ROYAL CARIBBEAN GROUP REPORTS SECOND QUARTER RESULTS, INCREASES FULL YEAR GUIDANCE, AND REINSTATES DIVIDEND

Rhea-AI Summary

Royal Caribbean Group (RCL) reported strong Q2 2024 results, with Earnings per Share of $3.11 and Adjusted EPS of $3.21, exceeding guidance due to strong pricing and onboard revenue. The company increased its full year 2024 Adjusted EPS guidance to $11.35-$11.45, representing 68% year-over-year growth. Key highlights include:

- Achieved Trifecta goals 18 months early
- Reinstated quarterly dividend of $0.40 per share
- Q2 total revenues of $4.1 billion
- Net Income of $854 million
- Adjusted EBITDA of $1.6 billion
- Operating cash flow of $1.6 billion
- Net Yields up 13.3% in Constant-Currency
- Load factors at 108%

The company reported strong demand and pricing, with booking volumes higher than 2023 at record pricing levels. Royal Caribbean expects continued yield growth and is already taking more bookings for 2025 than 2024.

Positive

• Exceeded Q2 earnings guidance with EPS of $3.11 and Adjusted EPS of $3.21
• Increased full year 2024 Adjusted EPS guidance to $11.35-$11.45, representing 68% YoY growth
• Achieved Trifecta goals 18 months ahead of schedule
• Reinstated quarterly dividend of $0.40 per share
• Q2 total revenues of $4.1 billion and Net Income of $854 million
• Net Yields up 13.3% in Constant-Currency
• Strong demand with booking volumes higher than 2023 at record pricing levels
• Record booked position for 2024 sailings
• Consumer spending onboard and pre-cruise purchases significantly exceeding 2023 levels

Negative

• Gross Cruise Costs per APCD increased 4.9% as-reported compared to Q2 2023
• Net Cruise Costs (NCC), excluding Fuel, per APCD increased 5.7% in Constant-Currency
• Increased cost guidance for full year 2024 due to higher stock-based compensation

Insights

Financial Analyst

Royal Caribbean Group's Q2 2024 results demonstrate exceptional performance and positive momentum for the cruise industry. The company reported earnings per share of $3.21, surpassing expectations due to strong pricing and onboard revenue. This resulted in a significant year-over-year increase of 76% in adjusted EPS.

Key financial highlights include:

• Total revenues of $4.1 billion
• Net income of $854 million
• Adjusted EBITDA of $1.6 billion
• Operating cash flow of $1.6 billion

The company's yield growth is particularly impressive, with gross margin yields up 24.2% and net yields up 13.3% in constant currency. This strong performance has led Royal Caribbean to increase its full-year 2024 adjusted EPS guidance to $11.35 - $11.45, representing a remarkable 68% year-over-year growth.

The reinstatement of a $0.40 per share quarterly dividend signals management's confidence in the company's financial health and future prospects. This move, coupled with the early achievement of their Trifecta goals, underscores Royal Caribbean's strong market position and operational efficiency.

From an investor's perspective, these results indicate a robust recovery and growth trajectory for Royal Caribbean, potentially making it an attractive option in the leisure and travel sector. However, it's important to monitor factors such as fuel prices, interest rates and global economic conditions that could impact future performance.

Market Research Analyst

The cruise industry's recovery appears to be in full swing, with Royal Caribbean's results serving as a strong indicator. The company's record bookings and pricing levels suggest a pent-up demand for cruise vacations that's translating into tangible financial results.

Several key market trends emerge from this report:

• Strong consumer spending: Both onboard and pre-cruise purchases are significantly exceeding 2023 levels, indicating robust discretionary spending in the travel sector.
• Premium pricing power: The company's ability to command higher prices, particularly for European and Alaskan itineraries, suggests a shift towards premium experiences.
• Forward-looking demand: Royal Caribbean is already seeing strong bookings for 2025, indicating sustained consumer confidence in cruise travel.

The company's customer deposit balance of $6.2 billion as of June 30, 2024, further underscores the strong demand outlook. This substantial booking pipeline provides a solid foundation for future revenues and helps mitigate potential short-term market fluctuations.

From a broader market perspective, Royal Caribbean's performance may signal positive trends for the wider travel and leisure industry. The willingness of consumers to spend on premium vacation experiences could have positive spillover effects on adjacent sectors such as hotels, airlines and destination experiences.

However, it's important to note that the industry still faces challenges, including potential economic headwinds, geopolitical uncertainties and the ongoing need to manage costs effectively. Investors should keep a close eye on these factors when evaluating the long-term prospects of cruise operators and the broader travel sector.

Strong demand and favorable timing of expenses drive second quarter above expectations

Trifecta goals achieved 18 months early

Adjusted EPS in 2024 is now expected to be $11.35 - $11.45  

Declared a quarterly dividend of $0.40 per share

MIAMI, July 25, 2024 /PRNewswire/ -- Royal Caribbean Group (NYSE: RCL) today reported second quarter Earnings per Share ("EPS") of $3.11 and Adjusted EPS of $3.21. These results were better than the company's guidance due to stronger pricing on close-in demand and continued strength in onboard revenue, as well as favorable timing of expenses of approximately $0.15. As a result of continued strong demand for its vacation experiences, the company is increasing its full year 2024 Adjusted EPS guidance to $11.35 - $11.45, or 68% year over year growth. In addition, the company's board of directors declared a quarterly dividend of $0.40 per share payable on October 11, 2024 to shareholders of record at the close of business on September 20, 2024.

