FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 2, 2012
ROYAL CARIBBEAN CRUISES LTD.
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(Exact Name of Registrant as Specified in Charter)
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Republic of Liberia
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(State or Other Jurisdiction of Incorporation)
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1-11884
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98-0081645
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(Commission File Number)
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(IRS Employer Identification No.)
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1050 Caribbean Way, Miami, Florida
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33132
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code: 305-539-6000
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report) |
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ROYAL CARIBBEAN CRUISES LTD.
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||||
Date:
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February 2, 2012
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By:
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/s/ Brian J. Rice
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Name:
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Brian J. Rice
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Title:
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Executive Vice President and
Chief Financial Officer
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o
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Net income was $607.4 million, or $2.77 per share, versus $515.7 million, or $2.37 per share, in 2010;
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o
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Net Yields increased 2.4% on a Constant-Currency basis (+4.1% As-Reported.) Net Cruise Costs (“NCC”) excluding fuel increased 1.3% on a Constant-Currency basis (+2.3% As-Reported.)
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o
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Net income was $36.6 million, or $0.17 per share, versus $31.9 million, or $0.15 per share, in 2010;
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o
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Net Yields increased 3.5% on a Constant-Currency basis (+3.2% As-Reported.) Net Cruise Costs per APCD (“NCC”) excluding fuel increased 3.7% on a Constant-Currency basis (+3.6% As-Reported.)
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●
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Firstly, the company made some changes related to its International distribution system in 2011 which carry on into 2012 and will increase yields by about 130 basis
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points. The changes also increase expenses, but the bottom line impact is not material.
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●
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Secondly, the company has increased its commitment in certain deployment initiatives which increase revenues but also increase related expenses. For example, China represents a strategic market initiative the company is augmenting significantly.
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FUEL STATISTICS
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First Quarter 2012
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Full Year 2012
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Fuel Consumption (metric tons)
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341,000
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1,354,000
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Fuel Expenses
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$224 million
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$889 million
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Percent Hedged (fwd consumption)
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53%
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55%
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Impact of 10% change in fuel prices *
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$11 million
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$42 million
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GUIDANCE
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As-Reported
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Constant-Currency
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First Quarter 2012
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Net Yields
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4% to 6%
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5% to 7%
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Net Cruise Costs per APCD
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Approx. 10%
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10% to 11%
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Net Cruise Costs per APCD,
excluding Fuel
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5% to 6%
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6% to 7%
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Full Year 2012
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Net Yields
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Flat to 4%
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1% to 5%
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Net Cruise Costs per APCD
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5% to 6%
