MIAMI, Aug. 4, 2021 /PRNewswire/ -- Royal Caribbean
Group (NYSE: RCL) today reported financial results for the second
quarter of 2021 and provided business updates on the resumption of
service.
The Group has made tremendous strides in resuming service both
in the United States and globally
and is encouraged by the significant improvement in demand and
pricing environments for cruises.
Resumption of Sailing and Business Highlights
The resumption of service is being implemented at a very fast
pace.
- Already, the Group is operating 29 ships across its five
brands, representing 42% of capacity.
- By the end of this month, the Group expects to be operating 36
ships, representing over 60% of its capacity.
- The Company anticipates having 80% of its capacity in service
by end of year 2021.
"We're thrilled to be back on the water at accelerated speed in
the US and elsewhere. After 16 months of being at a virtual
standstill and another painful financial result this quarter, the
flywheel is clearly picking up momentum," said Richard D. Fain, Chairman and CEO. "Since the
pandemic began, our objective has been to make our ships safer than
Main Street, and today, we are proving that ambitious goal is
achievable. We are also encouraged by the booking outlook
especially for 2022 and beyond."
- Booked load factor for 2022 is within historical ranges. Prices
for 2022 are up versus a record-setting 2019, even including the
dilutive impact of future cruise credits (FCCs).
- Customer Deposits have increased $530
million from last quarter to $2.4
billion.
- The Company ended the second quarter with $5.0 billion of liquidity.
Resumption of Sailing from U.S.
Since the last business update, the Company has announced
itineraries for 21 ships sailing by August
31, 2021, which includes 12 ships sailing from U.S. ports.
This is in addition to 15 ships previously announced sailing from
ports outside the U.S. In total, 36 ships from the Company's five
brands, or over 60% of its fleet, have either resumed sailing or
announced their intention to resume sailing by August 31, 2021. The response to these
announcements has been very positive, continuing to highlight the
robust, pent-up demand for cruising.
Second Quarter 2021
The Company reported US GAAP Net Loss for the second quarter of
2021 of $(1.3) billion or
$(5.29) per share compared to US GAAP
Net Loss of $(1.6) billion or
$(7.83) per share in the prior year.
The Company also reported Adjusted Net Loss of $(1.3) billion or $(5.06) per share for the second quarter of 2021
compared to Adjusted Net Loss of $(1.3)
billion or $(6.13) per share
in the prior year. The Net Loss and Adjusted Net Loss for the
quarter are the result of the impact of the COVID-19 pandemic on
the business.
The average monthly cash burn rate for the second quarter of
2021 was approximately $330 million,
slightly higher than the prior quarter as the Company returned
additional ships into operation.
"As we look forward, there is very positive momentum with our
ships resuming operations and a healthy demand environment" said
Jason T. Liberty, Executive Vice
President and CFO. "We are very optimistic with our accelerated
start in the United States and
globally. We anticipate 80% of our fleet to be back in service by
year-end delivering the world's best vacations. That is the
first step on our pathway back to delivering superior returns."
Update on Liquidity Actions and Ongoing Uses of Cash
Since the suspension of operations in March 2020, the Group has raised approximately
$13 billion through a combination of
bond issuances, common stock offerings and other loan facilities.
These actions have positioned the Group well with current liquidity
of approximately $5.0 billion.
The Group continues to take steps to improve its balance sheet
and reduce its interest costs. This includes the June
issuance of $650 million in senior
unsecured notes at 4.25% due 2026, the proceeds of which were used
to redeem in full the 7.25% senior secured bonds due 2025. This
follows a $1.5 billion unsecured bond
issuance in March 2021 used to
refinance current and upcoming maturities
As the Group continues to ramp up operations, it expects to
incur incremental spend related to bringing ships back to operating
status, returning crew members to ships and implementing enhanced
health and safety protocols. The Company also expects to continue
to collect deposits related to those sailings and for future
cruises. The decision to bring ships back into service takes into
account many variables, including deployment opportunities,
commercial potential, cost of operations and cash flow.
Update on Bookings
Overall booking volumes have improved, and pricing remains
strong. During the second quarter the Company received about 50%
more new bookings compared to the first quarter with trends
improving from one month to the next. By June, the Company was
receiving about 90% more bookings each week when compared to the
first quarter with improvements of a similar magnitude for both
2021 and 2022 sailings.
