Strong demand and favorable timing of
expenses drive second quarter above expectations
Trifecta goals achieved 18 months
early
Adjusted EPS in 2024 is now expected to be
$11.35 - $11.45
Declared a quarterly dividend of
$0.40 per share
MIAMI, July 25,
2024 /PRNewswire/ -- Royal Caribbean Group (NYSE:
RCL) today reported second quarter Earnings per Share ("EPS") of
$3.11 and Adjusted EPS of
$3.21. These results were better than
the company's guidance due to stronger pricing on close-in demand
and continued strength in onboard revenue, as well as favorable
timing of expenses of approximately $0.15. As a result of continued strong demand for
its vacation experiences, the company is increasing its full year
2024 Adjusted EPS guidance to $11.35
- $11.45, or 68% year over year
growth. In addition, the company's board of directors declared a
quarterly dividend of $0.40 per share
payable on October 11, 2024 to
shareholders of record at the close of business on September 20, 2024.
![(PRNewsfoto/Royal Caribbean Group) (PRNewsfoto/Royal Caribbean Group)](https://mma.prnewswire.com/media/1213007/RCG_Logo.jpg)
"Our momentum continues! We met our financial targets 18 months
earlier than expected, have our balance sheet in a strong position,
reinstated our dividend, and ... we are just getting started," said
Jason Liberty, president and CEO,
Royal Caribbean Group. "Exceptional demand for our vacation
experiences has accelerated our performance by generating
significant yield growth over the past several years," added
Liberty. "As we look forward, we remain intensely focused on
driving strong shareholder returns by delivering a lifetime of
vacations and taking a greater share of the rapidly growing
$1.9 trillion global vacation market.
This is underpinned by our formula for future success – disciplined
growth and moderate yield growth while controlling our
costs."
Key Highlights
Strong demand for the company's vacation experiences, including
onboard spend, led to stronger revenue in the second quarter and a
further improvement in yield and earnings expectations for the
balance of the year.
Second Quarter 2024:
- For the 12 months ending June 30,
2024, the company achieved all three of its Trifecta
goals: triple digit Adjusted EBITDA per APCD, ROIC in the
teens, and double digit Adjusted EPS.
- Load factors in the second quarter were 108%.
- Gross Margin Yields were up 24.2% as-reported. Net Yields were
up 13.3% in Constant-Currency (13.2% as-reported).
- Gross Cruise Costs per Available Passenger Cruise Days ("APCD")
increased 4.9% as-reported. Net Cruise Costs ("NCC"), excluding
Fuel, per APCD increased 5.7% in Constant-Currency (5.5%
as-reported).
- Total revenues were $4.1 billion,
Net Income was $854 million or
$3.11 per share, Adjusted Net Income
was $882 million or $3.21 per share, Adjusted EBITDA was $1.6 billion, and Operating cash flow was
$1.6 billion.
Full Year 2024 Outlook:
- Net Yields are expected to increase 10.4% to 10.9% in
Constant-Currency and as-reported.
- NCC, excluding Fuel, per APCD is expected to increase
approximately 6.0% in Constant-Currency and as-reported. The
increase in costs, compared to prior guidance, is driven entirely
by higher stock-based compensation due to the significant increase
in share price.
- Adjusted EPS is expected to grow 68% year-over-year and be in
the range of $11.35 to $11.45.
Second Quarter 2024 Results
Net Income for the second quarter of 2024 was $854 million or $3.11 per share compared to Net Income of
$459 million or $1.70 per share for the same period in the prior
year. Adjusted Net Income was $882
million or $3.21 per share for
the second quarter of 2024 compared to Adjusted Net Income of
$492 million or $1.82 per share for the same period in the prior
year. The company also reported total revenues of $4.1 billion and Adjusted EBITDA of $1.6 billion.
Gross Margin Yields increased 24.2% as-reported, and Net Yields
increased 13.3% in Constant-Currency (13.2% as-reported), when
compared to the second quarter of 2023. Load factor for the quarter
was 108%, up three percentage points compared to the second quarter
of 2023. Net Yield growth exceeded the company's guidance mainly
due to higher pricing on new and like for like hardware and higher
onboard revenue.
Gross Cruise Costs per APCD increased 4.9% as-reported, compared
to the second quarter of 2023. NCC, excluding Fuel, per APCD
increased 5.7% in Constant-Currency (5.5% as-reported), when
compared to the second quarter of 2023. Costs in the quarter were
favorable $0.15 to prior guidance due
to the timing of expenses.
Update on Bookings and Onboard Revenue
The demand and pricing environment remained very strong since
the last earnings call. Booking volumes were higher than the
corresponding period in 2023 and at record pricing levels. The
company continues to be in a record booked position for 2024
sailings. Consumer spending onboard, as well as pre-cruise
purchases, continue to significantly exceed 2023 levels driven by
greater participation at higher prices.
The further increase in yield expectations for the year is the
result of higher pricing and onboard revenue expectations across
key products, with particular strength in European and Alaskan
itineraries.
"We are thrilled with the ongoing excitement for our incredible
vacation experiences, which has continued to result in better
bookings than prior years," said Jason
Liberty, president and CEO, Royal Caribbean Group. "We have
seen strength for all key products and are already taking more
bookings for 2025 sailings than 2024."
As of June 30, 2024, the Group's
customer deposit balance was at $6.2
billion.
