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 4, 2013
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 |
(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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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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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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o
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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 4, 2013
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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:
|
Executive Vice President and
Chief Financial Officer
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●
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Results For the Full Year 2012:
|
º
|
Full year Net Yields increased 3.0% on a Constant-Currency basis; 1.5% As-Reported;
|
º
|
Net Cruise Costs (“NCC”) excluding fuel increased 4.2% on a Constant-Currency basis; 2.7% As-Reported;
|
º
|
Net income before the non-cash impairment charge described below was $432.2 million, or $1.97 per share, versus net income of $607.4 million, or $2.77 per share, in 2011. This exceeded the company’s previous guidance due to better yields from late bookings, partially offset by super-storm Sandy; and
|
º
|
The company recorded non-cash impairment charges totaling $413.9 million related to the Pullmantur brand during the fourth quarter resulting in reported net income of $18.3 million, or $0.08 per share for the full year of 2012.
|
●
|
2013 Outlook:
|
º
|
Net Yields are expected to increase 2% to 4% on a Constant-Currency and 3% to 5% on an As-Reported basis;
|
º
|
NCC excluding fuel are expected to be up 2% to 3% on a Constant-Currency basis and up approximately 3% on an As-Reported basis, directly related to increased insurance expenses and investments in marketing and technology; and
|
º
|
Earnings per share are expected to be within a range of $2.30 to $2.50.
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FUEL STATISTICS
|
First Quarter 2013
|
Full Year 2013
|
Fuel Consumption (metric tons)
|
350,600
|
1,377,500
|
Fuel Expenses
|
$245 million
|
$960 million
|
Percent Hedged (fwd consumption)
|
53%
|
55%
|
Impact of 10% change in fuel prices
|
$12 million
|
$43 million
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GUIDANCE
|
As-Reported
|
Constant-Currency
|
First Quarter 2013
|
||
Net Yields
|
Approx. 2%
|
2% to 3%
|
Net Cruise Costs per APCD
|
2% to 3%
|
2% to 3%
|
Net Cruise Costs per APCD,
excluding Fuel
|
Approx. 2%
|
Approx. 2%
|
Full Year 2013
|
||
Net Yields
|
3% to 5%
|
2% to 4%
|
Net Cruise Costs per APCD
|
3% to 4%
|
Approx. 3%
|
Net Cruise Costs per APCD,
excluding Fuel
|
Approx. 3%
|
2% to 3%
|
First Quarter 2013
|
Full Year 2013
|
|
Capacity Increase
|
1.5%
|
1.4%
|
Depreciation and Amortization
|
$183 to $193 million
|
$750 to $770 million
|
Interest Expense, net
|
$82 to $92 million
|
$335 to $355 million
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EPS
|
$0.10 to $0.20
|
$2.30 to $2.50
|
|
||
Exchange rates used in guidance calculations
|
||
Current – February
|
Previous – October
|
|
EUR
|
$1.36
|
$1.30
|
GBP
CAD
BRL
AUD
|
$1.58
$1.00
$0.50
$1.04
|
$1.61
$0.99
$0.49
$1.04
|
Quarter Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Passenger ticket revenues
|
$ | 1,275,117 | $ | 1,268,270 | $ | 5,594,595 | $ | 5,525,904 | ||||||||
Onboard and other revenues
|
531,033 | 507,131 | 2,093,429 | 2,011,359 | ||||||||||||
Total revenues
|
1,806,150 | 1,775,401 | 7,688,024 | 7,537,263 | ||||||||||||
Cruise operating expenses:
|
||||||||||||||||
Commissions, transportation and other
|
