cruise Costs Excluding Fuel, fuel expenses. In measuring our
ability to control costs in a manner that positively impacts net
income, we believe changes in Net Cruise Costs and Net Cruise Costs
Excluding Fuel to be the most relevant indicators of our
performance. We have not provided a quantitative
reconciliation of projected Gross Cruise Costs to projected Net
Cruise Costs and projected Net Cruise Costs Excluding Fuel due to
the significant uncertainty in projecting the costs deducted to
arrive at these measures. Accordingly, we do not believe that
reconciling information for such projected figures would be
meaningful. For the periods prior to the sale of the Pullmantur
non-core businesses, Net Cruise Costs excludes the estimated impact
of these divested businesses. Net Cruise Costs also excludes
initiative costs reported within cruise operating expenses
and marketing, selling and administrative expenses.
Net Revenues
Net Revenues represent total revenues less commissions,
transportation and other expenses and onboard and other
expenses. For the periods prior to the sale of the Pullmantur
non-core businesses, Net Revenues excludes the estimated impact of
these divested businesses.
Net Yields
Net Yields represent Net Revenues per APCD. We utilize Net
Revenues and Net Yields to manage our business on a day-to-day
basis as we believe that it is the most relevant measure of our
pricing performance because it reflects the cruise revenues earned
by us net of our most significant variable costs, which are
commissions, transportation and other expenses and onboard and
other expenses. We have not provided a quantitative
reconciliation of projected Gross Yields to projected Net Yields
due to the significant uncertainty in projecting the costs deducted
to arrive at this measure. Accordingly, we do not believe
that reconciling information for such projected figures would be
meaningful. For the periods prior to the sale of the Pullmantur
non-core businesses, Net Yields excludes the estimated impact of
these divested businesses.
Occupancy
Occupancy, in accordance with cruise vacation industry practice, is
calculated by dividing Passenger Cruise Days by APCD. A
percentage in excess of 100% indicates that three or more
passengers occupied some cabins.
Passenger Cruise Days
Passenger Cruise Days represent the number of passengers carried
for the period multiplied by the number of days of their respective
cruises.
Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL) is a global cruise
vacation company that owns Royal Caribbean International, Celebrity
Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de
France, as well as TUI Cruises
through a 50 percent joint venture. Together, these six
brands operate a combined total of 44 ships with an additional
eight under construction contracts, and two under conditional
agreements. They operate diverse itineraries around the world
that call on approximately 480 destinations on all seven
continents. Additional information can be found on
www.royalcaribbean.com, www.celebritycruises.com,
www.pullmantur.es, www.azamaraclubcruises.com,
www.cdfcroisieresdefrance.com, www.tuicruises.com or
www.rclinvestor.com.
Certain statements in this release relating to, among other
things, our future performance constitute forward-looking
statements under the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to,
statements regarding expected financial results for the third
quarter and full year 2015, and expectations regarding the timing
and results of our Double-Double initiative, the costs and yields
expected in 2015 and other future periods. Words such as
"anticipate," "believe," "could," "estimate," "expect," "goal,"
"intend," "may," "plan," "project," "seek," "should," "will," and
similar expressions are intended to identify these forward-looking
statements. Forward-looking statements reflect management's
current expectations, are inherently uncertain and are subject to
risks, uncertainties and other factors, which could cause our
actual results, performance or achievements to differ materially
from the future results, performance or achievements expressed or
implied in those forward-looking statements. Examples of
these risks, uncertainties and other factors include, but are not
limited to the following: the impact of the economic and
geopolitical environment on the demand for cruises, the impact of
the economic environment on our ability to generate cash flows from
operations or obtain new borrowings from the credit or capital
markets in amounts sufficient to satisfy our capital expenditures,
debt repayments and other financing needs, incidents or adverse
publicity concerning the cruise vacation industry, the
uncertainties of conducting business internationally and expanding
into new markets, changes in operating and financing costs, the
impact of foreign exchange rates and fuel price fluctuations,
vacation industry competition and changes in industry capacity and
overcapacity, emergency ship repairs, including the related lost
revenue, the impact of ship delivery delays, ship cancellations or
ship construction price increases, financial difficulties
encountered by shipyards or their subcontractors and the
unavailability or cost of air service.