Third Quarter 2024
Net Yields are expected to increase 6.5% to 7.0% in
Constant-Currency and as-reported. This expected growth in yield is
driven by strong demand for European and Alaskan itineraries
and continued strength in onboard revenue. The expected yield
growth in the third quarter is on top of 16.7% growth in Net Yields
Constant-Currency in the third quarter of 2023 as compared to the
same period in 2019.
NCC, excluding Fuel, per APCD, is expected to increase 4.7% to
5.2% in Constant-Currency and as-reported compared to the
third quarter of 2023.
Based on current fuel pricing, interest rates, currency exchange
rates and the factors detailed above, the company expects third
quarter Adjusted EPS to be in the range of $4.90 to $5.00.
Fuel Expense
Bunker pricing, net of hedging, for the second quarter was
$688 per metric ton and consumption
was 410,000 metric tons.
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 current fuel prices, the company has
included $293 million of fuel expense in its third quarter guidance
at a forecasted consumption of 429,000 metric tons, which is 61%
hedged via swaps. Forecasted consumption is 61%, 55%, and 34%
hedged via swaps for 2024, 2025, and 2026, respectively. The annual
average cost per metric ton of the hedge portfolio is approximately
$504, $493, and $486 for
2024, 2025, and 2026, respectively.
The company provided the following guidance for the third
quarter and full year 2024:
FUEL
STATISTICS
|
Third Quarter
2024
|
Full Year
2024
|
Fuel Consumption
(metric tons)
|
429,000
|
1,712,000
|
Fuel
Expenses
|
$293 million
|
$1,169
million
|
Percent Hedged (fwd.
consumption)
|
61 %
|
61 %
|
|
|
|
GUIDANCE
|
As-Reported
|
Constant-Currency
|
|
Third Quarter
2024
|
Net Yields vs.
2023
|
6.5 % to 7.0
%
|
6.5 % to 7.0
%
|
Net Cruise Costs per
APCD vs. 2023
|
3.3 % to 3.8
%
|
3.3 % to 3.8
%
|
Net Cruise Costs per
APCD ex. Fuel vs. 2023
|
4.7 % to 5.2
%
|
4.7 % to 5.2
%
|
|
Full Year
2024
|
Net Yields vs.
2023
|
10.4 % to 10.9
%
|
10.4 % to 10.9
%
|
Net Cruise Costs per
APCD vs. 2023
|
Approximately 4.0
%
|
Approximately 4.0
%
|
Net Cruise Costs per
APCD ex. Fuel vs. 2023
|
Approximately 6.0
%
|
Approximately 6.0
%
|
|
|
|
GUIDANCE
|
Third Quarter
2024
|
Full Year
2024
|
APCDs
|
13.4 million
|
50.7 million
|
Capacity
change vs. 2023
|
11.3 %
|
8.0 %
|
Depreciation and
amortization
|
$405 to $415
million
|
$1,600 to $1,610
million
|
Net Interest,
excluding loss on extinguishment of debt
|
$275 to $285
million
|
$1,130 to $1,140
million
|
Adjusted
EPS
|
$4.90 to
$5.00
|
$11.35 to
$11.45
|
|
|
|
SENSITIVITY
|
Third Quarter
2024
|
Full Year
2024
|
1% Change in Net
Yields
|
$36 million
|
$120 million
|
1% Change in NCC
excluding Fuel
|
$15 million
|
$60 million
|
|
Third Quarter
2024
|
Remainder of Year
2024
|
1% Change in
Currency
|
$6 million
|
$11 million
|
10% Change in Fuel
prices
|
$15 million
|
$29 million
|
100 basis pt. Change
in SOFR
|
$2 million
|
$6 million
|
|
|
Exchange rates used
in guidance calculations
|
|
GBP
|
$1.29
|
|
AUD
|
$0.68
|
|
CAD
|
$0.73
|
|
EUR
|
$1.09
|
|
|
|
|
Liquidity and Financing Arrangements
As of June 30, 2024, the Group's
liquidity position was $3.8 billion,
which includes cash and cash equivalents and undrawn revolving
credit facility capacity.
During the quarter, the company repaid the remaining balance of
its ship related debt amortization deferral obtained on its export
credit facilities during 2020 and 2021, which removed the remaining
restrictions on capital return. Also, during the quarter, the
company increased its revolving credit facility capacity by
$90 million.
"Our accelerated performance and commitment to strengthening the
balance sheet have allowed us to reduce both leverage and cost of
capital, consistent with our goal of achieving investment grade
metrics, and we continue to expect our leverage to be below 3.5x by
year end," said Naftali Holtz, chief
financial officer, Royal Caribbean Group. "Our strong balance sheet
allows us to expand capital allocation and reinstate a quarterly
dividend, further supporting our goal of creating long-term
shareholder value."
The company noted that as of June 30,
2024, the scheduled debt maturities for the remainder of
2024, 2025, 2026, and 2027 were $0.7
billion, $2.4 billion,
$2.9 billion, and $2.6 billion, respectively.
Capital Expenditures and Capacity Guidance
Capital expenditures for the full year 2024 are expected to be
approximately $3.5 billion, based on
current foreign exchange rates and are predominantly related to the
company's new ship order book. During the second quarter, the
company took delivery of both Utopia of the Seas and
Silver Ray utilizing existing committed financing
arrangements. Non-new ship related capital expenditures are
expected to be $0.7 billion.
Capacity changes for 2024 are expected to be 8.0% compared to
2023. Capacity changes for 2025, 2026, and 2027 are expected to be
5%, 7%, and 4%, respectively. These figures do not include
potential ship sales or additions that the company may elect in the
future.