294,720 | 315,316 | 1,289,255 | 1,299,713 | ||||||||||||
Onboard and other
|
124,521 | 116,469 | 529,453 | 535,501 | ||||||||||||
Payroll and related
|
209,921 | 211,860 | 828,198 | 825,676 | ||||||||||||
Food
|
115,409 | 111,758 | 449,649 | 424,308 | ||||||||||||
Fuel
|
229,302 | 208,091 | 909,691 | 764,758 | ||||||||||||
Other operating
|
284,110 | 287,367 | 1,151,188 | 1,092,651 | ||||||||||||
Total cruise operating expenses
|
1,257,983 | 1,250,861 | 5,157,434 | 4,942,607 | ||||||||||||
Marketing, selling and administrative expenses
|
255,494 | 238,445 | 1,011,543 | 960,602 | ||||||||||||
Depreciation and amortization expenses
|
188,536 | 179,933 | 730,493 | 702,426 | ||||||||||||
Impairment of Pullmantur related assets
|
385,444 | - | 385,444 | - | ||||||||||||
Operating Income
|
(281,307 | ) | 106,162 | 403,110 | 931,628 | |||||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
5,269 | 7,989 | 21,331 | 25,318 | ||||||||||||
Interest expense, net of interest capitalized
|
(89,036 | ) | (90,625 | ) | (355,785 | ) | (382,416 | ) | ||||||||
Extinguishment of unsecured senior notes
|
(16 | ) | - | (7,501 | ) | - | ||||||||||
Other (expense) income (including in 2012 $28.5 million net
deferred tax expense related to the Pullmantur impairment)
|
(27,713 | ) | 13,036 | (42,868 | ) | 32,891 | ||||||||||
(111,496 | ) | (69,600 | ) | (384,823 | ) | (324,207 | ) | |||||||||
Net (Loss) Income
|
$ | (392,803 | ) | $ | 36,562 | $ | 18,287 | $ | 607,421 | |||||||
(Loss) Earnings Per Share:
|
||||||||||||||||
Basic
|
$ | (1.80 | ) | $ | 0.17 | $ | 0.08 | $ | 2.80 | |||||||
Diluted
|
$ | (1.80 | ) | $ | 0.17 | $ | 0.08 | $ | 2.77 | |||||||
Weighted-Average Shares Outstanding:
|
||||||||||||||||
Basic
|
218,326 | 217,279 | 217,930 | 216,983 | ||||||||||||
Diluted
|
218,326 | 218,982 | 219,457 | 219,229 | ||||||||||||
Comprehensive Income (Loss)
|
||||||||||||||||
Net (Loss) Income
|
$ | (392,803 | ) | $ | 36,562 | $ | 18,287 | $ | 607,421 | |||||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation adjustments
|
4,926 | (13,803 | ) | (2,764 | ) | (18,200 | ) | |||||||||
Change in defined benefit plans
|
(4,567 | ) | (6,482 | ) | (4,567 | ) | (6,698 | ) | ||||||||
Gain (loss) on cash flow derivative hedges
|
8,213 | (29,866 | ) | (51,247 | ) | (76,106 | ) | |||||||||
Total other comprehensive income (loss)
|
8,572 | (50,151 | ) | (58,578 | ) | (101,004 | ) | |||||||||
Comprehensive (Loss) Income
|
$ | (384,231 | ) | $ | (13,589 | ) | $ | 40,291 | $ | 506,417 | ||||||
STATISTICS
|
||||||||||||||||
Quarter Ended
|
Year Ended
|
|||||||||||||||
December 31,
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December 31,
|
|||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Passengers Carried
|
1,144,656 | 1,201,947 | 4,852,079 | 4,850,010 | ||||||||||||
Passenger Cruise Days
|
8,796,654 | 8,779,189 | 35,197,783 | 34,818,335 | ||||||||||||
APCD
|
8,643,664 | 8,521,272 | 33,705,584 | 33,235,508 | ||||||||||||
Occupancy
|
101.8 | % | 103.0 | % | 104.4 | % | 104.8 | % |
As of | ||||||||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 194,855 | $ | 262,186 | ||||
Trade and other receivables, net
|
281,421 | 292,447 | ||||||
Inventories
|
146,295 | 144,553 | ||||||
Prepaid expenses and other assets
|
207,662 | 185,460 | ||||||
Derivative financial instruments
|
57,827 | 84,642 | ||||||
Total current assets
|
888,060 | 969,288 | ||||||
Property and equipment, net
|
17,451,034 | 16,934,817 | ||||||
Goodwill
|
432,975 | 746,537 | ||||||
Other assets
|
1,055,861 | 1,153,763 | ||||||
$ | 19,827,930 | $ | 19,804,405 | |||||
Liabilities and Shareholders' Equity
|
||||||||
Current liabilities
|
||||||||
Current portion of long-term debt
|
$ | 1,519,483 | $ | 638,891 | ||||
Accounts payable
|
