Strong demand and strength in onboard spend
drive first quarter earnings
Record bookings and booked position
continue to provide strong momentum to 2024
Adjusted EPS in 2024 is now expected to be
$10.70 - $10.90
MIAMI, April 25,
2024 /PRNewswire/ -- Royal Caribbean Group (NYSE:
RCL) today reported first quarter Earnings per Share ("EPS") of
$1.35 and Adjusted EPS of
$1.77. These results were better than
the company's guidance due to stronger pricing on close-in demand,
strength in onboard revenue and favorable timing of expenses. As a
result of an exceptional WAVE season and continued strength in
demand, the company is increasing 2024 Adjusted EPS guidance to
$10.70 - $10.90 per share.
"Wow, what a great start to the year! Demand for our leading
brands and the incredible experiences they deliver continues to be
very robust, resulting in outperformance in the first quarter, a
further increase of full year earnings guidance, and 60% expected
earnings growth year over year," said Jason
Liberty, president and CEO, Royal Caribbean Group. "Building
on this momentum, we expect to achieve all our Trifecta financial
goals in 2024, which allows us to focus on a new era of growth to
drive long-term shareholder returns and take a greater share of the
rapidly growing $1.9 trillion global
vacation market."
Key Highlights
Stronger than anticipated demand led to a record WAVE season and
continued strength in bookings in April from both a volume and
pricing standpoint. This robust booking environment across all key
itineraries coupled with continued strength in onboard spend, led
to higher revenue versus guidance in the first quarter and a
further improvement in full year yield expectations.
First Quarter 2024:
- Load factors in the first quarter were 107%.
- Gross Margin Yields were up 60.3% as-reported. Net Yields were
up 19.3% in Constant-Currency (19.5% as-reported).
- Gross Cruise Costs per Available Passenger Cruise Days ("APCD")
increased 5.1% as-reported. Net Cruise Costs ("NCC"), excluding
Fuel, per APCD increased 4.1% in Constant-Currency (4.2%
as-reported), which benefited from 325 bps of favorable timing of
expenses.
- Total revenues were $3.7 billion,
Net Income was $360 million or
$1.35 per share, Adjusted Net Income
was $478 million or $1.77 per share, Adjusted EBITDA was $1.2 billion, and operating cash flow was
$1.3 billion.
Full Year 2024 Outlook:
- Net Yields are expected to increase 9.0% to 10.0% in
Constant-Currency and as-reported.
- NCC, excluding Fuel, per APCD is expected to increase
approximately 5.5% in Constant-Currency (approximately 5.4%
as-reported), including 310 bps of costs related to increased
drydock days and the new operations of Hideaway Beach at Perfect
Day at CocoCay. Approximately one third of the increase in unit
costs, compared to prior guidance, is related to lower APCDs
due to cancelled Red Sea Sailings with the remainder driven by
higher stock-based compensation.
- Adjusted EPS is expected to grow 60% year over year and be in
the range of $10.70 to $10.90. The
increase in earnings includes a $0.10
headwind related to a stronger dollar and higher fuel prices.
Approximately one third of the increase is attributable to the
first quarter business outperformance with the remainder mainly
driven by better business outlook, lower interest expense but also
higher stock-based compensation.
- The company expects to achieve all of its Trifecta financial
goals in 2024: triple digit EBITDA per APCD, ROIC in the teens, and
double digit EPS, one year earlier than prior expectations.
First Quarter 2024 Results
Net Income for the first quarter of 2024 was $360 million or $1.35 per share compared to Net Loss of
$(48) million or $(0.19) per share for the same period in the
prior year. Adjusted Net Income was $478
million or $1.77 per share for
the first quarter of 2024 compared to Adjusted Net Loss of
$(59) million or $(0.23) per share for the same period in the
prior year. The company also reported total revenues of
$3.7 billion and Adjusted EBITDA of
$1.2 billion.
