MIAMI, Oct. 28, 2016 /PRNewswire/ -- Royal
Caribbean Cruises Ltd. (NYSE: RCL) today reported GAAP and adjusted
third quarter earnings of $3.21 and
$3.20, respectively, up 13% from last
year and better than expectations. Full year adjusted
earnings guidance is unchanged at $6.00 to
$6.10 per share.
Looking ahead to 2017, the company's booked position is better
than same time last year on both volume and rate, supporting the
company's trajectory to the Double-Double.
KEY HIGHLIGHTS
Third Quarter 2016 results:
- Net Yields were up 2.9% on a Constant-Currency basis (up 0.4%,
As-Reported), better than guidance driven mainly by strong close-in
demand for North American itineraries.
- Net Cruise Costs ("NCC") excluding fuel were down 1.6% on a
Constant-Currency basis (down 2.0%, As-Reported), in line with
guidance.
- US GAAP Net Income was $693.3
million or $3.21 per share,
versus $228.8 million, or
$1.03 per share in 2015. Last year's
figure includes an impairment charge related to Pullmantur.
- Adjusted Net Income was $690.9
million, or $3.20 per share,
better than expectations driven by strong yields and positive
movements in currency and fuel during the quarter, versus
$628.1 million, or $2.84 per share, in 2015.
Full Year 2016 forecast:
- Net Yields are expected to be up 4.0% or better on a
Constant-Currency basis (up in the range of 1.7% to 2.0%
As-Reported). Strong close-in demand for North American products in
the third quarter is helping offset the impact from the delay in
opening Empress of the Seas sailings in the fourth
quarter.
- NCC excluding fuel are expected to be up approximately 1.0% on
a Constant-Currency basis (flat to up 1.0% As-Reported).
- Adjusted EPS is expected to be in the range of $6.00 to $6.10 per share, unchanged from prior
guidance.
"Our business continues to progress solidly to the
Double-Double, and our recent dividend increase is
evidence of our confidence in that trajectory," said Richard D. Fain, chairman and chief executive
officer. "It is gratifying to again be headed towards record
earnings for the year, above our initial guidance."
THIRD QUARTER RESULTS
Net Yields on a Constant-Currency basis increased 2.9% during
the quarter, better than previous guidance. Continued
strength in demand for North American products was a key driver of
the outperformance while the balance of the portfolio performed
in-line with expectations. Growth in onboard revenue continued to
outpace overall net yield growth, despite an extraordinary
outperformance last summer. Favorable trends in both currency
and fuel compared to expectations also provided a benefit to the
quarter.
US GAAP Net Income for the third quarter 2016 was $693.3 million or $3.21 per share, compared to $228.8 million or $1.03 per share in 2015 – this includes
$399.3 million in non-cash impairment
charges related to the Pullmantur brand that was taken last
year. Adjusted Net Income for the third quarter of 2016 was
$690.9 million, or $3.20 per share, which was $0.10 better than guidance and up 13% versus same
quarter last year. About half of the outperformance was
driven by better than expected revenue performance, with the
balance of the improvement being mainly driven by the benefits of a
weaker dollar and lower fuel prices.
Constant-Currency NCC excluding fuel decreased 1.6%, in-line
with expectations. Bunker pricing net of hedging for the
third quarter was $524 per metric ton
and consumption was 341,000 metric tons.
FULL YEAR 2016
The company maintains full year Adjusted EPS guidance of
$6.00 to $6.10 per share.
Constant-Currency Net Yields are expected to be up 4.0% or better
for the full year. Strong close-in demand for North American
itineraries in the third quarter is helping offset an impact from
the delayed opening of Empress of the Seas sailings during
the fourth quarter.
NCC excluding fuel are expected to be up approximately 1.0% on a
Constant-Currency basis, in-line with previous guidance.
"Our strong booked position and continued focus on effective
cost management is expected to keep full year earnings ahead of
initial guidance and positions us well for the
Double-Double in 2017," said Jason T. Liberty, chief financial officer.
"Minor operational variations are causing some timing shifts
between quarters, but the overall market and our overall results
remain unchanged from our last guidance."
Taking into account current fuel pricing, interest rates,
currency exchange rates and the factors detailed above, the company
expects 2016 Adjusted EPS in the range of $6.00 to $6.10 per share.
