MIAMI, Aug. 10, 2020 /PRNewswire/ -- Royal Caribbean
Group (NYSE: RCL) today reported financial results for the second
quarter of 2020 and commented on the business in light of the
global COVID-19 pandemic.
Second Quarter 2020
Starting on March 13, 2020 and due
to the COVID-19 pandemic, the Company suspended its global cruise
operation. This resulted in the cancellation of all of the
Company's second quarter sailings.
The Company reported US GAAP Net Loss for the second quarter of
2020 of $(1.6) billion or
$(7.83) per share compared to US GAAP
Net Income of $472.8 million or
$2.25 per share in the prior
year. The 2020 results include a non-cash asset impairment
loss of $156.5 million. The
Company reported Adjusted Net Loss of $(1.3)
billion or $(6.13) per share
for the second quarter of 2020 compared to Adjusted Net Income of
$532.7 million or $2.54 per share in the prior year. The Net
Loss for the quarter is a result of the impact of the COVID-19
pandemic on the business.
Business Update
"The COVID-19 pandemic is posing an unprecedented challenge to
our industry and society. Our teams are working tirelessly to
return to service soonest and doing so by developing new health and
safety protocols to protect the well-being of our guests, crew and
destinations we visit," said Richard D.
Fain, Chairman and CEO. "In the meantime, we are using this
time to refine our operations to be as efficient as we can while
providing the great experiences that so many people are eagerly
awaiting."
Regarding the new health and safety protocols, the Company is
being advised by a "Healthy Sail Panel" of experts in areas of
science and public health with backgrounds in medical practice,
research, infectious disease, biosecurity, hospitality and maritime
operations.
Update on Liquidity Actions and Ongoing Uses of Cash
Given the current environment, the Company continues to
prioritize and bolster its liquidity, working to ensure it is well
positioned for recovery. Since the last earnings call, the
Company has taken further actions to enhance its liquidity,
preserve cash and secure additional financing. Among these latest
efforts the Company highlighted the following:
- The issuance of $1.0 billion of
priority guaranteed notes and $1.15
billion of convertible notes;
- The issuance of GBP 300 million
of commercial paper in the UK providing over $370 million of additional liquidity;
- Completed a $0.9 billion 12-month
debt amortization holiday from all export-credit backed
facilities;
- Amended over $11 billion of
commercial bank and export credit facilities to provide covenant
waivers through the fourth quarter of 2021; and
- Further reduced operating expenses due to the fleet layup
measures and actions to decrease sales, marketing and
administrative expenses.
In addition, the Company has $11.3
billion of committed credit facilities that are available to
fund ship deliveries originally planned through 2025.
"We continue to take substantial actions to bolster our
financial position," said Jason T.
Liberty, executive vice president and CFO. "We have accessed
the capital market in an opportunistic manner and continue to
aggressively manage our spend. We are prepared to navigate a
volatile period while making decisions that position the Company
well for the recovery."
The Company estimates its cash burn to be, on average, in the
range of approximately $250 million
to $290 million per month during a
prolonged suspension of operations. This range includes all
interest expenses, including the increases driven by the latest
capital raises. It also includes ongoing ship operating expenses,
administrative expenses, hedging costs, expected necessary capital
expenditures (net of committed financings in the case of newbuilds)
and excludes cash refunds of customer deposits, commissions, debt
obligations and cash inflows from new and existing bookings. The
Company is considering ways to further reduce its average monthly
cash burn under a further prolonged out-of-service scenario and
during re-start of operations.
Liquidity and Financing Arrangements
As of
June 30, 2020, the Company had
liquidity of approximately $4.1
billion all in the form of cash and cash equivalents. The
Company noted that as of June 30,
2020, the scheduled debt maturities for the remainder of
2020 and 2021, are $0.3 billion and
$1.3 billion, respectively.
Capital Expenditures and Capacity Updates
The expected
capital expenditures for the remainder of 2020 and 2021 are
$0.6 billion and $1.8 billion, respectively. These expenditures
are mostly related to newbuild projects.
COVID-19 has impacted shipyard operations and will result in
delivery delays for newbuilds. Currently, the Company expects that
three of the five ships originally scheduled for delivery between
July of 2020 and December of 2021 will be delivered within the
remaining time frame. Two of these ships are Silver Moon and
Silver Dawn, with capacity lower than 600 berths.