"Our momentum continues! We met our financial targets 18 months earlier than expected, have our balance sheet in a strong position, reinstated our dividend, and ... we are just getting started," said Jason Liberty, president and CEO, Royal Caribbean Group. "Exceptional demand for our vacation experiences has accelerated our performance by generating significant yield growth over the past several years," added Liberty. "As we look forward, we remain intensely focused on driving strong shareholder returns by delivering a lifetime of vacations and taking a greater share of the rapidly growing $1.9 trillion global vacation market. This is underpinned by our formula for future success – disciplined growth and moderate yield growth while controlling our costs."  

Key Highlights

Strong demand for the company's vacation experiences, including onboard spend, led to stronger revenue in the second quarter and a further improvement in yield and earnings expectations for the balance of the year.

Second Quarter 2024:

• For the 12 months ending June 30, 2024, the company achieved all three of its Trifecta goals: triple digit Adjusted EBITDA per APCD, ROIC in the teens, and double digit Adjusted EPS.
• Load factors in the second quarter were 108%.
• Gross Margin Yields were up 24.2% as-reported. Net Yields were up 13.3% in Constant-Currency (13.2% as-reported).
• Gross Cruise Costs per Available Passenger Cruise Days ("APCD") increased 4.9% as-reported. Net Cruise Costs ("NCC"), excluding Fuel, per APCD increased 5.7% in Constant-Currency (5.5% as-reported).
• Total revenues were $4.1 billion, Net Income was $854 million or $3.11 per share, Adjusted Net Income was $882 million or $3.21 per share, Adjusted EBITDA was $1.6 billion, and Operating cash flow was $1.6 billion.

Full Year 2024 Outlook:

• Net Yields are expected to increase 10.4% to 10.9% in Constant-Currency and  as-reported.
• NCC, excluding Fuel, per APCD is expected to increase approximately 6.0% in Constant-Currency and as-reported. The increase in costs, compared to prior guidance, is driven entirely by higher stock-based compensation due to the significant increase in share price.
• Adjusted EPS is expected to grow 68% year-over-year and be in the range of $11.35 to $11.45.

Second Quarter 2024 Results

Net Income for the second quarter of 2024 was $854 million or $3.11 per share compared to Net Income of $459 million or $1.70 per share for the same period in the prior year. Adjusted Net Income was $882 million or $3.21 per share for the second quarter of 2024 compared to Adjusted Net Income of $492 million or $1.82 per share for the same period in the prior year. The company also reported total revenues of $4.1 billion and Adjusted EBITDA of $1.6 billion.

Gross Margin Yields increased 24.2% as-reported, and Net Yields increased 13.3% in Constant-Currency (13.2% as-reported), when compared to the second quarter of 2023. Load factor for the quarter was 108%, up three percentage points compared to the second quarter of 2023. Net Yield growth exceeded the company's guidance mainly due to higher pricing on new and like for like hardware and higher onboard revenue.

Gross Cruise Costs per APCD increased 4.9% as-reported, compared to the second quarter of 2023. NCC, excluding Fuel, per APCD increased 5.7% in Constant-Currency (5.5% as-reported), when compared to the second quarter of 2023. Costs in the quarter were favorable $0.15 to prior guidance due to the timing of expenses.

Update on Bookings and Onboard Revenue

The demand and pricing environment remained very strong since the last earnings call. Booking volumes were higher than the corresponding period in 2023 and at record pricing levels. The company continues to be in a record booked position for 2024 sailings. Consumer spending onboard, as well as pre-cruise purchases, continue to significantly exceed 2023 levels driven by greater participation at higher prices.

The further increase in yield expectations for the year is the result of higher pricing and onboard revenue expectations across key products, with particular strength in European and Alaskan itineraries. 

"We are thrilled with the ongoing excitement for our incredible vacation experiences, which has continued to result in better bookings than prior years," said Jason Liberty, president and CEO, Royal Caribbean Group. "We have seen strength for all key products and are already taking more bookings for 2025 sailings than 2024."

As of June 30, 2024, the Group's customer deposit balance was at $6.2 billion.  

Third Quarter 2024

Net Yields are expected to increase 6.5% to 7.0% in Constant-Currency and as-reported. This expected growth in yield is driven by strong demand for European and Alaskan itineraries and continued strength in onboard revenue. The expected yield growth in the third quarter is on top of 16.7% growth in Net Yields Constant-Currency in the third quarter of 2023 as compared to the same period in 2019.

NCC, excluding Fuel, per APCD, is expected to increase 4.7% to 5.2%  in Constant-Currency and as-reported compared to the third quarter of 2023.

