Royal Caribbean has made a few financial announcements today, chief among them are...
Royal Caribbean management identified an error in a previous accounting treatment of interest expense in connection with its amortization of certain financing fees. Royal Caribbean has revised its past financial statements to reflect the correct accounting.- Royal Caribbean's second quarter EPS was 47 cents before the Interest Expense revision (see above). After making the adjustment, Royal Caribbean earnings were 43 cents per share.
- If you exclude the Interest Expense revision, full year 2011 EPS guidance is now expected to be $3.05 to $3.15. This reflects a 10 cent reduction to prior guidance due to continuing low bookings in the Eastern Mediterranean sailings.
- Royal Caribbean's Board of Directors have reinstated the quarterly dividend at a rate of 10 cents per share, payable on August 30, 2011 to shareholders of record at the close of business on August 12, 2011.
Here are Royal Caribbean's Second Quarter 2011 results
- Royal Caribbean's net income was $93.5 million, or $0.43 per share, versus $53.7 million, or $0.25 per share, in 2010.
- Royal Caribbean's revenues improved to $1.8 billion for the quarter, which is up from $1.6 billion in the same quarter of 2010. The increase is a result of increases in capacity and yield improvements. Net yields for the second quarter of 2011 increased 3.8% (0.8% on a Constant-Currency basis).
- Costs for 2011's second quarter were nearly unchanged. In fact, most expense categories performed better than expected.
- At-the-pump fuel pricing declines have lagged those of WTI during the quarter resulting in second quarter fuel pricing very similar to earlier calculations at $599 per metric ton. During the quarter and prior to the market declines in WTI pricing, the company monetized a portion of its WTI option portfolio thereby realizing a significant portion of the first quarter's marked-to-market gains. As a result of these actions, the net marked-to-market valuation of fuel options was immaterial in the second quarter.
Revenue:
For the full year, the company expects Net Yields to improve approximately 5% on an as-reported basis and 2% to 3% on a Constant-Currency basis. For the third quarter, the company expects Net Yields to improve approximately 5% on an as-reported basis and 1% to 2% on a Constant-Currency basis. Excluding Mediterranean sailings, third quarter Net Yields are expected to increase approximately 11% (approximately 9% on a Constant-Currency basis).
Two factors that influenced the company's outlook in April are again affecting the outlook on yields, geopolitical events and fluctuations in the U.S. Dollar:
Geopolitical: The ongoing conflicts in the Eastern Mediterranean and its spillover effects continues to create hesitation around travel to the region. Some of this was already evident at the time of the company's last guidance. However, during the second quarter, the civil unrest in the Eastern Mediterranean expanded to other areas including Syria and Greece and the level of concern amongst travelers grew as tensions in the region dominated the headlines. This has resulted in a full year yield reduction of approximately 150 basis points versus April guidance. Net Yields for the Mediterranean are now expected to be down approximately 4% for the year, which is in stark contrast with the rest of the company's portfolio. The impact related to the events in Japan was reasonably clear by the time of the last guidance. The impact on bookings was immediate, but the situation has now stabilized. The guidance for 2011 has not changed materially from previous guidance and the outlook going forward is very positive.
Strengthening of the U.S. Dollar: In a reversal of the trends observed in April, the company's revenues have been negatively influenced by the strengthening of the U.S. Dollar relative to other currencies. Assuming current currency exchange rates, the company expects Net Yields for the full year on an as-reported basis to decline approximately 50 basis points from its previous guidance as a result of currency.
The company noted that with the exception of the Eastern Mediterranean, it continues to observe strong demand for its products, especially the Caribbean, Alaska and Northern Europe. The strength of this demand (both rate and volume) reinforces that Eastern Mediterranean pricing softness this summer appears to be geopolitically related and that the economic demand for its products is strong. Further supporting this premise, excluding the Mediterranean, Net Yields for the year are expected to be up approximately 8% (approximately 6% on a Constant-Currency basis).