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6% to 7%
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Net Cruise Costs per APCD,
excluding Fuel
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3% to 4%
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4% to 5%
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First Quarter 2012
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Full Year 2012
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Capacity Increase
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2.5%
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2.1%
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Depreciation and Amortization
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$175 to $185 million
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$730 to $750 million
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Interest Expense, net
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$82 to $92 million
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$360 to $380 million
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EPS
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$0.10 to $0.20
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$1.90 to $2.30
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Exchange rates used in guidance calculations
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EUR
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$1.31
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GBP
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$1.58 | |
CAD
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$1.00
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Quarter Ended
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Year Ended
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|||||||||||||||
December 31,
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December 31,
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Passenger ticket revenues
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$ | 1,268,270 | $ | 1,146,108 | $ | 5,525,904 | $ | 4,908,644 | ||||||||
Onboard and other revenues
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507,131 | 458,390 | 2,011,359 | 1,843,860 | ||||||||||||
Total revenues
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1,775,401 | 1,604,498 | 7,537,263 | 6,752,504 | ||||||||||||
Cruise operating expenses:
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||||||||||||||||
Commissions, transportation and other
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315,316 | 285,566 | 1,299,713 | 1,175,522 | ||||||||||||
Onboard and other
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116,469 | 105,615 | 535,501 | 480,564 | ||||||||||||
Payroll and related
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211,860 | 202,474 | 825,676 | 767,586 | ||||||||||||
Food
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111,758 | 101,739 | 424,308 | 388,205 | ||||||||||||
Fuel
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208,091 | 163,155 | 764,758 | 646,998 | ||||||||||||
Other operating
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287,367 | 248,440 | 1,092,651 | 999,201 | ||||||||||||
Total cruise operating expenses
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1,250,861 | 1,106,989 | 4,942,607 | 4,458,076 | ||||||||||||
Marketing, selling and administrative expenses
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238,445 | 211,936 | 960,602 | 848,079 | ||||||||||||
Depreciation and amortization expenses
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179,933 | 163,878 | 702,426 | 643,716 | ||||||||||||
Operating Income
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106,162 | 121,695 | 931,628 | 802,633 | ||||||||||||
Other income (expense):
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||||||||||||||||
Interest income
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7,989 | 4,696 | 25,318 | 9,243 | ||||||||||||
Interest expense, net of interest capitalized
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(90,625 | ) | (99,936 | ) | (382,416 | ) | (371,207 | ) | ||||||||
Other income
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13,036 | 5,445 | 32,891 | 74,984 | ||||||||||||
(69,600 | ) | (89,795 | ) | (324,207 | ) | (286,980 | ) | |||||||||
Net Income
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$ | 36,562 | $ | 31,900 | $ | 607,421 | $ | 515,653 | ||||||||
Earnings Per Share:
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Basic
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$ | 0.17 | $ | 0.15 | $ | 2.80 | $ | 2.40 | ||||||||
Diluted
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$ | 0.17 | $ | 0.15 | $ | 2.77 | $ | 2.37 | ||||||||
Weighted-Average Shares Outstanding:
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||||||||||||||||
Basic
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217,279 | 215,581 | 216,983 | 215,026 | ||||||||||||
Diluted
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218,982 | 218,742 | 219,229 | 217,711 |
STATISTICS
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Quarter Ended
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Year Ended
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||||||||
December 31,
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December 31,
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||||||||
2011
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2010
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2011
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2010
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||||||
Passengers Carried