"The surge in bookings has been extremely encouraging especially
for 2022 and beyond," said Fain. "The return of cruising has
been faster than anyone expected, and we are excited to gradually
restart our presence in our key markets. We are watching the
impact of the Delta variant and other likely variants, but overall,
we remain optimistic in our mounting trajectory going
forward. People also book their cruises long in advance, so
we are concentrating on maintaining our price levels while growing
our load factors."
Overall, the booking activity for 2021 sailings is consistent
with the Company's expected capacity and occupancy ramp up, at
prices that are higher than 2019. While it's too early to
make any definitive conclusions of the impact of the Delta variant
on bookings, the company has seen a modest impact on closer-in
bookings. However, 2022 continues to remain strong; in
particular the spring and summer months are performing well.
As of June 30, 2021, the Company
had approximately $2.4 billion in
customer deposits, which has increased by $530 million from March
31, 2021. Approximately 40% of the customer deposit balance
is related to FCCs, this has dropped from 45% in the prior quarter,
which is a positive trend, indicating net new demand.
Liberty added, "We are very encouraged by the continued pent-up
demand for cruising shown by our accelerated booking trends
globally and the elevated onboard spend we are seeing from our
guests on current sailings. We remain confident we are on
track to resuming our trajectory of delivering superior
results."
Sustainability
Despite pandemic headwinds, the Company has made significant
progress across key Environmental, Social, and Governance focus
areas, and these efforts remain a priority during the Company's
return to service.
Some of its key achievements include a reduction in greenhouse
gas emissions, removal of a significant amount of single use
plastics from the supply chain, equipping the majority of its fleet
with emissions purification systems, outfitting new ships with
Selective Catalytic Reduction to reduce NOx emissions, reducing
waste to landfill, outfitting ships with Advanced Wastewater
Purification, and introducing Global Sustainable Tourism Council
certified tours.
In addition, through ingenuity and design, the Company's next
class of ships will be powered by liquefied natural gas, a cleaner
burning form of fuel, and fuel cell technology, which can help
reduce ship emissions. Exploring alternative fuel solutions
is a major priority for the Company and our industry. The Company's
teams are focused on exploring decarbonization solutions while also
continuing to increase our energy efficiency. These efforts have
placed Celebrity Apex, which had its maiden voyage in June, on the
path to achieving the international targets of 40% reduction in
carbon intensity by 2030 from a 2008 baseline.
The Group participated in the Sustainability Accounting
Standards Board's working group to create reporting standards and
metrics for our industry and is working to align our reporting to
the Task Force on Climate-related Financial Disclosures, better
known as TCFD. In line with our mantra of continuous
improvement, we are working towards developing a new set of targets
covering the reduction of carbon emissions and intensity,
sustainable commodity sourcing and tourism, single use plastics and
waste management.
Human capital is another important focal point for our Company.
Our human capital strategy is focused on key elements that include
enhancing our diverse and inclusive workforce, providing
opportunities for growth and development, and offering mental
health support and well-being resources to our crew and shoreside
employees. We have also developed an active listening
strategy that gives each of our employees a voice to drive
meaningful change in the workplace. We believe setting our
workforce up for success through initiatives that support these
elements, positions our business to excel now and into the
future.
Liquidity and Financing Arrangements
As of June 30, 2021, the Company's
liquidity was approximately $5.0
billion, including $4.3
billion in cash and cash equivalents and a $0.7 billion commitment for a 364-day
facility.
As of the date of this release, the scheduled debt maturities
for the remainder of 2021 and 2022, were $21
million and $2.2 billion,
respectively.
Net interest expense for the third quarter of 2021 is expected
to be in the range of $265-$270M
million.
Capital Expenditures and Capacity Updates
Based upon current ship orders and delivery schedules, the
projected capital expenditures for the remainder of 2021 are
$900 million. The Company expects the
delivery of Silver Dawn to the Silversea fleet during the
fourth quarter which has committed financing.
Depreciation and amortization expenses for the third quarter of
2021 are expected to be in the range of $320- $325
million.
