Royal Caribbean Reports 4Q Results

Royal Caribbean Cruises Ltd. has announced their fourth quarter earnings of $38.3 million, or $0.20 pershare, compared to a net loss of ($39.0) million, or ($0.20) per share, in 2001. Included in the fourth quarter of 2002 are net proceeds of $33.0 million, or $0.17 per share, related to the termination of the proposed DLC merger with P&O Princess. Fourth quarter earnings are better than those previously predicted by the company due to better than expected yield performance. Net yields (net revenue per available passenger cruise day) for the fourth quarter were up 10.6% compared to previous guidance of 7% to 9%. As a result, net yields for the full year were only 0.7% below the level experienced in 2001. "Obviously, the fourth quarter of 2001 was greatly impacted by the aftermath of 9/11," said Bonnie S. Biumi, Acting Chief Financial Officer of Royal Caribbean Cruises Ltd. "Nevertheless, a double digit yield improvement in the face of a double digit capacity increase amply demonstrates the strength of our brands." For the full year 2002, net income was $351.3 million, or $1.79 per share, compared with $254.5 million, or $1.32 per share, in 2001. Included in 2002 are net proceeds of $33.0 million, or $0.17 per share, related to the termination of the proposed DLC merger with P&O Princess and a charge of $20.0 million, or $0.10 per share, recorded in connection with a litigation settlement. Excluding the impact of these items, net income for 2002 would have been $338.3 million, or $1.72 per share. Earnings for 2001 were negatively impacted by the events of September 11 and ships out of service. The comparable figures for 2001 were $318.9 million, or $1.65 per share. Revenues for the year were up 9.2% at $3.4 billion, compared with $3.1 billion in 2001. The increase in revenues for the year was due to a 15.0% increase in capacity, partially offset by the 0.7% decline in yields and a decrease in the air/sea mix from 24.0% in 2001 to 14.2% in 2002. For the year operating costs were $2.1 billion, up from $1.9 billion in 2001, but down 5.0% on a per available passenger cruise day basis. The company believes changes in running expenses (i.e., those expenses directly associated with shipboard operations) and SG&A to be a more relevant measure of its ability to control costs in a manner that positively impacts the bottom line. Running and SG&A expenses for the year (excluding fuel, the Brilliance of the Seas lease payments, the litigation settlement and the costs associated with September 11th) were down 4.8% on a per available passenger cruise day basis.