Gross Margin Yields increased 60.3% as-reported, and Net Yields
increased 19.3% in Constant Currency (19.5% as-reported) when
compared to the first quarter of 2023. Load factor for the quarter
was 107%, up 5 percentage points compared to the first quarter of
2023. About half of the first quarter yield growth was driven by
higher ticket pricing on existing hardware, with the remainder
driven by a combination of onboard revenue rates, higher load
factors, and new hardware. While onboard revenue continues to
grow, the company is particularly pleased with the significant
increase in ticket rates compared to 2023.
Gross Cruise Costs per APCD increased 5.1% as-reported, compared
to 2023. NCC, excluding Fuel, per APCD increased 4.1% in Constant
Currency (4.2% as-reported), when compared to the first quarter
2023. Costs were favorable to prior guidance due to the timing of
expenses.
Update on Bookings
The demand and pricing environment continues to be very strong.
Overall, this has been the strongest WAVE season in the company's
history from both a demand and pricing standpoint. As a result, the
company continues to be in a record booked position, with rates for
2024 sailings even further ahead of 2023 than they were at the
beginning of the year. In addition to record ticket pricing,
consumer spending onboard and pre-cruise purchases continue to
exceed prior years driven by greater participation at higher
prices.
"Our existing fleet along with our new ships continue to perform
exceptionally well, highlighted by the market response to the
launch of Icon of the Seas, which has exceeded all
expectations," added Liberty. "The momentum continues with
Utopia of the Seas and Silver Ray, set to launch this
summer. And, just this quarter alone, we announced an order for a
seventh Oasis Class ship and the expansion of our Royal Beach Club
portfolio in Cozumel; and we officially broke ground on Royal Beach
Club Paradise Island. These strategies will further propel
our leadership in the cruise industry and push us to new heights in
the vacation industry."
As of March 31, 2024, the Group's
customer deposit balance was at $6.0
billion.
Second Quarter 2024
Net Yields are expected to increase 10.20% to 10.70% in Constant
Currency (10.0% to 10.5% as-reported).
NCC, excluding Fuel, per APCD, is expected to increase 7.4% to
7.9% in Constant Currency (7.2% to 7.7% as-reported) compared to
2023 and includes costs related to increased drydock days and
the operations of Hideaway Beach, as well as timing of costs
shifted from the first quarter.
Based on current fuel pricing, interest rates, currency exchange
rates and the factors detailed above, the company expects second
quarter Adjusted EPS to be in the range of $2.65 to $2.75.
Fuel Expense
Bunker pricing, net of hedging, for the first quarter was
$696 per metric ton and consumption
was 437,000 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 today's fuel prices, the company has
included $291 million of fuel expense in its second quarter
guidance at a forecasted consumption of 416,000 metric tons, which
is 61% hedged via swaps. Forecasted consumption is 61%, 45%, and
24% hedged via swaps for 2024, 2025, and 2026, respectively. The
annual average cost per metric ton of the hedge portfolio is
approximately $504, $468, and $479 for
2024, 2025, and 2026, respectively.
The company provided the following guidance for the first
quarter and full year 2024:
FUEL
STATISTICS
|
Second Quarter
2024
|
Full Year
2024
|
Fuel Consumption
(metric tons)
|
416,000
|
1,720,000
|
Fuel
Expenses
|
$291 million
|
$1,183
million
|
Percent Hedged (fwd.
consumption)
|
61 %
|
61 %
|
|
|
|
GUIDANCE
|
As-Reported
|
Constant
Currency
|
|
Second Quarter
2024
|
Net Yields vs.
2023
|
10.0% to
10.5%
|
10.2% to
10.7%
|
Net Cruise Costs per
APCD vs. 2023
|
6.1% to 6.6%
|
6.2% to 6.7%
|
Net Cruise Costs per
APCD ex. Fuel vs. 2023
|
7.2% to 7.7%
|
7.4% to 7.9%
|
|
Full Year
2024
|
Net Yields vs.
