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): July 25, 2013
ROYAL CARIBBEAN CRUISES LTD.
|
|
(Exact Name of Registrant as Specified in Charter)
|
|
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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|
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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July 25, 2013
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By:
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/s/ Jason T. Liberty
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|
Name:
|
Jason T. Liberty
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|||
Title:
|
Senior Vice President,
Chief Financial Officer
|
●
|
Net Income for the quarter was $24.7 million, or $0.11 per share, compared to a net loss of ($3.7 million), or ($0.02) per share, in 2012. Earnings during the quarter include an impact of $0.05 per share related to the Grandeur fire and a non-cash charge of $0.07 per share accounting correction related to the company’s affinity credit card program.
|
●
|
For the full year 2013, the company’s earnings outlook is essentially unchanged from the update that was provided in late May, which reflected the impact of the Grandeur of the Seas fire and the strengthening of the US dollar. EPS is expected to be in the range of $2.20 to $2.30. Constant-Currency Net Yields are expected to increase approximately 3% (excluding the affinity card adjustment).
|
●
|
The company’s cost control efforts are showing encouraging results. Excluding the Grandeur fire, Constant-Currency NCC excluding fuel increased 1.5% in the second quarter. NCC excluding fuel are now expected to grow 1% to 2% for the year (compared to prior guidance of 2% to 3%).
|
●
|
The company’s better than expected expenses in the second quarter and its reduced cost guidance are reflective of actions the company is taking as part of a broad
|
April Guidance (Midpoint)
|
$2.40
|
Grandeur Fire
|
($0.10)
|
F/X & Fuel Impact as of May 30th
|
($0.08)
|
Updated Guidance on May 30th
|
$2.22
|
Net Savings
|
$0.03
|
Current Guidance (Midpoint)
|
$2.25
|
FUEL STATISTICS
|
Third Quarter 2013
|
Full Year 2013
|
Fuel Consumption (metric tons)
|
329,000
|
1,346,000
|
Fuel Expenses
|
$219 million
|
$923 million
|
Percent Hedged (fwd consumption)
|
56%
|
60%
|
Impact of 10% change in fuel prices
|
$9 million
|
$16 million
|
GUIDANCE
|
As-Reported
|
Constant-Currency
|
Third Quarter 2013
|
||
Net Yields
|
Approx. 1%
|
1% to 2%
|
Net Cruise Costs per APCD
|
Approx. 4%
|
3% to 4%
|
Net Cruise Costs per APCD
excluding Fuel
|
4% to 5%
|
Approx. 4%
|
Full Year 2013
|
||
Net Yields
|
Approx. 2%
|
2% to 3%
|
Net Cruise Costs per APCD
|
1% to 2%
|
1% to 2%
|
Net Cruise Costs per APCD
excluding Fuel
|
1% to 2%
|
1% to 2%
|
Third Quarter 2013
|
Full Year 2013
|
|
Capacity Increase
|
1.8%
|
1.0%
|
Depreciation and Amortization
|
$183 to $193 million
|
$750 to $770 million
|
Interest Expense, net
|
$75 to $85 million
|
$315 to $335 million
|
Reported EPS
|
$1.60 to $1.70
|
$2.20 to $2.30
|
1% Change in Currency
|
$3 million
|
$ 6 million (2H)
|
1% Change in Net Yield*
|
$17 million
|
$32 million (2H)
|
1% Change in NCC x fuel
|
$9 million
|
$18 million (2H)
|
*For the full year a 1% Net Yield change is approximately $60 million.
