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, 2016
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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|
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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.
|
||||
Date:
|
February 2, 2016
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By:
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/s/ Jason T. Liberty
|
|
Name:
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Jason T. Liberty
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|||
Title:
|
Chief Financial Officer
|
>
|
Net Yields were up 3.5% on a Constant-Currency basis (down 1.0% As-Reported).
|
>
|
Net Cruise Costs (“NCC”) excluding fuel were down 0.6% on a Constant-Currency basis (down 3.2% As-Reported).
|
>
|
Adjusted Net Income was better than guidance at $1.07 billion, or $4.83 per share, versus Adjusted Net Income of $755.7 million, or $3.39 per share, in 2014. US GAAP Net Income was $665.8 million or $3.02 per share, versus $764.1 million, or $3.43 per share in 2014.
|
>
|
Net Yields are expected to increase 2.0% to 4.0% on a Constant-Currency basis (in the range of flat to up 2% As-Reported).
|
>
|
NCC excluding fuel are expected to be up 1% or less on a Constant-Currency basis (up 0.5% or less As-Reported).
|
>
|
Adjusted EPS for 2016 is expected to be in the range of $5.90 - $6.10 per share.
|
>
|
In the second quarter of 2016, Royal Caribbean International will take delivery of Ovation of the Seas, third in the highly successful Quantum class of vessels. Also debuting during the second quarter is Harmony of the Seas, third in the groundbreaking Oasis class. Splendour of the Seas will leave the Royal Caribbean fleet in April. During the summer, TUI Cruises, the company’s German joint venture, will take delivery of its third new build, Mein Schiff 5.
|
FUEL STATISTICS
|
First Quarter 2016
|
Full Year 2016
|
Fuel Consumption (metric tons)
|
341,000
|
1,409,000
|
Fuel Expenses
|
$185 million
|
$716 million
|
Percent Hedged (fwd consumption)
|
70%
|
66%
|
Impact of 10% change in fuel prices
|
$2.8 million
|
$12 million
|
GUIDANCE
|
As-Reported
|
Constant-Currency
|
First Quarter 2016
|
||
Net Yields
|
Approximately 0.5%
|
Approximately 4.0%
|
Net Cruise Costs per APCD
|
0.5% or less
|
1.0% to 1.5%
|
Net Cruise Costs per APCD
excluding Fuel
|
3.5% to 4.0%
|
4.5% to 5.0%
|
Full Year 2016
|
||
Net Yields
|
Flat to up 2.0%
|
2.0% to 4.0%
|
Net Cruise Costs per APCD
|
(2.5%) to (3.0%)
|
(2.0%) to (2.5%)
|
Net Cruise Costs per APCD
excluding Fuel
|
0.5% or less
|
1% or less
|
First Quarter 2016
|
Full Year 2016
|
|
Capacity Increase
|
5.0%
|
6.3%
|
Depreciation and Amortization
|
$205 to $215 million
|
$898 to $908 million
|
Interest Expense, net
|
$58 to $68 million
|
$282 to $292 million
|
Adjusted EPS
|
Approximately $0.30
|
$5.90 - $6.10
|
1% Change in Currency
|
$2 million
|
$15 million
|
1% Change in Net Yield
|
$14 million
|
$68 million
|
1% Change in NCC x Fuel
|
$9 million
|
$37 million
|
1% Change in LIBOR
|
$10 million
|
$53 million
|
Exchange rates used in guidance calculations
|
||
Current – January
|
Previous – October
|
|
GBP
|
$1.45
|
$1.53
|
CNH
|
$0.15
|
$0.16
|
AUD
|
$0.70
|
$0.74
|
CAD
|
$0.70
|
$0.77
|
EUR
|
$1.09
|
$1.14
|
Quarter Ended
|
Year Ended
|
||||||||||||||
December 31,
|
December 31,
|
||||||||||||||
2015
|
2014
|
2015
|
2014
|
||||||||||||
