FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULES 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of July, 2004
ROYAL CARIBBEAN CRUISES LTD.
1050 Caribbean Way, Miami, Florida 33132
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual reports under cover
Form 20-F or Form 40-F.]
Form 20-F X
Form 40-F
[Indicate by check mark whether the registrant by furnishing the information contained in this
Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.]
Yes No
X
[IF "Yes" is marked indicate below the file number assigned to the registrant in connection
with Ruke 12g3-2(b): 82-____.]
Contact: Lynn Martenstein or Dan Mathewes
(305) 539-6570 or (305) 539-6153
For Immediate Release
ROYAL CARIBBEAN
REPORTS RECORD SECOND QUARTER EARNINGS AND INCREASES GUIDANCE FOR THE YEAR
MIAMI – (July 28, 2004)
– Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL) announced today that net income for
the second quarter of 2004 was $122.2 million, or $0.59 per share. This compares to $55.7
million, or $0.28 per share, for the second quarter of 2003. Revenues for the second
quarter of 2004 increased 26.2% to $1.1 billion from revenues of $905.8 million in the
second quarter of 2003. The increase in revenues was primarily due to a 12.4% increase in
capacity coupled with an increase in cruise ticket prices, occupancy and onboard revenues.
Gross Yields for the second quarter of 2004 increased 12.3% from the second quarter of
2003. Net Yields, which the company considers a better measure of revenue performance,
increased 12.6% from the second quarter of 2003.
“These are exciting times at
Royal Caribbean,” said Richard D. Fain, chairman and chief executive officer of Royal
Caribbean Cruises Ltd. “The marketplace is demonstrating characteristics that we
haven’t seen since prior to 2001.”
The booking environment continues to
be strong as evidenced by widespread improvements in pricing and occupancy. The company
has continued to focus on its “strategic pricing” programs as a result of which
the booking curve continues to be longer than in 2003. In addition, the company has been
able to fill on a more profitable basis remaining berths as sailings approach. This has
resulted in higher occupancy and higher yields. Assuming there are no external shocks, the
company currently forecasts that Net Yields for the third and fourth quarters of 2004 will
increase in the range of 10% to 11% and 1% to 3%, respectively, compared to the same
periods last year. On this basis, the company expects Net Yields for the full year 2004
will increase in the range of 7% to 9% from the prior year.
The company first remarked on the
improvement in the yield environment last spring, but the fact that this improvement has
continued is very gratifying. The company attributes part of the yield improvements to its
success in anticipating and managing market demand via its revenue management.
Gross Cruise Costs and Net Cruise
Costs, on a per Available Passenger Cruise Day basis, for the second quarter of 2004
increased 8.1% and 6.6%, respectively, compared to the same quarter in 2003. Consistent
with industry and market trends, year-over-year cost comparisons were negatively impacted
by increases in fuel prices. Year-over-year comparisons were also affected by an increase
in marketing, selling and administrative expenses, as well as crew and port expenses.
For the second half of 2004, the
company estimates that Net Cruise Costs, on a per Available Passenger Cruise Day basis,
will be flat to up 2% as compared to the same period from the prior year. The company
estimates that Net Cruise Costs, on a per Available Passenger Cruise Day basis, for the
third quarter of 2004 will increase in the range of 4% to 5% and for the fourth quarter of
2004 will be flat to down 2% compared to the same periods in 2003.
Based upon these expectations,
management anticipates 2004 earnings per share to be in the range of $2.25 to $2.40.
The 2005 booking season has just
begun and is off to a good start. While the company does not have enough visibility to
provide specific yield guidance, demand is stronger than at the same time last year and
early indications, assuming there are no external shocks, point to a positive yield
environment.
In a separate release, the company
today announced that it was lengthening and refurbishing Enchantment of the Seas.
The addition of a 73-foot midsection and refurbishment will increase the vessel’s overall length to
990 feet and add 151 staterooms. The additional space and extensive renovations will also
accommodate new public areas onboard Enchantment of the Seas, including a new
specialty restaurant, Royal Caribbean International’s hallmark Boleros Latin lounge
and Latte’tudes coffee shop and ice cream parlor. In addition, existing spaces will
be extensively reconditioned. The expansion of Enchantment of the Seas will add
substantial revenue without adding commensurate costs, while significantly improving the
overall passenger experience. The Enchantment of the Seas’ transformation
comes in the wake of extensive enhancements to Empress of the Seas and Monarch
of the Seas. The line also has announced plans to revitalize Sovereign of the
Seas this fall.