Update on Bookings
The extended suspension of cruising has significantly impacted
bookings for the remainder of 2020 which are meaningfully lower
than same time last year and at lower prices.
Although still early in the booking cycle, the booked position
for 2021 is trending well and is within historical ranges. The
Company has implemented various programs to best serve its booked
guests providing the choice of future cruise credits ("FCCs") or
the opportunity to "Lift & Shift" their booking to the same
sailing the following year in lieu of providing cash refunds. For
the booking period since our last business update, approximately
60% of the 2021 bookings are new and the rest are due to the
redemption of FCCs and the "Lift & Shift" program. Pricing for
2021 bookings is relatively flat year-over-year when including the
negative yield impact of bookings made with future cruise credits;
it is slightly up year-over-year when excluding them.
As of June 30, 2020, the Company
had $1.8 billion in customer deposits
of which approximately $300 million
correspond to fourth quarter 2020 sailings. Approximately 48% of
the guests booked on cancelled sailings have requested cash
refunds.
2020 Outlook
The magnitude, duration and speed of COVID-19 remains
uncertain. As a consequence, the Company cannot estimate the
impact of COVID-19 on its business, financial condition or near or
longer-term financial or operational results with reasonable
certainty. Notwithstanding the foregoing, the Company expects to
incur a net loss on both a US GAAP and adjusted basis for its third
quarter and the 2020 fiscal year, the extent of which will depend
on the timing and extent of the return to service.
Interest expense for the remainder of the year (July 1, 2020 through December 31, 2020) will be in the range of
$505 million to $515 million.
As of June 30, 2020, the Company
had hedged approximately 64%, 40%, 23% and 5% of its total
projected metric tons of fuel consumption for the remainder of
2020, 2021, 2022 and 2023, respectively. The current suspension of
our cruise operations due to the COVID-19 pandemic resulted in
reductions to our forecasted fuel consumption. As of June 30, 2020, we had outstanding fuel swaps of
172,050 and 15,200 metric tons maturing in 2020 and 2021,
respectively, that no longer hedged our forecasted fuel
consumption. For the same four-year period, the annual average cost
per metric ton of the fuel swap portfolio is approximately
$423, $435, $514 and
$580, respectively.
CONFERENCE CALL SCHEDULED
The Company has scheduled a conference call at 10 a.m. Eastern Daylight Time today. This
call can be heard, either live or on a delayed basis, on the
Company's investor relations website at www.rclinvestor.com.
Definitions
Selected Operational and Financial
Metrics
Adjusted (Loss) Earnings per Share ("Adjusted EPS")
Represents Adjusted Net (Loss) Income attributable to Royal
Caribbean Cruises Ltd. divided by weighted average shares
outstanding or by diluted weighted average shares outstanding, as
applicable. We believe that this non-GAAP measure is meaningful
when assessing our performance on a comparative basis.
Adjusted Net (Loss) Income
Adjusted Net (Loss) Income represents net (loss) income less net
income attributable to noncontrolling interest excluding certain
items that we believe adjusting for is meaningful when assessing
our performance on a comparative basis. For the periods presented,
these items included (i) asset impairment and credit losses
recorded in the first and second quarters of 2020 as a result of
the impact of COVID-19; (ii) equity investment impairment charges
recorded in the first quarter of 2020 as a result of the impact of
COVID-19; (iii) currency translation losses recognized in
connection with the ships classified as assets held-for-sale that
were previously chartered to Pullmantur; (iv) settlement costs with
Pullmantur incurred in connection with its reorganization filing;
(v) restructuring charges incurred in relation to the reduction in
our U.S. workforce in the second quarter of 2020, the
reorganization of our global sales and marketing structure and
other initiatives expenses; (vi) the amortization of non-cash debt
discount on the $1.15 billion convertible notes; (vii) loss on
the extinguishment of debt; (viii) the amortization of the
Silversea Cruises intangible assets resulting from the 2018
Silversea Cruises acquisition; (ix) the noncontrolling interest
adjustment to exclude the impact of the contractual accretion
requirements associated with the put option held by Heritage Cruise
Holding Ltd.'s ("Heritage") prior to the July 2020 noncontrolling interest purchase;
(x) the change in fair value in the Silversea Cruises
contingent consideration; (xi) net insurance recoveries or costs
related to the collapse of the drydock structure at the Grand
Bahama Shipyard involving Oasis of the Seas; (xii)
transaction costs related to the 2018 Silversea Cruises
acquisition.