Passenger ticket revenues
|
$
|
1,370,632
|
$
|
1,303,799
|
$
|
6,058,821
|
$
|
5,893,847
|
|||||||
Onboard and other revenues
|
531,421
|
514,027
|
2,240,253
|
2,180,008
|
|||||||||||
Total revenues
|
1,902,053
|
1,817,826
|
8,299,074
|
8,073,855
|
|||||||||||
Cruise operating expenses:
|
|||||||||||||||
Commissions, transportation and other
|
307,369
|
303,824
|
1,400,778
|
1,372,785
|
|||||||||||
Onboard and other
|
114,546
|
126,454
|
553,104
|
582,750
|
|||||||||||
Payroll and related
|
213,987
|
213,409
|
861,775
|
847,641
|
|||||||||||
Food
|
118,692
|
119,958
|
480,009
|
478,130
|
|||||||||||
Fuel
|
188,112
|
229,310
|
795,801
|
947,391
|
|||||||||||
Other operating
|
230,635
|
251,790
|
1,007,926
|
1,077,584
|
|||||||||||
Total cruise operating expenses
|
1,173,341
|
1,244,745
|
5,099,393
|
5,306,281
|
|||||||||||
Marketing, selling and administrative expenses
|
269,464
|
257,995
|
1,086,504
|
1,048,952
|
|||||||||||
Depreciation and amortization expenses
|
209,330
|
193,382
|
827,008
|
772,445
|
|||||||||||
Impairment of Pullmantur related assets
|
-
|
-
|
411,267
|
-
|
|||||||||||
Restructuring charges
|
-
|
2,360
|
-
|
4,318
|
|||||||||||
Operating Income
|
249,918
|
119,344
|
874,902
|
941,859
|
|||||||||||
|
|||||||||||||||
Other income (expense): | |||||||||||||||
Interest income
|
3,781
|
2,321
|
12,025
|
10,344
|
|||||||||||
Interest expense, net of interest capitalized
|
(64,127)
|
(64,368)
|
(277,725)
|
(258,299)
|
|||||||||||
Other income (including $12.0 million net deferred tax benefit related to impairments in the year ended December 31, 2015 and $33.5 million deferred tax benefit related to the reversal of a valuation allowance in the quarter and year ended December 31, 2014)
|
17,227
|
52,471
|
56,581
|
70,242
|
|||||||||||
(43,119)
|
(9,576)
|
(209,119)
|
(177,713)
|
||||||||||||
Net Income
|
$
|
206,799
|
$
|
109,768
|
$
|
665,783
|
$
|
764,146
|
|||||||
Earnings Per Share:
|
|||||||||||||||
Basic
|
$
|
0.95
|
$
|
0.50
|
$
|
3.03
|
$
|
3.45
|
|||||||
Diluted
|
$
|
0.94
|
$
|
0.49
|
$
|
3.02
|
$
|
3.43
|
|||||||
Weighted-Average Shares Outstanding:
|
|||||||||||||||
Basic
|
218,652
|
220,622
|
219,537
|
221,658
|
|||||||||||
Diluted
|
219,893
|
222,041
|
220,689
|
223,044
|
|||||||||||
Comprehensive Income
|
|||||||||||||||
Net Income
|
$
|
206,799
|
$
|
109,768
|
$
|
665,783
|
$
|
764,146
|
|||||||
Other comprehensive (loss) income:
|
|||||||||||||||
Foreign currency translation adjustments
|
(6,158)
|
(8,257)
|
(30,152)
|
(26,102)
|
|||||||||||
Change in defined benefit plans
|
(807)
|
(1,677)
|
4,760
|
(7,213)
|
|||||||||||
Loss on cash flow derivative hedges
|
(125,079)
|
(546,171)
|
(406,047)
|
(869,350)
|
|||||||||||
Total other comprehensive loss
|
(132,044)
|
(556,105)
|
(431,439)
|
(902,665)
|
|||||||||||
Comprehensive Income (Loss)
|
$
|
74,755
|
$
|
(446,337)
|
$
|
234,344
|
$
|
(138,519)
|
|||||||
STATISTICS
|
|||||||||||||||
Quarter Ended
|
Year Ended | ||||||||||||||
December 31,
|
December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Passengers Carried
|
1,348,447
|
1,263,129
|
5,401,899
|
5,149,952
|
|||||||||||
Passenger Cruise Days
|
9,666,317
|
9,221,383
|
38,523,060
|
36,710,966
|
|||||||||||
APCD
|
9,361,889
|
8,825,623
|
36,646,639
|
34,773,915
|
|||||||||||
Occupancy
|
103.3%
|
104.5%
|
105.1%
|
105.6%
|
As of
|
|||||||
December 31,
|
December 31,
|
||||||
2015
|
2014
|
||||||
(unaudited)
|
|||||||
Assets
