01—Abstract
Summary
Summary of the 10-K filed February 20, 2014. Cited figures are marked; the original filing is the authoritative source.
Royal Caribbean Cruises Ltd. (RCL) reported solid performance for the fiscal year ended December 31, 2013, demonstrating resilience despite a challenging global economic environment and lingering effects of negative industry media coverage.
The company achieved diluted Adjusted Earnings Per Share of $2.40a, a significant increase from $1.97 in the prior year, and net income of $473.7 million. Total revenues grew by 3.5% to $8.0 billion, driven by increased ticket prices and onboard spending. RCL's global strategy, which leverages its diverse brands to source guests from stronger markets, proved effective in generating higher yields.
The company is strategically investing in its fleet through revitalizations and new builds, with a focus on enhancing the guest experience and driving profitability. Significant fleet expansion is planned, including new Quantum-class and Oasis-class ships.
RCL also continues to emphasize cost control initiatives, including restructuring its global sales and marketing operations and optimizing the Pullmantur brand, which are expected to yield benefits in the coming years. With a strong liquidity position of $1.9 billionb and ongoing efforts to improve its credit rating, RCL appears well-positioned for continued operational and financial improvement.
02—Key points
Key Highlights
- Total revenues increased 3.5% to $8.0 billion in 2013 compared to $7.7 billion in 2012.
- Diluted Adjusted Earnings Per Share (EPS) rose to $2.40 in 2013, up from $1.97 in 2012.
- Net Yields increased by 2.7% (3.2% on a constant currency basis) in 2013, driven by higher ticket prices and onboard spending.
- The company has a robust fleet expansion plan with new builds including Quantum-class and Oasis-class ships, increasing capacity.
- RCL is implementing significant cost control and restructuring initiatives, including changes to its global sales structure and a strategic focus on the Pullmantur brand.
- Liquidity remains strong, with $1.9 billion in cash and available credit facilities as of December 31, 2013.
- The company is focused on returning its credit rating to investment grade through increased operating cash flow and debt management.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Royal Caribbean Cruises Ltd kept $0.06.
- Revenue$7.96B100.0%
- Cost of revenue−$5.31B66.7%
- Gross profit$2.65B33.3%
- Operating costs−$1.86B23.3%
- Operating income$798.1M10.0%
- Interest, other & tax−$324.5M4.1%
- Net income$473.7M6.0%
Where FY2013 revenue went
$7.96B- Cost of revenue: $5.31B, 67% of revenue
- SG&A: $1.04B, 13% of revenue
- Net income: $473.7M, 6.0% of revenue
- Other operating costs: $811.7M, 10% of revenue
- Interest, other & tax: $324.5M, 4.1% of revenue
Kept 6.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 20, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $7.96B$7.69B | +3.5% |
| Cost of Revenue | $5.31B$5.16B | +2.9% |
| Gross Profit | $2.65B$2.53B | +4.9% |
| SG&A Expenses | $1.04B$1.01B | +3.3% |
| Operating Expenses | $7.16B$7.28B | −1.7% |
| Operating Income | $798.15M$403.11M | +98.0% |
| Interest Expense | $332.42M$355.79M | −6.6% |
| Net Income | $473.69M$18.29M | +2490.3% |
| EPS (Basic) | $2.16$0.08 | +2600.0% |
| EPS (Diluted) | $2.14$0.08 | +2575.0% |
| Shares Outstanding (Basic) | 219.64M217.93M | +0.8% |
| Shares Outstanding (Diluted) | 220.94M219.46M | +0.7% |
05—Questions
Frequently Asked Questions
What were the key financial performance indicators for Royal Caribbean Cruises Ltd. in 2013?
In 2013, Royal Caribbean Cruises Ltd. reported total revenues of $8.0 billion, an increase of 3.5% from the previous year. Net income was $473.7 million, and diluted Adjusted Earnings Per Share (EPS) was $2.40, demonstrating significant improvement over 2012's results. Net Yields also saw a positive increase of 2.7%.
What are the company's plans for fleet expansion and modernization?
RCL is actively investing in its fleet. New ship orders include additional Quantum-class and Oasis-class vessels for Royal Caribbean International, with deliveries scheduled through 2016. The company also continues its vessel revitalization program to incorporate popular features across its existing fleet, enhancing the guest experience and maintaining competitiveness.
How is the company addressing cost management and operational efficiency?
Royal Caribbean is focused on cost control through several initiatives. These include restructuring and consolidating its global sales, marketing, and administrative functions, optimizing its brands like Pullmantur, and implementing energy efficiency measures to reduce fuel costs. These efforts are aimed at improving profitability and long-term shareholder value.
What is the company's outlook for 2014?
For 2014, RCL anticipates continued growth in Net Yields of approximately 2-3% (on a constant currency basis) and a relatively flat Net Cruise Costs per APCD. The company projects diluted Adjusted EPS between $3.20 and $3.40. This outlook reflects confidence in ongoing revenue growth, cost management, and the benefits from fleet investments.
06—Continue