Royal Caribbean Cruises Ltd. (NYSE:RCL)

Goodwill

The goodwill value exhibited substantial growth from 288,512 thousand US dollars in 2017 to 1,378,353 thousand in 2018, slightly increasing to 1,385,644 thousand in 2019. Subsequently, it considerably declined to 809,480 thousand in 2020 and remained relatively stable at 809,383 thousand in 2021.

Customer Relationships

Customer relationships were first recorded at 97,400 thousand US dollars in 2018 and remained constant through the years 2019 to 2021.

Galapagos Operating License

Starting from 2018, the Galapagos operating license asset was valued at 47,669 thousand US dollars and stayed unchanged through 2021.

Other Finite-Life Intangible Assets and Gross Carrying Value

Other finite-life intangible assets maintained a steady value of roughly 11,560 thousand US dollars from 2017 through 2021. The total finite-life intangible assets’ gross carrying value increased sharply in 2018 to 156,629 thousand US dollars and plateaued at this level through 2021.

Accumulated Amortization of Finite-Life Intangible Assets

Accumulated amortization showed a rising trend in absolute value (more negative), increasing from -3,700 thousand US dollars in 2017 to -43,548 thousand in 2021, indicating growing amortization expenses over the period.

Net Carrying Value of Finite-Life Intangible Assets

The net value of finite-life intangible assets increased from 7,900 thousand US dollars in 2017 to a peak of 150,378 thousand in 2018, followed by a consistent decline to 113,081 thousand by 2021, reflecting ongoing amortization reducing the asset base.

Indefinite-Life Intangible Assets

Indefinite-life intangible assets were recorded starting 2018 at 351,725 thousand US dollars, experienced a slight increase in 2019 to 352,275 thousand, then declined to 321,475 thousand in 2020 and remained stable through 2021.

Net Intangible Assets

Net intangible assets surged from 7,900 thousand US dollars in 2017 to over 500,000 thousand in 2018, then gradually decreased over the following years to approximately 434,556 thousand in 2021, indicating amortization and impairment effects exceeding new acquisitions or increases.

Total Goodwill and Intangible Assets

Total goodwill and intangible assets peaked at about 1,880,456 thousand US dollars in 2018 and 2019 and then dropped significantly to 1,254,334 thousand in 2020 and further to 1,243,939 thousand in 2021, demonstrating a contraction in recognized intangible assets, primarily driven by reductions in goodwill and net intangible assets.

The data reveals several notable trends over the examined five-year period. Total assets, both reported and goodwill adjusted, show a consistent increase from 2017 through 2020, peaking in 2020 with values above 31 billion US dollars. However, in 2021 there is a slight decrease in total assets compared to the prior year, suggesting a small contraction or asset divestment after continuous growth.

Shareholders’ equity exhibits a different pattern. Both reported and adjusted equity values increase steadily from 2017 to 2019, reaching peak levels above 12 billion US dollars in 2019. A sharp decline occurs in 2020, with equity dropping to approximately 8.7 billion (reported) and 7.9 billion (adjusted). The downward trend continues more markedly into 2021, with equity decreasing further to just over 5 billion (reported) and around 4.3 billion (adjusted). This substantial reduction may reflect significant financial challenges or losses impacting retained earnings and reserves.

Net income figures echo the trends found in equity. Reported and adjusted net income show positive values from 2017 through 2019, with peaks near 1.9 billion US dollars in 2019. In 2020, there is a major shift to net losses exceeding 5 billion US dollars, which persist into 2021 at similar magnitudes. The reconciliation between reported and adjusted net income indicates that adjustments primarily affect 2020 figures, suggesting goodwill or other non-cash impairments were accounted for that year, reducing net losses by approximately 575 million US dollars after adjustment.

Overall, the analysis indicates a period of growth and profitability from 2017 to 2019, followed by a sharp financial downturn starting in 2020. The decline in equity and net income is more pronounced than the change in total assets, pointing to significant earnings pressure and possibly impairment or write-downs impacting the company’s financial position. The relative similarity between reported and adjusted data, aside from 2020 net income, also highlights that goodwill adjustments mildly ameliorate reported losses during the downturn but do not alter the fundamental negative trend.