351,587 | 304,623 | ||||||
Accrued interest
|
106,366 | 123,853 | ||||||
Accrued expenses and other liabilities
|
541,722 | 564,272 | ||||||
Customer deposits
|
1,546,993 | 1,436,003 | ||||||
Total current liabilities
|
4,066,151 | 3,067,642 | ||||||
Long-term debt
|
6,970,464 | 7,856,962 | ||||||
Other long-term liabilities
|
482,566 | 471,978 | ||||||
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;
229,080,109 and 227,366,165 shares issued, December 31, 2012
and December 31, 2011, respectively)
|
2,291 | 2,276 | ||||||
Paid-in capital
|
3,109,887 | 3,071,759 | ||||||
Retained earnings
|
5,744,791 | 5,823,430 | ||||||
Accumulated other comprehensive loss
|
(134,516 | ) | (75,938 | ) | ||||
Treasury stock (10,308,683 common shares at
cost, December 31, 2012 and December 31, 2011)
|
(413,704 | ) | (413,704 | ) | ||||
Total shareholders' equity
|
8,308,749 | 8,407,823 | ||||||
$ | 19,827,930 | $ | 19,804,405 |
Year Ended
|
||||||||
December 31,
|
||||||||
2012
|
2011
|
|||||||
Operating Activities
|
||||||||
Net income
|
$ | 18,287 | $ | 607,421 | ||||
Adjustments:
|
||||||||
Depreciation and amortization
|
730,493 | 702,426 | ||||||
Impairment of Pullmantur related assets
|
385,444 | - | ||||||
Deferred tax expense related to Pullmantur impairment
|
28,488 | - | ||||||
Loss (gain) on fuel call options
|
5,651 | (18,920 | ) | |||||
Loss on extinguishment of debt
|
7,501 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
Decrease in trade and other receivables, net
|
8,026 | 87,872 | ||||||
Increase in inventories
|
(1,645 | ) | (18,423 | ) | ||||
Increase in prepaid expenses and other assets
|
(1,614 | ) | (17,052 | ) | ||||
Increase in accounts payable
|
36,602 | 56,755 | ||||||
Decrease in accrued interest
|
(15,786 | ) | (28,553 | ) | ||||
Increase in accrued expenses and other liabilities
|
33,060 | 25,318 | ||||||
Increase in customer deposits
|
103,733 | 19,482 | ||||||
Cash received on settlement of derivative financial instruments
|
69,684 | 12,200 | ||||||
Dividends received from unconsolidated affiliate
|
- | 21,147 | ||||||
Other, net
|
(26,190 | ) | 6,066 | |||||
Net cash provided by operating activities
|
1,381,734 | 1,455,739 | ||||||
Investing Activities
|
||||||||
Purchases of property and equipment
|
(1,291,499 | ) | (1,173,626 | ) | ||||
Cash (paid) received on settlement of derivative financial instruments
|
(10,886 | ) | 16,307 | |||||
Loan to unconsolidated affiliate
|
- | (110,660 | ) | |||||
Cash payments received on loan to unconsolidated affiliate
|
23,512 | - | ||||||
Proceeds from the sale of ships
|
9,811 | 345,000 | ||||||
Other, net
|
5,739 | (1,586 | ) | |||||
Net cash used in investing activities
|
(1,263,323 | ) | (924,565 | ) | ||||
Financing Activities
|
||||||||
Debt proceeds
|
2,558,474 | 1,578,368 | ||||||
Debt issuance costs
|
(75,839 | ) | (84,381 | ) | ||||
Repayments of debt
|
(2,216,701 | ) | (2,179,046 | ) | ||||
Extinguishment of unsecured senior notes
|
(344,589 | ) | - | |||||
Dividends paid
|
(117,707 | ) | (21,707 | ) | ||||
Proceeds from exercise of common stock options
|
15,146 | 19,463 | ||||||
Other, net
|
1,599 | 10,788 | ||||||
Net cash used in financing activities
|
(179,617 | ) | (676,515 | ) | ||||
Effect of exchange rate changes on cash
|
(6,125 | ) | (12,402 | ) | ||||
Net decrease in cash and cash equivalents
|
(67,331 | ) | (157,743 | ) | ||||
Cash and cash equivalents at beginning of period
|
262,186 | 419,929 | ||||||
Cash and cash equivalents at end of period
|
$ | 194,855 | $ | 262,186 | ||||
Supplemental Disclosure
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amount capitalized
|
$ | 341,047 | $ | 360,892 |
Quarter Ended
|
Year Ended
|
||||||||||||||||||||||||
December 31,
|
December 31,
|
