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MarketScreener Homepage  >  Equities  >  Nyse  >  Royal Caribbean Cruises    RCL   LR0008862868

ROYAL CARIBBEAN CRUISES (RCL)
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Royal Caribbean Cruises Ltd. : Royal Caribbean Reports Third Quarter Results And Updates 2012 Guidance

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10/25/2012 | 02:35pm CET

MIAMI, Oct. 25, 2012 /PRNewswire/ -- Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL) today reported better than expected third quarter results and increased its earnings outlook for full year 2012.

KEY HIGHLIGHTS

    --  Results For the Third Quarter 2012:Both close-in booking activity and
        cost controls were stronger than the company anticipated in its previous
        guidance.
        --  Net Yields increased 0.1% on a Constant-Currency basis (down 2.4%
            As-Reported);
        --  Net Cruise Costs ("NCC") excluding fuel increased 2.0% on a
            Constant-Currency basis (declined 0.2% As-Reported); and
        --  Net income was $367.8 million, or $1.68 per share, versus net income
            of $399.0 million, or $1.82 per share, in 2011.
    --  Fourth Quarter 2012:
        --  Net Yields are expected to increase approximately 1% on both a
            Constant-Currency and As-Reported basis;
        --  NCC excluding fuel are expected to be up approximately 1% on a
            Constant-Currency basis and flat to up 1% on an As-Reported basis;
            and
        --  Earnings per share are expected to be within a range of ($0.02) to
            $0.08.
    --  Full Year 2012:
        --  Net Yields are expected to increase approximately 3% on a
            Constant-Currency basis and  1% to 2% on an As-Reported basis;
        --  NCC excluding fuel are expected to be up approximately 4% on a
            Constant-Currency basis and up 2% to 3% on an As-Reported basis; and
        --  Earnings per share are expected to be within a range of $1.85 to
            $1.95.

"The strong third quarter certainly validates our confidence in our business model," said Richard D. Fain, chairman and chief executive officer. "Strong close-in demand and our focus on costs drove substantially better results than expected. I am especially gratified that we are still seeing price increases in a year marked by so many external pressures," Fain continued.

Third Quarter 2012 Results
Royal Caribbean Cruises Ltd. today announced third quarter 2012 net income of $367.8 million, or $1.68 per share, versus income of $399.0 million, or $1.82 per share, in the third quarter of 2011.

Close-in bookings for the third quarter across most itineraries -- including Europe -- were stronger than anticipated, resulting in a Net Yield increase of 0.1% on a Constant-Currency basis. NCC excluding fuel were also better than anticipated and increased 2.0% on a Constant-Currency basis (declined 0.2% As-Reported). Approximately 200 basis points of the Net Yield improvement and approximately 220 basis points of the NCC excluding fuel increases during the quarter relate to previously announced deployment initiatives and changes to the company's international distribution system.

Bunker pricing net of hedging for the third quarter was $639 per metric ton and consumption was 334,200 metric tons.

Outlook

Fourth Quarter 2012
As the company anticipated in February, the tragedy in Italy had its biggest yield impact in the second and third quarters of the year. The effect of the incident on bookings has continued to wane and fourth quarter 2012 Net Yields are expected to increase approximately 1% on both Constant-Currency and As-Reported bases. Excluding previously referenced deployment initiatives and changes to the company's international distribution system, Net Yields for the quarter are expected to be approximately flat.

For the fourth quarter of 2012, NCC excluding fuel are expected to be up approximately 1% on a Constant-Currency basis and flat to up 1% on an As-Reported basis. Excluding the deployment initiatives and changes to the company's international distribution system, NCC excluding fuel are expected to be approximately flat on both a Constant-Currency and As-Reported basis.

Full Year 2012
The company increased its guidance for full year earnings per share by $0.15 to a range of $1.85 to $1.95. This increase has been mainly driven by stronger than anticipated revenue (+$0.06 per share) and expense reduction (+$0.06 per share). The remaining $0.03 per share improvement is principally due to currency benefits net of oil price increases.

