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Press release from PR Newswire

Royal Caribbean Reports 2011 Results and Provides Initial 2012 Outlook

Thursday, February 02, 2012

Royal Caribbean Reports 2011 Results and Provides Initial 2012 Outlook08:29 EST Thursday, February 02, 2012MIAMI, Feb. 2, 2012 /PRNewswire/ -- Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL) today reported fourth quarter and full year 2011 results and provided an initial outlook for 2012."First and foremost, our thoughts are with the guests, crew members and families who have been affected by the tragedy in Italy," said Richard D. Fain, chairman and chief executive officer.  "Like so many who have spent their working lives in this industry, a tragedy like this just breaks our hearts." Fain continued, "All of us in the industry, who are so devoted to providing safe and exceptional vacations to millions of people around the world, are devastated and humbled when something like this happens.  Ironically, this tragedy is so noteworthy partially because it is so rare.  Cruising has an extraordinary record of safe operation but this tragic incident is a reminder that there is no such thing as perfect safety, only perfect dedication to safety.  And I can assure you that we strive toward this perfect dedication to safety each and every day.  Stunned by the tragedy, we and the rest of the industry are determined to learn whatever lessons we can and rededicate ourselves to continue providing the best and safest vacations for our guests."  Against this background, the company reported on its results for 2011 and provided its preliminary outlook for 2012.FOURTH QUARTER AND FULL YEAR 2011 RESULTSThe year ended on a strong note with good bookings and cost control more than compensating for the increased cost of fuel and foreign exchange impacts.Results For the Full Year 2011:Net income was $607.4 million, or $2.77 per share, versus $515.7 million, or $2.37 per share, in 2010;Net Yields increased 2.4% on a Constant-Currency basis (+4.1% As-Reported.)   Net Cruise Costs ("NCC") excluding fuel increased 1.3% on a Constant-Currency basis (+2.3% As-Reported.)  Results For the Fourth Quarter 2011:Net income was $36.6 million, or $0.17 per share, versus $31.9 million, or $0.15 per share, in 2010;Net Yields increased 3.5% on a Constant-Currency basis (+3.2% As-Reported.)  Net Cruise Costs per APCD ("NCC") excluding fuel increased 3.7% on a Constant-Currency basis (+3.6% As-Reported.)  "The year ended on a strong note which more than offset the rise in oil prices and the strengthening U.S. dollar," said Brian Rice, chief financial officer.  Rice continued, "For the year as a whole, adjusted for fuel price increases and geopolitical events, our earnings would have meaningfully exceeded the midpoint of our January 2011 guidance." Fourth Quarter 2011 ResultsRoyal Caribbean Cruises Ltd. today announced fourth quarter 2011 net income of $36.6 million, or $0.17 per share, versus $31.9 million, or $0.15 per share, in 2010.  Revenues improved to $1.8 billion in the fourth quarter of 2011 compared to $1.6 billion in the fourth quarter of 2010 as a result of capacity increases and yield improvements.  Net Yields increased 3.5% on a Constant-Currency basis (+3.2% As-Reported.)   NCC excluding fuel increased 3.7% on a Constant-Currency basis (+3.6% As-Reported.)  Bunker pricing for the fourth quarter was $609 per metric ton and consumption was 342,000 metric tons.  Absent changes in currency exchange rates and fuel pricing, all operational metrics for the fourth quarter were in-line with or better then the company's previous guidance.Full Year 2011 ResultsAlso included in today's announcement was full year 2011 net income of $607.4 million, or $2.77 per share, versus $515.7 million, or $2.37 per share, in 2010.  Revenues improved to $7.5 billion for the full year of 2011 compared to $6.8 billion for the full year of 2010 as a result of capacity increases and yield improvements.  Net Yields increased 2.4% on a Constant-Currency basis (+4.1% As-Reported.)   NCC excluding fuel increased 1.3% on a Constant-Currency basis (+2.3% As-Reported.)  Bunker pricing for the full year was $582 per metric ton and consumption was 1,314,000 metric tons.  