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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
To Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 21, 2024
ROYAL CARIBBEAN CRUISES LTD.
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(Exact Name of Registrant as Specified in Charter) |
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Republic of Liberia
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(State or Other Jurisdiction of Incorporation) |
1-11884 |
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98-0081645 |
(Commission File Number) |
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(IRS Employer Identification No.) |
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1050
Caribbean Way, Miami,
Florida |
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33132 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant's telephone number, including area code: 305-539-6000
Not
Applicable |
(Former Name or Former Address, if Changed Since Last Report) |
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class |
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Trading Symbol(s) |
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Name
of each exchange on which registered |
Common stock, par value $0.01 per share |
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RCL |
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New York Stock Exchange |
Indicate by check
mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01 | Regulation FD Disclosure |
On February 21, 2024, Royal Caribbean Cruises Ltd. (the “Company”) issued a press release providing updated guidance regarding
financial results for the fiscal year ended December 31, 2024. A copy of this press release is furnished as exhibit 99.1 to this report.
This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall
not be incorporated by reference into any filing by the Company, whether made before or after the filing of this report, regardless of
any general incorporation language in the filing, except as expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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ROYAL CARIBBEAN CRUISES LTD. |
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Date: |
February 21, 2024 |
By: |
/s/ Naftali Holtz |
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Name: |
Naftali Holtz |
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Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
ROYAL CARIBBEAN GROUP INCREASES 2024 GUIDANCE
ON
ACCELERATING DEMAND
Since last earnings call, demand and bookings
have exceeded expectations
Adjusted EPS in 2024 is now expected to be
$9.90 - $10.10
The company expects to achieve all Trifecta
goals in 2024
MIAMI –
February 21, 2024 – Royal Caribbean Group (NYSE: RCL) today provided an update on demand and updated its 2024 guidance.
The company continues to be very encouraged about
the demand and pricing environment for 2024. Since its most recent update on its Q4 2023 earnings call, the WAVE booking
season has exceeded the company’s initial expectations, with the first 5 weeks of the year resulting in the best WAVE booking weeks
in the company’s history. Bookings have been significantly higher than during the same period last year, with the back half of the
year up by more than the front half. For 2024, all four quarters and all key products are booked ahead of the same time last year in both
rate and volume. Consumer spending for onboard purchases continue to exceed prior years driven by greater participation at higher prices,
indicating quality and healthy future demand.
"Since our last earnings call, robust demand
for our vacation experiences has significantly exceeded our initial expectations,” said Jason Liberty, president and CEO of Royal
Caribbean. “As a result, we are increasing our 2024 guidance on stronger revenue outlook, and we expect to achieve all Trifecta
goals in 2024. Trifecta marks an important milestone as we remain intensely focused on delivering a lifetime of vacations
and priceless memories for our guests while delivering exceptional long-term shareholder value.”
As a result of the strong WAVE season, the company
is increasing its 2024 Adjusted EPS guidance by $0.40 compared to its February guidance. For the full year, Adjusted EPS is now expected
to be $9.90 to $10.10 driven by an increase in constant currency net yield growth of approximately 100 bps compared to the February guidance.
Approximately $0.15 of the full year increase in adjusted EPS is driven by an improved revenue outlook for the first quarter of 2024.
The company now expects to achieve all Trifecta goals in 2024.
About Royal Caribbean Group
Royal Caribbean Group (NYSE: RCL) is one of the
leading cruise companies in the world with a global fleet of 65 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 8 ships on order as of December 31, 2023.
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 financial results for
2024; demand for our brands; and our progress towards achievement of our Trifecta goals. 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 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 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; an increase in concern about the risk of illness on our ships or when traveling 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 food and fuel prices; 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 quarterly 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.
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.
Adjusted Earnings
(Loss) per Share ("Adjusted EPS") is a non-GAAP measure that represents
Adjusted Net Income (Loss) 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 (Loss) attributable to Royal Caribbean Cruises Ltd. is a non-GAAP measure that represents net income (loss) less net
income attributable to noncontrolling interest, excluding certain items that we believe adjusting for is meaningful when assessing our
performance on a comparative basis.
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 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 (Loss) 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.
We believe that this non-GAAP measure is meaning 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 the most recent
five-quarter average of 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.
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.
Trifecta refers
to the multi-year Adjusted EBITDA per APCD, Adjusted EPS and ROIC goals we publicly announced in November 2022 and 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 lease
$100, Adjusted EPS of at least $10, and ROIC of 13% or higher by the end of 2025.
Adjusted Measures of Financial Performance
We have not provided in this
press release 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.
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