Royal Caribbean Reports Third Quarter ResultsBy Royal Caribbean Cruises Ltd., PRNE
Wednesday, October 26, 2011
MIAMI, October 27, 2011 -
Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL) today reported its third quarter 2011 results and updated its outlook for the remainder of the year. Revenue yields, expenses and operating income all performed better than expected during the quarter. As a result, year-over-year Net Income grew 14% to $399 million. Included in third quarter results is an $0.08 per share charge in Other Income/(Expense) related to mark-to-market revaluations of the company’s fuel option portfolio. For the full year, the company’s profit expectations have remained stable except for this revaluation charge and changes in currency exchange rates.
- Results For the Third Quarter 2011:
- Net income was $399.0 million, or $1.82 per share, versus $350.2 million, or $1.61 per share, in 2010;
- Net Yields increased 5.3% (2.6% on a Constant-Currency basis.) Net Cruise Costs per APCD (”NCC”) excluding fuel increased 2.5% (0.7% on a Constant-Currency basis.)
- Full Year Guidance:
- For the full year 2011, the company’s Constant-Currency Net Yield improvement expectations are essentially unchanged at 2% to 3%. Including currency movements, full year Net Yields are expected to increase approximately 4%;
- Full year 2011 EPS is expected to be within a range of $2.70 to $2.80, a $0.15 reduction from prior guidance primarily due to the strengthening of the U.S. Dollar and the fuel option revaluation loss.
- 2012 Outlook: Though economic uncertainty is elevated and it is still early in the booking cycle, 2012 demand thus far has been solid. Booked load factors and pricing are both running ahead of this time last year, which supports the company’s expectation of continued yield accretion during 2012.
“It was gratifying to beat both our revenue and cost forecasts in the third quarter despite the turmoil in the worldwide financial markets,” said Richard D. Fain, chairman and chief executive officer. Fain continued, “The strength of our brands, combined with the value of our product, provides us with a high degree of economic resilience, and both our 2011 results and our 2012 booking patterns validate this.”
Third Quarter 2011 Results
Royal Caribbean Cruises Ltd. today announced net income of $399.0 million, or $1.82 per share, versus $350.2 million, or $1.61 per share, in 2010. Results include an $0.08 per share mark-to-market revaluation loss on the company’s WTI fuel option portfolio. Absent the revaluation charge, third quarter earnings per share totaled $1.90.
Revenues improved to $2.3 billion in the third quarter of 2011 compared to $2.1 billion in the third quarter of 2010 as a result of capacity increases and yield improvements. Net Yields for the third quarter of 2011 increased 5.3% (2.6% on a Constant-Currency basis). The company experienced particularly strong demand for its Caribbean and Alaska products during the third quarter with both markets experiencing increases in excess of 15% in ticket yields and Alaska yields reaching a historical high.
Costs in the third quarter of 2011 remained under tight control with NCC excluding fuel increasing only 0.7% on a Constant-Currency basis (2.5% on an as-reported basis).
Bunker pricing for the third quarter was consistent with earlier calculations at $608 per metric ton and consumption was 333,000 metric tons. During the quarter the company booked an $0.08 per share mark-to-market revaluation loss on its WTI fuel option portfolio. This loss partially offsets the revaluation gains the company recorded earlier in the year. As previously noted, these fuel options have been entered into for the purpose of protecting the company against spikes in oil prices. However, the options are not treated as hedges for accounting purposes and therefore can cause swings in quarterly earnings. Overall, they have been a successful strategy despite the swings they have caused.
The company provided the following updates to its forward guidance:
Constant-Currency yield growth expectations for the year are unchanged at 2% to 3%. Recent strengthening of the U.S. Dollar has reduced full year 2011 as-reported Net Yield expectations slightly to an increase of approximately 4%. For the fourth quarter, the company expects Net Yields to increase 3% to 4% on both an as-reported and a Constant-Currency basis. Close-in demand was strong in the third quarter, but the company does not anticipate this strength will continue for the seasonally weaker fourth quarter.
For the full year, the company expects NCC excluding fuel to increase 2% to 3% on an as-reported basis and 1% to 2% on a Constant-Currency basis. The comparable figure for the fourth quarter is expected to be approximately 4% on an as-reported basis and 3% to 4% on a Constant-Currency basis.
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 $204 million and $761 million of fuel expense in its fourth quarter 2011 and full year 2011 guidance, respectively.