Based on current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects third quarter Adjusted EPS to be in the range of $4.90 to $5.00. 

Fuel Expense

Bunker pricing, net of hedging, for the second quarter was $688 per metric ton and consumption was 410,000 metric tons.

The company does not forecast fuel prices and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on current fuel prices, the company has included $293 million of fuel expense in its third quarter guidance at a forecasted consumption of 429,000 metric tons, which is 61% hedged via swaps. Forecasted consumption is 61%, 55%, and 34% hedged via swaps for 2024, 2025, and 2026, respectively. The annual average cost per metric ton of the hedge portfolio is approximately $504, $493, and $486 for 2024, 2025, and 2026, respectively. 

The company provided the following guidance for the third quarter and full year 2024: 

FUEL STATISTICS	Third Quarter 2024	Full Year 2024
Fuel Consumption (metric tons)	429,000	1,712,000
Fuel Expenses	$293 million	$1,169 million
Percent Hedged (fwd. consumption)	61 %	61 %
GUIDANCE	As-Reported	Constant-Currency
	Third Quarter 2024
Net Yields vs. 2023	6.5 % to 7.0 %	6.5 % to 7.0 %
Net Cruise Costs per APCD vs. 2023	3.3 % to 3.8 %	3.3 % to 3.8 %
Net Cruise Costs per APCD ex. Fuel vs. 2023	4.7 % to 5.2 %	4.7 % to 5.2 %
	Full Year 2024
Net Yields vs. 2023	10.4 % to 10.9 %	10.4 % to 10.9 %
Net Cruise Costs per APCD vs. 2023	Approximately 4.0 %	Approximately 4.0 %
Net Cruise Costs per APCD ex. Fuel vs. 2023	Approximately 6.0 %	Approximately 6.0 %
GUIDANCE	Third Quarter 2024	Full Year 2024
APCDs	13.4 million	50.7 million
Capacity change  vs. 2023	11.3 %	8.0 %
Depreciation and amortization	$405 to $415 million	$1,600 to $1,610 million
Net Interest, excluding loss on extinguishment of debt	$275 to $285 million	$1,130 to $1,140 million
Adjusted EPS	$4.90 to $5.00	$11.35 to $11.45
SENSITIVITY	Third Quarter 2024	Full Year 2024
1% Change in Net Yields	$36 million	$120 million
1% Change in NCC excluding Fuel	$15 million	$60 million
	Third Quarter 2024	Remainder of Year 2024
1% Change in Currency	$6 million	$11 million
10% Change in Fuel prices	$15 million	$29 million
100 basis pt. Change in SOFR	$2 million	$6 million
Exchange rates used in guidance calculations
GBP	$1.29
AUD	$0.68
CAD	$0.73
EUR	$1.09

Liquidity and Financing Arrangements

As of June 30, 2024, the Group's liquidity position was $3.8 billion, which includes cash and cash equivalents and undrawn revolving credit facility capacity.

During the quarter, the company repaid the remaining balance of its ship related debt amortization deferral obtained on its export credit facilities during 2020 and 2021, which removed the remaining restrictions on capital return. Also, during the quarter, the company increased its revolving credit facility capacity by $90 million.

"Our accelerated performance and commitment to strengthening the balance sheet have allowed us to reduce both leverage and cost of capital, consistent with our goal of achieving investment grade metrics, and we continue to expect our leverage to be below 3.5x by year end," said Naftali Holtz, chief financial officer, Royal Caribbean Group. "Our strong balance sheet allows us to expand capital allocation and reinstate a quarterly dividend, further supporting our goal of creating long-term shareholder value."

The company noted that as of June 30, 2024, the scheduled debt maturities for the remainder of 2024, 2025, 2026, and 2027 were $0.7 billion, $2.4 billion, $2.9 billion, and $2.6 billion, respectively.

Capital Expenditures and Capacity Guidance

Capital expenditures for the full year 2024 are expected to be approximately $3.5 billion, based on current foreign exchange rates and are predominantly related to the company's new ship order book. During the second quarter, the company took delivery of both Utopia of the Seas and Silver Ray utilizing existing committed financing arrangements.  Non-new ship related capital expenditures are expected to be $0.7 billion.

Capacity changes for 2024 are expected to be 8.0% compared to 2023. Capacity changes for 2025, 2026, and 2027 are expected to be 5%, 7%, and 4%, respectively. These figures do not include potential ship sales or additions that the company may elect in the future.

Conference call scheduled

The company has scheduled a conference call at 10 a.m. Eastern Time today.  This call can be heard, either live or on a delayed basis, on the company's investor relations website at www.rclinvestor.com.

Definitions

Selected Operational and Financial Metrics

Adjusted EBITDA is a non-GAAP measure that represents EBITDA (as defined below) excluding certain items that we believe adjusting for is meaningful when assessing our profitability on a comparative basis. For the periods presented, these items included (i) other (income) expense; (ii) gain on sale of controlling interest; (iii) recovery of losses from one of our equity method investees; (iv) restructuring charges and other initiative expenses, and (v) impairment and credit losses (recoveries). 

