What were the key drivers of revenue changes in Q3 2003 compared to Q3 2002?

Revenue increased by 8.6% to $1.1 billion, primarily driven by a 9.4% increase in capacity due to the addition of new ships like Navigator of the Seas and Serenade of the Seas. However, this growth was partially offset by a 0.8% decline in gross yields, which was attributed to lower cruise ticket prices influenced by the war in Iraq and continued economic uncertainty, although this was partly compensated by higher shipboard revenues.

How did profitability change in Q3 2003?

Net income for the third quarter of 2003 was $191.9 million, a slight decrease from $193.5 million in the same period of 2002. This resulted in diluted earnings per share of $0.97 for Q3 2003, compared to $0.99 for Q3 2002. The decrease in net income was influenced by the decline in gross yields and increased operating expenses.

What is the company's outlook for future capacity and capital expenditures?

The company has a significant commitment to capital expenditures for new ship construction. As of September 30, 2003, they had three ships on order with an aggregate cost of approximately $1.9 billion, scheduled for delivery through the second quarter of 2006. They anticipated total capital expenditures of approximately $1.1 billion, $0.6 billion, and $0.3 billion for 2003, 2004, and 2005, respectively.

Were there any significant debt or financing activities during this period?

Yes, in May 2003, the company completed a public offering of $250.0 million in senior unsecured notes due 2010. Additionally, in March 2003, they replaced their previous revolving credit facility with a new $500.0 million facility, which was subsequently increased to $580.0 million by September 30, 2003, and further to $655.0 million in October 2003.

RCL 8-K SEC Disclosure — Oct 29, 2003

Summary

Royal Caribbean Cruises Ltd. (RCL) filed a Form 6-K report on October 28, 2003, presenting its unaudited financial results for the third quarter and the first nine months ended September 30, 2003. The report indicates a slight increase in revenues year-over-year for both periods, driven by capacity expansion from new ship deliveries, particularly the Navigator of the Seas and Serenade of the Seas. However, gross yields experienced a decline due to lower cruise ticket prices influenced by the war in Iraq and economic uncertainty, though this was partially offset by increased shipboard revenues. Net income for the third quarter of 2003 was $191.9 million, a slight decrease from $193.5 million in the prior year, resulting in diluted earnings per share of $0.97 compared to $0.99. For the nine-month period, net income was $300.7 million, down from $313.0 million in 2002, with diluted EPS at $1.53 versus $1.60. The company also reported significant capital expenditures related to new ship construction and took delivery of the Mariner of the Seas in October 2003.

Key Highlights

1Revenues for Q3 2003 increased by 8.6% to $1.1 billion compared to Q3 2002, driven by a 9.4% increase in capacity due to new ship additions.
2Despite revenue growth, gross yields (revenues per available passenger cruise day) declined by 0.8% in Q3 2003, attributed to lower ticket prices and economic uncertainty.
3Net income for Q3 2003 was $191.9 million, a slight decrease from $193.5 million in Q3 2002, with diluted EPS of $0.97 versus $0.99.
4For the first nine months of 2003, revenues rose 9.5% to $2.9 billion, with capacity up 12.0%, but gross yields decreased by 2.2%.
5Capital expenditures for the first nine months of 2003 were $535.4 million, primarily for new ship construction.
6On October 29, 2003, the company took delivery of the Mariner of the Seas, a Voyager-class ship, with a final payment of $455.8 million.
7The company refinanced its revolving credit facility in March 2003, increasing the commitment to $580 million by September 30, 2003, and further to $655 million in October 2003.

ROYAL CARIBBEAN CRUISES LTD 8-K Report (Oct 29, 2003)

Summary

Key Highlights

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