Royal

Caribbean
Cruises Ltd.
Andrs Billoch, Peter Giannikopoulos,
Karla Laura, Hexuan Li, Jianyu Yao , Yang Zheng

2
Royal Caribbean Cruises, Ltd.

3
Income Analysis

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Operating Expense

Cruise industry
Global cruise market estimated at $37.1 billion
21.6 passengers annually
7% annual growth since 1990
Cruise passengers worldwide spend an estimated
$18.9 billion
Industry is rapidly growing internationally
Carnival Corporation, Royal Caribbean Cruises Ltd.
Co, and Norwegian Cruise
79.4% share of passengers and 71.8% of share of
revenues.
Carnival Corporation
Founded in 1972
Headquarters in Miami, Florida and
London, England
Operates 102 cruise ships
91,000 employees worldwide

North America:
Carnival Cruise Lines (24 ships)
Holland America Line (15 ships)
Princess Cruises (17 ships)
Seabourn (6 ships)

Europe
Cunard Cruises in U.K. (3 ships)
P&O Cruises (UK) (7 ships)
AIDA Cruises in Germany (10 ships)
Costa Cruises in Southern Europe (14 ships)
Iberocruceros in Spain (3 ships)

Australia
P&O Cruises Australia (3 ships)
Capital Structure

Capital Structure

Liability Analysis

Liability Analysis

Liabilities

Financing Activities
$576.6 million in repayments of debt, proceeds,
and paid in dividends
Future capital commitments
New ship orders: 3 Quantum-class/1 Oasis-class
Funding Needs
$3.0 billion in contractual obligations
Long-term Debt Obligations
$2.0 billion as revolving borrowing capacity
Debt covenants
Minimum net worth of $5.9 billion
Shareholders Equity
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Profitability

5.95%

6.97%
Royal Caribbean Carnival
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Profitability

2.37%

2.72%
Royal Caribbean Carnival
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Profitability

5.53%

4.45%
Royal Caribbean Carnival
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End of year
Royal Caribbean (In thousands) Carnival (In millions)
2013 2012 2011 2013 2012 2011
Operating Activities
Net income 473,692 18,287 607,421 1,078 1,298 1,912
Net cash provided by operating
activities
1,412,068 1,381,734 1,455,739 2,834 2,999 3,766
Investing Activities
Net cash used in investing activities
(824,538) (1,263,323) (924,565) (2,056) (1,772) (2,646)
Financing Activities
Net cash used in financing activities
(576,626) (179,617) (676,515) (780) (1,190) (1,093)
Net increase (decrease) in cash and
cash equivalents
9,832 (67,331) (157,743) (3) 15 21
Cash and cash equivalents at
beginning of year
194,855 262,186 419,929 465 450 429
Cash and cash equivalents at end of
year
204,687 194,855 262,186 462 465 450
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Profitability
Royal
Caribbean
Carnival
$ 8 billion $ 15.5 billion
41 ships
100 ships
14200 employees
64,000 employees
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Liquidity

Current Obligation- Financially capable
WE VS Carnival

MEASUREMENT ROYAL CARIBBEAN CARNIVAL
WORKING CAPITAL (3.3) BILLION (4.8) BILLION
CURRENT RATIO 22.4% 28.8%
ACID-TEST RATIO 10.9% 12.9%
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Debt Financing

Royal VS Caribbean in 2013
Royal: 1.9 billion liquidity
204.7 million cash
1.7 billion unsecured credit facilities
Carnival: 6.5 billion liquidity
187 in cash
2.8 revolving credit facilities
3.5 committed export ship financings
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Capital Structure

ROE : 5.53% > 4.45% of Carnival
Corporate Governance
Recommendation

Would we loan money short-term to RCL?

No


Would we loan money long-term to RCL?

Yes
Recommendation

Royals 2013 revenue = $8 billion - 41 ships
(approx. $195 million per ship

Carnivals 2013 revenue = $15.5 billion - 102 ships
(approx. $150 million per ship)

Royals Shareholders
Stock price = $56.95 per share
ROE = 5.53%
EPS = 2.16

Carnivals Shareholders
Stock price = 40.15 per share
ROE = 4.45%
EPS = 1.39
Recommendation

Would you want to work for Royal Caribbean?
Interesting
Salary
Stock awards for key employees
Payroll and related $842 millions
Pension Plan expenses $13 millions
Employee Right
Safety, Environment and Health Department
About 80% of the on-crew-employees are represented
under a collective bargaining agreement
Future Plan
competitive compensation structure, development and
other personal and professional growth opportunities
Muse Wealth Co.,Ltd
Muse Wealth Financial Service and Wealth Management

Muse Wealth Co., Ltd
Hexuan Li
06/19/14
Signature