Conference call scheduled
The company has scheduled a conference call at 10 a.m. Eastern Time today. This call can
be heard, either live or on a delayed basis, on the company's
investor relations website at www.rclinvestor.com.
Definitions
Selected Operational and Financial Metrics
Adjusted EBITDA is a non-GAAP measure that represents
EBITDA (as defined below) excluding certain items that we believe
adjusting for is meaningful when assessing our profitability on a
comparative basis. For the periods presented, these items
included (i) other (income) expense; (ii) gain on sale of
controlling interest; (iii) recovery of losses from one of our
equity method investees; (iv) restructuring charges and other
initiative expenses, and (v) impairment and credit losses
(recoveries).
Adjusted Earnings per Share ("Adjusted EPS") is a
non-GAAP measure that represents Adjusted Net Income attributable
to Royal Caribbean Cruises Ltd. (as defined below) divided by
weighted average shares outstanding or by diluted weighted average
shares outstanding, as applicable. We believe that this non-GAAP
measure is meaningful when assessing our performance on a
comparative basis.
Adjusted Net Income is a non-GAAP measure that represents
Net Income attributable to Royal Caribbean Cruises Ltd. 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 (i) loss on extinguishment of debt;
(ii) the amortization of the Silversea Cruises intangible assets
resulting from the Silversea Cruises acquisition; (iii) gain on
sale of controlling interest; (iv) tax on the sale of PortMiami
noncontrolling interest; (v) Silver Whisper deferred tax
liability release; (vi) restructuring charges and other initiative
expenses; (vii) recovery of losses from one of our equity method
investees; and (viii) impairment and credit losses
(recoveries).
Available Passenger Cruise Days ("APCD") is our
measurement of capacity and represents double occupancy per cabin
multiplied by the number of cruise days for the period, which
excludes canceled cruise days and cabins not available for sale. We
use this measure to perform capacity and rate analysis to identify
our main non-capacity drivers that cause our cruise revenue and
expenses to vary.
Constant-Currency is a significant measure for our
revenues and expenses, which are denominated in currencies other
than the U.S. Dollar. Because our reporting currency is the U.S.
Dollar, the value of these revenues and expenses in U.S. Dollar
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 our revenues and expenses
in "Constant-Currency" - 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 of the 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.
EBITDA is a non-GAAP measure that represents of Net
Income attributable to Royal Caribbean Cruises Ltd. excluding (i)
interest income; (ii) interest expense, net of interest
capitalized; (iii) depreciation and amortization expenses; and (iv)
income tax expense (benefit). We believe that this non-GAAP measure
is meaningful when assessing our operating performance on a
comparative basis.
Occupancy ("Load factor"), in accordance with cruise
vacation industry practice, is calculated by dividing Passenger
Cruise Days (as defined below) by APCD. A percentage in excess of
100% indicates that three or more passengers occupied some
cabins.
Passenger Cruise Days ("PCD") represent the number of
passengers carried for the period multiplied by the number of days
of their respective cruises.
Gross Cruise Costs represent the sum of total cruise
operating expenses plus marketing, selling and administrative
expenses.
Net Cruise Costs ("NCC") and NCC excluding Fuel
are non-GAAP measures that 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 cost performance. For the periods
presented, Net Cruise Costs and Net Cruise Costs excluding Fuel
exclude (i) the gain on sale of controlling interest; (ii)
impairment and credit losses (recoveries); and (iii) restructuring
and other initiative expenses.
Invested Capital represents the most recent
five-quarter average of total debt (i.e., Current portion of
long-term debt plus Long-term debt) plus the most recent
five-quarter average of Total shareholders' equity. We use this
measure to calculate ROIC (as defined below).
Adjusted Operating Income is a non-GAAP measure that
represents operating income including income from equity
investments and income taxes but excluding certain items that we
believe adjusting for is meaningful when assessing our operating
performance on a comparative basis. We use this non-GAAP measure to
calculate ROIC (as defined below).
Return on Invested Capital ("ROIC") represents
Adjusted Operating Income divided by Invested Capital. We believe
ROIC is a meaningful measure because it quantifies how efficiently
we generated operating income relative to the capital we have
invested in the business. ROIC is also used as a key metric in our
long-term incentive compensation program for our executive
officers.
Trifecta refers to the multi-year Adjusted EBITDA per
APCD, Adjusted EPS and ROIC goals we publicly announced in
November 2022 and are seeking to
achieve by the end of 2025. We designed this program to help us
better execute and achieve our business goals by clearly
articulating longer-term financial objectives. Under the Trifecta
Program, we are targeting Adjusted EBITDA per APCD of at least
$100, Adjusted EPS of at least
$10, and ROIC of 13% or higher by the
end of 2025.
Gross Margin Yield represent Gross Margin per
APCD.
Adjusted Gross Margin represent Gross Margin, adjusted
for payroll and related, food, fuel, other operating, and
depreciation and amortization expenses. Gross Margin is calculated
pursuant to GAAP as total revenues less total cruise operating
expenses, and depreciation and amortization.
Net Yields represent Adjusted Gross Margin per APCD.
We utilize Adjusted Gross Margin and Net Yields to manage our
business on a day-to-day basis as we believe that they are the most
relevant measures of our pricing performance because they reflect
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.
Adjusted EBITDA Margin is a non-GAAP measure that
represents Adjusted EBITDA (as defined above) divided by total
revenues.
For additional information see "Adjusted Measures of Financial
Performance" below.