FOURTH QUARTER 2016
Constant-Currency Net Yields are expected to be up approximately
6.0% in the fourth quarter of 2016, and NCC excluding fuel are
expected to be down approximately 1.5%.
These yield improvement expectations in the fourth quarter are
largely driven by the deconsolidation of Pullmantur that was
announced earlier this year, strong demand for our new hardware and
a higher mix of North American and Australian based
itineraries.
Based on current fuel pricing, interest rates, currency exchange
rates and the factors detailed above, the company expects fourth
quarter Adjusted EPS to be approximately $1.20 per share.
2017 OUTLOOK
At this time, 2017 itineraries are booked ahead of last year in
both rate and volume. New ships including Harmony of
the Seas and Ovation of the Seas are seeing
strong trends, supporting a solid outlook for 2017.
"Next year marks the finish line for the
Double-Double and we are looking forward to a strong
finish to this chapter in our continuous journey of rising
shareholder returns," said Richard D.
Fain, chairman and chief executive officer. "New
hardware, continued strength onboard, along with continued cost
discipline and a highly motivated team over 65,000 strong is
proving to be a winning combination."
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 $189 million and
$720 million of fuel expense in its
fourth quarter and full year 2016 guidance, respectively.
Forecasted consumption is 68% hedged via swaps for the remainder
of 2016 and 60%, 45%, 36% and 20% hedged for 2017, 2018, 2019 and
2020, respectively. For the same five-year period, the average cost
per metric ton of the hedge portfolio is approximately $535, $508, $452, $342 and $340, respectively.
The company provided the following fuel statistics for the
fourth quarter and full year 2016:
FUEL
STATISTICS
|
Fourth Quarter
2016
|
Full Year
2016
|
Fuel Consumption
(metric tons)
|
340,000
|
1,371,000
|
Fuel
Expenses
|
$189
million
|
$720
million
|
Percent Hedged
(fwd consumption)
|
68%
|
68%
|
Impact of 10%
change in fuel prices
|
$4.0
million
|
$4.0
million
|
In summary, the company provided the following guidance for the
fourth quarter and full year of 2016:
GUIDANCE
|
As-Reported
Constant-Currency
|
|
|
Fourth Quarter
2016
|
|
Net
Yields
|
Approx.
4.5%
|
Approx.
6.0%
|
|
Net Cruise Costs
per APCD
|
Approx.
(1.5%)
|
(1.0%) to
(1.5%)
|
|
Net Cruise Costs
per APCD excluding
Fuel
|
Approx.
(2.0%)
|
Approx.
(1.5%)
|
|
|
|
|
|
Full Year
2016
|
|
Net
Yields
|
1.7% to
2.0%
|
4.0% or
better
|
|
Net Cruise Costs
per APCD
|
Approx.
(2.0%)
|
Approx.
(1.5%)
|
|
Net Cruise Costs
per APCD excluding
Fuel
|
Approx.
0.5%
|
Approx.
1.0%
|
|
|
|
|
|
GUIDANCE
|
Fourth Quarter
2016
|
Full Year
2016
|
|
Capacity
Increase
|
(0.2%)
|
3.3%
|
|
Depreciation and
Amortization
|
$230 to $235
million
|
$890 to $900
million
|
|
Interest Expense,
net
|
$75 to $80
million
|
$287 to $292
million
|
|
Adjusted
EPS
|
Approx.
$1.20
|
$6.00 to
$6.10
|
|
|
|
|
|
GUIDANCE
|
Fourth Quarter
2016
|
Full Year
2016
|
|
1% Change in
Currency
|
$4 million
|
$4 million
|
|
1% Change in Net
Yield
|
$15
million
|
$15
million
|
|
1% Change in NCC x
fuel
|
$8 million
|
$8 million
|
|
1% Change in
LIBOR
|
$12
million
|
$12
million
|
|
|
|
Exchange rates
used in guidance calculations
|
|
|
Previous –
August
|
Current -
October
|
|
GBP
|
$1.32
|
$1.22
|
|
AUD
CAD
CNH
EUR
|
$0.75
$0.76
$0.15
$1.10
|
$0.76
$0.75
$0.15
$1.09
|
|
LIQUIDITY AND FINANCING ARRANGEMENTS
As of September 30, 2016, liquidity
was $1.1 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 2016, 2017, 2018, 2019 and 2020 are
$0.3 billion, $1.3 billion, $2.2
billion, $0.8 billion and
$1.7 billion, respectively.
