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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF AUGUST , 1998
ROYAL CARIBBEAN CRUISES LTD.
- --------------------------------------------------------------------------------
(TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)
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 [ ]
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 [ ] NO [X]
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ROYAL CARIBBEAN CRUISES LTD.
QUARTERLY FINANCIAL REPORT
SECOND QUARTER 1998
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ROYAL CARIBBEAN CRUISES LTD.
INDEX TO QUARTERLY FINANCIAL REPORT
PAGE
----
Consolidated Statements of Operations
for the Second Quarters and Six Months 1
Ended June 30, 1998 and 1997
Consolidated Balance Sheets as of
June 30, 1998 and December 31, 1997 2
Consolidated Statements of Cash
Flows for the Six Months Ended
June 30, 1998 and 1997 3
Notes to the Consolidated Financial
Statements 4
Management's Discussion and
Analysis of Financial Condition and
Results of Operations 7
<PAGE> 4
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Second Quarter Ended June 30, Six Months Ended June 30,
--------------------------------- ---------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 656,456 $ 403,467 $ 1,316,233 $ 798,057
------------- ------------- ------------- -------------
Expenses
Operating 402,585 251,388 798,995 505,707
Marketing, selling and administrative 84,967 57,132 181,259 110,883
Depreciation and amortization 47,371 27,550 94,985 53,433
------------- ------------- ------------- -------------
534,923 336,070 1,075,239 670,023
------------- ------------- ------------- -------------
Operating Income 121,533 67,397 240,994 128,034
------------- ------------- ------------- -------------
Other Income (Expense)
Interest income 4,342 504 6,921 962
Interest expense, net of capitalized interest (43,662) (21,141) (86,218) (43,246)
Other income (expense) (2,443) (842) (4,390) (1,351)
------------- ------------- ------------- -------------
(41,763) (21,479) (83,687) (43,635)
------------- ------------- ------------- -------------
Income Before Extraordinary Item 79,770 45,918 157,307 84,399
Extraordinary Item -- (7,558) -- (7,558)
------------- ------------- ------------- -------------
Net Income $ 79,770 $ 38,360 $ 157,307 $ 76,841
============= ============= ============= =============
Basic Earnings Per Share *
Income before extraordinary item $ 0.45 $ 0.33 $ 0.91 $ 0.63
Extraordinary item -- (0.06) -- (0.06)
------------- ------------- ------------- -------------
Net income $ 0.45 $ 0.27 $ 0.91 $ 0.57
============= ============= ============= =============
Weighted average shares outstanding 168,710,590 127,915,616 166,261,994 127,795,770
============= ============= ============= =============
Diluted Earnings Per Share *
Income before extraordinary item $ 0.44 $ 0.32 $ 0.86 $ 0.62
Extraordinary item -- (0.05) -- (0.06)
------------- ------------- ------------- -------------
Net income $ 0.44 $ 0.27 $ 0.86 $ 0.56
============= ============= ============= =============
Weighted average shares outstanding 182,635,524 140,323,858 183,037,982 136,997,827
============= ============= ============= =============
</TABLE>
* Earnings per share is computed after giving effect to the two-for-one stock
split effective July 31, 1998. Prior year amounts have been restated.
The accompanying notes are an integral part of these financial statements.