Versus the full year guidance the company provided in January 2011, we estimate that geopolitical events and fuel pricing negatively impacted earnings by approximately $0.65 and $0.20 per share, respectively.  LOOKING AHEAD TO THE YEAR 2012The company provided the following update on the demand environment for 2012.  Because the tragedy in Italy is having such a significant near term effect on bookings and because that impact on the company's earnings is so uncertain, the company first described the situation prior to the event and then discussed the possible consequences.Outlook Pre-Costa ConcordiaBooking patterns at the end of 2011 were strong and WAVE season was off to an excellent start.  During the two weeks prior to the tragedy, bookings averaged 5% more than the same period last year and at higher prices.  Booked load factors and pricing were ahead of the same time last year in all four quarters.  Based on the bookings in hand at that time and the pattern of forward bookings through the period, the company anticipated Constant-Currency yield improvement in the mid single digits for the year.  This figure was influenced by two unique factors:  Firstly, the company made some changes related to its International distribution system in 2011 which carry on into 2012 and will increase yields by about 130 basis points.  The changes also increase expenses, but the bottom line impact is not material.Secondly, the company has increased its commitment in certain deployment initiatives which increase revenues but also increase related expenses. For example, China represents a strategic market initiative the company is augmenting significantly.Altogether, these factors are expected to cause both Net Yields and NCCs for the full year 2012 to increase approximately 200 basis points and 300 basis points, respectively.  Absent these factors, the company estimates that its "normalized" Net Yield growth would have been in the range of 2% to 4% on a Constant-Currency basis.Impact of Costa ConcordiaIt is very difficult to assess the impact of the incident on our revenues.  It has been the subject of extensive media coverage and world-wide attention.  In addition, we curtailed our marketing activities as did most cruise lines and travel agencies.  We believe that most observers and potential guests understand that cruising is safe and that this incident was a very rare anomaly in an otherwise reliably safe vacation.  But in the near term it has a significant impact on our bookings.  We are pleased to note that there has been no material change in cancellation activity which has remained within normal levels.  However, new booking activity has been hurt.  Overall booking volumes from North America have fallen by low to mid-teen percentages versus same time last year for the last few weeks.  In Europe, where media coverage has been more extensive, the decline has been higher, though results vary significantly by country.  In aggregate the company's other markets, including Asia/Pacific and Latin America are down slightly.  For the year as a whole, notwithstanding the recent slowdown, booked load factors and pricing are still higher than they were at the same time last year.  This reflects the very robust starting position the company was in before the incident.The impact on bookings has been greatest in the first three quarters and wanes as the year progresses.  On the other hand, the first quarter also has more of its capacity booked making it less affected by changes in booking patterns.  Spring and summer sailings are showing the largest declines in new bookings, while longer term bookings remain healthy.  In addition, the company noted that the impact is much greater for first time cruisers compared to experienced cruisers.  This reflects the greater knowledge experienced cruisers have about cruise vacations and ships.Including the contribution from distribution changes and deployment initiatives noted above, the company currently anticipates yield improvement for the full year 2012 to be in a range between 1% and 5% on a Constant-Currency basis and between flat and 4% on an As-Reported basis versus the prior year.Already, bookings have started to recover, particularly in North America and the company does not expect that this event will have a significant long term impact on its business.Full Year 2012 ExpensesAs previously mentioned, distribution changes and deployment initiatives will increase NCCs by approximately 300 basis points.  