About Royal Caribbean Group
Royal Caribbean Group (NYSE: RCL) is a vacation industry leader
with a global fleet of 68 ships across its five brands traveling to
approximately 1,000 destinations. With a mission to deliver the
best vacations responsibly, Royal Caribbean Group serves millions
of guests each year through its portfolio of best-in-class brands,
including Royal Caribbean International, Celebrity Cruises, and
Silversea; and expanding portfolio of land-based vacation
experiences through Perfect Day at CocoCay and Royal Beach Club
collection. The company also owns 50% of a joint venture that
operates TUI Cruises and Hapag-Lloyd Cruises. With a rich history
of innovating, Royal Caribbean Group continually delivers exciting
new products and guest experiences that help shape the future of
leisure travel. Learn more at www.royalcaribbeangroup.com or
www.rclinvestor.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this press release relating to, among
other things, our future performance estimates, forecasts and
projections constitute forward-looking statements under the Private
Securities Litigation Reform Act of 1995. These statements include,
but are not limited to: statements regarding revenues, costs and
financial results for 2024 and beyond; demand for our brands; our
progress towards achievement of our Trifecta goals; future capital
expenditures; and expectations regarding our credit profile. Words
such as "anticipate," "believe," "committed," "could," "driving,"
"estimate," "expect," "goal," "intend," "may," "plan," "project,"
"seek," "should," "will," "would," "considering," and similar
expressions are intended to help identify forward-looking
statements. Forward-looking statements reflect management's current
expectations, are based on judgments, 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: our ability to obtain sufficient
financing or capital to fund our capital expenditures, operations,
debt repayments and other financing needs; the impact of the
economic and geopolitical environment on key aspects of our
business, such as the demand for cruises, passenger spending, and
operating costs; incidents or adverse publicity concerning our
ships, port facilities, land destinations and/or passengers or the
cruise vacation industry in general; concerns over safety, health
and security of guests and crew; further impairments of our
goodwill, long-lived assets, equity investments and notes
receivable; an inability to source our crew or our provisions and
supplies from certain places; disease outbreaks and increased
concern about the risk of illness on our ships or when travelling
to or from our ships, which could cause a decrease in demand, guest
cancellations, and ship redeployments; unavailability of ports of
call; growing anti-tourism sentiments and environmental concerns;
changes in U.S. or other countries' foreign travel policy; the
uncertainties of conducting business globally and expanding into
new markets and new ventures; our ability to recruit, develop and
retain high quality personnel; changes in operating costs; our
indebtedness, any additional indebtedness we may incur and
restrictions in the agreements governing our indebtedness that
limit our flexibility in operating our business; fluctuations in
foreign currency exchange rates, fuel prices and interest rates;
the settlement of conversions of our convertible notes, if any, in
shares of our common stock or a combination of cash and shares of
our common stock, which may result in substantial dilution for our
existing shareholders; our expectation and ability to pay a cash
dividend on our common stock in the future; changes to our dividend
policy; vacation industry competition and increase in industry
capacity and overcapacity; the risks and costs related to cyber
security attacks, data breaches, protecting our systems and
maintaining data integrity and security; the impact of new or
changing legislation and regulations (including environmental
regulations) or governmental orders on our business; pending or
threatened litigation, investigations and enforcement actions; the
effects of weather, climate events and/or natural disasters on our
business; the impact of issues at shipyards, including ship
delivery delays, ship cancellations or ship construction cost
increases; shipyard unavailability; the unavailability or cost of
air service; and uncertainties of a foreign legal system as we are
not incorporated in the United
States.
More information about factors that could affect our operating
results is included under the caption "Risk Factors" in our most
recent Annual Report on Form 10-K, as well as our other filings
with the SEC, 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
defined as non-GAAP financial measures 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 U.S.
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 U.S. 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 U.S. GAAP
measures.
A reconciliation to the most comparable U.S. 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. We
have not provided a quantitative reconciliation of the projected
non-GAAP financial measures to the most comparable GAAP financial
measures because preparation of meaningful U.S. GAAP projections
would require unreasonable effort. Due to significant uncertainty,
we are unable to predict, without unreasonable effort, the future
movement of foreign exchange rates, fuel prices and interest rates
inclusive of our related hedging programs. In addition, we are
unable to determine the future impact of non-core business related
gains and losses which may result from strategic initiatives. These
items are uncertain and could be material to our results of
operations in accordance with U.S. GAAP. Due to this uncertainty,
we do not believe that reconciling information for such projected
figures would be meaningful.
