Attached files
| file | filename |
|---|---|
| 8-K - ROYAL CARIBBEAN CRUISES LTD | main8k20150731.htm |
Exhibit 99.1
News From
Royal Caribbean Cruises Ltd.
Corporate Communications Office
1050 Caribbean Way, Miami, Florida 33132-2096
Contact: Laura Hodges
(305) 982-2625
For Immediate Release
ROYAL CARIBBEAN REPORTS SECOND QUARTER RESULTS AND
UPDATES 2015 GUIDANCE
MIAMI – July 31, 2015 – 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.
Page 2 of 16
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.
Page 3 of 16
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
|
Page 4 of 16
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
|
Page 5 of 16
|
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.
Page 6 of 16
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
Page 7 of 16
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
Page 8 of 16
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.
Page 9 of 16
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 Croisières 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.
Page 10 of 16
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.
Page 11 of 16
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 | % | ||||||||
Page 12 of 16
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 | |||||
Page 13 of 16
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 | ||||
Page 14 of 16
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 | |||||||
Page 15 of 16
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 | ||||||||||||
Page 16 of 16