Absent these changes, Constant-Currency NCC excluding fuel are expected to increase approximately 1% to 2% on a comparable basis (flat to 1% As-Reported.)   Earnings GuidanceTaking into account the high degree of uncertainty surrounding current booking patterns, current fuel pricing and currency exchange rates, and the factors detailed above, the company anticipates 2012 earnings to be in the range of $1.90 to $2.30 per share.        FIRST QUARTER OUTLOOKThe company's booked load factors in the first quarter were already very strong prior to the incident.  Subsequently, the quarter experienced a big percentage decline in new activity, but the bookings already in hand mean the company still expects yield improvements of 5% to 7% on a Constant-Currency basis (+4% to 6% As-Reported basis.)  This estimate includes approximately 300 basis points relating to the previously referenced distribution and deployment items."We are still on track to achieve our original projections for the first quarter, but there is a high degree of uncertainty and it is difficult to judge the impact of the tragedy on the balance of the year," said Brian J. Rice, executive vice president and chief financial officer.  Rice continued, "We have clearly lost some of our positive momentum in the short term.  Fortunately, we had a very strong order book before the tragedy; our brands are back in the market advertising and we do not expect any significant long term impact to our business."ExpensesFor the first quarter of 2012, NCC excluding fuel are expected to increase between 6% and 7% on a Constant-Currency basis (+5% to 6% As-Reported.) Approximately 450 basis points of the increase is due to the previously referenced distribution and deployment items. Revitalization dry-docks are also disproportionately weighted toward the first quarter. Earnings GuidanceTaking into account the high degree of uncertainty surrounding current booking patterns, current fuel pricing and currency exchange rates, and the factors detailed above, the company expects that first quarter 2012 EPS will likely be within a range of $0.10 to $0.20.   FUEL EXPENSE & GUIDANCE SUMMARYFuel ExpenseThe company does not forecast fuel prices, and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on today's fuel prices the company has included $224 million and $889 million of fuel expense in its first quarter 2012 and full year 2012 guidance, respectively.  Forecasted consumption is now 55% hedged via swaps for all of 2012 and 47%, 30% and 20% for 2013, 2014 and 2015, respectively.  For the same four-year period, the average cost per metric ton of the hedge portfolio is approximately $521, $518, $575 and $580, respectively.  In addition to the above-mentioned fuel hedges, the company also has fuel options to further protect against escalating fuel prices.  The company currently has options expiring in 2013 at a strike price of $90 bbl that covers an estimated 11% of 2013 consumption.            The company provided the following fuel statistics for the first quarter and full year 2012:FUEL STATISTICSFirst Quarter 2012Full Year 2012Fuel Consumption (metric tons)341,0001,354,000Fuel Expenses$224 million$889 millionPercent Hedged (fwd consumption)53%55%Impact of 10% change in fuel prices *$11 million$42 million          *excludes mark-to-market impact of fuel options.The company provided the following additional guidance for the first quarter and full year of 2012:GUIDANCEAs-Reported Constant-CurrencyFirst Quarter 2012Net Yields4% to 6%5% to 7%Net Cruise Costs per APCDApprox. 10%10% to 11%Net Cruise Costs per APCD,excluding Fuel5% to 6%6% to 7%Full Year 2012Net YieldsFlat to 4%1% to 5%Net Cruise Costs per APCD5% to 6%6% to 7%Net Cruise Costs per APCD,excluding Fuel3% to 4% 4% to 5%First Quarter 2012Full Year 2012Capacity Increase2.5%2.1%Depreciation and Amortization$175 to $185 million$730 to $750 millionInterest Expense, net$82 to $92 million$360 to $380 millionEPS$0.10 to $0.20$1.90 to $2.30Exchange rates used in guidance calculationsEUR $1.31GBP$1.58CAD$1.00Liquidity and Financing ArrangementsAs of December 31, 2011, liquidity was $1.1 billion, including cash and the undrawn portion of the company's unsecured revolving credit facilities.  