Net Cruise Costs (Excluding Fuel):
For the full year, the company expects NCC excluding fuel to increase approximately 3% on an as-reported basis and 1% - 2% on a Constant-Currency basis. For the third quarter, the company expects NCC excluding fuel to increase 4% to 5% on an as-reported basis and approximately 2% on a Constant-Currency basis.
The company has remained focused on tight cost controls and has reduced operating costs 100 basis points more than expected through a number of initiatives. In addition the strengthening U.S. Dollar has improved NCC excluding fuel a further 50 basis points since April.
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 $202 million and $763 million of fuel expense in its third quarter 2011 and full year 2011 guidance, respectively. These figures also take account further energy savings initiatives which continue to reduce the company's already low level of energy consumption.
Forecasted consumption is now 55% hedged for the remainder of 2011 at a WTI barrel equivalent rate of approximately $67 bbl, 55% hedged in 2012 at an equivalent rate of $72 bbl, 47% hedged in 2013 at an equivalent rate of $78 bbl, 30% hedged in 2014 at an equivalent rate of $87 bbl and 20% hedged in 2015 at an equivalent rate of $88 bbl. Additionally, the company also utilizes fuel options to further protect against escalating fuel prices. WTI fuel options at strike prices ranging from $90 bbl to $100 bbl cover an additional 8% and 11% of estimated consumption in 2012 and 2013, respectively.
The company provided the following fuel statistics for the third quarter and full year 2011:
FUEL STATISTICS Third Quarter 2011 Full Year 2011
Fuel Consumption 335,000 1,319,000
Fuel Expenses $202 Million $763 Million
Percent Hedged (fwd consumption) 53% 55%
Impact of 10% change in fuel prices * $10 million $20 million
*excludes marked-to-market impact of fuel options.
In addition, based on the assumed fuel statistics above, the company provided the following guidance for the third quarter and full year 2011.
GUIDANCE As-Reported Constant-Currency
Third Quarter 2011
Net Yields Approx. 5% 1% to 2%
Net Cruise Costs per APCD Approx. 6% 4% to 5%
Net Cruise Costs per APCD, 4% to 5% Approx. 2%
excluding Fuel
Full Year 2011
Net Yields Approx. 5% 2% to 3%
Net Cruise Costs per APCD Approx. 4% Approx. 3%
Net Cruise Costs per APCD, Approx. 3% 1% to 2%
excluding Fuel
Third Quarter 2011 Full Year 2011
EPS $1.85 to $1.90 $2.85 to $2.95
Capacity Increase 6.3% 7.6%
Depreciation and Amortization $175 to $180 million $705 to $710 million
Interest Expense, net $88 to $93 million $355 to $365 million
Exchange rates used in guidance calculations
EUR $1.45
GBP $1.64
Liquidity and Financing Arrangements
As of June 30, 2011, and taking into account the new revolver, liquidity was $1.3 billion, including cash and the undrawn portion of the company's unsecured revolving credit facilities. Additionally, the company has committed unsecured financing on its remaining newbuilds.
The company has renewed its primary revolving credit facility that was due to expire in June of 2012. The facility has been extended to 5 years and now matures in July 2016. It can be drawn up to $875 million. This facility combined with the company's $525 million facility due in November 2014, provides the company with access to $1.4 billion in unsecured revolving credit facilities. The company intends to maintain staggered maturity profiles on these two facilities going forward to further reduce refinancing risks.
Capital Expenditures and Capacity Guidance
The company took delivery of the Celebrity Silhouette on July 18th. Celebrity Silhouette is the fourth in a series of five of the highly acclaimed Celebrity Solstice-class vessels and will initially split her time between Caribbean and European itineraries.
Based on current ship orders, projected capital expenditures for 2011, 2012, 2013 and 2014 are $1.1 billion, $1.2 billion, $500 million and $1.1 billion, respectively. These estimates include the recently announced Project Sunshine, energy savings initiatives and additional refurbishment investments.
