What were the key drivers of Royal Caribbean's revenue growth in 2007?

Revenue growth in 2007 was primarily driven by a 12.3% increase in capacity, largely due to the acquisition of Pullmantur Cruises and the delivery of new ships like Liberty of the Seas. Additionally, a 4.7% increase in Gross Yields, supported by higher ticket prices and onboard spending, contributed significantly to the revenue growth.

How is Royal Caribbean managing the rising costs of fuel?

Royal Caribbean is managing rising fuel costs through a combination of strategies. These include hedging programs, energy-saving initiatives, and the implementation of a temporary fuel supplement. Despite these efforts, the company noted that higher and volatile fuel prices are expected to continue impacting results.

What is the company's strategy for international market expansion?

The company is strategically expanding its international presence by redeploying ships to markets outside North America (such as Europe, Latin America, and Asia) and increasing international passenger sourcing. This is further supported by the acquisition of brands like Pullmantur Cruises and the launch of new brands tailored for specific international markets like CDF Croisières de France.

What are the company's major capital commitments for the near future?

Royal Caribbean has significant capital commitments related to fleet expansion, with seven new ships on order expected to join the fleet by 2011, including the large Project Genesis class ships for Royal Caribbean International and Solstice-class ships for Celebrity Cruises. The total cost for these seven ships is approximately $7.0 billion.

RCL 10-K FY2007 Annual Report — Revenue, Net Income, EPS

Summary

This 2007 10-K filing for Royal Caribbean Cruises Ltd. (RCL) highlights a year of significant expansion and strategic moves. The company is demonstrating robust growth, with total revenues increasing by 17.6% to $6.1 billion, driven by a 12.3% increase in capacity and a 4.7% rise in Gross Yields. This growth was fueled by the acquisition of Pullmantur Cruises, the introduction of new ships like Liberty of the Seas, and strategic fleet redeployments to international markets. RCL is actively expanding its global presence with the launch of new brands and strategic partnerships, aiming to diversify its passenger base beyond North America, which is showing considerable success with international passenger sourcing increasing significantly. Despite rising fuel costs and a generally weakening U.S. economy, the company's outlook for 2008 remains positive, projecting earnings per share growth. RCL is investing heavily in new fleet expansion, with seven new ships on order, including the large Project Genesis class. The company's financial health appears strong, with a decreasing Net Debt-to-Capital ratio and a successful bond issuance to refinance acquisition debt. Key areas of focus include managing operational costs, enhancing guest experiences across its diverse brands, and continuing its international market penetration strategy.

Key Highlights

1Total revenues increased by 17.6% to $6.1 billion in 2007, driven by increased capacity and higher yields.

2Net Yields increased by 3.3% compared to 2006, aided by the addition of Pullmantur's tour business and favorable pricing.

3International passenger sourcing increased significantly, with non-North American passenger ticket revenues rising to 30% of the total.

4The company took delivery of Liberty of the Seas and announced plans for seven new ships, including the large Project Genesis class, to expand its fleet.

5RCL launched two new brands in 2007: Azamara Cruises (deluxe segment) and CDF Croisières de France (French contemporary market).

6Net Debt-to-Capital ratio improved, decreasing to 44.7% from 46.6% in the previous year.

7The company successfully issued €1.0 billion in senior unsecured notes to refinance acquisition debt and repay portions of its credit facilities.

ROYAL CARIBBEAN CRUISES LTD Annual Report, Year Ended Dec 31, 2007

Summary

Key Highlights

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