Royal Caribbean Cruises Ltd.


Washington, D.C. 20549


For the month of   January, 2004


1050 Caribbean Way, Miami, Florida 33132
(Address of principal executive offices)

     [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.]

Form 20-F x Form 40-F o

     [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.]

Yes o No x

     [If “Yes” is marked indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_________.]



News From
Royal Caribbean Cruises Ltd.

Corporate Communications Office

1050 Caribbeam Way, Miami, Florida 33132-2096
  Contact:   Lynn Martenstein or Dan Mathewes (305) 539-6570 or (305) 539-6153

For Immediate Release


MIAMI – January 29, 2004 – Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL) today reported net income for the year of $280.7 million, or $1.42 per share. This was within the range of the company’s previous guidance of $1.42 to $1.46 per share. Net income for 2002 was $351.3 million, or $1.79 per share. Revenues for the year increased 10.2% to $3.8 billion from revenues of $3.4 billion in 2002. The increase in revenues was primarily due to an increase in capacity and shipboard revenues, partially offset by lower cruise ticket prices and occupancy levels. Gross Yields for the year decreased 1.7% from 2002. Net Yields, which the company considers a better measure of revenue performance, decreased 1.1% from 2002.

Revenues for the fourth quarter were $878.0 million, up 12.4% from $780.9 million in 2002. Gross Yields for the quarter were flat while Net Yields for the quarter were down 0.4%. The company reported a net loss of $20.0 million, or $0.10 per share, for the fourth quarter of 2003, which compares with net income of $38.3 million, or $0.20 per share, for the fourth quarter of 2002. Included in the fourth quarter of 2002 were net proceeds of $33.0 million, or $0.17 per share, related to the termination of the proposed merger with P&O Princess.

For the full year 2003, Gross Cruise Costs and Net Cruise Costs, on a per Available Passenger Cruise Day basis, increased 1.5% and 3.9%, respectively. Consistent with industry and market trends, year-over-year cost comparisons continued to be negatively affected by increases in fuel prices. During the fourth quarter, the company also incurred additional charges associated with information technology software, marketing activities delayed from earlier in the year, and expanded repairs and refurbishment of certain vessels.



From the time of the company’s last update, bookings and pricing levels have continued to strengthen. Since the start of what has been characterized as the industry’s “wave period,” the company has broken several booking records for both Royal Caribbean International and Celebrity Cruises. The company had previously reported that the booking curve had stabilized. The company is now seeing initial signs that the booking curve may be lengthening. As a result, visibility for the first half of 2004 has improved somewhat from prior periods; however, it remains limited for the second half of the year. The company currently forecasts that Net Yields for the first quarter of 2004 will increase in the range of 5% to 7% and expects Net Yields in the second quarter to increase more than the first quarter due to easier comparisons to the prior year. Limited visibility and prior year comparisons make forecasting Net Yields for the full year difficult. Assuming there are no external events and positive booking trends continue, Net Yields for the full year of 2004 are expected to increase in the range of 5% to 7%.

“It is amazing how well our company and the industry have performed over the last two years, given the difficult operating environment,” said Richard D. Fain, chairman and chief executive officer. “We are pleased but not surprised by the strong booking activity we have seen over the last few months and are well positioned with our two strong brands, young innovative fleet, and superior revenue management systems to take advantage of this improving environment.”

Net Cruise Costs for the full year 2004 are expected to increase approximately 1% to 2%, on an Available Passenger Cruise Day basis. The increase in Net Cruise Costs is primarily attributable to increases in fuel prices, insurance expense and port expenses (the latter associated with itinerary changes, increased occupancy levels, and other increases). Based upon year-over-year comparisons, management anticipates that Net Cruise Costs, on an Available Passenger Cruise Day basis, will increase in the first half of the year and decrease in the second half of the year. Depreciation and amortization is expected to be in the range of $395 to $405 million and net interest expense is expected to be in the range of $315 to $325 million. Although the company is still in the process of analyzing the impact of the final regulations under Internal Revenue Code Section 883, the company has not changed its estimates that the application of the final regulations will reduce 2004 earnings per share by approximately $0.04 to $0.05.



The company’s May 2001 zero coupon convertible notes become convertible during the first quarter of 2004 if the share price of our common stock closes above $34.27 for 20 days out of the last 30 trading days of the quarter. If the notes become convertible during the quarter, earnings per share for the quarter would be reduced by approximately $0.01. If the notes continue to be convertible for the remainder of the year, full year earnings per share would be reduced by approximately $0.06. Assuming this dilution occurs and no change in the revenue picture, management expects 2004 earnings per share to be in the range of $2.10 to $2.30.