Forecasted consumption is now 57% hedged via swaps for the remainder of 2011 and 55%, 47%, 30% and 20% for 2012, 2013, 2014 and 2015, respectively. For the same five-year period, the average cost per metric ton of the remaining hedge portfolio is approximately $490, $520, $520, $575 and $580, respectively.
In addition to the above-mentioned fuel hedges, the company also utilizes fuel options to further protect against escalating fuel prices. The company recently sold its options for 2012, which were at a strike price of $100 and will recognize an associated small gain in the fourth quarter. The remaining WTI fuel option portfolio consists of options expiring in 2013 at a strike price of $90 bbl that covers an estimated 11% of 2013 consumption.
The company provided the following fuel statistics for the fourth quarter and full year 2011:
FUEL STATISTICS Fourth Quarter 2011 Full Year 2011 Fuel Consumption (metric tons) 344,000 1,317,000 Fuel Expenses $204 Million $761 Million Percent Hedged (fwd consumption) 57% 57% Impact of 10% change in fuel prices * $9 million $9 million *excludes mark-to-market impact of fuel options.
In addition, based on the assumed fuel statistics above, the company provided the following guidance for the fourth quarter and full year 2011.
GUIDANCE As-Reported Constant-Currency Fourth Quarter 2011 Net Yields 3% to 4% 3% to 4% Net Cruise Costs per APCD Approx. 6% Approx. 6% Net Cruise Costs per APCD, excluding Fuel Approx. 4% 3% to 4% Full Year 2011 Net Yields Approx. 4% 2% to 3% Net Cruise Costs per APCD 3% to 4% 2% to 3% Net Cruise Costs per APCD, excluding Fuel 2% to 3% 1% to 2% Fourth Quarter 2011 Full Year 2011 EPS $0.09 to $0.19 $2.70 to $2.80 Capacity Increase 7.3% 7.5% Depreciation and Amortization $180 to $185 million $702 to $707 million Interest Expense, net $82 to $87 million $357 to $362 million Exchange rates used in guidance calculations EUR $1.39 GBP $1.60 CAD $1.00
Liquidity and Financing Arrangements
As of September 30, 2011, liquidity was $1.3 billion, including cash and the undrawn portion of the company’s unsecured revolving credit facilities. Additionally, the company has committed unsecured financing on all of its remaining newbuilds. The company noted that remaining debt maturities for 2011, 2012, and 2013 are $250 million, $600 million, and $1.6 billion, respectively. The company expects that the combination of cash flows and existing liquidity are sufficient to meet these obligations without accessing the capital markets during this time period, but it will consider opportunistic actions.
Capital Expenditures and Capacity Guidance
Based on current ship orders, projected capital expenditures for 2011, 2012, 2013 and 2014 are $1.1 billion, $1.2 billion, $500 million and $1.1 billion, respectively.
Capacity increases for the same four years are 7.5%, 2.1%, 2.4% and 0.8%, 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.
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 2010 monthly exchange rates for each month of the period during 2010 to the results during the corresponding months in 2011, so as to calculate what the results would have been had exchange rates been the same throughout both periods. It should be emphasized that the use of Constant-Currency is primarily used 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 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 (each of which is described above under the Description of Certain Line Items heading). 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 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 represent total revenues less commissions, transportation and other expenses and onboard and other expenses.