Adjusted Earnings per Share ("Adjusted EPS") is a non-GAAP measure that represents Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. (as defined below) divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis.

Adjusted Net Income is a non-GAAP measure that represents Net Income attributable to Royal Caribbean Cruises Ltd. excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included (i) loss on extinguishment of debt; (ii) the amortization of the Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition; (iii) gain on sale of controlling interest; (iv) tax on the sale of PortMiami noncontrolling interest; (v) Silver Whisper deferred tax liability release; (vi) restructuring charges and other initiative expenses; (vii) recovery of losses from one of our equity method investees; and (viii) impairment and credit losses (recoveries).

Available Passenger Cruise Days ("APCD") is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period, which excludes canceled cruise days and cabins not available for sale. We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.

Constant-Currency is a significant measure for our revenues and expenses, which are denominated in currencies other than the U.S. Dollar. Because our reporting currency is the U.S. Dollar, the value of these revenues and expenses in U.S. Dollar will be affected by changes in currency exchange rates. Although such changes in local currency prices are just one of many elements impacting our revenues and expenses, it can be an important element. For this reason, we also monitor our revenues and expenses in "Constant-Currency" - i.e., as if the current period's currency exchange rates had remained constant with the comparable prior period's rates. We calculate "Constant-Currency" by applying the average of the prior year period exchange rates for each of the corresponding months of the reported and/or forecasted period, so as to calculate what the results would have been had exchange rates been the same throughout both periods. We do not make predictions about future exchange rates and use current exchange rates for calculations of future periods. It should be emphasized that the use of Constant-Currency is primarily used by us for comparing short-term changes and/or projections. Over the longer term, changes in guest sourcing and shifting the amount of purchases between currencies can significantly change the impact of the purely currency-based fluctuations.

EBITDA is a non-GAAP measure that represents of Net Income attributable to Royal Caribbean Cruises Ltd. excluding (i) interest income; (ii) interest expense, net of interest capitalized; (iii) depreciation and amortization expenses; and (iv) income tax expense (benefit). We believe that this non-GAAP measure is meaningful when assessing our operating performance on a comparative basis.

Occupancy ("Load factor"), in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days (as defined below) by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days ("PCD") represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.

Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses.

Net Cruise Costs ("NCC") and NCC excluding Fuel are non-GAAP measures that represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs excluding Fuel, fuel expenses. In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs excluding Fuel to be the most relevant indicators of our cost performance. For the periods presented, Net Cruise Costs and Net Cruise Costs excluding Fuel exclude (i) the gain on sale of controlling interest; (ii) impairment and credit losses (recoveries); and (iii) restructuring and other initiative expenses.

Invested Capital represents the most recent five-quarter average of total debt (i.e., Current portion of long-term debt plus Long-term debt) plus the most recent five-quarter average of Total shareholders' equity. We use this measure to calculate ROIC (as defined below).

Adjusted Operating Income is a non-GAAP measure that represents operating income including income from equity investments and income taxes but excluding certain items that we believe adjusting for is meaningful when assessing our operating performance on a comparative basis. We use this non-GAAP measure to calculate ROIC (as defined below).

Return on Invested Capital ("ROIC") represents Adjusted Operating Income divided by Invested Capital. We believe ROIC is a meaningful measure because it quantifies how efficiently we generated operating income relative to the capital we have invested in the business. ROIC is also used as a key metric in our long-term incentive compensation program for our executive officers.

Trifecta refers to the multi-year Adjusted EBITDA per APCD, Adjusted EPS and ROIC goals we publicly announced in November 2022 and are seeking to achieve by the end of 2025. We designed this program to help us better execute and achieve our business goals by clearly articulating longer-term financial objectives. Under the Trifecta Program, we are targeting Adjusted EBITDA per APCD of at least $100, Adjusted EPS of at least $10, and ROIC of 13% or higher by the end of 2025.

Gross Margin Yield represent Gross Margin per APCD.

Adjusted Gross Margin represent Gross Margin, adjusted for payroll and related, food, fuel, other operating, and depreciation and amortization expenses. Gross Margin is calculated pursuant to GAAP as total revenues less total cruise operating expenses, and depreciation and amortization.

Net Yields represent Adjusted Gross Margin per APCD. We utilize Adjusted Gross Margin and Net Yields to manage our business on a day-to-day basis as we believe that they are the most relevant measures of our pricing performance because they reflect the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses, and onboard and other expenses.

Adjusted EBITDA Margin is a non-GAAP measure that represents Adjusted EBITDA (as defined above) divided by total revenues.

For additional information see "Adjusted Measures of Financial Performance" below.