|
|||||||
Current assets
|
|||||||
Cash and cash equivalents
|
$
|
121,565
|
$
|
189,241
|
|||
Trade and other receivables, net
|
238,972
|
261,392
|
|||||
Inventories
|
121,332
|
123,490
|
|||||
Prepaid expenses and other assets
|
220,579
|
226,960
|
|||||
Derivative financial instruments
|
134,574
|
-
|
|||||
Total current assets
|
837,022
|
801,083
|
|||||
Property and equipment, net
|
18,777,778
|
18,193,627
|
|||||
Goodwill
|
286,764
|
420,542
|
|||||
Other assets
|
1,020,291
|
1,297,938
|
|||||
$
|
20,921,855
|
$
|
20,713,190
|
||||
Liabilities and Shareholders' Equity
|
|||||||
Current liabilities
|
|||||||
Current portion of long-term debt
|
$
|
899,677
|
$
|
799,630
|
|||
Accounts payable
|
302,072
|
331,505
|
|||||
Accrued interest
|
38,325
|
49,074
|
|||||
Accrued expenses and other liabilities
|
658,601
|
635,138
|
|||||
Derivative financial instruments
|
651,866
|
266,986
|
|||||
Customer deposits
|
1,742,286
|
1,766,914
|
|||||
Total current liabilities
|
4,292,827
|
3,849,247
|
|||||
Long-term debt
|
7,767,378
|
7,644,318
|
|||||
Other long-term liabilities
|
798,611
|
935,266
|
|||||
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;
|
|||||||
233,905,166 and 233,106,019 shares issued, December 31, 2015
|
|||||||
and December 31, 2014, respectively)
|
2,339
|
2,331
|
|||||
Paid-in capital
|
3,297,619
|
3,253,552
|
|||||
Retained earnings
|
6,944,862
|
6,575,248
|
|||||
Accumulated other comprehensive loss
|
(1,328,433)
|
(896,994)
|
|||||
Treasury stock (15,911,971 and 13,808,683 common shares at
cost, December 31, 2015 and December 31, 2014, respectively)
|
(853,348)
|
(649,778)
|
|||||
Total shareholders' equity
|
8,063,039
|
8,284,359
|
|||||
$
|
20,921,855
|
$
|
20,713,190
|
||||
Year Ended
|
|||||||
December 31,
|
|||||||
2015
|
2014
|
||||||
Net income
|
$
|
665,783
|
$
|
764,146
|
|||
Adjustments:
|
|||||||
Depreciation and amortization
|
827,008
|
772,445
|
|||||
Impairment of Pullmantur related assets
|
411,267
|
-
|
|||||
Net deferred income tax benefit
|
(10,001)
|
(41,003)
|
|||||
Loss on sale of property and equipment
|
-
|
17,401
|
|||||
Loss on derivative instruments not designated as hedges
|
59,162
|
48,637
|
|||||
Changes in operating assets and liabilities:
|
|||||||
Decrease in trade and other receivables, net
|
63,102
|
100,095
|
|||||
Decrease in inventories
|
1,197
|
26,254
|
|||||
Decrease in prepaid expenses and other assets
|
14,905
|
41,077
|
|||||
Decrease in accounts payable
|
(25,278)
|
(40,651)
|
|||||
Decrease in accrued interest
|
(10,749)
|
(53,951)
|
|||||
Increase in accrued expenses and other liabilities
|
41,754
|
70,565
|
|||||
(Decrease) increase in customer deposits
|
(92,849)
|
14,885
|
|||||
Dividends received from unconsolidated affiliates
|
33,338
|
5,814
|
|||||
Other, net
|
(32,273)
|
18,045
|
|||||
Net cash provided by operating activities
|
1,946,366
|
1,743,759
|
|||||
Investing Activities
|
|||||||
Purchases of property and equipment
|
(1,613,340)
|
(1,811,398)
|
|||||
Cash paid on settlement of derivative financial instruments
|
(178,597)
|
(68,098)
|
|||||
Investments in and loans to unconsolidated affiliates
|
(56,163)
|
(188,595)
|
|||||
Cash received on loans to unconsolidated affiliates
|
124,253
|
76,167
|
|||||
Proceeds from sale of property and equipment
|
-
|
220,000
|
|||||
Other, net
|
(19,128)
|
1,546
|
|||||
Net cash used in investing activities
|
(1,742,975)
|
(1,770,378)
|
