-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bs9uACkYhj2xBvLcyxnaTPEmGGiopLIRpt+9cqDLj+uhf/xwNYYOHCCUh5OtjoVO B31lID6NR7GjQtiXBTwbBw== 0000950144-00-006923.txt : 20000517 0000950144-00-006923.hdr.sgml : 20000517 ACCESSION NUMBER: 0000950144-00-006923 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000516 FILED AS OF DATE: 20000516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROYAL CARIBBEAN CRUISES LTD CENTRAL INDEX KEY: 0000884887 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 980081645 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 001-11884 FILM NUMBER: 637280 BUSINESS ADDRESS: STREET 1: 1050 CARIBBEAN WAY CITY: MIAMI STATE: FL ZIP: 33132 BUSINESS PHONE: 3055396000 MAIL ADDRESS: STREET 1: 1050 CARIBBEAN WAY CITY: MIAMI STATE: FL ZIP: 33132 6-K 1 ROYAL CARIBBEAN CRUISES QUARTERLY REPORT 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of May, 2000 ROYAL CARIBBEAN CRUISES LTD. - -------------------------------------------------------------------------------- (Translation of registrant's name into English) 1050 Caribbean Way, Miami, Florida 33132 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the commission pursuant to rule 12g3-2(b) under the securities exchange act of 1934. Yes [ ] No [X] 2 ROYAL CARIBBEAN CRUISES LTD. QUARTERLY FINANCIAL REPORT FIRST QUARTER 2000 3 ROYAL CARIBBEAN CRUISES LTD. INDEX TO QUARTERLY FINANCIAL REPORT Page ---- Consolidated Statements of Operations for the First Quarters Ended March 31, 2000 1 and 1999 Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999 2 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2000 and 1999 3 Notes to the Consolidated Financial Statements 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 6 4 ROYAL CARIBBEAN CRUISES LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except per share amounts)
First Quarter Ended March 31, --------------------------------- 2000 1999 ------------- ------------- Revenues $ 707,786 $ 610,046 ------------- ------------- Expenses Operating 403,179 366,613 Marketing, selling and administrative 108,415 87,814 Depreciation and amortization 56,556 47,229 ------------- ------------- 568,150 501,656 ------------- ------------- Operating Income 139,636 108,390 ------------- ------------- Other Income (Expense) Interest income 1,373 891 Interest expense, net of capitalized interest (31,978) (35,222) Other income (expense) (3,503) 16,137 ------------- ------------- (34,108) (18,194) ------------- ------------- Net Income $ 105,528 $ 90,196 ============= ============= Basic Earnings Per Share Net income $ 0.57 $ 0.52 ============= ============= Weighted average shares outstanding 182,466,598 169,057,619 ============= ============= Diluted Earnings Per Share Net income $ 0.55 $ 0.49 ============= ============= Weighted average shares outstanding 193,538,594 183,075,050 ============= =============
The accompanying notes are an integral part of these financial statements. 1 5 ROYAL CARIBBEAN CRUISES LTD. CONSOLIDATED BALANCE SHEETS (in thousands)
As of ----------------------------- March 31, December 31, 2000 1999 ----------- ----------- (unaudited) ASSETS Current Assets Cash and cash equivalents $ 102,901 $ 63,470 Trade and other receivables, net 47,527 53,459 Inventories 23,929 26,398 Prepaid expenses 54,656 51,050 ----------- ----------- Total current assets 229,013 194,377 Property and Equipment - at cost less accumulated depreciation and amortization 5,889,563 5,858,185 Goodwill - less accumulated amortization of $120,382 and $117,778, respectively 296,784 299,388 Other Assets 29,778 28,561 ----------- ----------- $ 6,445,138 $ 6,380,511 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $ 118,893 $ 128,086 Accounts payable 96,977 103,041 Accrued liabilities 204,881 209,104 Customer deposits 470,712 465,033 ----------- ----------- Total current liabilities 891,463 905,264 Long-Term Debt 2,208,895 2,214,091 Commitments and Contingencies Shareholders' Equity Preferred stock 106,661 172,200 Common stock 1,854 1,812 Paid-in capital 1,933,721 1,866,647 Retained earnings 1,308,162 1,225,976 Treasury stock (5,618) (5,479) ----------- ----------- Total shareholders' equity 3,344,780 3,261,156 ----------- ----------- $ 6,445,138 $ 6,380,511 =========== ===========
2 6 ROYAL CARIBBEAN CRUISES LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands)
Three Months Ended March 31, ---------------------------- 2000 1999 ---------- ----------- Operating Activities Net income $ 105,528 $ 90,196 Adjustments: Depreciation and amortization 56,556 47,229 Changes in operating assets and liabilities: Decrease (increase) in trade and other receivables, net 5,932 (42,306) Decrease in inventories 2,469 1,044 Increase in prepaid expenses and other assets (3,606) (1,283) (Decrease) increase in accounts payable, trade (6,064) 5,872 Decrease in accrued liabilities (4,223) (9,968) Increase in customer deposits 5,679 41,879 Other, net 1,091 1,067 --------- --------- Net cash provided by operating activities 163,362 133,730 --------- --------- Investing Activities Purchase of property and equipment (85,283) (167,495) Other, net (2,269) (901) --------- --------- Net cash used in investing activities (87,552) (168,396) --------- --------- Financing Activities Repayment of long-term debt (14,473) (12,758) Dividends (23,342) (18,342) Other, net 1,436 1,115 --------- --------- Net cash used in financing activities (36,379) (29,985) --------- --------- Net Increase (Decrease) in Cash and Cash Equivalents 39,431 (64,651) Cash and Cash Equivalents at Beginning of Period 63,470 172,921 --------- --------- Cash and Cash Equivalents at End of Period $ 102,901 $ 108,270 ========= ========= Supplemental Disclosure Interest paid, net of amount capitalized $ 24,602 $ 27,667 ========= =========