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ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
As of
-----------------------------
June 30, December 31,
1998 1997
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 369,980 $ 110,793
Trade and other receivables, net 28,957 22,628
Inventories 28,703 37,274
Prepaid expenses 31,919 40,450
----------- -----------
Total current assets 459,559 211,145
Property and Equipment - at cost less accumulated depreciation 5,033,781 4,785,291
Goodwill - less accumulated amortization of $102,158 and
$96,952, respectively 315,008 320,214
Other Assets 19,135 23,098
----------- -----------
$ 5,827,483 $ 5,339,748
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $ 129,251 $ 141,013
Accounts payable 108,529 108,474
Accrued liabilities 258,988 210,454
Customer deposits 490,308 429,403
----------- -----------
Total current liabilities 987,076 889,344
Long-Term Debt 2,524,170 2,431,683
Commitments and Contingencies
Shareholders' Equity
Preferred stock 172,500 172,500
Common stock 1,688 1,621
Paid-in capital 1,359,804 1,188,304
Retained earnings 786,884 660,655
Treasury stock (4,639) (4,359)
----------- -----------
Total shareholders' equity 2,316,237 2,018,721
----------- -----------
$ 5,827,483 $ 5,339,748
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------- ---------
1998 1997
--------- ---------
<S> <C> <C>
Operating Activities
Net income $ 157,307 $ 76,841
Adjustments:
Depreciation and amortization 94,985 53,433
Extraordinary item (non-cash portion) -- 2,387
Gain on sale of vessel (31,031) --
Write-down of vessel to fair value 32,035 --
Changes in operating assets and liabilities:
(Increase) in trade and other receivables, net (6,329) (3,408)
(Increase) in inventories (1,009) (3,535)
Decrease in prepaid expenses 9,525 2,926
Increase in accounts payable, trade 57 1,947
Increase in accrued liabilities 52,816 7,913
Increase in customer deposits 60,905 57,878
Other 1,768 1,250
--------- ---------
Net cash provided by operating activities 371,029 197,632
--------- ---------
Investing Activities
Purchase of property and equipment (424,506) (412,660)
Proceeds from disposal of vessel 94,500 --
Other 757 (4,751)
--------- ---------
Net cash used in investing activities (329,249) (417,411)
--------- ---------
Financing Activities
Proceeds from issuance of long-term debt 296,141 186,000
Repayment of long-term debt (214,493) (110,855)
Proceeds from issuance of Preferred Stock -- 167,100
Proceeds from issuance of Common Stock 165,532 --
Dividends (31,077) (20,845)
Other 1,304 2,760
--------- ---------
Net cash provided by financing activities 217,407 224,160
--------- ---------
Net Increase in Cash and Cash Equivalents 259,187 4,381
Cash and Cash Equivalents at Beginning of Period 110,793 40,419
--------- ---------
Cash and Cash Equivalents at End of Period $ 369,980 $ 44,800
========= =========
Supplemental Disclosure
Interest paid, net of amount capitalized $ 83,410 $ 41,087
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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ROYAL CARIBBEAN CRUISES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all normal recurring accruals necessary for a fair
presentation. The Company's revenues are moderately seasonal and results for
interim periods are not necessarily indicative of the results for the entire
year.
The interim unaudited Consolidated Financial Statements should be read in
conjunction with the audited Consolidated Financial Statements and notes thereto
for 1997.
NOTE 2 - ACQUISITION
On July 2, 1997 the Company entered into a definitive agreement to acquire all
of the outstanding stock of Celebrity Cruise Lines Inc. and its subsidiaries
("Celebrity"). Celebrity is a provider of cruises to the North American market.
This acquisition has been accounted for under the purchase method and the
results of the operations of Celebrity have been included in the consolidated
financial statements since July 1, 1997. The total cost of the acquisition was
allocated to the tangible assets acquired and liabilities assumed based on their
respective fair values.
The following unaudited pro forma information presents a summary of consolidated
results of operations of the Company, including Celebrity, as if the acquisition
had occurred January 1, 1996.
----------------------------------------------------- -------------
Six Months
Ended
(In thousands, except per share amounts) June 30, 1997
----------------------------------------------------- -------------
Revenue $ 1,055,621
Income before Extraordinary Item $ 76,120
Net Income $ 68,562
Basic Earnings per Share
Income before Extraordinary Item $ 0.50
Net Income $ 0.45
Diluted Earnings per Share
Income before Extraordinary Item $ 0.50
Net Income $ 0.45
----------------------------------------------------- -------------
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NOTE 3 - STOCK SPLIT
On June 23, 1998, the Company authorized a two-for-one split of its common stock
effected in the form of a stock dividend. The additional shares were distributed
on July 31, 1998 to shareholders of record on July 10, 1998. All share and per
share information has been retroactively restated to reflect this stock split.
