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Royal Caribbean Reports 2004 Results!



 
 
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Old February 1st, 2005, 02:26 PM
Ray Goldenberg
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Default Royal Caribbean Reports 2004 Results!

Hi Everyone,

I received this press release from Royal Caribbean and thought it
would be of interest. If you have missed any of my news' postings,
they are available on my web site.

Best regards,
Ray
LIGHTHOUSE TRAVEL
800-719-9917 or 805-566-3905
http://www.lighthousetravel.com


Royal Caribbean Reports 2004 Results

MIAMI, February 1, 2005 /PRNewswire-FirstCall/ -- Royal Caribbean
Cruises Ltd. (NYSE: RCL; OSE) today reported net income for the year
of $474.7 million, or $2.26 per share, compared to $280.7 million, or
$1.42 per share, in 2003. Revenues for the year increased 20.4% to
$4.6 billion from revenues of $3.8 billion in 2003. The increase in
revenues was attributable to a 10.3% increase in capacity coupled with
an increase in cruise ticket prices, occupancy and onboard revenues.
Gross Yields for the year increased 9.1% from 2003. Net Yields
increased a record 9.2% from 2003. Occupancy reached 105.7%, up from
103.2% in 2003.

"Despite hurricanes, sky-rocketing fuel costs and other challenges,
2004 was a very good year for the company," said Richard D. Fain,
chairman and chief executive officer. "We are especially pleased with
our yield performance and our income growth. These results reflect the
strong demand for our product, successful implementation of our brand
building initiatives, and the underlying strength of the industry
fundamentals."

Revenues for the fourth quarter of 2004 were $964.6 million, up 9.9%
from $878.0 million in 2003. Gross Yields and Net Yields increased
4.7% and 4.4%, respectively. Net Yields in the fourth quarter have now
surpassed those achieved in the fourth quarter of 2000. The company
reported a net loss of $25.8 million, or $0.13 per share, for the
fourth quarter of 2004, which compares with a net loss of $20.0
million, or $0.10 per share, for the fourth quarter of 2003. As
previously disclosed, included in the fourth quarter of 2004 is $8.1
million associated with the reversal of a tax accrual.

For the fourth quarter of 2004, Gross Cruise Costs and Net Cruise
Costs per APCD, increased 6.3% and 6.5%, respectively. An unexpected
spike in at- the-pump fuel costs during November and December was the
primary driver of this increase. During the fourth quarter of 2004,
fuel costs represented approximately 7.1% of total revenues.

Commenting on these figures, Mr. Fain said: "While the year as a whole
has been very gratifying, we are disappointed that fuel and other
costs hurt our fourth quarter results so much. In addition, onboard
revenue, while up, did not reach the exceptional performance we had
enjoyed during the first three quarters."

With three weeks of what has been characterized as the industry's
"wave period" completed, the company is able to report that bookings
and pricing levels continue to be strong. Consumer demand is healthy
across all products and for both brands. Many of the demand
characteristics the company is now seeing are similar to those seen in
the late 1990's. As a result, the company currently forecasts Net
Yields for the first quarter of 2005 will increase approximately 7%
and Net Yields for the full year 2005 will increase in the range of 5%
to 7%.

For 2005, the company has a relatively small capacity increase of
1.6%, which means fewer economies of scale to absorb inflationary and
other cost pressures. In addition, uncertainty about fuel costs makes
forecasting difficult. Assuming the yearly average at-the-pump price
of fuel in 2005 is the same as the yearly average in 2004 and
adjusting for fewer fuel hedges, the company currently expects that
fuel costs will increase by approximately 8% per APCD. Based on this
assumption, the company expects Net Cruise Costs to increase in the
range of 2% to 3% per APCD. This increase in fuel costs accounts for
1% of the increase in Net Cruise Costs per APCD. Compared to the same
periods in the prior year, management anticipates that Net Cruise
Costs will increase in the first half of the year and be flat to
slightly down in the second half of the year.

Depreciation and amortization is expected to be in the range of $410
to $420 million and net interest expense is expected to be in the
range of $305 to $315 million. Additionally, 2005 will be the initial
year the company accrues income taxes associated with the final
regulations under Internal Revenue Code Section 883. The company
expects the application of the final regulations will reduce 2005
earnings per share by approximately $0.04 to $0.05.

Based upon these assumptions, management expects full year 2005
earnings per share to be in the range of $2.70 to $2.90. On the same
basis, first quarter 2005 earnings per share are expected to be in the
range of $0.50 to $0.55.

On December 13, 2004, Royal Caribbean International's Sovereign of the
Seas re-entered service after an extreme makeover that included
bow-to-stern renovations and several new entertainment and dining
options. Renovation highlights include the creation of the ship's
first balcony staterooms, the addition of Boleros Latin lounge, and
the transformation of the Windjammer Cafe into the Windjammer
Marketplace.