In 2022 the Company has two ship deliveries scheduled, both with
committed financing: Wonder of the Seas and Celebrity
Beyond. Excluding the newbuild deliveries, the capital
expenditures for 2022 will depend on the Company's schedule to
return to service.
Fuel Expense
As of June 30, 2021, the Company
had hedged approximately 38%, 25% and 5% of its total projected
metric tons of fuel consumption for the remainder of 2021 and for
all of 2022 and 2023, respectively. The prior suspension of cruise
operations and recent resumption of operations resulted in
reductions to the forecasted fuel consumption. As of June 30, 2021, the Company had outstanding fuel
swaps of 82,500 and 14,650 metric tons maturing in 2021 and 2022,
respectively, that no longer hedge the forecasted fuel consumption.
For the remainder of 2021 and for all of 2022 and 2023, the annual
average cost per metric ton of the fuel swap portfolio is
approximately $393, $512, and $580,
respectively.
2021 Outlook
The Company's operations remain heavily impacted by the
consequences of the COVID-19 pandemic. Therefore, the Company
cannot reasonably estimate its financial or operational results.
However, the Company expects to incur a net loss on both a U.S.
GAAP and adjusted basis for its third quarter and the 2021 fiscal
year, the degree to which will depend on many factors including the
timing and extent of the return to service.
CONFERENCE CALL SCHEDULED
The Company has scheduled a conference call at 10:00 a.m. Eastern 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 per Share ("Adjusted EPS")
Represents Adjusted Net Loss attributable to Royal Caribbean
Cruises Ltd. (as defined below) 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 attributable to Royal Caribbean Cruises
Ltd.
Represents net loss 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) gain or loss on
the extinguishment of debt; (ii) the amortization of non-cash debt
discount on our convertible notes; (iii) the estimated cash refund
expected to be paid to Pullmantur guests and other expenses
incurred as part of the Pullmantur reorganization; (iv) impairment
and credit losses recognized as a result of the impact of COVID-19;
(v) equity investment asset impairments; (vi) net insurance
recoveries related to the collapse of the drydock structure at the
Grand Bahama Shipyard involving Oasis of the Seas; (vii)
restructuring charges incurred in relation to the reduction in our
U.S. workforce and other initiative expenses; (viii) the change in
the fair value in the Silversea Cruises contingent consideration
and the amortization of the Silversea Cruises intangible assets
resulting from our acquisition of a 66.7% interest in Silversea
Cruises in 2018; (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 (previously known as Silversea Cruises Group Ltd.)
noncontrolling interest in Silversea Cruises, which noncontrolling
interest we acquired on July 9, 2020;
(x) the net gain recognized in the first quarter of 2021 in
relation to the sale of the Azamara brand; and (xi) currency
translation losses recognized during the second quarter of 2020, in
connection with the ships classified as assets held-for-sale that
were previously chartered to Pullmantur.
For additional information see "Adjusted Measures of Financial
Performance" below.
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 and
operator of three global cruise vacation brands: Royal Caribbean
International, Celebrity Cruises and Silversea Cruises. Royal
Caribbean Group is also a 50% owner of a joint venture that
operates TUI Cruises and Hapag-Lloyd Cruises. Together, our brands
operate 60 ships with an additional 13 on order as of June 30, 2021. Learn more at
www.royalcaribbeangroup.com or www.rclinvestor.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this press 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 2021 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, liquidity 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, as well as our plan to return to service, including
our ability to conduct simulated voyages and resume sailings in
compliance with the Framework for the Conditional Sailing Order
issued by the U.S. Centers for Disease Control and Prevention; the
impact of state regulation and litigation regarding proof of
passenger vaccination; 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; our ability to accurately estimate our monthly cash burn
rate during the suspension of our operations; concerns over safety,
health and security of guests and crew; any protocols we adopt
across our fleet relating to COVID-19, such as those recommended by
the Healthy Sail Panel, may be costly and less effective than we
expect in reducing the risk of infection and spread of COVID-19 on
our cruise ships; 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 related to cyber security
attacks, data breaches, 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; the
unavailability or cost of air service; and uncertainties of a
foreign legal system as we are not incorporated in the United States.
