Royal Caribbean Cruise Lines 2014 Annual Report Download - page 23

22 Royal Caribbean Cruises Ltd.
PART I
guests and a wide variety of specialty restaurants and
dining options. Many of these services are available
for pre-booking on the internet prior to embarkation.
In conjunction with our cruise vacations, we offer pre-
and post-cruise hotel packages to our Royal Caribbean
International, Celebrity Cruises and Azamara Club
Cruises guests. During 2014, we continued to expand
the markets in which we sell our cruise vacation pro-
tection coverage, which provides guests with cover-
age for trip cancellation, medical protection and
baggage protection. Onboard and other revenues
accounted for approximately 27%, 28% and 27% of
total revenues in 2014, 2013 and 2012, respectively.
SEGMENT REPORTING
We operate five wholly-owned cruise brands, Royal
Caribbean International, Celebrity Cruises, Azamara
Club Cruises, Pullmantur and CDF Croisières de France.
In addition, we have a 50% investment in a joint ven-
ture with TUI AG which operates the brand TUI Cruises.
We believe our global brands possess the versatility
to enter multiple cruise market segments within the
cruise vacation industry. Although each of our brands
has its own marketing style as well as ships and crews
of various sizes, the nature of the products sold and
services delivered by our brands share a common base
(i.e., the sale and provision of cruise vacations). Our
brands also have similar itineraries as well as similar
cost and revenue components. In addition, our brands
source passengers from similar markets around the
world and operate in similar economic environments
with a significant degree of commercial overlap. As a
result, our brands (including TUI Cruises) have been
aggregated as a single reportable segment based on
the similarity of their economic characteristics, types
of consumers, regulatory environment, maintenance
requirements, supporting systems and processes as
well as products and services provided. Our Chairman
and Chief Executive Officer has been identified as
the chief operating decision-maker and all significant
operating decisions including the allocation of resources
are based upon the analyses of the Company as one
segment. (For financial information see Item 8. Finan-
cial Statements and Supplementary Data.)
EMPLOYEES
As of December 31, 2014, our brands, excluding our
50% joint venture, TUI Cruises, employed over 64,000
employees, including 58,000 shipboard employees as
well as 5,700 full-time and 600 part-time employees
in our shoreside operations. As of December 31, 2014,
approximately 86% of our shipboard employees were
covered by collective bargaining agreements.
INSURANCE
We maintain insurance on the hull and machinery of
our ships, with insured values generally equal to the
net book value of each ship. This coverage is main-
tained with financially sound insurance underwriters
from the British, Scandinavian, French, United States
and other reputable international insurance markets.
We maintain protection and indemnity liability insur-
ance, which provides coverage for liabilities, costs and
expenses for illness and injury to crew, guest injury,
pollution and other third-party claims that arise out
of, or are the result of, our cruise operations. Our ves-
sels are insured through either the United Kingdom
Mutual Steam Ship Assurance Association (Bermuda)
Limited or the Steamship Mutual Underwriting Asso-
ciation (Bermuda) Limited. Our protection and indem-
nity liability insurance is done on a mutual basis and
we are subject to additional premium calls in amounts
based on claim records of all members of the mutual
protection and indemnity association. We are also
subject to additional premium calls based on invest-
ment shortfalls experienced by the insurer.
We maintain war risk insurance which covers damage
due to acts of war, including invasion, insurrection,
terrorism, rebellion, piracy and hijacking, on each ship,
through a Norwegian war risk insurance organization.
This coverage includes coverage for physical damage
to the ship which is not covered under the hull poli-
cies as a result of war exclusion clauses in such hull
policies. We also maintain protection and indemnity
war risk coverage for risks that would be excluded by
the rules of the indemnity insurance organizations,
subject to certain limitations. Consistent with most
marine war risk policies, under the terms of our war
risk insurance coverage, underwriters can give seven
days notice to us that the policy will be canceled and
reinstated at higher premium rates.
Insurance coverage for shoreside property, shipboard
inventory, general liability, off-vessel liability, directors
& officers and network & privacy risks are maintained
with insurance underwriters in the United States and
the United Kingdom.
We do not carry business interruption insurance for
our ships based on our evaluation of the risks involved
and protective measures already in place, as compared
to the cost of insurance.
All insurance coverage is subject to certain limitations,
exclusions and deductible levels. In addition, in certain
circumstances, we either self-insure or co-insure a
portion of these risks. Premiums charged by insurance
carriers, including carriers in the maritime insurance