Since September 30, 2003, the company has received $265.0 million in additional commitments under the terms of its unsecured revolving credit facility. The additional commitments have increased the availability under the facility to $845.0 million and do not alter any of the facility’s existing terms. In November the company issued $350.0 million in 6.875% senior unsecured notes due 2013. Additionally, the company has also decided not to use the OECD secured financing previously available for use on the delivery of Jewel of the Seas. Instead the company has entered into an 8-year $200 million unsecured term loan, which can be drawn anytime prior to July 1, 2004.

In January 2004, Celebrity Cruises announced the launch of Celebrity Xpeditions, a series of exotic experiences and exceptional excursions that take guests to the farthest corners of the world. Subject to closing of a pending acquisition, including regulatory approvals, the first in the Celebrity Xpeditions program will begin June 11, 2004, with a series of seven- to 11-night journeys in the Galapagos Islands, on a 296-foot vessel, named the Celebrity Xpedition, which resembles a luxurious yacht. Additional “over-the-top” Celebrity Xpeditions in Antarctica, the Arctic, Alaska, Florida, and elsewhere will be announced later this year.

Travel Weekly announced in January that Royal Caribbean International was named Best Overall Cruise Line in the 2003 Travel Weekly First Annual Readers Choice Awards, which surveyed more than 2,200 travel professionals. In addition, Royal Caribbean International won in two other categories — Best Cruise Line: America and Best Cruise Line: Caribbean.

The February issue of Condé Nast Traveler has honored Celebrity Cruises for having the world’s greatest ships. Seven Celebrity ships – every ship in the fleet that falls into the large-ship category – ranked in the top 10 in the annual Condé Nast Traveler’s “Best Cruise Ships in the World” readers’ poll. In addition to sweeping the Condé Nast Traveler’s overall poll, Celebrity was also honored as top in service (Summit) and cuisine (Century). These



accolades further underscore Celebrity’s commitment to provide a cruise product that consistently delivers an exceptional premium cruise experience.

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 A slide presentation will accompany the conference call, and is also available for viewing at


Available Passenger Cruise Days

Available Passenger Cruise Days represent double occupancy per cabin multiplied by the number of cruise days for the period.

Gross Yields

Gross Yields represent revenues per Available Passenger Cruise Day.

Net Yields

Net Yields represent revenues less costs of air transportation, travel agent commissions and certain other direct costs (all of which are included in operating expenses) per Available Passenger Cruise Day. Such costs were $188.6 million and $165.4 million for the three months ending December 31, 2003 and 2002, respectively. For the twelve months ending December 31, 2003 and 2002, these costs were $849.8 million and $789.0 million, respectively.

Gross Cruise Costs

Gross Cruise Costs represent operating expenses and marketing, selling and administrative expenses.

Net Cruise Costs

Net Cruise Costs represent running expenses (i.e. those expenses directly associated with ship operations, which are defined as operating expenses less costs deducted to arrive at Net Yields) and marketing, selling and administrative expenses.



Royal Caribbean Cruises Ltd. is a global cruise vacation company that operates Royal Caribbean International and Celebrity Cruises, with a combined total of 27 ships in service and two under construction or on firm order. The company also offers unique cruisetour vacations in Alaska, Canada and Europe. Additional information can be found on, or

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 at sea or in port, 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 interest rates or oil prices, weather, changes in our stock price and other factors described in further detail in Royal Caribbean’s filings with the Securities and Exchange Commission. The above examples may not be 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 presentation constitute non-GAAP financial measures as defined by Regulation G. A reconciliation of these items can be found on our investor relations website at

Financial Tables Follow




(in thousands, except per share data)

      Fourth Quarter Ended   Twelve Months Ended
      December 31,   December 31,
      2003   2002   2003   2002
      (Unaudited)   (Unaudited)        
  $ 878,045     $ 780,930     $ 3,784,249     $ 3,434,347  
    596,645       510,074       2,381,035       2,113,217  
Marketing, selling and administrative
    141,877       118,823       514,334       431,055  
Depreciation and amortization
    94,644       85,587       362,695       339,100  
    833,166       714,484       3,258,064       2,883,372  
Operating Income
    44,879       66,446       526,185       550,975  
Other Income (Expense)
Interest income
    1,336       2,005       4,519       12,413  
Interest expense, net of capitalized interest
    (69,631 )     (63,811 )     (268,398 )     (266,842 )
Other income (expense)
    3,367       33,637       18,358       54,738  
    (64,928 )     (28,169 )     (245,521 )     (199,691 )
Net Income
  $ (20,049 )   $ 38,277     $ 280,664     $ 351,284  
Earnings Per Share:
  $ (0.10 )   $ 0.20     $ 1.45     $ 1.82  
  $ (0.10 )   $ 0.20     $ 1.42     $ 1.79  
Weighted-Average Shares Outstanding:
    195,675       192,741       194,074       192,485  
    195,675       195,656       197,341       195,731  