CAPITAL EXPENDITURES AND CAPACITY GUIDANCE
Based upon current ship orders, projected capital expenditures
for full year 2016, 2017, 2018, 2019 and 2020 are $2.4 billion, $0.5
billion, $2.6 billion,
$1.5 billion and $2.0 billion, respectively. Capacity
changes for 2016, 2017, 2018, 2019 and 2020 are expected to be
3.3%, -1.7%, 3.3%, 7.4% and 3.5%, 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 website 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 the impairment of the Pullmantur
related assets, net loss related to the elimination of the
Pullmantur reporting lag, the net gain related to the sale of the
Pullmantur and CDF brands and related costs, restructuring charges
and other initiative costs related to our Pullmantur right-sizing
strategy and other restructuring initiatives.
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. APCDs reported do not
include the November and December
2015 APCD amounts related to the elimination of the
Pullmantur reporting lag.
Constant-Currency
We believe Net Yields, Net Cruise Costs and Net Cruise Costs
Excluding Fuel are our most relevant non-GAAP 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. Over the longer term, changes in
guest sourcing and shifting the amount of purchases between
currencies can significantly change the impact of the purely
currency-based fluctuations.
DOUBLE-DOUBLE
Our DOUBLE-DOUBLE Program refers to the multi-year Adjusted EPS and
Return on Invested Capital (ROIC) goals we publicly announced in
2014 and are seeking to achieve by the end of 2017. Under
this program, we are targeting Adjusted EPS of at least
$6.78 by the end of 2017, which is
double our 2014 Adjusted EPS of $3.39. We are also targeting ROIC of at
least 10% by the end of 2017 as compared to ROIC of 5.9% in
2014.
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. Net Cruise Costs excludes the net gain related to the
sale of the Pullmantur and CDF brands and related costs and
initiative costs related to our Pullmantur right-sizing strategy
and other restructuring initiatives.
Net Revenues
Net Revenues represent total revenues less commissions,
transportation and other expenses and onboard and other
expenses.
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. Net Yields excludes initiative costs related to the
sale of the Pullmantur and CDF brands.
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: RCL) is a
global cruise vacation company that owns and operates three global
brands: Royal Caribbean International, Celebrity Cruises and
Azamara Club Cruises. We also own a 50 percent joint
venture interest in the German brand TUI Cruises and a 49% interest
in the Spanish brand Pullmantur and have a minority interest in
smaller regional brands. Together, these brands operate a
combined total of 49 ships with an additional thirteen on
order. They operate diverse itineraries around the world that
call on approximately 490 destinations on all seven
continents. Additional information can be found
on www.royalcaribbean.com, www.celebritycruises.com, www.azamaraclubcruises.com, www.tuicruises.com, www.pullmantur.es,
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 fourth
quarter and full year 2016 and for 2017, and expectations regarding
the timing and results of our Double-Double initiative and the
costs and yields expected in 2016, and other future
periods. Words such as "anticipate," "believe," "could,"
"driving," "estimate," "expect," "goal," "intend," "may," "plan,"
"project," "seek," "should," "will," "would," 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 key aspects
of our business, such as the demand for cruises, passenger
spending, our operating costs and our ability to obtain new
borrowings in amounts sufficient to satisfy our capital
expenditures, debt repayments and other financing needs, incidents
or adverse publicity concerning the cruise vacation industry,
concerns over safety, health and security aspects of traveling,
unavailability of ports of call, the uncertainties of conducting
business internationally and expanding into new markets and new
ventures, changes in operating and financing costs, the impact of
foreign exchange rates, interest rate and fuel price
fluctuations, vacation industry competition and changes in industry
capacity and overcapacity, the impact of new or changing
regulations on our business, emergency ship repairs, including the
related lost revenue, the impact of ship delivery delays, ship
cancellations or ship construction price increases, shipyard
unavailability 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 and our recent quarterly report on 10-Q, copies of which may
be obtained by visiting our Investor Relations website at
www.rclinvestor.com or the SEC's website 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.