About Royal Caribbean Group
Royal Caribbean Group
(NYSE: RCL) is the operating business name for Royal Caribbean
Cruises Ltd. Royal Caribbean Group is the owner of four
global cruise vacation brands: Royal Caribbean International,
Celebrity Cruises, Silversea and Azamara. Royal Caribbean Group is
also a 50% owner of a joint venture that operates TUI Cruises and
Hapag-Lloyd Cruises. Together, our brands operate 62 ships with an
additional 16 on order as of July 31,
2020. Learn more at www.rclcorporate.com or
www.rclinvestor.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this release relating to,
among other things, our future performance estimates, forecasts and
projections constitute forward-looking statements under the Private
Securities Litigation Reform Act of 1995. These statements
include, but are not limited to: statements regarding revenues,
costs and financial results for 2020 and beyond. Words such
as "anticipate," "believe," "could," "driving," "estimate,"
"expect," "goal," "intend," "may," "plan," "project," "seek,"
"should," "will," "would," "considering", and similar expressions
are intended to help identify forward-looking statements.
Forward-looking statements reflect management's current
expectations, are based on judgments, 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 global
incidence and spread of COVID-19, which has led to the temporary
suspension of our operations and has had and will continue to have
a material adverse impact on our business and results of
operations, or other contagious illnesses on economic conditions
and the travel industry in general and the financial position and
operating results of our Company in particular, such as: the
current and potential additional governmental and self-imposed
travel restrictions, the current and potential extension of the
suspension of cruises and new additional suspensions, guest
cancellations; our ability to obtain sufficient financing, capital
or revenues to satisfy liquidity needs, capital expenditures, debt
repayments and other financing needs; the effectiveness of the
actions we have taken to improve and address our liquidity needs;
the impact of the economic and geopolitical environment on key
aspects of our business, such as the demand for cruises, passenger
spending, and operating costs; incidents or adverse publicity
concerning our ships, port facilities, land destinations and/or
passengers or the cruise vacation industry in general; concerns
over safety, health and security of guests and crew; further
impairments of our goodwill, long-lived assets, equity investments
and notes receivable; an inability to source our crew or our
provisions and supplies from certain places; the incurrence of
COVID-19 and other contagious diseases on our ships and an increase
in concern about the risk of illness on our ships or when traveling
to or from our ships, all of which reduces demand; unavailability
of ports of call; growing anti-tourism sentiments and environmental
concerns; changes in US foreign travel policy; the uncertainties of
conducting business internationally and expanding into new markets
and new ventures; our ability to recruit, develop and retain high
quality personnel; changes in operating and financing costs; our
indebtedness, any additional indebtedness we may incur and
restrictions in the agreements governing our indebtedness that
limit our flexibility in operating our business, including the
significant portion of assets that are collateral under these
agreements; the impact of foreign currency exchange rates, interest
rate and fuel price fluctuations; the settlement of conversions of
our convertible notes, if any, in shares of our common stock or a
combination of cash and shares of our common stock, which may
result in substantial dilution for our existing shareholders; our
expectation that we will not declare or pay dividends on our common
stock for the near future; vacation industry competition and
changes in industry capacity and overcapacity; the risks and costs
associated with protecting our systems and maintaining integrity
and security of our business information, as well as personal data
of our guests, employees and others; the impact of new or
changing legislation and regulations or governmental orders on our
business; pending or threatened litigation, investigations and
enforcement actions; the effects of weather, natural disasters and
seasonality on our business; emergency ship repairs, including the
related lost revenue; the impact of issues at shipyards, including
ship delivery delays, ship cancellations or ship construction cost
increases; shipyard unavailability; and the unavailability or cost
of air service.
In addition, many of these risks and uncertainties are currently
heightened by and will continue to be heightened by, or in the
future may be heightened by, the COVID-19 pandemic. It is not
possible to predict or identify all such risks.
More information about factors that could affect our operating
results is included under the caption "Risk Factors" in our most
recent quarterly report on Form 10-Q, as well as our other filings
with the SEC, and 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, copies
of which may be obtained by visiting our Investor Relations website
at www.rclinvestor.com or the SEC's website 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.
Adjusted Measures of Financial Performance
This press
release includes certain adjusted financial measures defined as
non-GAAP financial measures 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 US GAAP.