More information about factors that could affect our operating
results is included under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our most recent annual report on Form
10-K, a copy of which may be obtained by visiting our Investor
Relations web site at www.rclinvestor.com or the SEC's web site at
www.sec.gov. Undue reliance should not be placed on the
forward-looking statements in this release, which are based on
information available to us on the date hereof. We undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Adjusted Measures of Financial Performance
This press
release includes certain adjusted financial measures as defined
under Securities and Exchange Commission rules, which we believe
provide useful information to investors as a supplement to our
consolidated financial statements which are prepared and presented
in accordance with generally accepted accounting principles, or
GAAP.
The presentation of adjusted financial information is not
intended to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP. These measures may be different from
adjusted measures used by other companies. In addition, these
adjusted measures are not based on any comprehensive set of
accounting rules or principles. Adjusted measures have limitations
in that they do not reflect all of the amounts associated with our
results of operations as do the corresponding GAAP measures.
A reconciliation to the most comparable GAAP measure of all
adjusted financial measures included in this press release can be
found in the tables included at the end of this press release.
ROYAL CARIBBEAN
CRUISES LTD.
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
(unaudited, in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger ticket
revenues
|
$
|
1,507,468
|
|
$
|
1,455,099
|
|
$
|
2,814,247
|
|
$
|
2,803,302
|
|
|
|
Onboard and other
revenues
|
|
550,854
|
|
|
524,944
|
|
|
1,059,674
|
|
|
1,063,965
|
|
|
|
Total
revenues
|
|
2,058,322
|
|
|
1,980,043
|
|
|
3,873,921
|
|
|
3,867,267
|
|
|
|
Cruise operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
|
355,835
|
|
|
346,180
|
|
|
680,253
|
|
|
672,045
|
|
|
|
|
Onboard and
other
|
|
147,105
|
|
|
150,606
|
|
|
263,344
|
|
|
273,638
|
|
|
|
|
Payroll and
related
|
|
218,570
|
|
|
209,171
|
|
|
430,161
|
|
|
419,972
|
|
|
|
|
Food
|
|
119,407
|
|
|
119,184
|
|
|
239,193
|
|
|
237,264
|
|
|
|
|
Fuel
|
|
202,565
|
|
|
242,804
|
|
|
407,841
|
|
|
487,263
|
|
|
|
|
Other
operating
|
|
272,927
|
|
|
262,729
|
|
|
518,234
|
|
|
544,472
|
|
|
|
|
|
Total cruise
operating expenses
|
|
1,316,409
|
|
|
1,330,674
|
|
|
2,539,026
|
|
|
2,634,654
|
|
|
|
Marketing, selling
and administrative expenses
|
|
274,148
|
|
|
260,988
|
|
|
560,980
|
|
|
551,295
|
|
|
|
Depreciation and
amortization expenses
|
|
206,468
|
|
|
192,880
|
|
|
406,936
|
|
|
386,615
|
|
|
|
Restructuring
charges
|
|
-
|
|
|
(86)
|
|
|
-
|
|
|
1,650
|
|
|
|
Operating
Income
|
|
261,297
|
|
|
195,587
|
|
|
366,979
|
|
|
293,053
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
2,772
|
|
|
2,630
|
|
|
6,509
|
|
|
5,906
|
|
|
|
|
Interest expense, net
of interest capitalized
|
|
(76,620)
|
|
|
(65,260)
|
|
|
(146,779)
|
|
|
(133,831)
|
|
|
|
|
Other (expense)
income
|
|
(2,482)
|
|
|
4,716
|
|
|
3,488
|
|
|
(998)
|
|
|
|
|
|
|
|
|
|
|
|
(76,330)
|
|
|
(57,914)
|
|
|
(136,782)
|
|
|
(128,923)
|
|
|
|
Net
Income
|
$
|
184,967
|
|
$
|
137,673
|
|
$
|
230,197
|
|
$
|
164,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.84