Additionally, the company has committed unsecured financing on its remaining newbuilds.  The company noted that it reduced its outstanding debt by over $650 million during 2011 and debt maturities for 2012, 2013, and 2014 are $600 million, $1.6 billion, and $1.8 billion, respectively.  Capital Expenditures and Capacity GuidanceBased on current ship orders, projected capital expenditures for 2012, 2013 and 2014 are $1.2 billion, $500 million and $1.1 billion, respectively.  The company has one option for a second Sunshine-Class vessel which would be delivered during the second quarter of 2015 that expires in late February 2012.  Capacity increases for 2012, 2013 and 2014 are 2.1%, 2.5% and 0.6%, respectively.Conference Call Scheduled The company has scheduled a conference call at 10 a.m. Eastern Standard Time today to discuss its earnings.  This call can be heard, either live or on a delayed basis, on the company's investor relations web site at www.rclinvestor.com. Selected Operational and Financial MetricsAvailable Passenger Cruise Days ("APCD")APCD is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period.  We use this measure to perform capacity and rate analysis to identify the main non-capacity drivers that cause our cruise revenues and expenses to vary.  Constant-CurrencyWe believe Net Yields and Net Cruise Costs are our most relevant non-GAAP financial measures.  However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses in US dollars will be affected by changes in currency exchange rates.  Although such changes in local currency prices is just one of many elements impacting our revenues and expenses, it can be an important element.  For this reason, we also monitor Net Yields and Net Cruise Costs on a "Constant-Currency" basis ? i.e. as if the current period's currency exchange rates had remained constant with the comparable prior period's rates.  We calculate "Constant-Currency" by applying the average prior year period exchange rates for each of the corresponding months of the reported and/or forecasted period, so as to calculate what the results would have been had exchange rates been the same throughout both 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 significantly change the impact of the purely currency based fluctuations.  Gross Cruise CostsGross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses.Gross Yields Gross Yields represent total revenues per APCD.Net Cruise Costs and Net Cruise Costs Excluding FuelNet Cruise Costs and Net Cruise Costs Excluding Fuel represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel (each of which is described above under the Description of Certain Line Items heading).  In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance.  A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations.  We have not provided a quantitative reconciliation of projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel due to the significant uncertainty in projecting the costs deducted to arrive at these measures.  Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.Net Debt-to-CapitalNet Debt-to-Capital is a ratio which represents total long-term debt, including the current portion of long-term debt, less cash and cash equivalents ("Net Debt") divided by the sum of Net Debt and total shareholders' equity.  We believe Net Debt and Net Debt-to-Capital, along with total long-term debt and shareholders' equity are useful measures of our capital structure.  Net RevenuesNet Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses. Net Yields Net Yields represent Net Revenues per APCD.  We utilize Net Revenues and Net Yields to manage our business on a day-to-day basis as we believe that it is the most relevant measure of our pricing performance because it reflects 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.  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.OccupancyOccupancy, in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days by APCD.  