NOTE 4 - FIXED ASSETS
In May 1998, the Company sold SONG OF AMERICA for $94.5 million and recognized a
gain on the sale of $31.0 million which is included in Other income/expense. The
Company will continue to operate SONG OF AMERICA under a charter agreement until
March 1999.
Also included in Other income/expense is a charge of $32.0 million related to
the write-down to fair market value of VIKING SERENADE. Based on the Company's
strategic objective to maintain a modernized fleet, the unique circumstances of
this vessel and indications of the current value of VIKING SERENADE, the Company
recorded a write-down of the carrying value of VIKING SERENADE to its current
estimated fair market value. The Company continues to operate and depreciate the
vessel which is classified as part of Fixed Assets on the balance sheet.
NOTE 5 - LONG-TERM DEBT
On March 16, 1998, the Company completed a debt offering of $150.0 million of
6.75% Senior Notes due 2008 and $150.0 million of 7.25% Senior Debentures due
2018. Net proceeds to the Company were approximately $296.1 million.
NOTE 6 - COMMON STOCK
On March 9, 1998, the Company completed a public offering of 13,800,000 shares
of common stock at a price of $28.25 per share. Of the total shares sold,
7,699,310 shares were sold by selling shareholders and the balance of 6,100,690
shares were sold by the Company. After deduction of the underwriting discount
and other estimated expenses of the offering, net proceeds to the Company were
approximately $165.5 million.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
In the first quarter of 1998, the Company signed contracts for the construction
of one Vantage-class vessel designated for the Royal Caribbean International
fleet, scheduled for delivery in February 2001 and two Millennium-class vessels
designated for the Celebrity fleet, scheduled for delivery in June 2000 and
January 2001. The Company also has three Eagle-class vessels on order for the
Royal Caribbean International fleet scheduled for delivery in the fall of 1999,
fall of 2000 and spring of 2002. The aggregate contract price of the six ships,
which excludes capitalized interest and other ancillary costs, is approximately
$2.5 billion. Additionally, the Company has the right, cancelable on or before
January 31, 1999, to purchase up to three additional vessels with delivery dates
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between September 2001 and June 2002 at an aggregate contract price of
approximately $1.0 billion (two of which are denominated in French francs and
are subject to change based on fluctuations in exchange rates).
NOTE 8 - RECENT PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133"). SFAS 133 standardizes the accounting for
derivative instruments and hedging activities and is effective for fiscal years
beginning after June 15, 1999. The Company is in the process of evaluating the
impact of the adoption of SFAS 133 but does not expect the adoption to have a
material effect on the financial statements.
NOTE 9 - LITIGATION
In June 1998, Royal Caribbean Cruises Ltd. (the "Company") entered into a plea
agreement with the U.S. Department of Justice settling previously filed charges
contained in two indictments pending in the U.S. District of Puerto Rico and the
Southern District of Florida, respectively. The indictments, which pertained to
events that occurred in 1994 and prior years, contained a total of 11 felony
counts related to improper disposal of oil-contaminated bilge water and attempts
to conceal such activities from the U.S. Coast Guard. Under the plea agreement,
the Company pled guilty to 8 of the 11 counts and agreed to pay $9 million. The
U.S. government is continuing its investigation of the Company's waste disposal
practices through federal grand jury proceedings in Miami, Florida and New York,
New York. Although the Company is not able at this time to estimate the timing
or impact of these continuing investigations, the Company may be subject to
additional charges for violations of U.S. law.
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ROYAL CARIBBEAN CRUISES LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements under this caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations", may constitute
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or achievements to
differ materially from the future results, performance or achievements expressed
or implied in such forward-looking statements. Such factors include inter alia
general economic and business conditions, cruise industry competition, the
impact of tax laws and regulations affecting the Company and its principal
shareholders, changes in other laws and regulations affecting the Company,
delivery schedule of new vessels, emergency ship repairs, incidents involving
cruise vessels at sea, changes in interest rates, Year 2000 compliance and
weather.
