Royal Caribbean Cruise Lines 2001 Annual Report Download - page 47

Notes to the Consolidated Financial Statements (continued)
Royal Caribbean Cruises Ltd. 45
Separately, we entered into a joint venture with First Choice
Holidays PLC to launch a new cruise brand, Island Cruises. As
part of the transaction, ownership of Viking Serenade was trans-
ferred to the new joint venture at a valuation of approximately
$95.4 million. The contribution of Viking Serenade represents
our 50% investment in the joint venture as well as approxi-
mately $47.7 million in proceeds towards the purchase price
of the convertible preferred stock. The contribution of
Viking Serenade resulted in a deferred gain of approximately
$3.8 million, which is being recognized over the estimated
remaining useful life of the vessel. Royal Caribbean International
operated Viking Serenade under a charter agreement until early
2002, at which time the vessel moved to the new joint venture.
Note 6. Long-Term Debt
Long-term debt consists of the following (in thousands):
2001 2000
$360 million unsecured term loan
bearing interest at LIBOR
plus 1.0%, due 2006 $ 360,000 $–
Zero Coupon Convertible Notes
with yield to maturity of 4.75%,
due 2021 355,628 –
Liquid Yield Option™ Notes
with yield to maturity of 4.875%,
due 2021 600,878 –
$625 million unsecured term loan
bearing interest at LIBOR
plus 1.25%, due 2005 625,000 625,000
$300 million unsecured term loan
bearing interest at LIBOR
plus 0.8%, due 2009 through 2010 300,000 300,000
$1 billion unsecured revolving
credit facility bearing interest
at LIBOR plus 0.45% on balances
outstanding, 0.2% facility fee,
due 2003 350,000 270,000
Senior Notes and Senior Debentures
bearing interest at rates ranging
from 6.75% to 8.75%, due 2002
through 2011, 2018 and 2027 1,950,341 1,392,017
Unsecured term loan bearing
interest at 8.0%, due 2006 109,250 134,332
Term loans bearing interest at
rates ranging from 6.7% to 8.0%,
due through 2010, secured by
certain Celebrity vessels 506,675 241,452
Term loans bearing interest at
LIBOR plus 0.45%, due through
2008, secured by certain
Celebrity vessels 78,491 19,697
Capital lease obligations with
implicit interest rates ranging
from 7.0% to 7.2%,
due through 2011 409,849 427,598
5,646,112 3,410,096
Less – current portion (238,581) (109,926)
Long-term portion $5,407,531 $3,300,170
During 2001, we drew $360.0 million under our unsecured
term loan that bears interest at LIBOR plus 1.0%, due 2006.
In August 2001, we entered into a $326.7 million term loan
bearing interest at a fixed rate of 8.0%, due in 2010 and
secured by a Celebrity vessel.
In May 2001, we received net proceeds of $339.4 million from
the issuance of Zero Coupon Convertible Notes, due 2021. In
February 2001, we received net proceeds of $494.6 million
and $560.8 million from the issuance of 8.75% Senior Notes
due 2011 and Liquid Yield Option™ Notes due 2021, respectively.
The Liquid Yield Option™ Notes and the Zero Coupon
Convertible Notes are zero coupon bonds with yields to matu-
rity of 4.875% and 4.75%, respectively, due 2021. Each Liquid
Yield Option™ Note and Zero Coupon Convertible Note was
issued at a price of $381.63 and $391.06, respectively, and will
have a principal amount at maturity of $1,000. The Liquid Yield
Option™ Notes and Zero Coupon Convertible Notes are
convertible at the option of the holder into 17.7 million and
13.8 million shares of common stock, respectively, if the
market price of our common stock reaches certain levels.
These conditions were not met at December 31, 2001 for the
Liquid Yield Option™ Notes or the Zero Coupon Convertible
Notes and therefore, the shares issuable upon conversion are
not included in the earnings per share calculation.
We may redeem the Liquid Yield Option™ Notes beginning on
February 2, 2005, and the Zero Coupon Convertible Notes
beginning on May 18, 2006, at their accreted values for cash as
a whole at any time, or from time to time in part. Holders may
require us to purchase any outstanding Liquid Yield Option™
Notes at their accreted value on February 2, 2005 and
February 2, 2011 and any outstanding Zero Coupon
Convertible Notes at their accreted value on May 18, 2004,
May 18, 2009, and May 18, 2014. We may choose to pay the
purchase price in cash or common stock or a combination
thereof. In addition, we have a three-year, $345.8 million unse-
cured variable rate term loan facility available to us should the
holders of the Zero Coupon Convertible Notes require us to
purchase their notes on May 18, 2004.
During 2001, under the terms of two of our secured term
loans, we elected to defer principal payments totaling
$64.4 million to 2004 through 2006.