2023
|
9.0% to
10.0%
|
9.0% to
10.0%
|
Net Cruise Costs per
APCD vs. 2023
|
Approximately
3.7%
|
Approximately
3.7%
|
Net Cruise Costs per
APCD ex. Fuel vs. 2023
|
Approximately
5.4%
|
Approximately
5.5%
|
|
|
|
GUIDANCE
|
Second Quarter
2024
|
Full Year
2024
|
APCDs
|
12.2 million
|
50.7 million
|
Capacity
change vs. 2023
|
4.6 %
|
8.1 %
|
Depreciation and
amortization
|
$390 to $400
million
|
$1,600 to $1,610
million
|
Net Interest,
excluding loss on extinguishment of debt
|
$270 to $280
million
|
$1,140 to $1,150
million
|
Adjusted
EPS
|
$2.65 to
$2.75
|
$10.70 to
$10.90
|
|
|
|
SENSITIVITY
|
Second Quarter
2024
|
Full Year
2024
|
1% Change in
Currency
|
$3 million
|
$14 million
|
1% Change in Net
Yields
|
$29 million
|
$120 million
|
1% Change in NCC
excluding Fuel
|
$14 million
|
$60 million
|
100 basis pt. Change
in SOFR
|
$1 million
|
$9 million
|
10% Change in Fuel
prices
|
$15 million
|
$45 million
|
|
|
Exchange rates used
in guidance calculations
|
|
GBP
|
$1.26
|
|
AUD
|
$0.65
|
|
CAD
|
$0.73
|
|
EUR
|
$1.07
|
|
Liquidity and Financing Arrangements
As of March 31, 2024, the Group's
liquidity position was $3.7 billion,
which includes cash and cash equivalents and undrawn revolving
credit facility capacity.
During the quarter, the company increased its revolving credit
facility by $80 million and
refinanced its $1.25 billion of 11.625% unsecured notes due in
2027 by issuing new $1.25 billion of
6.25% unsecured notes due in 2032. Also during the first quarter,
S&P upgraded the company's rating to BB+ with a stable outlook
and Moody's upgraded the company's credit rating to Ba2 with a
positive outlook.
The company noted that as of March 31, 2024, the scheduled
debt maturities for the remainder of 2024, 2025, 2026, and 2027
were $1.4 billion, $2.6 billion,
$3.0 billion and $2.5 billion, respectively.
Approximately 85% of the company's debt is tied to fixed
interest rates.
Capital Expenditures and Capacity Guidance
Capital expenditures for the full year 2024 are expected to be
approximately $3.4 billion, based on
current foreign exchange rates and are predominantly related to the
company's new ship order book. The company expects to take delivery
of Utopia of the Seas and Silver Ray this
year. All ship orders have committed financing in place.
Non-new ship related capital expenditures are expected to be
$0.7 billion.
Capacity changes for 2024 are expected to be 8.1% compared to
2023. Capacity changes for 2025, 2026, and 2027 are expected to be
5%, 6%, 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 expense; (ii) gain on sale of controlling interest; and
(iii) impairment and credit losses (recoveries).
Adjusted Earnings (Loss) per Share ("Adjusted EPS") is a
non-GAAP measure that represents Adjusted Net Income (Loss)
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 (Loss) is a non-GAAP measure that
represents Net Income (Loss) 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 in 2018; (iii) gain on sale of controlling interest;
(iv) tax on the sale of PortMiami noncontrolling interest; (v)
Silver Whisper deferred tax liability release; and (vi)
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 (Loss) 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; and (ii)
impairment and credit losses.
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 (Loss) is a non-GAAP
measure that represents operating income (loss) including income
(loss) 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 (Loss) 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.