For the full year of 2012, Net Yields are expected to increase approximately 3% on a Constant-Currency basis and to be up 1% to 2% on an As-Reported basis. Approximately 200-250 basis points of the expected improvement in Net Yields relates to deployment initiatives and changes to the company's international distribution system.

For the full year, NCC excluding fuel are expected to increase approximately 4% on a Constant-Currency basis (up 2% to 3% As-Reported). Excluding deployment initiatives and changes to the company's distribution system, Constant-Currency NCC excluding fuel are expected to be flat to up 1%.

Capacity Additions
The company noted that it is engaged in negotiations for the possible construction of an Oasis-type newbuild that would be delivered in middle to late 2016. While the company has not entered into any agreement at this time, it hopes to do so before year's end. The new ship is expected to cost less on a per berth basis than either of the first two Oasis-class vessels.

"The Oasis of the Seas and Allure of the Seas have proven themselves to be exceptionally attractive ships by generating the highest guest satisfaction ratings in the fleet coupled with very compelling financial returns," said Richard D. Fain, chairman and chief executive officer. Fain continued, "Ordering another such ship for delivery in 2016, at a lower cost, with better energy efficiency is very consistent with our balanced goals of prudent growth, return improvement and debt reduction."

2013 Outlook
The company noted that while it is very early in the 2013 bookings cycle and visibility at this time is limited, the company is encouraged by the trends so far. For the year 2013, booked load factors and average per diems are both slightly higher currently than at this same time last year. This is particularly encouraging in light of the fact that these prior year comparisons relate to bookings before the Costa Concordia incident which occurred in January 2012.

FUEL EXPENSE & GUIDANCE SUMMARY

Fuel Expense
The company does not forecast fuel prices, and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on today's fuel prices the company has included $229 million and $910 million of fuel expense in its fourth quarter 2012 and full year 2012 guidance, respectively.

Forecasted consumption is now 58% hedged via swaps for the remainder of 2012 and 54%, 45%, 25% and 7% hedged for 2013, 2014, 2015 and 2016, respectively. For the same five-year period, the average cost per metric ton of the hedge portfolio is approximately $522, $568, $623, $610 and $582, respectively.

During the third quarter the company fully liquidated its previously disclosed WTI fuel option portfolio resulting in a $1.8 million gain. Year-to-date through September, the company has recorded a net loss of $5.7 million on this portfolio.

The company provided the following fuel statistics for the fourth quarter and full year 2012:

          FUEL STATISTICS     Fourth Quarter 2012     Full Year 2012
     Fuel Consumption (metric
               tons)                         344,000              1,363,000
           Fuel Expenses                $229 million           $910 million
        Percent Hedged (fwd
            consumption)                          58%                    58%
      Impact of 10% change in
            fuel prices                   $9 million             $9 million

The company provided the following additional guidance for the fourth quarter and full year of 2012:

                 GUIDANCE                          As-Reported

                                                     Constant-Currency
                                              Fourth Quarter 2012
                                              -------------------
                Net Yields                                  Approx. 1%           Approx. 1%
                Net Cruise
                 Costs per
                    APCD                                    Approx. 2%             2% to 3%
                Net Cruise
                 Costs per
                   APCD,                                    Flat to 1%           Approx. 1%
                              excluding Fuel

                                                 Full Year 2012
                                                 --------------
                Net Yields                                    1% to 2%           Approx. 3%
                Net Cruise
                 Costs per
                    APCD                                      5% to 6%           Approx. 7%
                Net Cruise
                 Costs per
                   APCD,                                      2% to 3%           Approx. 4%
                              excluding Fuel

                                              Fourth Quarter 2012         Full Year 2012
                                              -------------------         --------------
                 Capacity
                  Increase                                         1.4%                  1.4%
               Depreciation
                    and
                Amortization                      $185 to $195 million  $725 to $735 million
                 Interest
                Expense, net                        $80 to $90 million  $330 to $340 million
                    EPS                         ($0.02) to $0.08              $1.85 to $1.95