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, 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. is a global cruise vacation company that operates Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisieres de France, and TUI Cruises through a 50% joint venture. The company has a combined total of 40 ships in service and two under construction. It also offers unique land-tour vacations in Alaska, Asia, Australia, Canada, Europe, Latin America and New Zealand. Additional information can be found on www.royalcaribbean.com, www.celebrity.com, www.pullmantur.es, www.azamaraclubcruises.com, www.cdfcroisieresdefrance.com, www.tuicruises.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 2011 and the yields expected in 2011. 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 adverse publicity concerning the cruise vacation industry 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 OPERATIONS (unaudited, in thousands, except per share data) Quarter Ended September 30, 2011 2010 Passenger ticket revenues $ 1,734,328 $ 1,520,562 Onboard and other revenues 587,666 540,097 Total revenues 2,321,994 2,060,659 Cruise operating expenses: Commissions, transportation and other 405,674 350,166 Onboard and other 181,604 159,824 Payroll and related 210,535 197,070 Food 113,319 99,969 Fuel 202,478 164,786 Other operating 291,690 267,810 Total cruise operating expenses 1,405,300 1,239,625 Marketing, selling and administrative expenses 231,761 213,300 Depreciation and amortization expenses 177,191 162,232 Operating Income 507,742 445,502 Other income (expense): Interest income 7,070 1,815 Interest expense, net of interest capitalized (98,198) (89,082) Other (expense) income (17,656) (8,056) (108,784) (95,323) Net Income $ 398,958 $ 350,179 Earnings Per Share: Basic $ 1.84 $ 1.63 Diluted $ 1.82 $ 1.61 Weighted-Average Shares Outstanding: Basic 217,105 215,150 Diluted 218,934 217,512 STATISTICS Quarter Ended September 30, 2011 2010 Passengers Carried 1,247,574 1,199,759 Passenger Cruise Days 9,255,801 8,656,023 APCD 8,575,926 8,069,663 Occupancy 107.9% 107.3%
Nine Months Ended September 30, 2011 2010 Passenger ticket revenues $ 4,257,634 $ 3,762,536 Onboard and other revenues 1,504,228 1,385,470 Total revenues 5,761,862 5,148,006 Cruise operating expenses: Commissions, transportation and other 984,397 889,956 Onboard and other 419,032 374,949 Payroll and related 613,816 565,112 Food 312,550 286,466 Fuel 556,667 483,843 Other operating 805,284 750,761 Total cruise operating expenses 3,691,746 3,351,087 Marketing, selling and administrative expenses 722,157 636,143 Depreciation and amortization expenses 522,493 479,838 Operating Income 825,466 680,938 Other income (expense): Interest income 17,329 4,547 Interest expense, net of interest capitalized (291,791) (271,271) Other (expense) income 19,855 69,539 (254,607) (197,185) Net Income $ 570,859 $ 483,753 Earnings Per Share: Basic $ 2.63 $ 2.25 Diluted $ 2.60 $ 2.23 Weighted-Average Shares Outstanding: Basic 216,883 214,839 Diluted 219,315 217,388 STATISTICS Nine Months Ended September 30, 2011 2010 Passengers Carried 3,648,063 3,430,273 Passenger Cruise Days 26,039,146 24,058,087 APCD 24,714,236 22,967,291 Occupancy 105.4% 104.7%
ROYAL CARIBBEAN CRUISES LTD. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) As of September 30, December 31, 2011 2010 (unaudited) Assets Current assets Cash and cash equivalents $ 451,460 $ 419,929 Trade and other receivables, net 303,919 266,710 Inventories 152,273 126,797 Prepaid expenses and other assets 241,392 145,144 Derivative financial instruments 74,074 56,491 Total current assets 1,223,118 1,015,071 Property and equipment, net 16,988,832 16,771,677 Goodwill 760,769 759,328 Other assets 1,197,307 1,107,753 $ 20,170,026 $ 19,653,829 Liabilities and Shareholders' Equity Current liabilities Current portion of long-term debt $ 639,497 $ 1,198,929 Accounts payable 323,082 249,047 Accrued interest 146,536 160,906 Accrued expenses and other liabilities 526,158 553,218 Customer deposits 1,479,968 1,283,073 Total current liabilities 3,115,241 3,445,173 Long-term debt 8,136,206 7,951,187 Other long-term liabilities 480,483 356,717 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; 227,530,560 and 226,211,731 shares issued, September 30, 2011 2,275 2,262 and December 31, 2010, respectively) Paid-in capital 3,066,162 3,027,130 Retained earnings 5,809,150 5,259,998 Accumulated other comprehensive (loss) income (25,787) 25,066 Treasury stock (10,308,683 common shares at cost, September 30, 2011 and December 31, 2010) (413,704) (413,704) Total shareholders' equity 8,438,096 7,900,752 $ 20,170,026 $ 19,653,829