|
||
Exchange rates used in guidance calculations
|
||
Current – July
|
Previous - April
|
|
GBP |
$1.54
|
$1.53
|
CAD
|
$0.97
|
$0.97
|
BRL
AUD
EUR
|
$0.45
$0.92
$1.32
|
$0.50
$1.03
$1.31
|
Quarter Ended
|
Six Months Ended
|
||||||||||||||||||
June 30,
|
June 30,
|
||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
||||||||||||||||
Passenger ticket revenues
|
$
|
1,366,713
|
$
|
1,332,207
|
$
|
2,760,491
|
$
|
2,684,445
|
|||||||||||
Onboard and other revenues
|
516,054
|
488,797
|
1,033,496
|
971,039
|
|||||||||||||||
Total revenues
|
1,882,767
|
1,821,004
|
3,793,987
|
3,655,484
|
|||||||||||||||
Cruise operating expenses:
|
|||||||||||||||||||
Commissions, transportation and other
|
316,506
|
307,697
|
639,443
|
628,435
|
|||||||||||||||
Onboard and other
|
140,710
|
130,981
|
262,197
|
238,576
|
|||||||||||||||
Payroll and related
|
208,975
|
206,519
|
418,898
|
416,633
|
|||||||||||||||
Food
|
112,530
|
109,300
|
232,013
|
222,925
|
|||||||||||||||
Fuel
|
232,471
|
237,961
|
474,123
|
466,955
|
|||||||||||||||
Other operating
|
312,427
|
303,556
|
579,135
|
577,602
|
|||||||||||||||
Total cruise operating expenses
|
1,323,619
|
1,296,014
|
2,605,809
|
2,551,126
|
|||||||||||||||
Marketing, selling and administrative expenses
|
259,626
|
247,571
|
533,660
|
512,172
|
|||||||||||||||
Depreciation and amortization expenses
|
186,184
|
180,514
|
375,548
|
359,906
|
|||||||||||||||
Operating Income
|
113,338
|
96,905
|
278,970
|
232,280
|
|||||||||||||||
Other income (expense):
|
|||||||||||||||||||
Interest income
|
3,405
|
4,972
|
7,152
|
11,318
|
|||||||||||||||
Interest expense, net of interest capitalized
|
(86,877)
|
(89,106)
|
(177,059)
|
(181,772)
|
|||||||||||||||
Other expense
|
(5,119)
|
(16,424)
|
(8,090)
|
(18,515)
|
|||||||||||||||
(88,591)
|
(100,558)
|
(177,997)
|
(188,969)
|
||||||||||||||||
Net (Loss) Income
|
$
|
24,747
|
$
|
(3,653)
|
$
|
100,973
|
$
|
43,311
|
|||||||||||
(Loss) Earnings Per Share:
|
|||||||||||||||||||
Basic
|
$
|
0.11
|
$
|
(0.02)
|
$
|
0.46
|
$
|
0.20
|
|||||||||||
Diluted
|
$
|
0.11
|
$
|
(0.02)
|
$
|
0.46
|
$
|
0.20
|
|||||||||||
Weighted-Average Shares Outstanding:
|
|||||||||||||||||||
Basic
|
219,502
|
217,866
|
219,301
|
217,725
|
|||||||||||||||
Diluted
|
220,648
|
217,866
|
220,596
|
219,217
|
|||||||||||||||
Comprehensive Income (Loss)
|
|||||||||||||||||||
Net (Loss) Income
|
$
|
24,747
|
$
|
(3,653)
|
$
|
100,973
|
$
|
43,311
|
|||||||||||
Other comprehensive income (loss):
|
|||||||||||||||||||
Foreign currency translation adjustments
|
(1,551)
|
(12,361)
|
(5,795)
|
(9,021)
|
|||||||||||||||
Change in defined benefit plans
|
5,293
|
-
|
5,293
|
-
|
|||||||||||||||
(Loss) Gain on cash flow derivative hedges
|
17,542
|
(288,252)
|
(5,058)
|
(140,782)
|
|||||||||||||||
Total other comprehensive (loss) income
|
21,284
|
(300,613)
|
(5,560)
|
(149,803)
|
|||||||||||||||