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 annual report on Form 10-K, 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
|
(unaudited, in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Passenger ticket
revenues
|
$
|
22,785
|
|
|
$
|
107,022
|
|
|
$
|
43,629
|
|
|
$
|
1,483,873
|
|
Onboard and other
revenues
|
28,129
|
|
|
68,583
|
|
|
49,299
|
|
|
724,482
|
|
Total
revenues
|
50,914
|
|
|
175,605
|
|
|
92,928
|
|
|
2,208,355
|
|
Cruise operating
expenses:
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
5,188
|
|
|
28,824
|
|
|
8,137
|
|
|
345,953
|
|
Onboard and
other
|
8,598
|
|
|
21,579
|
|
|
13,079
|
|
|
145,297
|
|
Payroll and
related
|
167,640
|
|
|
243,877
|
|
|
264,276
|
|
|
574,267
|
|
Food
|
17,196
|
|
|
27,483
|
|
|
25,668
|
|
|
148,799
|
|
Fuel
|
59,109
|
|
|
79,192
|
|
|
100,931
|
|
|
273,460
|
|
Other
operating
|
167,099
|
|
|
279,465
|
|
|
296,226
|
|
|
703,463
|
|
Total cruise
operating expenses
|
424,830
|
|
|
680,420
|
|
|
708,317
|
|
|
2,191,239
|
|
Marketing, selling
and administrative expenses
|
285,558
|
|
|
301,418
|
|
|
543,599
|
|
|
697,308
|
|
Depreciation and
amortization expenses
|
323,439
|
|
|
319,757
|
|
|
633,605
|
|
|
644,087
|
|
Impairment and credit
losses
|
40,621
|
|
|
156,497
|
|
|
40,172
|
|
|
1,264,615
|
|
Operating
Loss
|
(1,023,534)
|
|
|
(1,282,487)
|
|
|
(1,832,765)
|
|
|
(2,588,894)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
4,670
|
|
|
5,206
|
|
|
9,531
|
|
|
10,740
|
|
Interest expense, net
of interest capitalized
|
(304,811)
|
|
|
(218,889)
|
|
|
(577,325)
|
|
|
(311,800)
|
|
Equity investment
loss
|
(48,088)
|
|
|
(51,853)
|
|
|
(107,959)
|
|
|
(62,245)
|
|
Other income
(expense)
|
24,508
|
|
|
(83,825)
|
|
|
29,541
|
|
|
(116,684)
|
|
|
(323,721)
|
|
|
(349,361)
|
|
|
(646,212)
|
|
|
(479,989)
|
|
Net
Loss
|
(1,347,255)
|
|
|
(1,631,848)
|
|
|
(2,478,977)
|
|
|
(3,068,883)
|
|
Less: Net Income
attributable to noncontrolling interest
|
—
|
|
|
7,444
|
|
|
—
|
|
|
14,888
|
|
Net Loss
attributable to Royal Caribbean Cruises
Ltd.
|
$
|
(1,347,255)
|
|
|
$
|
(1,639,292)
|
|
|
$
|
(2,478,977)
|
|
|
$
|
(3,083,771)
|
|
Loss per
Share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(5.29)
|
|
|
$
|
(7.83)
|
|
|
$
|
(9.96)
|
|
|
$
|
(14.74)
|
|
Diluted
|
$
|
(5.29)
|
|
|
$
|
(7.83)
|
|
|
$
|
(9.96)
|
|
|
$
|
(14.74)
|
|
Weighted-Average
Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
254,577
|
|
|
209,385
|
|
|
248,823
|
|
|
209,241
|
|
Diluted
|
254,577
|
|
|
209,385
|
|
|
248,823
|
|
|
209,241
|
|
|
|
|
|
|
|
|
|
Comprehensive
Loss
|
|
|
|
|
|
|
|
Net
Loss
|
$
|
(1,347,255)
|
|
|
$
|
(1,631,848)
|
|
|
$
|
(2,478,977)
|
|
|
$
|
(3,068,883)
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(3,489)
|
|
|
26,337
|
|
|
6,233
|
|
|
36,627
|
|
Change in defined
benefit plans
|
(3,088)
|
|
|
(6,278)
|
|
|
7,375
|
|
|
(13,867)
|
|
Gain (loss) on cash
flow derivative hedges
|
51,476
|
|
|
124,331
|
|
|
61,778
|
|
|
(176,274)
|
|
Total other
comprehensive income (loss)
|
44,899
|
|
|
144,390
|
|
|
75,386
|
|
|
(153,514)
|
|
Comprehensive
Loss
|
(1,302,356)
|
|
|
(1,487,458)
|
|
|
(2,403,591)
|
|
|
(3,222,397)
|
|
Less: Comprehensive
Income attributable to
noncontrolling interest
|
—
|
|
|
7,444
|
|
|
—
|
|
|
14,888
|
|
Comprehensive Loss
attributable to Royal Caribbean
Cruises Ltd.