The presentation of adjusted 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 US GAAP. These measures may be different from
adjusted measures used by other companies. In addition, these
adjusted measures are not based on any comprehensive set of
accounting rules or principles. Adjusted measures have limitations
in that they do not reflect all of the amounts associated with our
results of operations as do the corresponding US GAAP measures.
A reconciliation to the most comparable US GAAP measure of all
adjusted financial measures included in this press release can be
found in the tables included at the end of this press release.
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
|
(unaudited, in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Passenger ticket
revenues
|
$
|
107,022
|
|
|
$
|
2,017,836
|
|
|
$
|
1,483,873
|
|
|
$
|
3,727,820
|
|
Onboard and other
revenues
|
68,583
|
|
|
788,795
|
|
|
724,482
|
|
|
1,518,578
|
|
Total
revenues
|
175,605
|
|
|
2,806,631
|
|
|
2,208,355
|
|
|
5,246,398
|
|
Cruise operating
expenses:
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
28,824
|
|
|
426,934
|
|
|
345,953
|
|
|
790,089
|
|
Onboard and
other
|
21,579
|
|
|
174,429
|
|
|
145,297
|
|
|
309,599
|
|
Payroll and
related
|
243,877
|
|
|
265,569
|
|
|
574,267
|
|
|
535,101
|
|
Food
|
27,483
|
|
|
146,847
|
|
|
148,799
|
|
|
286,381
|
|
Fuel
|
79,192
|
|
|
181,924
|
|
|
273,460
|
|
|
342,095
|
|
Other
operating
|
279,465
|
|
|
348,801
|
|
|
703,463
|
|
|
694,943
|
|
Total cruise operating
expenses
|
680,420
|
|
|
1,544,504
|
|
|
2,191,239
|
|
|
2,958,208
|
|
Marketing, selling
and administrative expenses
|
301,418
|
|
|
376,874
|
|
|
697,308
|
|
|
791,821
|
|
Depreciation and
amortization expenses
|
319,757
|
|
|
311,600
|
|
|
644,087
|
|
|
603,885
|
|
Impairment and credit
losses
|
156,497
|
|
|
—
|
|
|
1,264,615
|
|
|
—
|
|
Operating (Loss)
Income
|
(1,282,487)
|
|
|
573,653
|
|
|
(2,588,894)
|
|
|
892,484
|
|
Other
expense:
|
|
|
|
|
|
|
|
Interest
income
|
5,206
|
|
|
6,342
|
|
|
10,740
|
|
|
16,126
|
|
Interest expense, net
of interest capitalized
|
(218,889)
|
|
|
(111,304)
|
|
|
(311,800)
|
|
|
(211,719)
|
|
Equity investment
(loss) income
|
(51,853)
|
|
|
33,045
|
|
|
(62,245)
|
|
|
66,739
|
|
Other
expense
|
(83,825)
|
|
|
(21,781)
|
|
|
(116,684)
|
|
|
(26,869)
|
|
|
(349,361)
|
|
|
(93,698)
|
|
|
(479,989)
|
|
|
(155,723)
|
|
Net (Loss)
Income
|
(1,631,848)
|
|
|
479,955
|
|
|
(3,068,883)
|
|
|
736,761
|
|
Less: Net Income
attributable to noncontrolling interest
|
7,444
|
|
|
7,125
|
|
|
14,888
|
|
|
14,250
|
|
Net (Loss) Income
attributable to Royal Caribbean Cruises Ltd.
