Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 08, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35784 | |
Entity Registrant Name | NORWEGIAN CRUISE LINE HOLDINGS LTD. | |
Entity Incorporation, State or Country Code | D0 | |
Entity Tax Identification Number | 98-0691007 | |
Entity Address, Address Line One | 7665 Corporate Center Drive | |
Entity Address, City or Town | Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33126 | |
City Area Code | 305 | |
Local Phone Number | 436-4000 | |
Title of 12(b) Security | Ordinary shares | |
Trading Symbol | NCLH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 256,346,957 | |
Entity Central Index Key | 0001513761 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | ||
Total revenue | $ 1,246,882 | $ 1,403,630 |
Cruise operating expense | ||
Payroll and related | 247,147 | 223,107 |
Fuel | 125,024 | 98,253 |
Total cruise operating expense | 994,260 | 826,651 |
Other operating expense | ||
Marketing, general and administrative | 270,689 | 248,942 |
Depreciation and amortization | 198,197 | 169,741 |
Impairment loss | 1,607,797 | |
Total other operating expense | 2,076,683 | 418,683 |
Operating income (loss) | (1,824,061) | 158,296 |
Non-operating income (expense) | ||
Interest expense, net | (68,907) | (73,503) |
Other income (expense), net | 5,823 | (434) |
Total non-operating income (expense) | (63,084) | (73,937) |
Net income (loss) before income taxes | (1,887,145) | 84,359 |
Income tax benefit | 6,173 | 33,798 |
Net income (loss) | $ (1,880,972) | $ 118,157 |
Weighted-average shares outstanding | ||
Basic (in shares) | 213,630,798 | 217,241,473 |
Diluted (in shares) | 213,630,798 | 218,873,272 |
Earnings (loss) per share | ||
Basic (in dollars per share) | $ (8.80) | $ 0.54 |
Diluted (in dollars per share) | $ (8.80) | $ 0.54 |
Passenger ticket | ||
Revenue | ||
Total revenue | $ 840,791 | $ 973,273 |
Onboard and other | ||
Revenue | ||
Total revenue | 406,091 | 430,357 |
Cruise operating expense | ||
Total cruise operating expense | 74,973 | 79,413 |
Commissions, transportation and other | ||
Cruise operating expense | ||
Total cruise operating expense | 332,368 | 229,264 |
Food | ||
Cruise operating expense | ||
Total cruise operating expense | 49,216 | 55,045 |
Other | ||
Cruise operating expense | ||
Total cruise operating expense | $ 165,532 | $ 141,569 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (1,880,972) | $ 118,157 |
Other comprehensive income (loss): | ||
Shipboard Retirement Plan | 102 | 95 |
Cash flow hedges: | ||
Net unrealized gain (loss) | (305,860) | 15,152 |
Amount realized and reclassified into earnings | 21,999 | (7,000) |
Total other comprehensive income (loss) | (283,759) | 8,247 |
Total comprehensive income (loss) | $ (2,164,731) | $ 126,404 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,360,261 | $ 252,876 |
Accounts receivable, net | 96,277 | 75,109 |
Inventories | 85,516 | 95,427 |
Prepaid expenses and other assets | 154,281 | 306,733 |
Total current assets | 1,696,335 | 730,145 |
Property and equipment, net | 13,567,576 | 13,135,337 |
Goodwill | 98,134 | 1,388,931 |
Tradenames | 500,525 | 817,525 |
Other long-term assets | 599,939 | 612,661 |
Total assets | 16,462,509 | 16,684,599 |
Current liabilities: | ||
Current portion of long-term debt | 173,797 | 746,358 |
Accounts payable | 364,216 | 100,777 |
Accrued expenses and other liabilities | 762,253 | 782,275 |
Advance ticket sales | 1,659,527 | 1,954,980 |
Total current liabilities | 2,959,793 | 3,584,390 |
Long-term debt | 8,432,425 | 6,055,335 |
Other long-term liabilities | 695,637 | 529,295 |
Total liabilities | 12,087,855 | 10,169,020 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Ordinary shares, $0.001 par value; 490,000,000 shares authorized; 238,976,120 shares issued and 214,525,261 shares outstanding at March 31, 2020 and 237,533,270 shares issued and 213,082,411 shares outstanding at December 31, 2019 | 239 | 237 |
Additional paid-in capital | 4,257,571 | 4,235,690 |
Accumulated other comprehensive income (loss) | (579,249) | (295,490) |
Retained earnings | 1,950,019 | 3,829,068 |
Treasury shares (24,450,859 at March 31, 2020 and December 31, 2019, at cost) | (1,253,926) | (1,253,926) |
Total shareholders' equity | 4,374,654 | 6,515,579 |
Total liabilities and shareholders' equity | $ 16,462,509 | $ 16,684,599 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Ordinary shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, authorized | 490,000,000 | 490,000,000 |
Ordinary shares, issued | 238,976,120 | 237,533,270 |
Ordinary shares, outstanding | 214,525,261 | 213,082,411 |
Ordinary shares, treasury stock | 24,450,859 | 24,450,859 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ (1,880,972) | $ 118,157 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 195,195 | 169,714 |
Impairment loss | 1,607,797 | |
Deferred income taxes, net | (6,120) | (32,094) |
Loss on derivatives | 13,619 | 4 |
Loss on extinguishment of debt | 2,903 | |
Provision for bad debts and inventory obsolescence | 8,372 | 1,022 |
Share-based compensation expense | 32,758 | 26,999 |
Net foreign currency adjustments | (1,386) | (1,896) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (23,109) | (2,179) |
Inventories | 9,258 | (496) |
Prepaid expenses and other assets | 145,768 | (59,821) |
Accounts payable | 258,215 | (89,914) |
Accrued expenses and other liabilities | (123,552) | (44,281) |
Advance ticket sales | (288,544) | 439,352 |
Net cash provided by (used in) operating activities | (52,701) | 527,470 |
Cash flows from investing activities | ||
Additions to property and equipment, net | (610,155) | (214,559) |
Cash received on settlement of derivatives | 289 | |
Cash paid on settlement of derivatives | (28,606) | |
Other | 868 | 259 |
Net cash used in investing activities | (637,893) | (214,011) |
Cash flows from financing activities | ||
Repayments of long-term debt | (181,530) | (2,345,589) |
Proceeds from long-term debt | 2,007,870 | 2,392,000 |
Proceeds from employee related plans | 4,100 | 7,744 |
Net share settlement of restricted share units | (14,975) | (18,850) |
Purchases of treasury shares | (199,996) | |
Deferred financing fees | (12,993) | (7,911) |
Net cash provided by (used in) financing activities | 1,802,472 | (172,602) |
Effect of exchange rates on cash and cash equivalents | (4,493) | |
Net increase in cash and cash equivalents | 1,107,385 | 140,857 |
Cash and cash equivalents at beginning of period | 252,876 | 163,851 |
Cash and cash equivalents at end of period | $ 1,360,261 | $ 304,708 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Shares | Total |
Balance at Dec. 31, 2018 | $ 235 | $ 4,129,639 | $ (161,647) | $ 2,898,840 | $ (904,066) | $ 5,963,001 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 26,999 | 26,999 | ||||
Issuance of shares under employee related plans | 2 | 7,742 | 7,744 | |||
Treasury shares | (199,996) | (199,996) | ||||
Net share settlement of restricted share units | (18,850) | (18,850) | ||||
Other comprehensive income (loss), net | 8,247 | 8,247 | ||||
Net income (loss) | 118,157 | 118,157 | ||||
Balance at Mar. 31, 2019 | 237 | 4,145,530 | (153,400) | 3,016,997 | (1,104,062) | 5,905,302 |
Balance at Dec. 31, 2019 | 237 | 4,235,690 | (295,490) | 3,829,068 | (1,253,926) | 6,515,579 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 32,758 | 32,758 | ||||
Issuance of shares under employee related plans | 2 | 4,098 | 4,100 | |||
Net share settlement of restricted share units | (14,975) | (14,975) | ||||
Other comprehensive income (loss), net | (283,759) | (283,759) | ||||
Net income (loss) | (1,880,972) | (1,880,972) | ||||
Balance at Mar. 31, 2020 | $ 239 | $ 4,257,571 | $ (579,249) | 1,950,019 | $ (1,253,926) | 4,374,654 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative change in accounting policy | Accounting Standards Update 2016-13 [Member] | $ 1,923 | $ 1,923 |
Description of Business and Org
Description of Business and Organization | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Organization | 1. Description of Business and Organization We are a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. As of March 31, 2020, we had 28 ships with approximately 59,150 Berths and had orders for nine additional ships to be delivered through 2027, subject to certain conditions. We have one Explorer Class Ship on order for delivery in 2023. We have two Allura Class Ships on order for delivery in 2022 and 2025. Project Leonardo will introduce an additional six ships with expected delivery dates from 2022 through 2027. These additions to our fleet will increase our total Berths to approximately 82,000. We expect that the effects of the novel coronavirus (“COVID-19”) on the shipyards where our ships are under construction (or will be constructed) will result in delays in ship deliveries and such delays may be prolonged. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Liquidity and Management’s Plan Due to the continued spread of COVID-19, growing travel restrictions and limited access to ports around the world, in March 2020, the Company implemented a voluntary suspension of all cruise voyages across its three brands, which has subsequently been extended through June 30, 2020. On March 14, 2020, concurrent with our and the broader cruise industry’s suspension, the U.S. Centers for Disease Control and Prevention (“CDC”) issued a No Sail Order through April 13, 2020. On April 9, 2020, the CDC modified its existing No Sail Order to extend it until the earliest of (a) the expiration of the Secretary of Health and Human Services’ declaration that COVID-19 constitutes a public health emergency, (b) the date the Director of the CDC rescinds or modifies the No Sail Order or (c) 100 days after the order appears on the Federal Register, which would be July 24, 2020. In addition, the duration of any voluntary suspensions we have implemented and resumption of operations outside of the United States will be dependent, in part, on various travel restrictions and travel bans issued by various countries around the world, as well as the availability of ports around the world. Significant events affecting travel, including COVID-19, typically have an impact on the demand for cruise vacations, with the full extent of the impact generally determined by the length of time the event influences travel decisions. We believe the ongoing effects of COVID-19 on our operations and global bookings have had, and will continue to have, a significant impact on our financial results and liquidity, and such negative impact may continue well beyond the containment of such an outbreak. Due to the unknown duration and extent of the outbreak, travel restrictions and advisories, the potential unavailability of ports and/or destinations, unknown cancellations and timing of redeployments and a general impact on consumer sentiment regarding cruise travel, the full effect on our financial performance cannot be quantified at this time, but we expect to report a net loss for the year ending December 31, 2020. Subsequent to March 31, 2020, we have taken steps to improve our liquidity through securing deferrals of existing debt amortization, including through available export credit agencies and related governments, as discussed more fully under Note 8 – “Long-Term Debt”. The Company has received additional financing through debt and equity transactions totaling $1.95 billion in proceeds after underwriting fees. The Company expects to receive another $400.0 million from the transaction with L Catterton upon the satisfaction of certain customary closing conditions. Refer to Note 15 – “Subsequent Events” for further information on the equity financing. The Company has also undertaken several proactive measures to mitigate the financial and operational impacts of COVID-19, through the reduction of capital expenditures and operating expenses. In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. Based on the actions the Company has taken as described above and our resulting current resources, the Company has alleviated the substantial doubt previously disclosed and has sufficient liquidity to satisfy our obligations over the next twelve months Basis of Presentation The accompanying consolidated financial statements are unaudited and, in our opinion, contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire fiscal year. Historically, demand for cruises has been strongest during the Northern Hemisphere’s summer months, although demand for cruises during the summer months of 2020 are expected to continue to be adversely impacted by the COVID-19 pandemic. