MIAMI, Dec. 19, 2022 /PRNewswire/ -- Royal Caribbean
Group (NYSE: RCL) announced today that it has entered into a new
partnership with iCON Infrastructure Partners VI, L.P. ("iCON
VI")1, a fund advised by iCON Infrastructure LLP ("iCON
Infrastructure" or "iCON") to develop strategic cruise port
infrastructure in support of Royal Caribbean Group's robust growth
plans.
Access to destinations continues to be of strategic importance
to Royal Caribbean Group's core business. The proposed partnership
will own, develop, and manage cruise terminal facilities and
infrastructure in home ports and key ports of call. The
partnership, which will be owned 90% by iCON VI and 10% by Royal
Caribbean Group, will be managed by an independent management team
with strategic support from Royal Caribbean Group. Both parties
have committed to provide funding for future expansion in
accordance with their percentage interest.
"Our partnership with iCON is a unique opportunity to catapult
us into the coming decades of port investments, build further
financial strength, and provide exceptional cruising experiences,
responsibly, to our guests at the best destinations in the world,"
said Jason Liberty, president and
CEO, Royal Caribbean Group. "Over the last few years, we have
developed more destinations than any other cruise company and this
new partnership will allow us to implement a capital-light
investment framework to accelerate the development of strategic
destinations around the world. We selected iCON because of our
shared strategic priorities – delivering the best experiences in
the world, responsibly – and our shared commitment to
sustainability, being a committed partner in each of the
destinations we visit and exploring the very best locations around
the world."
iCON is a leading independent investment group with a
focus on investing in high-quality infrastructure assets located
predominantly in North America and Europe, with extensive experience investing in
ports and port-related infrastructure.
The new partnership will initially include PortMiami Terminal A,
and several development projects in Italy, Spain,
and the U.S. Virgin Islands. The
partnership will also pursue additional port infrastructure
developments based on the robust pipeline of projects as part of
Royal Caribbean Group's destination development strategy. At
closing (anticipated for the first quarter of 2023), Royal
Caribbean Group expects to receive net cash proceeds of
approximately $210 million. The
partnership is expected to be accretive to earnings, ROIC, and
leverage metrics and will allow Royal Caribbean Group to
continue investing in the development of strategic infrastructure
while supporting the goals of its Trifecta program.
"We are thrilled to be partnering with Royal Caribbean
Group to develop, own and manage a portfolio of cruise
terminals in key strategic markets," said Iain Macleod, Managing Partner at iCON.
"Through this partnership, we will provide world class cruise
terminal infrastructure, offering cruise guests more opportunities
to see and experience the world in partnership with the Royal
Caribbean Group, a world class operator. In the years to come, we
look forward to delivering new high-quality terminals, working
closely with key destination communities and with a strong focus on
sustainability."
BofA Securities is serving as exclusive financial advisor to
Royal Caribbean Group.
About Royal Caribbean Group:
Royal Caribbean Group (NYSE: RCL) is one of the leading cruise
companies in the world with a global fleet of 64 ships traveling to
approximately 1,000 destinations around the world. Royal Caribbean
Group is the owner and operator of three award-winning cruise
brands: Royal Caribbean International, Celebrity Cruises, and
Silversea Cruises, and it is also a 50% owner of a joint venture
that operates TUI Cruises and Hapag-Lloyd Cruises. Together, the
brands have an additional 10 ships on order as of September 30, 2022. Learn more at
www.royalcaribbeangroup.com or www.rclinvestor.com.