A percentage in excess of 100% indicates that three or more passengers occupied some cabins.Passenger Cruise DaysPassenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.Royal Caribbean Cruises Ltd. is a global cruise vacation company that operates Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisieres de France, and TUI Cruises through a 50% joint venture.  The company has a combined total of 39 ships in service and two under construction.  It also offers unique land-tour vacations in Alaska, Asia, Australia, Canada, Europe, Latin America and New Zealand.  Additional information can be found on www.royalcaribbean.com, www.celebrity.com, www.pullmantur.es, www.azamaraclubcruises.com, www.cdfcroisieresdefrance.com, www.tuicruises.com or www.rclinvestor.com.Certain statements in this release relating to, among other things, our future performance constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, statements regarding expected financial results for the first quarter and full year 2012 and the yields expected in 2012.  Words such as "anticipate," "believe," "could," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," and similar expressions are intended to identify these forward-looking statements.  Forward-looking statements reflect management's current expectations, 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 economic environment on the demand for cruises, the impact of the economic environment on our ability to generate cash flows from operations or obtain new borrowings from the credit or capital markets in amounts sufficient to satisfy our capital expenditures, debt repayments and other financing needs, the uncertainties of conducting business internationally and expanding into new markets, changes in operating and financing costs, vacation industry competition and changes in industry capacity and overcapacity, emergency ship repairs, including the related lost revenue, the impact of ship delivery delays, ship cancellations or ship construction price increases, financial difficulties encountered by shipyards or their subcontractors and incidents or adverse publicity concerning the cruise vacation industry such as the recent Costa Concordia casualty and the unavailability or cost of air service.  More information about factors that could affect our operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting our Investor Relations web site at www.rclinvestor.com or the SEC's web site 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. Non-GAAP Measures of Financial PerformanceThis press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission rules, which we believe provide useful information to investors as a supplement to our consolidated financial statements which are prepared and presented in accordance with generally accepted accounting principles, or GAAP.The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.  These measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as do the corresponding GAAP measures. A reconciliation to the most comparable GAAP measure of all non-GAAP financial measures included in this press release can be found in the tables included at the end of this press release.Financial Tables FollowROYAL CARIBBEAN CRUISES LTD.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited, in thousands, except per share data) Quarter EndedYear EndedDecember 31,December 31,2011 2010 2011 2010 Passenger ticket revenues$1,268,270$1,146,108$5,525,904$4,908,644Onboard and other revenues507,131458,3902,011,3591,843,860Total revenues1,775,4011,604,4987,537,2636,752,504Cruise operating expenses:Commissions, transportation and other315,316285,5661,299,7131,175,522Onboard and other116,469105,615535,501480,564Payroll and related211,860202,474825,676767,586Food111,758101,739424,308388,205Fuel208,091163,155764,758646,998Other operating287,367248,4401,092,651999,201Total cruise operating expenses1,250,8611,106,9894,942,6074,458,076Marketing, selling and administrative expenses238,445211,936960,602848,079Depreciation and amortization expenses179,933163,878702,426643,716Operating Income106,162121,695931,628802,633Other income (expense):Interest income7,9894,69625,3189,243Interest expense, net of interest capitalized(90,625)(99,936)(382,416)(371,207)Other income 13,0365,44532,89174,984(69,600)(89,795)(324,207)(286,980)Net