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2019, which are included in our most recent Annual Report on Form 10-K filed with the SEC, as updated by our Current Report on Form 8-K filed on May 5, 2020. Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. Earnings Per Share A reconciliation between basic and diluted earnings per share was as follows (in thousands, except share and per share data): Three Months Ended March 31, 2020 2019 Net income (loss) $ (1,880,972) $ 118,157 Basic weighted-average shares outstanding 213,630,798 217,241,473 Dilutive effect of share awards — 1,631,799 Diluted weighted-average shares outstanding 213,630,798 218,873,272 Basic earnings (loss) per share $ (8.80) $ 0.54 Diluted earnings (loss) per share $ (8.80) $ 0.54 For the three months ended March 31, 2020 and 2019, a total of 7.0 million and 5.5 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive. Foreign Currency The majority of our transactions are settled in U.S. dollars. We remeasure assets and liabilities denominated in foreign currencies at exchange rates in effect at the balance sheet date. Gains or losses resulting from transactions denominated in other currencies are recognized in our consolidated statements of operations within other income, net. We recognized a gain of $19.9 million and a loss of $1.0 million for the three months ended March 31, 2020 and 2019, respectively, related to transactions denominated in other currencies. Depreciation and Amortization Expense The amortization of deferred financing fees is included in depreciation and amortization expense in the consolidated statements of cash flows; however, for purposes of the consolidated statements of operations they are included in interest expense, net. Recently Issued Accounting Guidance In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provided guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform. The provisions apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2022. We are currently evaluating the impact of ASU 2020-04 on our consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Disaggregation of Revenue Revenue and cash flows are affected by economic factors in various geographical regions. Revenues by destination were as follows (in thousands): Three Months Ended March 31, 2020 2019 North America $ 951,056 $ 982,989 Europe 13,335 33,752 Asia-Pacific 150,921 222,767 South America 76,306 90,303 Other 55,264 73,819 Total revenue $ 1,246,882 $ 1,403,630 North America includes the U.S., the Caribbean, Canada and Mexico. Europe includes the Baltic region, Canary Islands and Mediterranean. Asia-Pacific includes Australia, New Zealand and Asia. Other includes all other international territories. Segment Reporting We have concluded that our business has a single reportable segment. Each brand, Norwegian, Oceania Cruises and Regent, constitutes a business for which discrete financial information is available and management regularly reviews the brand level operating results and, therefore, each brand is considered an operating segment. Our operating segments have similar economic and qualitative characteristics, including similar long-term margins and similar products and services; therefore, we aggregate all of the operating segments into one reportable segment. Although we sell cruises on an international basis, our passenger ticket revenue is primarily attributed to U.S.-sourced guests who make reservations in the U.S. Revenue attributable to U.S.-sourced guests has historically approximated 75-80%. No other individual country’s revenues exceed 10% in any given period. Contract Balances Receivables from customers are included within accounts receivable, net. As of March 31, 2020 and December 31, 2019, our receivables from customers were $17.3 million and $15.3 million, respectively. In March 2020, our brands launched new cancellation policies to permit our guests to cancel cruises which are not part of the Company’s temporary suspension of voyages up to 48 hours prior to embarkation and receive a refund in the form of a credit to be applied toward a future cruise. These programs are currently in place for cruises booked through specific time periods specified by brand, and for cruises scheduled to embark through either September 30 or December 31, 2020, depending on the brand. The future cruise credit is valid for any sailing through December 31, 2022, and we may extend this offer. The future cruise credits are not contracts, and therefore, guests who have elected this option are excluded from our contract liability balance; however, the credit for the original amount paid is included in advance ticket sales. Our contract liabilities are included within advance ticket sales. As of March 31, 2020 and December 31, 2019, our contract liabilities were $0.2 billion and $1.4 billion, respectively. Of the amounts included within contract liabilities as of March 31, 2020, approximately 60% were refundable in accordance with our cancellation policies. For the three months ended March 31, 2020, $0.9 billion of revenue recognized was included in the contract liability balance at the beginning of the period. For cruise vacations that had been cancelled by us as of March 31, 2020, approximately $92.0 million in costs to obtain these contracts, consisting of protected commissions and credit card fees, were recognized in earnings during the three months ended March 31, 2020. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 4. Intangible Assets We evaluate goodwill and tradenames for impairment annually or more frequently when an event occurs or circumstances change that indicates the carrying value of a reporting unit may not be recoverable. In March 2020, for its three brands, which has subsequently been extended through June 30, 2020. Due to the temporary suspension of operations and decline in our stock price, we performed interim goodwill and tradename impairment tests as of March 31, 2020. We refer you to Note 9 – “Fair Value Measurements” for information on our valuation assumptions. The changes in the carrying amount of goodwill for each reporting unit for the three months ended March 31, 2020 are as follows (in thousands): Reporting Unit Norwegian Regent Cruise Oceania Seven Seas Total Line Cruises Cruises Goodwill Balance, December 31, 2019 $ 403,805 $ 523,026 $ 462,100 $ 1,388,931 Impairment loss (403,805) (523,026) (363,966) (1,290,797) Balance, March 31, 2020 $ — $ — $ 98,134 $ 98,134 As of March 31, 2020, we impaired our tradenames for Oceania Cruises and Regent Seven Seas Cruises by $170.0 million and $147.0 million, respectively. Following these impairments, the carrying value of our tradenames was $500.5 million. The carrying amounts of intangible assets subject to amortization are included within other long-term assets. The gross carrying amounts of intangible assets, the related accumulated amortization, the net carrying amounts and the weighted- average amortization periods of the Company’s intangible assets are listed in the following tables (in thousands, except amortization period): March 31, 2020 Weighted- Average Gross Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years) Customer relationships $ 120,000 $ (112,943) $ 7,057 6.0 License 750 (350) 400 10.0 Total intangible assets subject to amortization $ 120,750 $ (113,293) $ 7,457 December 31, 2019 Weighted- Average Gross Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years) Customer relationships $ 120,000 $ (110,169) $ 9,831 6.0 Licenses 750 (331) 419 10.0 Total intangible assets subject to amortization $ 120,750 $ (110,500) $ 10,250 The aggregate amortization expense for intangible assets is as follows (in thousands): Three Months Ended March 31, 2020 2019 Amortization expense $ 2,793 $ 4,622 The following table sets forth the Company’s estimated aggregate amortization expense for each of the five years below (in thousands): Amortization Year Ended December 31, Expense 2021 $ 75 2022 75 2023 75 2024 75 2025 44 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 5. Leases Lease balances were as follows (in thousands): Balance Sheet location March 31, 2020 December 31, 2019 Operating leases Right-of-use assets Other long-term assets $ 229,588 $ 236,604 Current operating lease liabilities Accrued expenses and other liabilities 23,874 39,126 Non-current operating lease liabilities Other long-term liabilities 200,428 207,243 Finance leases Right-of-use assets Property and equipment, net 13,386 13,873 Current finance lease liabilities Current portion of long-term debt 5,304 6,419 Non-current finance lease liabilities Long-term debt 7,895 8,812 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 6. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) for the three months ended March 31, 2020 was as follows (in thousands): Three Months Ended March 31, 2020 Change Accumulated Change Related to Other Related to Shipboard Comprehensive Cash Flow Retirement Income (Loss) Hedges Plan Accumulated other comprehensive income (loss) at beginning of period $ (295,490) $ (289,362) $ (6,128) Current period other comprehensive loss before reclassifications (305,860) (305,860) — Amounts reclassified into earnings 22,101 21,999 (1) 102 (2) Accumulated other comprehensive income (loss) at end of period $ (579,249) $ (573,223) (3) $ (6,026) Accumulated other comprehensive income (loss) for the three months ended March 31, 2019 was as follows (in thousands): Three Months Ended March 31, 2019 Change Accumulated Change Related to Other Related to Shipboard Comprehensive Cash Flow Retirement Income (Loss) Hedges Plan Accumulated other comprehensive income (loss) at beginning of period $ (161,647) $ (157,449) $ (4,198) Current period other comprehensive income before reclassifications 15,152 15,152 — Amounts reclassified into earnings (6,905) (7,000) (1) 95 (2) Accumulated other comprehensive income (loss) at end of period $ (153,400) $ (149,297) $ (4,103) (1) We refer you to Note 9— “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations. (2) Amortization of prior-service cost and actuarial loss reclassified to other income, net. (3) Includes $107.6 million of loss expected to be reclassified into earnings in the next 12 months. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, net | 7. Property and Equipment, net Property and equipment, net increased $432.2 million for the three months ended March 31, 2020 primarily due to the delivery of Seven Seas Splendor in January 2020 and ship improvement projects slightly offset by a $25.4 million impairment of projects that will not be completed, which has been recognized in depreciation and amortization expense. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | 8. Long-Term Debt As of March 31, 2020, NCLC had borrowed $875 million under its existing Revolving Loan Facility maturing on January 2, 2024. As of March 31, 2020 borrowings under the Revolving Loan Facility bear interest at LIBOR plus a margin of 1.25%. In March 2020, NCLC entered into a $675 million revolving credit facility (“ maturing on March 4, 2021, with JPMorgan Chase LIBOR plus a margin of 0.80% In April 2020, NCLC amended $386 million of export credit backed facilities that finance Norwegian Breakaway, Norwegian Getaway, Norwegian Escape, Norwegian Joy, Norwegian Bliss and Norwegian Encore to incorporate the terms of a 12 -month debt holiday initiative offered to the cruise industry by Euler Hermes Aktiengesellschaft (“Hermes”), the official export credit agency of Germany. The debt holiday was initiated to provide interim debt service and financial covenant relief for borrowers during the current global COVID-19 pandemic with respect to their Hermes guaranteed financings. The amended agreements provide that, among other things, (a) Margin €529.8 million Breakaway one loan (Norwegian Breakaway) 0.90 % €529.8 million Breakaway two loan (Norwegian Getaway) 1.20 % €590.5 million Breakaway three loan (Norwegian Escape) 1.50 % €729.9 million Breakaway four loan (Norwegian Joy) 1.50 % €710.8 million Seahawk 1 term loan (Norwegian Bliss) 1.00 % €748.7 million Seahawk 2 term loan (Norwegian Encore) 1.00 % After the end of the Deferral Period, the deferred amounts will amortize in eight equal semiannual installments. Also, in April 2020, NCLC amended the $230 million credit agreement, dated as of January 10, 2019, with Nordea Bank ABP, New York Branch, as administrative agent, and certain other lenders. The amendment extends the maturity date of the term loan by one year to January 10, 2022. In May 2020, NCLC amended its $260 million credit agreement, dated as of May 15, 2019, with Bank of America, N.A., as administrative