Royal Caribbean Cruise Lines 2013 Annual Report Download - page 101
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In addition, we are obligated under other noncancel-
able operating leases primarily for offices, warehouses
and motor vehicles. As of December 31, 2013, future
minimum lease payments under noncancelable oper-
ating leases were as follows (in thousands):
Year
Thereafter
Total expense for all operating leases amounted to
$57.5 million, $61.6 million and $60.2 million for the
years 2013, 2012 and 2011, respectively.
Other
Some of the contracts that we enter into include
indemnification provisions that obligate us to make
payments to the counterparty if certain 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 stated 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 (i) any person other than A. Wilhelmsen AS. and
Cruise Associates and their respective affiliates (the
“Applicable Group”) acquires ownership of more than
33% of our common stock and the Applicable Group
owns less of our common stock than such person, or
(ii) subject to certain exceptions, during any 24-month
period, a majority of the Board is no longer comprised
of individuals who were members of the Board on
the first day of such period, we may be obligated to
prepay indebtedness outstanding under the majority
of our credit facilities, which we may be unable to
replace on similar terms. Certain of our outstanding
debt securities also contain change of control provi-
sions that would be triggered by the acquisition of
greater than 50% of our common stock by a person
other than a member of the Applicable Group cou-
pled with a ratings downgrade. If this were to occur,
it would have an adverse impact on our liquidity and
operations.
At December 31, 2013, we have future commitments
to pay for our usage of certain port facilities, marine
consumables, services and maintenance contracts as
follows (in thousands):
Year
Thereafter
NOTE 16. RESTRUCTURING AND RELATED
IMPAIRMENT CHARGES
For the year ended December 31, 2013, we incurred
the following restructuring and related impairment
charges in connection with our profitability initiatives
(in thousands):
Restructuring exit costs
Impairment charges
Restructuring and related impairment charges
The following are the restructuring profitability initia-
tives that are at different stages of implementation.
Consolidation of Global Sales, Marketing, General
and Administrative Structure
One of our profitability initiatives relates to restructur-
ing and consolidation of our global sales, marketing
and general and administrative structure. During the
third quarter of 2013, we moved forward with activities
related to this initiative, including the consolidation of
most of our call centers located outside of the United
States and the establishment of brand dedicated
sales, marketing and revenue management teams in
key priority markets. This resulted in the elimination
of approximately 500 shore-side positions, primarily
from our international markets, and recognition of
a liability for one-time termination benefits during
the year ended December 31, 2013. Additionally, we
incurred contract termination costs and other related
costs consisting of legal and consulting fees to imple-
ment this initiative.
As a result of these actions, we incurred restructuring
exit costs of $18.2 million for the year ended Decem-
ber 31, 2013, which are reported in Restructuring and
related impairment charges in our consolidated state-
ments of comprehensive income (loss). We expect to
incur additional restructuring exit costs of approxi-
mately $1.2 million, through the end of 2014, to com-
plete this initiative.