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
(unaudited; in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Passenger ticket
revenues
|
$
2,887
|
|
$
2,444
|
|
$
5,429
|
|
$
4,340
|
Onboard and other
revenues
|
1,223
|
|
1,079
|
|
2,409
|
|
2,068
|
Total
revenues
|
4,110
|
|
3,523
|
|
7,838
|
|
6,408
|
Cruise operating
expenses:
|
|
|
|
|
|
|
|
Commissions, transportation and other
|
572
|
|
516
|
|
1,070
|
|
919
|
Onboard
and other
|
244
|
|
220
|
|
437
|
|
379
|
Payroll
and related
|
313
|
|
284
|
|
631
|
|
594
|
Food
|
225
|
|
203
|
|
446
|
|
402
|
Fuel
|
282
|
|
276
|
|
586
|
|
577
|
Other
operating
|
516
|
|
456
|
|
1,039
|
|
876
|
Total cruise operating
expenses
|
2,152
|
|
1,955
|
|
4,209
|
|
3,747
|
Marketing, selling and
administrative expenses
|
466
|
|
435
|
|
1,001
|
|
896
|
Depreciation and
amortization expenses
|
393
|
|
362
|
|
780
|
|
721
|
Operating
Income
|
1,099
|
|
771
|
|
1,848
|
|
1,044
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
4
|
|
10
|
|
9
|
|
24
|
Interest
expense, net of interest capitalized
|
(298)
|
|
(355)
|
|
(721)
|
|
(714)
|
Equity
investment income
|
56
|
|
42
|
|
97
|
|
62
|
Other
expense
|
(3)
|
|
(5)
|
|
(11)
|
|
(1)
|
|
(241)
|
|
(308)
|
|
(626)
|
|
(629)
|
Net
Income
|
858
|
|
463
|
|
1,222
|
|
415
|
Less: Net Income
attributable to noncontrolling interest
|
4
|
|
4
|
|
8
|
|
4
|
Net Income
attributable to Royal Caribbean Cruises Ltd.
|
$
854
|
|
$
459
|
|
$
1,214
|
|
$
411
|
Earnings per
Share:
|
|
|
|
|
|
|
|
Basic
|
$
3.32
|
|
$
1.79
|
|
$
4.72
|
|
$
1.61
|
Diluted
|
$
3.11
|
|
$
1.70
|
|
$
4.46
|
|
$
1.60
|
Weighted-Average
Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
257
|
|
256
|
|
257
|
|
256
|
Diluted
|
281
|
|
282
|
|
281
|
|
259
|
|
|
|
|
|
|
|
|
Comprehensive Income
(Loss)
|
|
|
|
|
|
|
|
Net
Income
|
$
858
|
|
$
463
|
|
$
1,222
|
|
$
415
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
6
|
|
(3)
|
|
10
|
|
(10)
|
Change in
defined benefit plans
|
(12)
|
|
(3)
|
|
(3)
|
|
—
|
(Loss)
gain on cash flow derivative hedges
|
(31)
|
|
5
|
|
13
|
|
(27)
|
Total other
comprehensive (loss) income
|
(37)
|
|
(1)
|
|
20
|
|
(37)
|
Comprehensive
Income
|
821
|
|
462
|
|
1,242
|
|
378
|
Less: Comprehensive
Income attributable to noncontrolling interest
|
4
|
|
4
|
|
8
|
|
4
|
Comprehensive Income
attributable to Royal Caribbean Cruises Ltd.
|
$
817
|
|
$
458
|
|
$
1,234
|
|
$
374
|
ROYAL CARIBBEAN
CRUISES LTD.
|
STATISTICS
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
Passengers
Carried
|
2,040,242
|
|
1,900,810
|
|
4,094,624
|
|
3,707,079
|
Passenger Cruise
Days
|
13,230,448
|
|
12,297,290
|
|
26,380,157
|
|
23,772,032
|
APCD
|
12,233,196
|
|
11,708,837
|
|
24,519,026
|
|
22,942,326
|
Occupancy
|
108.2 %
|
|
105.0 %
|
|
107.6 %
|
|
103.6 %
|
|
|
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED BALANCE
SHEETS
|
(in millions, except
share data)
|
|
As of
|
|
June
30,
|
|
December
31,
|
|
2024
|
|
2023
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and
cash equivalents
|
$
391
|
|
$
497
|
Trade and
other receivables, net of allowances of $8 and $7 at June 30, 2024
and December 31,
2023, respectively
|
412
|
|
405
|
Inventories
|
242
|
|
248
|
Prepaid
expenses and other assets
|
790
|
|
617
|
Derivative financial instruments
|
51
|
|
25
|
Total current
assets
|
1,886
|
|
1,792
|
Property
and equipment, net
|
31,759
|
|
30,114
|
Operating
lease right-of-use assets
|
589
|
|
611
|
Goodwill
|
809
|
|
809
|
Other
assets, net of allowances of $42 and $43 at June 30, 2024 and
December 31, 2023,
respectively
|
1,931
|
|
1,805
|
Total
assets
|
$
36,974
|
|
$
35,131
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current
portion of long-term debt
|
$
1,332
|
|
$
1,720
|
Current
portion of operating lease liabilities
|
64
|
|
65
|
Accounts
payable
|
821
|
|
792
|
Accrued
expenses and other liabilities
|
1,410
|
|
1,478
|
Derivative financial instruments
|
22
|
|
35
|
Customer
deposits
|
6,245
|
|
5,311
|
Total current
liabilities
|
9,894
|
|
9,401
|
Long-term
debt
|
19,785
|
|
19,732
|
Long-term
operating lease liabilities
|
591
|
|
613
|
Other
long-term liabilities
|
522
|
|
486
|
Total
liabilities
|
30,792
|
|
30,232
|
|
|
|
|
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; 285,863,919
and 284,672,386
shares issued, June 30, 2024 and December 31, 2023,
respectively)
|
3
|
|
3
|
Paid-in
capital
|
7,536
|
|
7,474
|
Retained
earnings (accumulated deficit)
|
1,204
|
|
(10)
|
Accumulated other comprehensive loss
|
(654)
|
|
(674)
|
Treasury
stock (28,468,430 and 28,248,125 common shares at cost, June 30,
2024 and
December 31, 2023, respectively)
|
(2,081)
|
|
(2,069)
|
Total shareholders'
equity attributable to Royal Caribbean Cruises Ltd.