agent and collateral agent, and certain other lenders. The amendment provides that (a) amortization payments due through May 1, 2021 will be deferred following the consummation of the successful debt and equity financing, which resulted in aggregate gross proceeds greater than the amount required for the extension and (b) the principal amount so deferred will constitute a separate tranche of loans under the facility (the “Deferred Jewel Loans”). The Deferred Jewel Loans will accrue interest at a per annum rate based on LIBOR plus a margin of 2.50% in the case of Eurocurrency loans or at a per annum rate based on the base rate plus a margin of 1.50% in the case of base rate loans. After the end of the deferral period, the deferred loan payments will amortize in an aggregate principal amount equal to 25% per annum in semiannual installments, and in the case of such payment due on the maturity date, an amount equal to the then unpaid principal amount of the Deferred Jewel Loans outstanding. In addition, in May 2020, NCLH and NCLC entered into an investment agreement with an affiliate of L Catterton (the “Private Investor”), pursuant to which NCLC agreed to sell and issue to the Private Investor (the “Private Exchangeable Notes Transaction”) up to $400 million in aggregate principal amount of exchangeable senior notes due 2026 (the “Private Exchangeable Notes”). The Private Exchangeable Notes Transaction is expected to close no later than May 29, 2020 upon the satisfaction of certain customary closing conditions. The Private Exchangeable Notes will accrue interest at a rate of 7.0% per annum for the first year post-issuance (which will accrete to the principal amount), 4.5% per annum interest (which will accrete to the principal amount) plus 3.0% per annum cash interest for the following four years and 7.5% per annum in cash interest for the final year prior to maturity. The Private Investor will have certain registration rights in respect of NCLH’s ordinary shares underlying the Private Exchangeable Notes and be subject to certain customary transfer, voting and standstill restrictions. The Private Exchangeable Notes will be guaranteed by NCLH on a senior basis. Holders may exchange their Private Exchangeable Notes at their option into redeemable preference shares of NCLC. Upon exchange, the preference shares will be immediately and automatically exchanged, for each $1,000 principal amount of exchanged Private Exchangeable Notes, into a number of NCLH’s ordinary shares based on the exchange rate. The exchange rate will initially be approximately 82.6446 ordinary shares per $1,000 principal amount of Private Exchangeable Notes (equivalent to an initial exchange price of $12.10 per ordinary share), subject to future adjustment. NCLC has the right to redeem all or a portion of the Private Exchange Notes at any time after the third anniversary of the issuance date at a price equal to 100% of the accreted principal amount thereof if the market closing price of NCLH’s ordinary shares has been at least 250% of the per share price implied by the exchange rate then in effect for at least 20 trading days during any 30 consecutive trading day period. In May 2020, NCLC conducted a private offering of $675.0 million aggregate principal amount of 12.25% senior secured notes due 2024 (the “Senior Secured Notes”) at 99% original issue discount and a private offering of $862.5 million aggregate principal amount of 6.00% exchangeable senior notes due 2024 (the “Exchangeable Notes”). The Exchangeable Notes will be guaranteed by NCLH on a senior basis. Holders may exchange their Exchangeable Notes at their option into redeemable preference shares of NCLC. Upon exchange, the preference shares will be immediately and automatically exchanged, for each $1,000 principal amount of exchanged Exchangeable Notes, into a number of NCLH’s ordinary shares based on the exchange rate. The exchange rate will initially be 72.7273 ordinary shares per $1,000 principal amount of Exchangeable Notes (equivalent to an initial exchange price of approximately $13.75 per ordinary share), subject to adjustment. The Senior Secured Notes will pay interest at 12.25% per annum, semiannually on May 15 and November 15 of each year, commencing on November 15, 2020, to holders of record at the close of business on the immediately preceding May 1 and November 1, respectively. NCLC may redeem the Senior Secured Notes, in whole or part, at any time prior to February 15, 2024, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but excluding, the redemption date and a “make-whole premium.” NCLC may redeem the Senior Secured Notes, in whole or in part, on or after February 15, 2024, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but excluding, the redemption date. At any time on or prior to February 15, 2022, NCLC may choose to redeem up to 35% of the aggregate principal amount of the Senior Secured Notes at a redemption price equal to 112.25% of the principal amount of the Senior Secured Notes redeemed plus accrued and unpaid interest to, but excluding, the redemption date, so long as at least 65% of the aggregate principal amount of the Senior Secured Notes issued remains outstanding following such redemption. The Senior Secured Notes will be secured by first-priority interests in, among other things and subject to certain agreed security principles, shares of capital stock in certain subsidiary guarantors, two of our vessels, our material intellectual property and two islands that we use in the operations of our cruise business. The Senior Secured Notes will also be guaranteed by our subsidiaries that own the property that will secure the Senior Secured Notes as well as certain additional subsidiaries whose assets will not secure the Senior Secured Notes. The indenture governing the Senior Secured Notes will include requirements that will, among other things and subject to a number of qualifications and exceptions, restrict the ability of NCLC and its restricted subsidiaries, as applicable, to (i) incur or guarantee additional indebtedness; (ii) pay dividends or distributions on, or redeem or repurchase, equity interests and make other restricted payments; (iii) make investments; (iv) consummate certain asset sales; (v) engage in certain transactions with affiliates; (vi) grant or assume certain liens; and (vii) consolidate, merge or transfer all or substantially all of our assets. NCLC entered into a Fifth Amended and Restated Credit Agreement, dated as of May 8, 2020, with a subsidiary of NCLC, as co-borrower and JPMorgan Chase Bank, N.A., as administrative agent, and lenders holding 87.57% of the term loans outstanding. This revised facility provides that, among other things, (a) amortization payments due within the first year after effectiveness will be deferred and (b) the principal amount so deferred will constitute a separate tranche of loans (the “Deferred Term A Loans”). The Deferred Term A Loans will accrue interest (x) in the case of Eurocurrency loans, at a per annum rate based on LIBOR plus a margin of 2.50% or (y) in the case of base rate loans, at a per annum rate based on the base rate plus a margin of 1.50%. After the end of the deferral period, the Deferred Term A Loans will amortize in an aggregate principal amount equal to 25% per annum of the Deferred Term A Loans, in quarterly installments, and in the case of such payment due on the maturity date, an amount equal to the then unpaid principal amount of the Deferred Term A Loans outstanding . The Term A Loans (other than the Deferred Term A Loans) shall constitute a separate class of loans (the “Legacy Term A Loans), with the same terms as the Term A Loans under the Fourth Amended and Restated Credit Agreement, except that the amortization payments on the Legacy Term A Loans shall be deferred during the deferral period. As a result of the aforementioned executed amendments, including those with contingent conditions that were satisfied on May 8, 2020, we have reclassified $1.4 billion of debt which was originally classified as a current liability based on the contractual maturities outstanding at March 31, 2020 to long-term debt. The following are scheduled principal repayments on long-term debt including finance lease obligations as of March 31, 2020 for each of the next five years (in thousands): Year Amount April 1, 2020 - March 31, 2021 $ 173,797 April 1, 2021 - March 31, 2022 1,742,815 April 1, 2022 - March 31, 2023 872,491 April 1, 2023 - March 31, 2024 2,819,592 April 1, 2024 - March 31, 2025 1,147,007 Thereafter 1,996,325 Total $ 8,752,027 We are in the process of seeking consents to amend our export credit backed facilities to incorporate the terms of a 12-month debt holiday initiative offered to the cruise industry by Servizi Assicurativi del Commercio Estero (“SACE”), the official ECA of Italy, to refinance the amortization payments on such facilities, but we cannot guarantee the outcome of that process. At March 31, 2020, we were in compliance with all of our debt covenants. Subsequent to March 31, 2020, as part of the Hermes debt holiday we have obtained lender consents to waive financial covenants for the Deferral Period. If we do not continue to remain in compliance with our covenants, we would have to seek additional amendments to our covenants. However, no assurances can be made that such amendments would be approved by our lenders. Generally, if an event of default under any debt agreement occurs, then pursuant to cross default and/or cross acceleration clauses, substantially all of our outstanding debt and derivative contract payables could become due, and all debt and derivative contracts could be terminated, which could have a material adverse impact to our operations and liquidity. |
Fair Value Measurements and Der
Fair Value Measurements and Derivatives | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Fair Value Measurements and Derivatives | 9. Fair Value Measurements and Derivatives Fair value is defined as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability). Fair Value Hierarchy The following hierarchy for inputs used in measuring fair value should maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available: Level 1 Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement dates. Level 2 Significant other observable inputs that are used by market participants in pricing the asset or liability based on market data obtained from independent sources. Level 3 Significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available. Derivatives We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We attempt to minimize these risks through a combination of our normal operating and financing activities and through the use of derivatives. We assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of our hedged forecasted transactions. We use regression analysis for this hedge relationship and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivative and the hedged forecasted transaction. Cash flows from the derivatives are classified in the same category as the cash flows from the underlying hedged transaction. If it is determined that the hedged forecasted transaction is no longer probable of occurring, then the amount recognized in accumulated other comprehensive income (loss) is released to earnings. There are no amounts excluded from the assessment of hedge effectiveness and there are no credit-risk-related contingent features in our derivative agreements. We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivatives, is not considered significant, as we primarily conduct business with large, well-established financial institutions with which we have established relationships, and which have credit risks acceptable to us, or the credit risk is spread out among many creditors. We do not anticipate non-performance by any of our significant counterparties. As of March 31, 2020, we had fuel swaps and collars, which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 1.2 million metric tons of our projected fuel purchases, maturing through December 31, 2023. As of March 31, 2020, we had fuel swaps which were not designated as cash flow hedges. Due to a decrease in forecasted fuel consumption resulting from voyage cancellations due to COVID-19, we released into earnings fuel hedges of approximately 68 thousand metric tons of fuel as these forecasted transactions were no longer probable of occurring. The agreements mature through October 31, 2020. As of March 31, 2020, we had foreign currency forward contracts, matured foreign currency options and matured foreign currency collars which are