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

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Royal Caribbean Cruises Ltd., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Passenger ticket revenues	941,175)	1,504,569)	7,857,057)	6,792,716)	6,313,170)
Onboard and other revenues	590,958)	704,236)	3,093,604)	2,701,133)	2,464,675)
Revenues	1,532,133)	2,208,805)	10,950,661)	9,493,849)	8,777,845)
Commissions, transportation and other	(207,562)	(344,625)	(1,656,297)	(1,433,739)	(1,363,170)
Onboard and other	(116,946)	(157,213)	(639,782)	(537,355)	(495,552)
Payroll and related	(838,088)	(788,273)	(1,079,121)	(924,985)	(852,990)
Food	(164,389)	(161,750)	(583,905)	(520,909)	(492,857)
Fuel	(385,322)	(371,015)	(697,962)	(710,617)	(681,118)
Other operating	(945,205)	(942,232)	(1,405,698)	(1,134,602)	(1,010,892)
Cruise operating expenses	(2,657,512)	(2,765,108)	(6,062,765)	(5,262,207)	(4,896,579)
Gross profit (loss)	(1,125,379)	(556,303)	4,887,896)	4,231,642)	3,881,266)
Marketing, selling and administrative expenses	(1,370,076)	(1,199,620)	(1,559,253)	(1,303,144)	(1,186,016)
Depreciation and amortization expenses	(1,292,878)	(1,279,254)	(1,245,942)	(1,033,697)	(951,194)
Impairment and credit losses	(82,001)	(1,566,380)	—)	—)	—)
Operating income (loss)	(3,870,334)	(4,601,557)	2,082,701)	1,894,801)	1,744,056)
Interest income	16,773)	21,036)	26,945)	32,800)	30,101)
Interest expense, net of interest capitalized	(1,291,753)	(844,238)	(408,513)	(333,672)	(299,982)
Equity investment income (loss)	(135,469)	(213,286)	230,980)	210,756)	156,247)
Other income (expense)	(24,916)	(152,085)	8,087)	32,007)	13,011)
Other income (expense)	(1,435,365)	(1,188,573)	(142,501)	(58,109)	(100,623)
Income (loss) before income taxes	(5,305,699)	(5,790,130)	1,940,200)	1,836,692)	1,643,433)
Income tax (expense) benefit	45,200)	15,000)	(32,600)	(20,900)	(18,300)
Net income (loss)	(5,260,499)	(5,775,130)	1,907,600)	1,815,792)	1,625,133)
Net income attributable to noncontrolling interest	—)	(22,332)	(28,713)	(4,750)	—)
Net income (loss) attributable to Royal Caribbean Cruises Ltd.	(5,260,499)	(5,797,462)	1,878,887)	1,811,042)	1,625,133)

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).

The financial performance from 2017 through 2021 is characterized by a period of steady growth followed by a severe contraction and subsequent operational crisis. Between 2017 and 2019, total revenues expanded consistently, peaking at 10.95 billion US dollars in 2019. This growth was driven by both passenger ticket revenues and onboard spending. However, a precipitous decline occurred in 2020 and 2021, with revenues falling to 2.21 billion and 1.53 billion US dollars, respectively, representing a collapse of approximately 86% from the 2019 peak by the end of 2021.

Revenue and Gross Profitability: From 2017 to 2019, gross profit margins remained healthy, with gross profit increasing from 3.88 billion to 4.89 billion US dollars. In 2020, the business model shifted from profitability to loss at the gross level, recording a gross loss of 556 million US dollars, which widened to 1.13 billion US dollars in 2021. This indicates that cruise operating expenses exceeded total revenues during the pandemic period, rendering the core service delivery unsustainable without external financing.
Operating Expense Analysis: Variable costs such as food and commissions declined in tandem with revenue during 2020 and 2021. However, fixed and semi-fixed costs demonstrated significant rigidity. Depreciation and amortization expenses rose steadily every year, moving from 951 million US dollars in 2017 to 1.29 billion US dollars in 2021, regardless of vessel utilization. Additionally, a substantial non-cash impairment charge of 1.57 billion US dollars was recognized in 2020, contributing heavily to the operating loss.
Operating Income and Net Results: Operating income transitioned from a peak of 2.08 billion US dollars in 2019 to a massive operating loss of 4.60 billion US dollars in 2020. While the operating loss narrowed slightly to 3.87 billion US dollars in 2021, the company remained deep in negative territory. Net losses were equally severe, totaling 5.78 billion US dollars in 2020 and 5.26 billion US dollars in 2021.
Financial Obligations and Interest Burden: A critical trend is observed in the net interest expense, which grew aggressively from 300 million US dollars in 2017 to 1.29 billion US dollars in 2021. This four-fold increase suggests a significant accumulation of debt to fund operations during the period of revenue collapse. The interest burden became a primary driver of losses in 2021, nearly equaling the total annual revenue generated in that same year.

Overall, the data reflects a transition from a high-growth, profitable enterprise to one struggling with extreme liquidity pressures and high fixed costs. The combination of plummeting revenues, rigid depreciation schedules, and soaring interest expenses resulted in a profound erosion of equity and consistent multi-billion dollar net losses through 2021.

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