|
$
|
(1,302,356)
|
|
|
$
|
(1,494,902)
|
|
|
$
|
(2,403,591)
|
|
|
$
|
(3,237,285)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except share data)
|
|
As of
|
|
June
30,
|
|
December
31,
|
|
2021
|
|
2020
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
4,250,369
|
|
|
$
|
3,684,474
|
|
Trade and other
receivables, net of allowances of $4,459 and $3,867 at
June 30, 2021
and December 31, 2020, respectively
|
345,055
|
|
|
284,149
|
|
Inventories
|
132,888
|
|
|
118,703
|
|
Prepaid expenses and
other assets
|
224,688
|
|
|
154,339
|
|
Derivative financial
instruments
|
56,230
|
|
|
70,082
|
|
Total current
assets
|
5,009,230
|
|
|
4,311,747
|
|
Property and equipment,
net
|
25,872,907
|
|
|
25,246,595
|
|
Operating lease
right-of-use assets
|
559,508
|
|
|
599,985
|
|
Goodwill
|
809,435
|
|
|
809,480
|
|
Other assets, net of
allowances of $85,369 and $81,580 at June 30, 2021
and December 31, 2020, respectively
|
1,440,882
|
|
|
1,497,380
|
|
Total
assets
|
$
|
33,691,962
|
|
|
$
|
32,465,187
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of
long-term debt
|
$
|
970,627
|
|
|
$
|
961,768
|
|
Current portion of
operating lease liabilities
|
84,842
|
|
|
102,677
|
|
Commercial
paper
|
—
|
|
|
409,319
|
|
Accounts
payable
|
384,683
|
|
|
353,422
|
|
Accrued
interest
|
270,343
|
|
|
252,668
|
|
Accrued expenses and
other liabilities
|
552,992
|
|
|
615,750
|
|
Derivative financial
instruments
|
52,723
|
|
|
56,685
|
|
Customer
deposits
|
2,363,505
|
|
|
1,784,832
|
|
Total current
liabilities
|
4,679,715
|
|
|
4,537,121
|
|
Long-term
debt
|
20,078,789
|
|
|
17,957,956
|
|
Long-term operating
lease liabilities
|
533,551
|
|
|
563,876
|
|
Other long-term
liabilities
|
515,892
|
|
|
645,565
|
|
Total
liabilities
|
25,807,947
|
|
|
23,704,518
|
|
|
|
|
|
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; 282,575,446 and
265,198,371 shares issued, June 30, 2021 and December 31,
2020, respectively)
|
2,826
|
|
|
2,652
|
|
Paid-in
capital
|
7,527,305
|
|
|
5,998,574
|
|
Retained
earnings
|
3,083,798
|
|
|
5,562,775
|
|
Accumulated other
comprehensive loss
|
(663,955)
|
|
|
(739,341)
|
|
Treasury stock
(27,882,987 and 27,799,775 common shares at cost, June 30,
2021 and
December 31, 2020, respectively)
|
(2,065,959)
|
|
|
(2,063,991)
|
|
Total shareholders'
equity
|
7,884,015
|
|
|
8,760,669
|
|
Total liabilities
and shareholders' equity
|
$
|
33,691,962
|
|
|
$
|
32,465,187
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited, in
thousands)
|
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
Operating
Activities
|
|
|
|
Net Loss
|
$
|
(2,478,977)
|
|
|
$
|
(3,068,883)
|
|
Adjustments:
|
|
|
|
Depreciation and
amortization
|
633,605
|
|
|
644,087
|
|
Impairment and credit
losses
|
40,172
|
|
|
1,264,615
|
|
Net deferred income
tax benefit
|
(8,450)
|
|
|
(2,666)
|
|
(Gain) loss on
derivative instruments not designated as hedges
|
(16,163)
|
|
|
84,280
|
|
Share-based
compensation expense
|
35,562
|
|
|
8,764
|
|
Equity investment
loss
|
107,959
|
|
|