used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. The notional amount of our foreign currency forward contracts was €2.0 billion, or $2.2 billion based on the euro/U.S. dollar exchange rate as of March 31, 2020. As of March 31, 2020, we had interest rate swaps and collars, which are used to hedge our exposure to interest rate movements and manage our interest expense. The notional amount of our outstanding debt associated with the interest rate swaps and collars was $0.7 billion as of March 31, 2020. The derivatives measured at fair value and the respective location in the consolidated balance sheets include the following (in thousands): Assets Liabilities March 31, December 31, March 31, December 31, Balance Sheet Location 2020 2019 2020 2019 Derivative Contracts Designated as Hedging Instruments Fuel contracts Other long-term assets $ — $ 277 $ — $ — Accrued expenses and other liabilities — 2,300 93,109 18,257 Other long-term liabilities — 683 110,085 17,763 Foreign currency contracts Other long-term assets 1,411 — — — Accrued expenses and other liabilities — — 15,581 33,475 Other long-term liabilities — 169 206,917 118,500 Interest rate contracts Accrued expenses and other liabilities — — 7,790 2,178 Other long-term liabilities — — 4,690 1,861 Total derivatives designated as hedging instruments $ 1,411 $ 3,429 $ 438,172 $ 192,034 Derivative Contracts Not Designated as Hedging Instruments Fuel contracts Accrued expenses and other liabilities $ — $ — $ 13,619 $ — Total derivatives not designated as hedging instruments $ — $ — $ 13,619 $ — Total derivatives $ 1,411 $ 3,429 $ 451,791 $ 192,034 The fair values of swap and forward contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The Company determines the value of options and collars utilizing an option pricing model based on inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets. The option pricing model used by the Company is an industry standard model for valuing options and is used by the broker/dealer community. The inputs to this option pricing model are the option strike price, underlying price, risk-free rate of interest, time to expiration, and volatility. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. Our derivatives and financial instruments were categorized as Level 2 in the fair value hierarchy, and we had no derivatives or financial instruments categorized as Level 1 or Level 3. Our derivative contracts include rights of offset with our counterparties. We have elected to net certain assets and liabilities within counterparties when the rights of offset exist. We are not required to post cash collateral related to our derivative instruments. The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands): Gross Gross Gross Amounts Total Net Amounts March 31, 2020 Amounts Offset Amounts Not Offset Net Amounts Assets $ 1,411 $ — $ 1,411 $ (1,411) $ — Liabilities 451,791 — 451,791 (451,791) — Gross Gross Gross Amounts Total Net Amounts December 31, 2019 Amounts Offset Amounts Not Offset Net Amounts Assets $ 277 $ — $ 277 $ — $ 277 Liabilities 192,034 (3,152) 188,882 (149,863) 39,019 The effects of cash flow hedge accounting on accumulated other comprehensive income (loss) were as follows (in thousands): Location of Gain (Loss) Reclassified from Accumulated Amount of Gain (Loss) Reclassified Amount of Gain (Loss) Other Comprehensive from Accumulated Other Recognized in Other Income (Loss) into Comprehensive Derivatives Comprehensive Income Income Income (Loss) into Income Three Months Three Months Three Months Three Months Ended Ended Ended Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Fuel contracts $ (198,477) $ 96,508 Fuel $ (6,217) $ 7,518 Fuel contracts — — Other income (expense), net (14,320) — Foreign currency contracts (97,887) (80,278) Depreciation and amortization (1,129) (703) Interest rate contracts (9,496) (1,078) Interest expense, net (333) 185 Total gain (loss) recognized in other comprehensive income $ (305,860) $ 15,152 $ (21,999) $ 7,000 The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Depreciation Depreciation and Interest Other Income and Interest Fuel Amortization Expense, net ( Expense), net Fuel Amortization Expense, net Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded $ 125,024 $ 198,197 $ 68,907 $ 5,823 $ 98,253 $ 169,741 $ 73,503 Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income Fuel contracts (6,217) — — — 7,518 — — Foreign currency contracts — (1,129) — — — (703) — Interest rate contracts — — (333) — — — 185 Amount of loss reclassified from accumulated other comprehensive income (loss) into income as a result that a forecasted transaction is no longer probable of occurring Fuel contracts — — — (14,320) — — — Long-Term Debt As of March 31, 2020 and December 31, 2019, the fair value of our long-term debt, including the current portion, was $8,595.3 million and $6,957.8 million, respectively, which was $156.6 million lower and $31.3 million higher, respectively, than the carrying values. The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below market rates at the measurement dates. The fair value of our long-term debt was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities, considered to be Level 2 inputs in the fair value hierarchy. Market risk associated with our long-term variable rate debt is the potential increase in interest expense from an increase in interest rates. Goodwill and Tradenames Goodwill and tradenames are nonfinancial instruments that are measured at fair value on a non-recurring basis. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350) — Simplifying the Test for Goodwill Impairment, The Step 1 Test uses discounted future cash flows and other market data to determine the fair value of the reporting units, which are all considered Level 3 inputs. Our discounted cash flow valuation reflects our principal assumptions of 1) forecasted future operating results and growth rates, which have been prepared under multiple scenarios and are probability weighted, 2) forecasted capital expenditures for fleet growth and ship improvements and 3) a weighted average cost of capital of market participants. Historically, our Step 1 Test consisted of a combined approach using discounted future cash flows and market multiples to determine the fair value of the reporting units. However, for the March 31, 2020 Step 1 Test, the market multiples were used solely as a corroboratory approach given the impact of COVID-19 on the current year’s results, as of the valuation date, as well as prospective results including the lack of any guidance provided, which were not available for our peers. We believe that this approach is the most representative method to assess fair value as it utilizes expectations of long-term growth as well as current market conditions. For the tradenames, we use the relief from royalty method, which uses the same forecasts and discount rates from the discounted cash flow valuation in the goodwill assessment along with a tradename royalty rate assumption. We believe that we have made reasonable estimates and judgments. However, a change in our estimated future operating cash flows may result in a decline in fair value in future periods, which may result in a need to recognize additional impairment charges. Other The carrying amounts reported in the consolidated balance sheets of all other financial assets and liabilities approximate fair value. |
Employee Benefits and Compensat
Employee Benefits and Compensation Plans | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefits and Compensation Plans | 10. Employee Benefits and Compensation Plans Share Option Awards The following is a summary of option activity under NCLH’s Amended and Restated 2013 Performance Incentive Plan for the three months ended March 31, 2020: Weighted- Number of Share Option Awards Weighted-Average Exercise Price Average Aggregate Time- Performance- Market- Time- Performance- Market- Contractual Intrinsic Based Based Based Based Based Based Term Value Awards Awards Awards Awards Awards Awards (years) (in thousands) Outstanding as of January 1, 2020 4,918,554 115,489 208,333 $ 51.84 $ 59.11 $ 59.43 5.42 $ 33,413 Exercised (48,221) (906) — 44.38 19.00 — Forfeited and cancelled (25,000) — — 56.19 — — Outstanding as of March 31, 2020 4,845,333 114,583 208,333 $ 51.89 $ 59.43 $ 59.43 5.18 $ — Restricted Share Unit Awards On March 2, 2020, NCLH granted 2.4 million time-based restricted share unit awards to our employees, which vest in substantially equal annual installments over three years. Additionally, on March 2, 2020, NCLH granted 0.6 million performance-based restricted share units to certain members of our management team, which vest upon the achievement of certain pre-established performance targets established for the 2020 and 2021 calendar years and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2023. The following is a summary of restricted share unit activity for the three months ended March 31, 2020: Number of Weighted- Number of Weighted- Number of Weighted- Time-Based Average Grant Performance- Average Grant Market- Average Grant Awards Date Fair Value Based Awards Date Fair Value Based Awards Date Fair Value Non-vested as of January 1, 2020 3,245,625 $ 54.94 1,129,396 $ 56.09 50,000 $ 59.43 Granted 2,392,044 35.86 611,808 (1) 35.59 — — Vested (1,594,003) 54.20 (181,682) 56.33 — — Forfeited or expired (85,667) 50.85 (17,652) 56.77 — — Non-vested as of March 31, 2020 3,957,999 $ 43.80 1,541,870 $ 47.92 50,000 $ 59.43 (1) Number of performance-based restricted share units included assumes maximum achievement of performance targets. The compensation expense recognized for share-based compensation for the periods presented include the following (in thousands): Three Months Ended March 31, 2020 2019 Payroll and related expense $ 4,702 $ 3,804 Marketing, general and administrative expense 28,056 23,195 Total share-based compensation expense $ 32,758 $ 26,999 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Ship Construction Contracts Project Leonardo will introduce an additional six ships, each approximately 140,000 Gross Tons with approximately 3,300 Berths, with expected delivery dates from 2022 through 2027, subject to certain conditions. For the Regent brand, we have an order for one Explorer Class Ship to be delivered in 2023, which will be approximately 55,000 Gross Tons and 750 Berths. For the Oceania Cruises brand, we have orders for two Allura Class Ships to be delivered in 2022 and 2025. Each of the Allura Class Ships will be approximately 67,000 Gross Tons and 1,200 Berths. We expect that the effects of COVID-19 on the shipyards where our ships are under construction (or will be constructed) will result in delays in ship deliveries and such delays may be prolonged. The combined contract prices of the nine ships on order for delivery as of March 31, 2020 was approximately €7.1 billion, or $7.8 billion based on the euro/U.S. dollar exchange rate as of March 31, 2020. We have obtained export credit financing which is expected to fund approximately 80% of the contract price of each ship, subject to certain conditions. We do not anticipate any contractual breaches or cancellations to occur. However, if any such events were to occur, it could result in, among other things, the forfeiture of prior deposits or payments made by us and potential claims and impairment losses which may materially impact our business, financial condition and results of operations. Litigation Class Actions On March 12, 2020, a class action complaint, Eric Douglas v. Norwegian Cruise Lines, Frank J. Del Rio and Mark A. Kempa, Case No. 1:20-CV-21107, was filed in the United States District Court for the Southern District of Florida, naming the Company, Frank J. Del Rio, the Company’s President and Chief Executive Officer, and Mark A. Kempa, the Company’s Executive Vice President and Chief Financial Officer, as defendants. Subsequently, two similar class action complaints were also filed in the United States District Court for the Southern District of Florida naming the same defendants. These complaints assert claims, purportedly brought on behalf of a class of shareholders, under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and allege that the Company made false and misleading statements to the market and customers about COVID-19 and the impact on its business. Each of the complaints seek unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, on behalf of a purported class of purchasers of our ordinary shares between February 20, 2020 and either March 11, 2020 or March 12, 2020. We believe that the allegations contained