|
|
$
|
0.62
|
|
$
|
1.05
|
|
$
|
0.74
|
|
|
|
Diluted
|
$
|
0.84
|
|
$
|
0.62
|
|
$
|
1.04
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
219,913
|
|
|
222,189
|
|
|
219,770
|
|
|
221,745
|
|
|
|
Diluted
|
|
220,902
|
|
|
223,381
|
|
|
220,886
|
|
|
223,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
|
184,967
|
|
$
|
137,673
|
|
$
|
230,197
|
|
$
|
164,130
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
11,741
|
|
|
(1,833)
|
|
|
(19,803)
|
|
|
637
|
|
|
|
|
Change in defined
benefit plans
|
|
3,742
|
|
|
(2,054)
|
|
|
2,249
|
|
|
(4,085)
|
|
|
|
|
Gain (loss) on cash
flow derivative hedges
|
|
202,473
|
|
|
(20,638)
|
|
|
(58,476)
|
|
|
(73,553)
|
|
|
|
|
|
Total other
comprehensive income (loss)
|
|
217,956
|
|
|
(24,525)
|
|
|
(76,030)
|
|
|
(77,001)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
$
|
402,923
|
|
$
|
113,148
|
|
$
|
154,167
|
|
$
|
87,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passengers
Carried
|
|
1,314,284
|
|
|
1,283,596
|
|
|
2,649,802
|
|
|
2,561,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger Cruise
Days
|
|
9,465,349
|
|
|
9,032,618
|
|
|
18,679,992
|
|
|
17,886,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
|
9,040,437
|
|
|
8,607,667
|
|
|
17,819,382
|
|
|
17,080,917
|
|
|
|
Occupancy
|
|
104.7%
|
|
|
104.9%
|
|
|
104.8%
|
|
|
104.7%
|
|
|
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
(in thousands,
except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 159,360
|
|
$ 189,241
|
|
|
|
Trade and other
receivables, net
|
|
212,454
|
|
261,392
|
|
|
|
Inventories
|
|
140,228
|
|
123,490
|
|
|
|
Prepaid expenses and
other assets
|
|
292,431
|
|
226,960
|
|
|
|
Derivative financial
instruments
|
|
108,918
|
|
-
|
|
|
|
Total
current assets
|
|
913,391
|
|
801,083
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
18,890,338
|
|
18,193,627
|
|
|
Goodwill
|
|
409,836
|
|
420,542
|
|
|
Other
assets
|
|
1,181,629
|
|
1,297,938
|
|
|
|
|
|
$ 21,395,194
|
|
$ 20,713,190
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$ 1,188,576
|
|
$ 799,630
|
|
|
|
Accounts
payable
|
|
343,981
|
|
331,505
|
|
|
|
Accrued
interest
|
|
54,072
|
|
49,074
|
|
|
|
Accrued expenses and
other liabilities
|
|
519,080
|
|
635,138
|
|
|
|
Derivative financial
instruments
|
|
468,614
|
|
266,986
|
|
|
|
Customer
deposits
|
|
2,217,215
|
|
1,766,914
|
|
|
|
Total
current liabilities
|
|
4,791,538
|
|
3,849,247
|
|
|
Long-term
debt
|
|
7,592,330
|
|
7,644,318
|
|
|
Other long-term
liabilities
|
|
691,086
|
|
935,266
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Preferred stock
($0.01 par value; 20,000,000 shares authorized;
|
|
|
|
|
|
|
|
none
outstanding)
|
|
-
|
|
-
|
|
|
|
Common stock ($0.01
par value; 500,000,000 shares authorized;
|
|
|
|
|
|
|
|
233,733,457 and
233,106,019 shares issued, June 30, 2015
|
|
|
|
|
|
|
|
and December 31,
2014, respectively)
|
|
2,337
|
|
2,331
|
|
|
|
Paid-in
capital
|
|
3,267,189
|
|
3,253,552
|
|
|
|
Retained
earnings
|
|
6,673,516
|
|
6,575,248
|
|
|
|
Accumulated other
comprehensive loss
|
|
(973,024)
|
|
(896,994)
|
|
|
|
Treasury stock
(13,808,683 common shares at
cost, June 30, 2015 and December 31, 2014)
|
|
(649,778)
|
|
(649,778)
|
|
|
|
Total
shareholders' equity
|
|
8,320,240
|
|
8,284,359
|
|
|
|
|
|
$ 21,395,194
|
|
$ 20,713,190
|
|
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
Net income
|
|
$
230,197
|
|
$ 164,130
