Royal Caribbean Cruise Lines 2008 Annual Report Download - page 73

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Royal Caribbean Cruises Ltd. F-18
NOTE 17.
RELATED PARTIES
A. Wilhelmsen AS. and Cruise Associates collectively own approxi-
mately 35.7% of our common stock and are parties to a shareholders’
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 18.
RESTRUCTURING INITIATIVES
During 2008, we implemented a costs savings initiative in response to
the reduction in our profitability. As part of this initiative, we eliminated
approximately 400 shore-side positions. In addition, we discontinued
some non-core operations, including The Scholar Ship. The elimination
of the shore-side positions and the discontinuation of non-core opera-
tions were concluded during the third quarter of 2008. As a result of
this initiative, we incurred charges of approximately $14.3 million, or
$0.07 per share in 2008, comprised of $9.0 million related to termina-
tion benefits and $5.3 million related to contract termination costs.
Expenses related to termination benefits were included in marketing,
selling and administrative expenses and contract termination costs
were included in other operating expenses in the consolidated state-
ments of operations.
The following table summarizes the status of the liabilities from the cost savings initiative (in thousands):
Beginning Balance Ending Balance Cumulative
January 1, 2008 Accruals Payments December 31, 2008 Charges Incurred
Termination benefits $ – $ 9,039 $ 6,937 $2,102 $ 9,039
Contract termination costs – 5,291 5,291 – 5,291
Total $ – $14,330 $12,228 $2,102 $14,330
NOTE 19.
QUARTERLY SELECTED FINANCIAL DATA (UNAUDITED)
(in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter
2008 2007 2008 2007 2008 2007 2008 2007
Total revenues
1 $1,429,085 $1,223,126 $1,583,774 $1,481,325 $2,063,389 $1,953,592 $1,456,277 $1,491,095
Operating income $ 137,568 $ 79,643 $ 168,950 $ 200,883 $ 461,907 $ 482,834 $ 63,559 $ 137,974
Net income $ 75,607 $ 8,825 $ 84,749 $ 128,745 $ 411,887 $ 395,000 $ 1,479 $ 70,834
Earnings per share:
Basic $ 0.35 $ 0.04 $ 0.40 $ 0.61 $ 1.93 $ 1.85 $ 0.01 $ 0.33
Diluted $ 0.35 $ 0.04 $ 0.40 $ 0.60 $ 1.92 $ 1.84 $ 0.01 $ 0.33
Dividends declared per share $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ – $ 0.15
1 Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere summer months and holidays.