Name: Royal Caribbean Cruises Ltd. (NYSE:RCL) | Common-Size Income Statement
Creator: Stock Analysis on Net

Common-Size Income Statement

Royal Caribbean Cruises Ltd., common-size consolidated income statement

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Passenger ticket revenues	61.43%	68.12%	71.75%	71.55%	71.92%
Onboard and other revenues	38.57%	31.88%	28.25%	28.45%	28.08%
Revenues	100.00%	100.00%	100.00%	100.00%	100.00%
Commissions, transportation and other	-13.55%	-15.60%	-15.13%	-15.10%	-15.53%
Onboard and other	-7.63%	-7.12%	-5.84%	-5.66%	-5.65%
Payroll and related	-54.70%	-35.69%	-9.85%	-9.74%	-9.72%
Food	-10.73%	-7.32%	-5.33%	-5.49%	-5.61%
Fuel	-25.15%	-16.80%	-6.37%	-7.49%	-7.76%
Other operating	-61.69%	-42.66%	-12.84%	-11.95%	-11.52%
Cruise operating expenses	-173.45%	-125.19%	-55.36%	-55.43%	-55.78%
Gross profit (loss)	-73.45%	-25.19%	44.64%	44.57%	44.22%
Marketing, selling and administrative expenses	-89.42%	-54.31%	-14.24%	-13.73%	-13.51%
Depreciation and amortization expenses	-84.38%	-57.92%	-11.38%	-10.89%	-10.84%
Impairment and credit losses	-5.35%	-70.92%	0.00%	0.00%	0.00%
Operating income (loss)	-252.61%	-208.33%	19.02%	19.96%	19.87%
Interest income	1.09%	0.95%	0.25%	0.35%	0.34%
Interest expense, net of interest capitalized	-84.31%	-38.22%	-3.73%	-3.51%	-3.42%
Equity investment income (loss)	-8.84%	-9.66%	2.11%	2.22%	1.78%
Other income (expense)	-1.63%	-6.89%	0.07%	0.34%	0.15%
Other income (expense)	-93.68%	-53.81%	-1.30%	-0.61%	-1.15%
Income (loss) before income taxes	-346.29%	-262.14%	17.72%	19.35%	18.72%
Income tax (expense) benefit	2.95%	0.68%	-0.30%	-0.22%	-0.21%
Net income (loss)	-343.34%	-261.46%	17.42%	19.13%	18.51%
Net income attributable to noncontrolling interest	0.00%	-1.01%	-0.26%	-0.05%	0.00%
Net income (loss) attributable to Royal Caribbean Cruises Ltd.	-343.34%	-262.47%	17.16%	19.08%	18.51%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

A stark contrast is observed in the financial performance between the period of 2017-2019 and the period of 2020-2021. The first three years demonstrate a stable and profitable operational model, while the subsequent two years indicate a severe collapse in revenue relative to fixed and variable costs, leading to exponential increases in losses.

Revenue Composition: From 2017 to 2019, revenue streams remained consistent, with passenger ticket revenues contributing approximately 71-72% and onboard revenues accounting for roughly 28%. However, a shift occurred in 2020 and 2021, where ticket revenues declined to 61.43% by 2021, while onboard and other revenues grew significantly to 38.57% of total revenues.
Cruise Operating Expenses: Operating expenses were stable at approximately 55% of revenues between 2017 and 2019. Beginning in 2020, these expenses surged to 125.19% and further to 173.45% in 2021. The primary drivers of this increase were payroll and related costs, which rose from under 10% to 54.70%, and other operating expenses, which escalated from roughly 12% to 61.69% by 2021. Fuel expenses also saw a significant relative increase, moving from 6.37% in 2019 to 25.15% in 2021.
Fixed Costs and Asset Impairment: Depreciation and amortization expenses remained steady at approximately 11% of revenues until 2020, after which they spiked to 57.92% and eventually 84.38% in 2021. Additionally, a substantial impairment and credit loss of 70.92% of revenues was recorded in 2020, indicating a significant write-down of asset values during that period.
Financial Obligations and Interest: Interest expenses shifted from a manageable 3-4% of revenues in the 2017-2019 window to 38.22% in 2020 and 84.31% in 2021. This trajectory suggests a massive increase in debt service requirements relative to the diminished revenue base.
Overall Profitability: Net income margins were consistently positive and stable between 17.16% and 19.08% from 2017 to 2019. This shifted to a profound deficit starting in 2020, with net losses reaching 261.46% of revenues in 2020 and expanding to 343.34% in 2021. The operating income similarly transitioned from a positive ~19% to a loss of 252.61% by the end of the period.

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