Total Assets

Steady increase from 22.3 to 32.5 billion between 2017 and 2020, slight decline in 2021.

Shareholders’ Equity

Growth through 2019 followed by sharp decline in 2020 and 2021, indicating weakened financial stability.

Net Income (Loss)

Positive and growing net income to 2019, then steep losses exceeding 5 billion in 2020-2021; adjustments slightly reduce losses in 2020.

Goodwill Adjustments

Minor impact overall with notable effect on 2020 net income, reducing reported losses by several hundred million US dollars.

The financial data reveals significant fluctuations in profitability, asset utilization, leverage, and returns for the company over the period analyzed. The trends suggest a period of stability followed by a sharp decline in financial performance.

Net profit margin

The reported and adjusted net profit margins were relatively stable and positive from 2017 to 2019, ranging from approximately 17% to 19%. However, in 2020 and 2021, there were drastic declines, with margins turning deeply negative, reaching -262.47% and -343.34% reported, respectively. The adjusted margins reflect a similar pattern with a slightly less pronounced decline in 2020 (-236.38%) before matching the steep fall in 2021.

Total asset turnover

The turnover ratios indicate a gradual decrease in asset efficiency from 2017 through 2019, with reported figures moving from 0.39 down to 0.34 and then up slightly to 0.36, while adjusted ratios mirrored this trend somewhat higher. From 2019 to 2021, asset turnover dropped sharply, falling to 0.07 in 2020 and further to 0.05 in 2021, signaling a severe reduction in the ability to generate revenues from assets.

Financial leverage

There was a notable increase in financial leverage through the years. Reported leverage rose from 2.08 in 2017 to 2.49 in 2018 and remained stable in 2019. However, leverage increased significantly in 2020 to 3.71 and surged further to 6.34 in 2021. Adjusted leverage shows an even sharper increase, rising from 2.11 in 2017 to 7.35 in 2021. This upward trend suggests a growing reliance on debt funding or other leveraged financing methods.

Return on equity (ROE)

Reported ROE followed a positive but declining trajectory from 15.18% in 2017 to 15.45% in 2019, then plummeted sharply into negative territory in 2020 (-66.18%) and worsened further in 2021 (-103.44%). Adjusted ROE mirrored these movements, with slightly higher ratios in the earlier years (up to 18.62% in 2018) before crashing dramatically in 2020 (-65.67%) and 2021 (-123.02%). This reflects the combined effect of deteriorating net profit margins, declining asset turnover, and rising leverage.

Return on assets (ROA)

ROA for both reported and adjusted figures showed a decreasing trend over the initial three years, from around 7.29% to 6.2% reported and from 7.38% to 6.49% adjusted. The company then experienced a significant decline in asset returns in 2020 and 2021, with reported ROA dropping to -17.86% and -16.31%, and adjusted ROA at -16.49% and -16.73%. This indicates considerable challenges in generating asset-based returns during the most recent years.

Overall, the data highlights a severe downturn beginning in 2020, coinciding with a sharp deterioration in profitability, efficiency, and returns, alongside intensified financial leverage. These patterns suggest that the company faced substantial operational and financial challenges during this period, impacting its financial health and performance metrics substantially.

Net Income (Loss) Attributable to Royal Caribbean Cruises Ltd.

The reported net income showed a consistent upward trend from 2017 to 2019, increasing from approximately 1.63 billion USD to 1.88 billion USD. However, in 2020, there was a significant reversal, with the company reporting a substantial loss of about 5.8 billion USD. This loss slightly decreased in magnitude in 2021 to approximately 5.3 billion USD but remained considerably negative compared to the earlier profitable years.

Adjusted Net Income (Loss) Attributable to Royal Caribbean Cruises Ltd.

The adjusted net income mirrored the reported figures closely for the same periods. It followed the same pattern of steady growth through 2019, peaking at 1.88 billion USD, then sharply declining into a major loss in 2020 near 5.2 billion USD, and remaining at a similar negative level in 2021. Notably, the adjustment narrowed the loss somewhat in 2020 compared to the reported figure but did not affect the 2021 loss.