Capacity increases for the same four years are 7.6%, 1.9%, 2.5% and 0.7%, respectively.
Conference Call Scheduled
The company has scheduled a conference call at 10 a.m. Eastern Daylight Time tomorrow to discuss its earnings. This call can be heard, either live or on a delayed basis, on the company's investor relations web site at www.rclinvestor.com .
Selected Operational and Financial Metrics
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 and Net Cruise Costs are our most relevant non-GAAP financial measures. However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses can be affected by changes in currency exchange rates. Although such changes in local currency prices is just one of many elements impacting our revenues and expenses, it can be an important element. For this reason, we also monitor Net Yields and Net Cruise Costs as if the current periods' currency exchange rates had remained constant with the comparable prior periods' rates, or on a "Constant-Currency" basis. We calculate "Constant-Currency" by applying the average 2010 monthly exchange rates for each month of the period during 2010 to the results during the corresponding months in 2011, so as to calculate what the results would have been had exchange rates been the same throughout both periods. It should be emphasized that the use of Constant-Currency is primarily used for comparing short-term changes and/or projections.
Over the longer term, changes in guest sourcing and shifting the amount of purchases between currencies significantly 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 and Net Cruise Costs Excluding Fuel
Net Cruise Costs and Net Cruise Costs 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 (each of which is described above under the Description of Certain Line Items heading). 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. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations. 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 Debt-to-Capital
Net Debt-to-Capital is a ratio which represents total long-term debt, including the current portion of long-term debt, less cash and cash equivalents ("Net Debt") divided by the sum of Net Debt and total shareholders' equity. We believe Net Debt and Net Debt-to-Capital, along with total long-term debt and shareholders' equity are useful measures of our capital structure.
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.
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. is a global cruise vacation company that operates Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisieres de France, and TUI Cruises through a 50% joint venture. The company has a combined total of 40 ships in service and two under construction. It also offers unique land-tour vacations in Alaska, Asia, Australia, Canada, Europe, Latin America and New Zealand. Additional information can be found on www.royalcaribbean.com , www.celebrity.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 2011 and the yields expected in 2011. 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 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, the uncertainties of conducting business internationally and expanding into new markets, changes in operating and financing costs, 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 adverse publicity concerning the cruise vacation industry 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 subsequent quarterly reports on Form 10-Q, copies 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.
Non-GAAP Measures of Financial Performance
This press release includes certain non-GAAP 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 non-GAAP 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 non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP 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 non-GAAP financial measures included in this press release can be found in the tables included at the end of this press release.
Financial Tables Follow
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30,
-------------------------- ----------------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Passenger ticket revenues $ 1,296,789 $ 1,159,453 $ 2,523,306 $ 2,241,974
Onboard and other revenues 471,084 442,244 916,562 845,373
--------- --------- --------- ---------
Total revenues 1,767,873 1,601,697 3,439,868 3,087,347