62,245
|
|
Amortization of debt
issuance costs
|
72,500
|
|
|
28,807
|
|
Amortization of debt
discounts and premiums
|
56,609
|
|
|
6,668
|
|
(Gain) loss on
extinguishment of debt
|
(3,156)
|
|
|
40,335
|
|
Currency translation
adjustment losses
|
—
|
|
|
69,044
|
|
Change in fair value
of contingent consideration
|
—
|
|
|
(44,605)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
(Increase) decrease in
trade and other receivables, net
|
(180,562)
|
|
|
94,873
|
|
(Increase) decrease in
inventories
|
(17,191)
|
|
|
9,511
|
|
(Increase) decrease in
prepaid expenses and other assets
|
(75,213)
|
|
|
249,481
|
|
Increase in accounts
payable
|
38,073
|
|
|
118,398
|
|
Increase in accrued
interest
|
17,675
|
|
|
52,114
|
|
Decrease in accrued
expenses and other liabilities
|
(123,028)
|
|
|
(17,110)
|
|
Increase (decrease) in
customer deposits
|
629,285
|
|
|
(1,622,721)
|
|
Dividends received
from unconsolidated affiliates
|
—
|
|
|
1,991
|
|
Other, net
|
1,746
|
|
|
(28,051)
|
|
Net cash used in
operating activities
|
(1,269,554)
|
|
|
(2,048,823)
|
|
Investing
Activities
|
|
|
|
Purchases of property
and equipment
|
(1,286,175)
|
|
|
(1,391,891)
|
|
Cash received on
settlement of derivative financial instruments
|
24,766
|
|
|
1,558
|
|
Cash paid on
settlement of derivative financial instruments
|
(34,121)
|
|
|
(117,518)
|
|
Investments in and
loans to unconsolidated affiliates
|
(70,084)
|
|
|
(87,943)
|
|
Cash received on
loans to unconsolidated affiliates
|
20,127
|
|
|
10,241
|
|
Proceeds from the
sale of property and equipment and other assets
|
175,439
|
|
|
5,256
|
|
Other, net
|
(13,627)
|
|
|
(11,180)
|
|
Net cash used in
investing activities
|
(1,183,675)
|
|
|
(1,591,477)
|
|
Financing
Activities
|
|
|
|
Debt
proceeds
|
3,144,077
|
|
|
12,672,189
|
|
Debt issuance
costs
|
(110,760)
|
|
|
(276,995)
|
|
Repayments of
debt
|
(1,185,490)
|
|
|
(3,424,387)
|
|
Proceeds from
issuance of commercial paper notes
|
—
|
|
|
6,765,739
|
|
Repayments of
commercial paper notes
|
(414,570)
|
|
|
(7,837,635)
|
|
Dividends
paid
|
—
|
|
|
(326,421)
|
|
Proceeds from common
stock issuances
|
1,621,860
|
|
|
—
|
|
Other, net
|
(36,125)
|
|
|
(28,284)
|
|
Net cash provided by
financing activities
|
3,018,992
|
|
|
7,544,206
|
|
Effect of exchange
rate changes on cash
|
132
|
|
|
(953)
|
|
Net increase in cash
and cash equivalents
|
565,895
|
|
|
3,902,953
|
|
Cash and cash
equivalents at beginning of period
|
3,684,474
|
|
|
243,738
|
|
Cash and cash
equivalents at end of period
|
$
|
4,250,369
|
|
|
$
|
4,146,691
|
|
Supplemental
Disclosure
|
|
|
|
Cash paid during the
period for:
|
|
|
|
Interest, net of
amount capitalized
|
$
|
382,461
|
|
|
$
|
153,078
|
|
Non-cash Investing
Activities
|
|
|
|
Notes receivable
issued upon sale of property and equipment and other
assets
|
$
|
16,000
|
|
|
$
|
53,419
|
|
Purchase of property
and equipment included in accounts payable and accrued expenses and
other liabilities
|
$
|
33,207
|
|
|
$
|
64,326
|
|
ROYAL CARIBBEAN
CRUISES LTD.