Comprehensive (Loss) Income
|
$
|
46,031
|
$
|
(304,266)
|
$
|
95,413
|
$
|
(106,492)
|
|||||||||||
STATISTICS | |||||||||||||||||||
Quarter Ended
|
Six Months Ended
|
||||||||||||||||||
June 30,
|
June 30,
|
||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
||||||||||||||||
Passengers Carried
|
1,174,397
|
1,183,122
|
2,435,689
|
2,460,693
|
|||||||||||||||
Passenger Cruise Days
|
8,485,968
|
8,514,124
|
17,330,559
|
17,197,327
|
|||||||||||||||
APCD
|
8,238,182
|
8,180,898
|
16,666,292
|
16,480,698
|
|||||||||||||||
Occupancy
|
103.0%
|
104.1%
|
104.0%
|
104.3%
|
As of
|
||||||||
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
205,174
|
$
|
194,855
|
||||
Trade and other receivables, net
|
310,051
|
281,421
|
||||||
Inventories
|
141,440
|
146,295
|
||||||
Prepaid expenses and other assets
|
270,392
|
207,662
|
||||||
Derivative financial instruments
|
26,037
|
57,827
|
||||||
Total current assets
|
953,094
|
888,060
|
||||||
Property and equipment, net
|
17,511,913
|
17,451,034
|
||||||
Goodwill
|
430,666
|
432,975
|
||||||
Other assets
|
1,055,121
|
1,055,861
|
||||||
$
|
19,950,794
|
$
|
19,827,930
|
|||||
Liabilities and Shareholders' Equity
|
||||||||
Current liabilities
|
||||||||
Current portion of long-term debt
|
$
|
1,906,468
|
$
|
1,519,483
|
||||
Accounts payable
|
314,197
|
351,587
|
||||||
Accrued interest
|
75,107
|
106,366
|
||||||
Accrued expenses and other liabilities
|
541,699
|
541,722
|
||||||
Customer deposits
|
1,874,704
|
1,546,993
|
||||||
Total current liabilities
|
4,712,175
|
4,066,151
|
||||||
Long-term debt
|
6,347,640
|
6,970,464
|
||||||
Other long-term liabilities
|
524,720
|
482,566
|
||||||
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;
|
||||||||
229,919,883 and 229,080,109 shares issued, June 30, 2013
|
||||||||
and December 31, 2012, respectively)
|
2,299
|
2,291
|
||||||
Paid-in capital
|
3,125,172
|
3,109,887
|
||||||
Retained earnings
|
5,792,568
|
5,744,791
|
||||||
Accumulated other comprehensive loss
|
(140,076)
|
(134,516)
|
||||||
Treasury stock (10,308,683 common shares at
cost, June 30, 2013 and December 31, 2012)
|
(413,704)
|
(413,704)
|
||||||
Total shareholders' equity
|
8,366,259
|
8,308,749
|
||||||
$
|
19,950,794
|
$
|
19,827,930
|
Six Months Ended
|
||||||||
June 30
|
||||||||
2013 | 2012 | |||||||
Operating Activities
|
||||||||
Net income
|
$
|
100,973
|
$
|
43,311
|
||||
Adjustments:
|
||||||||
Depreciation and amortization
|
375,548
|
359,906
|
||||||
Loss on derivative instruments not designated as hedges
|
25,494
|
3,278
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Decrease in trade and other receivables, net
|
21,084
|
56,651
|
||||||
Decrease (increase) in inventories
|
4,679
|
(2,451)
|
||||||
Increase in prepaid expenses and other assets
|
(53,555)
|
(58,495)
|
||||||
(Decrease) increase in accounts payable
|
(36,265)
|
12,348
|
||||||