--------- --------- --------- ---------
Cruise operating expenses:
Commissions, transportation and other 299,174 271,140 578,723 539,790
Onboard and other 134,938 124,190 237,428 215,125
Payroll and related 198,794 188,608 403,281 368,042
Food 99,149 93,850 199,231 186,497
Fuel 188,128 164,118 354,189 319,057
Other operating 265,192 244,281 513,594 482,951
--------- --------- --------- ---------
Total cruise operating expenses 1,185,375 1,086,187 2,286,446 2,111,462
Marketing, selling and administrative expenses 242,258 211,795 490,396 422,843
Depreciation and amortization expenses 172,050 160,031 345,302 317,606
--------- --------- --------- ---------
Operating Income 168,190 143,684 317,724 235,436
--------- --------- --------- ---------
Other income (expense):
Interest income 6,478 1,363 10,259 2,732
Interest expense, net of interest capitalized (92,968) (90,661) (193,593) (182,189)
Other income (expense) 11,791 (655) 37,511 77,595
--------- --------- --------- ---------
(74,699) (89,953) (145,823) (101,862)
--------- --------- --------- ---------
Net Income $ 93,491 $ 53,731 $ 171,901 $ 133,574
Earnings Per Share:
Basic $ 0.43 $ 0.25 $ 0.79 $ 0.62
Diluted $ 0.43 $ 0.25 $ 0.78 $ 0.61
Weighted-Average Shares Outstanding:
Basic 217,028 215,043 216,771 214,680
Diluted 219,370 217,561 219,516 217,304
STATISTICS
Quarter Ended Six Months Ended
June 30, June 30,
--------------------- -----------------------
2011 2010 2011 2010
--------- --------- ---------- ----------
Passengers Carried 1,185,679 1,112,984 2,400,489 2,230,514
Passenger Cruise Days 8,337,646 7,817,339 16,783,344 15,402,065
APCD 8,038,014 7,543,536 16,138,310 14,897,628
Occupancy 103.7% 103.6% 104.0% 103.4%
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
As of
--------------------------------
June 30, December 31,
2011 2010
-------------- ----------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 551,460 $ 419,929
Trade and other receivables, net 273,708 266,710
Inventories 145,547 126,797
Prepaid expenses and other assets 225,326 145,144
Derivative financial instruments 130,835 56,491
-------------- ----------------
Total current assets 1,326,876 1,015,071
Property and equipment, net 16,440,866 16,771,677
Goodwill 800,436 759,328
Other assets 1,380,320 1,107,753
-------------- ----------------
$ 19,948,498 $ 19,653,829
Liabilities and Shareholders' Equity
Current liabilities
Current portion of long-term debt $ 703,245 $ 1,198,929
Accounts payable 343,162 249,047
Accrued interest 100,253 160,906
Accrued expenses and other liabilities 480,656 553,218
Customer deposits 1,660,614 1,283,073
-------------- ----------------
Total current liabilities 3,287,930 3,445,173
Long-term debt 7,901,646 7,951,187
Other long-term liabilities 410,643 356,717
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;
227,366,165 and 226,211,731 shares issued, June 30, 2011 2,273 2,262
and December 31, 2010, respectively)
Paid-in capital 3,054,797 3,027,130
Retained earnings 5,431,899 5,259,998
Accumulated other comprehensive income 273,014 25,066
Treasury stock (10,308,683 common shares at (413,704) (413,704)
cost, June 30, 2011 and December 31, 2010)
-------------- ----------------
Total shareholders' equity 8,348,279 7,900,752
-------------- ----------------
$ 19,948,498 $ 19,653,829
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six Months Ended
June 30,
--------------------------------------------------
2011 2010
------------------------- -----------------------
Operating Activities
Net income $ 171,901 $ 133,574
Adjustments:
Depreciation and amortization 345,302 317,606
(Gain) loss on fuel call options (24,803) 7,348
Changes in operating assets and liabilities:
Decrease in trade and other receivables, net 63,803 127,131
Increase in inventories (17,316) (5,607)
Increase in prepaid expenses and other assets (83,740) (37,937)
Increase in accounts payable 92,619 23,622
Decrease in accrued interest (60,653) (42,500)
Decrease in accrued expenses and other liabilities (21,931) (13,572)
Increase in customer deposits 306,070 320,382
Cash received on settlement of derivative financial instruments - 172,993
Other, net (4,510) 7,862
Net cash provided by operating activities 766,742 1,010,902
Investing Activities
Purchases of property and equipment (251,565) (847,541)
Cash received (paid) on settlement of derivative financial instruments 25,250 (7,121)