|
$
|
(1,639,292)
|
|
|
$
|
472,830
|
|
|
$
|
(3,083,771)
|
|
|
$
|
722,511
|
|
(Loss) Earnings
per Share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(7.83)
|
|
|
$
|
2.26
|
|
|
$
|
(14.74)
|
|
|
$
|
3.45
|
|
Diluted
|
$
|
(7.83)
|
|
|
$
|
2.25
|
|
|
$
|
(14.74)
|
|
|
$
|
3.44
|
|
Weighted-Average
Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
209,385
|
|
|
209,531
|
|
|
209,241
|
|
|
209,427
|
|
Diluted
|
209,385
|
|
|
210,052
|
|
|
209,241
|
|
|
209,962
|
|
|
|
|
|
|
|
|
|
Comprehensive
(Loss) Income
|
|
|
|
|
|
|
|
Net (Loss)
Income
|
$
|
(1,631,848)
|
|
|
$
|
479,955
|
|
|
$
|
(3,068,883)
|
|
|
$
|
736,761
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
26,337
|
|
|
7,263
|
|
|
36,627
|
|
|
7,827
|
|
Change in defined
benefit plans
|
(6,278)
|
|
|
(9,722)
|
|
|
(13,867)
|
|
|
(10,375)
|
|
Gain (loss) on cash
flow derivative hedges
|
124,331
|
|
|
(71,734)
|
|
|
(176,274)
|
|
|
(22,891)
|
|
Total other
comprehensive (loss) income
|
144,390
|
|
|
(74,193)
|
|
|
(153,514)
|
|
|
(25,439)
|
|
Comprehensive (Loss)
Income
|
(1,487,458)
|
|
|
405,762
|
|
|
(3,222,397)
|
|
|
711,322
|
|
Less: Comprehensive
Income attributable to noncontrolling interest
|
7,444
|
|
|
7,125
|
|
|
14,888
|
|
|
14,250
|
|
Comprehensive
(Loss) Income attributable to Royal Caribbean
Cruises Ltd.
|
$
|
(1,494,902)
|
|
|
$
|
398,637
|
|
|
$
|
(3,237,285)
|
|
|
$
|
697,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS
(1)
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Passengers
Carried
|
20,027
|
|
|
1,663,900
|
|
|
1,259,846
|
|
|
3,197,126
|
|
Passenger Cruise
Days
|
181,268
|
|
|
11,321,528
|
|
|
8,648,375
|
|
|
21,883,345
|
|
APCD
|
214,449
|
|
|
10,437,420
|
|
|
8,431,579
|
|
|
20,298,020
|
|
Occupancy
|
84.5
|
%
|
|
108.5
|
%
|
|
102.6
|
%
|
|
107.8
|
%
|
(1)
|
Due to the
three-month reporting lag, we include Silversea Cruises' result of
operations from January 1 through March 31 for the quarters ended
June 30, 2020 and 2019 and from October 1 through March 31 for the
six months ended June 30, 2020 and 2019.
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except share data)
|
|
As of
|
|
June
30,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
4,146,691
|
|
|
$
|
243,738
|
|
Trade and other
receivables, net of allowances of $21,362 and $5,635
at June 30, 2020 and December 31, 2019, respectively
|
205,921
|
|
|
305,821
|
|
Inventories
|
152,596
|
|
|
162,107
|
|
Prepaid expenses and
other assets
|
178,364
|
|
|
429,211
|
|
Derivative financial
instruments
|
868
|
|
|
21,751
|
|
Total current
assets
|
4,684,440
|
|
|
1,162,628
|
|
Property and
equipment, net
|
25,647,715
|
|
|
25,466,808
|
|
Operating lease
right-of-use assets
|
609,422
|
|
|
687,555
|
|
Goodwill
|
809,384
|
|
|
1,385,644
|
|
Other assets, net of
allowances of $61,990 and $0 at June 30, 2020
and December 31, 2019, respectively
|
1,555,582
|
|
|
1,617,649
|
|
Total
assets
|
$
|
33,306,543
|
|
|
$
|
30,320,284
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interest and Shareholders'
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of
debt
|
$
|
706,283
|
|
|
$
|
1,186,586
|
|
Commercial
paper
|
368,952
|
|
|
1,434,180
|
|
Current portion of
operating lease liabilities
|
102,814
|
|
|
96,976
|
|
Accounts
payable
|
661,427
|
|
|
563,706
|
|
Accrued
interest
|
122,204
|
|
|
70,090
|
|
Accrued expenses and
other liabilities
|
810,536
|
|
|
1,078,345
|
|
Derivative financial
instruments
|
158,818
|
|
|
94,875
|
|
Customer
deposits
|
1,805,874
|
|
|
3,428,138
|
|
Total current
liabilities
|
4,736,908
|
|
|
7,952,896
|
|
Long-term
debt
|
17,753,424
|
|
|
8,414,110
|
|
Long-term operating
lease liabilities
|
569,392
|
|
|
601,641
|
|
Other long-term
liabilities
|
698,045
|
|
|
617,810
|
|
Total
liabilities
|
23,757,769
|
|
|
17,586,457
|
|
Redeemable
noncontrolling interest
|
584,869
|
|
|
569,981
|
|
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; 237,168,148 and
236,547,842 shares issued, June 30, 2020 and December 31,
2019, respectively)
|
2,372
|
|
|
2,365
|
|
Paid-in
capital
|
3,700,288
|
|
|
3,493,959
|
|
Retained
earnings
|
8,276,463
|
|
|
11,523,326
|
|
Accumulated other
comprehensive loss
|
(951,227)
|
|
|
(797,713)
|
|
Treasury stock