    Exchange rates used in guidance calculations
    --------------------------------------------
                                               Current - October         Previous - July
    EUR                                                          $1.30                 $1.21
    GBP                                                          $1.61                 $1.55
    CAD                                                          $0.99                 $0.98
    BRL                                                          $0.49                 $0.49
    AUD                                                          $1.04                 $1.03

Liquidity and Financing Arrangements
As of September 30, 2012, liquidity was $­­­1.9 billion, including cash and the undrawn portion of the company's unsecured credit facilities. As previously disclosed, the company has taken a number of actions this year to augment liquidity in advance of its 2013 and 2014 scheduled debt maturities, including increasing the size of its revolving credit facility due July 2016 by $233 million and establishing a EUR365 million 5-year unsecured delayed-draw bank facility. More recently, the company further bolstered its liquidity through a new $290 million 3 ½ year unsecured bank facility. In part, this additional liquidity was used for the early extinguishment of EUR255 million (or approximately 25%) of the company's EUR1.0 billion senior notes due in January 2014.

The company also has committed unsecured financing for its remaining newbuilds. The company noted that scheduled debt maturities for 2012, 2013 and 2014 are now $600 million, $1.5 billion and $1.5 billion, respectively.

Capital Expenditures and Capacity Guidance
Based on current ship orders, projected capital expenditures for 2012, 2013, 2014 and 2015 are $1.3 billion, $600 million, $1.1 billion and $1.0 billion, respectively.

Capacity increases for 2012, 2013, 2014 and 2015 are 1.4%, 1.3%, 1.0% and 6.5%, respectively.

Conference Call Scheduled
The company has scheduled a conference call at 10 a.m. Eastern Daylight Time today to discuss its earnings. This call can be heard, either live or on a delayed basis, on the company's investor relations web site at www.rclinvestor.com.

Selected Operational and Financial Metrics

Available Passenger Cruise Days ("APCD")
APCD is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period. We use this measure to perform capacity and rate analysis to identify the main non-capacity drivers that cause our cruise revenues and expenses to vary.

Constant-Currency
We believe Net Yields and Net Cruise Costs are our most relevant non-GAAP financial measures. However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses in US dollars will be affected by changes in currency exchange rates. Although such changes in local currency prices is just one of many elements impacting our revenues and expenses, it can be an important element. For this reason, we also monitor Net Yields and Net Cruise Costs on a "Constant-Currency" basis - i.e. as if the current period's currency exchange rates had remained constant with the comparable prior period's rates. We calculate "Constant-Currency" by applying the average prior year period exchange rates for each of the corresponding months of the reported and/or forecasted period, so as to calculate what the results would have been had exchange rates been the same throughout both periods. We do not make predictions about future exchange rates and use current exchange rates for calculations of future periods. It should be emphasized that the use of Constant-Currency is primarily used by us for comparing short-term changes and/or projections.

Over the longer term, changes in guest sourcing and shifting the amount of purchases between currencies significantly change the impact of the purely currency-based fluctuations.

Gross Cruise Costs
Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses.

Gross Yields
Gross Yields represent total revenues per APCD.

Net Cruise Costs and Net Cruise Costs Excluding Fuel
Net Cruise Costs and Net Cruise Costs Excluding Fuel represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel. In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations. We have not provided a quantitative reconciliation of projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel due to the significant uncertainty in projecting the costs deducted to arrive at these measures. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.

Net Debt-to-Capital
Net Debt-to-Capital is a ratio which represents total long-term debt, including the current portion of long-term debt, less cash and cash equivalents ("Net Debt") divided by the sum of Net Debt and total shareholders' equity. We believe Net Debt and Net Debt-to-Capital, along with total long-term debt and shareholders' equity are useful measures of our capital structure.