Loans to unconsolidated affiliates (69,682) -
Proceeds from the sale of ships 345,000 -
Other, net (3,044) (8,266)
Net cash provided by (used in) investing activities 45,959 (862,928)
Financing Activities
Debt proceeds 702,442 1,081,069
Debt issuance costs (28,593) (36,929)
Repayments of debt (1,376,801) (1,168,928)
Proceeds from exercise of common stock options 17,923 11,377
Other, net 705 748
Net cash used in financing activities (684,324) (112,663)
Effect of exchange rate changes on cash 3,154 (1,110)
Net increase in cash and cash equivalents 131,531 34,201
Cash and cash equivalents at beginning of period 419,929 284,619
Cash and cash equivalents at end of period $ 551,460 $ 318,820
Supplemental Disclosure
Cash paid during the period for:
Interest, net of amount capitalized $ 223,438 $ 159,288
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,
--------------------------------------------------- -----------------------------------------------------
2011 2011 2010 2011 2011 2010
On a On a
Constant Constant
Currency basis Currency basis
--------- -------------- --------- ---------- -------------- ----------
Passenger ticket revenues $ 1,296,789 $ 1,250,933 $ 1,159,453 $ 2,523,306 $ 2,461,208 $ 2,241,974
Onboard and other revenues 471,084 463,063 442,244 916,562 907,073 845,373
--------- -------------- --------- ---------- -------------- ----------
Total revenues 1,767,873 1,713,996 1,601,697 3,439,868 3,368,281 3,087,347
Less:
Commissions, transportation and other 299,174 287,707 271,140 578,723 564,182 539,790
Onboard and other 134,938 130,240 124,190 237,428 232,411 215,125
Net revenues $ 1,333,761 $ 1,296,049 $ 1,206,367 $ 2,623,717 $ 2,571,688 $ 2,332,432
APCD 8,038,014 8,038,014 7,543,536 16,138,310 16,138,310 14,897,628
Gross Yields $ 219.94 $ 213.24 $ 212.33 $ 213.15 $ 208.71 $ 207.24
Net Yields $ 165.93 $ 161.24 $ 159.92 $ 162.58 $ 159.35 $ 156.56
Gross Cruise Costs and Net Cruise Costs were calculated as follows (in thousands, except APCD and costs per APCD): Quarter Ended Six Months Ended June 30, June 30, --------------------------------------------------- ----------------------------------------------------- 2011 2011 2010 2011 2011 2010 On a On a Constant Constant Currency basis Currency basis --------- -------------- --------- ---------- -------------- ---------- Total cruise operating expenses $ 1,185,375 $ 1,157,939 $ 1,086,187 $ 2,286,446 $ 2,255,110 $ 2,111,462 Marketing, selling and administrative expenses 242,258 233,152 211,795 490,396 479,644 422,843 --------- -------------- --------- ---------- -------------- ---------- Gross Cruise Costs 1,427,633 1,391,091 1,297,982 2,776,842 2,734,754 2,534,305 Less: Commissions, transportation and other 299,174 287,707 271,140 578,723 564,182 539,790 Onboard and other 134,938 130,240 124,190 237,428 232,411 215,125 Net Cruise Costs $ 993,521 $ 973,144 $ 902,652 $ 1,960,691 $ 1,938,161 $ 1,779,390 Less: Fuel 188,128 186,823 164,118 354,189 352,379 319,057 --------- -------------- --------- ---------- -------------- ---------- Net Cruise Costs Excluding Fuel $ 805,393 $ 786,321 $ 738,534 $ 1,606,502 $ 1,585,782 $ 1,460,333 APCD 8,038,014 8,038,014 7,543,536 16,138,310 16,138,310 14,897,628 Gross Cruise Costs per APCD $ 177.61 $ 173.06 $ 172.07 $ 172.07 $ 169.46 $ 170.11 Net Cruise Costs per APCD $ 123.60 $ 121.07 $ 119.66 $ 121.49 $ 120.10 $ 119.44 Net Cruise Costs Excluding Fuel per APCD $ 100.20 $ 97.83 $ 97.90 $ 99.55 $ 98.26 $ 98.02
Net Debt-to-Capital was calculated as follows (in thousands):
As of
June 30, December 31,
---------- ----------------------------
2011 2010
---------- ----------------------------
Long-term debt, net of current portion $ 7,901,646 $ 7,951,187
Current portion of long-term debt 703,245 1,198,929
---------- ----------------------------
Total debt 8,604,891 9,150,116
Less: Cash and cash equivalents 551,460 419,929
---------- ----------------------------
Net Debt $ 8,053,431 $ 8,730,187
Total shareholders' equity $ 8,348,279 $ 7,900,752
Total debt 8,604,891 9,150,116
---------- ----------------------------
Total debt and shareholders' equity 16,953,170 17,050,868
Debt-to-Capital 50.8% 53.7%
Net Debt 8,053,431 8,730,187
---------- ----------------------------
Net Debt and shareholders' equity $ 16,401,710 $ 16,630,939
Net Debt-to-Capital 49.1% 52.5%
ROYAL CARIBBEAN CRUISES LTD.