Income$36,56231,900$607,421$515,653Earnings Per Share:Basic$0.170.15$2.80$2.40Diluted$0.170.15$2.77$2.37Weighted-Average Shares Outstanding:Basic 217,279215,581216,983215,026Diluted 218,982218,742219,229217,711STATISTICSQuarter EndedYear EndedDecember 31,December 31,2011201020112010Passengers Carried1,201,9471,155,6484,850,0104,585,920Passenger Cruise Days8,779,1898,193,13034,818,33532,251,217APCD8,521,2727,943,78233,235,50830,911,073Occupancy103.0%103.1%104.8%104.3%ROYAL CARIBBEAN CRUISES LTD.CONSOLIDATED BALANCE SHEETS(in thousands, except share data)As  ofDecember 31,December 31,20112010(unaudited)AssetsCurrent assetsCash and cash equivalents$        262,186$        419,929Trade and other receivables, net292,447266,710Inventories144,553126,797Prepaid expenses and other assets185,460145,144Derivative financial instruments84,64256,491   Total current assets969,2881,015,071Property and equipment, net16,934,81716,771,677Goodwill746,537759,328Other assets1,153,7631,107,753$   19,804,405$   19,653,829Liabilities and Shareholders' EquityCurrent liabilitiesCurrent portion of long-term debt$        638,891$     1,198,929Accounts payable304,623249,047Accrued interest123,853160,906Accrued expenses and other liabilities564,272553,218Customer deposits1,436,0031,283,073   Total current liabilities3,067,6423,445,173Long-term debt7,856,9627,951,187Other long-term liabilities471,978356,717Commitments and contingenciesShareholders' equityPreferred stock ($0.01 par value; 20,000,000 shares authorized;   none outstanding)--Common stock ($0.01 par value; 500,000,000 shares authorized;227,366,165 and 226,211,731 shares issued, December 31, 20112,2762,262and December 31, 2010, respectively)Paid-in capital3,071,7593,027,130Retained earnings5,823,4305,259,998Accumulated other comprehensive (loss) income(75,938)25,066Treasury stock (10,308,683 common shares at   cost, December 31, 2011 and December 31, 2010)(413,704)(413,704)   Total shareholders' equity8,407,8237,900,752$   19,804,405$   19,653,829ROYAL CARIBBEAN CRUISES LTD.CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited, in thousands)Year Ended December 31,20112010Operating ActivitiesNet income$   607,421$   515,653Adjustments:Depreciation and amortization702,426643,716(Gain) loss on fuel call options(18,920)2,826Changes in operating assets and liabilities:Decrease in trade and other receivables, net85,793146,498Increase in inventories(18,423)(20,274)Decrease (increase) in prepaid expenses and other assets13,553(10,954)Increase (decrease) in accounts payable28,229(15,507)(Decrease) increase in accrued interest(28,553)13,359Increase in accrued expenses and other liabilities 25,31871,969Increase in customer deposits19,482135,975Cash received on settlement of derivative financial instruments12,200172,993Dividends received from unconsolidated affiliates21,147-Other, net6,0666,765Net cash provided by operating activities1,455,7391,663,019Investing ActivitiesPurchases of property and equipment (1,173,626)(2,187,189)Cash received (paid) on settlement of derivative financial instruments16,307(91,325)Loans to unconsolidated affiliates(110,660)-Proceeds from the sale of ships345,000-Other, net(1,586)(9,404)Net cash used in investing activities(924,565)(2,287,918)Financing ActivitiesDebt proceeds1,578,3682,420,262Debt issuance costs(84,381)(90,782)Repayments of debt(2,179,046)(1,600,265)Dividends paid(21,707)-Proceeds from exercise of common stock options19,46326,158Other, net10,7881,587Net cash (used in) provided by financing activities(676,515)756,960Effect of exchange rate changes on cash(12,402)3,249Net (decrease) increase in cash and cash equivalents(157,743)135,310Cash and cash equivalents at beginning of period419,929284,619Cash and cash equivalents at end of period$   262,186$   419,929Supplemental DisclosureCash paid during the period for:Interest, net of amount capitalized$   360,892$   297,477ROYAL CARIBBEAN CRUISES LTD.NON-GAAP RECONCILING INFORMATION(unaudited) Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):Quarter EndedYear EndedDecember 31,December 31,20112011On aConstantCurrencybasis201020112011On aConstantCurrencybasis2010Passenger ticket revenues$1,268,270$1,272,816$1,146,108$5,525,904$5,414,034$4,908,644Onboard and other