RESULTS OF OPERATIONS
SUMMARY. Income before the extraordinary item in 1997 and the $9.0
million charge in the current quarter, related to a previously announced plea
agreement with the U.S. Department of Justice, increased 93.3% during the second
quarter as compared to the same period in 1997. On a comparable basis, income
for the quarter reached $88.8 million or $0.49 per share on a diluted basis
compared to $45.9 million or $0.33 per share in 1997. After the plea agreement
and the extraordinary item, net income for the quarter was $79.8 million or
$0.44 per share as compared to $38.4 million or $0.27 per share. Included in the
current quarter's operations is a $31.0 million gain on the sale of SONG OF
AMERICA and a $32.0 million write-down of VIKING SERENADE to reflect its
estimated fair value.
Second quarter revenues increased 62.7% to $656.5 million compared to $403.5
million for the same period in 1997 due to increased capacity resulting from the
acquisition of Celebrity as well as additions to the Royal Caribbean
International fleet. Operating income (excluding the plea agreement) increased
93.7% to $130.5 million for the second quarter of 1998 from $67.4 million for
the same period in 1997, as a result of increased capacity, higher ticket prices
and lower operating costs and improved marketing, selling and administrative
expenses as a percentage of revenues.
For the six-month period ended June 30, 1998, revenues increased 64.9% to $1.3
billion compared to $798.1 million in 1997 due primarily to increased capacity.
Operating income (excluding the plea agreement) increased 95.3% to $250.0
million compared to $128.0 million in 1997, as a result of increased capacity,
higher ticket prices and lower operating costs and improved marketing, selling
and administrative expenses as a
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percentage of revenues. Net income for the first half of 1998 increased to
$157.3 million, or $0.86 per share on a diluted basis, as compared to $76.8
million or $0.56 per share in 1997.
The following table presents statements of operations data as a percentage of
total revenues:
<TABLE>
<CAPTION>
SECOND QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Expenses
Operating 61.3 62.3 60.7 63.4
Marketing, selling and administrative 12.9 14.2 13.8 13.9
Depreciation and amortization 7.2 6.8 7.2 6.7
------ ------ ------ ------
Operating Income 18.6 16.7 18.3 16.0
Other Income (Expense) (6.4) (5.3) (6.4) (5.5)
------ ------ ------ ------
Income Before Extraordinary Item 12.2 11.4 11.9 10.5
Extraordinary Item -- (1.9) -- (0.9)
------ ------ ------ ------
Net Income 12.2% 9.5% 11.9% 9.6%
====== ====== ====== ======
</TABLE>
The Company's revenues are moderately seasonal, due to variations in rates and
occupancy percentages.
REVENUES. Total revenues for the second quarter of 1998 increased 62.7%
to $656.5 million compared to $403.5 million for the same period in 1997. The
increase in revenues for the second quarter was due to a 63.4% increase in
capacity. The acquisition of Celebrity in the third quarter of 1997 contributed
approximately two-thirds of the capacity increase while additions to the Royal
Caribbean International fleet accounted for the balance of the increase. The
capacity increase in the Royal Caribbean International brand during the second
quarter was due to the introduction of RHAPSODY OF THE SEAS in the second
quarter of 1997, ENCHANTMENT OF THE SEAS in the third quarter of 1997, and
VISION OF THE SEAS in the second quarter of 1998. Revenue per available lower
berth ("Yield") in the second quarter of 1998 was approximately equal to the
yield for the same period in 1997. An increase in cruise ticket per diems was
offset by a reduction in shipboard revenue per diems. The reduction in shipboard
revenue per diems is due to the inclusion of Celebrity's results in 1998.
Celebrity utilizes a higher percentage of concessionaires onboard its vessels
than does Royal Caribbean International, resulting in a dilutive effect on the
per diem. The concessionaires pay a commission (net) to the Company which is
recorded as revenue, in contrast to in-house operations, where shipboard
revenues and the related cost of sales are recorded on a gross basis. Occupancy
for the second quarter was 105.0% as compared to 104.8% for the same period in
1997.