ROYAL CARIBBEAN CRUISES LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Nine Months Ended September 30, 2011 2010 Operating Activities Net income $ 570,859 $ 483,753 Adjustments: Depreciation and amortization 522,493 479,838 (Gain) loss on fuel call options (11,701) 4,167 Changes in operating assets and liabilities: Decrease in trade and other receivables, net 55,062 91,196 Increase in inventories (25,490) (6,255) Increase in prepaid expenses and other assets (72,538) (33,456) Increase in accounts payable 74,498 16,894 (Decrease) increase in accrued interest (14,370) 7,159 Increase in accrued expenses and other liabilities 34,380 59,855 Increase in customer deposits 97,089 157,952 Cash received on settlement of derivative financial instruments - 172,993 Dividends received from unconsolidated affiliates 21,147 - Other, net 21,289 1,811 Net cash provided by operating activities 1,272,718 1,435,907 Investing Activities Purchases of property and equipment (1,030,102) (925,826) Cash received (paid) on settlement of derivative financial instruments 20,172 (1,521) Loans to unconsolidated affiliates (110,660) - Proceeds from the sale of ships 345,000 - Other, net 352 (12,057) Net cash used in investing activities (775,238) (939,404) Financing Activities Debt proceeds 1,408,368 1,081,069 Debt issuance costs (80,619) (57,238) Repayments of debt (1,786,414) (1,378,099) Dividends paid (21,707) - Proceeds from exercise of common stock options 18,947 11,802 Other, net 10,413 1,148 Net cash used in financing activities (451,012) (341,318) Effect of exchange rate changes on cash (14,937) 2,126 Net increase in cash and cash equivalents 31,531 157,311 Cash and cash equivalents at beginning of period 419,929 284,619 Cash and cash equivalents at end of period $ 451,460 $ 441,930 Supplemental Disclosure Cash paid during the period for: Interest, net of amount capitalized $ 269,625 $ 210,684
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 September 30, 2011 On a Constant Currency 2011 basis 2010 Passenger ticket revenues $ 1,734,328 $ 1,680,010 $ 1,520,562 Onboard and other revenues 587,666 579,196 540,097 Total revenues 2,321,994 2,259,206 2,060,659 Less: Commissions, transportation and other 405,674 392,424 350,166 Onboard and other 181,604 176,292 159,824 Net revenues $ 1,734,716 $ 1,690,490 $ 1,550,669 APCD 8,575,926 8,575,926 8,069,663 Gross Yields $ 270.76 $ 263.44 $ 255.36 Net Yields $ 202.28 $ 197.12 $ 192.16
Nine Months Ended September 30, 2011 On a Constant Currency 2011 basis 2010 Passenger ticket revenues $ 4,257,634 $ 4,141,218 $ 3,762,536 Onboard and other revenues 1,504,228 1,486,269 1,385,470 Total revenues 5,761,862 5,627,487 5,148,006 Less: Commissions, transportation and other 984,397 956,606 889,956 Onboard and other 419,032 408,703 374,949 Net revenues $ 4,358,433 $ 4,262,178 $ 3,883,101 APCD 24,714,236 24,714,236 22,967,291 Gross Yields $ 233.14 $ 227.70 $ 224.15 Net Yields $ 176.35 $ 172.46 $ 169.07
Gross Cruise Costs and Net Cruise Costs were calculated as follows (in thousands, except APCD and costs per APCD): Quarter Ended September 30, 2011 On a Constant Currency 2011 basis 2010 Total cruise operating expenses $ 1,405,300 $ 1,377,294 $ 1,239,625 Marketing, selling and administrative expenses 231,761 225,996 213,300 Gross Cruise Costs 1,637,061 1,603,290 1,452,925 Less: Commissions, transportation and other 405,674 392,424 350,166 Onboard and other 181,604 176,292 159,824 Net Cruise Costs $ 1,049,783 $ 1,034,574 $ 942,935 Less: Fuel 202,478 201,415 164,786 Net Cruise Costs Excluding Fuel $ 847,305 $ 833,159 $ 778,149 APCD 8,575,926 8,575,926 8,069,663 Gross Cruise Costs per APCD $ 190.89 $ 186.95 $ 180.05 Net Cruise Costs per APCD $ 122.41 $ 120.64 $ 116.85 Net Cruise Costs Excluding Fuel per APCD $ 98.80 $ 97.15 $ 96.43
Nine Months Ended September 30, 2011 On a Constant Currency 2011 basis 2010 Total cruise operating expenses $ 3,691,746 $ 3,633,042 $ 3,351,087 Marketing, selling and administrative expenses 722,157 705,640 636,143 Gross Cruise Costs 4,413,903 4,338,682 3,987,230 Less: Commissions, transportation and other 984,397 956,606 889,956 Onboard and other 419,032 408,703 374,949 Net Cruise Costs $ 3,010,474 $ 2,973,373 $ 2,722,325 Less: Fuel 556,667 553,794 483,843 Net Cruise Costs Excluding Fuel $ 2,453,807 $ 2,419,579 $ 2,238,482 APCD 24,714,236 24,714,236 22,967,291 Gross Cruise Costs per APCD $ 178.60 $ 175.55 $ 173.60 Net Cruise Costs per APCD $ 121.81 $ 120.31 $ 118.53 Net Cruise Costs Excluding Fuel per APCD $ 99.29 $ 97.90 $ 97.46