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
406,936
|
|
386,615
|
|
|
|
Net deferred income
tax expense
|
|
2,534
|
|
2,934
|
|
|
|
Loss (gain) on
derivative instruments not designated as hedges
|
|
16,902
|
|
(10,841)
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Decrease in trade and
other receivables, net
|
|
54,272
|
|
15,903
|
|
|
|
(Increase) decrease
in inventories
|
|
(17,523)
|
|
7,777
|
|
|
|
Increase in prepaid
expenses and other assets
|
|
(58,722)
|
|
(35,799)
|
|
|
|
Increase (decrease)
in accounts payable
|
|
14,668
|
|
(41,228)
|
|
|
|
Increase (decrease)
in accrued interest
|
|
4,998
|
|
(59,019)
|
|
|
|
(Decrease) increase
in accrued expenses and other liabilities
|
|
(39,474)
|
|
45,730
|
|
|
|
Increase in customer
deposits
|
|
405,752
|
|
388,693
|
|
|
Other, net
|
|
19,805
|
|
16,034
|
|
|
Net cash provided by
operating activities
|
|
1,040,345
|
|
880,929
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(1,151,616)
|
|
(342,472)
|
|
|
Cash (paid) received
on settlement of derivative financial instruments
|
|
(118,521)
|
|
18,096
|
|
|
Investments in and
loans to unconsolidated affiliates
|
|
(54,250)
|
|
(68,885)
|
|
|
Cash received from
loans to unconsolidated affiliates
|
|
120,297
|
|
66,138
|
|
|
Other, net
|
|
(12,482)
|
|
1,280
|
|
|
Net cash used in
investing activities
|
|
(1,216,572)
|
|
(325,843)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
Debt
proceeds
|
|
2,376,001
|
|
1,846,200
|
|
|
Debt issuance
costs
|
|
(41,171)
|
|
(33,627)
|
|
|
Repayments of
debt
|
|
(1,992,232)
|
|
(2,334,396)
|
|
|
Dividends
paid
|
|
(197,718)
|
|
(131,857)
|
|
|
Proceeds from
exercise of common stock options
|
|
5,067
|
|
54,938
|
|
|
Cash received on
settlement of derivative financial instruments
|
|
-
|
|
22,835
|
|
|
Other, net
|
|
1,156
|
|
941
|
|
|
Net cash provided by
(used in) financing activities
|
|
151,103
|
|
(574,966)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
|
(4,757)
|
|
455
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
(29,881)
|
|
(19,425)
|
|
|
Cash and cash
equivalents at beginning of period
|
|
189,241
|
|
204,687
|
|
|
Cash and cash
equivalents at end of period
|
|
$
159,360
|
|
$ 185,262
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure
|
|
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
|
|
|
|
Interest, net of
amount capitalized
|
|
$
120,089
|
|
$ 173,470
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
NON-GAAP
RECONCILING INFORMATION
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Yields
and Net Yields were calculated as follows (in thousands, except
APCD and Yields):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2015
On a
Constant Currency basis
|
|
|
2014
|
|
|
|
2015
|
|
|
2015
On a
Constant Currency basis
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger ticket
revenues
|
|
|
$
|
1,507,468
|
|
$
|
1,588,539
|
|
$
|
1,455,099
|
|
|
$
|
2,814,247
|
|
$
|
2,967,384
|
|
$
|
2,803,302
|
|
Onboard and other
revenues
|
|
|
|
550,854
|
|
|
563,643
|
|
|
524,944
|
|
|
|
1,059,674
|
|
|
1,082,728
|
|
|
1,063,965
|
|
Total
revenues
|
|
|
|
|
|
2,058,322
|
|
|
2,152,182
|
|
|
1,980,043
|
|
|
|
3,873,921
|
|
|
4,050,112
|
|
|
3,867,267
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
|
355,835
|
|
|
375,694
|
|
|
346,180
|
|
|
|
680,253
|
|
|
715,124
|
|
|
672,045
|
|
|
Onboard and
other
|
|
|
|
147,105
|
|
|
153,163
|
|
|
150,606
|
|
|
|
263,344
|
|
|
272,427
|
|
|
273,638
|
|
Net Revenues
