FORM 6-K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
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PURSUANT TO RULES 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April, 2003
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ROYAL CARIBBEAN CRUISES LTD.
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1050 Caribbean Way, Miami, Florida 33132
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(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
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[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
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[If "Yes" is marked indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_____.]
Contact: Lynn Martenstein or Dan Mathewes
(305) 539-6570 or (305) 539-6153
For Immediate Release
ROYAL CARIBBEAN REPORTS FIRST QUARTER 2003 RESULTS
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MIAMI - (April 23, 2003) - Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL)
announced today that net income for the first quarter of 2003 was $53.2 million,
or $0.27 per share, which was essentially the same as the first quarter of 2002.
Revenues for the first quarter of 2003 were $880.2 million, up 10% from $800.0
million in 2002. The increase in revenues was primarily due to an 11.5% increase
in capacity, partially offset by a 1.3% decline in gross yields (revenue per
available passenger cruise day). The decrease in gross yields was primarily due
to a decrease in the percentage of passengers booking airline tickets as part of
their vacation package with the company ("air/sea mix") and lower occupancy
levels, partially offset by an increase in cruise ticket prices and shipboard
revenues. Net yields for the first quarter of 2003 increased 3.9% from the first
quarter of 2002. The air/sea mix decreased to 15.1% in 2003 from 19.8% in 2002.
Operating and SG&A expenses, on a per available passenger cruise day basis, were
relatively flat on a quarter over quarter basis (up 0.3%). Although the company
previously anticipated costs would be higher in the first quarter, increased
fuel costs were offset by a lower than expected air/sea mix and a shift in
marketing and operating costs to later in the year. With the onset of the war
with Iraq, the company suspended its television advertisements. Now that the war
is over, the company is restarting those advertisements, first in the primary
markets and then throughout the United States.
The company believes that changes in running expenses (i.e., those expenses
directly associated with ship operations - defined as operating expenses less
costs deducted to arrive at net yields) and SG&A to be the most relevant measure
of its ability to control costs in a manner that positively impacts the bottom
line. For the quarter, running and SG&A expenses were up 8.9%, on a per
available passenger cruise day basis. This increase is primarily attributable to
the increase in fuel costs and the Brilliance of the Seas lease payments.
The company estimates running and SG&A expenses for the second quarter will be
up on a quarter over quarter basis but expects that these costs will decrease
slightly in the second half of the year. For the full year 2003, the company
estimates that running and SG&A expenses will increase in the range of 2% to 3%,
on a per available passenger cruise day basis.
The war with Iraq and economic uncertainty continue to have a negative impact on
bookings, especially in the second quarter of 2003. While we had strong bookings
through late 2002, we started to see a slowdown in December, which became more
pronounced as the war with Iraq approached. This trend continued throughout the
war. As a result, we currently anticipate that net yields for the second quarter
will be down in the range of 6% to 9%. While we have started to see some
improvement in bookings, not enough time has passed since the end of the war to
determine if booking levels will return to pre-war levels. Because of the
disruption related to the war in Iraq and the fact that bookings continue to
come closer to the sailing date, we have limited visibility past the second
quarter of 2003, which makes it difficult to provide net yield guidance for the
remainder of the year.
"Just as we are pleased with the yield improvement our brands enjoyed in the
first quarter, we are disappointed in the poor bookings we have seen since the
beginning of the year for the second quarter sailings," said Richard D. Fain,
chairman and chief executive officer of Royal Caribbean Cruises Ltd. "In the
near term, we still have a challenging road ahead of us. But as we witnessed
after the first Gulf War and, more recently, after the 9/11 terrorists attacks,
the strong underlying fundamentals of the industry give us confidence to be
optimistic about our recovery after the war with Iraq."
During the quarter, Celebrity Cruises announced that the Zenith would be the
first vessel to offer 11 to 14-night "Exotic Caribbean" cruises departing from
Jacksonville, Florida. Among the highlights of Zenith's Western Caribbean
itinerary are Celebrity's first calls on Roatan, the largest of Honduras' Bay
Islands, surrounded by coral reefs and offering superb diving and fishing
opportunities and a transit through the historic Panama Canal. Given
Jacksonville's immediate access to the southeastern United States, this
itinerary is expected to attract additional customers interested in the drive-in
option.
In addition to the announcement that all Royal Caribbean International vessels
will be outfitted with rock climbing walls by November 2003, the first quarter
saw Alaskan itineraries for Royal Caribbean International increase the number of
ways to "get out there" with the addition of 26 new shore excursions. While the
list of shore excursions offers something for everyone, options such as the
Klondike Rock Climbing and Rappelling and the Extended Helicopter Glacier Trek
will offer guests a chance to experience a true adrenaline-boost.
The company has scheduled a conference call at 10 a.m. today to discuss its
earnings. This call can be listened to, either live or on a delayed basis, on
the company's investor relations web site at www.rclinvestor.com.
Net Yields and Running Expenses
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Net yields represent revenues less the costs of air transportation, travel agent
commissions and certain other direct costs (all of which are included in
operating expenses) per available passenger cruise day. Such costs were $188.6
million and $202.9 million for the three months ending March 31, 2003 and 2002,
respectively. Management believes that net yields are the most relevant
measurement of the company's pricing performance and are used by the company for
revenue management purposes.
For future periods, the company has not provided a quantitative reconciliation
of projected revenue per available passenger cruise day to projected net yield
or projected operating costs to projected running expenses. This information has
not been provided due to the significant uncertainty in projecting the costs
deducted to arrive at these measures. The company utilizes net yields and
running expenses to manage its business on a day-to-day basis and believes net
yields and running expenses are the more relevant measures of its performance.
As such, we do not believe that this 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 25
ships in service and three under construction or on firm order. The company also
offers unique land-tour vacations in Alaska, Canada and Europe through its
cruise-tour division. Additional information can be found on
www.royalcaribbean.com, www.celebrity.com or www.rclinvestor.com.
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 at sea, 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 interest rates or oil prices, weather
and other factors described in further detail in Royal Caribbean's filings with
the Securities and Exchange Commission.
Financial Tables Follow
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ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
First Quarter Ended
March 31,
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2003 2002
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Revenues $880,164 $799,953
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Expenses
Operating 552,569 502,638
Marketing, selling and administrative 123,984 102,076
Depreciation and amortization 88,669 82,827
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765,222 687,541
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Operating Income 114,942 112,412
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Other Income (Expense)
Interest income 1,105 4,227
Interest expense, net of capitalized interest (64,884) (68,268)
Other income (expense) 2,011 4,442
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(61,768) (59,599)
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Net Income (Loss) $ 53,174 $ 52,813
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Earnings (Loss) Per Share:
Basic $ 0.28 $ 0.27
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Diluted $ 0.27 $ 0.27
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Weighted average shares outstanding:
Basic 193,029 192,325
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Diluted 194,905 195,509
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STATISTICS
First Quarter Ended
March 31,
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2003 2002
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Occupancy as a percentage of total capacity 101.7% 103.9%
Passenger Cruise Days 4,743,164 4,344,802
Available Passenger Cruise Days 4,663,592 4,182,320
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ROYAL CARIBBEAN CRUISES LTD.
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(Registrant)
Date: April 23, 2003 By: /s/ BONNIE S. BIUMI
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Bonnie S. Biumi
Acting Chief Financial Officer