Finance Friday Royal Caribbean Q1 2013 Greg Dragonetti Royal Caribbean Cruises Ltd. May 3, 2013 4 via Royal Caribbean Royal Caribbean Reports Strong First Quarter Results Royal Caribbean Cruises Ltd. this week announced first quarter 2013 net income of $76.2 million, or $0.35 per share, versus net income of $47.0 million, or $0.21 per share, in the first quarter of 2012.Both onboard revenue and ticket pricing improved, contributing to a Net Yield increase of 3.6% on a Constant-Currency basis. NCC excluding fuel were also better than anticipated, primarily due to timing, and declined 0.5% on a Constant-Currency basis.Bunker pricing net of hedging for the first quarter was $699 per metric ton and consumption was 5,000 metric tons lower than expected at 345,900 metric tons. Versus the first quarter of 2012, fuel consumption per APCD was 1.2% lower.Outlook for Remainder of the YearSince the beginning of the year booking volumes have averaged 5% ahead of the prior year. At this time, full year booked load factors and APDs are higher than the same time last year. Royal Caribbean said that the overall demand environment is in-line with the company’s expectations from February, but as usual there are regional fluctuations. Bookings from North America have remained strong since the beginning of the year, with the exception of a modest disruption to Caribbean demand which Royal Caribbean attributes to adverse industry media coverage. Despite the difficult economic news in the EU, demand from European sourced guests strengthened in early February and the Royal Caribbean said it expects pricing improvement from the region for the year. Demand from China has weakened somewhat due to itinerary changes related to the territorial dispute with Japan.Royal Caribbean siad that it expects that the negative effects from the adverse industry media coverage in March and itinerary changes in Asia will be offset by the favorable performance in the first quarter and a slightly better outlook for Europe. As a result, full year 2013 Constant-Currency yield expectations remain unchanged from the company’s February guidance of an increase of 2% to 4%.“Our brands have continued to generate solid demand despite a soft economy in Europe and recent adverse industry media coverage,” commented Brian J. Rice, vice chairman and chief financial officer. Rice continued, “The consumer continues to recognize that we offer a great vacation at an excellent value.”Based on current fuel pricing and currency exchange rates, NCC excluding fuel are expected to be up 2% to 3% both on Constant-Currency and As-Reported bases.Royal Caribbean said that it does not forecast changes in foreign currency exchange rates or oil prices. Movements in these two variables are often offsetting, with the recent decrease in oil prices largely negating the unfavorable impact of currency exchange movements.Based on current fuel pricing and currency exchange rates, Royal Caribbean said that it continues to expect that 2013 earnings will be in the range of $2.30 to $2.50 per share.Second Quarter 2013 – Constant-Currency Net Yields are expected to increase approximately 3% in the second quarter of 2013. NCC excluding fuel are expected to increase approximately 3% on a Constant-Currency basis, due in part to timing shifts of marketing activities from the first quarter to the second quarter.Based on current fuel pricing and currency exchange rates, the company expects that second quarter earnings will be in the range of $0.10 to $0.15 per share.2014 Deployment Update – Royal Caribbean said that it recently opened the majority of its 2014 deployment offerings and announced a two-month European summer micro-season for the Oasis of the Seas that complements the vessel’s scheduled maintenance drydock in Rotterdam. Demand for these sailings has been exceptionally strong.Despite this micro-deployment, the company expects to further reduce its European deployment year-over-year by another 10% and also expects that European itineraries will be approximately 25% of its overall 2014 capacity.