Net Revenues
Net Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses.

Net Yields
Net Yields represent Net Revenues per APCD. We utilize Net Revenues and Net Yields to manage our business on a day-to-day basis as we believe that it is the most relevant measure of our pricing performance because it reflects the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses and onboard and other expenses. We have not provided a quantitative reconciliation of projected Gross Yields to projected Net Yields due to the significant uncertainty in projecting the costs deducted to arrive at this measure. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.

Occupancy
Occupancy, in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days
Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.

Royal Caribbean Cruises Ltd. (NYSE,OSE: RCL) is a global cruise vacation company that owns Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France, as well as TUI Cruises through a 50 percent joint venture. Together, these six brands operate a combined total of 41 ships with three under construction. They operate diverse itineraries around the world that call on approximately 460 destinations on all seven continents. Additional information can be found on www.royalcaribbean.com, www.celebritycruises.com, www.pullmantur.es, www.azamaraclubcruises.com, www.cdfcroisieresdefrance.com or www.rclinvestor.com.

Certain statements in this release relating to, among other things, our future performance constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding expected financial results for the fourth quarter and full year 2012 and the costs and yields expected in 2012 and other future periods. Words such as "anticipate," "believe," "could," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," and similar expressions are intended to identify these forward-looking statements. Forward-looking statements reflect management's current expectations, are inherently uncertain and are subject to risks, uncertainties and other factors, which could 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, but are not limited to the following: the impact of the economic environment on the demand for cruises, the impact of the economic environment on our ability to generate cash flows from operations or obtain new borrowings from the credit or capital markets in amounts sufficient to satisfy our capital expenditures, debt repayments and other financing needs, the uncertainties of conducting business internationally and expanding into new markets, changes in operating and financing costs, vacation industry competition and changes in industry capacity and overcapacity, emergency ship repairs, including the related lost revenue, the impact of ship delivery delays, ship cancellations or ship construction price increases, financial difficulties encountered by shipyards or their subcontractors and incidents or adverse publicity concerning the cruise vacation industry such as the Costa Concordia casualty and the unavailability or cost of air service.

More information about factors that could affect our operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting our Investor Relations web site at www.rclinvestor.com or the SEC's web site at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Measures of Financial Performance
This press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission rules, which we believe provide useful information to investors as a supplement to our consolidated financial statements which are prepared and presented in accordance with generally accepted accounting principles, or GAAP.

The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as do the corresponding GAAP measures.

A reconciliation to the most comparable GAAP measure of all non-GAAP financial measures included in this press release can be found in the tables included at the end of this press release.

Financial Tables Follow

                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                        ROYAL CARIBBEAN CRUISES LTD.
                                                                                                                                           CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                                                                                                                              (unaudited; in thousands, except per share data)
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                            Quarter Ended                                       Nine Months Ended
                                                                                                           September 30,                                          September 30,
                                                                                                           -------------                                          -------------
                                                                                                                     2012                                        2011                                              2012                      2011
                                                                                                                     ----                                        ----                                              ----                      ----
                                                                                                                                                                                                                                                                                                                                                                          