The accompanying notes are an integral part of these financial statements. 3 7 ROYAL CARIBBEAN CRUISES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal recurring accruals necessary for a fair presentation. The Company's revenues are moderately seasonal and results for interim periods are not necessarily indicative of the results for the entire year. The interim unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for 1999. NOTE 2 - EARNINGS PER SHARE Below is a reconciliation between basic and diluted earnings per share for the quarters ended March 31, 2000 and 1999 (in thousands, except per share amounts):
First Quarter Ended March 31, First Quarter Ended March 31, ------------------------------------------ ---------------------------------------- 2000 1999 ------------------------------------------ ---------------------------------------- Income Shares Per Share Income Shares Per Share --------- ------- ---------- --------- ------- ---------- Net Income $ 105,528 $ 90,196 Less: Preferred stock dividends (1,933) (3,127) --------- --------- Basic EPS $ 103,595 182,467 $ 0.57 $ 87,069 169,058 $ 0.52 ========== ========== Effect of Dilutive Securities: Stock options 2,634 3,369 Convertible preferred stock 1,933 8,438 3,127 10,648 --------- ------- --------- ------- Diluted EPS $ 105,528 193,539 $ 0.55 $ 90,196 183,075 $ 0.49 ========= ======= ========== ========= ======= ==========
NOTE 3 - PREFERRED STOCK On March 10, 2000, the Company announced that it would redeem all the outstanding shares of the convertible preferred stock on April 14, 2000. Substantially all of these shares were converted prior to the redemption date and the remaining outstanding shares were redeemed on April 14, 2000. The shares of the convertible preferred stock stopped trading on the NYSE prior to the April 14th redemption date, and dividends ceased to accrue on the shares of convertible preferred stock on April 14th. NOTE 4 - COMMITMENTS AND CONTINGENCIES CAPITAL EXPENDITURES. As previously announced, the Company entered into a letter of intent to purchase two additional Voyager-class vessels for delivery in 2002 and 2003. In May, the Company entered into definitive contracts for construction of these vessels. The Company currently has a total of 12 ships on order. The aggregate contract price of the 12 ships, which excludes capitalized interest and other ancillary costs, is approximately $5.0 billion of which the Company has deposited $407.4 million. Additional deposits are due prior to the dates of delivery of $149.0 million in 2000, $144.1 million in 4 8 2001, $121.8 million in 2002 and $27.8 million in 2003. The Company anticipates that overall capital expenditures will be approximately $1.4, $2.1, and $1.5 billion for 2000, 2001 and 2002, respectively. LITIGATION. In January 2000, the Company entered into a settlement with the State of Alaska resolving a civil lawsuit relating to the Company's waste disposal practices in Alaska. The settlement calls for the Company to make payments totaling $3.3 million, which were accrued in 1999. Beginning in August 1996, several purported class action suits were filed alleging that Royal Caribbean International and Celebrity should have paid commissions to travel agents on a portion of the port charges that were included in the price of cruise fares. The suits seek damages in an unspecified amount. Similar suits are pending against other companies in the cruise industry. In December 1998, a Florida state court dismissed one of the suits for failure to state a claim under Florida law. The plaintiff in that case has filed an appeal of that decision. The Company is not able at this time to estimate the timing or impact of these proceedings on the Company. In April 1999, a lawsuit was filed in the United States District Court for the Southern District of New York on behalf of current and former crew members alleging that the Company failed to pay the plaintiffs their full wages. The suit seeks payment of (i) the wages alleged to be owed, (ii) penalty wages under U.S. law and (iii) punitive damages. In November 1999, a purported class action suit was filed in the same court alleging a similar cause of action. The Company is not able at this time to estimate the impact of these proceedings on the Company; there can be no assurance that such proceedings, if decided adversely, would not have a material adverse effect on the Company's results of operations. The Company is routinely involved in other claims typical to the cruise industry. The majority of these claims are covered by insurance. Management believes the outcome of such other claims which are not covered by insurance are not expected to have a material adverse effect upon the Company's financial condition or results of operations. OTHER. The Company has commitments through 2014 to pay a minimum amount for its annual usage of certain port facilities (in thousands): Year ---- 2000 $ 9,720 2001 11,238 2002 13,050 2003 12,524 2004 13,302 Thereafter 138,060 -------- $197,894 ======== 5 9 ROYAL CARIBBEAN CRUISES LTD. