Royal Caribbean Cruise Lines 2002 Annual Report Download - page 17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
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Unaudited selected statistical information is shown in the following table:
Year Ended December 31,
2002 2001 2000
Guests Carried 2,768,475 2,438,849 2,049,902
Guest Cruise Days 18,112,782 15,341,570 13,019,811
Occupancy Percentage 104.5% 101.8% 104.4%
Net income increased 38.1% to $351.3 million or $1.79 per share on a diluted basis in 2002
compared to $254.5 million or $1.32 per share in 2001. The increase in net income was prima-
rily the result of an increase in capacity associated with the addition of Infinity , Radiance of the
Seas
, Summit and Adventure of the Seas in 2001 and Constellation , Brilliance of the Seas and
Navigator of the Seas in 2002.
Net income for 2002 included net proceeds of $33.0 million received in connection with the
termination of our merger agreement with P&O Princess Cruises plc (“ P&O Princess” ) and a
charge of approximately $20.0 million recorded in connection with a litigation settlement. (See
Note 12 – Commitments and Contingencies.) Net income for 2001 was adversely impacted
by approximately $47.7 million due to lost revenues and extra costs directly associated with
passengers not being able to reach their departure ports during the weeks following the ter-
rorist attacks of September 11, 2001 and costs associated with business decisions taken in
the aftermath of the attacks.
We have canceled a total of five weeks of sailings in the first quarter of 2003 due to the un-
anticipated drydock of one ship, which we estimate will negatively impact net income by
approximately $0.06 per share.
TERMINATION OF PROPOSED COMBINATION WITH P&O PRINCESS
In October 2002, our proposed combination with P&O Princess was terminated prior to its con-
summation and P&O Princess paid us a break fee of $62.5 million. We incurred approximately
$29.5 million of merger-related costs. We also agreed to terminate, effective as of January 1,
2003, our joint venture with P&O Princess. The venture was terminated before it commenced
business operations.
FLEET EXPANSION
Our current fleet expansion program encompasses three distinct ship designs known as the
Voyager class, Millennium class and Radiance class. Since 1999, we have taken delivery of four
Voyager, four Millennium and two Radiance-class ships. We currently operate 25 ships with
53,042 berths.
We have three ships on order for the Royal Caribbean International brand. The planned berths
and expected delivery dates of the ships on order are as follows:
Ship Expected Delivery Date Berths
Voyager class:
Mariner of the Seas 4th Quarter 2003 3,114
Radiance class:(1)
Serenade of the Seas 3rd Quarter 2003 2,076
Jewel of the Seas 2nd Quarter 2004 2,076
(1) We have options on two Radiance-class ships with delivery dates in the fourth quarters of 2005 and 2006.
We believe the Voyager-class ships are the largest and the most innovative passenger
cruise ships ever built. The Radiance-class ships are a progression from Royal Caribbean
International's Vision-class ships.
ROYAL CARIBBEAN CRUISES LTD.