Royal Caribbean Cruise Lines 2011 Annual Report Download - page 38

2011 ANNUAL REPORT 34
PART I
we rely on tax treaties to provide exemption from tax-
ation. To the extent the tonnage tax laws of these
countries change or we do not continue to meet the
applicable qualification requirements or if tax treaties
are changed or revoked, we may be required to pay
higher income tax in these jurisdictions, resulting in
lower net income.
As budgetary constraints continue to adversely impact
the jurisdictions in which we operate, increases in
income tax regulations or tax reform affecting our
operations may be imposed.
We are not a United States corporation and our share-
holders may be subject to the uncertainties of a foreign
legal system in protecting their interests.
Our corporate affairs are governed by our Articles
of Incorporation and Bylaws and by the Business
Corporation Act of Liberia. The provisions of the
Business Corporation Act of Liberia resemble provi-
sions of the corporation laws of a number of states in
the United States. However, while most states have
a fairly well developed body of case law interpreting
their respective corporate statutes, there are very
few judicial cases in Liberia interpreting the Business
Corporation Act of Liberia. As such, the rights and
fiduciary responsibilities of directors under Liberian
law are not as clearly established as the rights and
fiduciary responsibilities of directors under statutes or
judicial precedent in existence in certain United States
jurisdictions. For example, the right of shareholders
to bring a derivative action in Liberian courts may be
more limited than in United States jurisdictions. There
may also be practical difficulties for shareholders
attempting to bring suit in Liberia and Liberian courts
may or may not recognize and enforce foreign judg-
ments. Thus, our public shareholders may have more
difficulty in protecting their interests with respect to
actions by management, directors or controlling share-
holders than would shareholders of a corporation
incorporated in a United States jurisdiction.
Litigation, enforcement actions, fines or penalties
could adversely impact our financial condition or
results of operations and/or damage our reputation.
Our business is subject to various United States and
international laws and regulations that could lead to
enforcement actions, fines, civil or criminal penalties
or the assertion of litigation claims and damages.
In addition, improper conduct by our employees or
agents could damage our reputation and/or lead to
litigation or legal proceedings that could result in civil
or criminal penalties, including substantial monetary
fines. In certain circumstances it may not be econom-
ical to defend against such matters and/or a legal
strategy may not ultimately result in us prevailing in a
matter. Such events could lead to an adverse impact
on our financial condition or results of operations.
Provisions of our Articles of Incorporation, Bylaws and
Liberian law could inhibit others from acquiring us,
prevent a change of control, and may prevent efforts
by our shareholders to change our management.
Certain provisions of our Articles of Incorporation and
Bylaws and Liberian law may inhibit third parties from
effectuating a change of control of the Company
without Board approval which could result in the
entrenchment of current management. These include
provisions in our Articles of Incorporation that pre-
vent third parties, other than A. Wilhelmsen AS. and
Cruise Associates, from acquiring beneficial owner-
ship of more than 4.9% of our outstanding shares
without the consent of our Board of Directors.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Information about our cruise ships, including their
size and primary areas of operation, may be found
within the Operating Strategies—Fleet revitalization,
maintenance and expansion section and the Operations—
Cruise Ships and Itineraries section in Item 1. Business.
Information regarding our cruise ships under con-
struction, estimated expenditures and financing may
be found within the Future Capital Commitments and
Funding Sources sections of Item 7. Management’s
Discussion and Analysis of Financial Condition and
Results of Operations.
Our principal executive office and principal shoreside
operations are located at the Port of Miami, Florida
where we lease three office buildings totaling approx-
imately 361,800 square feet from Miami-Dade County,
Florida, under long-term leases with current terms
expiring in 2021. We lease an office building in the
United Kingdom totaling approximately 7,230 square
feet used to conduct our operations in the United
King dom. We also lease a number of international
offices throughout Europe, Asia, Mexico, South
America and Australia to administer our brand opera-
tions globally.
We lease an office building in Springfield, Oregon
totaling approximately 163,000 square feet, which
is used as a call center for reservations. In addition,
we own two office buildings totaling approximately
95,000 square feet in Wichita, Kansas, which are used
as call centers for reservations and customer service.
We lease two buildings in Miramar, Florida totaling
approximately 178,000 square feet. One building is
used primarily as office space and the other building
is used as a call center for reservations. We also
lease our logistics center in Weston, Florida totaling
approximately 267,000 square feet.