During 1997, the Company paid two quarterly cash dividends of $0.14 per common share and two quarterly cash dividends of $0.15 per common share, totaling $40.8 million. In addition, the Company paid preferred share dividends totaling $9.2 million. During 1996, the Company paid two quarterly cash dividends of $0.13 per common share and two quarterly cash dividends of $0.14 per common share, totaling $34.4 million.
In 1997, the Company made scheduled principal payments totaling approximately $245.4 million under various term loans and capital leases.
FUTURE COMMITMENTS
The Company has seven ships on order. One is a Vision-class vessel, Vision of the Seas, scheduled for delivery in April 1998. Three are Eagle-class vessels scheduled for delivery in the fall of 1999, fall of 2000 and spring of 2002. Two are Millennium-class vessels scheduled for delivery in June 2000 and January 2001. One is a Voyager-class vessel scheduled for delivery
in February 2001. The Company has signed letters of agreement, which are subject to the fulfillment of various conditions, for the construction of the Voyager-class and Millennium-class vessels. The aggregate contract price of the seven ships, which excludes capitalized interest and other ancillary costs, is approximately $2.8 billion of which the Company deposited $88.3 million during 1997, $14.1 million during 1996, and $14.1 million during 1995. Additional deposits are due prior to the date of delivery of $160.2 million in 1998, $117.7 million in 1999 and $25.0 million in 2000. The Company currently estimates that overall capital expenditures will be approximately $620 million, $810 million, and $970 million for 1998, 1999 and 2000, respectively. The Company also has options to purchase three additional vessels with delivery dates between September 2001 and June 2002. The options have an aggregate contract price of approximately $1.0 billion (two of the options are denominated in French francs and are subject to change based on fluctuations in exchange rates). The options are exercisable on or before January 31, 1999.
The Company has $2.6 billion of long-term debt as of December 31, 1997, of which $141.0 million is due during the twelve-month period ending December 31, 1998. (See Note 5-Long-Term Debt.)
In addition, the Company continuously considers potential acquisitions, strategic alliances and adjustments to its fleet composition, including the acquisition or disposition of vessels. If any such acquisitions, strategic alliances and adjustments to its fleet composition were to occur, they would be financed by the issuance of additional shares of equity securities, by the incurrence of additional indebtedness or from cash flows from operations.
FUNDING SOURCES
As of December 31, 1997, the Company's liquidity was $1,050.8 million consisting of $110.8 million in cash and cash equivalents and $940.0 million available under the $1 Billion Revolving Credit Facility. The capital expenditures and scheduled debt payments will be funded through a combination of cash flows provided by operations, drawdowns under the $1 Billion Revolving Credit Facility and sales of securities in private or public securities markets. In addition, the agreements related to the Eagle, Millennium and Voyager ships on order require the shipyards to make available export financing for up to 80% of the contract price of the vessels. The Company's cash management practice is to utilize excess available cash to reduce outstanding balances on the $1 Billion Revolving Credit Facility rather than investing excess available cash at a rate lower than its cost of borrowing.
OTHER
The Company enters into interest rate swap agreements to manage interest costs as part of its liability risk management program. The differential in interest rates to be paid or received under these agreements is recognized in income as part of interest expense over the life of the contracts. The objective of the program is to control fluctuations in interest expense which could occur as a result of movements in market interest rates. The Company continuously evaluates its debt portfolio including its interest rate swap agreements and makes periodic adjustments to the mix of fixed rate and floating rate debt based on its view of interest rate movements. (See Note 11-Financial Instruments.)
As part of the Company's continuing program to expand and improve its computer systems, the Company has addressed and will continue to address the potential impact of the Year 2000 on its data processing systems. Management believes its key internal systems will be fully Year 2000 compliant sufficiently in advance of year 2000 processing requirements and that associated costs will not be material. In addition, the Company relies upon a variety of third-party vendors, particularly airlines and airline computer reservation systems (CRS), and relies on travel agents to sell its cruises. There can be no assurance that the systems of such vendors and travel agents will be converted in a timely manner or that any such failure to convert would not have a material impact on the Company.