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1,201,947
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1,155,648
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4,850,010
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4,585,920
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Passenger Cruise Days
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8,779,189
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8,193,130
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34,818,335
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32,251,217
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APCD
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8,521,272
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7,943,782
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33,235,508
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30,911,073
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Occupancy
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103.0%
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103.1%
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104.8%
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104.3%
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As of
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||||||||
December 31,
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December 31,
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|||||||
2011
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2010
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|||||||
(unaudited)
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||||||||
Assets
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Current assets
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||||||||
Cash and cash equivalents
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$ | 262,186 | $ | 419,929 | ||||
Trade and other receivables, net
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292,447 | 266,710 | ||||||
Inventories
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144,553 | 126,797 | ||||||
Prepaid expenses and other assets
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185,460 | 145,144 | ||||||
Derivative financial instruments
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84,642 | 56,491 | ||||||
Total current assets
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969,288 | 1,015,071 | ||||||
Property and equipment, net
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16,934,817 | 16,771,677 | ||||||
Goodwill
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746,537 | 759,328 | ||||||
Other assets
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1,153,763 | 1,107,753 | ||||||
$ | 19,804,405 | $ | 19,653,829 | |||||
Liabilities and Shareholders' Equity
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Current liabilities
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Current portion of long-term debt
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$ | 638,891 | $ | 1,198,929 | ||||
Accounts payable
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304,623 | 249,047 | ||||||
Accrued interest
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123,853 | 160,906 | ||||||
Accrued expenses and other liabilities
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564,272 | 553,218 | ||||||
Customer deposits
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1,436,003 | 1,283,073 | ||||||
Total current liabilities
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3,067,642 | 3,445,173 | ||||||
Long-term debt
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7,856,962 | 7,951,187 | ||||||
Other long-term liabilities
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471,978 | 356,717 | ||||||
Commitments and contingencies
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Shareholders' equity
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Preferred stock ($0.01 par value; 20,000,000 shares authorized;
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none outstanding)
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- | - | ||||||
Common stock ($0.01 par value; 500,000,000 shares authorized;
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227,366,165 and 226,211,731 shares issued, December 31, 2011
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2,276 | 2,262 | ||||||
and December 31, 2010, respectively)
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Paid-in capital
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3,071,759 | 3,027,130 | ||||||
Retained earnings
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5,823,430 | 5,259,998 | ||||||
Accumulated other comprehensive (loss) income
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(75,938 | ) | 25,066 | |||||
Treasury stock (10,308,683 common shares at
cost, December 31, 2011 and December 31, 2010)
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(413,704 | ) | (413,704 | ) | ||||
Total shareholders' equity
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8,407,823 | 7,900,752 | ||||||
$ | 19,804,405 | $ | 19,653,829 |
Year Ended
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||||||||
December 31,
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||||||||
2011
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2010
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Operating Activities
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Net income
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$ | 607,421 | $ | 515,653 | ||||
Adjustments:
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Depreciation and amortization
