Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 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 | 275,618,888 | |
Entity Central Index Key | 0001513761 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Total revenue | $ 16,929 | $ 1,664,277 | $ 1,263,811 | $ 3,067,907 |
Cruise operating expense | ||||
Payroll and related | 128,744 | 229,385 | 375,891 | 452,492 |
Fuel | 48,992 | 100,531 | 174,016 | 198,784 |
Total cruise operating expense | 301,652 | 958,424 | 1,295,912 | 1,785,075 |
Other operating expense | ||||
Marketing, general and administrative | 131,436 | 240,901 | 402,125 | 489,843 |
Depreciation and amortization | 179,252 | 156,271 | 377,449 | 326,012 |
Impairment loss | 1,607,797 | |||
Total other operating expense | 310,688 | 397,172 | 2,387,371 | 815,855 |
Operating income (loss) | (595,411) | 308,681 | (2,419,472) | 466,977 |
Non-operating income (expense) | ||||
Interest expense, net | (114,537) | (65,969) | (183,444) | (139,472) |
Other income (expense), net | (14,418) | 3,616 | (8,595) | 3,182 |
Total non-operating income (expense) | (128,955) | (62,353) | (192,039) | (136,290) |
Net income (loss) before income taxes | (724,366) | 246,328 | (2,611,511) | 330,687 |
Income tax benefit (expense) | 9,123 | (6,138) | 15,296 | 27,660 |
Net income (loss) | $ (715,243) | $ 240,190 | $ (2,596,215) | $ 358,347 |
Weighted-average shares outstanding | ||||
Basic (in shares) | 239,342,745 | 215,426,441 | 226,486,772 | 216,328,943 |
Diluted (in shares) | 239,342,745 | 216,810,766 | 226,486,772 | 217,837,005 |
Earnings (loss) per share | ||||
Basic (in dollars per share) | $ (2.99) | $ 1.11 | $ (11.46) | $ 1.66 |
Diluted (in dollars per share) | $ (2.99) | $ 1.11 | $ (11.46) | $ 1.65 |
Passenger ticket | ||||
Revenue | ||||
Total revenue | $ 13,835 | $ 1,179,404 | $ 854,626 | $ 2,152,677 |
Onboard and other | ||||
Revenue | ||||
Total revenue | 3,094 | 484,873 | 409,185 | 915,230 |
Cruise operating expense | ||||
Total cruise operating expense | 3,188 | 107,063 | 78,161 | 186,476 |
Commissions, transportation and other | ||||
Cruise operating expense | ||||
Total cruise operating expense | 34,601 | 297,691 | 366,969 | 526,955 |
Food | ||||
Cruise operating expense | ||||
Total cruise operating expense | 6,997 | 54,347 | 56,213 | 109,392 |
Other | ||||
Cruise operating expense | ||||
Total cruise operating expense | $ 79,130 | $ 169,407 | $ 244,662 | $ 310,976 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (715,243) | $ 240,190 | $ (2,596,215) | $ 358,347 |
Other comprehensive income (loss): | ||||
Shipboard Retirement Plan | 102 | 94 | 204 | 189 |
Cash flow hedges: | ||||
Net unrealized gain (loss) | 54,478 | (17,189) | (251,382) | (2,037) |
Amount realized and reclassified into earnings | 28,782 | (9,274) | 50,781 | (16,274) |
Total other comprehensive income (loss) | 83,362 | (26,369) | (200,397) | (18,122) |
Total comprehensive income (loss) | $ (631,881) | $ 213,821 | $ (2,796,612) | $ 340,225 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 2,259,949 | $ 252,876 |
Accounts receivable, net | 74,213 | 75,109 |
Inventories | 82,263 | 95,427 |
Prepaid expenses and other assets | 334,243 | 306,733 |
Total current assets | 2,750,668 | 730,145 |
Property and equipment, net | 13,488,514 | 13,135,337 |
Goodwill | 98,134 | 1,388,931 |
Tradenames | 500,525 | 817,525 |
Other long-term assets | 690,218 | 612,661 |
Total assets | 17,528,059 | 16,684,599 |
Current liabilities: | ||
Current portion of long-term debt | 337,338 | 746,358 |
Accounts payable | 484,927 | 100,777 |
Accrued expenses and other liabilities | 648,216 | 782,275 |
Advance ticket sales | 1,113,374 | 1,954,980 |
Total current liabilities | 2,583,855 | 3,584,390 |
Long-term debt | 10,011,872 | 6,055,335 |
Other long-term liabilities | 595,307 | 529,295 |
Total liabilities | 13,191,034 | 10,169,020 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Ordinary shares, $0.001 par value; 490,000,000 shares authorized; 280,798,331 shares issued and 256,347,472 shares outstanding at June 30, 2020 and 237,533,270 shares issued and 213,082,411 shares outstanding at December 31, 2019 | 281 | 237 |
Additional paid-in capital | 4,851,781 | 4,235,690 |
Accumulated other comprehensive income (loss) | (495,887) | (295,490) |
Retained earnings | 1,234,776 | 3,829,068 |
Treasury shares (24,450,859 at June 30, 2020 and December 31, 2019, at cost) | (1,253,926) | (1,253,926) |
Total shareholders' equity | 4,337,025 | 6,515,579 |
