Royal Caribbean (RCL) Earned $4.4 Billion and Its Free Cash Flow Was Negative. Where Did It Go?

Royal Caribbean Cruises Ltd. (NYSE:RCL) closed at $277.74 on October 2 after reporting net income of $4.4 billion over the past twelve months. Over the same twelve months, the company's levered free cash flow was negative. Both statements describe the same twelve months. Reconciling them explains most of what this business is. READ ALSO: Here is Why Tripadvisor (TRIP) is a Bad Investment at Today's PriceRoyal Caribbean (RCL) Earned $4.4 Billion and Its Free Cash Flow Was Negative. Where Did It Go? The Money Went Into Ships: Royal Caribbean generated $6.79 billion of operating cash flow. That is cash the business actually collected after paying its crew, its fuel bills and its interest. Free cash flow was minus $1.52 billion.