Adjusted Earnings per Share estimates for the Full Year and
Fourth Quarter of 2016 are presented in lieu of US GAAP earnings
per share estimates due to uncertainty in projecting the amounts
adjusted to arrive at this measure, such as, uncertainty in the
timing and amount of restructuring charges and other initiative
costs that we will absorb in the remainder of 2016, the amount of
which is expected to be immaterial. Refer to Note 11
Restructuring Charges in our consolidated financial statements in
our quarterly report on 10-Q for the third quarter of 2016 for
further information on our Restructuring charges and other
initiative charges and to the definition for Adjusted Earnings per
Share herein. For the quarter and nine months ended
September 30, 2016, we incurred
restructuring charges and other initiative charges of $1.5 million and $9.9
million, respectively.
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
(unaudited, in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Passenger ticket
revenues
|
$
|
1,899,956
|
|
|
$
|
1,873,942
|
|
|
$
|
4,794,653
|
|
|
$
|
4,688,189
|
|
Onboard and other
revenues
|
663,785
|
|
|
649,158
|
|
|
1,792,145
|
|
|
1,708,832
|
|
Total
revenues
|
2,563,741
|
|
|
2,523,100
|
|
|
6,586,798
|
|
|
6,397,021
|
|
Cruise operating
expenses:
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
400,933
|
|
|
413,156
|
|
|
1,060,391
|
|
|
1,093,409
|
|
Onboard and
other
|
159,887
|
|
|
175,214
|
|
|
399,739
|
|
|
438,558
|
|
Payroll and
related
|
214,081
|
|
|
217,627
|
|
|
671,955
|
|
|
647,788
|
|
Food
|
125,732
|
|
|
122,124
|
|
|
371,759
|
|
|
361,317
|
|
Fuel
|
178,772
|
|
|
199,848
|
|
|
531,283
|
|
|
607,689
|
|
Other
operating
|
260,718
|
|
|
259,057
|
|
|
857,161
|
|
|
777,291
|
|
Total cruise
operating expenses
|
1,340,123
|
|
|
1,387,026
|
|
|
3,892,288
|
|
|
3,926,052
|
|
Marketing, selling
and administrative expenses
|
257,430
|
|
|
256,060
|
|
|
845,808
|
|
|
817,040
|
|
Depreciation and
amortization expenses
|
229,328
|
|
|
210,742
|
|
|
661,712
|
|
|
617,678
|
|
Impairment of
Pullmantur related assets
|
—
|
|
|
411,267
|
|
|
—
|
|
|
411,267
|
|
Restructuring
charges
|
1,897
|
|
|
—
|
|
|
6,627
|
|
|
—
|
|
Operating
Income
|
734,963
|
|
|
258,005
|
|
|
1,180,363
|
|
|
624,984
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
6,472
|
|
|
1,735
|
|
|
14,875
|
|
|
8,244
|
|
Interest expense, net
of interest capitalized
|
(82,610)
|
|
|
(66,819)
|
|
|
(226,803)
|
|
|
(213,598)
|
|
Other income
(including a $21.7 million loss related to the 2016 elimination of
the Pullmantur
reporting lag for the
nine months ended September 30, 2016 and including in the quarter
and nine
months ended
September 30, 2015 a net deferred tax benefit of $12.0 million
related to the
Pullmantur
impairment)
|
34,432
|
|
|
35,866
|
|
|
53,867
|
|
|
39,354
|
|
|
(41,706)
|
|
|
(29,218)
|
|
|
(158,061)
|
|
|
(166,000)
|
|
Net
Income
|
$
|
693,257
|
|
|
$
|
228,787
|
|
|
$
|
1,022,302
|
|
|
$
|
458,984
|
|
|
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