|||||
Financing Activities
|
|||||||
Debt proceeds
|
4,399,501
|
4,153,958
|
|||||
Debt issuance costs
|
(68,020)
|
(72,974)
|
|||||
Repayments of debt
|
(4,118,553)
|
(3,724,218)
|
|||||
Purchase of treasury of stock
|
(200,000)
|
(236,074)
|
|||||
Dividends paid
|
(280,212)
|
(198,952)
|
|||||
Proceeds from exercise of common stock options
|
11,252
|
70,879
|
|||||
Cash received on settlement of derivative financial instruments
|
-
|
22,835
|
|||||
Other, net
|
2,520
|
2,026
|
|||||
Net cash (used in) provided by financing activities
|
(253,512)
|
17,480
|
|||||
Effect of exchange rate changes on cash
|
(17,555)
|
(6,307)
|
|||||
Net decrease in cash and cash equivalents
|
(67,676)
|
(15,446)
|
|||||
Cash and cash equivalents at beginning of period
|
189,241
|
204,687
|
|||||
Cash and cash equivalents at end of period
|
$
|
121,565
|
$
|
189,241
|
|||
Supplemental Disclosure
|
|||||||
Cash paid during the year for:
|
|||||||
Interest, net of amount capitalized
|
$
|
248,611
|
$
|
276,933
|
Quarter Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||
2015
|
2015
On
Constant Currency basis
|
2014
|
2015
|
2015
On a
Constant Currency basis
|
2014
|
|||||||||||||
Passenger ticket revenues
|
$
|
1,370,632
|
$
|
1,443,434
|
$
|
1,303,799
|
$
|
6,058,821
|
$
|
6,392,389
|
$
|
5,893,847
|
||||||
Onboard and other revenues
|
531,421
|
540,283
|
514,027
|
2,240,253
|
2,291,067
|
2,180,008
|
||||||||||||
Total revenues
|
1,902,053
|
1,983,717
|
1,817,826
|
8,299,074
|
8,683,456
|
8,073,855
|
||||||||||||
Less:
|
||||||||||||||||||
Commissions, transportation and other
|
307,369
|
320,735
|
303,824
|
1,400,778
|
1,471,291
|
1,372,785
|
||||||||||||
Onboard and other
|
114,546
|
118,706
|
126,454
|
553,104
|
576,544
|
582,750
|
||||||||||||
Net Revenues including divested businesses
|
1,480,138
|
1,544,276
|
1,387,548
|
6,345,192
|
6,635,621
|
6,118,320
|
||||||||||||
Less:
|
||||||||||||||||||
Net Revenues related to divested businesses
|
||||||||||||||||||
prior to sales transaction
|
-
|
-
|
-
|
-
|
-
|
35,656
|
||||||||||||
Net Revenues
|
$
|
1,480,138
|
$
|
1,544,276
|
$
|
1,387,548
|
$
|
6,345,192
|
$
|
6,635,621
|
$
|
6,082,664
|
||||||
APCD
|
9,361,889
|
9,361,889
|
8,825,623
|
36,646,639
|
36,646,639
|
34,773,915
|
||||||||||||
Gross Yields
|
$
|
203.17
|
$
|
211.89
|
$
|
205.97
|
$
|
226.46
|
$
|
236.95
|
$
|
232.18
|
||||||
Net Yields
|
$
|
158.10
|
$
|
164.95
|
$
|
157.22
|
$
|
173.15
|
$
|
181.07
|
$
|
174.92
|
||||||
Quarter Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||
2015
|
2015
On a
Constant Currency basis
|
2014
|
2015
|
2015
On a
Constant Currency basis
|
2014
|
|||||||||||||
Total cruise operating expenses
|
$
|
1,173,341
|
$
|
1,199,459
|
$
|
1,244,745
|
$
|
5,099,393
|
$
|
5,257,018
|
$
|
5,306,281
|
||||||
Marketing, selling and administrative expenses
|
269,464
|
276,748
|
257,995
|
1,086,504
|
1,122,977
|
1,048,952
|
||||||||||||
Gross Cruise Costs
|
1,442,805
|
1,476,207
|
1,502,740
|
6,185,897
|
6,379,995
|
6,355,233
|
||||||||||||
Less:
|
||||||||||||||||||
Commissions, transportation and other
|
307,369
|
320,735
|
303,824
|
1,400,778
|
1,471,291
|
1,372,785
|
||||||||||||
Onboard and other
|
114,546
|
118,706
|
126,454
|
553,104
|
576,544
|
582,750
|
||||||||||||
Net Cruise Costs including divested businesses
|
1,020,890
|
1,036,766
|
1,072,462
|
4,232,015
|
4,332,160
|
4,399,698
|
||||||||||||
Less:
|
||||||||||||||||||