|
6,008
|
|
4,724
|
Noncontrolling Interests
|
174
|
|
175
|
Total shareholders'
equity
|
6,182
|
|
4,899
|
Total liabilities
and shareholders' equity
|
$
36,974
|
|
$
35,131
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited, in
millions)
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
Operating
Activities
|
|
|
|
Net Income
(Loss)
|
$
1,222
|
|
$
415
|
Adjustments:
|
|
|
|
Depreciation and amortization
|
780
|
|
721
|
Net
deferred income tax expense (benefit)
|
5
|
|
(6)
|
Loss
(Gain) on derivative instruments not designated as
hedges
|
40
|
|
(12)
|
Share-based compensation expense
|
83
|
|
66
|
Equity
investment income
|
(97)
|
|
(62)
|
Amortization of debt issuance costs, discounts and
premiums
|
51
|
|
58
|
Loss on
extinguishment of debt
|
133
|
|
44
|
Changes in operating
assets and liabilities:
|
|
|
|
(Increase) decrease in trade and other receivables,
net
|
(16)
|
|
132
|
Decrease
in inventories
|
6
|
|
8
|
Increase
in prepaid expenses and other assets
|
(196)
|
|
(139)
|
Increase
in accounts payable trade
|
18
|
|
30
|
Decrease
in accrued expenses and other liabilities
|
(47)
|
|
(63)
|
Increase
in customer deposits
|
934
|
|
1,508
|
Other, net
|
(15)
|
|
2
|
Net cash provided by
operating activities
|
2,901
|
|
2,702
|
Investing
Activities
|
|
|
|
Purchases of property
and equipment
|
(2,382)
|
|
(1,048)
|
Cash received on
settlement of derivative financial instruments
|
12
|
|
18
|
Cash paid on settlement
of derivative financial instruments
|
(92)
|
|
(14)
|
Investments in and
loans to unconsolidated affiliates
|
(20)
|
|
—
|
Cash received on loans
from unconsolidated affiliates
|
9
|
|
11
|
Other, net
|
(21)
|
|
12
|
Net cash used in
investing activities
|
(2,494)
|
|
(1,021)
|
Financing
Activities
|
|
|
|
Debt
proceeds
|
4,698
|
|
1,208
|
Debt issuance
costs
|
(87)
|
|
(53)
|
Repayments of
debt
|
(4,974)
|
|
(4,249)
|
Premium on repayment of
debt
|
(104)
|
|
—
|
Proceeds from sale of
noncontrolling interest
|
—
|
|
209
|
Other, net
|
(44)
|
|
(4)
|
Net cash used in
financing activities
|
(511)
|
|
(2,889)
|
Effect of exchange rate
changes on cash and cash equivalents
|
(2)
|
|
—
|
Net decrease in cash
and cash equivalents
|
(106)
|
|
(1,209)
|
Cash and cash
equivalents at beginning of period
|
497
|
|
1,935
|
Cash and cash
equivalents at end of period
|
$
391
|
|
$
726
|
|
|
|
|
Supplemental
Disclosure
|
|
|
|
Cash paid during the
period for:
|
|
|
|
Interest,
net of amount capitalized
|
$
621
|
|
$
560
|
Non-cash Investing
Activities
|
|
|
|
Purchase of property
and equipment included in accounts payable and accrued
expenses and other liabilities
|
$
34
|
|
$
18
|
ROYAL CARIBBEAN
CRUISES LTD.
|
NON-GAAP RECONCILING
INFORMATION
|
(unaudited)
|
Gross Margin Yields,
Net Yields and Adjusted Gross Margin per PCD were calculated by
dividing Gross Margin and Adjusted Gross Margins by APCD, and
Adjusted Gross Margin by PCD as follows (in millions, except APCD,
PCD,Yields, and Adjusted Gross Margin per PCD. Reported Yields and
per PCD amounts may vary from amounts calculated based on
accompanying financial tables due to rounding.):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2024 On a
Constant-
Currency Basis
|
|
2023
|
|
2024
|
|
2024 On a
Constant-
Currency Basis
|
|
2023
|
Total
revenue
|
$
4,110
|
|
$
4,115
|
|
$
3,523
|
|
$
7,838
|
|
$
7,838
|
|
$
6,408
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Cruise operating
expenses
|
2,152
|
|
2,155
|
|
1,955
|
|
4,209
|
|
4,211
|
|
3,747
|
Depreciation and
amortization expenses
|
393
|
|
393
|
|
362
|
|
780
|
|
780
|
|
721
|
Gross
Margin
|
1,565
|
|
1,567
|
|
1,206
|
|
2,849
|
|
2,847
|
|
1,940
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Payroll and
related
|
313
|
|
313
|
|
284
|
|
631
|
|
631
|
|
594
|
Food
|
225
|
|
226
|
|
203
|
|
446
|
|
446
|
|
402
|
Fuel
|
282
|
|
282
|
|
276
|
|
586
|
|
586
|
|
577
|
Other
operating
|
516
|
|
517
|
|
456
|
|
1,039
|
|
1,039
|
|
876
|
Depreciation and
amortization expenses
|
393
|
|
393
|
|
362
|
|
780
|
|
780
|
|
721
|
Adjusted Gross
Margin
|
$
3,294
|
|
$
3,298
|
|
$
2,787
|
|
$
6,331
|
|
$
6,329
|
|
$
5,110
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
12,233,196
|
|
12,233,196
|
|
11,708,837
|
|
24,519,026
|
|
24,519,026
|
|
22,942,326
|
Passenger Cruise
Days
|
13,230,448
|
|
13,230,448
|
|
12,297,290
|
|
26,380,157
|
|
26,380,157
|
|
23,772,032
|
Gross Margin
Yields
|
$
127.94
|
|
$
128.06
|
|
$
103.04
|
|
$
116.21
|
|
$
116.14
|
|
$
84.51
|
Net
Yields
|
$
269.38
|
|
$
269.61
|
|
$
238.00
|
|
$
258.23
|
|
$
258.20
|
|
$
222.74
|
Adjusted Gross
Margin per PCD
|
$
249.08
|
|
$
249.29
|
|
$
226.61
|
|
$
240.01
|
|
$
239.98
|
|
$
214.97
|
ROYAL CARIBBEAN
CRUISES LTD.
