Royal Caribbean Cruise Lines 2009 Annual Report Download - page 58

Future Capital Commitments
Our future capital commitments consist primarily of new ship orders. As of December 31, 2009, we had one Oasis-class ship
designated for Royal Caribbean International and three Solstice-class ships, designated for Celebrity Cruises, on order for an
aggregate additional capacity of approximately 13,950 berths. The aggregate cost of the four ships is approximately $4.2 billion, of
which we have deposited $430.7 million as of December 31, 2009. Approximately 9.0% of the aggregate cost of ships was exposed to
fluctuations in the euro exchange rate at December 31, 2009.
As of December 31, 2009 we anticipated overall capital expenditures, including the four ships on order, will be approximately
$2.2 billion for 2010, $1.0 billion for 2011 and $1.0 billion for 2012.
Contractual Obligations
As of December 31, 2009, our contractual obligations were as follows (in thousands):
As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously
consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships or the
purchase of existing ships. We continuously consider potential acquisitions and strategic alliances. If any of these were to occur, they
would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through
cash flows from operations.
Off-Balance Sheet Arrangements
Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is
negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable
determinations which may be made by United Kingdom tax authorities. These indemnifications could result in an increase in our
lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances,
timing or a combination of events that could trigger such indemnifications. We have been advised by the lessor that the United
Kingdom tax authorities are disputing the lessor’s accounting treatment of the lease and that the parties are in discussions on the
matter. If the
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Operating Activities:
Operating lease obligations(1)(2) $ 377,552 $51,531 $ 281,387 $18,121 $26,513
Interest on long-term debt(3) 1,571,492 317,784 486,107 304,932 462,669
Other(4)
698,102 131,602 217,906 134,725 213,869
Investing Activities:
Ship purchase obligations(5) 3,404,429 1,951,833 1,452,596
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Financing Activities:
Long-term debt obligations (6) 8,362,790 749,404 2,150,655 3,096,234 2,366,497
Capital lease obligations (7) 56,980 6,811 9,259 5,244 35,666
Total $14,471,345 $3,208,965 $4,597,910 $3,559,256 $3,105,214
(1) We are obligated under noncancelable operating leases primarily for a ship, offices, warehouses and motor vehicles.
(2) Under the Brilliance of the Seas lease agreement, we may be required to make a termination payment of approximately
£126.0 million, or approximately $203.8 million based on the exchange rate at December 31, 2009, if the lease is canceled in
2012. This amount is included in the 1-3 years column.
(3) Long-term debt obligations mature at various dates through fiscal year 2027 and bear interest at fixed and variable rates. Interest
on variable-rate debt is calculated based on forecasted cash outflows, including interest swapped from a fixed-rate to a variable-
rate using the applicable rate at December 31, 2009. Debt denominated in other currencies is calculated based on the applicable
exchange rate at December 31, 2009. Amounts are based on existing debt obligations and do not consider potential refinancing
of expiring debt obligations.
(4) Amounts represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities,
marine consumables, services and maintenance contracts.
(5) Amounts represent contractual obligations with initial terms in excess of one year.
(6) Amounts represent debt obligations with initial terms in excess of one year.
(7) Amounts represent capital lease obligations with initial terms in excess of one year.