Royal Caribbean Cruise Lines 2014 Annual Report Download - page 56

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Royal Caribbean Cruises Ltd. 55
PART II
FUTURE CAPITAL COMMITMENTS
Our future capital commitments consist primarily of
new ship orders. As of December 31, 2014, we had
two Quantum-class ships and two Oasis-class ships
on order for our Royal Caribbean International brand
with an aggregate capacity of approximately 19,200
berths. Additionally, we have two “Project Edge”
ships on order for our Celebrity Cruises brand with an
aggregate capacity of approximately 5,800 berths,
which are expected to become effective in the second
quarter of 2015.
As of December 31, 2014, the aggregate cost of
our ships on order, not including the “Project Edge”
ships, was approximately $5.0 billion, of which we had
deposited $394.4 million as of such date. Approximately
28.8% of the aggregate cost was exposed to fluctua-
tions in the Euro exchange rate at December 31, 2014.
(See Note 14. Fair Value Measurements and Derivative
Instruments and Note 15. Commitments and Contingen-
cies to our consolidated financial statements under
Item 8. Financial Statements and Supplementary Data).
As of December 31, 2014, anticipated overall capital
expenditures, based on our existing ships on order,
are approximately $1.6 billion for 2015, $2.3 billion for
2016, $0.4 billion for 2017 and $2.2 billion for 2018.
CONTRACTUAL OBLIGATIONS
As of December 31, 2014, our contractual obligations were as follows (in thousands):
Paymentsduebyperiod
Total
Lessthan
year –years –years
Morethan
years
Operating Activities:
Operating lease obligations()          
Interest on long-term debt()     
Other()     
Investing Activities:
Ship purchase obligations()     —
Other()   — — —
Financing Activities:
Long-term debt obligations()     
Capital lease obligations()     
Other()     
Total          
() We are obligated under noncancelable operating leases primarily for offices, warehouses and motor vehicles. Amounts represent contractual
obligations with initial terms in excess of one year.
() Long-term debt obligations mature at various dates through fiscal year 2027 and bear interest at fixed and variable rates. Interest on variable-rate
debt is calculated based on forecasted debt balances, including interest swapped using the applicable rate at December 31, 2014. Debt denomi-
nated in other currencies is calculated based on the applicable exchange rate at December 31, 2014.
() Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine
consumables, services and maintenance contracts.
() Amounts do not include potential obligations which remain subject to cancellation at our sole discretion.
() Amount represents unused commitment on loan to unconsolidated affiliate.
() Amounts represent debt obligations with initial terms in excess of one year.
() Amounts represent capital lease obligations with initial terms in excess of one year.
() Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our
revolving credit facilities.
Please refer to Funding Needs and Sources for discus-
sion on the planned funding of the above contractual
obligations.
As a normal part of our business, depending on mar-
ket conditions, pricing and our overall growth strat-
egy, we continuously consider opportunities to enter
into contracts for the building of additional ships. We
may also consider the sale of ships or the purchase
of existing ships. We continuously consider potential
acquisitions and strategic alliances. If any of these
were to occur, they would be financed through the
incurrence of additional indebtedness, the issuance
of additional shares of equity securities or through
cash flows from operations.
OFF-BALANCE SHEET ARRANGEMENTS
In connection with the sale of Celebrity Mercury in
February 2011, we and TUI AG each guaranteed repay-
ment of 50% of a €180.0 million amortizing bank loan
provided to TUI Cruises which is due 2016. As of
December 31, 2014, €117.0 million, or approximately
$141.6 million based on the exchange rate at December
31, 2014, remains outstanding. Based on current facts
and circumstances, we do not believe potential obli-
gations under this guarantee are probable.
TUI Cruises has entered into construction agreements
with Meyer Turku shipyard that includes certain restric-
tions on each of our and TUI AG’s ability to reduce