ROYAL CARIBBEAN CRUISES LTD Quarterly Report for Q2 Ended Jun 30, 2012

Summary

Royal Caribbean Cruises Ltd. (RCL) reported a net loss of $3.7 million for the second quarter of 2012, a significant decrease from a net income of $93.5 million in the same period of 2011. This downturn was primarily driven by a substantial increase in cruise operating expenses, particularly fuel costs, which rose by 16.8% per metric ton. While total revenues saw a modest increase of 3.0% to $1.8 billion, driven by a 1.8% rise in Net Yields and capacity, higher operating costs outpaced revenue growth. The company highlighted strategic initiatives, including changes in its international distribution system and increased deployment in markets like Australia and China, which are expected to positively impact Net Yields. However, these initiatives, combined with rising fuel prices and general operating cost inflation, led to a 9.3% increase in cruise operating expenses. Despite these challenges, RCL maintained a strong liquidity position with $1.1 billion in cash and available credit facilities, and remains committed to its long-term capital expenditure plans, including the construction of new ships.

Key Highlights

• 1Reported a net loss of $3.7 million for Q2 2012, compared to a net income of $93.5 million in Q2 2011.
• 2Total revenues increased by 3.0% to $1.8 billion in Q2 2012.
• 3Cruise operating expenses increased by 9.3% to $1.3 billion in Q2 2012, largely due to higher fuel costs.
• 4Fuel expenses increased by 16.8% per metric ton year-over-year.
• 5Net Yields increased by 1.8% in Q2 2012.
• 6Company is undertaking strategic deployment initiatives in markets like Australia and China.
• 7Liquidity remains strong with $1.1 billion in cash and available credit facilities as of June 30, 2012.

Frequently Asked Questions