Net Debt-to-Capital was calculated as follows (in thousands): As of September 30, December 31, 2011 2010 Long-term debt, net of current portion $ 8,136,206 $ 7,951,187 Current portion of long-term debt 639,497 1,198,929 Total debt 8,775,703 9,150,116 Less: Cash and cash equivalents 451,460 419,929 Net Debt $ 8,324,243 $ 8,730,187 Total shareholders' equity $ 8,438,096 $ 7,900,752 Total debt 8,775,703 9,150,116 Total debt and shareholders' equity 17,213,799 17,050,868 Debt-to-Capital 51.0% 53.7% Net Debt 8,324,243 8,730,187 Net Debt and shareholders' equity $ 16,762,339 $ 16,630,939 Net Debt-to-Capital 49.7% 52.5%
ROYAL CARIBBEAN CRUISES LTD. EFFECT OF CORRECTION ON CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Quarter Ended September 30, 2010 As Previously As Reported Adjustment Revised Interest expense, net of interest capitalized $ (82,494) $ (6,588) $ (89,082) Total other expense (88,735) (6,588) (95,323) Net Income 356,767 (6,588) 350,179 Earnings per Share: Basic $ 1.66 $ (0.03) $ 1.63 Diluted $ 1.64 $ (0.03) $ 1.61 Nine Months Ended September 30, 2010 As Previously As Reported Adjustment Revised Interest expense, net of interest capitalized $ (250,264) $ (21,007) $ (271,271) Total other expense (176,178) (21,007) (197,185) Net Income 504,760 (21,007) 483,753 Earnings per Share: Basic $ 2.35 $ (0.10) $ 2.25 Diluted $ 2.32 $ (0.10) $ 2.23
Quarter Ended September 30, 2009 As Previously As Reported Adjustment Revised Interest expense, net of interest capitalized $ (73,912) $ (684) $ (74,596) Total other expense (76,449) (684) (77,133) Net Income 230,392 (684) 229,708 Earnings per Share: Basic $ 1.08 $ 0.00 $ 1.07 Diluted $ 1.07 $ 0.00 $ 1.07 Nine Months Ended September 30, 2009 As Previously As Reported Adjustment Revised Interest expense, net of interest capitalized $ (221,701) $ (1,873) $ (223,574) Total other expense (247,088) (1,873) (248,961) Net Income 159,068 (1,873) 157,195 Earnings per Share: Basic $ 0.74 $ (0.01) $ 0.74 Diluted $ 0.74 $ (0.01) $ 0.73
ROYAL CARIBBEAN CRUISES LTD. EFFECT OF CORRECTION ON CONSOLIDATED BALANCE SHEETS (in thousands) As of December 31, 2010 As Previously Reported Adjustment As Revised Property and equipment, net $ 16,769,181 $ 2,496 $ 16,771,677 Other assets 1,151,324 (43,571) 1,107,753 Total assets 19,694,904 (41,075) 19,653,829 Accrued expenses and other liabilities 552,543 675 553,218 Total current liabilities 3,444,498 675 3,445,173 Retained earnings 5,301,748 (41,750) 5,259,998 Total shareholders' equity 7,942,502 (41,750) 7,900,752 Total liabilities and shareholders' equity 19,694,904 (41,075) 19,653,829
As of December 31, 2009 As Previously Reported Adjustment As Revised Property and equipment, net $ 15,268,053 $ 384 $ 15,268,437 Other assets 1,146,677 (9,453) 1,137,224 Total assets 18,233,494 (9,069) 18,224,425 Accrued expenses and other liabilities 521,190 867 522,057 Total current liabilities 2,749,030 867 2,749,897 Retained earnings 4,754,950 (9,936) 4,745,014 Total shareholders' equity 7,499,717 (9,936) 7,489,781 Total liabilities and shareholders' equity 18,233,494 (9,069) 18,224,425
ROYAL CARIBBEAN CRUISES LTD. EFFECT OF CORRECTION ON CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) The correction did not have an effect on the company's operating cash flows. The following table presents the effect on the individual line items within operating cash flows on the company's Consolidated Statement of Cash Flows for September 30, 2010. Nine Months Ended September 30, 2010 As Previously Reclassification As Reported Adjustment (1) Revised Net Income $ 504,760 $ (21,007) $ - $ 483,753 Increase in accrued expenses and other liabilities 58,700 1,155 - 59,855 Other, net (13,874) 19,852 (4,167) 1,811 (1) For the nine months ended September 30, 2010, $4.2 million has been reclassified in the consolidated statement of cash flows from other, net to (gain) loss on fuel call options within net cash flows provided by operating activities in order to conform to the current year presentation.
Ian Bailey, +1-305-982-2625
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