About Royal Caribbean Group

Royal Caribbean Group (NYSE: RCL) is a vacation industry leader with a global fleet of 68 ships across its five brands traveling to approximately 1,000 destinations. With a mission to deliver the best vacations responsibly, Royal Caribbean Group serves millions of guests each year through its portfolio of best-in-class brands, including Royal Caribbean International, Celebrity Cruises, and Silversea; and expanding portfolio of land-based vacation experiences through Perfect Day at CocoCay and Royal Beach Club collection. The company also owns 50% of a joint venture that operates TUI Cruises and Hapag-Lloyd Cruises. With a rich history of innovating, Royal Caribbean Group continually delivers exciting new products and guest experiences that help shape the future of leisure travel. Learn more at www.royalcaribbeangroup.com or www.rclinvestor.com.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release relating to, among other things, our future performance estimates, forecasts and projections constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to: statements regarding revenues, costs and financial results for 2024 and beyond; demand for our brands; our progress towards achievement of our Trifecta goals; future capital expenditures; and expectations regarding our credit profile. Words such as "anticipate," "believe," "committed," "could," "driving," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "would," "considering," and similar expressions are intended to help identify forward-looking statements. Forward-looking statements reflect management's current expectations, are based on judgments, are inherently uncertain and are subject to 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. Examples of these risks, uncertainties and other factors include, but are not limited to, the following: our ability to obtain sufficient financing or capital to fund our capital expenditures, operations, debt repayments and other financing needs; the impact of the economic and geopolitical environment on key aspects of our business, such as the demand for cruises, passenger spending, and operating costs; incidents or adverse publicity concerning our ships, port facilities, land destinations and/or passengers or the cruise vacation industry in general; concerns over safety, health and security of guests and crew; further impairments of our goodwill, long-lived assets, equity investments and notes receivable; an inability to source our crew or our provisions and supplies from certain places; disease outbreaks and increased concern about the risk of illness on our ships or when travelling to or from our ships, which could cause a decrease in demand, guest cancellations, and ship redeployments; unavailability of ports of call; growing anti-tourism sentiments and environmental concerns; changes in U.S. or other countries' foreign travel policy; the uncertainties of conducting business globally and expanding into new markets and new ventures; our ability to recruit, develop and retain high quality personnel; changes in operating costs; our indebtedness, any additional indebtedness we may incur and restrictions in the agreements governing our indebtedness that limit our flexibility in operating our business; fluctuations in foreign currency exchange rates, fuel prices and interest rates; the settlement of conversions of our convertible notes, if any, in shares of our common stock or a combination of cash and shares of our common stock, which may result in substantial dilution for our existing shareholders; our expectation and ability to pay a cash dividend on our common stock in the future; changes to our dividend policy; vacation industry competition and increase in industry capacity and overcapacity; the risks and costs related to cyber security attacks, data breaches, protecting our systems and maintaining data integrity and security; the impact of new or changing legislation and regulations (including environmental regulations) or governmental orders on our business; pending or threatened litigation, investigations and enforcement actions; the effects of weather, climate events and/or natural disasters on our business; the impact of issues at shipyards, including ship delivery delays, ship cancellations or ship construction cost increases; shipyard unavailability; the unavailability or cost of air service; and uncertainties of a foreign legal system as we are not incorporated in the United States.

More information about factors that could affect our operating results is included under the caption "Risk Factors" in our most recent Annual Report on Form 10-K, as well as our other filings with the SEC, copies of which may be obtained by visiting our Investor Relations website at www.rclinvestor.com or the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Adjusted Measures of Financial Performance

This press release includes certain adjusted financial measures defined as non-GAAP financial measures under Securities and Exchange Commission rules, which we believe provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles, or U.S. GAAP.

The presentation of adjusted financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. These measures may be different from adjusted measures used by other companies. In addition, these adjusted measures are not based on any comprehensive set of accounting rules or principles. Adjusted measures have limitations in that they do not reflect all of the amounts associated with our results of operations as do the corresponding U.S. GAAP measures.

A reconciliation to the most comparable U.S. GAAP measure of all adjusted financial measures included in this press release can be found in the tables included at the end of this press release. We have not provided a quantitative reconciliation of the projected non-GAAP financial measures to the most comparable GAAP financial measures because preparation of meaningful U.S. GAAP projections would require unreasonable effort. Due to significant uncertainty, we are unable to predict, without unreasonable effort, the future movement of foreign exchange rates, fuel prices and interest rates inclusive of our related hedging programs. In addition, we are unable to determine the future impact of non-core business related gains and losses which may result from strategic initiatives. These items are uncertain and could be material to our results of operations in accordance with U.S. GAAP. Due to this uncertainty, we do not believe that reconciling information for such projected figures would be meaningful.