|
|
|
Basic
|
$
|
3.23
|
|
|
$
|
1.04
|
|
|
$
|
4.74
|
|
|
$
|
2.09
|
|
Diluted
|
$
|
3.21
|
|
|
$
|
1.03
|
|
|
$
|
4.72
|
|
|
$
|
2.08
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
214,819
|
|
|
219,963
|
|
|
215,663
|
|
|
219,835
|
|
Diluted
|
215,667
|
|
|
221,137
|
|
|
216,575
|
|
|
220,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
|
|
|
|
|
|
|
Net
Income
|
$
|
693,257
|
|
|
$
|
228,787
|
|
|
$
|
1,022,302
|
|
|
$
|
458,984
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
4,043
|
|
|
(4,191)
|
|
|
8,423
|
|
|
(23,994)
|
|
Change in defined
benefit plans
|
(5,051)
|
|
|
3,318
|
|
|
(12,148)
|
|
|
5,567
|
|
Gain (loss) on cash
flow derivative hedges
|
95,536
|
|
|
(222,492)
|
|
|
254,624
|
|
|
(280,968)
|
|
Total other
comprehensive income (loss)
|
94,528
|
|
|
(223,365)
|
|
|
250,899
|
|
|
(299,395)
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
$
|
787,785
|
|
|
$
|
5,422
|
|
|
$
|
1,273,201
|
|
|
$
|
159,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016(1)
|
|
2015
|
Passengers
Carried
|
1,558,224
|
|
|
1,403,650
|
|
|
4,365,144
|
|
|
4,053,451
|
|
Passenger Cruise
Days
|
10,727,918
|
|
|
10,176,750
|
|
|
30,367,048
|
|
|
28,856,742
|
|
APCD
|
9,766,482
|
|
|
9,465,368
|
|
|
28,503,681
|
|
|
27,284,750
|
|
Occupancy
|
109.8
|
%
|
|
107.5
|
%
|
|
106.5
|
%
|
|
105.8
|
%
|
|
(1) Does
not include the November and December 2015 amounts related to the
elimination of the Pullmantur reporting lag.
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except share data)
|
|
|
|
|
|
As of
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
178,428
|
|
|
$
|
121,565
|
|
Trade and other
receivables, net
|
273,422
|
|
|
238,972
|
|
Inventories
|
118,849
|
|
|
121,332
|
|
Prepaid expenses and
other assets
|
231,442
|
|
|
220,579
|
|
Derivative financial
instruments
|
928
|
|
|
134,574
|
|
Total current
assets
|
803,069
|
|
|
837,022
|
|
Property and
equipment, net
|
20,230,803
|
|
|
18,777,778
|
|
Goodwill
|
288,461
|
|
|
286,764
|
|
Other
assets
|
1,127,929
|
|
|
880,479
|
|
|
$
|
22,450,262
|
|
|
$
|
20,782,043
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of
long-term debt
|
$
|
1,298,002
|
|
|
$
|
899,542
|
|
Accounts
payable
|
259,027
|
|
|
302,072
|
|
Accrued
interest
|
95,112
|
|
|
38,325
|
|
Accrued expenses and
other liabilities
|
678,874
|
|
|
658,601
|
|
Derivative financial
instruments
|
201,877
|
|
|
651,866
|
|
Customer
deposits
|
1,967,678
|
|
|
1,742,286
|
|
Total current
liabilities
|
4,500,570
|
|
|
4,292,692
|
|
Long-term
debt
|
8,419,850
|
|
|
7,627,701
|
|
Other long-term
liabilities
|
739,693
|
|
|
798,611
|
|
|
|
|
|
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; 234,589,237 and
233,905,166 shares issued, September 30, 2016 and December 31,
2015, respectively)
|
2,346
|
|
|
2,339
|
|
Paid-in
capital
|
3,316,385
|
|
|
3,297,619
|
|
Retained
earnings
|
7,702,260
|
|
|
6,944,862
|
|
Accumulated other
comprehensive loss
|
(1,077,534)
|
|
|
(1,328,433)
|
|
Treasury stock
(20,019,237 and 15,911,971 common shares at cost,