|
NON-GAAP RECONCILING
INFORMATION
|
(unaudited)
|
Gross Cruise Costs, Net
Cruise Costs and Net Cruise Costs excluding Fuel were calculated as
follows (in millions, except APCD and costs per APCD. Reported per
APCD amounts may vary from amounts calculated based on accompanying
financial tables due to rounding.):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2024 On a
Constant-
Currency Basis
|
|
2023
|
|
2024
|
|
2024 On a
Constant-
Currency Basis
|
|
2023
|
Total cruise operating
expenses
|
$
2,152
|
|
$
2,155
|
|
$
1,955
|
|
$
4,209
|
|
$
4,211
|
|
$
3,747
|
Marketing, selling and
administrative expenses
|
466
|
|
467
|
|
435
|
|
1,001
|
|
1,002
|
|
896
|
Gross Cruise
Costs
|
2,618
|
|
2,622
|
|
2,390
|
|
5,210
|
|
5,213
|
|
4,643
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
572
|
|
572
|
|
516
|
|
1,070
|
|
1,070
|
|
919
|
Onboard and
other
|
244
|
|
244
|
|
220
|
|
437
|
|
438
|
|
379
|
Net Cruise Costs
Including Other Costs
|
1,802
|
|
1,806
|
|
1,654
|
|
3,703
|
|
3,705
|
|
3,345
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
controlling interest (1)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3)
|
Impairment and credit
losses (recoveries) (2)
|
6
|
|
6
|
|
—
|
|
6
|
|
6
|
|
(7)
|
Restructuring charges
and other initiative expenses
|
3
|
|
3
|
|
5
|
|
3
|
|
3
|
|
5
|
Net Cruise
Costs
|
1,793
|
|
1,797
|
|
1,649
|
|
3,694
|
|
3,696
|
|
3,350
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Fuel
|
282
|
|
282
|
|
276
|
|
586
|
|
586
|
|
577
|
Net Cruise Costs
Excluding Fuel
|
$
1,511
|
|
$
1,515
|
|
$
1,373
|
|
$
3,108
|
|
$
3,110
|
|
$
2,773
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
12,233,196
|
|
12,233,196
|
|
11,708,837
|
|
24,519,026
|
|
24,519,026
|
|
22,942,326
|
Gross Cruise Costs
per APCD
|
$
214.06
|
|
$
214.35
|
|
$
204.10
|
|
$
212.50
|
|
$
212.58
|
|
$
202.40
|
Net Cruise Costs per
APCD
|
$
146.70
|
|
$
146.88
|
|
$
140.76
|
|
$
150.69
|
|
$
150.73
|
|
$
146.04
|
Net Cruise Costs
Excluding Fuel per APCD
|
$
123.65
|
|
$
123.82
|
|
$
117.19
|
|
$
126.78
|
|
$
126.82
|
|
$
120.87
|
|
|
(1)
|
For 2023, represents
gain on sale of controlling interest in cruise terminal facilities
in Italy. These amounts are included in Other operating
within our consolidated statements of comprehensive income
(loss).
|
|
|
(2)
|
For 2024, represents
property and equipment impairment charges related to certain
construction in progress assets. For 2023, represents asset
impairments and credit losses recoveries for notes receivables for
which credit losses were previously recorded. These amounts are
included in Other operating within our consolidated
statements of comprehensive income (loss).
|
ROYAL CARIBBEAN
CRUISES LTD.
|
NON-GAAP RECONCILING
INFORMATION
|
(unaudited)
|
EBITDA, Adjusted EBITDA
and Adjusted EBITDA Margin were calculated as follows (in millions,
except APCD and per APCD data. Reported per APCD and Margin amounts
may vary from amounts calculated based on accompanying financial
tables due to rounding.):
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
Net Income
attributable to Royal Caribbean Cruises Ltd.