Total liabilities and shareholders' equity | $ 17,528,059 | $ 16,684,599 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 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 | 280,798,331 | 237,533,270 |
Ordinary shares, outstanding | 256,347,472 | 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 | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ (2,596,215) | $ 358,347 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 379,375 | 326,471 |
Impairment loss | 1,607,797 | |
Deferred income taxes, net | (14,458) | (29,793) |
Loss on derivatives | 8,294 | |
Loss on extinguishment of debt | 5,014 | 3,988 |
Provision for bad debts and inventory obsolescence | 10,359 | 1,057 |
Gain on involuntary conversion of assets | (1,403) | (2,810) |
Share-based compensation expense | 55,147 | 56,650 |
Net foreign currency adjustments | 160 | (716) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,108) | (15,121) |
Inventories | 11,996 | (1,342) |
Prepaid expenses and other assets | (115,066) | (57,929) |
Accounts payable | 369,519 | (81,690) |
Accrued expenses and other liabilities | (202,547) | (74,470) |
Advance ticket sales | (844,244) | 558,579 |
Net cash provided by (used in) operating activities | (1,328,380) | 1,041,221 |
Cash flows from investing activities | ||
Additions to property and equipment, net | (725,477) | (413,888) |
Cash received on settlement of derivatives | 289 | |
Cash paid on settlement of derivatives | (28,606) | |
Other | 2,519 | 4,047 |
Net cash used in investing activities | (751,564) | (409,552) |
Cash flows from financing activities | ||
Repayments of long-term debt | (207,863) | (2,808,615) |
Proceeds from long-term debt | 3,962,655 | 2,652,000 |
Common share issuance proceeds, net | 441,935 | |
Proceeds from employee related plans | 4,100 | 11,368 |
Net share settlement of restricted share units | (15,318) | (20,830) |
Purchases of treasury shares | (200,071) | |
Early redemption premium | (117) | |
Deferred financing fees | (94,559) | (9,330) |
Net cash provided by (used in) financing activities | 4,090,950 | (375,595) |
Effect of exchange rates on cash and cash equivalents | (3,933) | |
Net increase in cash and cash equivalents | 2,007,073 | 256,074 |
Cash and cash equivalents at beginning of period | 252,876 | 163,851 |
Cash and cash equivalents at end of period | $ 2,259,949 | $ 419,925 |
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 | 56,650 | 56,650 | ||||
Issuance of shares under employee related plans | 2 | 11,366 | 11,368 | |||
Treasury shares | (200,071) | (200,071) | ||||
Net share settlement of restricted share units | (20,830) | (20,830) | ||||
Other comprehensive income (loss), net | (18,122) | (18,122) | ||||
Net income (loss) | 358,347 | 358,347 | ||||
Balance at Jun. 30, 2019 | 237 | 4,176,825 | (179,769) | 3,257,187 | (1,104,137) | 6,150,343 |
Balance at Mar. 31, 2019 | 237 | 4,145,530 | (153,400) | 3,016,997 | (1,104,062) | 5,905,302 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 29,651 | 29,651 | ||||
Issuance of shares under employee related plans | 3,624 | 3,624 | ||||
Treasury shares | (75) | (75) | ||||
Net share settlement of restricted share units | (1,980) | (1,980) | ||||
Other comprehensive income (loss), net | (26,369) | (26,369) | ||||
Net income (loss) | 240,190 | 240,190 | ||||
Balance at Jun. 30, 2019 | 237 | 4,176,825 | (179,769) | 3,257,187 | (1,104,137) | 6,150,343 |
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 | 55,147 | 55,147 | ||||
Issuance of shares under employee related plans | 2 | 4,098 | 4,100 | |||
Common share issuance proceeds, net | 42 | 440,924 | 440,966 | |||
Net share settlement of restricted share units | (15,318) | (15,318) | ||||
Beneficial conversion feature | 131,240 | 131,240 | ||||
Other comprehensive income (loss), net | (200,397) | (200,397) | ||||
Net income (loss) | (2,596,215) | (2,596,215) | ||||
Balance at Jun. 30, 2020 | 281 | 4,851,781 | (495,887) | 1,234,776 | (1,253,926) | 4,337,025 |
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] | ||||||
Share-based compensation | 22,389 | 22,389 | ||||
Common share issuance proceeds, net | 42 | 440,924 | 440,966 | |||
Net share settlement of restricted share units | (343) | (343) | ||||
Beneficial conversion feature | 131,240 | 131,240 | ||||
Other comprehensive income (loss), net | 83,362 | 83,362 | ||||
Net income (loss) | (715,243) | (715,243) | ||||
Balance at Jun. 30, 2020 | $ 281 | $ 4,851,781 | $ (495,887) | 1,234,776 | $ (1,253,926) | 4,337,025 |
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 | 6 Months Ended |