|
NON-GAAP
RECONCILING INFORMATION
|
(unaudited)
|
Adjusted Net Loss
attributable to Royal Caribbean Cruises Ltd. and Adjusted Loss per
Share were calculated as follows (in thousands, except per share
data):
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net Loss
attributable to Royal Caribbean Cruises Ltd.
|
$
|
(1,347,255)
|
|
|
$
|
(1,639,292)
|
|
|
$
|
(2,478,977)
|
|
|
$
|
(3,083,771)
|
|
Adjusted Net Loss
attributable to Royal Caribbean Cruises
Ltd.
|
(1,287,121)
|
|
|
(1,282,573)
|
|
|
(2,365,400)
|
|
|
(1,592,985)
|
|
Net Adjustments to
Net Loss attributable to
Royal Caribbean Cruises Ltd.
|
$
|
60,134
|
|
|
$
|
356,719
|
|
|
$
|
113,577
|
|
|
$
|
1,490,786
|
|
Adjustments to Net
Loss attributable to Royal Caribbean
Cruises Ltd.:
|
|
|
|
|
|
|
|
(Gain) Loss on
extinguishment of debt (1)
|
$
|
(4,470)
|
|
|
$
|
40,335
|
|
|
$
|
(3,156)
|
|
|
$
|
40,335
|
|
Convertible debt
amortization of debt discount (2)
|
26,073
|
|
|
4,184
|
|
|
52,146
|
|
|
4,184
|
|
Pullmantur
reorganization settlement (3)
|
—
|
|
|
21,637
|
|
|
5,000
|
|
|
21,637
|
|
Impairment and credit
losses (4)
|
40,621
|
|
|
156,497
|
|
|
40,172
|
|
|
1,264,615
|
|
Equity investment
impairments (5)
|
—
|
|
|
—
|
|
|
26,042
|
|
|
39,735
|
|
Oasis of the Seas
incident, Grand Bahama's drydock write-off
and other incidental expenses (6)
|
(5,263)
|
|
|
—
|
|
|
(6,584)
|
|
|
(1,938)
|
|
Restructuring charges
and other initiatives expense (7)
|
330
|
|
|
32,982
|
|
|
1,647
|
|
|
45,025
|
|
Change in the fair
value of contingent consideration and
amortization of Silversea Cruises intangible assets related to
Silversea Cruises acquisition (8)
|
1,623
|
|
|
9,483
|
|
|
3,246
|
|
|
(38,467)
|
|
Noncontrolling
interest adjustment (9)
|
—
|
|
|
22,557
|
|
|
—
|
|
|
46,616
|
|
Net gain related to
the sale of the Azamara brand (10)
|
1,220
|
|
|
—
|
|
|
(4,936)
|
|
|
—
|
|
Currency translation
adjustment losses (11)
|
—
|
|
|
69,044
|
|
|
—
|
|
|
69,044
|
|
Net Adjustments to
Net Loss attributable to Royal
Caribbean Cruises Ltd.