including divested businesses
|
|
1,555,382
|
|
|
1,623,325
|
|
|
1,483,257
|
|
|
|
2,930,324
|
|
|
3,062,561
|
|
|
2,921,584
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues related
to divested businesses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
prior to sales
transaction
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
35,656
|
|
Net
revenues
|
|
|
|
|
$
|
1,555,382
|
|
$
|
1,623,325
|
|
$
|
1,483,257
|
|
|
$
|
2,930,324
|
|
$
|
3,062,561
|
|
$
|
2,885,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
|
|
|
|
|
|
9,040,437
|
|
|
9,040,437
|
|
|
8,607,667
|
|
|
|
17,819,382
|
|
|
17,819,382
|
|
|
17,080,917
|
|
Gross
Yields
|
|
|
|
|
$
|
227.68
|
|
$
|
238.06
|
|
$
|
230.03
|
|
|
$
|
217.40
|
|
$
|
227.29
|
|
$
|
226.41
|
|
Net Yields
|
|
|
|
|
|
$
|
172.05
|
|
$
|
179.56
|
|
$
|
172.32
|
|
|
$
|
164.45
|
|
$
|
171.87
|
|
$
|
168.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Cruise
Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel were
calculated as follows (in thousands, except APCD and costs per
APCD):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2015
On a
Constant Currency basis
|
|
|
2014
|
|
|
|
2015
|
|
|
2015
On a
Constant Currency basis
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cruise
operating expenses
|
|
|
$
|
1,316,409
|
|
$
|
1,364,803
|
|
$
|
1,330,674
|
|
|
$
|
2,539,026
|
|
$
|
2,619,832
|
|
$
|
2,634,654
|
|
Marketing, selling
and administrative expenses
|
|
274,148
|
|
|
285,340
|
|
|
260,988
|
|
|
|
560,980
|
|
|
581,671
|
|
|
551,295
|
|
Gross Cruise
Costs
|
|
|
|
|
1,590,557
|
|
|
1,650,143
|
|
|
1,591,662
|
|
|
|
3,100,006
|
|
|
3,201,503
|
|
|
3,185,949
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
|
355,835
|
|
|
375,694
|
|
|
346,180
|
|
|
|
680,253
|
|
|
715,124
|
|
|
672,045
|
|
|
Onboard and
other
|
|
|
|
147,105
|
|
|
153,163
|
|
|
150,606
|
|
|
|
263,344
|
|
|
272,427
|
|
|
273,638
|
|
Net Cruise Costs
including divested businesses
|
|
1,087,617
|
|
|
1,121,286
|
|
|
1,094,876
|
|
|
|
2,156,409
|
|
|
2,213,952
|
|
|
2,240,266
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cruise Costs
related to divested businesses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
prior to sales
transaction
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
47,854
|
|
|
Other initiative
costs included within cruise operating expenses and marketing,
selling and administrative expenses
|
|
-
|
|
|
-
|
|
|
8,562
|
|
|
|
-
|
|
|
-
|
|
|
13,796
|
|
Net Cruise
Costs
|
|
|
|
|
1,087,617
|
|
|
1,121,286
|
|
|
1,086,314
|
|
|
|
2,156,409
|
|
|
2,213,952
|
|
|
2,178,616
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel
|
|
|
|
|
|
|
202,565
|
|
|
205,382
|
|
|
242,804
|
|
|
|
407,841
|
|
|
411,890
|
|
|
487,263
|
|
Net Cruise Costs
Excluding Fuel
|
|
|
$
|
885,052
|
|
$
|
915,904
|
|
$
|
843,510
|
|
|
$
|
1,748,568
|
|
$
|
1,802,062
|
|
$
|
1,691,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
|
|
|
|
|
|
9,040,437
|
|
|
9,040,437
|
|
|
8,607,667
|
|
|
|
17,819,382
|
|
|
17,819,382
|
|
|
17,080,917
|
|
Gross Cruise Costs
per APCD
|
|
|
$
|
175.94
|
|
$
|
182.53
|
|
$
|
184.91
|
|
|
$
|
173.97
|
|
$
|
179.66
|
|
$
|
186.52
|
|
Net Cruise Costs per
APCD
|
|
|
$
|
120.31
|
|
$
|
124.03
|
|
$
|
126.20
|
|
|
$
|
121.01
|
|
$
|
124.24
|
|
$
|
127.55
|
|
Net Cruise Costs
Excluding Fuel per APCD
|
$
|
97.90
|
|
$
|
101.31
|
|
$
|
98.00
|
|
|
$
|
98.13
|
|
$
|
101.13
|
|
$
|
99.02
|
ROYAL CARIBBEAN
CRUISES LTD.