|
|
$
854
|
|
$
459
|
|
$
1,214
|
|
$
411
|
Interest
income
|
|
(4)
|
|
(10)
|
|
(9)
|
|
(24)
|
Interest expense, net
of interest capitalized
|
|
298
|
|
355
|
|
721
|
|
714
|
Depreciation and
amortization expenses
|
|
393
|
|
362
|
|
780
|
|
721
|
Income tax expense
(benefit) (1)
|
|
17
|
|
8
|
|
23
|
|
(1)
|
EBITDA
|
|
1,558
|
|
1,174
|
|
2,729
|
|
1,821
|
|
|
|
|
|
|
|
|
|
Other (income) expense
(2)
|
|
(14)
|
|
(3)
|
|
(12)
|
|
2
|
Gain on sale of
controlling interest (3)
|
|
—
|
|
—
|
|
—
|
|
(3)
|
Recovery of losses from
one of our equity method investees
|
|
—
|
|
(4)
|
|
—
|
|
(4)
|
Restructuring charges
and other initiative expenses
|
|
3
|
|
5
|
|
3
|
|
5
|
Impairment and credit
losses (recoveries) (4)
|
|
6
|
|
—
|
|
6
|
|
(7)
|
Adjusted
EBITDA
|
|
$
1,553
|
|
$
1,172
|
|
$
2,726
|
|
$
1,814
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
4,110
|
|
$
3,523
|
|
$
7,838
|
|
$
6,408
|
|
|
|
|
|
|
|
|
|
APCD
|
|
12,233,196
|
|
11,708,837
|
|
24,519,026
|
|
22,942,326
|
Net Income
attributable to Royal Caribbean Cruises Ltd. per
APCD
|
|
$
69.85
|
|
$
39.18
|
|
$
49.53
|
|
$
17.91
|
Adjusted EBITDA per
APCD
|
|
$
126.96
|
|
$
100.16
|
|
$
111.18
|
|
$
79.09
|
Adjusted EBITDA
Margin
|
|
37.8 %
|
|
33.3 %
|
|
34.8 %
|
|
28.3 %
|
|
|
(1)
|
These amounts are
included in Other expense within our consolidated statements
of comprehensive income (loss).
|
|
|
(2)
|
Represents net
non-operating (income) expense. The amount excludes income tax
expense (benefit), included in the EBITDA calculation
above.
|
|
|
(3)
|
For 2023, represents
gain on sale of controlling interest in cruise terminal facilities
in Italy. These amounts are included in Other operating
within our consolidated statements of comprehensive income
(loss).
|
|
|
(4)
|
For 2024, represents
property and equipment impairment charges related to certain
construction in progress assets. For 2023, represents asset
impairments and credit losses recoveries for notes receivables for
which credit losses were previously recorded. These amounts are
included in Other operating within our consolidated
statements of comprehensive income (loss).
|
ROYAL CARIBBEAN
CRUISES LTD.
|
NON-GAAP RECONCILING
INFORMATION
|
(unaudited)
|
Adjusted Net Income
attributable to Royal Caribbean Cruises Ltd. and Adjusted Earnings
per Share were calculated as follows (in millions, except shares
and per share data):
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
Net Income
attributable to Royal Caribbean Cruises Ltd.
|
$
854
|
|
$
459
|
|
$
1,214
|
|
$
411
|
Loss on extinguishment
of debt
|
17
|
|
30
|
|
133
|
|
44
|
Amortization of
Silversea Cruises intangible assets resulting from the
Silversea
Cruises acquisition (1)
|
2
|
|
2
|
|
3
|
|
3
|
Gain on sale of
controlling interest (2)
|
—
|
|
—
|
|
—
|
|
(3)
|
PortMiami tax on sale
of noncontrolling interest (3)
|
—
|
|
—
|
|
—
|
|
10
|
Silver Whisper deferred
tax liability release (4)
|
—
|
|
—
|
|
—
|
|
(26)
|
Restructuring charges
and other initiative expenses
|
3
|
|
5
|
|
3
|
|
5
|
Recovery of losses from
one of our equity method investees
|
—
|
|
(4)
|
|
—
|
|
(4)
|
Impairment and credit
losses (recoveries) (5)
|
6
|
|
—
|
|
6
|
|
(7)
|
Adjusted Net Income
attributable to Royal Caribbean Cruises Ltd.
|
$
882
|
|
$
492
|
|
$
1,359
|
|
$
433
|
|
|
|
|
|
|
|
|
Earnings per
Share - Diluted (6)
|
$
3.11
|
|
$
1.70
|
|
$
4.46
|
|
$
1.60
|
Adjusted Earnings
per Share - Diluted (6)
|
$
3.21
|
|
$
1.82
|
|
$
4.97
|
|
$
1.69
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding - Diluted
|
281
|
|
282
|
|
281
|
|
259
|
|
|
(1)
|
Represents the
amortization of the Silversea Cruises intangible assets resulting
from the 2018 Silversea Cruises acquisition.
|
|
|
(2)
|
For 2023, represents
gain on sale of controlling interest in cruise terminal facilities
in Italy. These amounts are included in Other operating
within our consolidated statements of comprehensive income
(loss).
|
|
|
(3)
|
For 2023, represents
tax on the PortMiami sale of noncontrolling interest. These amounts
are included in Other expense in our consolidated statements
of comprehensive income (loss).
|
|
|
(4)
|
For 2023, represents
the release of the deferred tax liability subsequent to the
execution of the bargain purchase option for the Silver
Whisper. These amounts are included in Other expense
within our consolidated statements of comprehensive income (loss).
|
|
|
(5)
|
For 2024, represents
property and equipment impairment charges related to certain
construction in progress assets. For 2023, represents asset
impairments and credit losses recoveries for notes receivables for
which credit losses were previously recorded. These amounts are
included in Other operating within our consolidated
statements of comprehensive income (loss).
|
|
|
(6)
|
Diluted EPS and
Adjusted Diluted EPS includes the add-back of dilutive interest
expense related to our convertible notes of $19 million and $38
million for the quarter and six months ended June 30, 2024,
respectively, and $21 million and $4 million for the quarter and
six months ended June 30, 2023, respectively.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/royal-caribbean-group-reports-second-quarter-results-increases-full-year-guidance-and-reinstates-dividend-302206505.html
SOURCE Royal Caribbean Group