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 one of the leading cruise
companies in the world with a global fleet of 65 ships traveling to
approximately 1,000 destinations around the world. Royal Caribbean
Group is the owner and operator of three award winning cruise
brands: Royal Caribbean International, Celebrity Cruises, and
Silversea Cruises and it is also a 50% owner of a joint venture
that operates TUI Cruises and Hapag-Lloyd Cruises. Together, the
brands have an additional 8 ships on order as of March 31, 2024. 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," "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; 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
|
|
March
31,
|
|
2024
|
|
2023
|
Passenger ticket
revenues
|
$
2,542
|
|
$
1,897
|
Onboard and other
revenues
|
1,186
|
|
989
|
Total
revenues
|
3,728
|
|
2,886
|
Cruise operating
expenses:
|
|
|
|
Commissions, transportation and other
|
498
|
|
403
|
Onboard and other
|
193
|
|
159
|
Payroll and related
|
318
|
|
310
|
Food
|
221
|
|
199
|
Fuel
|
304
|
|
302
|
Other operating
|
522
|
|
420
|
Total cruise operating
expenses
|
2,056
|
|
1,793
|
Marketing, selling and
administrative expenses
|
535
|
|
461
|
Depreciation and
amortization expenses
|
387
|
|
360
|
Operating
Income
|
750
|
|
272
|
Other income
(expense):
|
|
|
|
Interest income
|
5
|
|
15
|
Interest expense, net of interest capitalized
|
(424)
|
|
(360)
|
Equity investment income
|
41
|
|
20
|
Other (expense) income
|
(8)
|
|
5
|
|
(386)
|
|
(320)
|
Net Income
(Loss)
|
364
|
|
(48)
|
Less: Net Income
attributable to noncontrolling interest
|
4
|
|
—
|
Net Income (Loss)
attributable to Royal Caribbean Cruises Ltd.
|
$
360
|
|
$
(48)
|
Earnings (Loss) per
Share:
|
|
|
|
Basic
|
$
1.40
|
|
$
(0.19)
|
Diluted
|
$
1.35
|
|
$
(0.19)
|
Weighted-Average
Shares Outstanding:
|
|
|
|
Basic
|
257
|
|
255
|
Diluted
|
281
|
|
255
|
|
|
|
|
Comprehensive Income
(Loss)
|
|
|
|
Net Income
(Loss)
|
$
364
|
|
$
(48)
|
Other comprehensive
income (loss):
|
|
|
|
Foreign currency translation adjustments
|
4
|
|
(7)
|
Change in defined benefit plans
|
9
|
|
4
|
Gain (loss) on cash flow derivative hedges
|
44
|
|
(32)
|
Total other
comprehensive income (loss)
|
57
|
|
(35)
|
Comprehensive Income
(Loss)
|
421
|
|
(83)
|
Less: Comprehensive
Income attributable to noncontrolling interest
|
4
|
|
—
|
Comprehensive Income
(Loss) attributable to Royal Caribbean Cruises Ltd.
|
$
417
|
|
$
(83)
|
ROYAL CARIBBEAN
CRUISES LTD.