Decrease in accrued interest
|
(31,259)
|
(37,377)
|
||||||
Decrease in accrued expenses and other liabilities
|
(6,513)
|
(28,505)
|
||||||
Increase in customer deposits
|
272,329
|
224,873
|
||||||
Other, net
|
273
|
9,980
|
||||||
Net cash provided by operating activities
|
672,788
|
583,519
|
||||||
Investing Activities
|
||||||||
Purchases of property and equipment
|
(396,073)
|
(322,751)
|
||||||
Cash (paid) received on settlement of derivative financial instruments
|
(25,843)
|
4,646
|
||||||
Equity contribution to unconsolidated affiliate
|
(35,757)
|
-
|
||||||
Cash payments received on loan to unconsolidated affiliate
|
11,993
|
11,813
|
||||||
Other, net
|
781
|
(6,877)
|
||||||
Net cash used in investing activities
|
(444,899)
|
(313,169)
|
||||||
Financing Activities
|
||||||||
Debt proceeds
|
1,519,464
|
345,000
|
||||||
Debt issuance costs
|
(20,554)
|
(21,730)
|
||||||
Repayments of debt
|
(1,670,248)
|
(575,585)
|
||||||
Dividends paid
|
(54,098)
|
(65,293)
|
||||||
Proceeds from exercise of common stock options
|
6,918
|
1,768
|
||||||
Other, net
|
742
|
774
|
||||||
Net cash used in financing activities
|
(217,776)
|
(315,066)
|
||||||
Effect of exchange rate changes on cash
|
206
|
(5,261)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
10,319
|
(49,977)
|
||||||
Cash and cash equivalents at beginning of period
|
194,855
|
262,186
|
||||||
Cash and cash equivalents at end of period
|
$
|
205,174
|
$
|
212,209
|
||||
Supplemental Disclosure
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amount capitalized
|
$
|
199,288
|
$
|
194,341
|
||||
Non cash Investing Activities
|
||||||||
Purchases of property and equipment through asset trade in
|
$
|
46,375
|
$
|
-
|
||||
Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields)
|
|||||||||||||||||||||||
Quarter Ended
|
Six Months Ended
|
||||||||||||||||||||||
June 30,
|
June 30,
|
||||||||||||||||||||||
2013
|
2013
On a
Constant
Currency
basis
|
2012
|
2013
|
2013
On a
Constant
Currency
basis
|
2012
|
||||||||||||||||||
Passenger ticket revenues
|
$
|
1,366,713
|
$
|
1,373,476
|
1,332,207
|
$
|
2,760,491
|
$
|
2,783,218
|
$
|
2,684,445
|
||||||||||||
Onboard and other revenues
|
516,054
|
515,807
|
488,797
|
1,033,496
|
1,035,640
|
971,039
|
|||||||||||||||||
Total revenues
|
1,882,767
|
1,889,283
|
1,821,004
|
3,793,987
|
3,818,858
|
3,655,484
|
|||||||||||||||||
Less:
|
|||||||||||||||||||||||
Commissions, transportation and other
|
316,506
|
317,956
|
307,697
|
639,443
|
645,024
|
628,435
|
|||||||||||||||||
Onboard and other
|
140,710
|
140,440
|
130,981
|
262,197
|
261,811
|
238,576
|
|||||||||||||||||
Net revenues
|
$
|
1,425,551
|
$
|
1,430,887
|
$
|
1,382,326
|
$
|
2,892,347
|
$
|
2,912,023
|
$
|
2,788,473
|
|||||||||||
APCD
|
8,238,182
|
8,238,182
|
8,180,898
|
16,666,292
|
16,666,292
|
16,480,698
|
|||||||||||||||||
Gross Yields
|
$
|
228.54