in the complaints are without merit and intend to defend the complaints vigorously. We cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom. In addition, in March 2020 the Florida Attorney General announced an investigation related to the Company’s marketing during the COVID-19 outbreak. Following the announcement of the investigation by the Florida Attorney General, we received notifications from other attorneys general and governmental agencies that they are conducting similar investigations. The Company is cooperating with these ongoing investigations, the outcomes of which cannot be predicted at this time. Helms-Burton Act In August 2019, two lawsuits were filed against Norwegian Cruise Line Holdings Ltd. in the United States District Court for the Southern District of Florida under Title III of the Cuban Liberty and Solidarity (Libertad) Act of 1996, also known as the Helms-Burton Act. The complaint filed by Havana Docks Corporation alleges it holds an interest in the Havana Cruise Port Terminal and the complaint filed by Javier Garcia-Bengochea alleges that he holds an interest in the Port of Santiago, Cuba, both of which were expropriated by the Cuban Government. The complaints further allege that the Company “trafficked” in those properties by embarking and disembarking passengers at these facilities. The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs. On January 7, 2020, the United States District Court for the Southern District of Florida dismissed the claim by Havana Docks Corporation. On April 14, 2020, the district court granted Havana Docks Corporation’s motion to reconsider and vacated its order dismissing the claim, allowing Havana Docks Corporation to file an amended complaint on April 16, 2020. On April 24, 2020, we filed a motion seeking permission to appeal the district court’s order. We believe we have meritorious defenses to the claims and intend to vigorously defend these matters. As of March 31, 2020, we are unable to reasonably estimate any potential contingent loss from these matters due to a lack of legal precedence. Other In the normal course of our business, various other claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount of our liability is typically limited to our deductible amount. Nonetheless, the ultimate outcome of these claims and lawsuits that are not covered by insurance cannot be determined at this time. We have evaluated our overall exposure with respect to all of our threatened and pending litigation and, to the extent required, we have accrued amounts for all estimable probable losses associated with our deemed exposure. We are currently unable to estimate any other potential contingent losses beyond those accrued, as discovery is not complete nor is adequate information available to estimate such range of loss or potential recovery. However, based on our current knowledge, we do not believe that the aggregate amount or range of reasonably possible losses with respect to these matters will be material to our consolidated results of operations, financial condition or cash flows. We intend to vigorously defend our legal position on all claims and, to the extent necessary, seek recovery. Other Contingencies The Company also has agreements with its credit card processors that govern approximately $1.3 billion at March 31, 2020 in advance ticket sales that have been received by the Company relating to future voyages. These agreements allow the credit card processors to require under certain circumstances, including the existence of a material adverse change, excessive chargebacks and other triggering events, that the Company maintain a reserve which could be satisfied by posting collateral. The Company is in discussions regarding the nature of collateral, if any, relating to these agreements. |
Other Income (Expense), Net
Other Income (Expense), Net | 3 Months Ended |
Mar. 31, 2020 | |
Other Income And Expenses [Abstract] | |
Other Income (Expense), Net | 12. Other Income (Expense), Net For the three months ended March 31, 2020, other income (expense), net was income of $5.8 million primarily due to gains from foreign currency exchange offset by losses on fuel hedges released into earnings as a result of the forecasted transactions no longer being probable. For the three months ended March 31, 2019, other income (expense), net was expense of $0.4 million primarily due to foreign currency exchange losses. |
Income Tax Benefit
Income Tax Benefit | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Benefit | 13. Income Tax Benefit For the three months ended March 31, 2020 and 2019, we had an income tax benefit of $6.2 million and $33.8 million, respectively. For the three months ended March 31, 2020, the tax benefit is due to operating losses and the reversal of a valuation allowance. During 2018, we implemented certain tax restructuring strategies that created our ability to utilize the net operating loss carryforwards of Prestige, for which we had previously provided a full valuation allowance. As a result, we recorded a tax benefit of $35.7 million in connection with the reversal of substantially all of the valuation allowance in March 2019. The Company is currently analyzing the impact of the recent financing transactions on its ability to utilize its net operating losses under Section 382 of the Internal Revenue Code. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 14. Supplemental Cash Flow Information For the three months ended March 31, 2020 and 2019, we had non-cash investing activities in connection with property and equipment of $12.0 million and $9.8 million, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events In May 2020, the Company offered 36,363,636 ordinary shares, par value $0.001 per share to the public at a price of $11.00 per share. The underwriters were offered an option to acquire from us up to 5,454,545 additional shares, which they have exercised. Underwriting discounts and commissions were $0.385 per share. The net proceeds from the offering were $443.9 million after deducting the underwriters’ discounts and commissions. Both NCLH and NCLC undertook a number of actions related to debt financing and equity-linked financing, which are described in |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Liquidity and Management’s Plan Due to the continued spread of COVID-19, growing travel restrictions and limited access to ports around the world, in March 2020, the Company implemented a voluntary suspension of all cruise voyages across its three brands, which has subsequently been extended through June 30, 2020. On March 14, 2020, concurrent with our and the broader cruise industry’s suspension, the U.S. Centers for Disease Control and Prevention (“CDC”) issued a No Sail Order through April 13, 2020. On April 9, 2020, the CDC modified its existing No Sail Order to extend it until the earliest of (a) the expiration of the Secretary of Health and Human Services’ declaration that COVID-19 constitutes a public health emergency, (b) the date the Director of the CDC rescinds or modifies the No Sail Order or (c) 100 days after the order appears on the Federal Register, which would be July 24, 2020. In addition, the duration of any voluntary suspensions we have implemented and resumption of operations outside of the United States will be dependent, in part, on various travel restrictions and travel bans issued by various countries around the world, as well as the availability of ports around the world. Significant events affecting travel, including COVID-19, typically have an impact on the demand for cruise vacations, with the full extent of the impact generally determined by the length of time the event influences travel decisions. We believe the ongoing effects of COVID-19 on our operations and global bookings have had, and will continue to have, a significant impact on our financial results and liquidity, and such negative impact may continue well beyond the containment of such an outbreak. Due to the unknown duration and extent of the outbreak, travel restrictions and advisories, the potential unavailability of ports and/or destinations, unknown cancellations and timing of redeployments and a general impact on consumer sentiment regarding cruise travel, the full effect on our financial performance cannot be quantified at this time, but we expect to report a net loss for the year ending December 31, 2020. Subsequent to March 31, 2020, we have taken steps to improve our liquidity through securing deferrals of existing debt amortization, including through available export credit agencies and related governments, as discussed more fully under Note 8 – “Long-Term Debt”. The Company has received additional financing through debt and equity transactions totaling $1.95 billion in proceeds after underwriting fees. The Company expects to receive another $400.0 million from the transaction with L Catterton upon the satisfaction of certain customary closing conditions. Refer to Note 15 – “Subsequent Events” for further information on the equity financing. The Company has also undertaken several proactive measures to mitigate the financial and operational impacts of COVID-19, through the reduction of capital expenditures and operating expenses. In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. Based on the actions the Company has taken as described above and our resulting current resources, the Company has alleviated the substantial doubt previously disclosed and has sufficient liquidity to satisfy our obligations over the next twelve months Basis of Presentation The accompanying consolidated financial statements are unaudited and, in our opinion, contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire fiscal year. Historically, demand for cruises has been strongest during the Northern Hemisphere’s summer months, although demand for cruises during the summer months of 2020 are expected to continue to be adversely impacted by the COVID-19 pandemic. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2019, which are included in our most recent Annual Report on Form 10-K filed with the SEC, as updated by our Current Report on Form 8-K filed on May 5, 2020. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Earnings Per Share | Earnings Per Share A reconciliation between basic and diluted earnings per share was as follows (in thousands, except share and per share data): Three Months Ended March 31, 2020 2019 Net income (loss) $ (1,880,972) $ 118,157 Basic weighted-average shares outstanding 213,630,798 217,241,473 Dilutive effect of share awards — 1,631,799 Diluted weighted-average shares outstanding 213,630,798 218,873,272 Basic earnings (loss) per share $ (8.80) $ 0.54 Diluted earnings (loss) per share $ (8.80) $ 0.54 For the three months ended March 31, 2020 and 2019, a total of 7.0 million and 5.5 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive. |
Foreign Currency | Foreign Currency The majority of our transactions are settled in U.S. dollars. We remeasure assets and liabilities denominated in foreign currencies at exchange rates in effect at the balance sheet date. Gains or losses resulting from transactions denominated in other currencies are recognized in our consolidated statements of operations within other income, net. We recognized a gain of $19.9 million and a loss of $1.0 million for the three months ended March 31, 2020 and 2019, respectively, related to transactions denominated in other currencies. |
Depreciation and Amortization Expense | Depreciation and Amortization Expense The amortization of deferred financing fees is included in depreciation and amortization expense in the consolidated statements of cash flows; however, for purposes of the consolidated statements of operations they are included in interest expense, net. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provided guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform. The provisions apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2022. We are currently evaluating the impact of ASU 2020-04 on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of reconciliation between basic and diluted EPS | A reconciliation between basic and diluted earnings per share was as follows (in thousands, except share and per share data): Three Months Ended March 31, 2020 2019 Net income (loss) $ (1,880,972) $ 118,157 Basic weighted-average shares outstanding 213,630,798 217,241,473 Dilutive effect of share awards — 1,631,799 Diluted weighted-average shares outstanding 213,630,798 218,873,272 Basic earnings (loss) per share $ (8.80) $ 0.54 Diluted earnings (loss) per share $ (8.80) $ 0.54 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues by destination | Revenue and cash flows are affected by economic factors in various geographical regions. Revenues by destination were as follows (in thousands): Three Months Ended March 31, 2020 2019 North America $ 951,056 $ 982,989 Europe 13,335 33,752 Asia-Pacific 150,921 222,767 South America 76,306 90,303 Other 55,264 73,819 Total revenue $ 1,246,882 $ 1,403,630 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill for each reporting unit | The changes in the carrying amount of goodwill for each reporting unit for the three months ended March 31, 2020 are as follows (in thousands): Reporting Unit Norwegian Regent Cruise Oceania Seven Seas Total Line Cruises Cruises Goodwill Balance, December 31, 2019 $ 403,805 $ 523,026 $ 462,100 $ 1,388,931 Impairment loss (403,805) (523,026) (363,966) (1,290,797) Balance, March 31, 2020 $ — $ — $ 98,134 $ 98,134 |