||||||||||||||||||||||||
2012
|
2012
On a
Constant
Currency
basis
|
2011
|
2012
|
2012
On a
Constant
Currency
basis
|
2011
|
||||||||||||||||||||
Passenger ticket revenues
|
$
|
1,275,117
|
$
|
1,275,138
|
1,268,270
|
$
|
5,594,595
|
$
|
5,698,635
|
$
|
5,525,904
|
||||||||||||||
Onboard and other revenues
|
531,033
|
533,786
|
507,131
|
2,093,429
|
2,116,296
|
2,011,359
|
|||||||||||||||||||
Total revenues
|
1,806,150
|
1,808,924
|
1,775,401
|
7,688,024
|
7,814,931
|
7,537,263
|
|||||||||||||||||||
Less:
|
|||||||||||||||||||||||||
Commissions, transportation and other
|
294,720
|
295,766
|
315,316
|
1,289,255
|
1,317,028
|
1,299,713
|
|||||||||||||||||||
Onboard and other
|
124,521
|
125,513
|
116,469
|
529,453
|
540,011
|
535,501
|
|||||||||||||||||||
Net revenues
|
$
|
1,386,909
|
$
|
1,387,645
|
$
|
1,343,616
|
$
|
5,869,316
|
$
|
5,957,892
|
$
|
5,702,049
|
|||||||||||||
APCD
|
8,643,664
|
8,643,664
|
8,521,272
|
33,705,584
|
33,705,584
|
33,235,508
|
|||||||||||||||||||
Gross Yields
|
$
|
208.96
|
$
|
209.28
|
$
|
208.35
|
$
|
228.09
|
$
|
231.86
|
$
|
226.78
|
|||||||||||||
Net Yields
|
$
|
160.45
|
$
|
160.54
|
$
|
157.68
|
$
|
174.13
|
$
|
176.76
|
$
|
171.56
|
Quarter Ended
|
Year Ended
|
||||||||||||||||||||||||
December 31,
|
December 31,
|
||||||||||||||||||||||||
2012
|
2012
On a
Constant
Currency
basis
|
2011
|
2012
|
2012
On a
Constant
Currency
basis
|
2011
|
||||||||||||||||||||
Total cruise operating expenses
|
$
|
1,257,983
|
$
|
1,263,369
|
$
|
1,250,861
|
$
|
5,157,434
|
$
|
5,231,963
|
$
|
4,942,607
|
|||||||||||||
Marketing, selling and administrative expenses
|
255,494
|
257,017
|
238,445
|
1,011,543
|
1,029,564
|
960,602
|
|||||||||||||||||||
Gross Cruise Costs
|
1,513,477
|
1,520,386
|
1,489,306
|
6,168,977
|
6,261,527
|
5,903,209
|
|||||||||||||||||||
Less:
|
|||||||||||||||||||||||||
Commissions, transportation and other
|
294,720
|
295,766
|
315,316
|
1,289,255
|
1,317,028
|
1,299,713
|
|||||||||||||||||||
Onboard and other
|
124,521
|
125,513
|
116,469
|
529,453
|
540,011
|
535,501
|
|||||||||||||||||||
Net Cruise Costs
|
$
|
1,094,236
|
$
|
1,099,107
|
$
|
1,057,521
|
$
|
4,350,269
|
$
|
4,404,488
|
$
|
4,067,995
|
|||||||||||||
Less:
|
|||||||||||||||||||||||||
Fuel
|
229,302
|
229,164
|
208,091
|
909,691
|
914,444
|
764,758
|
|||||||||||||||||||
Net Cruise Costs Excluding Fuel
|
$
|
864,934
|
$
|
869,943
|
$
|
849,430
|
$
|
3,440,578
|
$
|
3,490,044
|
$
|
3,303,237
|
|||||||||||||
APCD
|
8,643,664
|
8,643,664
|
8,521,272
|
33,705,584
|
33,705,584
|
33,235,508
|
|||||||||||||||||||
Gross Cruise Costs per APCD
|
$
|
175.10
|
$
|
175.90
|
$
|
174.78
|
$
|
183.03
|
$
|
185.77
|
$
|
177.62
|
|||||||||||||
Net Cruise Costs per APCD
|
$
|
126.59
|
$
|
127.16
|
$
|
124.10
|
$
|
129.07
|
$
|
130.68
|
$
|
122.40
|
|||||||||||||
Net Cruise Costs Excluding Fuel per APCD
|
$
|
100.07
|
$
|
100.65
|
$
|
99.68
|
$
|
102.08
|
$
|
103.54
|
$
|
99.39
|
Net Debt-to-Capital was calculated as follows (in thousands): |
As of
|
|||||||
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
Long-term debt, net of current portion
|
$ | 6,970,464 | $ | 7,856,962 | ||||
Current portion of long-term debt
|
1,519,483 | 638,891 | ||||||
Total debt
|
8,489,947 | 8,495,853 | ||||||
Less: Cash and cash equivalents
|
194,855 | 262,186 | ||||||
Net Debt
|
$ | 8,295,092 | $ | 8,233,667 | ||||
Total shareholders' equity
|
$ | 8,308,749 | $ | 8,407,823 | ||||
Total debt
|
8,489,947 | 8,495,853 | ||||||
Total debt and shareholders' equity
|
16,798,696 | 16,903,676 | ||||||
Debt-to-Capital
|
50.5 | % | 50.3 | % | ||||
Net Debt
|
8,295,092 | 8,233,667 | ||||||
Net Debt and shareholders' equity
|
$ | 16,603,841 | $ | 16,641,490 | ||||
Net Debt-to-Capital
|
50.0 | % | 49.5 | % |