 

ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited; in millions, except per share data)
	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Passenger ticket revenues	$           2,887		$           2,444		$           5,429		$           4,340
Onboard and other revenues	1,223		1,079		2,409		2,068
Total revenues	4,110		3,523		7,838		6,408
Cruise operating expenses:
Commissions, transportation and other	572		516		1,070		919
Onboard and other	244		220		437		379
Payroll and related	313		284		631		594
Food	225		203		446		402
Fuel	282		276		586		577
Other operating	516		456		1,039		876
Total cruise operating expenses	2,152		1,955		4,209		3,747
Marketing, selling and administrative expenses	466		435		1,001		896
Depreciation and amortization expenses	393		362		780		721
Operating Income	1,099		771		1,848		1,044
Other income (expense):
Interest income	4		10		9		24
Interest expense, net of interest capitalized	(298)		(355)		(721)		(714)
Equity investment income	56		42		97		62
Other expense	(3)		(5)		(11)		(1)
	(241)		(308)		(626)		(629)
Net Income	858		463		1,222		415
Less: Net Income attributable to noncontrolling interest	4		4		8		4
Net Income attributable to Royal Caribbean Cruises Ltd.	$              854		$              459		$           1,214		$              411
Earnings per Share:
Basic	$             3.32		$             1.79		$             4.72		$             1.61
Diluted	$             3.11		$             1.70		$             4.46		$             1.60
Weighted-Average Shares Outstanding:
Basic	257		256		257		256
Diluted	281		282		281		259
Comprehensive Income (Loss)
Net Income	$              858		$              463		$           1,222		$              415
Other comprehensive income (loss):
Foreign currency translation adjustments	6		(3)		10		(10)
Change in defined benefit plans	(12)		(3)		(3)		—
(Loss) gain on cash flow derivative hedges	(31)		5		13		(27)
Total other comprehensive (loss) income	(37)		(1)		20		(37)
Comprehensive Income	821		462		1,242		378
Less: Comprehensive Income attributable to noncontrolling interest	4		4		8		4
Comprehensive Income attributable to Royal Caribbean Cruises Ltd.	$              817		$              458		$           1,234		$              374

 

ROYAL CARIBBEAN CRUISES LTD.
STATISTICS
(unaudited)
	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Passengers Carried	2,040,242		1,900,810		4,094,624		3,707,079
Passenger Cruise Days	13,230,448		12,297,290		26,380,157		23,772,032
APCD	12,233,196		11,708,837		24,519,026		22,942,326
Occupancy	108.2 %		105.0 %		107.6 %		103.6 %

 

ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
	As of
	June 30,		December 31,
	2024		2023
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$                         391		$                         497
Trade and other receivables, net of allowances of $8 and $7 at June 30, 2024 and December 31,    2023, respectively	412		405
Inventories	242		248
Prepaid expenses and other assets	790		617
Derivative financial instruments	51		25
Total current assets	1,886		1,792
Property and equipment, net	31,759		30,114
Operating lease right-of-use assets	589		611
Goodwill	809		809
Other assets, net of allowances of $42 and $43 at June 30, 2024 and December 31, 2023,    respectively	1,931		1,805
Total assets	$                    36,974		$                    35,131
Liabilities and Shareholders' Equity
Current liabilities
Current portion of long-term debt	$                      1,332		$                      1,720
Current portion of operating lease liabilities	64		65
Accounts payable	821		792
Accrued expenses and other liabilities	1,410		1,478
Derivative financial instruments	22		35
Customer deposits	6,245		5,311
Total current liabilities	9,894		9,401
Long-term debt	19,785		19,732
Long-term operating lease liabilities	591		613
Other long-term liabilities	522		486
Total liabilities	30,792		30,232
Shareholders' equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)	—		—
Common stock ($0.01 par value; 500,000,000 shares authorized; 285,863,919 and 284,672,386    shares issued, June 30, 2024 and December 31, 2023, respectively)	3		3
Paid-in capital	7,536		7,474
Retained earnings (accumulated deficit)	1,204		(10)
Accumulated other comprehensive loss	(654)		(674)
Treasury stock (28,468,430 and 28,248,125 common shares at cost, June 30, 2024 and    December 31, 2023, respectively)	(2,081)		(2,069)
Total shareholders' equity attributable to Royal Caribbean Cruises Ltd.	6,008		4,724
Noncontrolling Interests	174		175
Total shareholders' equity	6,182		4,899
Total liabilities and shareholders' equity	$                    36,974		$                    35,131

 

ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
	Six Months Ended June 30,
	2024		2023
Operating Activities
Net Income (Loss)	$                      1,222		$                         415
Adjustments:
Depreciation and amortization	780		721
Net deferred income tax  expense (benefit)	5		(6)
Loss (Gain) on derivative instruments not designated as hedges	40		(12)
Share-based compensation expense	83		66
Equity investment income	(97)		(62)
Amortization of debt issuance costs, discounts and premiums	51		58
Loss on extinguishment of debt	133		44
Changes in operating assets and liabilities:
(Increase) decrease in trade and other receivables, net	(16)		132
Decrease in inventories	6		8
Increase in prepaid expenses and other assets	(196)		(139)
Increase in accounts payable trade	18		30
Decrease in accrued expenses and other liabilities	(47)		(63)
Increase in customer deposits	934		1,508
Other, net	(15)		2
Net cash provided by operating activities	2,901		2,702
Investing Activities
Purchases of property and equipment	(2,382)		(1,048)
Cash received on settlement of derivative financial instruments	12		18
Cash paid on settlement of derivative financial instruments	(92)		(14)
Investments in and loans to unconsolidated affiliates	(20)		—
Cash received on loans from unconsolidated affiliates	9		11
Other, net	(21)		12
Net cash used in investing activities	(2,494)		(1,021)
Financing Activities
Debt proceeds	4,698		1,208
Debt issuance costs	(87)		(53)
Repayments of debt	(4,974)		(4,249)
Premium on repayment of debt	(104)		—
Proceeds from sale of noncontrolling interest	—		209
Other, net	(44)		(4)
Net cash used in financing activities	(511)		(2,889)
Effect of exchange rate changes on cash and cash equivalents	(2)		—
Net decrease in cash and cash equivalents	(106)		(1,209)
Cash and cash equivalents at beginning of period	497		1,935
Cash and cash equivalents at end of period	$                         391		$                         726
Supplemental Disclosure
Cash paid during the period for:
Interest, net of amount capitalized	$                         621		$                         560
Non-cash Investing Activities
Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities	$                          34		$                           18