Schedule of gross carrying amounts of intangible assets, related accumulated amortization and the weighted average amortization periods of intangible assets | average amortization periods of the Company’s intangible assets are listed in the following tables (in thousands, except amortization period): March 31, 2020 Weighted- Average Gross Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years) Customer relationships $ 120,000 $ (112,943) $ 7,057 6.0 License 750 (350) 400 10.0 Total intangible assets subject to amortization $ 120,750 $ (113,293) $ 7,457 December 31, 2019 Weighted- Average Gross Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years) Customer relationships $ 120,000 $ (110,169) $ 9,831 6.0 Licenses 750 (331) 419 10.0 Total intangible assets subject to amortization $ 120,750 $ (110,500) $ 10,250 |
Schedule of aggregate amortization expense | The aggregate amortization expense for intangible assets is as follows (in thousands): Three Months Ended March 31, 2020 2019 Amortization expense $ 2,793 $ 4,622 |
Schedule of estimated aggregate amortization expense | The following table sets forth the Company’s estimated aggregate amortization expense for each of the five years below (in thousands): Amortization Year Ended December 31, Expense 2021 $ 75 2022 75 2023 75 2024 75 2025 44 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease balances | Lease balances were as follows (in thousands): Balance Sheet location March 31, 2020 December 31, 2019 Operating leases Right-of-use assets Other long-term assets $ 229,588 $ 236,604 Current operating lease liabilities Accrued expenses and other liabilities 23,874 39,126 Non-current operating lease liabilities Other long-term liabilities 200,428 207,243 Finance leases Right-of-use assets Property and equipment, net 13,386 13,873 Current finance lease liabilities Current portion of long-term debt 5,304 6,419 Non-current finance lease liabilities Long-term debt 7,895 8,812 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Three Months Ended March 31, 2020 Change Accumulated Change Related to Other Related to Shipboard Comprehensive Cash Flow Retirement Income (Loss) Hedges Plan Accumulated other comprehensive income (loss) at beginning of period $ (295,490) $ (289,362) $ (6,128) Current period other comprehensive loss before reclassifications (305,860) (305,860) — Amounts reclassified into earnings 22,101 21,999 (1) 102 (2) Accumulated other comprehensive income (loss) at end of period $ (579,249) $ (573,223) (3) $ (6,026) Three Months Ended March 31, 2019 Change Accumulated Change Related to Other Related to Shipboard Comprehensive Cash Flow Retirement Income (Loss) Hedges Plan Accumulated other comprehensive income (loss) at beginning of period $ (161,647) $ (157,449) $ (4,198) Current period other comprehensive income before reclassifications 15,152 15,152 — Amounts reclassified into earnings (6,905) (7,000) (1) 95 (2) Accumulated other comprehensive income (loss) at end of period $ (153,400) $ (149,297) $ (4,103) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt instrument interest rate | Margin €529.8 million Breakaway one loan (Norwegian Breakaway) 0.90 % €529.8 million Breakaway two loan (Norwegian Getaway) 1.20 % €590.5 million Breakaway three loan (Norwegian Escape) 1.50 % €729.9 million Breakaway four loan (Norwegian Joy) 1.50 % €710.8 million Seahawk 1 term loan (Norwegian Bliss) 1.00 % €748.7 million Seahawk 2 term loan (Norwegian Encore) 1.00 % |
Schedule of principal repayments on long-term debt including finance lease obligations | Year Amount April 1, 2020 - March 31, 2021 $ 173,797 April 1, 2021 - March 31, 2022 1,742,815 April 1, 2022 - March 31, 2023 872,491 April 1, 2023 - March 31, 2024 2,819,592 April 1, 2024 - March 31, 2025 1,147,007 Thereafter 1,996,325 Total $ 8,752,027 |
Fair Value Measurements and D_2
Fair Value Measurements and Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of derivatives measured at fair value and disclosed by balance sheet location | The derivatives measured at fair value and the respective location in the consolidated balance sheets include the following (in thousands): Assets Liabilities March 31, December 31, March 31, December 31, Balance Sheet Location 2020 2019 2020 2019 Derivative Contracts Designated as Hedging Instruments Fuel contracts Other long-term assets $ — $ 277 $ — $ — Accrued expenses and other liabilities — 2,300 93,109 18,257 Other long-term liabilities — 683 110,085 17,763 Foreign currency contracts Other long-term assets 1,411 — — — Accrued expenses and other liabilities — — 15,581 33,475 Other long-term liabilities — 169 206,917 118,500 Interest rate contracts Accrued expenses and other liabilities — — 7,790 2,178 Other long-term liabilities — — 4,690 1,861 Total derivatives designated as hedging instruments $ 1,411 $ 3,429 $ 438,172 $ 192,034 Derivative Contracts Not Designated as Hedging Instruments Fuel contracts Accrued expenses and other liabilities $ — $ — $ 13,619 $ — Total derivatives not designated as hedging instruments $ — $ — $ 13,619 $ — Total derivatives $ 1,411 $ 3,429 $ 451,791 $ 192,034 |
Schedule of gross and net amounts recognized within assets and liabilities | The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands): Gross Gross Gross Amounts Total Net Amounts March 31, 2020 Amounts Offset Amounts Not Offset Net Amounts Assets $ 1,411 $ — $ 1,411 $ (1,411) $ — Liabilities 451,791 — 451,791 (451,791) — Gross Gross Gross Amounts Total Net Amounts December 31, 2019 Amounts Offset Amounts Not Offset Net Amounts Assets $ 277 $ — $ 277 $ — $ 277 Liabilities 192,034 (3,152) 188,882 (149,863) 39,019 |
Schedule of cash flow hedge accounting on accumulated other comprehensive income (loss) | The effects of cash flow hedge accounting on accumulated other comprehensive income (loss) were as follows (in thousands): Location of Gain (Loss) Reclassified from Accumulated Amount of Gain (Loss) Reclassified Amount of Gain (Loss) Other Comprehensive from Accumulated Other Recognized in Other Income (Loss) into Comprehensive Derivatives Comprehensive Income Income Income (Loss) into Income Three Months Three Months Three Months Three Months Ended Ended Ended Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Fuel contracts $ (198,477) $ 96,508 Fuel $ (6,217) $ 7,518 Fuel contracts — — Other income (expense), net (14,320) — Foreign currency contracts (97,887) (80,278) Depreciation and amortization (1,129) (703) Interest rate contracts (9,496) (1,078) Interest expense, net (333) 185 Total gain (loss) recognized in other comprehensive income $ (305,860) $ 15,152 $ (21,999) $ 7,000 |
Schedule of cash flow hedge accounting on the consolidated financial statements of operations | The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Depreciation Depreciation and Interest Other Income and Interest Fuel Amortization Expense, net ( Expense), net Fuel Amortization Expense, net Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded $ 125,024 $ 198,197 $ 68,907 $ 5,823 $ 98,253 $ 169,741 $ 73,503 Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income Fuel contracts (6,217) — — — 7,518 — — Foreign currency contracts — (1,129) — — — (703) — Interest rate contracts — — (333) — — — 185 Amount of loss reclassified from accumulated other comprehensive income (loss) into income as a result that a forecasted transaction is no longer probable of occurring Fuel contracts — — — (14,320) — — — |
Employee Benefits and Compens_2
Employee Benefits and Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of summary of option activity | Weighted- Number of Share Option Awards Weighted-Average Exercise Price Average Aggregate Time- Performance- Market- Time- Performance- Market- Contractual Intrinsic Based Based Based Based Based Based Term Value Awards Awards Awards Awards Awards Awards (years) (in thousands) Outstanding as of January 1, 2020 4,918,554 115,489 208,333 $ 51.84 $ 59.11 $ 59.43 5.42 $ 33,413 Exercised (48,221) (906) — 44.38 19.00 — Forfeited and cancelled (25,000) — — 56.19 — — Outstanding as of March 31, 2020 4,845,333 114,583 208,333 $ 51.89 $ 59.43 $ 59.43 5.18 $ — |
Schedule of summary of restricted share unit activity | Number of Weighted- Number of Weighted- Number of Weighted- Time-Based Average Grant Performance- Average Grant Market- Average Grant Awards Date Fair Value Based Awards Date Fair Value Based Awards Date Fair Value Non-vested as of January 1, 2020 3,245,625 $ 54.94 1,129,396 $ 56.09 50,000 $ 59.43 Granted 2,392,044 35.86 611,808 (1) 35.59 — — Vested (1,594,003) 54.20 (181,682) 56.33 — — Forfeited or expired (85,667) 50.85 (17,652) 56.77 — — Non-vested as of March 31, 2020 3,957,999 $ 43.80 1,541,870 $ 47.92 50,000 $ 59.43 (1) Number of performance-based restricted share units included assumes maximum achievement of performance targets. |
Schedule of compensation expense recognized for share-based compensation | The compensation expense recognized for share-based compensation for the periods presented include the following (in thousands): Three Months Ended March 31, 2020 2019 Payroll and related expense $ 4,702 $ 3,804 Marketing, general and administrative expense 28,056 23,195 Total share-based compensation expense $ 32,758 $ 26,999 |
Description of Business and O_2
Description of Business and Organization (Details) | Mar. 31, 2020item |
Description Of Business And Organization [Line Items] | |
Number of cruises ships | 28 |
Capacity of ship, berths | 59,150 |
Ships Launching Period Through 2027 | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 9 |
Increased number of berths | 82,000 |
Ships Launching Period In 2022 And 2027 | Project Leonardo Ships | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 6 |
Ships Launching Period Through 2022 And 2025 | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 2 |
Ships Launching Winter 2020 and Fall 2023 | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Liquidity and Management's Plan (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended |
May 31, 2020 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Proceeds from debt and equity financing | $ 1,950 | |
Substantial Doubt about Going Concern, within One Year [true false] | false | |
Forecast | ||
Debt Instrument [Line Items] | ||
Proceeds from debt and equity financing | $ 400 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reconciliation between Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ (1,880,972) | $ 118,157 |
Basic weighted-average shares outstanding | 213,630,798 | 217,241,473 |
Dilutive effect of share awards | 1,631,799 | |
Diluted weighted-average shares outstanding | 213,630,798 | 218,873,272 |
Basic earnings (loss) per share (in dollars per share) | $ (8.80) | $ 0.54 |
Diluted earnings (loss) per share (in dollars per share) | $ (8.80) | $ 0.54 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share | 7 | 5.5 |
Foreign currency transaction (gains) losses | $ 19.9 | $ 1 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 1,246,882 | $ 1,403,630 |
North America | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 951,056 | 982,989 |
Europe | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 13,335 | 33,752 |
Asia-Pacific | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 150,921 | 222,767 |
South America | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 76,306 | 90,303 |
Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 55,264 | $ 73,819 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Number of reportable segments | segment | 1 | |
Receivables from customers included in accounts receivable, net | $ 17.3 | $ 15.3 |
Advanced ticket sales | $ 200 | $ 1,400 |
Percentage refundable on cancellation | 60.00% | |