|
|
|
|
|
|
NON-GAAP
RECONCILING INFORMATION (CONTINUED)
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Debt-to-Capital was calculated as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net
of current portion
|
$ 7,592,330
|
|
|
$ 7,644,318
|
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
1,188,576
|
|
|
799,630
|
|
|
|
|
|
|
|
|
|
Total
debt
|
8,780,906
|
|
|
8,443,948
|
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
159,360
|
|
|
189,241
|
|
|
|
|
|
|
|
|
|
Net
Debt
|
$ 8,621,546
|
|
|
$ 8,254,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
$ 8,320,240
|
|
|
$ 8,284,359
|
|
|
|
|
|
|
|
|
|
Total
debt
|
8,780,906
|
|
|
8,443,948
|
|
|
|
|
|
|
|
|
|
Total debt and
shareholders' equity
|
$ 17,101,146
|
|
|
$ 16,728,307
|
|
|
|
|
|
|
|
|
|
Debt-to-Capital
|
51.3%
|
|
|
50.5%
|
|
|
|
|
|
|
|
|
|
Net
Debt
|
$ 8,621,546
|
|
|
$ 8,254,707
|
|
|
|
|
|
|
|
|
|
Net Debt and
shareholders' equity
|
$ 16,941,786
|
|
|
$ 16,539,066
|
|
|
|
|
|
|
|
|
|
Net
Debt-to-Capital
|
50.9%
|
|
|
49.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
and Adjusted Earnings per Share were calculated as follows (in
thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
$
|
184,967
|
|
$
|
146,709
|
|
$
|
230,197
|
|
$
|
192,828
|
|
Net
Income
|
|
184,967
|
|
|
137,673
|
|
|
230,197
|
|
|
164,130
|
|
|
Net Adjustments to
Net Income-Increase
|
$
|
-
|
|
$
|
9,036
|
|
$
|
-
|
|
$
|
28,698
|
|
Adjustments to Net
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
$
|
-
|
|
$
|
(86)
|
|
$
|
-
|
|
$
|
1,650
|
|
Other initiative
costs
|
|
-
|
|
|
9,122
|
|
|
-
|
|
|
16,035
|
|
Estimated impact of
divested businesses prior to sales transaction
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Adjustments to
Net Income-Increase
|
$
|
-
|
|
$
|
9,036
|
|
$
|
-
|
|
$
|
28,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
per Share - Diluted
|
$
|
0.84
|
|
$
|
0.66
|
|
$
|
1.04
|
|
$
|
0.86
|
|
Earnings per Share
- Diluted
|
|
0.84
|
|
|
0.62
|
|
|
1.04
|
|
|
0.74
|
|
|
Net Adjustments to
Net Income-Increase
|
$
|
-
|
|
$
|
0.04
|
|
$
|
-
|
|
$
|
0.12
|
|
Adjustments to
Earnings per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Other initiative
costs
|
|
-
|
|
|
0.04
|
|
|
-
|
|
|
0.07
|
|
Estimated impact of
divested businesses prior to sales transaction
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.05
|
|
|
Net Adjustments to
Net Income-Increase
|
$
|
-
|
|
$
|
0.04
|
|
$
|
-
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding - Diluted
|
|
220,902
|
|
|
223,381
|
|
|
220,886
|
|
|
223,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|