|
STATISTICS
|
(unaudited)
|
|
|
|
|
|
Quarter
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
|
|
|
|
Passengers
Carried
|
2,054,382
|
|
1,806,270
|
Passenger Cruise
Days
|
13,149,708
|
|
11,474,742
|
APCD
|
12,285,830
|
|
11,233,489
|
Occupancy
|
107.0 %
|
|
102.1 %
|
|
|
|
|
|
|
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED BALANCE
SHEETS
|
(in millions, except
share data)
|
|
As of
|
|
March
31,
|
|
December
31,
|
|
2024
|
|
2023
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash equivalents
|
$
437
|
|
$
497
|
Trade and other receivables, net of allowances of $9 and $7
at March 31, 2024 and
December 31, 2023, respectively
|
455
|
|
405
|
Inventories
|
236
|
|
248
|
Prepaid expenses and other assets
|
690
|
|
617
|
Derivative financial instruments
|
52
|
|
25
|
Total current
assets
|
1,870
|
|
1,792
|
Property and equipment, net
|
30,025
|
|
30,114
|
Operating lease right-of-use assets
|
599
|
|
611
|
Goodwill
|
809
|
|
809
|
Other assets, net of allowances of $43 at March 31, 2024
and December 31, 2023, respectively
|
1,887
|
|
1,805
|
Total
assets
|
$
35,190
|
|
$
35,131
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of long-term debt
|
$
1,643
|
|
$
1,720
|
Current portion of operating lease liabilities
|
63
|
|
65
|
Accounts payable
|
876
|
|
792
|
Accrued expenses and other liabilities
|
1,236
|
|
1,478
|
Derivative financial instruments
|
47
|
|
35
|
Customer deposits
|
6,040
|
|
5,311
|
Total current
liabilities
|
9,905
|
|
9,401
|
Long-term debt
|
18,876
|
|
19,732
|
Long-term operating lease liabilities
|
603
|
|
613
|
Other long-term liabilities
|
481
|
|
486
|
Total
liabilities
|
29,865
|
|
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;
285,814,489 and 284,672,386
shares issued, March 31, 2024 and
December 31, 2023, respectively)
|
3
|
|
3
|
Paid-in capital
|
7,496
|
|
7,474
|
Retained earnings (accumulated deficit)
|
350
|
|
(10)
|
Accumulated other comprehensive loss
|
(617)
|
|
(674)
|
Treasury stock (28,468,430 and 28,248,125 common shares at
cost, March 31, 2024 and
December 31, 2023,
respectively)
|
(2,081)
|
|
(2,069)
|
Total shareholders'
equity attributable to Royal Caribbean Cruises Ltd.
|
5,151
|
|
4,724
|
Noncontrolling Interests
|
174
|
|
175
|
Total shareholders'
equity
|
5,325
|
|
4,899
|
Total liabilities
and shareholders' equity
|
$
35,190
|
|
$
35,131
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited, in
millions)
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Operating
Activities
|
|
|
|
Net Income
(Loss)
|
$
364
|
|
$
(48)
|
Adjustments:
|
|
|
|
Depreciation and amortization
|
387
|
|
360
|
Net deferred income tax benefit
|
—
|
|
(11)
|
Gain (loss) on derivative instruments not designated as
hedges
|
35
|
|
(3)
|
Share-based compensation expense
|
45
|
|
26
|
Equity investment income
|
(41)
|
|
(20)
|
Amortization of debt issuance costs, discounts and
premiums
|
26
|
|
30
|
Loss on extinguishment of debt
|
116
|
|
13
|
Changes in operating
assets and liabilities:
|
|
|
|
(Increase) decrease in trade and other receivables,
net
|
(57)
|
|
123
|
Decrease in inventories
|
12
|
|
3
|
Increase in prepaid expenses and other assets
|
(80)
|
|
(78)
|
Increase in accounts payable trade
|
78
|
|
57
|
Decrease in accrued expenses and other liabilities
|
(238)
|
|
(261)
|
Increase in customer deposits
|
729
|
|
1,103
|
Other, net
|
(48)
|
|
16
|
Net cash provided by
operating activities
|
1,328
|
|
1,310
|
Investing
Activities
|
|
|
|
Purchases of property
and equipment
|
(242)
|
|
(252)
|
Cash received on
settlement of derivative financial instruments