                            Passenger ticket revenues                $1,635,033                                $1,734,328                                                     $4,319,478                                               $4,257,634
                            Onboard and other revenues                   591,357                                   587,666                                                      1,562,396                                                1,504,228
                            Total revenues                           2,226,390                                 2,321,994                                                      5,881,874                                                5,761,862
                                                                     ---------                                 ---------                                                      ---------                                                ---------
                            Cruise operating expenses:
                             Commissions,
                             transportation and other                   366,100                                   405,674                                                        994,535                                                  984,397
                            Onboard and other                          166,356                                   181,604                                                        404,932                                                  419,032
                            Payroll and related                        201,644                                   210,535                                                        618,277                                                  613,816
                            Food                                       111,315                                   113,319                                                        334,240                                                  312,550
                            Fuel                                       213,434                                   202,478                                                        680,389                                                  556,667
                            Other operating                            289,476                                   291,690                                                        867,078                                                  805,284
                                                                       -------                                   -------                                                        -------                                                  -------
                                          Total cruise operating
                                          expenses                                1,348,325                                                   1,405,300                                                      3,899,451                                                  3,691,746
                             Marketing, selling and
                             administrative expenses                   243,877                                   231,761                                                        756,049                                                  722,157
                             Depreciation and amortization
                             expenses                                  182,051                                   177,191                                                        541,957                                                  522,493
                            Operating Income                           452,137                                   507,742                                                        684,417                                                  825,466
                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                
                            Other income (expense):
                            Interest income                              4,744                                     7,070                                                         16,062                                                   17,329
                             Interest expense, net of
                             interest capitalized                      (84,977)                                  (98,198)                                                      (266,749)                                                (291,791)
                             Extinguishment of
                             unsecured senior notes                     (7,485)                                        -                                                         (7,485)                                                       -
                            Other income (expense)                       3,360                                   (17,656)                                                       (15,155)                                                  19,855
                                                                         -----                                   -------                                                        -------                                                   ------
                                                                                                                                                 (84,358)                                                      (108,784)                                                  (273,327)                                                   (254,607)
                                                                                                                                                 -------                                                       --------                                                   --------                                                    --------
                            Net Income                                $367,779                                  $398,958                                                       $411,090                                                 $570,859
                                                                                      ===                       ===
                                                                                                                                                                                                                                                                                                                                                                          
                            Earnings Per Share:
                            Basic                                        $1.69                                     $1.84                                                          $1.89                                                    $2.63
                                                                                                                                                                                                                                                                                                           
                            Diluted                                      $1.68                                     $1.82                                                          $1.87                                                    $2.60
                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                          
                             Weighted-Average Shares
                             Outstanding:
                            Basic                                      217,940                                   217,105                                                        217,797                                                  216,883
                                                                                                                                                                                                                                                                                    
                            Diluted                                    219,296                                   218,934                                                        219,263                                                  219,315
                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                          
                            Comprehensive Income (Loss)
                            Net Income                                $367,779                                  $398,958                                                       $411,090                                                 $570,859
                             Other comprehensive income
                             (loss):
                             Foreign currency
                             translation adjustments                     1,331                                   (43,786)                                                        (7,690)                                                  (4,397)
                             Change in defined benefit
                             plans                                                       -                                                           -                                                              -                                                       (216)
                             Gain (loss) on cash flow
                             derivative hedges                          81,322                                  (255,015)                                                       (59,460)                                                 (46,240)
                                                                        ------                                  --------                                                        -------                                                  -------
                                          Total other
                                          comprehensive income
                                          (loss)                                     82,653                                                    (298,801)                                                       (67,150)                                                   (50,853)
                                                                                     ------                                                    --------                                                        -------                                                    -------
                                                                                                                                                                                                                                                                                                                                                                          
                            Comprehensive Income                      $450,432                                  $100,157                                                       $343,940                                                 $520,006
                                                                                      ===                       ===
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                            STATISTICS
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                           Quarter Ended                                               Nine Months Ended
                                                                                                           September 30,                                                 September 30,
                                                                                                           -------------                                                 -------------
                                                                                                                     2012                                        2011                                              2012                      2011
                                                                                                                     ----                                        ----                                              ----                      ----
                                                                                                                                                                                                                                                                                                                                                                          
                            Passengers Carried                       1,246,730                                 1,247,574                                                      3,707,423                                                3,648,063
                                                                                                                                                                                                                                                                                                                                                                          
                            Passenger Cruise Days                    9,203,801                                 9,255,801                                                     26,401,129                                               26,039,146
                                                                                                                                                                                                                                                                                                                                                                          
                            APCD                                     8,581,222                                 8,575,926                                                     25,061,920                                               24,714,236
                            Occupancy                                    107.3%                                    107.9%                                                         105.3%                                                   105.4%


