Royal Caribbean Cruise Lines 2010 Annual Report Download - page 30

PART I
ROYAL CARIBBEAN CRUISES LTD. 27
Lawrence Pimentel has served as President and Chief
Executive Officer of Azamara Club Cruises since July
2009. From 2001 until January 2009, Mr. Pimentel
was President, Chief Executive Officer, Director and
co-owner of SeaDream Yacht Club, a privately held
luxury cruise line located in Miami, Florida with two
yacht-style ships that sailed primarily in the Caribbean
and Mediterranean. From April 1991 to February 2001,
Mr. Pimentel was President and Chief Executive Officer
of Carnival Corp.’s Seabourn Cruise Line and from
May 1998 to February 2001, he was President and Chief
Executive Officer of Carnival Corp.’s Cunard Line.
Brian J. Rice has served as Executive Vice President
and Chief Financial Officer since November 2006.
Mr. Rice has been employed with Royal Caribbean
since 1989 in a variety of positions including Executive
Vice President, Revenue Performance. In such capac-
ity, Mr. Rice was responsible for revenue management,
air/sea, groups, international operations, decision
support, reservations and customer service for both
Royal Caribbean International and Celebrity Cruises.
Harri U. Kulovaara has served as Executive Vice
President, Maritime, since January 2005. Mr. Kulovaara
is responsible for fleet design and newbuild operations.
Mr. Kulovaara also chairs our Maritime Safety Advisory
Board. Mr. Kulovaara has been employed with Royal
Caribbean since 1995 in a variety of positions, includ-
ing Senior Vice President, Marine Operations, and
Senior Vice President, Quality Assurance. Mr. Kulovaara
is a naval architect and engineer.
Michael W. Bayley has served as Executive Vice
President, International since May 2010. In this capac-
ity, he is responsible for the international sales, mar-
keting and other international business operations for
Royal Caribbean International, Celebrity Cruises and
Azamara Club Cruises. Mr. Bayley has been employed
by Royal Caribbean for over 29 years, serving in a
number of roles including, most recently, as Senior
Vice President, International. During his tenure with us,
Mr. Bayley has also served as Senior Vice President,
Hotel Operations for Royal Caribbean International
where he oversaw worldwide hotel operations and
onboard revenue as well as Chairman and Managing
Director of Island Cruises.
ITEM 1A. RISK FACTORS
The risk factors set forth below and elsewhere in this
Annual Report on Form 10-K are important factors
that could cause actual results to differ from expected
or historical results. It is not possible to predict or
identify all such risks. The risks described below are
only those known risks relating to our operations and
financial condition that we consider material. There
may be additional risks that we consider not to be
material, or which are not known, and any of these
risks could have the effects set forth below. See Item
7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations for a cautionary
note regarding forward-looking statements.
Adverse worldwide economic conditions could reduce
the demand for cruises and adversely impact our
operating results, cash flows and financial condition.
The demand for cruises is affected by international,
national and local economic and business conditions
and is sensitive to reductions in discretionary consumer
spending. The recent severe economic downturn cou-
pled with continued negative economic indicators,
including high unemployment rates, the volatility in
the price of fuel and declines in the securities, real
estate and other markets, has had an adverse effect
on vacationers’ discretionary income and consumer
confidence. This, in turn, has resulted in cruise booking
slowdowns, decreased cruise prices and lower onboard
revenues for us and for the others in the cruise indus-
try. Although the cruise industry began to recover in
2010, we cannot predict with any certainty whether
demand for cruises will continue to improve or the rate
of such improvement. Stagnant or worsening global
economic conditions could result in a prolonged
period of booking slowdowns, depressed cruise prices
and reduced onboard revenues. This could adversely
impact our operating results, cash flows and financial
condition including the impairment of the value of our
ships, goodwill and other assets.
We may not be able to obtain sufficient financing or
capital for our needs or may not be able to do so
on terms that are acceptable or consistent with our
expectations.
To fund our capital expenditures and scheduled debt
payments, we have historically relied on a combina-
tion of cash flows provided by operations, drawdowns
under available credit facilities, the incurrence of
additional indebtedness and the sale of equity or debt
securities in private or public securities markets. The
decrease in consumer cruise spending as a result of
the recent severe economic downturn had an adverse
impact on our cash flows from operations and if the
current economic conditions worsen our operational
cash flows could continue to be negatively affected.
See “—Adverse worldwide economic conditions could
reduce the demand for cruises and adversely impact
our operating results, cash flows and financial condition.”
Although we believe we have or can access sufficient
liquidity to fund our operations and obligations as
expected, there can be no assurances to that effect.
Our ability to timely refinance and/or replace our
credit facilities on acceptable terms and our ability
to access additional funding, as may be needed, will
depend upon continued and sustained improvements
in the financial markets as well as our financial results
and credit ratings and the performance of our industry