|
—
|
|
5
|
Cash paid on settlement
of derivative financial instruments
|
(35)
|
|
(6)
|
Investments in and
loans to unconsolidated affiliates
|
(9)
|
|
—
|
Cash received on loans
from unconsolidated affiliates
|
5
|
|
5
|
Other, net
|
(15)
|
|
14
|
Net cash used in
investing activities
|
(296)
|
|
(234)
|
Financing
Activities
|
|
|
|
Debt
proceeds
|
2,179
|
|
705
|
Debt issuance
costs
|
(19)
|
|
(27)
|
Repayments of
debt
|
(3,107)
|
|
(2,664)
|
Premium on repayment of
debt
|
(104)
|
|
—
|
Proceeds from sale of
noncontrolling interest
|
—
|
|
209
|
Other, net
|
(40)
|
|
(7)
|
Net cash used in
financing activities
|
(1,091)
|
|
(1,784)
|
Effect of exchange rate
changes on cash and cash equivalents
|
(1)
|
|
—
|
Net decrease in cash
and cash equivalents
|
(60)
|
|
(708)
|
Cash and cash
equivalents at beginning of period
|
497
|
|
1,935
|
Cash and cash
equivalents at end of period
|
$
437
|
|
$
1,227
|
|
|
|
|
Supplemental
Disclosure
|
|
|
|
Cash paid during the
period for:
|
|
|
|
Interest, net of amount capitalized
|
$
411
|
|
$
389
|
Non-cash Investing
Activities
|
|
|
|
Purchase of property
and equipment included in accounts payable and accrued
expenses and other liabilities
|
$
44
|
|
$
19
|
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):
|
|
|
|
|
|
|
|
Quarter Ended March
31,
|
|
2024
|
|
2024 On a
Constant
Currency Basis
|
|
2023
|
Total
revenue
|
$
3,728
|
|
$
3,724
|
|
$
2,886
|
Less:
|
|
|
|
|
|
Cruise operating
expenses
|
2,056
|
|
2,055
|
|
1,793
|
Depreciation and
amortization expenses
|
387
|
|
387
|
|
360
|
Gross
Margin
|
1,285
|
|
1,282
|
|
733
|
Add:
|
|
|
|
|
|
Payroll and
related
|
318
|
|
318
|
|
310
|
Food
|
221
|
|
221
|
|
199
|
Fuel
|
304
|
|
304
|
|
302
|
Other
operating
|
522
|
|
521
|
|
420
|
Depreciation and
amortization expenses
|
387
|
|
387
|
|
360
|
Adjusted Gross
Margin
|
$
3,037
|
|
$
3,033
|
|
$
2,324
|
|
|
|
|
|
|
APCD
|
12,285,830
|
|
12,285,830
|
|
11,233,489
|
Passenger Cruise
Days
|
13,149,708
|
|
13,149,708
|
|
11,474,742
|
Gross Margin
Yields
|
$
104.59
|
|
$
104.35
|
|
$
65.25
|
Net
Yields
|
$
247.20
|
|
$
246.87
|
|
$
206.88
|
Adjusted Gross
Margin per PCD
|
$
230.96
|
|
$
230.65
|
|
$
202.53
|
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):
|
|
|
|
|
|
|
|
Quarter Ended March
31,
|
|
2024
|
|
2024 On a
Constant
Currency Basis
|
|
2023
|
Total cruise operating
expenses
|
$
2,056
|
|
$
2,055
|
|
$
1,793
|
Marketing, selling and
administrative expenses
|
535
|
|
535
|
|
461
|
Gross Cruise
Costs
|
2,591
|
|
2,590
|
|
2,254
|
Less:
|
|
|
|
|
|
Commissions,
transportation and other
|
498
|
|
498
|
|
403
|
Onboard and
other
|
193
|
|
194
|
|
159
|
Net Cruise Costs
Including Other Costs
|
1,900
|
|
1,898
|
|
1,692
|
Less:
|
|
|
|
|
|
Gain on sale of
controlling interest (1)
|
—
|
|
—
|
|
(3)
|
Impairment and credit
losses (recoveries) (2)
|
—
|
|
—
|
|
(7)
|
Net Cruise
Costs
|
1,900
|
|
1,898
|
|
1,702
|
Less:
|
|
|
|
|
|
Fuel
|
304
|
|
304
|
|
302
|
Net Cruise Costs
Excluding Fuel
|
$
1,596
|
|
$
1,594
|
|
$
1,400
|
|
|
|
|
|
|
APCD
|
12,285,830
|
|
12,285,830
|
|
11,233,489
|
Gross Cruise Costs
per APCD
|
$
210.89
|
|
$
210.81
|
|
$
200.65
|
Net Cruise Costs per
APCD
|
$
154.65
|
|
$
154.49
|
|
$
151.51
|
Net Cruise Costs
Excluding Fuel per APCD
|
$
129.91
|
|
$
129.74
|
|
$
124.63
|
|
|
|
|
|
|
(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 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):
|
|
|
|
|
|
|
|
Quarter Ended March
31,
|
|
|
2024
|
|
2023
|
|
|
|
|
|
Net Income (Loss)
attributable to Royal Caribbean Cruises Ltd.