    Fourth Quarter Ended   Twelve Months Ended
    December 31,   December 31,
    2003   2002   2003   2002
Occupancy as a percentage of total capacity
    101.6 %     101.3 %     103.2 %     104.5 %
Passenger Cruise Days
    5,184,086       4,595,907       20,064,702       18,112,782  
Available Passenger Cruise Days
    5,101,528       4,538,068       19,439,238       17,334,204  



(in thousands, except share data)

          As of December 31,
          2003   2002
Current Assets
Cash and cash equivalents
  $ 330,086     $ 242,584  
Trade and other receivables, net
    89,489       79,535  
    53,277       37,299  
Prepaid expenses and other assets
    101,698       88,325  
Total current assets
    574,550       447,743  
Property & Equipment - at cost less accumulated depreciation and amortization
    9,943,495       9,276,484  
Goodwill, net
    278,561       278,561  
Other Assets
    526,136       535,743  
  $ 11,322,742     $ 10,538,531  
Current Liabilities
Current portion of long-term debt
  $ 360,018     $ 122,544  
Accounts payable
    187,756       171,153  
Accrued expenses and other liabilities
    271,944       308,281  
Customer deposits
    729,595       567,955  
Total current liabilities
    1,549,313       1,169,933  
Long-Term Debt
    5,475,786       5,322,294  
Other Long-Term Liabilities
    34,746       11,610  
Commitments and Contingencies
Shareholders’ Equity
Common stock ($.01 par value; 500,000,000 shares authorized; 196,106,658 and 192,982,513 shares issued)
    1,961       1,930  
Paid-in capital
    2,100,612       2,053,649  
Retained earnings
    2,162,195       1,982,580  
Accumulated other comprehensive income
    5,846       3,693  
Treasury stock (556,212 and 515,868 common shares at cost)
    (7,717 )     (7,158 )
Total shareholders’ equity
    4,262,897       4,034,694  
  $ 11,322,742     $ 10,538,531  



(in thousands)

      Twelve Months Ended
      December 31,
      2003   2002
Net Income
  $ 280,664     $ 351,284  
Depreciation and amortization
    362,695       339,100  
Accretion of original issue discount
    48,874       46,796  
Changes in Operating Assets and Liabilities:
Decrease (increase) in trade and other receivables, net
    10,011       (7,339 )
Increase in inventories
    (15,978 )     (3,806 )
Decrease (increase) in prepaid expenses and other assets
    6,670       (8,469 )
Increase in accounts payable
    19,756       27,083  
Decrease in accrued expenses and other liabilities
    (3,340 )     (2,240 )
Increase in customer deposits
    161,640       121,870  
Other, net
    (13,189 )     6,191  
Net cash provided by operating activities
    857,803       870,470  
Purchases of property and equipment
    (1,029,530 )     (689,991 )
Other, net
    (73,114 )     (6,275 )
Net cash used in investing activities
    (1,102,644 )     (696,266 )
Proceeds from issuance of long-term debt, net
Repayments of long-term debt
    (231,100 )     (603,270 )
    (98,320 )     (100,127 )
Other, net
    71,227       44,599  
Net cash provided by (used in) financing activities
    332,343       (658,798 )
Net Increase (Decrease) in Cash and Cash Equivalents
    87,502       (484,594 )
Cash and Cash Equivalents At Beginning of Year
    242,584       727,178  
Cash and Cash Equivalents At End of Year
  $ 330,086     $ 242,584  
Supplemental Disclosure
Cash paid during the year for:
Interest, net of amount capitalized
  $ 219,598     $ 236,523  
Noncash investing and financing activities:
Acquisition of vessel through debt
  $     $ 319,951  




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, thereunto duly authorized.

Date: January 29, 2004   By: /s/ BONNIE S. BIUMI
    Bonnie S. Biumi
Senior Vice President and Treasurer