Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Felicia Hendrix with Lehman Brothers.
Felicia Hendrix - Lehman Brothers
Good morning, guys. I have a few questions for you; one is on your CapEx spend. So you’ve laid out, and this isn’t new but you are spending about over $6 billion in CapEx from ’09 to 2012, and I’m just wondering, can you walk us through how much you anticipate will get funded through free cash flow? And then for the balance, can you just walk us through how you plan to fund that? Obviously in this environment, there is a lot of concern about any company with large CapEx plans, so anything that you can walk us through would be very helpful.
Brian J. Rice
Our CapEx, as you know, is largely new ships that are under contract. I believe at this point in time we have about $7 billion on order. Our maintenance CapEx and IT and all the other money we spend tends to be a little below $200 million a year. We haven’t given specific percentages but I can tell you the majority of that CapEx will be funded through free cash flow from operations.
Something we probably don’t do a good enough job talking about is the back-up financing that we have if we need it on all our new ship contracts. We financed the Independence of the Seas and the Solstice, we have committed financing for already and we’ll be taking delivery of in November. And all our new ship contracts come with the opportunity to have guarantees for anywhere from 80% to 85% of the new ship contract.
So at this point in time, with the bond markets being as tight as they are, we’d be using bank financing and if necessary, we would be able to get government guarantees, both out of Germany and Finland, for the ships that we’ve built in those respective markets.
So I guess the bottom line here is we’ve been very fortunate, despite the credit crunch, to really not be exposed to it at this point in time.
Felicia Hendrix - Lehman Brothers
And then, let’s just say the economy, for example, turns in Germany. How stable are those guarantees?
Brian J. Rice
They are backed up by the Government of Germany. There’s a branch of the German government called Hermes, which provides the guarantees and their contractual obligations that they have with us, and the same with Finland with [Finvarra].
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