Net Cruise Costs related to divested businesses
|
||||||||||||||||||
prior to sales transaction
|
-
|
-
|
-
|
-
|
-
|
47,854
|
||||||||||||
Other initiative costs included within cruise operating expenses and marketing, selling and administrative expenses
|
-
|
-
|
3,936
|
-
|
-
|
18,972
|
||||||||||||
Loss on sale of ship included within other operating expenses
|
-
|
-
|
-
|
-
|
-
|
17,401
|
||||||||||||
Net Cruise Costs
|
1,020,890
|
1,036,766
|
1,068,526
|
4,232,015
|
4,332,160
|
4,315,471
|
||||||||||||
Less:
|
||||||||||||||||||
Fuel
|
188,112
|
188,253
|
229,310
|
795,801
|
803,289
|
947,391
|
||||||||||||
Net Cruise Costs Excluding Fuel
|
$
|
832,778
|
$
|
848,513
|
$
|
839,216
|
$
|
3,436,214
|
$
|
3,528,871
|
$
|
3,368,080
|
||||||
APCD
|
9,361,889
|
9,361,889
|
8,825,623
|
36,646,639
|
36,646,639
|
34,773,915
|
||||||||||||
Gross Cruise Costs per APCD
|
$
|
154.11
|
$
|
157.68
|
$
|
170.27
|
$
|
168.80
|
$
|
174.09
|
$
|
182.76
|
||||||
Net Cruise Costs per APCD
|
$
|
109.05
|
$
|
110.74
|
$
|
121.07
|
$
|
115.48
|
$
|
118.21
|
$
|
124.10
|
||||||
Net Cruise Costs Excluding Fuel per APCD
|
$
|
88.95
|
$
|
90.63
|
$
|
95.09
|
$
|
93.77
|
$
|
96.29
|
$
|
96.86
|
Quarter Ended
|
Year Ended
|
|||||||||||
December 31,
|
December 31,
|
|||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||
Adjusted Net Income
|
$
|
206,799
|
$
|
70,048
|
$
|
1,065,066
|
$
|
755,729
|
||||
Net Income
|
206,799
|
109,768
|
665,783
|
764,146
|
||||||||
Net Adjustments to Net Income- (Decrease) Increase
|
$
|
-
|
$
|
(39,720)
|
$
|
399,283
|
$
|
(8,417)
|
||||
Adjustments to Net Income:
|
||||||||||||
Impairment of Pullmantur related assets (1)
|
$
|
-
|
$
|
-
|
$
|
399,283
|
$
|
-
|
||||
Restructuring charges
|
-
|
2,360
|
-
|
4,318
|
||||||||
Other initiative costs
|
-
|
3,936
|
-
|
21,211
|
||||||||
Estimated impact of divested businesses prior to sales transaction
|
-
|
-
|
-
|
11,013
|
||||||||
Loss on sale of ship included within other operating expenses
|
-
|
-
|
-
|
17,401
|
||||||||
Impact of voyage proration change
|
-
|
(12,533)
|
-
|
(28,877)
|
||||||||
Reversal of a deferred tax valuation allowance
|
-
|
(33,483)
|
-
|
(33,483)
|
||||||||
Net Adjustments to Net Income- (Decrease) Increase
|
$
|
-
|
$
|
(39,720)
|
$
|
399,283
|
$
|
(8,417)
|
||||
Adjusted Earnings per Share - Diluted
|
$
|
0.94
|
$
|
0.32
|
$
|
4.83
|
$
|
3.39
|
||||
Earnings per Share - Diluted
|
0.94
|
0.49
|
3.02
|
3.43
|
||||||||
Net Adjustments to Net Income- (Decrease) Increase
|
$
|
-
|
$
|
(0.17)
|
$
|
1.81
|
$
|
(0.04)
|
||||
Adjustments to Earnings per Share:
|
||||||||||||
Impairment of Pullmantur related assets
|
$
|
-
|
$
|
-
|
$
|
1.81
|
$
|
-
|
||||
Restructuring charges
|
-
|
0.01
|
-
|
0.02
|
||||||||
Other initiative costs
|
-
|
0.02
|
-
|
0.09
|
||||||||
Estimated impact of divested businesses prior to sales transaction
|
-
|
-
|
-
|
0.05
|
||||||||
Loss on sale of ship included within other operating expenses
|
-
|
-
|
-
|
0.08
|
||||||||
Impact of voyage proration change
|
-
|
(0.05)
|
-
|
(0.13)
|
||||||||
Reversal of a deferred tax valuation allowance
|
-
|
(0.15)
|
-
|
(0.15)
|
||||||||
Net Adjustments to Net Income- (Decrease) Increase
|
$
|
-
|
$
|
(0.17)
|
$
|
1.81
|
$
|
(0.04)
|
||||
Weighted-Average Shares Outstanding - Diluted
|
219,893
|
222,041
|
220,689
|
223,044
|
||||||||
(1) Includes a net deferred income tax benefit of $12.0 million related to the Pullmantur impairment.
|