About iCON:
iCON is the exclusive advisor to funds with cumulative
commitments in excess of $8bn. iCON
VI, iCON's latest flagship fund, closed fundraising in June 2022 with $3.6bn of capital committed from over 50
investors. Investors in iCON's funds comprise globally recognized
corporate and public pension funds, asset managers, insurance
companies and sovereign wealth funds.
iCON is a long-term investor with an extensive track record of
partnering alongside strategic counterparties that share a similar
focus on growth, operational excellence and sustainability. iCON
advised funds invest across a range of infrastructure sectors
including ports, transport, telecommunications, healthcare, water,
energy generation, distribution and storage. Learn more at
www.iconinfrastructure.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 the impact of the
Partnership on our financial performance, projections and balance
sheet. Words such as "anticipate," "believe," "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: the impact of the global incidence
and continued spread of COVID-19, which has had and may continue to
have a material adverse impact on our business, liquidity and
results of operations, or other contagious illnesses on economic
conditions and the travel industry in general and the financial
position and operating results of our Company in particular, such
as: governmental and self-imposed travel restrictions and guest
cancellations; our ability to obtain sufficient financing, capital
or revenues to satisfy liquidity needs, capital expenditures, debt
repayments and other financing needs; the effectiveness of the
actions we have taken to improve and address our liquidity needs;
the impact of the economic and geopolitical environment on key
aspects of our business including the conflict between Ukraine and Russia, 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; our
COVID-19 protocols and any other health protocols we may develop in
response to infectious diseases may be costly and less effective
than we expect in reducing the risk of infection and spread of such
disease on our cruise ships; 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; an increase in concern about the risk of illness on
our ships or when travelling to or from our ships, all of which
reduces demand; unavailability of ports of call; growing
anti-tourism sentiments and environmental concerns; changes in U.S.
foreign travel policy; the uncertainties of conducting business
internationally and expanding into new markets and new ventures;
our ability to recruit, develop and retain high quality personnel;
changes in operating and financing 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; the impact of foreign currency exchange
rates, the impact of higher interest rate and fuel prices; 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 that we will not declare or
pay dividends on our common stock for the near future; vacation
industry competition and changes in industry capacity and
overcapacity; the risks and costs related to cyber security
attacks, data breaches, protecting our systems and maintaining
integrity and security of our business information, as well as
personal data of our guests, employees and others; 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, natural disasters and seasonality
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 current report on Form 10-Q, 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.
Selected Definitions
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.
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. Refer to Management's Discussion and Analysis of
Financial Condition and Results of Operations within Item 2 of
our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2022 for a discussion
of items adjusted to arrive at Adjusted EBITDA.
Adjusted Earnings (Loss) per Share ("Adjusted EPS") is a
non-GAAP measure that represents Adjusted Net Income (Loss) (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 (Loss) is a non-GAAP measure that represents
net income (loss) excluding certain items that we believe adjusting
for is meaningful when assessing our performance on a comparative
basis. Refer to Management's Discussion and Analysis of
Financial Condition and Results of Operations within Item 2 of
our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2022, and within Item 7
of our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of items
adjusted to arrive at Adjusted Net Income (Loss).
Adjusted Operating Income (Loss) is a non-GAAP measure that
represents operating income (loss) including income (loss) 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. Refer to Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations of our Quarterly Report on Form 10-Q for
the quarter ended September 30, 2022
for a discussion of items adjusted to arrive at Adjusted Operating
Income (Loss). We use this non-GAAP measure to calculate ROIC (as
defined below).
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.
EBITDA is a non-GAAP measure that represents net income (loss)
excluding (i) interest income; (ii) interest expense, net of
interest capitalized; (iii) depreciation and amortization expenses;
and (iv) income tax benefit or expense. We believe that this
non-GAAP measure is meaningful when assessing our operating
performance on a comparative basis.
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 Total shareholders' equity. We use this
measure to calculate ROIC (as defined below).
Return on Invested Capital ("ROIC") represents Adjusted
Operating Income (Loss) 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.
1 iCON Infrastructure Partners VI ("iCON VI")
comprises two parallel limited partnerships, iCON Infrastructure
Partners VI, L.P. and iCON Infrastructure Partners VI-B, L.P. iCON
Infrastructure Management VI Limited, the managing general partner
of each of iCON Infrastructure Partners VI, L.P. and iCON
Infrastructure Partners VI-B, L.P., is licensed by the Guernsey
Financial Services Commission. iCON Infrastructure LLP ("iCON"),
the investment advisor to the managing general partner, is
regulated by the Financial Conduct Authority.
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