 

ROYAL CARIBBEAN CRUISES LTD.
NON-GAAP RECONCILING INFORMATION
(unaudited)
Gross Margin Yields, Net Yields and Adjusted Gross Margin per PCD were calculated by dividing Gross Margin and Adjusted Gross Margins by APCD, and Adjusted Gross Margin by PCD as follows (in millions, except APCD, PCD,Yields, and Adjusted Gross Margin per PCD. Reported Yields and per PCD amounts may vary from amounts calculated based on accompanying financial tables due to rounding.):
	Quarter Ended June 30,						Six Months Ended June 30,
	2024		2024 On a Constant- Currency Basis		2023		2024		2024 On a Constant- Currency Basis		2023
Total revenue	$              4,110		$              4,115		$              3,523		$            7,838		$              7,838		$            6,408
Less:
Cruise operating expenses	2,152		2,155		1,955		4,209		4,211		3,747
Depreciation and amortization expenses	393		393		362		780		780		721
Gross Margin	1,565		1,567		1,206		2,849		2,847		1,940
Add:
Payroll and related	313		313		284		631		631		594
Food	225		226		203		446		446		402
Fuel	282		282		276		586		586		577
Other operating	516		517		456		1,039		1,039		876
Depreciation and amortization expenses	393		393		362		780		780		721
Adjusted Gross Margin	$              3,294		$              3,298		$              2,787		$            6,331		$              6,329		$            5,110
APCD	12,233,196		12,233,196		11,708,837		24,519,026		24,519,026		22,942,326
Passenger Cruise Days	13,230,448		13,230,448		12,297,290		26,380,157		26,380,157		23,772,032
Gross Margin Yields	$            127.94		$            128.06		$            103.04		$          116.21		$            116.14		$            84.51
Net Yields	$            269.38		$            269.61		$            238.00		$          258.23		$            258.20		$          222.74
Adjusted Gross Margin per PCD	$            249.08		$            249.29		$            226.61		$          240.01		$            239.98		$          214.97

 

ROYAL CARIBBEAN CRUISES LTD.
NON-GAAP RECONCILING INFORMATION
(unaudited)
Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs excluding Fuel were calculated as follows (in millions, except APCD and costs per APCD. Reported per APCD amounts may vary from amounts calculated based on accompanying financial tables due to rounding.):
	Quarter Ended June 30,						Six Months Ended June 30,
	2024		2024 On a Constant- Currency Basis		2023		2024		2024 On a Constant- Currency Basis		2023
Total cruise operating expenses	$              2,152		$              2,155		$              1,955		$            4,209		$              4,211		$            3,747
Marketing, selling and administrative expenses	466		467		435		1,001		1,002		896
Gross Cruise Costs	2,618		2,622		2,390		5,210		5,213		4,643
Less:
Commissions, transportation and other	572		572		516		1,070		1,070		919
Onboard and other	244		244		220		437		438		379
Net Cruise Costs Including Other Costs	1,802		1,806		1,654		3,703		3,705		3,345
Less:
Gain on sale of controlling interest (1)	—		—		—		—		—		(3)
Impairment and credit losses (recoveries) (2)	6		6		—		6		6		(7)
Restructuring charges and other initiative expenses	3		3		5		3		3		5
Net Cruise Costs	1,793		1,797		1,649		3,694		3,696		3,350
Less:
Fuel	282		282		276		586		586		577
Net Cruise Costs Excluding Fuel	$              1,511		$              1,515		$              1,373		$            3,108		$              3,110		$            2,773
APCD	12,233,196		12,233,196		11,708,837		24,519,026		24,519,026		22,942,326
Gross Cruise Costs per APCD	$            214.06		$            214.35		$            204.10		$          212.50		$            212.58		$          202.40
Net Cruise Costs per APCD	$            146.70		$            146.88		$            140.76		$          150.69		$            150.73		$          146.04
Net Cruise Costs Excluding Fuel per APCD	$            123.65		$            123.82		$            117.19		$          126.78		$            126.82		$          120.87

(1)	For 2023, represents gain on sale of controlling interest in cruise terminal facilities in Italy. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).
(2)	For 2024, represents property and equipment impairment charges related to certain construction in progress assets. For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).