(27,799,775 and 27,746,848 common shares at cost, at June 30,
2020
and December 31, 2019, respectively)
|
(2,063,991)
|
|
|
(2,058,091)
|
|
Total shareholders'
equity
|
8,963,905
|
|
|
12,163,846
|
|
Total liabilities,
redeemable noncontrolling interest and shareholders'
equity
|
$
|
33,306,543
|
|
|
$
|
30,320,284
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited, in
thousands)
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
Net (loss)
income
|
$
|
(3,068,883)
|
|
|
$
|
736,761
|
|
Adjustments:
|
|
|
|
Depreciation and
amortization
|
644,087
|
|
|
603,885
|
|
Impairment and credit
losses
|
1,264,615
|
|
|
—
|
|
Net deferred income
tax (benefit) expense
|
(2,666)
|
|
|
3,794
|
|
Loss (gain) on
derivative instruments not designated as hedges
|
84,280
|
|
|
(713)
|
|
Share-based
compensation expense
|
8,764
|
|
|
41,974
|
|
Equity investment loss
(income)
|
62,245
|
|
|
(66,739)
|
|
Amortization of debt
issuance costs
|
28,807
|
|
|
20,467
|
|
Amortization of
commercial paper notes discount
|
6,668
|
|
|
16,350
|
|
Loss on extinguishment
of secured senior term loan
|
40,335
|
|
|
6,326
|
|
Change in fair value
of contingent consideration
|
(44,605)
|
|
|
10,700
|
|
Currency translation
adjustment losses
|
69,044
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Decrease (increase) in
trade and other receivables, net
|
94,873
|
|
|
(14,262)
|
|
Decrease (increase) in
inventories
|
9,511
|
|
|
(14,436)
|
|
Decrease (increase) in
prepaid expenses and other assets
|
249,481
|
|
|
(51,443)
|
|
Increase in accounts
payable
|
118,398
|
|
|
43,594
|
|
Increase in accrued
interest
|
52,114
|
|
|
763
|
|
(Decrease) increase in
accrued expenses and other liabilities
|
(17,110)
|
|
|
34,056
|
|
(Decrease) increase in
customer deposits
|
(1,622,721)
|
|
|
760,435
|
|
Dividends received
from unconsolidated affiliates
|
1,991
|
|
|
80,572
|
|
Other, net
|
(28,051)
|
|
|
(16,557)
|
|
Net cash (used in)
provided by operating activities
|
(2,048,823)
|
|
|
2,195,527
|
|
Investing
Activities
|
|
|
|
Purchases of property
and equipment
|
(1,391,891)
|
|
|
(1,866,141)
|
|
Cash received on
settlement of derivative financial instruments
|
1,558
|
|
|
6,204
|
|
Cash paid on
settlement of derivative financial instruments
|
(117,518)
|
|
|
(55,758)
|
|
Investments in and
loans to unconsolidated affiliates
|
(87,943)
|
|
|
(3,046)
|
|
Cash received on
loans to unconsolidated affiliates
|
10,241
|
|
|
19,509
|
|
Other, net
|
(5,924)
|
|
|
(173)
|
|
Net cash used in
investing activities
|
(1,591,477)
|
|
|
(1,899,405)
|
|
Financing
Activities
|
|
|
|
Debt
proceeds
|
12,672,189
|
|
|
2,749,564
|
|
Debt issuance
costs
|
(276,995)
|
|
|
(35,454)
|
|
Repayments of
debt
|
(3,424,387)
|
|
|
(3,008,893)
|
|
Proceeds from
issuance of commercial paper notes
|
6,765,739
|
|
|
13,335,536
|
|
Repayments of
commercial paper notes
|
(7,837,635)
|
|
|
(13,080,788)
|
|
Dividends
paid
|
(326,421)
|
|
|
(293,197)
|
|
Proceeds from
exercise of common stock options
|
386
|
|
|
265
|
|
Other, net
|
(28,670)
|
|
|
(15,930)
|
|
Net cash provided by
(used in) financing activities
|
7,544,206
|
|
|
(348,897)
|
|
Effect of exchange
rate changes on cash
|
(953)
|
|
|
(76)
|
|
Net increase
(decrease) in cash and cash equivalents
|
3,902,953
|
|
|
(52,851)
|
|
Cash and cash
equivalents at beginning of period
|
243,738
|
|
|
287,852
|
|
Cash and cash
equivalents at end of period
|
$
|
4,146,691
|
|
|
$
|
235,001
|
|
Supplemental
Disclosure
|
|
|
|
Cash paid during the
period for:
|
|
|
|
Interest, net of
amount capitalized
|
$
|
153,078
|
|
|
$
|
141,961
|
|
Non-cash Investing
Activities
|
|
|
|
Notes receivable
issued upon sale of property and equipment
|
$
|
53,419
|
|
|
$
|
—
|
|
Purchase of property
and equipment included in accounts payable and
accrued expenses and other liabilities
|
$
|
64,326
|
|
|
$
|
—
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
|
NON-GAAP
RECONCILING INFORMATION
|
|
(unaudited)
|
|
|
|
Adjusted Net (Loss)
Income and Adjusted (Loss) Earnings per Share were calculated as
follows (in thousands, except per share data):
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net (Loss) Income
attributable to Royal Caribbean Cruises Ltd.