|
$
|
60,134
|
|
|
$
|
356,719
|
|
|
$
|
113,577
|
|
|
$
|
1,490,786
|
|
|
|
|
|
|
|
|
|
Loss per Share -
Diluted
|
$
|
(5.29)
|
|
|
$
|
(7.83)
|
|
|
$
|
(9.96)
|
|
|
$
|
(14.74)
|
|
Adjusted Loss per
Share - Diluted
|
(5.06)
|
|
|
(6.13)
|
|
|
(9.51)
|
|
|
(7.61)
|
|
Net Adjustments to
Loss per Share
|
$
|
0.23
|
|
|
$
|
1.70
|
|
|
$
|
0.45
|
|
|
$
|
7.13
|
|
|
|
|
|
|
|
|
|
Adjustments to
Loss per Share:
|
|
|
|
|
|
|
|
(Gain) Loss on
extinguishment of debt (1)
|
$
|
(0.02)
|
|
|
$
|
0.19
|
|
|
$
|
(0.01)
|
|
|
$
|
0.19
|
|
Convertible debt
amortization of debt discount (2)
|
0.10
|
|
|
0.02
|
|
|
0.21
|
|
|
0.02
|
|
Pullmantur
reorganization settlement (3)
|
—
|
|
|
0.10
|
|
|
0.02
|
|
|
0.10
|
|
Impairment and credit
losses (4)
|
0.16
|
|
|
0.75
|
|
|
0.16
|
|
|
6.05
|
|
Equity investment
impairments (5)
|
—
|
|
|
—
|
|
|
0.10
|
|
|
0.19
|
|
Oasis of the Seas
incident, Grand Bahama's drydock write-off
and other incidental expenses (6)
|
(0.02)
|
|
|
—
|
|
|
(0.03)
|
|
|
(0.01)
|
|
Restructuring charges
and other initiatives expense (7)
|
—
|
|
|
0.16
|
|
|
0.01
|
|
|
0.22
|
|
Change in the fair
value of contingent consideration and
amortization of Silversea Cruises intangible assets related to
Silversea Cruises acquisition (8)
|
0.01
|
|
|
0.04
|
|
|
0.01
|
|
|
(0.18)
|
|
Noncontrolling
interest adjustment (9)
|
—
|
|
|
0.11
|
|
|
—
|
|
|
0.22
|
|
Net gain related to
the sale of the Azamara brand (10)
|
—
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Currency translation
adjustment losses (11)
|
—
|
|
|
0.33
|
|
|
—
|
|
|
0.33
|
|
Net Adjustments to
Loss per Share
|
$
|
0.23
|
|
|
$
|
1.70
|
|
|
$
|
0.45
|
|
|
$
|
7.13
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding - Diluted
|
254,577
|
|
|
209,385
|
|
|
248,823
|
|
|
209,241
|
|
|
|
(1)
|
For the three months
ended June 30, 2021, represents the net gain on the full repayment
of the Silversea Cruises 7.25% senior secured notes ("Silversea
Notes") in the amount of $619.8 million. For the six months ended
June 30, 2021, represents the net gain on the full repayment of the
Silversea Notes and the first quarter 2021 loss on the partial
repayment of the $1.55 billion unsecured revolving credit facility.
For the quarter and six months ended June 30, 2020, represents a
loss on the extinguishment of the $2.2 billion Senior Secured Term
Loan.
|
(2)
|
Represents the
amortization of non-cash debt discount on our convertible
notes.
|
(3)
|
Represents estimated
cash refunds expected to be paid to Pullmantur guests and other
expenses incurred as part of the Pullmantur
reorganization.
|
(4)
|
In 2021 and 2020,
represents asset impairment and credit losses as a result of the
impact of COVID-19. In 2021, amounts are net of the recovery
of credit losses recognized in 2020.
|
(5)
|
Represent equity
investment asset impairments, primarily for our investments in TUI
Cruises GmbH in 2021 and Grand Bahama Shipyard in 2020, as a result
of the impact of COVID-19.
|
(6)
|
Amounts include net
insurance recoveries related to the collapse of the drydock
structure at the Grand Bahama Shipyard involving Oasis of the
Seas.
|
(7)
|
Represents primarily
restructuring charges incurred in relation to the reduction in our
U.S. workforce and other initiatives expenses.
|
(8)
|
Related to the
Silversea Cruises acquisition.
|
(9)
|
Adjustment made to
exclude the impact of the contractual accretion requirements
associated with the put option held by Heritage Cruise Holding
Ltd.'s (previously known as Silversea Cruises Group Ltd.)
noncontrolling interest, which noncontrolling interest we acquired
on July 9, 2020.
|
(10)
|
Represents the net
gain recognized in the first quarter of 2021 in relation to the
sale of the Azamara brand.
|
(11)
|
Represents currency
translation losses recognized during the second quarter of 2020, in
connection with the ships classified as assets held-for-sale that
were previously chartered to Pullmantur.
|
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SOURCE Royal Caribbean Group