Revenue recognized included in contract liability | $ 900 | |
Costs to obtain contract | $ 92 | |
Revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Concentration risk, benchmark | No other individual country’s revenues exceed 10% in any given period. | |
Revenue | Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Percentage of revenue attributable to U.S.- sourced passengers | 75.00% | |
Revenue | Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Percentage of revenue attributable to U.S.- sourced passengers | 80.00% |
Intangible Assets - Changes in
Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Line Items] | ||
Balance | $ 1,388,931 | |
Impairment loss | (1,290,797) | |
Balance | 98,134 | |
Tradenames | 500,525 | $ 817,525 |
Norwegian Cruise Line | ||
Goodwill [Line Items] | ||
Balance | 403,805 | |
Impairment loss | (403,805) | |
Oceania Cruises | ||
Goodwill [Line Items] | ||
Balance | 523,026 | |
Impairment loss | (523,026) | |
Impairment of tradenames | 170,000 | |
Regent Seven Seas Cruises | ||
Goodwill [Line Items] | ||
Balance | 462,100 | |
Impairment loss | (363,966) | |
Balance | 98,134 | |
Impairment of tradenames | $ 147,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 120,750 | $ 120,750 |
Accumulated Amortization | (113,293) | (110,500) |
Net Carrying Amount | 7,457 | 10,250 |
Customer relationships | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | 120,000 | 120,000 |
Accumulated Amortization | (112,943) | (110,169) |
Net Carrying Amount | $ 7,057 | $ 9,831 |
Weighted- Average Amortization Period (Years) | 6 years | 6 years |
Licenses | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 750 | $ 750 |
Accumulated Amortization | (350) | (331) |
Net Carrying Amount | $ 400 | $ 419 |
Weighted- Average Amortization Period (Years) | 10 years | 10 years |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 2,793 | $ 4,622 |
Intangible Assets - Future Esti
Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Amortization Expense | |
2021 | $ 75 |
2022 | 75 |
2023 | 75 |
2024 | 75 |
2025 | $ 44 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other long-term assets | ||
Operating leases | ||
Right-of-use assets | $ 229,588 | $ 236,604 |
Operating lease, right-of-use asset - Extensible List | us-gaap:OtherAssetsNoncurrent | |
Accrued expenses and other liabilities | ||
Operating leases | ||
Current operating lease liabilities | $ 23,874 | 39,126 |
Operating lease liability, current - Extensible list | nclh:AccruedLiabilitiesAndOtherLiabilitiesCurrent | |
Other long-term liabilities | ||
Operating leases | ||
Non-current operating lease liabilities | $ 200,428 | 207,243 |
Operating lease liability, non current - Extensible list | us-gaap:OtherLiabilitiesNoncurrent | |
Property and equipment, net | ||
Finance leases | ||
Right-of-use assets | $ 13,386 | 13,873 |
Finance lease, right-of-use asset - Extensible List | us-gaap:PropertyPlantAndEquipmentNet | |
Current portion of long-term debt | ||
Finance leases | ||
Current finance lease liabilities | $ 5,304 | 6,419 |
Finance lease liability, current - Extensible list | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent | |
Long-term debt. | ||
Finance leases | ||
Non-current finance lease liabilities | $ 7,895 | $ 8,812 |
Finance lease liability, noncurrent - Extensible list | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income (loss) at beginning of period | $ (295,490) | $ (161,647) |
Current period other comprehensive income (loss) before reclassifications | (305,860) | 15,152 |
Amounts reclassified into earnings | 22,101 | (6,905) |
Accumulated other comprehensive income (loss) at end of period | (579,249) | (153,400) |
Change Related to Cash Flow Hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income (loss) at beginning of period | (289,362) | (157,449) |
Current period other comprehensive income (loss) before reclassifications | (305,860) | 15,152 |
Amounts reclassified into earnings | 21,999 | (7,000) |
Accumulated other comprehensive income (loss) at end of period | (573,223) | (149,297) |
Amount of loss expected to be reclassified into earnings | 107,600 | |
Change Related to Shipboard Retirement Plan | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income (loss) at beginning of period | (6,128) | (4,198) |
Amounts reclassified into earnings | 102 | 95 |
Accumulated other comprehensive income (loss) at end of period | $ (6,026) | $ (4,103) |
Property and Equipment, net (De
Property and Equipment, net (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Property Plant And Equipment [Abstract] | |
Property plant and equipment net increase due to ship improvement projects | $ 432.2 |
Impairments | $ 25.4 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ / shares in Units, € in Millions | May 08, 2020 | May 31, 2020USD ($)D$ / shares | Apr. 30, 2020EUR (€)installment | Mar. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Apr. 30, 2020USD ($) |
Debt Instrument [Line Items] | ||||||
Long term-debt, reclassified | $ 1,400,000,000 | $ 1,400,000,000 | ||||
Export Credit Backed Securities | ||||||
Debt Instrument [Line Items] | ||||||
Number of installments for amortization | installment | 8 | |||||
$675 Million Senior Secured Revolving Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding | 675,000,000 | 675,000,000 | ||||
Maximum borrowing capacity | $ 675,000,000 | 675,000,000 | ||||
$675 Million Senior Secured Revolving Loan Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.80% | |||||
$675 Million Senior Secured Revolving Loan Facility | Eurocurrency Loans | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.75% | |||||
$675 Million Senior Secured Revolving Loan Facility | Base Rate Loans | Base rate loans | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.75% | |||||
$260 Million Norwegian Jewel Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 260,000,000 | |||||
Private Exchangeable Notes | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price as a percentage of face amount | 100.00% | |||||
Percentage of share price on debt instrument | 250.00% | |||||
Number of specified trading days | D | 20 | |||||
Number of consecutive trading days | D | 30 | |||||
Debt instrument amount | $ 1,000 | |||||
Ordinary share exchange rate | 0.0826446 | |||||
Initial exchange price | $ / shares | $ 12.10 | |||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||||
Export Credit Backed Securities | ||||||
Debt Instrument [Line Items] | ||||||
Debt holiday period | 12 months | |||||
EUR 529.8 Million Breakaway One Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | € | € 529.8 | |||||
EUR 529.8 Million Breakaway One Loan | Six Months London Interbank Offered Rate Libor | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.90% | |||||
EUR 529.8 Million Breakaway Two Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | € | € 529.8 | |||||
EUR 529.8 Million Breakaway Two Loan | Six Months London Interbank Offered Rate Libor | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.20% | |||||
EUR 590.5 Million Breakaway Three Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | € | € 590.5 | |||||
EUR 590.5 Million Breakaway Three Loan | Six Months London Interbank Offered Rate Libor | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% | |||||
EUR 729.9 Million Breakaway Four Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | € | € 729.9 | |||||
EUR 729.9 Million Breakaway Four Loan | Six Months London Interbank Offered Rate Libor | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% | |||||
EUR 710.8 Million Seahawk 1 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | € | € 710.8 | |||||
EUR 710.8 Million Seahawk 1 Term Loan | Six Months London Interbank Offered Rate Libor | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
EUR 748.7 Million Seahawk 2 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | € | € 748.7 | |||||
EUR 748.7 Million Seahawk 2 Term Loan | Six Months London Interbank Offered Rate Libor | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.00% | |||||
Subsequent Event | Export Credit Backed Securities | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding | $ 386,000,000 | |||||
Subsequent Event | $230 Pride of America Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Deferred term | 1 year | |||||
Principal amount | $ 230,000,000 | |||||
Subsequent Event | $230 Pride of America Term Loan | Eurocurrency Loans | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.75% | |||||
Subsequent Event | $230 Pride of America Term Loan | Base Rate Loans | Base rate loans | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.75% | |||||
Subsequent Event | $260 Million Norwegian Jewel Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Annual debt repayment rate | 25 | |||||
Subsequent Event | $260 Million Norwegian Jewel Term Loan | Eurocurrency Loans | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.50% | |||||
Subsequent Event | $260 Million Norwegian Jewel Term Loan | Base Rate Loans | Base rate loans | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% | |||||
Subsequent Event | Private Exchangeable Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 400,000,000 | |||||
Subsequent Event | Private Exchangeable Notes | Accreted Interest [Member] | Debt Instrument, First Year Post Issuance | ||||||
Debt Instrument [Line Items] | ||||||
Interest Rate | 7.00% | |||||
Subsequent Event | Private Exchangeable Notes | Accreted Interest [Member] | Debt Instrument, Four Years Following First Year Post Issuance | ||||||
Debt Instrument [Line Items] | ||||||
Interest Rate | 4.50% | |||||
Subsequent Event | Private Exchangeable Notes | Cash Interest | Debt Instrument, Four Years Following First Year Post Issuance | ||||||
Debt Instrument [Line Items] | ||||||
Interest Rate | 3.00% | |||||
Subsequent Event | Private Exchangeable Notes | Cash Interest | Debt Instrument, Final Year Prior To Maturity | ||||||
Debt Instrument [Line Items] | ||||||
Interest Rate | 7.50% | |||||
Subsequent Event | Senior Secured Notes Due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 675,000,000 | |||||
Original issue discount and private offering | 99.00% | |||||
Interest Rate | 12.25% | |||||
Percentage of principal amount of debt redeemed | 35.00% | |||||
Percentage of thresholds, after percentage | 65.00% | |||||
Subsequent Event | Senior Secured Notes Due 2024 | Debt Redemption Prior To February 15, 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price as a percentage of face amount | 100.00% | |||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||||
Subsequent Event | Senior Secured Notes Due 2024 | Debt Redemption On Or After February 15, 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price as a percentage of face amount | 100.00% | |||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||||
Subsequent Event | Senior Secured Notes Due 2024 | Debt Redemption Prior To February 15, 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price as a percentage of face amount | 112.25% | |||||
Debt Instrument, Redemption Price, Percentage | 112.25% | |||||
Subsequent Event | Exchangeable Senior Secured Notes Due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 862,500,000 | |||||
Interest Rate | 6.00% | |||||
Debt instrument amount | $ 1,000 | |||||
Ordinary share exchange rate | 0.0727273 | |||||
Initial exchange price | $ / shares | $ 13.75 | |||||
Subsequent Event | Deferred Term A Loans | Fifth Amended And Restated Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of outstanding loans held by lender | 87.57% | |||||
Annual debt repayment rate | 25 | |||||
Subsequent Event | Deferred Term A Loans | Fifth Amended And Restated Credit Agreement | Eurocurrency Loans | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.50% | |||||
Subsequent Event | Deferred Term A Loans | Fifth Amended And Restated Credit Agreement | Base Rate Loans | Base rate loans | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% | |||||
NCLC | $875.0 Million Senior Secured Revolving Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding | $ 875,000,000 | $ 875,000,000 | ||||
NCLC | $875.0 Million Senior Secured Revolving Loan Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% |
Long-Term Debt - Summary of Sch
Long-Term Debt - Summary of Scheduled Principal Repayments on Long-Term Debt Including Finance Lease Obligations (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Long Term Debt And Finance Lease Obligations Rolling Maturity [Abstract] | |
April 1, 2020 - March 31, 2021 | $ 173,797 |
April 1, 2021 - March 31, 2022 | 1,742,815 |
April 1, 2022 - March 31, 2023 | 872,491 |
April 1, 2023 - March 31, 2024 | 2,819,592 |