|
$
|
(1,639,292)
|
|
|
$
|
472,830
|
|
|
$
|
(3,083,771)
|
|
|
$
|
722,511
|
|
|
Adjusted Net
(loss) Income attributable to Royal Caribbean Cruises
Ltd.
|
(1,282,573)
|
|
|
532,735
|
|
|
(1,592,985)
|
|
|
808,582
|
|
|
Net Adjustments to
Net (Loss) Income attributable to Royal Caribbean Cruises
Ltd.
|
$
|
356,719
|
|
|
$
|
59,905
|
|
|
$
|
1,490,786
|
|
|
$
|
86,071
|
|
|
Adjustments to Net
(Loss) Income attributable to Royal Caribbean Cruises
Ltd.:
|
|
|
|
|
|
|
|
|
Impairment and credit
losses (1)
|
$
|
156,497
|
|
|
$
|
—
|
|
|
$
|
1,264,615
|
|
|
$
|
—
|
|
|
Equity investment
impairment (2)
|
—
|
|
|
—
|
|
|
39,735
|
|
|
—
|
|
|
Currency translation
adjustment losses (3)
|
69,044
|
|
|
—
|
|
|
69,044
|
|
|
—
|
|
|
Pullmantur
reorganization settlement (4)
|
21,637
|
|
|
—
|
|
|
21,637
|
|
|
—
|
|
|
Restructuring charges
and other initiatives expense (5)
|
32,982
|
|
|
—
|
|
|
45,025
|
|
|
—
|
|
|
Convertible debt
amortization of debt discount (6)
|
4,184
|
|
|
—
|
|
|
4,184
|
|
|
—
|
|
|
Loss on
extinguishment of debt (7)
|
40,335
|
|
|
6,326
|
|
|
40,335
|
|
|
6,326
|
|
|
Amortization of
Silversea Cruises intangible assets resulting from the 2018
Silversea
Cruises acquisition (8)
|
3,069
|
|
|
3,069
|
|
|
6,138
|
|
|
6,138
|
|
|
Noncontrolling
interest adjustment (9)
|
22,557
|
|
|
12,663
|
|
|
46,616
|
|
|
34,574
|
|
|
Change in fair value
of the Silversea contingent consideration (8)
|
6,414
|
|
|
10,700
|
|
|
(44,605)
|
|
|
10,700
|
|
|
Net insurance
recoveries of Oasis of the Seas incident (10)
|
—
|
|
|
27,147
|
|
|
(1,938)
|
|
|
27,147
|
|
|
Transaction costs
related to the 2018 Silversea Cruises acquisition (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,186
|
|
|
Net Adjustments to
Net (Loss) Income attributable to Royal Caribbean Cruises
Ltd.
