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"While the economy is still affecting our results, we are pleased to be reporting better than expected revenues and costs and we continue to see a gradual and steady improvement in the booking environment," said Richard D. Fain, chairman and chief executive officer. Fain continued, "This recovery, combined with our cost containment efforts and improving fleet profile, bode well for improvement in our returns on investment and our balance sheet in 2011 and beyond."

- Richard D. Fain, chairman and chief executive officer



  • Second quarter 2010 Net Yields are expected to improve approximately 6%, and for the full year 2010 Net Yields are forecasted to improve 4% to 5% due to improved business conditions offset by negative currency movements and the impact of the recent European travel disruptions.
  • NCC excluding fuel are expected to be down approximately 1% for the second quarter and for the full year 2010.
  • Initial estimates for the recent travel disruptions in Europe are a reduction in earnings per share (EPS) of less than $0.05 and this adjustment is reflected in the EPS guidance the company is providing.  
  • EPS for the full year 2010 is expected to be in the range of $2.15 to $2.25. Second quarter 2010 EPS is expected to be in the range of $0.16 to $0.21.
  • Based on today's fuel prices the company has included $170 million and $678 million of fuel expense in its second quarter 2010 and full year 2010 guidance, respectively.
  • The ongoing focus on fuel consumption has allowed the company to meaningfully reduce its full year 2010 consumption estimate to 1,346,000 metric tons of fuel versus the guidance the company provided in January 2010.
  • The company's fuel consumption is currently 50% hedged for the second quarter of 2010. In keeping with its previously disclosed hedging strategy, forecasted consumption is now 48% hedged for the remainder of 2010, 53% hedged in 2011 and 40% hedged in 2012.
  • The company also reaffirmed that the midpoint of its guidance would generate around $1.5 billion in EBITDA for 2010 and further commented that outside of possible opportunistic actions, it does not anticipate a need to access the capital markets for the foreseeable future.
  • Based on current ship orders, projected capital expenditures for 2010, 2011 and 2012 are unchanged at $2.2 billion, $1.0 billion, and $1.0 billion, respectively.  
  • Capacity increases for the same three years are 11.5%, 8.7% and 2.8%, respectively.


  • Most improvement in earnings driven by revenues
    • "not excited" by 2.6% yield improvement; reached inflection point on yields
    • Revenues declined due to recession
  • Capital spending will peak this year and will drop by 1/2 next year.
  • New ship orders: equation hasn't changed....stronger dollar, more accommodating shipyards, and exceptional performance...but need to balance with strengthening balance sheet
  • Celebrity Eclipse - delivered directly to British market, first voyage the day before yesterday... she is selling well.
  • Load factor 103%
  • Brands are controlling running expenses
  • All-in net cruise cost per APCD 2.2% lower YOY;
  • $86 legal settlement adjustment
  • Bookings
    • demand has continued to improve
    • pricing leverage slowly returning
    • 20% higher volume yoy
    • booking window healthy - European and Alaska
    • 2nd and 3rd quarter volumes strong
    • pricing still weak in 2nd and 3rd Qs
  • No need to access capital markets in the near-term
  • New reporting method with SEC: 10-Q should be available tomorrow morning
  • Hope to return to Mexico Riveria market in future
  • Deployment of Mariner---in 2012, half of fleet will be in Europe
  • May 2011--RCL may emerge as cruise leader in terms of carrying number of passengers
  • Celebrity Eclicpse:
    • Eclipse volume and rate as expected on previous call
    • other solstice ships performing as expected
    • deployment summer 2011-winter 2012
      • 4th ship--Silhouette-- will debut in July 2011
      • 50% of capacity will be solstice class



  • capital allocation going forward?
    • focus on de-leveraging balance sheet--have goal of moving towards investment grade... no need to reinstitute dividend at this year
    • "Solsticing" some of the existing ships...have found some of those investments very effective
  • European travel summer bookings?  Bookings have normalized.
  • Cost control: want to temper expectations of continued cost reductions (i.e. Net Cruise Costs per APCD excluding Fuel)
  • Yields:  business environment is better; if no disruption in Europe, would have been 100 bps improvement
  • EPS benefited from FX
  • Spain and Brazil color:  Spain has stabilized but at a "terrible" level; ahead of budget with respect to Spain; but still no signs of economic impact in Spain
    • Brazil---overcapacity concerns...2 of 6 ships in Brazil had successful seasons... for next season starting in December, still no visibility.
  • Oasis-- on-board revenue: best in fleet; most positive outlook among all the fleets...
  • Iceland volcano impact: bulk will be revenue hit.
    • should be less than 5 cents but edging up to that #.
  • Narrowing high end of range of FY yield forecast: if not for strength in dollar, the guidance would have been 5-6% for FY 2010.
  • On-board revs: Driven not by minimums...consumers were spending....on-board revenues and ticket yields tend to move in same direction....1Q 2010 on-board revenues was a little less than 3% and ticket yields 4.6%.
  • Allure and Oasis pricing/premiums: cost basis similar; same ship operated in same way; both ships should command a premium in Caribbean market;
  • BP oil explosion in Gulf--no impact
  • Balance sheet improvement expected to come from: free cash flow (expect $1.5 EBITDA FY 2010)
  • ROIC--want to exceed WACC.
    • With '08 cost structure, ROIC can be 8%.
  • Forward bookings: "mid to high single digits growth" for 2Q, 3Q, and 4Q 2010.
  • 3Q yield forecast: not back to pre-recession levels
  • On-board revs: Spanish tour operations have been scaled back; improvements in balance of fleets---developmental itineraries.
  • NA pricing/European pricing--driven by currency changes - positive yield developments despite currency pressure...in constant dollars, still favorable