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Revenues for the first six months of 1998 increased 64.9% to $1.3 billion from
$798.1 million for the first six months of 1997. The increase in revenues for
the first six months of 1998 was due to a 63.9% increase in capacity and a 0.7%
increase in yield. The increase in capacity was due to the acquisition of
Celebrity as well as additions to the Royal Caribbean International fleet as
discussed above. The increase in yield was due to an increase in occupancy
levels to 104.8% as compared to 104.1% in 1997. An increase in cruise ticket per
diems was offset by a reduction in shipboard and other revenue per diems as
discussed above.
EXPENSES. Operating expenses increased 60.1% to $402.6 million for the
second quarter of 1998 as compared to $251.4 million for the second quarter of
1997. Operating expenses increased 58.0% to $799.0 million for the first six
months of 1998 as compared to $505.7 million for the same period in 1997. The
increase in operating expenses for the second quarter and first six months was
primarily due to the increase in capacity. Additionally, included in operating
expenses for the second quarter and first six months of 1998 is a $9.0 million
charge related to the plea agreement with the U.S. Department of Justice. As a
percentage of revenues, operating expenses decreased 1.0% and 2.7% for the
second quarter and the first six months of 1998, respectively, primarily due to
improved ticket pricing as well as the inclusion of Celebrity results in 1998
versus 1997. Celebrity's operating expenses as a percentage of revenue were
lower than Royal Caribbean International's primarily due to lower shipboard cost
of sales as a result of the higher use of concessionaires onboard Celebrity
vessels as discussed above.
Marketing, selling and administrative expenses increased 48.7% to $85.0 million
for the second quarter of 1998 from $57.1 million in 1997 and increased 63.5% to
$181.3 million for the first six months of 1998 from $110.9 million for the
comparable period in 1997. The increase in both periods was primarily due to the
acquisition of Celebrity as well as higher advertising and staffing costs. As a
percentage of revenue, marketing, selling and administrative expenses decreased
for the second quarter and six months ended June 30, 1998 due primarily to
economies of scale.
Depreciation and amortization for the second quarter of 1998 increased to $47.4
million from $27.6 million in 1997 and increased to $95.0 million for the first
six months of 1998 compared to $53.4 million in 1997. The increases are
primarily due to the acquisition of Celebrity as well as the addition of
ENCHANTMENT OF THE SEAS, RHAPSODY OF THE SEAS, and VISION OF THE SEAS, partially
offset by the departure from the fleet of SONG OF NORWAY and SUN VIKING.
OTHER INCOME (EXPENSE). Interest expense, net of capitalized interest,
increased to $43.7 million in the second quarter of 1998 as compared to $21.1
million for the second quarter of 1997, and increased to $86.2 million for the
first six months of 1998 as compared to $43.2 million for first six months of
1997. The increase for the quarter and for the first six months of 1998 is a
result of an increase in the average debt level driven by the Company's fleet
expansion program as well as the acquisition of Celebrity in 1997.
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In May 1998, the Company sold SONG OF AMERICA for $94.5 million and recognized a
gain on the sale of $31.0 million which is included in Other income/expense. The
Company will continue to operate SONG OF AMERICA under a charter agreement until
March 1999.
Also included in Other income/expense is a charge of $32.0 million related to
the write-down to fair market value of VIKING SERENADE. Based on the Company's
strategic objective to maintain a modernized fleet, the unique circumstances of
this vessel and indications of the current value of VIKING SERENADE, the Company
recorded a write-down of the carrying value of VIKING SERENADE to its current
estimated fair market value. The Company continues to operate and depreciate the
vessel which is classified as part of Fixed Assets on the balance sheet.
