Royal Caribbean Cruise Lines 2002 Annual Report Download - page 9

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7
ROYAL CARIBBEAN CRUISES LTD.
include the wine bar Vintages, the cruise
industry’s first wine education and enter-
tainment venue; Boleros, the first Latin jazz
bar at sea; Chops Grille, a popular steak-
house borrowed from our Radiance-class
ships; Ben & Jerry’s Ice Cream Parlor,
another first; and Jade, a buffet-style spe-
cialty restaurant with Asian fusion foods.
Each of the 13 ships in our 1999-2004
expansion has a personality all her own. The
cumulative effect is an extremely high level of
customer satisfaction. In the “2002 Reader’s
Choice Awards” poll by Condé Nast Traveler, our
company claimed 16 of the top 26 places in
the Best Large Ships category. The previous
year, we garnered 14 of the top 23 places.
STRONGEST CASH FLOW
Even as our financial health grew more
robust in 2002, we were disappointed when
our proposed combination with P&O
Princess Cruises plc was scuttled in favor of
a nominally higher offer. We received a ter-
mination fee of $62.5 million, resulting in
net proceeds of $33 million that were
included in our fourth-quarter results.
We ended the year with $1.2 billion in
liquidity and the strongest cash flow in our
history. As we near completion of our recent
capital expansion program, we believe we
have also seen the peak of our leverage posi-
tion. Now that we have achieved the critical
mass for our brands, we are working to
reduce our leverage with a smaller newbuild
program and a continued strong cash flow.
We ended 2002 with a net debt-to-capital
ratio of 56.3 percent, and we expect it to fall
rapidly as our capital commitments decline.
In 2003, we will happily welcome three
million guests onboard our ships. It was only
in 1997 that we topped one million guests for
the first time. Industry-wide, the North
American market grew to 7.4 million guests
in 2002, and Cruise Lines International
Association predicts demand will keep rising
– an estimated 8 million cruisers in 2003.
In addition to our cruise offerings, Royal
Celebrity Tours continued to establish itself as