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702,426 | 643,716 | ||||||
(Gain) loss on fuel call options
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(18,920 | ) | 2,826 | |||||
Changes in operating assets and liabilities:
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Decrease in trade and other receivables, net
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85,793 | 146,498 | ||||||
Increase in inventories
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(18,423 | ) | (20,274 | ) | ||||
Decrease (increase) in prepaid expenses and other assets
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13,553 | (10,954 | ) | |||||
Increase (decrease) in accounts payable
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28,229 | (15,507 | ) | |||||
(Decrease) increase in accrued interest
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(28,553 | ) | 13,359 | |||||
Increase in accrued expenses and other liabilities
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25,318 | 71,969 | ||||||
Increase in customer deposits
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19,482 | 135,975 | ||||||
Cash received on settlement of derivative financial instruments
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12,200 | 172,993 | ||||||
Dividends received from unconsolidated affiliates
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21,147 | - | ||||||
Other, net
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6,066 | 6,765 | ||||||
Net cash provided by operating activities
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1,455,739 | 1,663,019 | ||||||
Investing Activities
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Purchases of property and equipment
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(1,173,626 | ) | (2,187,189 | ) | ||||
Cash received (paid) on settlement of derivative financial instruments
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16,307 | (91,325 | ) | |||||
Loans to unconsolidated affiliates
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(110,660 | ) | - | |||||
Proceeds from the sale of ships
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345,000 | - | ||||||
Other, net
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(1,586 | ) | (9,404 | ) | ||||
Net cash used in investing activities
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(924,565 | ) | (2,287,918 | ) | ||||
Financing Activities
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Debt proceeds
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1,578,368 | 2,420,262 | ||||||
Debt issuance costs
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(84,381 | ) | (90,782 | ) | ||||
Repayments of debt
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(2,179,046 | ) | (1,600,265 | ) | ||||
Dividends paid
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(21,707 | ) | - | |||||
Proceeds from exercise of common stock options
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19,463 | 26,158 | ||||||
Other, net
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10,788 | 1,587 | ||||||
Net cash (used in) provided by financing activities
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(676,515 | ) | 756,960 | |||||
Effect of exchange rate changes on cash
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(12,402 | ) | 3,249 | |||||
Net (decrease) increase in cash and cash equivalents
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(157,743 | ) | 135,310 | |||||
Cash and cash equivalents at beginning of period
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419,929 | 284,619 | ||||||
Cash and cash equivalents at end of period
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$ | 262,186 | $ | 419,929 | ||||
Supplemental Disclosure
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||||||||
Cash paid during the period for:
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Interest, net of amount capitalized
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$ | 360,892 | $ | 297,477 | ||||
Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):
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Quarter Ended
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Year Ended
|
|||||||||||||||||||||||
December 31,
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December 31,
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|||||||||||||||||||||||
2011
|
2011
On a
Constant
Currency basis
|
2010
|
2011
|
2011
On a
Constant
Currency
basis
|
2010
|
|||||||||||||||||||
Passenger ticket revenues
|
$ | 1,268,270 | $ | 1,272,816 | $ | 1,146,108 | $ | 5,525,904 | $ | 5,414,034 | $ | 4,908,644 | ||||||||||||
Onboard and other revenues
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507,131 | 507,535 | 458,390 | 2,011,359 | 1,993,804 | 1,843,860 | ||||||||||||||||||
Total revenues
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1,775,401 | 1,780,351 | 1,604,498 | 7,537,263 | 7,407,838 | 6,752,504 | ||||||||||||||||||
Less:
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||||||||||||||||||||||||
Commissions, transportation and other
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315,316 | 316,548 | 285,566 | 1,299,713 | 1,273,155 | 1,175,522 | ||||||||||||||||||
Onboard and other
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116,469 | 116,522 | 105,615 | 535,501 | 525,225 | 480,564 | ||||||||||||||||||
Net revenues
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$ | 1,343,616 | $ | 1,347,281 | $ | 1,213,317 | $ | 5,702,049 | $ | 5,609,458 | $ | 5,096,418 | ||||||||||||
APCD
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8,521,272 | 8,521,272 | 7,943,782 | 33,235,508 | 33,235,508 | 30,911,073 | ||||||||||||||||||