 

ROYAL CARIBBEAN CRUISES LTD.
NON-GAAP RECONCILING INFORMATION
(unaudited)
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin were calculated as follows (in millions, except APCD and per APCD data. Reported per APCD and Margin amounts may vary from amounts calculated based on accompanying financial tables due to rounding.):
		Quarter Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
Net Income attributable to Royal Caribbean Cruises Ltd.		$              854		$              459		$           1,214		$              411
Interest income		(4)		(10)		(9)		(24)
Interest expense, net of interest capitalized		298		355		721		714
Depreciation and amortization expenses		393		362		780		721
Income tax expense (benefit) (1)		17		8		23		(1)
EBITDA		1,558		1,174		2,729		1,821
Other (income) expense (2)		(14)		(3)		(12)		2
Gain on sale of controlling interest (3)		—		—		—		(3)
Recovery of losses from one of our equity method investees		—		(4)		—		(4)
Restructuring charges and other initiative expenses		3		5		3		5
Impairment and credit losses (recoveries) (4)		6		—		6		(7)
Adjusted EBITDA		$           1,553		$           1,172		$           2,726		$           1,814
Total revenues		$           4,110		$           3,523		$           7,838		$           6,408
APCD		12,233,196		11,708,837		24,519,026		22,942,326
Net Income attributable to Royal Caribbean Cruises Ltd. per APCD		$           69.85		$           39.18		$           49.53		$           17.91
Adjusted EBITDA per APCD		$         126.96		$         100.16		$          111.18		$           79.09
Adjusted EBITDA Margin		37.8 %		33.3 %		34.8 %		28.3 %

(1)	These amounts are included in Other expense within our consolidated statements of comprehensive income (loss).
(2)	Represents net non-operating (income) expense. The amount excludes income tax expense (benefit), included in the EBITDA calculation above.
(3)	For 2023, represents gain on sale of controlling interest in cruise terminal facilities in Italy. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).
(4)	For 2024, represents property and equipment impairment charges related to certain construction in progress assets. For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).

 

ROYAL CARIBBEAN CRUISES LTD.
NON-GAAP RECONCILING INFORMATION
(unaudited)
Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Earnings per Share were calculated as follows (in millions, except shares and per share data):
	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net Income attributable to Royal Caribbean Cruises Ltd.	$                 854		$                 459		$              1,214		$                 411
Loss on extinguishment of debt	17		30		133		44
Amortization of Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition (1)	2		2		3		3
Gain on sale of controlling interest (2)	—		—		—		(3)
PortMiami tax on sale of noncontrolling interest (3)	—		—		—		10
Silver Whisper deferred tax liability release (4)	—		—		—		(26)
Restructuring charges and other initiative expenses	3		5		3		5
Recovery of losses from one of our equity method investees	—		(4)		—		(4)
Impairment and credit losses (recoveries) (5)	6		—		6		(7)
Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.	$                 882		$                 492		$              1,359		$                 433
Earnings per Share  - Diluted (6)	$                3.11		$                1.70		$                4.46		$                1.60
Adjusted Earnings per Share  - Diluted (6)	$                3.21		$                1.82		$                4.97		$                1.69
Weighted-Average Shares Outstanding - Diluted	281		282		281		259

(1)	Represents the amortization of the Silversea Cruises intangible assets resulting from the 2018 Silversea Cruises acquisition.
(2)	For 2023, represents gain on sale of controlling interest in cruise terminal facilities in Italy. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).
(3)	For 2023, represents tax on the PortMiami sale of noncontrolling interest. These amounts are included in Other expense in our consolidated statements of comprehensive income (loss).
(4)	For 2023, represents the release of the deferred tax liability subsequent to the execution of the bargain purchase option for the Silver Whisper. These amounts are included in Other expense within our consolidated statements of comprehensive income (loss).
(5)	For 2024, represents property and equipment impairment charges related to certain construction in progress assets. For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).
(6)	Diluted EPS and Adjusted Diluted EPS includes the add-back of dilutive interest expense related to our convertible notes of $19 million and $38 million for the quarter and  six months ended June 30, 2024, respectively, and $21 million and $4 million for the quarter and six months ended June 30, 2023, respectively.

 

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SOURCE Royal Caribbean Group

FAQ

What were Royal Caribbean's (RCL) Q2 2024 earnings per share?

Royal Caribbean reported Q2 2024 Earnings per Share (EPS) of $3.11 and Adjusted EPS of $3.21.

How much did Royal Caribbean (RCL) increase its full year 2024 Adjusted EPS guidance?

Royal Caribbean increased its full year 2024 Adjusted EPS guidance to $11.35 - $11.45, representing 68% year-over-year growth.

What was Royal Caribbean's (RCL) Q2 2024 total revenue?

Royal Caribbean reported total revenues of $4.1 billion for Q2 2024.

What dividend did Royal Caribbean (RCL) declare for Q2 2024?

Royal Caribbean declared a quarterly dividend of $0.40 per share, payable on October 11, 2024.

What was Royal Caribbean's (RCL) load factor in Q2 2024?

Royal Caribbean reported a load factor of 108% for Q2 2024, up three percentage points compared to Q2 2023.