September 30, 2016 and December 31, 2015,
respectively)
|
(1,153,308)
|
|
|
(853,348)
|
|
Total shareholders'
equity
|
8,790,149
|
|
|
8,063,039
|
|
|
$
|
22,450,262
|
|
|
$
|
20,782,043
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited, in
thousands)
|
|
|
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
2016
|
|
2015
|
Operating
Activities
|
|
|
|
Net income
|
$
|
1,022,302
|
|
|
$
|
458,984
|
|
Adjustments:
|
|
|
|
Depreciation and
amortization
|
661,712
|
|
|
617,678
|
|
Impairment of
Pullmantur related assets
|
—
|
|
|
411,267
|
|
Net deferred income
tax expense (benefit)
|
1,601
|
|
|
(13,466)
|
|
Loss on derivative
instruments not designated as hedges
|
6,353
|
|
|
49,607
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Decrease in trade and
other receivables, net
|
9,823
|
|
|
24,130
|
|
Increase in
inventories
|
(6,379)
|
|
|
(8,377)
|
|
Decrease (increase)
in prepaid expenses and other assets
|
2,484
|
|
|
(30,649)
|
|
Decrease in accounts
payable
|
(17,313)
|
|
|
(22,915)
|
|
Increase in accrued
interest
|
56,787
|
|
|
34,207
|
|
Increase in accrued
expenses and other liabilities
|
23,216
|
|
|
11,558
|
|
Increase in customer
deposits
|
197,277
|
|
|
65,511
|
|
Dividends received
from unconsolidated affiliates
|
71,370
|
|
|
5,327
|
|
Other, net
|
(28,281)
|
|
|
5,074
|
|
Net cash provided by
operating activities
|
2,000,952
|
|
|
1,607,936
|
|
|
|
|
|
Investing
Activities
|
|
|
|
Purchases of property
and equipment
|
(2,313,831)
|
|
|
(1,360,637)
|
|
Cash paid on
settlement of derivative financial instruments
|
(172,878)
|
|
|
(158,890)
|
|
Investments in and
loans to unconsolidated affiliates
|
(8,611)
|
|
|
(54,250)
|
|
Cash received on
loans to unconsolidated affiliates
|
22,470
|
|
|
122,710
|
|
Other,
net(2)
|
(44,709)
|
|
|
(18,642)
|
|
Net cash used in
investing activities
|
(2,517,559)
|
|
|
(1,469,709)
|
|
|
|
|
|
Financing
Activities
|
|
|
|
Debt
proceeds
|
6,038,560
|
|
|
2,962,501
|
|
Debt issuance
costs
|
(83,793)
|
|
|
(57,146)
|
|
Repayments of
debt
|
(4,818,262)
|
|
|
(2,887,237)
|
|
Purchases of treasury
stock
|
(299,959)
|
|
|
—
|
|
Dividends
paid
|
(243,557)
|
|
|
(197,718)
|
|
Proceeds from
exercise of common stock options
|
1,782
|
|
|
6,902
|
|
Other, net
|
2,179
|
|
|
1,778
|
|
Net cash provided by
(used in) financing activities
|
596,950
|
|
|
(170,920)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(23,480)
|
|
|
(9,129)
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
56,863
|
|
|
(41,822)
|
|
Cash and cash
equivalents at beginning of period
|
121,565
|
|
|
189,241
|
|
Cash and cash
equivalents at end of period
|
$
|
178,428
|
|
|
$
|
147,419
|
|
|
|
|
|
Supplemental
Disclosure
|
|
|
|
Cash paid during the
period for:
|
|
|
|
Interest, net of
amount capitalized
|
$
|
140,335
|
|
|
$
|
151,661
|
|
Non-cash Investing
Activities
|
|
|
|
Notes receivable
issued upon sale of property and equipment
|
$
|
213,042
|
|
|
$
|
—
|
|
|
(2)Amount
includes $26.0 million of cash outflow related to the divestiture
of RCHE.