revenues507,131507,535458,3902,011,3591,993,8041,843,860Total revenues1,775,4011,780,3511,604,4987,537,2637,407,8386,752,504Less:Commissions, transportation and other315,316316,548285,5661,299,7131,273,1551,175,522Onboard and other116,469116,522105,615535,501525,225480,564Net revenues$1,343,616$1,347,281$1,213,317$5,702,049$5,609,458$5,096,418APCD8,521,2728,521,2727,943,78233,235,50833,235,50830,911,073Gross Yields$208.35$208.93$201.98$226.78$222.89$218.45Net Yields$157.68$158.11$152.74$171.56$168.78$164.87 Gross Cruise Costs and Net Cruise Costs were calculated as follows (in thousands, except APCD and costs per APCD):Quarter EndedYear EndedDecember 31,December 31,20112011On aConstantCurrencybasis201020112011On aConstantCurrencybasis2010Total cruise operating expenses$1,250,861$1,253,328$1,106,989$4,942,607$4,885,732$4,458,076Marketing, selling and administrative expenses238,445238,945211,936960,602944,584848,079Gross Cruise Costs1,489,3061,492,2731,318,9255,903,2095,830,3165,306,155Less:Commissions, transportation and other315,316316,548285,5661,299,7131,273,1551,175,522Onboard and other116,469116,522105,615535,501525,225480,564Net Cruise Costs$1,057,521$1,059,203$927,744$4,067,995$4,031,936$3,650,069Less:Fuel208,091208,345163,155764,758762,139646,998Net Cruise Costs Excluding Fuel$849,430$850,858$764,589$3,303,237$3,269,797$3,003,071APCD8,521,2728,521,2727,943,78233,235,50833,235,50830,911,073Gross Cruise Costs per APCD$174.78$175.12$166.03$177.62$175.42$171.66Net Cruise Costs per APCD$124.10$124.30$116.79$122.40$121.31$118.08Net Cruise Costs Excluding Fuel per APCD $99.68$99.85$96.25$99.39$98.38$97.15 Net Debt-to-Capital was calculated as follows (in thousands):As ofDecember 31,December 31,20112010Long-term debt, net of current portion $7,856,962$7,951,187Current portion of long-term debt 638,8911,198,929Total debt 8,495,8539,150,116Less: Cash and cash equivalents 262,186419,929Net Debt $8,233,667$8,730,187Total shareholders' equity$8,407,823$7,900,752Total debt 8,495,8539,150,116Total debt and shareholders' equity16,903,67617,050,868Debt-to-Capital 50.3%53.7%Net Debt 8,233,6678,730,187Net Debt and shareholders' equity$16,641,490$16,630,939Net Debt-to-Capital 49.5%52.5%ROYAL CARIBBEAN CRUISES LTD.EFFECT OF CORRECTION ON CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)Quarter EndedYear EndedDecember 31, 2010December 31, 2010As PreviouslyReportedAdjustmentAs RevisedAs PreviouslyReportedAdjustmentAs RevisedInterest expense, net of interest capitalized$(89,129)$(10,807)$(99,936)$(339,393)$(31,814)$(371,207)Total other expense(78,988)(10,807)(89,795)(255,166)(31,814)(286,980)Net Income42,707(10,807)31,900547,467(31,814)515,653Earnings per Share:Basic$0.20$(0.05)$0.15$2.55$(0.15)$2.40Diluted$0.20$(0.05)$0.15$2.51$(0.15)$2.37ROYAL CARIBBEAN CRUISES LTD.EFFECT OF CORRECTION ON CONSOLIDATED BALANCE SHEET(in thousands)As ofDecember 31, 2010As PreviouslyReportedAdjustmentAs RevisedProperty and equipment, net$16,769,181$2,496$16,771,677Other assets1,151,324(43,571)1,107,753Total assets19,694,904(41,075)19,653,829Accrued expenses and other liabilities552,543675553,218Total current liabilities3,444,4986753,445,173Retained earnings5,301,748(41,750)5,259,998Total shareholders' equity7,942,502(41,750)7,900,752Total liabilities and shareholders' equity19,694,904(41,075)19,653,829ROYAL CARIBBEAN CRUISES LTD.EFFECT OF CORRECTION ON CONSOLIDATED STATEMENT OF CASH FLOWS(in thousands)The correction did not have an effect on the Company's operating cash flows.  The following table presents the effect on the individual line items within operating cash flows on the Company's Consolidated Statement of Cash Flows for December 31, 2010.Year Ended December 31, 2010As Previously ReportedAdjustmentReclassification (1)As RevisedNet Income$547,467$(31,814)$-$515,653Increase in accrued expenses and other liabilities72,161(192)-71,969Other, net(22,415)32,006(2,826)6,765(1) For the year ended December 31, 2010, $2.8 million has been reclassified in the consolidated statement of cash flows from other, net to (gain) loss on fuel call options within net cash flows provided by operating activities in order to conform to the current year presentation.SOURCE Royal Caribbean Cruises Ltd.For further information: Ian Bailey, +1-305-982-2625