|
$
|
356,719
|
|
|
$
|
59,905
|
|
|
$
|
1,490,786
|
|
|
$
|
86,071
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings per
Share - Diluted
|
$
|
(7.83)
|
|
|
$
|
2.25
|
|
|
$
|
(14.74)
|
|
|
$
|
3.44
|
|
|
Adjusted (Loss)
Earnings per Share - Diluted
|
(6.13)
|
|
|
2.54
|
|
|
(7.61)
|
|
|
3.85
|
|
|
Net Adjustments to
(Loss) Earnings per Share
|
$
|
1.70
|
|
|
$
|
0.29
|
|
|
$
|
7.13
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to (Loss)
Earnings per Share:
|
|
|
|
|
|
|
|
|
Impairment and credit
losses (1)
|
$
|
0.75
|
|
|
$
|
—
|
|
|
$
|
6.05
|
|
|
$
|
—
|
|
|
Equity investment
impairment (2)
|
—
|
|
|
|
—
|
|
|
|
0.19
|
|
|
|
—
|
|
|
Currency translation
adjustment losses (3)
|
0.33
|
|
|
|
—
|
|
|
|
0.33
|
|
|
|
—
|
|
|
Pullmantur
reorganization settlement (4)
|
0.10
|
|
|
|
—
|
|
|
|
0.10
|
|
|
|
—
|
|
|
Restructuring charges
and other initiatives expense (5)
|
0.16
|
|
|
|
—
|
|
|
|
0.22
|
|
|
|
—
|
|
|
Convertible debt
amortization of debt discount (6)
|
0.02
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
|
Loss on
extinguishment of debt (7)
|
0.19
|
|
|
|
0.03
|
|
|
|
0.19
|
|
|
|
0.03
|
|
|
Amortization of
Silversea Cruises intangible assets resulting from the 2018
Silversea
Cruises acquisition (8)
|
0.01
|
|
|
|
0.01
|
|
|
|
0.03
|
|
|
|
0.03
|
|
|
Noncontrolling
interest adjustment (9)
|
0.11
|
|
|
|
0.06
|
|
|
|
0.22
|
|
|
|
0.16
|
|
|
Amoriization hange in
fair value of the Silversea contingent consideration (8)
|
0.03
|
|
|
|
0.05
|
|
|
|
(0.21)
|
|
|
|
0.05
|
|
|
Net insurance
recoveries of Oasis of the Seas incident (10)
|
—
|
|
|
|
0.13
|
|
|
|
(0.01)
|
|
|
|
0.13
|
|
|
Transaction costs
related to the 2018 Silversea Cruises acquisition (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net Adjustments to
(Loss) Earnings per Share
|
$
|
1.70
|
|
|
$
|
0.29
|
|
|
$
|
7.13
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding - Diluted
|
209,385
|
|
|
210,052
|
|
|
209,241
|
|
|
209,962
|
|
|
(1)
|
Represents asset
impairment and credit losses recorded in the first and second
quarters of 2020 as a result of the impact of COVID-19.
|
(2)
|
Represents equity
investment asset impairment, primarily for our investment in Grand
Bahama Shipyard, recorded in the first quarter of 2020 as a
result of the impact of COVID-19.
|
(3)
|
Represents currency
translation losses recognized in connection with the ships
classified as assets held-for-sale that were previously chartered
to Pullmantur.
|
(4)
|
Represents settlement
costs with Pullmantur in connection with its reorganization
filing.
|
(5)
|
Represents
restructuring charges incurred in relation to the reduction in our
U.S. workforce in the second quarter of 2020, the reorganization of
our international sales and marketing structure and other
initiatives expenses.
|
(6)
|
Represents the
amortization of non-cash debt discount on the $1.15 billion
convertible notes.
|
(7)
|
For the quarter and
six months ended June 30, 2020, loss on the extinguishment of the
$2.2 billion Senior Secured Term Loan. For the quarter and six
months ended June 30, 2019, loss on the extinguishment of the $700
million 364-day loan related to the acquisition of Silversea
Cruises and the remaining balance of the unsecured term loan
originally incurred in 2010 to purchase Allure of the
Seas.
|
(8)
|
Related to the 2018
Silversea Cruises acquisition.
|
(9)
|
Adjustment made to
exclude the impact of the contractual accretion requirements
associated with the put option held by the Silversea
Cruises noncontrolling interest prior to the July 2020
noncontrolling interest purchase.
|
(10)
|
Amount includes net
insurance recoveries related to the collapse of the drydock
structure at the Grand Bahama Shipyard involving Oasis of the
Seas.
|
View original
content:http://www.prnewswire.com/news-releases/royal-caribbean-group-provides-business-update-and-reports-on-second-quarter-2020-301109047.html
SOURCE Royal Caribbean Group