|
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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2016 On a
Constant Currency Basis
|
|
2015
|
|
2016
|
|
2016 On a
Constant Currency Basis
|
|
2015
|
Passenger ticket
revenues
|
$
|
1,899,956
|
|
|
$
|
1,952,378
|
|
|
$
|
1,873,942
|
|
|
$
|
4,794,653
|
|
|
$
|
4,934,937
|
|
|
$
|
4,688,189
|
|
Onboard and other
revenues
|
663,785
|
|
|
670,195
|
|
|
649,158
|
|
|
1,792,145
|
|
|
1,806,124
|
|
|
1,708,832
|
|
Total
revenues
|
2,563,741
|
|
|
2,622,573
|
|
|
2,523,100
|
|
|
6,586,798
|
|
|
6,741,061
|
|
|
6,397,021
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
400,933
|
|
|
410,399
|
|
|
413,156
|
|
|
1,060,391
|
|
|
1,086,888
|
|
|
1,093,409
|
|
Onboard and
other
|
159,887
|
|
|
160,036
|
|
|
175,214
|
|
|
399,739
|
|
|
401,285
|
|
|
438,558
|
|
Net Revenues
including other initiative costs
|
2,002,921
|
|
|
2,052,138
|
|
|
1,934,730
|
|
|
5,126,668
|
|
|
5,252,888
|
|
|
4,865,054
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Other initiative
costs included within Net Revenues
|
(1,843)
|
|
|
(1,790)
|
|
|
—
|
|
|
(1,843)
|
|
|
(1,790)
|
|
|
—
|
|
Net
Revenues
|
$
|
2,004,764
|
|
|
$
|
2,053,928
|
|
|
$
|
1,934,730
|
|
|
$
|
5,128,511
|
|
|
$
|
5,254,678
|
|
|
$
|
4,865,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
9,766,482
|
|
|
9,766,482
|
|
|
9,465,368
|
|
|
28,503,681
|
|
|
28,503,681
|
|
|
27,284,750
|
|
Gross
Yields
|
$
|
262.50
|
|
|
$
|
268.53
|
|
|
$
|
266.56
|
|
|
$
|
231.09
|
|
|
$
|
236.50
|
|
|
$
|
234.45
|
|
Net Yields
|
$
|
205.27
|
|
|
$
|
210.30
|
|
|
$
|
204.40
|
|
|
$
|
179.92
|
|
|
$
|
184.35
|
|
|
$
|
178.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2016 On a
Constant Currency Basis
|
|
2015
|
|
2016
|
|
2016 On a
Constant Currency Basis
|
|
2015
|
Total cruise
operating expenses
|
$
|
1,340,123
|
|
|
$
|
1,350,295
|
|
|
$
|
1,387,026
|
|
|
$
|
3,892,288
|
|
|
$
|
3,926,447
|
|
|
$
|
3,926,052
|
|
Marketing, selling
and administrative expenses
|
257,430
|
|
|
260,471
|
|
|
256,060
|
|
|
845,808
|
|
|
856,941
|
|
|
817,040
|
|
Gross Cruise
Costs
|
1,597,553
|
|
|
1,610,766
|
|
|
1,643,086
|
|
|
4,738,096
|
|
|
4,783,388
|
|
|
4,743,092
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
400,933
|
|
|
410,399
|
|
|
413,156
|
|
|
1,060,391
|
|
|
1,086,888
|
|
|
1,093,409
|
|
Onboard and
other
|
159,887
|
|
|
160,036
|
|
|
175,214
|
|
|
399,739
|
|
|
401,285
|
|
|
438,558
|
|
Net Cruise Costs
including other initiative costs
|
1,036,733
|
|
|
1,040,331
|
|
|
1,054,716
|
|
|
3,277,966
|
|
|
3,295,215
|
|
|
3,211,125
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Other initiative
costs included within cruise operating expenses and marketing,
selling and administrative expenses
|
(2,252)
|
|
|
(2,157)
|
|
|
—
|
|
|
1,073
|
|
|
1,240
|
|
|
—
|
|
Net gain related to
the sale of Pullmantur and CDF Croisières de France brands included
within other operating expenses
|
(3,834)
|
|
|
(3,834)
|
|
|
—
|
|
|
(3,834)
|
|
|
(3,834)
|
|
|
—
|
|
Net Cruise
Costs
|
1,042,819
|
|
|
1,046,322
|
|
|
1,054,716
|
|
|
3,280,727
|
|
|
3,297,809
|
|
|
3,211,125
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Fuel(3)
|
178,772
|
|
|
178,742
|
|
|
199,848
|
|
|
530,859
|
|
|
531,836
|
|
|
607,689
|
|
Net Cruise Costs
Excluding Fuel
|
$
|
864,047
|
|
|
$
|
867,580
|
|
|
$
|
854,868
|
|
|
$
|
2,749,868
|
|
|
$
|
2,765,973
|
|
|
$
|
2,603,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
9,766,482
|
|
|
9,766,482
|
|
|
9,465,368
|
|
|
28,503,681
|
|
|
28,503,681
|
|
|
27,284,750
|
|
Gross Cruise Costs
per APCD
|
$
|
163.58
|
|
|
$
|
164.93
|
|
|
$
|
173.59
|
|
|
$
|
166.23
|
|
|
$
|
167.82
|
|
|
$
|
173.84
|
|
Net Cruise Cost per
APCD
|
$
|
106.78
|
|
|
$
|
107.13
|
|
|
$
|
111.43
|
|
|
$
|
115.10
|
|
|
$
|
115.70
|
|
|
$
|
117.69
|
|
Net Cruise Costs
Excluding Fuel per APCD
|
$
|
88.47
|
|
|
$
|
88.83
|
|
|
$
|
90.32
|
|
|
$
|
96.47
|
|
|
$
|
97.04
|
|
|
$
|
95.42
|
|
|
(3) For
the nine months ended September 30, 2016, amount does not include
fuel expense of $0.4 million included within other initiative costs
associated with the redeployment of Pullmantur's Empress to
the Royal Caribbean International brand.