|
|
$
360
|
|
$
(48)
|
Interest
income
|
|
(5)
|
|
(15)
|
Interest expense, net
of interest capitalized
|
|
424
|
|
360
|
Depreciation and
amortization expenses
|
|
387
|
|
360
|
Income tax expense
(benefit) (1)
|
|
6
|
|
(8)
|
EBITDA
|
|
1,172
|
|
649
|
|
|
|
|
|
Other expense
(2)
|
|
2
|
|
3
|
Gain on sale of
controlling interest (3)
|
|
—
|
|
(3)
|
Impairment and credit
losses (recoveries) (4)
|
|
—
|
|
(7)
|
Adjusted
EBITDA
|
|
$
1,174
|
|
$
642
|
|
|
|
|
|
Total
revenues
|
|
$
3,728
|
|
$
2,886
|
|
|
|
|
|
APCD
|
|
12,285,830
|
|
11,233,489
|
Net Income (Loss)
attributable to Royal Caribbean Cruises Ltd. per
APCD
|
|
$
29.30
|
|
$
(4.27)
|
Adjusted EBITDA per
APCD
|
|
$
95.56
|
|
$
57.15
|
Adjusted EBITDA
Margin
|
|
31.5 %
|
|
22.2 %
|
|
|
(1)
|
These amounts are
included in Other (expense) income within our consolidated
statements of comprehensive income (loss).
|
|
|
(2)
|
Represents net
non-operating 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 2023, represents
asset impairments and credit loss 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
(Loss) attributable to Royal Caribbean Cruises Ltd. and Adjusted
Earnings (Loss) per Share were calculated as follows (in
millions, except shares and per share data):
|
|
|
|
|
|
Quarter Ended March
31,
|
|
2024
|
|
2023
|
|
|
|
|
Net Income (Loss)
attributable to Royal Caribbean Cruises Ltd.
|
$
360
|
|
$
(48)
|
Loss on extinguishment
of debt
|
116
|
|
13
|
Amortization of
Silversea Cruises intangible assets resulting from the Silversea
Cruises acquisition (1)
|
2
|
|
2
|
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)
|
Impairment and credit
losses (recoveries) (5)
|
—
|
|
(7)
|
Adjusted Net Income
(Loss) attributable to Royal Caribbean Cruises Ltd.
|
$
478
|
|
$
(59)
|
|
|
|
|
Earnings (Loss) per
Share - Diluted (6)
|
$
1.35
|
|
$
(0.19)
|
Adjusted Earnings
(Loss) per Share - Diluted (6)
|
$
1.77
|
|
$
(0.23)
|
|
|
|
|
Weighted-Average
Shares Outstanding - Diluted
|
281
|
|
255
|
|
|
|
|
(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) income 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)
income within our consolidated statements of comprehensive
income (loss).
|
|
|
(5)
|
For 2023, represents
asset impairments and credit loss 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 for the
three months ended March 31, 2024.
|
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SOURCE Royal Caribbean Group