                                  ROYAL CARIBBEAN CRUISES LTD.
                                  CONSOLIDATED BALANCE SHEETS
                               (in thousands, except share data)

                                                                           As  of
                                                                           ------
                                                                        September 30,                         December 31,
                                                                                             2012                                 2011
                                                                                             ----                                 ----
                                                                         (unaudited)
     Assets
     Current assets
                       Cash and cash equivalents                                         $241,237                             $262,186
                       Trade and other receivables, net                                   301,110                              292,447
                       Inventories                                                        143,954                              144,553
                       Prepaid expenses and other assets                                  249,080                              185,460
                       Derivative financial instruments                                    97,799                               84,642
                                                                                           ------                               ------
                          Total current assets                                          1,033,180                              969,288

      Property and
      equipment, net                                         16,820,816                            16,934,817
     Goodwill                                                   742,466                               746,537
     Other assets                                             1,071,760                             1,153,763
                                                              ---------                             ---------
                                                                                      $19,668,222                          $19,804,405
                                                                                      ===========                          ===========

      Liabilities and
      Shareholders'
      Equity
      Current
      liabilities
                       Current portion of long-term debt                               $1,154,948                             $638,891
                       Accounts payable                                                   361,094                              304,623
                       Accrued interest                                                   119,847                              123,853
                        Accrued expenses and other
                        liabilities                                                       605,699                              564,272
                       Customer deposits                                                1,584,597                            1,436,003
                                                                                        ---------                            ---------
                          Total current liabilities                                     3,826,185                            3,067,642
     Long-term debt                                           6,623,920                             7,856,962
      Other long-term
      liabilities                                               515,456                               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;
                        228,384,628 and 227,366,165 shares
                        issued, September 30, 2012 and
                        December 31, 2011, respectively)                                    2,284                                2,276
                       Paid-in capital                                                  3,093,326                            3,071,759
                       Retained earnings                                                6,163,842                            5,823,430
                       Accumulated other comprehensive loss                              (143,087)                             (75,938)
                        Treasury stock (10,308,683 common
                        shares at                                                        (413,704)                            (413,704)
                          cost, September 30, 2012 and
                           December 31, 2011)

                          Total shareholders' equity                                    8,702,661                            8,407,823
                                                                                        ---------                            ---------
                                                                                      $19,668,222                          $19,804,405
                                                                                      ===========                          ===========



                   ROYAL CARIBBEAN CRUISES LTD.

              CONSOLIDATED STATEMENTS OF CASH FLOWS

                    (unaudited, in thousands)

                                                                          Nine Months Ended
                                                                            September 30,
                                                                            -------------
                                                                                            2012                   2011
                                                                                            ----                   ----

      Operating
      Activities
     Net income                                                 $411,090                             $570,859
     Adjustments:
                         Depreciation and amortization                                   541,957                522,493
                         Loss (gain) on fuel call options                                  5,671                (11,701)
                         Loss on extinguishment of debt                                    7,485                      -
      Changes in
      operating assets
      and liabilities:
                          Decrease in trade and other
                          receivables, net                                                42,484                 55,062
                         Decrease (increase) in inventories                                  423                (25,490)
                          Increase in prepaid expenses and
                          other assets                                                   (39,410)               (72,538)
                         Increase in accounts payable                                     46,836                 74,498
                         Decrease in accrued interest                                     (2,305)               (14,370)
                          Increase in accrued expenses and
                          other liabilities                                               11,688                 34,380
                         Increase in customer deposits                                    80,993                 97,089
      Cash received on
      settlement of
      derivative
      financial
      instruments                                                 69,684                                    -
      Dividends
      received from
      unconsolidated
      affiliate                                                        -                               21,147
     Other, net                                                   (4,340)                              21,289
                                                                  ------                               ------
      Net cash provided
      by operating
      activities                                               1,172,256                            1,272,718
                                                               ---------                            ---------