April 1, 2024 - March 31, 2025 | 1,147,007 |
Thereafter | 1,996,325 |
Total | $ 8,752,027 |
Fair Value Measurements and D_3
Fair Value Measurements and Derivatives - Derivatives Measured at Fair Value and Disclosed by Balance Sheet Location (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 1,411 | $ 277 |
Derivative liabilities, fair value | 451,791 | 192,034 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 1,411 | 3,429 |
Derivative liabilities, fair value | 438,172 | 192,034 |
Derivative Contracts Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 13,619 | 0 |
Fuel contracts | Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 277 |
Derivative liabilities, fair value | 0 | 0 |
Fuel contracts | Designated as Hedging Instrument | Accrued expenses and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 2,300 |
Derivative liabilities, fair value | 93,109 | 18,257 |
Fuel contracts | Designated as Hedging Instrument | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 683 |
Derivative liabilities, fair value | 110,085 | 17,763 |
Fuel contracts | Derivative Contracts Not Designated as Hedging Instruments | Accrued expenses and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 13,619 | 0 |
Foreign currency contracts | Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 1,411 | 0 |
Derivative liabilities, fair value | 0 | 0 |
Foreign currency contracts | Designated as Hedging Instrument | Accrued expenses and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 15,581 | 33,475 |
Foreign currency contracts | Designated as Hedging Instrument | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 169 |
Derivative liabilities, fair value | 206,917 | 118,500 |
Interest Rate Swap [Member] | Designated as Hedging Instrument | Accrued expenses and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 7,790 | 2,178 |
Interest Rate Swap [Member] | Designated as Hedging Instrument | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 4,690 | 1,861 |
Total derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 1,411 | 3,429 |
Derivative liabilities, fair value | $ 451,791 | $ 192,034 |
Fair Value Measurements and D_4
Fair Value Measurements and Derivatives - Amounts Recognized within Assets and Liabilities Based on Right of Offset (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Gross Amounts, Assets | $ 1,411 | $ 277 |
Total Net Amounts, Assets | 1,411 | 277 |
Gross Amounts Not Offset, Assets | (1,411) | |
Net Amounts, Assets | 277 | |
Gross Amounts, Liabilities | 451,791 | 192,034 |
Gross Amounts Offset, Liabilities | (3,152) | |
Total Net Amounts, Liabilities | 451,791 | 188,882 |
Gross Amounts Not Offset, Liabilities | $ (451,791) | (149,863) |
Net Amounts, Liabilities | $ 39,019 |
Fair Value Measurements and D_5
Fair Value Measurements and Derivatives - Effects of Derivatives Designated as Cash Flow Hedges (Details) - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | $ (305,860) | $ 15,152 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (21,999) | 7,000 |
Fuel contracts | Fuel | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (198,477) | 96,508 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (6,217) | 7,518 |
Fuel contracts | Other income (expense), net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (14,320) | |
Foreign currency contracts | Depreciation and amortization | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (97,887) | (80,278) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (1,129) | (703) |
Interest Rate Swap [Member] | Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (9,496) | (1,078) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | $ (333) | $ 185 |
Fair Value Measurements and D_6
Fair Value Measurements and Derivatives - Effects of Cash Flow Hedge Accounting on Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments Gain Loss [Line Items] | ||
Fuel | $ 125,024 | $ 98,253 |
Depreciation and amortization | 198,197 | 169,741 |
Interest expense, net | 68,907 | 73,503 |
Other income (expense), net | 5,823 | (434) |
Cash Flow Hedging | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (21,999) | 7,000 |
Cash Flow Hedging | Fuel contracts | Fuel | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (6,217) | 7,518 |
Cash Flow Hedging | Fuel contracts | Other income (expense), net | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (14,320) | |
Cash Flow Hedging | Fuel contracts | Other (Income) Expense, net | ||
Derivative Instruments Gain Loss [Line Items] | ||
Other income (expense), net | (14,320) | |
Cash Flow Hedging | Foreign currency contracts | Depreciation and amortization | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (1,129) | (703) |
Cash Flow Hedging | Interest Rate Swap [Member] | Interest expense, net | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | $ (333) | $ 185 |
Fair Value Measurements and D_7
Fair Value Measurements and Derivatives (Details) kT in Thousands, MT in Millions, $ in Millions, € in Billions | 3 Months Ended | ||
Mar. 31, 2020EUR (€)MTkT | Mar. 31, 2020USD ($)MTkT | Dec. 31, 2019USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of long-term debt | $ 8,595.3 | $ 6,957.8 | |
Fair value of long-term debt in excess of carrying value | $ 156.6 | $ 31.3 | |
Fuel swaps | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative maturing date | Dec. 31, 2023 | ||
Projected fuel purchases | MT | 1.2 | 1.2 | |
Fuel swaps | Derivative Contracts Not Designated as Hedging Instruments | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative maturing date | Oct. 31, 2020 | ||
Projected fuel purchases | kT | 68 | 68 | |
Foreign currency contracts | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Notional amount of derivatives | € 2 | $ 2,200 | |
Interest Rate Swap [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Notional amount of derivatives | $ 700 |
Employee Benefits and Compens_3
Employee Benefits and Compensation Plans (Details) - Awarded On March 2, 2020 shares in Millions | Mar. 02, 2020shares |
Time-Based RSU Awards | Employee | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted share unit awards granted | 2.4 |
Share-based award, vesting period | 3 years |
Performance-based awards | 2.4 |
Performance-Based Option Awards | Members of management team | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted share unit awards granted | 0.6 |
Performance-based awards | 0.6 |
Employee Benefits and Compens_4
Employee Benefits and Compensation Plans - Summary of Share Option Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Weighted-Average Contractual Term (years) | ||
Options Outstanding, Weighted-Average Contractual Term | 5 years 2 months 4 days | 5 years 5 months 1 day |
Aggregate Intrinsic Value | ||
Options Outstanding, Aggregate Intrinsic Value | $ 33,413 | |
Time-Based Option Awards | ||
Number of Share Option Awards | ||
Outstanding as of January 1, 2020 | 4,918,554 | |
Exercised | (48,221) | |
Forfeited and cancelled | (25,000) | |
Outstanding as of March 31, 2020 | 4,845,333 | 4,918,554 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2020 | $ 51.84 | |
Exercised | 44.38 | |
Forfeited and cancelled | 56.19 | |
Outstanding as of March 31, 2020 | $ 51.89 | $ 51.84 |
Performance-Based Option Awards | ||
Number of Share Option Awards | ||
Outstanding as of January 1, 2020 | 115,489 | |
Exercised | (906) | |
Outstanding as of March 31, 2020 | 114,583 | 115,489 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2020 | $ 59.11 | |
Exercised | 19 | |
Outstanding as of March 31, 2020 | $ 59.43 | $ 59.11 |
Market-Based Awards | ||
Number of Share Option Awards | ||
Outstanding as of January 1, 2020 | 208,333 | |
Exercised | 0 | |
Forfeited and cancelled | 0 | |
Outstanding as of March 31, 2020 | 208,333 | 208,333 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2020 | $ 59.43 | |
Exercised | 0 | |
Forfeited and cancelled | 0 | |
Outstanding as of March 31, 2020 | $ 59.43 | $ 59.43 |
Employee Benefits and Compens_5
Employee Benefits and Compensation Plans - Summary of Restricted Unit Activity (Details) - Restricted Share Units | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Time-Based RSU Awards | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2020 | shares | 3,245,625 |
Granted | shares | 2,392,044 |
Vested | shares | (1,594,003) |
Forfeited or expired | shares | (85,667) |
Non-vested as of March 31, 2020 | shares | 3,957,999 |
Weighted- Average Grant-Date Fair Value | |
Non-vested as of January 1, 2020 | $ / shares | $ 54.94 |
Granted | $ / shares | 35.86 |
Vested | $ / shares | 54.20 |
Forfeited or expired | $ / shares | 50.85 |
Non-vested as of March 31, 2020 | $ / shares | $ 43.80 |
Performance-Based Option Awards | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2020 | shares | 1,129,396 |
Granted | shares | 611,808 |
Vested | shares | (181,682) |
Forfeited or expired | shares | (17,652) |
Non-vested as of March 31, 2020 | shares | 1,541,870 |
Weighted- Average Grant-Date Fair Value | |
Non-vested as of January 1, 2020 | $ / shares | $ 56.09 |
Granted | $ / shares | 35.59 |
Vested | $ / shares | 56.33 |
Forfeited or expired | $ / shares | 56.77 |
Non-vested as of March 31, 2020 | $ / shares | $ 47.92 |
Market-Based RSU Awards | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2020 | shares | 50,000 |
Granted | shares | 0 |
Vested | shares | 0 |
Forfeited or expired | shares | 0 |
Non-vested as of March 31, 2020 | shares | 50,000 |
Weighted- Average Grant-Date Fair Value | |
Non-vested as of January 1, 2020 | $ / shares | $ 59.43 |
Granted | $ / shares | 0 |
Vested | $ / shares | 0 |
Forfeited or expired | $ / shares | 0 |
Non-vested as of March 31, 2020 | $ / shares | $ 59.43 |
Employee Benefits and Compens_6
Employee Benefits and Compensation Plans - Summary of Compensation Expense Recognized for Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 32,758 | $ 26,999 |
Payroll and related | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total share-based compensation expense | 4,702 | 3,804 |
Marketing, general and administrative expense | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 28,056 | $ 23,195 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Billions, $ in Billions | Mar. 12, 2020item | Aug. 31, 2019item | Mar. 31, 2020EUR (€)item | Mar. 31, 2020USD ($)item |
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of cruises ships | 28 | 28 | ||
Capacity of ship, berths | 59,150 | 59,150 | ||
Number of class action complaints | 2 | |||
Number of lawsuits filed | 2 | |||
Advance ticket sales with credit card processor | $ | $ 1.3 | |||
Ship Construction Contracts | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of additional ships | 9 | 9 | ||
Aggregate contract price of new ships | € 7.1 | $ 7.8 | ||
Export credit facility financing as percentage of contract price | 80.00% | 80.00% | ||
Ship Construction Contracts | Ships launching period in 2022 through 2027 | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of additional ships | 6 | 6 | ||
Capacity of ship, tons | 140,000 | 140,000 | ||
Capacity of ship, berths | 3,300 | 3,300 | ||
Ship Construction Contracts | Ships order delivery in 2020 and 2023 | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of additional ships | 1 | 1 | ||
Capacity of ship, tons | 55,000 | 55,000 | ||
Capacity of ship, berths | 750 | 750 | ||
Ship Construction Contracts | Ship order delivery in 2022 and 2025 | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of additional ships | 2 | 2 | ||
Capacity of ship, tons | 67,000 | 67,000 | ||
Capacity of ship, berths | 1,200 | 1,200 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Income And Expenses [Abstract] | ||
Other income, net | $ 5,823 | $ (434) |
Income Tax Benefit (Details)
Income Tax Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit (expense) | $ (6,173) | $ (33,798) |
Tax benefit connection with the reversal of substantially all of valuation allowance on net operating loss carryforwards | $ 35,700 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Non-cash investing activity in connection with property and equipment | $ 12 | $ 9.8 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | ||
May 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | |||
Ordinary shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of ordinary shares issued | 36,363,636 | ||
Ordinary shares, par value (in dollars per share) | $ 0.001 | ||
Share Price | 11 | ||
Underwriting discounts and commissions per share | $ 0.385 | ||
Net proceeds from offering | $ 443.9 | ||
Subsequent Event | Over-Allotment Option | |||
Subsequent Event [Line Items] | |||
Number of ordinary shares issued | 5,454,545 |