In response to steadily increasing demand for Celebrity Cruises'
vacation experience in Europe, Celebrity Cruises announced the
deployment of Century to Europe. Century's deployment gives Celebrity
Cruises, the top-rated premium line, a total of four ships in Europe
for the 2005 season. As the U.S. dollar continues to decline against
the euro, a growing number of savvy travelers are honing in on
cruising as the definitive way to experience Europe. The European
deployment of Century will allow the company to capitalize on this
strong demand.

The company has scheduled a conference call at 10 a.m. Eastern
Standard Time today to discuss its earnings. This call can be listened
to, either live or on a delayed basis, on the company's investor
relations web site at http://www.rclinvestor.com . A slide
presentation will accompany the conference call, and is also available
for viewing at http://www.rclinvestor.com .

Terminology

Available Passenger Cruise Days ("APCD")

APCDs represent double occupancy per cabin multiplied by the number of
cruise days for the period and are our measurement of capacity.

Gross Yields
Gross Yields represent total revenues per APCD.

Net Yields
Net Yields represent Gross Yields less commissions, transportation and
other expenses and onboard and other expenses per APCD. We utilize Net
Yields to manage our business on a day-to-day basis and believe that
it is the most relevant measure of our pricing performance. We have
not provided a quantitative reconciliation of projected Gross Yields
to projected Net Yields due to the significant uncertainty in
projecting the costs deducted to arrive at this measure. Accordingly,
we do not believe that reconciling information for such projected
figures would be meaningful.

Gross Cruise Costs

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

Net Cruise Costs

Net Cruise Costs represent Gross Cruise Costs excluding commissions,
transportation and other expenses and onboard and other expenses. In
measuring our ability to control costs in a manner that positively
impacts net income, we believe changes in Net Cruise Costs to be the
most relevant indicator of our performance. We have not provided a
quantitative reconciliation of projected Gross Cruise Costs to
projected Net Cruise Costs due to the significant uncertainty in
projecting the costs deducted to arrive at this measure. Accordingly,
we do not believe that reconciling information for such projected
figures would be meaningful.

Passenger Cruise Days

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

Occupancy Percentage

Occupancy Percentage, in accordance with cruise industry practice, is
calculated by dividing Passenger Cruise Days by APCDs. A percentage of
100% indicates that three or more passengers occupied some cabins.

Royal Caribbean Cruises Ltd. is a global cruise vacation company that
operates Royal Caribbean International and Celebrity Cruises, with a
combined total of 29 ships in service and two under construction. The
company also offers unique land-tour vacations in Alaska, Canada and
Europe through its cruise-tour division. Additional information can be
found on http://www.royalcaribbean.com, http://www.celebrity.com or
http://www.rclinvestor.com.

Certain statements in this news release are forward-looking
statements. Forward-looking statements do not guarantee future
performance and may involve 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. Such factors
include general economic and business conditions, vacation industry
competition (including cruise industry competition), changes in
vacation industry capacity (including cruise capacity), the impact of
tax laws and regulations affecting our business or our principal
shareholders, the impact of changes in other laws and regulations
affecting our business, the impact of pending or threatened
litigation, the delivery of scheduled new ships, emergency ship
repairs, incidents involving cruise ships, reduced consumer demand for
cruises as a result of any number of reasons (including armed
conflict, terrorist attacks, geo-political and economic uncertainties
or the unavailability of air service), changes in our stock price,
interest rates, oil prices or foreign currency exchange rates, weather
and other factors described in further detail in Royal Caribbean
Cruises Ltd.'s filings with the Securities and Exchange Commission.
The above examples are not exhaustive and new risks emerge from time
to time. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. In addition, certain financial measures in
this news release constitute non-GAAP financial measures as defined by
Regulation G. A reconciliation of these items can be found on our
investor relations website at http://www.rclinvestor.com.


Financial Tables Follow


ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Fourth Quarter Ended Twelve Months
Ended
December 31, December 31,
---------------------
---------------------
2004 2003 2004 2003
---------- --------- ----------
----------
(unaudited) (unaudited)
Passenger ticket
revenues $ 703,406 $ 640,336 $3,359,201
$2,775,055
Onboard and other
revenues 261,179 237,709 1,196,174
1,009,194
---------- --------- ----------
----------
Total revenues 964,585 878,045 4,555,375
3,784,249
---------- --------- ----------
----------
Cruise operating
expenses
Commissions,
transportation and
other 176,597 161,528 822,206
684,344
Onboard and other 56,795 49,024 300,717
249,537
Payroll and related 123,620 111,926 487,633
426,462
Food 67,622 62,410 269,436
239,483
Other operating 245,516 211,757 939,391
781,209
---------- --------- ----------
----------
Total cruise
operating
expenses 670,150 596,645 2,819,383
2,381,035
Marketing, selling and
administrative
expenses 153,673 141,877 588,267
514,334
Depreciation and
amortization expenses 100,608 94,644 394,136
362,695
---------- --------- ----------
----------
Operating income 40,154 44,879 753,589
526,185
---------- --------- ----------
----------
Other income (expense)
Interest income 3,682 1,336 9,208
4,519
Interest expense,
net of interest
capitalized (78,516) (69,631) (309,977)
(268,398)
Other income 8,895 3,367 21,871
18,358
---------- --------- ----------
----------
(65,939) (64,928) (278,898)
(245,521)
---------- --------- ----------
----------
Net (loss) income $ (25,785) $(20,049) $ 474,691 $
280,664
========== ========= ==========
==========
(LOSS) EARNINGS
PER SHA
Basic $ (0.13) $ (0.10) $ 2.39 $
1.45
========== ========= ==========
==========