Reported Net Profit Margin

Profit margins reflected the profitability trends with positive values from 2017 to 2019, ranging between 17.16% and 19.08%. In 2020, there was a drastic deterioration to a negative margin exceeding -260%, indicative of significant operating difficulties. The margin further worsened in 2021, reaching roughly -343%, underscoring ongoing severe losses relative to revenue.

Adjusted Net Profit Margin

The adjusted net profit margin closely tracked the reported margins across all years. It maintained positive performance near the reported figures through 2019 before dropping substantially into negative territory in 2020, though slightly less severe than the reported margin. The margin further declined in 2021 to approximately -343%, consistent with the reported margin values and reflecting deep losses.

Overall Trends and Insights

The data reveals a strong profitability trend from 2017 through 2019, with both net income and profit margins improving steadily. However, beginning in 2020, the company experienced severe financial distress leading to massive losses and negative profitability metrics that persisted into 2021. The adjustment for goodwill and other factors moderated the loss figures in 2020 slightly but did not improve the overall negative trend. The persistent large losses in 2020 and 2021 suggest significant operational or external challenges impacting financial performance, overshadowing prior profitability gains.

The data indicates consistent growth in total assets from 2017 through 2020, with reported total assets rising from approximately 22.3 billion to 32.5 billion US dollars, and adjusted total assets showing a similar trend. In 2021, total assets slightly declined, signaling a potential stabilization or plateau in asset accumulation.

Regarding asset turnover, both reported and adjusted ratios demonstrate a declining trend over the five-year period. Reported total asset turnover decreased from 0.39 in 2017 to 0.05 in 2021, closely mirrored by the adjusted turnover declining from 0.40 to 0.05. Notably, there is a sharp drop in asset turnover beginning in 2020, likely reflecting considerable decreases in revenue-generating efficiency relative to asset size during that year and the following.

The combination of increasing asset bases with substantially reducing asset turnover ratios suggests that the company's utilization of its assets to generate revenue weakened markedly, particularly from 2019 to 2021. This weakening in efficiency could be associated with external operational challenges or changes in market conditions affecting asset productivity.

Asset Trends

Steady increase in total assets from 2017 to 2020, slight reduction in 2021.

Adjusted assets exhibit a similar growth pattern, confirming consistency in asset valuation adjustments.

Asset Turnover Patterns

Overall declining asset turnover ratios over the period, indicating reduced revenue per unit of asset.

Significant decline in 2020 and 2021, with turnover dropping below 0.1 from previous levels around 0.35–0.40.

Implications

The decline in asset efficiency suggests operational challenges or reduced asset utilization effectiveness during the latter years, particularly during 2020 and 2021.

The minor decrease in asset size in 2021 contrasts with continued low turnover, indicating that diminishing efficiency is not primarily driven by asset expansion.

The data reveals a consistent increase in total assets over the analyzed period, both in reported and goodwill adjusted figures. Reported total assets rose steadily from approximately $22.3 billion at the end of 2017 to about $32.3 billion by the end of 2021. Similarly, adjusted total assets increased from approximately $22.0 billion to around $31.4 billion during the same timeframe. Although both metrics show growth, the difference between reported and adjusted total assets increased slightly over time, likely reflecting changes in goodwill valuation or asset reclassification.

Shareholders’ equity, meanwhile, displays a contrasting trend. Reported shareholders’ equity increased modestly from roughly $10.7 billion at the end of 2017 to a peak near $12.2 billion in 2019, followed by a sharp decline to about $5.1 billion by the end of 2021. Adjusted shareholders’ equity follows a similar pattern, rising until 2019 and then decreasing more significantly, ending at approximately $4.3 billion at the close of 2021. This decline post-2019 suggests material decreases in net assets or retained earnings, potentially due to losses, dividends, or other equity adjustments.

Financial leverage ratios indicate a notable increase in the degree of leverage over the assessment period. The reported financial leverage ratio started at 2.08 in 2017, remained roughly stable at 2.49 in 2018 and 2019, and then surged to 3.71 by 2020 and further to 6.34 in 2021. Adjusted financial leverage shows a similar yet more pronounced upward trajectory, moving from 2.11 in 2017 to 7.35 in 2021. This sharp increase suggests a significant rise in financial obligations relative to shareholder equity, pointing to higher risk exposure and reliance on debt financing as equity base declined.