|
$
|
229.33
|
$
|
222.59
|
$
|
227.64
|
$
|
229.14
|
$
|
221.80
|
|||||||||||
Net Yields
|
$
|
173.04
|
$
|
173.69
|
$
|
168.97
|
$
|
173.54
|
$
|
174.73
|
$
|
169.20
|
Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel were calculated as follows (in thousands, except APCD and costs per APCD
|
|||||||||||||||||||||||
Quarter Ended
|
Six Months Ended
|
||||||||||||||||||||||
June 30,
|
June 30,
|
||||||||||||||||||||||
2013
|
2013
On a
Constant
Currency
basis
|
2012
|
2013
|
2013
On a
Constant
Currency
basis
|
2012
|
||||||||||||||||||
Total cruise operating expenses
|
$
|
1,323,619
|
$
|
1,325,896
|
$
|
1,296,014
|
$
|
2,605,809
|
$
|
2,613,358
|
$
|
2,551,126
|
|||||||||||
Marketing, selling and administrative expenses
|
259,626
|
259,071
|
247,571
|
533,660
|
533,608
|
512,172
|
|||||||||||||||||
Gross Cruise Costs
|
1,583,245
|
1,584,967
|
1,543,585
|
3,139,469
|
3,146,966
|
3,063,298
|
|||||||||||||||||
Less:
|
|||||||||||||||||||||||
Commissions, transportation and other
|
316,506
|
317,956
|
307,697
|
639,443
|
645,024
|
628,435
|
|||||||||||||||||
Onboard and other
|
140,710
|
140,440
|
130,981
|
262,197
|
261,811
|
238,576
|
|||||||||||||||||
Net Cruise Costs
|
$
|
1,126,029
|
$
|
1,126,571
|
$
|
1,104,907
|
$
|
2,237,829
|
$
|
2,240,131
|
$
|
2,196,287
|
|||||||||||
Less:
|
|||||||||||||||||||||||
Fuel
|
232,471
|
233,754
|
237,961
|
474,123
|
476,609
|
466,955
|
|||||||||||||||||
Net Cruise Costs Excluding Fuel
|
$
|
893,558
|
$
|
892,817
|
$
|
866,946
|
$
|
1,763,706
|
$
|
1,763,522
|
$
|
1,729,332
|
|||||||||||
APCD
|
8,238,182
|
8,238,182
|
8,180,898
|
16,666,292
|
16,666,292
|
16,480,698
|
|||||||||||||||||
Gross Cruise Costs per APCD
|
$
|
192.18
|
$
|
192.39
|
$
|
188.68
|
$
|
188.37
|
$
|
188.82
|
$
|
185.87
|
|||||||||||
Net Cruise Costs per APCD
|
$
|
136.68
|
$
|
136.75
|
$
|
135.06
|
$
|
134.27
|
$
|
134.41
|
$
|
133.26
|
|||||||||||
Net Cruise Costs Excluding Fuel per APCD
|
$
|
108.47
|
$
|
108.38
|
$
|
105.97
|
$
|
105.82
|
$
|
105.81
|
$
|
104.93
|
Net Debt-to-Capital was calculated as follows (in thousands):
|
|||||||||||
As of
|
|||||||||||
June 30,
|
December 31,
|
||||||||||
2013
|
2012
|
||||||||||
Long-term debt, net of current portion
|
$
|
6,347,640
|
$
|
6,970,464
|
|||||||
Current portion of long-term debt
|
1,906,468
|
1,519,483
|
|||||||||
Total debt
|
8,254,108
|
8,489,947
|
|||||||||
Less: Cash and cash equivalents
|
205,174
|
194,855
|
|||||||||
Net Debt
|
$
|
8,048,934
|
$
|
8,295,092
|
|||||||
Total shareholders' equity
|
$
|
8,366,259
|
$
|
8,308,749
|
|||||||
Total debt
|
8,254,108
|
8,489,947
|
|||||||||
Total debt and shareholders' equity
|
16,620,367
|
16,798,696
|
|||||||||
Debt-to-Capital
|
49.7%
|
50.5%
|
|||||||||
Net Debt
|
8,048,934
|
8,295,092
|
|||||||||
Net Debt and shareholders' equity
|
$
|
16,415,193
|
$
|
16,603,841
|
|||||||
Net Debt-to-Capital
|
49.0%
|
50.0%
|