Diluted $ (0.13) $ (0.10) $ 2.26 $
1.42
========== ========= ==========
==========

WEIGHTED-AVERAGE
SHARES OUTSTANDING:
Basic 200,447 195,675 198,946
194,074
========== ========= ==========
==========

Diluted 200,447 195,675 234,580
211,175
========== ========= ==========
==========



STATISTICS

Fourth Quarter Ended Twelve Months
Ended
December 31, December 31,
---------------------
----------------------
2004 2003 2004
2003
---------- --------- ----------
----------

Occupancy as a
percentage of total
capacity 103.4% 101.6% 105.7%
103.2%
Passenger Cruise Days 5,535,406 5,184,086 22,661,965
20,064,702
Available Passenger
Cruise Days 5,354,396 5,101,528 21,439,288
19,439,238



ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

As of

---------------------------------
December 31,
December 31,
2004
2003
------------
------------
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 628,578 $
330,086
Trade and other receivables, net 84,899
89,489
Inventories 60,260
53,277
Prepaid expenses and other assets 86,869
101,698
-----------
-----------
Total current assets 860,606
574,550
Property and equipment - at cost
less accumulated depreciation
and amortization 10,193,443
9,943,495
Goodwill - less accumulated
amortization of $138,606 278,561
278,561
Other assets 631,474
526,136
-----------
-----------
$11,964,084
$11,322,742
===========
===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 905,374 $
315,232
Accounts payable 162,973
187,756
Accrued expenses and other
liabilities 330,073
271,944
Customer deposits 875,082
729,595
-----------
----------
Total current liabilities 2,273,502
1,504,527

Long-term debt 4,826,570
5,520,572
Other long-term liabilities 59,492
34,746

Commitments and contingencies

Shareholders' equity
Common stock ($.01 par value;
500,000,000 shares authorized;
201,253,140 and 196,106,658 shares
issued) 2,012
1,961
Paid-in capital 2,206,157
2,100,612
Retained earnings 2,533,265
2,162,195
Accumulated other comprehensive
income 71,363
5,846
Treasury stock (596,556 and 556,212
common shares at cost) (8,277)
(7,717)
------------
------------
Total shareholders' equity 4,804,520
4,262,897
------------
------------
$11,964,084
$11,322,742
============
============



ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Twelve Months
Ended
December 31,
2004
2003
----------
----------
(unaudited)
OPERATING ACTIVITIES
Net income $ 474,691 $
280,664
Adjustments:
Depreciation and amortization 394,136
362,695
Accretion of original issue
discount on debt 52,562
48,874
Changes in operating assets and
liabilities:
(Increase) decrease in trade and
other receivables, net (3,256)
10,011
Increase in inventories (6,813)
(15,978)
(Increase) decrease in prepaid
expenses and other assets (17,196)
6,670
(Decrease) increase in accounts
payable (25,987)
19,756
Increase (decrease) in accrued
expenses and other liabilities 53,851
(3,340)
Increase in customer deposits 145,273
161,640
Other, net 9,730
(13,189)
-----------
-----------
Net cash provided by operating
activities 1,076,991
857,803
-----------
-----------

INVESTING ACTIVITIES
Purchases of property and equipment (630,670)
(1,029,530)
Other, net (1,840)
(73,114)
-----------
-----------
Net cash used in investing activities (632,510)
(1,102,644)
-----------
-----------

FINANCING ACTIVITIES
Repayments of long-term debt, net (361,386)
(231,100)
Net proceeds from issuance of debt 225,000
590,536
Dividends (104,521)
(98,320)
Proceeds from exercise of common
stock options 98,316
45,960
Other, net (3,398)
25,267
-----------
-----------
Net cash (used in) provided by
financing activities (145,989)
332,343
-----------
-----------

Net increase in cash and cash
equivalents 298,492
87,502
Cash and cash equivalents at
beginning of year 330,086
242,584
-----------
-----------
Cash and cash equivalents at end of
year $ 628,578 $
330,086
===========
===========

SUPPLEMENTAL DISCLOSU
Cash paid during the year for:
Interest, net of amount capitalized $ 266,037 $
219,598
===========
===========





 




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