Royal Caribbean Cruise Lines 2011 Annual Report Download - page 42

2011 ANNUAL REPORT 38
PART II
ITEM 7. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
REVISIONS OF PRIOR PERIOD
FINANCIAL STATEMENTS
During the second quarter of 2011, we identified and
corrected errors in the manner in which we were
amortizing guarantee fees related to three outstand-
ing export credit agency guaranteed loans, and to a
much lesser extent, fees associated with our revolving
credit facilities. Accordingly, we revised previously
reported results for all affected periods. Refer to
Note 1. General—Revision of Prior Period Financial
Statements to our consolidated financial statements
under Item 8. Financial Statements and Supplementary
Data for further details. These errors impacted the
interest expense and net income we reported in prior
periods. The errors do not impact operating income,
cash flows, Net Yields, Net Cruise Costs or Net Cruise
Costs Excluding Fuel. The discussion and analysis
included herein is based on the revised financial results
for the years ended December 31, 2010 and 2009.
CAUTIONARY NOTE CONCERNING
FORWARD-LOOKING STATEMENTS
The discussion under this caption “Management’s
Discussion and Analysis of Financial Condition and
Results of Operations” and elsewhere in this document,
including, for example, under the “Risk Factors” and
“Business” captions, includes “forward-looking state-
ments” within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other
than statements of historical fact, including statements
regarding guidance (including our expectations for
the first quarter and full year of 2012 set forth under
the heading “- Outlook” below), business and industry
prospects or future results of operations or financial
position, made in this Annual Report on Form 10-K are
forward-looking. Words such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “goal,” “intend,” “may,”
“plan,” “project,” “seek,” “should,” “will,” and similar
expressions are intended to identify these forward-
looking statements. Forward-looking statements
reflect management’s current expectations, are inher-
ently uncertain and are subject to risks, uncertainties
and other factors, which could cause our actual results,
performance or achievements to differ materially
from the future results, performance or achievements
expressed or implied in those forward-looking state-
ments. Examples of these risks, uncertainties and other
factors include, but are not limited to, the following:
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ical environment or other conditions on the demand
for cruises;
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on our ability to generate cash flows from opera-
tions, satisfy the financial covenants required by our
credit facilities, or obtain new borrowings from the
credit or capital markets in amounts sufficient to
satisfy our capital expenditures, debt repayments
and other financing needs;
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kets on the ability of our counterparties and others
to perform their obligations to us including those
associated with our loan agreements and derivative
contracts;
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cruise vacation industry, or adverse publicity, includ-
ing those involving the health, safety and security of
guests, accidents (in particular the Costa Concordia
tragedy in early 2012), unusual weather conditions
or natural disasters or disruptions;
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management strategy with our goal of satisfying
guest expectations;
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could impair our operations or competitive position;
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and our ability to realize the intended benefits of
our investments in new markets;
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changes in foreign exchange rates, interest rates,
fuel, food, payroll, airfare for our shipboard personnel,
insurance and security costs;
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over capacity in certain markets;
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health, safety, security and other laws and regulations
affecting our business;
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fines or penalties;
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revenue;
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ment delays, ship cancellations or ship construction
price increases brought about by construction
faults, mechanical problems or financial difficulties
encountered by shipyards or their subcontractors;
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pirate attacks, armed conflict, the unavailability or
cost of air service and the resulting concerns over
safety and security aspects of traveling;