Royal Caribbean Cruise Lines 2012 Annual Report Download - page 6

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ROYAL CARIBBEAN CRUISES LTD.
  One particularly difficult challenge last year
was the economic situation in Spain, which
became so dire in fact, that we felt it appro-
priate to record non-cash impairment charges
againstourintangibleassetsthere.Adjusting
for these charges, net income for the year was
$432.2 million or $1.97 per diluted share. We
continue to deliver strong cash flows, and cash
provided by operating activities was $1.4 billion
in 2012.
  We have always considered the safety of
our guests and crew as a “sine qua non” as
our vessels ply the seven seas. We are keenly
aware of the level of focus our industry has
been receiving regarding safety and security.
It is with a bit of irony that this scrutiny actually
allowsustoarticulatebetterjusthowinvested
weare,andwhatagoodjobisbeingdone
regarding the safety and security of our guests
and crew. Most recently, Royal Caribbean and the
cruise industry, through the coordinated efforts
of the industry trade group CLIA, embarked
on a voluntary operational safety review. This
review was designed to improve transparency
as well as identify best practices and improve-
ment opportunities across the cruising industry.
A summary of this initiative is available on
CLIA’s website at: www.cruising.org.
  While there is no such thing as perfect
safety, there can be a perfect dedication to
safety and we work hard to achieve that.
FOR THE FUTURE: A MEASURED APPROACH
WITH A LONG-TERM PAYOFF
For 2013, we are seeing a recovery pattern in
pricing, in earnings and in our debt leverage
statistics. Capital commitments are at the lowest
level in a long time as we focus on revitalizing
our existing fleet and slow new vessel deliveries.
This should generate meaningful cash flow for
debt repayment and returns to shareholders
going forward.
  The last few years have presented us with
an extraordinary level of challenges both large
and small which have seriously hurt our profit-
ability. The scale and diversity of these events,
rangingfrommajorfinancialmeltdowns,to
vessel incidents, to political crises, has been
unprecedented. While this has been extremely
frustrating, it also has a silver lining—demon-
stratingjusthowresilientourbusinessmodel
and our company really is. If we do this well
against such odds, imagine how we would do
without such challenges.
  We remain on track to a period of slower
growth as we work hard on improving the pric-
ing power of our brands. During the fourth
quarter of 2012, we took delivery of the fifth
Solstice-class vessel, the Celebrity Reflection.
This innovative class of vessels has redefined
both the cruising experience and brand identity
for Celebrity Cruises and its guests. These
focus on product delivery
and shareholder returns.
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