|
ROYAL CARIBBEAN
CRUISES LTD.
|
NON-GAAP
RECONCILING INFORMATION (CONTINUED)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Adjusted Net Income
and Adjusted Earnings per Share were calculated as follows (in
thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
Income
|
$
|
693,257
|
|
|
$
|
228,787
|
|
|
$
|
1,022,302
|
|
|
$
|
458,984
|
|
Adjusted Net
income
|
690,911
|
|
|
628,070
|
|
|
1,050,031
|
|
|
858,267
|
|
Net Adjustments to
Net Income- (Decrease) Increase
|
$
|
(2,346)
|
|
|
$
|
399,283
|
|
|
$
|
27,729
|
|
|
$
|
399,283
|
|
Adjustments to Net
Income:
|
|
|
|
|
|
|
|
Impairment of
Pullmantur related assets(4)
|
$
|
—
|
|
|
$
|
399,283
|
|
|
$
|
—
|
|
|
$
|
399,283
|
|
Net loss related to
the elimination of the Pullmantur reporting lag
|
—
|
|
|
—
|
|
|
21,656
|
|
|
—
|
|
Net gain related to
the sale of the Pullmantur and CDF Croisières de France
brands
|
(3,834)
|
|
|
—
|
|
|
(3,834)
|
|
|
—
|
|
Restructuring
charges
|
1,897
|
|
|
—
|
|
|
6,627
|
|
|
—
|
|
Other initiative
costs
|
(409)
|
|
|
—
|
|
|
3,280
|
|
|
—
|
|
Net Adjustments to
Net Income- (Decrease) Increase
|
$
|
(2,346)
|
|
|
$
|
399,283
|
|
|
$
|
27,729
|
|
|
$
|
399,283
|
|
|
|
|
|
|
|
|
|
Earnings per Share
- Diluted
|
$
|
3.21
|
|
|
$
|
1.03
|
|
|
$
|
4.72
|
|
|
$
|
2.08
|
|
Adjusted Earnings
per Share - Diluted
|
3.20
|
|
|
2.84
|
|
|
4.85
|
|
|
3.88
|
|
Net Adjustments to
Net Income- (Decrease) Increase
|
$
|
(0.01)
|
|
|
$
|
1.81
|
|
|
$
|
0.13
|
|
|
$
|
1.80
|
|
|
|
|
|
|
|
|
|
Adjustments to
Earnings per Share:
|
|
|
|
|
|
|
|
Impairment of
Pullmantur related assets(4)
|
$
|
—
|
|
|
$
|
1.81
|
|
|
$
|
—
|
|
|
$
|
1.80
|
|
Net loss related to
the elimination of the Pullmantur reporting lag
|
—
|
|
|
—
|
|
|
0.10
|
|
|
—
|
|
Net gain related to
the sale of the Pullmantur and CDF Croisières de France
brands
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Restructuring
charges
|
0.01
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
Other initiative
costs
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Net Adjustments to
Net Income- (Decrease) Increase
|
$
|
(0.01)
|
|
|
$
|
1.81
|
|
|
$
|
0.13
|
|
|
$
|
1.80
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding - Diluted
|
215,667
|
|
|
221,137
|
|
|
216,575
|
|
|
220,979
|
|
|
(4)
Includes a net income tax benefit of $12.0 million related to the
Pullmantur impairment.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/royal-caribbean-reports-solid-third-quarter-results-and-remains-on-path-to-the-double-double-300353382.html
SOURCE Royal Caribbean