Royal Caribbean Cruise Lines 2006 Annual Report Download - page 40

Other
Some of the contracts that we enter into include indemnification pro-
visions that obligate us to make payments to the counterparty if cer-
tain events occur. These contingencies generally relate to changes
in taxes, increased lender capital costs and other similar costs. The
indemnification clauses are often standard contractual terms and
are entered into in the normal course of business. There are no stat-
ed or notional amounts included in the indemnification clauses and
we are not able to estimate the maximum potential amount of future
payments, if any, under these indemnification clauses. We have not
been required to make any payments under such indemnification
clauses in the past and, under current circumstances, we do not
believe an indemnification in any material amount is probable.
If any person other than A. Wilhelmsen AS. and Cruise Associates,
our two principal shareholders, acquires ownership of more than
30% of our common stock and our two principal shareholders, in
the aggregate, own less of our common stock than such person
and do not collectively have the right to elect, or to designate for
election, at least a majority of the board of directors, we may be
obligated to prepay indebtedness outstanding under the majority
of our credit facilities, which we may be unable to replace on sim-
ilar terms. If this were to occur, it could have an adverse impact on
our liquidity and operations.
At December 31, 2006, we have future commitments to pay for our
usage of certain port facilities, marine consumables, services and
maintenance contracts as follows (in thousands):
Year
2007 $ 138,511
2008 87,353
2009 42,846
2010 30,795
2011 25,582
Thereafter 103,242
$ 428,329
NOTE 13. RELATED PARTIES
A. Wilhelmsen AS. and Cruise Associates collectively own approxi-
mately 35.9% of our common stock and are parties to a sharehold-
ers’ agreement which provides that our board of directors will consist
of four nominees of A. Wilhelmsen AS., four nominees of Cruise
Associates and our Chief Executive Officer. They have the power to
determine, among other things, our policies and the policies of our
subsidiaries and actions requiring shareholder approval.
NOTE 14. SUBSEQUENT EVENTS
In January 2007, we issued ¤1.0 billion, or approximately $1.3 bil-
lion, of 5.63% senior unsecured notes due 2014 at a price of
99.638% of par. The net proceeds from the offering were used to
retire the ¤701.0 million, or approximately $925.1 million, drawn on
the ¤750.0 million, or approximately $960.5 million, unsecured
bridge loan facility obtained to finance our acquisition of Pullmantur.
The remainder of the net proceeds, approximately ¤289.0 million, or
approximately $374.8 million, were used to repay a portion of the
outstanding balance on our unsecured revolving credit facility.
In February 2007, we entered into interest rate swap agreements
that effectively change ¤1.0 billion of fixed rate debt with a weight-
ed-average fixed rate of 5.63% to EURIBOR-based floating rate
debt. We also entered into cross currency swap agreements that
effectively change ¤300.0 million of floating EURIBOR-based debt
to $389.1 million of floating LIBOR-based debt.
38 ROYAL CARIBBEAN CRUISES LTD.
Notes to the Consolidated Financial Statements (Continued)