Overall, the trends exhibit growth in total asset size alongside decreasing equity and markedly rising leverage, especially from 2020 forward. These patterns may imply a period of increased financial risk and vulnerability, possibly influenced by external factors impacting profitability and equity retention.

Net Income Trends

Reported net income attributable to the company demonstrated a positive growth trajectory from 2017 through 2019, increasing from approximately 1.63 billion USD to nearly 1.88 billion USD. However, this trend sharply reversed in 2020, with a substantial reported net loss of around 5.80 billion USD, which slightly improved but remained severely negative in 2021 at approximately 5.26 billion USD. The adjusted net income figures closely follow this pattern, with slight variations in 2020 due to adjustments, indicating ongoing operational challenges during this period.

Shareholders' Equity Movements

Reported shareholders' equity increased steadily from about 10.7 billion USD in 2017 to 12.2 billion USD in 2019, reflecting growth and retained earnings accumulation. Thereafter, equity saw a pronounced decline to 8.8 billion USD in 2020, followed by a further drop to approximately 5.1 billion USD in 2021. Adjusted shareholders' equity presented a similar pattern but consistently reported lower values than the reported figures, suggesting adjustments reduced the net book value of equity, likely due to goodwill impairments or write-downs.

Return on Equity (ROE) Analysis

Reported ROE remained healthy and relatively stable between 2017 and 2019, ranging from about 15.2% to 16.3%, signifying efficient use of equity to generate earnings. A dramatic decline occurred in 2020, resulting in a heavily negative ROE of -66.2%, which further deteriorated to -103.4% in 2021. Adjusted ROE, reflecting the impact of goodwill adjustments, displayed a slightly more volatile pattern but mirrored the same severely negative trajectory post-2019, reaching an even lower -123.0% in 2021. This indicates the company faced substantial losses relative to its equity base during these years.

Overall Insights

From 2017 to 2019, the company demonstrated strong financial performance with growing net income, expanding equity, and solid returns on equity. The onset of 2020 marks a significant inflection point with dramatic operating and financial challenges leading to large net losses and corresponding declines in equity and ROE. The persistence of negative adjusted financial metrics suggests impairments or writedowns, particularly on goodwill, exacerbated the downturn in reported profitability and equity value. These trends likely reflect external disruptions impacting business operations during the 2020-2021 period, requiring careful consideration in financial planning and risk management going forward.

Net Income Trends

The reported net income attributable to the company increased steadily from 2017 through 2019, rising from approximately $1.63 billion to nearly $1.88 billion. However, a sharp decline is evident in 2020, where the company reported a significant net loss of approximately $5.8 billion, which remained substantially negative in 2021 at about $5.3 billion. Adjusted net income figures follow a similar pattern, with a noticeable adjustment in 2020 reducing the loss from about $5.8 billion to approximately $5.2 billion, though the 2021 figure remains unchanged from the reported loss.

Asset Base Development

Reported total assets show consistent growth over the five-year period, increasing from roughly $22.3 billion in 2017 to over $32.2 billion by the end of 2021. Adjusted total assets also trend upward but maintain slightly lower values than reported figures each year, growing from about $22 billion in 2017 to nearly $31.4 billion in 2021. Both metrics indicate an expansion in asset holdings over time despite economic challenges in later years.

Return on Assets (ROA) Analysis

Reported ROA percentages reveal a downward trajectory starting from 7.29% in 2017 and declining gradually to 6.20% in 2019, followed by a drastic fall into negative territory in 2020 and 2021, with -17.86% and -16.31% respectively. Adjusted ROA mirrors this trend but displays slightly higher percentages during 2018 and 2019 and somewhat less negative figures in 2020 and 2021, indicating that goodwill adjustments mitigate some impact but do not alter the overall negative performance during these years.

Overall Insight

The financial data highlights a period of growth and profitability through 2019, followed by severe financial distress in 2020 and 2021, likely linked to extraordinary circumstances impacting operations. Asset values continued to grow, suggesting ongoing investments or asset accumulation despite earnings contractions. Adjustments related to goodwill slightly soften the extent of negative financial results and returns, but do not change the fundamental trend of sharp declines in profitability and returns during the last two years analyzed.