Results for Fourth Quarter and Full Year 2011

[HostDave]

Regent Seven Seas Cruises (Seven Seas Cruises S. DE R.L. or the “Company”) today reported results for the fourth quarter and full year ended December 31, 2011.

Net Yield for the fourth quarter of 2011 was up 0.5 percent driven by higher occupancy partially offset by lower Net Per Diem. In the fourth quarter of 2011, we had a 10.7 percent increase in capacity over the fourth quarter of 2010 caused by a 24-day unscheduled repair of the Seven Seas Voyager in 2010 with no such repairs or dry-docks in the fourth quarter of 2011. Net loss was $6.5 million for the fourth quarter of 2011 compared to net loss of $8.4 million for the fourth quarter of 2010. Adjusted EBITDA was $14.5 million on revenue of $107.9 million for the fourth quarter of 2011, compared to Adjusted EBITDA of $19.9 million on revenue of $96.6 million for the fourth quarter of 2010.

For the full year 2011, Net Yield was up 4.0 percent driven by higher occupancy and higher Net Per Diem. Net income was $11.5 million in 2011 compared to net income of $11.8 million in 2010. Adjusted EBITDA was $96.7 million on revenue of $485.9 million in 2011, compared to Adjusted EBITDA of $105.2 million on revenue of $449.2 million in 2010.

Commenting on the fourth quarter and full year results, the Company’s Chairman and CEO, Frank Del Rio, stated, “Even with the headwinds created by the unprecedented events in the Middle East and Eastern Mediterranean in the earlier parts of the year, we were pleased to achieve record Net Yields and record occupancy in 2011. We continue to refurbish our award winning fleet to ensure the best possible experience for our guests. This May, the Seven Seas Navigator will undergo a complete overhaul of its top 8 suites to make for a truly world class experience. We were also pleased to be named Best Cruise Line for Luxury Ocean Cruises by Luxury Travel Advisor and honored with the "Best Cabins" award by Condé Nast Traveler in addition to the “Best Cabins” award for Seven Seas Mariner at the Cruise Critic’s 2012 Cruisers’ Choice Awards.”

Other key operating metrics for the fourth quarter of 2011 compared to the prior year are as follows:
• Net Yield was up 0.5 percent driven by an occupancy increase of 7.1 percentage points partially offset by a decrease in Net Per Diem of 7.1 percent. The decrease in Net Per Diem for the quarter was primarily attributable to 25.4 percent of our capacity coming from the Eastern Mediterranean, Middle East and North Africa regions.
• Net Cruise Cost, excluding Fuel and Other expense, per APCD decreased 1.9 percent, to $268 in 2011 compared to $273 in 2010, mainly due to our focused cost control measures.
• Fuel expense increased 20.8 percent, or $1.8 million, reflecting higher prices. Our economic hedging strategy was able to partially offset this increase, as we recognized a $1.1 million cash benefit on executed fuel hedge contracts during the quarter that offset 60.2 percent of the price increase. The realized gain of fuel derivatives was recorded in other income (expense) as these instruments do not qualify for hedge accounting.
• Other expense was down $0.7 million primarily due to non-recurring expenses in 2010.

Other key operating metrics for the year ended 2011 compared to the prior year are as follows:
• Net Yield was up 4.0 percent driven by increased occupancy of 2.4 percentage points and an increase in Net Per Diem of 1.2 percent.
• Net Cruise Cost, excluding Fuel and Other expense, per APCD decreased 0.7 percent, to $274 in 2011 compared to $276 in 2010, mainly due to our focused cost control measures.
• Fuel expense increased 25.9 percent, or $8.4 million, reflecting higher prices. Our economic hedging strategy was able to partially offset this increase, as we recognized a $5.1 million cash benefit on executed fuel hedge contracts during the year that offset 61.4 percent of the price increase. The realized gain of fuel derivatives was recorded in other income (expense) as these instruments do not qualify for hedge accounting.
• Other expense was up $7.6 million primarily attributable to a 17-day scheduled dry-dock for the Seven Seas Voyager in the third quarter of 2011 and a 10-day scheduled dry-dock for the Seven Seas Mariner in the second quarter of 2011.