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“Projects like these give us a
two-fold benefit – upgrading our fleet while producing a good ROI on the capital
expenditures,” said Fain.
During the second quarter, the
company officially opened Cape Liberty Cruise Port in Bayonne, N.J. Cape Liberty Cruise
Port is located at the northeast corner of The Peninsula at Bayonne Harbor, a 430-acre,
man-made peninsula that extends into New York Harbor. The new cruise port offers
passengers outstanding views of the harbor, the Verrazano Narrows Bridge, the Statue of
Liberty and lower Manhattan. Royal Caribbean International has two ships at the new port
in 2004, from May through October. Voyager of the Seas offers an alternating
schedule of five-night Canada and nine-night Caribbean cruises. Empress of the Seas
offers alternating six-night and eight-night Bermuda itineraries.
The company has scheduled a
conference call at 10 a.m. eastern standard time today to discuss its earnings. This call
can be listened to live or on a delayed basis on the company’s investor relations web
site at www.rclinvestor.com.
Terminology
Available Passenger
Cruise Days
Available Passenger Cruise Days
represent double occupancy per cabin multiplied by the number of cruise days for the
period.
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Gross Yields
Gross Yields represent total revenues per Available Passenger Cruise Day.
Net Yields
Net Yields represent Gross Yields
excluding commissions, transportation and other expenses and onboard and other expenses per Available
Passenger Cruise Day. We utilize Net Yields for revenue management purposes and believe that it is the most
relevant measure of our pricing performance. 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. We utilize Net
Yields to manage our business on a day-to-day basis and believe it is a more relevant
measure of our performance. As such, we do not believe that reconciling information is
meaningful.
Gross Cruise Costs
Gross Cruise Costs represent total
operating expenses and marketing, selling and administrative expenses.
Net Cruise Costs
Net Cruise Costs represent Gross
Cruise Costs excluding commissions, transportation and other expenses and onboard and
other expenses. In measuring our ability to control costs in a manner that positively
impacts net income, we believe changes in Net Cruise Costs to be the most relevant
indicator of our performance. We have not provided a quantitative reconciliation of
projected Gross Cruise Costs to projected Net Cruise Costs due to the significant
uncertainty in projecting the costs deducted to arrive at this measure. We utilize Net
Cruise Costs to manage our business on a day-to-day basis and believe it is a more
relevant measure of our performance. As such, we do not believe that reconciling
information is meaningful.
Royal Caribbean Cruises Ltd. is a
global cruise vacation company that operates Royal Caribbean International and Celebrity
Cruises, with a combined total of 29 ships in service and one under construction. The
company also offers unique cruisetour vacations in Alaska, Canada and Europe. Additional
information can be found on www.royalcaribbean.com, www.celebrity.com or
www.rclinvestor.com.
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Certain statements in this news
release are forward-looking statements. Forward-looking statements do not guarantee future
performance and may involve 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. Such
factors include general economic and business conditions, vacation industry competition
(including cruise industry competition), changes in vacation industry capacity (including
cruise capacity), the impact of tax laws and regulations affecting our business or our
principal shareholders, the impact of changes in other laws and regulations affecting our
business, the impact of pending or threatened litigation, the delivery of scheduled new
ships, emergency ship repairs, incidents involving cruise ships, reduced consumer demand
for cruises as a result of any number of reasons (including armed conflict, terrorist
attacks, geo-political and economic uncertainties or the unavailability of air service),
changes in our stock price, interest rates or oil prices, weather and other factors
described in further detail in Royal Caribbean Cruises Ltd.’s filings with the
Securities and Exchange Commission. The above examples are not exhaustive and new risks
emerge from time to time. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or
otherwise. In addition, certain financial measures in this news release constitute
non-GAAP financial measures as defined by Regulation G. A reconciliation of these items
can be found on our investor relations website at www.rclinvestor.com.
Financial Tables Follow
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