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS USED IN THIS DOCUMENT, THE TERMS "ROYAL CARIBBEAN", "WE", "OUR" AND "US" REFER TO ROYAL CARIBBEAN CRUISES LTD., THE TERM "CELEBRITY" REFERS TO CELEBRITY CRUISE LINES INC. AND THE TERMS "ROYAL CARIBBEAN INTERNATIONAL" AND "CELEBRITY CRUISES" REFER TO OUR TWO CRUISE BRANDS. Certain statements under this caption "Management's Discussion and Analysis of Financial Condition and Results of Operations", include forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors, which may 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: o general economic and business conditions, o cruise industry competition, o the impact of tax laws and regulations, o changes in other laws and regulations, o the delivery schedule of new vessels, o emergency ship repairs, o incidents involving cruise vessels at sea, o reduced consumer demand for cruises as a result of any number of reasons, including armed conflict or political instability, o changes in interest rates and o weather. RESULTS OF OPERATIONS SUMMARY. Net income for the first quarter of 2000 increased 17.0% to $105.5 million or $0.55 per share on a diluted basis compared to $90.2 million or $0.49 per share for the same period in 1999. The increase in net income was achieved through a 15.3% increase in capacity and higher guest per diems. First quarter revenues were $707.8 million compared to $610.0 million for the same period in 1999. The increase in total revenue is primarily the result of an increase in capacity associated with VOYAGER OF THE SEAS, which entered service in the fourth quarter of 1999, and the impact of MONARCH OF THE SEAS, which was temporarily out of service during most of the first quarter of 1999, partially offset by the departure of SONG OF AMERICA from the fleet in March 1999. 6 10 We recover certain lost income from ships out of service through our loss-of-hire insurance. Included in net income in the first quarter of 1999 is approximately $17.0 million of loss-of-hire insurance, which was recorded in Other income (expense). As a result of the temporary decline in capacity and the inclusion of loss-of-hire insurance in Other income (expense) during the first quarter of 1999, certain operating margins are not comparative year over year. The following table presents statements of operations data as a percentage of total revenues: First Quarter Ended March 31, ---------------------------- 2000 1999 ------------- ----------- Revenues 100.0% 100.0% Expenses: Operating 57.0 60.1 Marketing, selling and administrative 15.3 14.4 Depreciation and amortization 8.0 7.7 --------- --------- Operating Income 19.7 17.8 Other Income (Expense) (4.8) (3.0) --------- --------- Net Income 14.9% 14.8% ========= ========= Our revenues are moderately seasonal due to variations in rates and occupancy percentages. REVENUES. Revenues for the first quarter of 2000 increased 16.0% to $707.8 million compared to $610.0 million for the same period in 1999. The increase in revenues for the first quarter was due to a 15.3% increase in capacity as well as a 0.6% increase in gross revenue per available lower berth ("Yield"). The increase in capacity is associated with the addition of VOYAGER OF THE SEAS to our fleet in November 1999, the impact of MONARCH OF THE SEAS, which was temporarily out of service during most of the first quarter of 1999 due to a grounding incident, partially offset by the departure of SONG OF AMERICA from the fleet in March 1999. The increase in Yield was due to an increase in guest per diems, primarily as a result of higher pricing on our Millennium cruises, partially offset by a decrease in the number of guests using our air program. Occupancy for the quarter was 101.7% compared to 102.1% for the same quarter in 1999. EXPENSES. Operating expenses increased 10.0% to $403.2 million for the first quarter of 2000 compared to $366.6 million for the same period in 1999. The increase for the quarter was primarily due to additional costs associated with the increased capacity discussed previously and an increase in fuel costs, partially offset by lower airfare costs due to fewer guests using our air program. As a percentage of revenues, operating expenses decreased from 60.1% for the first quarter of 1999 to 57.0% for the first quarter of 2000. The decrease was primarily due to fewer guests using our air program and the incurrence of certain operating expenses during the first quarter of 1999, while MONARCH OF THE SEAS was out of service, and there were no corresponding revenues. 