EFFECT OF CORRECTION ON CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Year Ended Year Ended
December 31, 2010 December 31, 2009
----------------------------------------------
As Previously Adjustment As Revised As Previously Adjustment As Revised
Reported Reported
------------- ---------- ---------- ------------- ---------- ----------
Interest expense, net of interest capitalized $ (339,393) $ (31,814) $ (371,207) $ (300,012) $ (9,936) $ (309,948)
Total other expense (255,166) (31,814) (286,980) (326,090) (9,936) (336,026)
Net Income 547,467 (31,814) 515,653 162,421 (9,936) 152,485
Earnings per Share:
Basic $ 2.55 $ (0.15) $ 2.40 $ 0.76 $ (0.05) $ 0.71
Diluted $ 2.51 $ (0.15) $ 2.37 $ 0.75 $ (0.05) $ 0.71
Quarter Ended Quarter Ended
March 31, 2011 March 31, 2010
(unaudited)
----------------------------------------------
As Previously Adjustment As Revised As Previously Adjustment As Revised
Reported Reported
------------- ---------- ---------- ------------- ---------- ----------
Interest expense, net of interest capitalized $ (87,483) $ (13,142) $ (100,625) $ (83,924) $ (7,604) $ (91,528)
Total other expense (57,982) (13,142) (71,124) (4,305) (7,604) (11,909)
Net Income 91,552 (13,142) 78,410 87,447 (7,604) 79,843
Earnings per Share:
Basic $ 0.42 $ (0.06) $ 0.36 $ 0.41 $ (0.04) $ 0.37
Diluted $ 0.42 $ (0.06) $ 0.36 $ 0.40 $ (0.04) $ 0.37
Quarter Ended Quarter Ended
June 30, 2010 June 30, 2009
----------------------------------------------
As Previously Adjustment As Revised As Previously Adjustment As Revised
Reported Reported
------------- ---------- ---------- ------------- ---------- ----------
Interest expense, net of interest capitalized $ (83,846) $ (6,815) $ (90,661) $ (68,327) $ (1,190) $ (69,517)
Total other expense (83,138) (6,815) (89,953) (90,148) (1,190) (91,338)
Net Income (Loss) 60,546 (6,815) 53,731 (35,086) (1,190) (36,276)
Earnings (Loss) per Share:
Basic $ 0.28 $ (0.03) $ 0.25 $ (0.16) $ (0.01) $ (0.17)
Diluted $ 0.28 $ (0.03) $ 0.25 $ (0.16) $ (0.01) $ (0.17)
Six Months Ended Six Months Ended
June 30, 2010 June 30, 2009
----------------------------------------------
As Previously Adjustment As Revised As Previously Adjustment As Revised
Reported Reported
------------- ---------- ---------- ------------- ---------- ----------
Interest expense, net of interest capitalized $ (167,770) $ (14,419) $ (182,189) $ (147,789) $ (1,190) $ (148,979)
Total other expense (87,443) (14,419) (101,862) (170,639) (1,190) (171,829)
Net Income (Loss) 147,993 (14,419) 133,574 (71,324) (1,190) (72,514)
Earnings (Loss) per Share:
Basic $ 0.69 $ (0.07) $ 0.62 $ (0.33) $ (0.01) $ (0.34)
Diluted $ 0.68 $ (0.07) $ 0.61 $ (0.33) $ (0.01) $ (0.34)
Quarter Ended Quarter Ended
September 30, 2010 September 30, 2009
----------------------------------------------
As Previously Adjustment As Revised As Previously Adjustment As Revised
Reported Reported
------------- ---------- ---------- ------------- ---------- ----------
Interest expense, net of interest capitalized $ (82,494) $ (6,588) $ (89,082) $ (73,912) $ (684) $ (74,596)