      Investing
      Activities
      Purchases of
      property and
      equipment                                                 (429,309)                         (1,030,102)
      Cash received on
      settlement of
      derivative
      financial
      instruments                                                 19,058                               20,172
      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                                                   (6,395)                                 352
                                                                  ------                                  ---
      Net cash used in
      investing
      activities                                                (383,323)                            (775,238)
                                                                --------                             --------

      Financing
      Activities
     Debt proceeds                                               915,000                            1,408,368
      Debt issuance
      costs                                                      (48,190)                             (80,619)
      Repayments of
      debt                                                   (1,263,769)                          (1,786,414)
      Extinguishment of
      unsecured senior
      notes                                                     (344,150)                                   -
     Dividends paid                                              (65,293)                             (21,707)
      Proceeds from
      exercise of
      common stock
      options                                                      3,703                               18,947
     Other, net                                                    1,228                               10,413
                                                                   -----                               ------
      Net cash used in
      financing
      activities                                                (801,471)                            (451,012)
                                                                --------                             --------

      Effect of
      exchange rate
      changes on cash                                             (8,411)                             (14,937)

      Net (decrease)
      increase in cash
      and cash
      equivalents                                                (20,949)                              31,531
      Cash and cash
      equivalents at
      beginning of
      period                                                     262,186                              419,929
                                                                 -------                              -------
      Cash and cash
      equivalents at
      end of period                                             $241,237                             $451,460
                                                                ========                             ========

      Supplemental
      Disclosure
      Cash paid during
      the period for:
                         Interest, net of amount capitalized                            $242,680               $269,625
                                                                                        ========               ========

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                           ROYAL CARIBBEAN CRUISES LTD.
                                                                                                                                                                                                                         NON-GAAP RECONCILING INFORMATION
                                                                                                                                                                                                                                   (unaudited)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                             Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                     Quarter Ended                                                                                            Nine Months Ended
                                                                                                                                  September 30,                                                                                           September 30,
                                                                                                                                  -------------                                                                                           -------------
                                                                                                                     2012                                         2012                                           2011                                                      2012                      2012                                           2011
                                                                                                                                                               On a                                                                                                                               On a
                                                                                                                                                             Constant                                                                                                                           Constant
                                                                                                                                                             Currency                                                                                                                           Currency
                                                                                                                                                               basis                                                                                                                             basis
                                                                                                                                                               -----                                                                                                                             -----
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                            Passenger ticket revenues                $1,635,033                                $1,685,476                                                  1,734,328                                                                                 $4,319,478                              $4,423,497                                                  $4,257,634
                            Onboard and other revenues                   591,357                                   602,293                                                    587,666                                                                                  1,562,396                               1,582,510                                                   1,504,228
                            Total revenues                           2,226,390                                 2,287,769                                                  2,321,994                                                                                  5,881,874                               6,006,007                                                   5,761,862
                                                                                                                                                                                                                                                                                                                                                                                                                      