EXTRAORDINARY ITEM. In May 1997, the Company redeemed $104.5 million of
11-3/8% Senior Subordinated Notes and incurred an extraordinary charge of
approximately $7.6 million, or $0.06 per share.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES AND USES OF CASH. Net cash provided by operating activities was
$371.0 million for the first six months of 1998 as compared to $197.6 million
for the first six months of 1997. The increase was primarily due to higher net
income as well as timing differences in cash payments relating to operating
assets and liabilities.
In March 1998, the Company issued $150.0 million of 6.75% Senior Notes due 2008
and $150.0 million of 7.25% Senior Debentures due 2018. The net proceeds to the
Company were approximately $296.1 million (see Note 5 - Long-Term Debt).
In March 1998, the Company issued 6,100,690 shares of common stock. The net
proceeds to the Company were approximately $165.5 million (see Note 6 - Common
Stock).
During the first six months of 1998, the Company paid two quarterly cash
dividends of $0.075 per common share each, or $24.8 million in total. In
addition, the Company paid two quarterly cash dividends of $0.91 per preferred
share or $6.3 million.
The Company's capital expenditures increased to $424.5 million for the first six
months of 1998 as compared to $412.7 million for the first six months of 1997.
Capital expenditures in the first six months of 1998 included $300.6 million in
payments for VISION OF THE SEAS as well as $94.6 million in payments for ships
under construction. Capital expenditures in the first six months of 1997
included $302.4 million in payments for RHAPSODY OF THE SEAS as well as $91.2
million in payments for other ships under construction. Also included in capital
expenditures are shoreside capital expenditures and costs for vessel
refurbishing to maintain consistent fleet standards.
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FUTURE COMMITMENTS. In the first quarter of 1998, the Company signed
contracts for the construction of one Vantage-class vessel designated for the
Royal Caribbean International fleet, scheduled for delivery in February 2001 and
two Millennium-class vessels designated for the Celebrity fleet, scheduled for
delivery in June 2000 and January 2001. The Company also has three Eagle-class
vessels on order for the Royal Caribbean International fleet, the first of
which, VOYAGER OF THE SEAS, is scheduled for delivery in the fall of 1999,
followed by two sister vessels scheduled for delivery in the fall of 2000 and
spring of 2002. The aggregate contract price of the six ships, which excludes
capitalized interest and other ancillary costs, is approximately $2.5 billion.
Additionally, the Company has the right, cancelable on or before January 31,
1999, to purchase up to three additional vessels with delivery dates between
September 2001 and June 2002 at an aggregate contract price of approximately
$1.0 billion (two of which are denominated in French francs and are subject to
change based on fluctuations in exchange rates).
FUNDING SOURCES. As of June 30, 1998, the Company's liquidity was $1.4
billion consisting of $370.0 million in cash and cash equivalents and $1.0
billion available on the $1.0 billion revolving credit facility (the "$1 Billion
Revolving Credit Facility"). In addition, the agreements related to the ships on
order require the shipyards to make available export financing for up to 80% of
the contract price of the vessels.
The Company's cash management practice is to utilize excess cash to reduce
outstanding balances under the $1 Billion Revolving Credit Facility, and to the
extent the cash balances exceed the amounts drawn under the $1 Billion Revolving
Credit Facility, the Company invests in short-term securities.
In addition, the Company continuously considers potential acquisitions,
strategic alliances and adjustments to its fleet composition, including the
acquisition or disposition of vessels. If any such acquisitions, strategic
alliances and adjustments to its fleet composition were to occur, they would be
financed by the issuance of additional shares of equity securities, the
incurrence of additional indebtedness or from cash flows from operations.
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INCORPORATION BY REFERENCE
This report on Form 6-K is hereby incorporated by reference in registrant's
Registration Statement on Form F-3 (File No. 333-8708) filed with the Securities
and Exchange Commission.
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, thereunto duly authorized.
ROYAL CARIBBEAN CRUISES LTD.
--------------------------------------------
(Registrant)
Date: August 17, 1998 By /s/ RICHARD J. GLASIER
-----------------------------------------
Richard J. Glasier
Executive Vice President and
Chief Financial Officer
12