7 11 Marketing, selling and administrative expenses increased 23.5% to $108.4 million for the first quarter of 2000 from $87.8 million for the same period in 1999. As a percentage of revenue, marketing, selling and administrative expenses increased to 15.3% in the first quarter of 2000 from 14.4% in the first quarter of 1999. The increase is due to an increased investment in information technology spending and staffing levels to support our capacity growth as well as an increase in advertising costs associated with new ad campaigns to promote our brand awareness. Depreciation and amortization increased $9.3 million, or 19.7% to $56.6 million in the first quarter of 2000 from $47.2 million during the same period in 1999. This increase is due to the incremental depreciation associated with the addition to the fleet of VOYAGER OF THE SEAS in November 1999 and shoreside capital expenditures primarily related to information technology in support of our growth plans. OTHER INCOME (EXPENSE). Gross interest expense (excluding capitalized interest) decreased to $41.1 million in the first quarter of 2000 compared to $41.7 million in 1999. The decline for the quarter is due primarily to a decrease in the average debt level. Capitalized interest increased $2.6 million to $9.1 million in 2000 from $6.5 million in 1999 due to an increase in expenditures related to the ships under construction. Included in Other income (expense) for the first quarter of 1999 is approximately $17.0 million of loss-of-hire insurance resulting from ships out of service. LIQUIDITY AND CAPITAL RESOURCES SOURCES AND USES OF CASH. Net cash provided by operating activities was $163.4 million for the first quarter of 2000 compared to $133.7 million for the first quarter of 1999. The increase was due to higher net income as well as timing differences in cash payments and receipts relating to operating assets and liabilities. During the first three months of 2000, we paid quarterly cash dividends on our common stock of $20.2 million, as well as quarterly cash dividends on our preferred stock totaling $3.1 million. We also made principal payments totaling $14.5 million during the first quarter of 2000 under various term loans and capital lease agreements. Our capital expenditures decreased to $85.3 million for the first quarter of 2000 compared to $167.5 million during the first quarter of 1999 due to the timing of payments for ships under construction. Capital expenditures included $64.9 million and $141.4 million in payments for ships under construction during the first quarter of 2000 and 1999, respectively. Capitalized interest increased to $9.1 million in the first quarter of 2000 from $6.5 million in the first quarter of 1999. The increase is due to an increase in cumulative expenditures related to ships under construction. FUTURE COMMITMENTS. As previously announced, we entered into a letter of intent to purchase two additional Voyager-class vessels for delivery in 2002 and 2003. In May, we entered into definitive contracts for construction of these vessels. We currently have 12 ships on order representing additional capacity of 29,000 berths. The aggregate contract price of the 12 ships, which excludes capitalized interest and other ancillary costs, is approximately $5.0 billion of which the Company has deposited $407.4 million. Additional deposits are due prior to the dates of delivery of $149.0 million in 2000, 8 12 $144.1 million in 2001, $121.8 million in 2002 and $27.8 million in 2003. We anticipate that overall capital expenditures, based on ships currently on order plus estimates of other shoreside capital expenditures, will be approximately $1.4, $2.1 and $1.5 billion for 2000, 2001 and 2002, respectively. We have options to purchase two additional Vantage-class vessels with delivery dates in the second quarters of 2005 and 2006. The options have an aggregate contract price of $804.6 million. We have the right to cancel the first option on or before August 31, 2000 and the second option on or before delivery of RADIANCE OF THE SEAS, which is currently scheduled for the first quarter of 2001. As of March 31, 2000, we had $2.3 billion of long-term debt. Approximately $118.9 million of this debt is due during the twelve month period ending March 31, 2001. As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships. We continuously consider potential acquisitions and strategic alliances. If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations. FUNDING SOURCES. As of March 31, 2000, our liquidity was approximately $1.1 billion consisting of $102.9 million in cash and cash equivalents and $1.0 billion available on the $1.0 billion revolving credit facility (the "$1 Billion Revolving Credit Facility"). We have $300.0 million available from April 1, 2000 through December 31, 2000 under a $300.0 million term credit facility. Capital expenditures and scheduled debt payments will be funded through a combination of cash flows provided by operations, drawdowns under the available credit facilities, the incurrence of additional indebtedness and sales of securities in private or public securities markets. In addition, the agreements related to six of the 12 ships on order require the shipyards to make available export financing for up to 80% of the contract price of the vessels. 9 13 INCORPORATION BY REFERENCE This report on Form 6-K is hereby incorporated by reference in registrant's Registration Statement on Form F-3 (File No. 333-89015) filed with the Securities and Exchange Commission. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROYAL CARIBBEAN CRUISES LTD. ---------------------------- (Registrant) Date: May 15, 2000 By /s/ Richard J. Glasier ---------------------------------------- Richard J. Glasier Executive Vice President and Chief Financial Officer 10 -----END PRIVACY-ENHANCED MESSAGE-----