                            Less:
                             Commissions,
                             transportation and other                   366,100                                   378,173                                                    405,674                                                                                    994,535                               1,021,262                                                     984,397
                            Onboard and other                          166,356                                   172,260                                                    181,604                                                                                    404,932                                 414,498                                                     419,032
                            Net revenues                            $1,693,934                                $1,737,336                                                 $1,734,716                                                                                 $4,482,407                              $4,570,247                                                  $4,358,433
                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                            APCD                                     8,581,222                                 8,581,222                                                  8,575,926                                                                                 25,061,920                              25,061,920                                                  24,714,236
                            Gross Yields                               $259.45                                   $266.60                                                    $270.76                                                                                    $234.69                                 $239.65                                                     $233.14
                            Net Yields                                 $197.40                                   $202.46                                                    $202.28                                                                                    $178.85                                 $182.36                                                     $176.35
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                            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                                                                                        Nine Months Ended
                                                                                                                                  September 30,                                                                                           September 30,
                                                                                                                                  -------------                                                                                           -------------
                                                                                                                     2012                                         2012                                           2011                                                      2012                      2012                                           2011
                                                                                                                                                               On a                                                                                                                               On a
                                                                                                                                                             Constant                                                                                                                           Constant
                                                                                                                                                             Currency                                                                                                                           Currency
                                                                                                                                                               basis                                                                                                                             basis
                                                                                                                                                               -----                                                                                                                             -----
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                            Total cruise operating expenses                $1,348,325                                $1,377,772                                                 $1,405,300                                                                                 $3,899,451                              $3,968,593                                                  $3,691,746
                             Marketing, selling and
                             administrative expenses                   243,877                                   250,433                                                    231,761                                                                                    756,049                                 772,547                                                     722,157
                            Gross Cruise Costs                       1,592,202                                 1,628,205                                                  1,637,061                                                                                  4,655,500                               4,741,140                                                   4,413,903
                                                                                                                                                                                                                                                                                                                                                                                                                      
                            Less:
                             Commissions,
                             transportation and other                   366,100                                   378,173                                                    405,674                                                                                    994,535                               1,021,262                                                     984,397
                            Onboard and other                          166,356                                   172,260                                                    181,604                                                                                    404,932                                 414,498                                                     419,032
                            Net Cruise Costs                        $1,059,746                                $1,077,772                                                 $1,049,783                                                                                 $3,256,033                              $3,305,380                                                  $3,010,474
                                                                                                                                                                                                                                                                                                                                                                                                                                             
                            Less:
                            Fuel                                       213,434                                   213,557                                                    202,478                                                                                    680,389                                 685,280                                                     556,667
                            Net Cruise Costs Excluding Fuel                  $846,312                                  $864,215                                                   $847,305                                                                                 $2,575,644                              $2,620,100                                                  $2,453,807
                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                            APCD                                     8,581,222                                 8,581,222                                                  8,575,926                                                                                 25,061,920                              25,061,920                                                  24,714,236
                            Gross Cruise Costs per APCD                   $185.54                                   $189.74                                                    $190.89                                                                                    $185.76                                 $189.18                                                     $178.60
                            Net Cruise Costs per APCD                   $123.50                                   $125.60                                                    $122.41                                                                                    $129.92                                 $131.89                                                     $121.81
                             Net Cruise Costs Excluding Fuel
                             per APCD                                   $98.62                                   $100.71                                                     $98.80                                                                                    $102.77                                 $104.55                                                      $99.29
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                             Net Debt-to-Capital was calculated as follows (in thousands):
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                         As of
                                                                                              September 30,                          December 31,
                                                                                              -------------                          ------------
                                                                                                       2012                                           2011
                                                                                                       ----                                           ----
                             Long-term debt, net of current
                             portion                                $6,623,920                                $7,856,962
                             Current portion of long-term
                             debt                                    1,154,948                                   638,891
                                                                                                                                                                                                                                                                                                                                                                                                                                 
                            Total debt                               7,778,868                                 8,495,853
                            Less: Cash and cash equivalents                   241,237                                   262,186
                            Net Debt                                $7,537,631                                $8,233,667
                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                            Total shareholders' equity                $8,702,661                                $8,407,823
                            Total debt                               7,778,868                                 8,495,853
                                                                                                                                                                                                                                                                                                                                                                                                                                 
                             Total debt and shareholders'
                             equity                                 16,481,529                                16,903,676
                                                                                                                                                                                                                                                                                                                                                                                                                                 
                            Debt-to-Capital                               47.2%                                     50.3%
                            Net Debt                                 7,537,631                                 8,233,667
                             Net Debt and shareholders'
                             equity                                $16,240,292                               $16,641,490
                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                            Net Debt-to-Capital                           46.4%                                     49.5%

SOURCE Royal Caribbean Cruises Ltd.


© PRNewswire 2012
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