Gross Yields
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$ | 208.35 | $ | 208.93 | $ | 201.98 | $ | 226.78 | $ | 222.89 | $ | 218.45 | ||||||||||||
Net Yields
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$ | 157.68 | $ | 158.11 | $ | 152.74 | $ | 171.56 | $ | 168.78 | $ | 164.87 |
Gross Cruise Costs and Net Cruise Costs were calculated as follows (in thousands, except APCD and costs per APCD):
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Quarter Ended
|
Year Ended
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|||||||||||||||||||||||
December 31,
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December 31,
|
|||||||||||||||||||||||
2011
|
2011
On a
Constant
Currency basis
|
2010
|
2011
|
2011
On a
Constant
Currency
basis
|
2010
|
|||||||||||||||||||
Total cruise operating expenses
|
$ | 1,250,861 | $ | 1,253,328 | $ | 1,106,989 | $ | 4,942,607 | $ | 4,885,732 | $ | 4,458,076 | ||||||||||||
Marketing, selling and administrative expenses
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238,445 | 238,945 | 211,936 | 960,602 | 944,584 | 848,079 | ||||||||||||||||||
Gross Cruise Costs
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1,489,306 | 1,492,273 | 1,318,925 | 5,903,209 | 5,830,316 | 5,306,155 | ||||||||||||||||||
Less:
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Commissions, transportation and other
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315,316 | 316,548 | 285,566 | 1,299,713 | 1,273,155 | 1,175,522 | ||||||||||||||||||
Onboard and other
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116,469 | 116,522 | 105,615 | 535,501 | 525,225 | 480,564 | ||||||||||||||||||
Net Cruise Costs
|
$ | 1,057,521 | $ | 1,059,203 | $ | 927,744 | $ | 4,067,995 | $ | 4,031,936 | $ | 3,650,069 | ||||||||||||
Less:
|
||||||||||||||||||||||||
Fuel
|
208,091 | 208,345 | 163,155 | 764,758 | 762,139 | 646,998 | ||||||||||||||||||
Net Cruise Costs Excluding Fuel
|
$ | 849,430 | $ | 850,858 | $ | 764,589 | $ | 3,303,237 | $ | 3,269,797 | $ | 3,003,071 | ||||||||||||
APCD
|
8,521,272 | 8,521,272 | 7,943,782 | 33,235,508 | 33,235,508 | 30,911,073 | ||||||||||||||||||
Gross Cruise Costs per APCD
|
$ | 174.78 | $ | 175.12 | $ | 166.03 | $ | 177.62 | $ | 175.42 | $ | 171.66 | ||||||||||||
Net Cruise Costs per APCD
|
$ | 124.10 | $ | 124.30 | $ | 116.79 | $ | 122.40 | $ | 121.31 | $ | 118.08 | ||||||||||||
Net Cruise Costs Excluding Fuel per APCD
|
$ | 99.68 | $ | 99.85 | $ | 96.25 | $ | 99.39 | $ | 98.38 | $ | 97.15 |
Net Debt-to-Capital was calculated as follows (in thousands):
|
||||||||
As of
|
||||||||
December 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Long-term debt, net of current portion
|
$ | 7,856,962 | $ | 7,951,187 | ||||
Current portion of long-term debt
|
638,891 | 1,198,929 | ||||||
Total debt
|
8,495,853 | 9,150,116 | ||||||
Less: Cash and cash equivalents
|
262,186 | 419,929 | ||||||
Net Debt
|
$ | 8,233,667 | $ | 8,730,187 | ||||
Total shareholders' equity
|
$ | 8,407,823 | $ | 7,900,752 | ||||
Total debt
|
8,495,853 | 9,150,116 | ||||||
Total debt and shareholders' equity
|
16,903,676 | 17,050,868 | ||||||
Debt-to-Capital
|
50.3 | % | 53.7 | % | ||||
Net Debt
|
8,233,667 | 8,730,187 | ||||||
Net Debt and shareholders' equity
|
$ | 16,641,490 | $ | 16,630,939 | ||||
Net Debt-to-Capital
|
49.5 | % | 52.5 | % |
Quarter Ended
|
Year Ended
|
|||||||||||||||||||||||
December 31, 2010
|
December 31, 2010
|
|||||||||||||||||||||||
As Previously
Reported
|
Adjustment
|
As Revised
|
As Previously
Reported
|
Adjustment
|
As Revised
|
|||||||||||||||||||
Interest expense, net of interest capitalized
|
$ | (89,129 | ) | $ | (10,807 | ) | $ | (99,936 | ) | $ | (339,393 | ) | $ | (31,814 | ) | $ | (371,207 | ) | ||||||
Total other expense
|
(78,988 | ) | (10,807 | ) | (89,795 | ) | (255,166 | ) | (31,814 | ) | (286,980 | ) | ||||||||||||
Net Income
|
42,707 | (10,807 | ) | 31,900 | 547,467 | (31,814 | ) | 515,653 | ||||||||||||||||
Earnings per Share:
|
||||||||||||||||||||||||
Basic
|
$ | 0.20 | $ | (0.05 | ) | $ | 0.15 | $ | 2.55 | $ | (0.15 | ) | $ | 2.40 | ||||||||||
Diluted
|
$ | 0.20 | $ | (0.05 | ) | $ | 0.15 | $ | 2.51 | $ | (0.15 | ) | $ | 2.37 |
As of
|
||||||||||||
December 31, 2010
|
||||||||||||
As Previously
Reported
|
Adjustment
|
As Revised
|
||||||||||
Property and equipment, net
|
$ | 16,769,181 | $ | 2,496 | $ | 16,771,677 | ||||||
Other assets
|
1,151,324 | (43,571 | ) | 1,107,753 | ||||||||
Total assets
|
19,694,904 | (41,075 | ) | 19,653,829 | ||||||||
Accrued expenses and other liabilities
|
552,543 | 675 | 553,218 | |||||||||
Total current liabilities
|
3,444,498 | 675 | 3,445,173 | |||||||||
Retained earnings
|
5,301,748 | (41,750 | ) | 5,259,998 | ||||||||
Total shareholders' equity
|
7,942,502 | (41,750 | ) | 7,900,752 | ||||||||
Total liabilities and shareholders' equity
|
19,694,904 | (41,075 | ) | 19,653,829 |
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 December 31, 2010.
|
||||||||||||||||
Year Ended December 31, 2010
|
||||||||||||||||
As Previously Reported
|
Adjustment
|
Reclassification1
|
As Revised
|
|||||||||||||
Net Income
|
$ | 547,467 | $ | (31,814 | ) | $ | - | $ | 515,653 | |||||||
Increase in accrued expenses and other liabilities
|
72,161 | (192 | ) | - | 71,969 | |||||||||||
Other, net
|
(22,415 | ) | 32,006 | (2,826 | ) | 6,765 | ||||||||||
1 For the year ended December 31, 2010, $2.8 million has been reclassified in the consolidated statement of cash flows from other, net to (gain) loss on fuel call options within net cash flows provided by operating activities in order to conform to the current year presentation.
|