Total other expense (88,735) (6,588) (95,323) (76,449) (684) (77,133)
Net Income 356,767 (6,588) 350,179 230,392 (684) 229,708
Earnings per Share:
Basic $ 1.66 $ (0.03) $ 1.63 $ 1.08 $ 0.00 $ 1.07
Diluted $ 1.64 $ (0.03) $ 1.61 $ 1.07 $ 0.00 $ 1.07
Nine Months Ended Nine Months Ended
September 30, 2010 September 30, 2009
----------------------------------------------
As Previously Adjustment As Revised As Previously Adjustment As Revised
Reported Reported
------------- ---------- ---------- ------------- ---------- ----------
Interest expense, net of interest capitalized $ (250,264) $ (21,007) $ (271,271) $ (221,701) $ (1,873) $ (223,574)
Total other expense (176,178) (21,007) (197,185) (247,088) (1,873) (248,961)
Net Income 504,760 (21,007) 483,753 159,068 (1,873) 157,195
Earnings per Share:
Basic $ 2.35 $ (0.10) $ 2.25 $ 0.74 $ (0.01) $ 0.74
Diluted $ 2.32 $ (0.10) $ 2.23 $ 0.74 $ (0.01) $ 0.73
ROYAL CARIBBEAN CRUISES LTD.
EFFECT OF CORRECTION ON CONSOLIDATED BALANCE SHEETS
(in thousands)
As of As of
December 31, 2010 December 31, 2009
-------------------------------------------------------- -------------------------------------------------------
As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised
---------------------- ---------- ---------- ---------------------- ---------- ----------
Property and equipment, net $ 16,769,181 $ 2,496 $ 16,771,677 $ 15,268,053 $ 384 $ 15,268,437
Other assets 1,151,324 (43,571) 1,107,753 1,146,677 (9,453) 1,137,224
Total assets 19,694,904 (41,075) 19,653,829 18,233,494 (9,069) 18,224,425
Accrued expenses and other liabilities 552,543 675 553,218 521,190 867 522,057
Total current liabilities 3,444,498 675 3,445,173 2,749,030 867 2,749,897
Retained earnings 5,301,748 (41,750) 5,259,998 4,754,950 (9,936) 4,745,014
Total shareholders' equity 7,942,502 (41,750) 7,900,752 7,499,717 (9,936) 7,489,781
Total assets and liabilities 19,694,904 (41,075) 19,653,829 18,233,494 (9,069) 18,224,425
ROYAL CARIBBEAN CRUISES LTD.
EFFECT OF CORRECTION ON CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
The correction did not have an effect on the Company's operating cash flows. The following table presents the effect on the individual line items within operating cash flows on the Company's Consolidated Statement of Cash Flows for June 30, 2010.
Six Months Ended June 30, 2010
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
As Previously Adjustment Reclassification(1) As Revised
Reported
------------------ ------------------ ------------------- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Income $ 147,993 $ (14,419) $ - $ 133,574
Decrease in accrued expenses and other liabilities (13,514) (58) - (13,572)
Other, net 733 14,477 (7,348) 7,862
(1) For the six months ended June 30, 2010, $7.3 million has been reclassified in the consolidated statement of cash flows from other, net within net cash flows provided by operating activities to (gain) loss on fuel call options within net cash flows provided by operating activities in order to conform to the current year presentation.
