Royal Caribbean: Q3 better than expected, liquidity at $1.9 billion

By Lisa Kerner

Charlotte, N.C., Oct. 25 - Royal Caribbean Cruises Ltd. reported better than expected third quarter results on Thursday.

Net income was up at $367.8 million, or $1.68 per share, compared to $399 million, or $1.82 per share, in 2011, according to a company news release.

As of Sept. 30, Royal Caribbean's total liquidity was $1.9 billion, including cash and the undrawn portion of the company's unsecured credit facilities, said executive vice president and chief financial officer Brian Rice during the earnings call.

Debt reduction

Royal Caribbean's focus has been on three goals: improving its balance sheet, increasing its return to shareholders and slower, prudent growth.

As a result, the company has reduced its debt levels by $1 billion over the last year, said Rice.

During the year, the company said it took a number of actions to augment liquidity in advance of its 2013 and 2014 scheduled debt maturities.

Royal Caribbean increased the size of its revolving credit facility due July 2016 by $233 million and established a €365 million five-year unsecured delayed-draw bank facility.

More recently, Royal Caribbean bolstered liquidity through a new $290 million 3 1/2-year unsecured bank facility. The additional liquidity was used in part for the early extinguishment of €255 million of the company's €1 billion of senior notes due in January 2014.

Royal Caribbean has committed unsecured financing for its remaining newbuilds.

Scheduled debt maturities for 2012, 2013 and 2014 are now $600 million, $1.5 billion and $1.5 billion, respectively.

Projected capital expenditures for 2012, 2013, 2014 and 2015 are $1.3 billion, $600 million, $1.1 billion and $1 billion, respectively.

Chief executive officer Richard Fain said it was "gratifying" to increase the company's full-year guidance to a range of $1.85 to $1.95.

Primary drivers for the increase include stronger than anticipated revenue and expense reduction.

Royal Caribbean is a Miami-based cruise vacation company.

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