Jun. 30, 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 June 30, 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. Due to the novel coronavirus (“COVID-19”), we have temporarily suspended global cruise voyages through October 31, 2020. We refer you to Note 2 – “Summary of Significant Accounting Policies” for further information. We have one Explorer Class Ship on order for delivery in 2023. We have two Allura Class Ships on order for delivery in 2023 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. The impacts of COVID-19 on the shipyards where our ships are under construction (or will be constructed) have resulted in some delays in expected ship deliveries, and the impacts of COVID-19 could result in additional delays in ship deliveries in the future, which may be prolonged. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 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 October 31, 2020. On March 14, 2020, concurrent with our and the broader cruise industry’s original suspension, the U.S. Centers for Disease Control and Prevention (“CDC”) issued a No Sail Order through April 13, 2020, which was subsequently extended through July 24, 2020. On July 16, 2020, the CDC extended its No Sail Order 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 based on specific public health or other considerations or (c) September 30, 2020. In addition, the duration of any voluntary suspensions we have implemented and the resumption of operations outside of the United States will be dependent, in part, on the severity and duration of the COVID-19 pandemic, the status of the CDC’s No Sail Order, the lifting of 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 COVID-19 pandemic, 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 and financial condition cannot be quantified at this time, but we expect to report a net loss for the year ending December 31, 2020. Since March 2020, we have taken several actions to bolster our financial condition while our global cruise voyages are suspended. In March 2020, NCLC borrowed the full amount of $1.55 billion under its $875 million Revolving Loan Facility and its $675 million Epic Credit Facility, dated as of March 5, 2020. million was used to repay in full and terminate the Epic Credit Facility. Refer to Note 8 – “Long-Term Debt” for further information on the debt financings and Note 16 – “Subsequent Events” for further information on the equity financing. The Company has also undertaken several proactive cost reduction and cash conservation measures to mitigate the financial and operational impacts of COVID-19, through the reduction of capital expenditures and operating expenses, including food, fuel, insurance, port charges and reduced crew manning of vessels during the suspension, resulting in lower crew payroll expense. In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , 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 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; however, demand for cruises during the summer months of 2020 has been materially 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 July 8, 2020. Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. Earnings (Loss) 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net income (loss) $ (715,243) $ 240,190 $ (2,596,215) $ 358,347 Basic weighted-average shares outstanding 239,342,745 215,426,441 226,486,772 216,328,943 Dilutive effect of share awards — 1,384,325 — 1,508,062 Diluted weighted-average shares outstanding 239,342,745 216,810,766 226,486,772 217,837,005 Basic earnings (loss) per share $ (2.99) $ 1.11 $ (11.46) $ 1.66 Diluted earnings (loss) per share $ (2.99) $ 1.11 $ (11.46) $ 1.65 For the three months ended June 30, 2020 and 2019, a total of 59.2 million and 3.6 million shares, respectively, and for the six months ended June 30, 2020 and 2019, a total of 33.1 million and 4.5 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 loss of $10.2 million and $3.3 million for the three months ended June 30, 2020 and 2019, respectively, and a gain of $9.7 million and a loss of $4.3 million for the six months ended June 30, 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 | 6 Months Ended |
Jun. 30, 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 North America $ 3,366 $ 968,466 $ 954,422 $ 1,951,455 Europe 9,701 508,435 23,036 542,187 Asia-Pacific — 67,239 150,921 290,006 South America — 3,765 76,306 94,068 Other 3,862 116,372 59,126 190,191 Total revenue $ 16,929 $ 1,664,277 $ 1,263,811 $ 3,067,907 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 June 30, 2020 and December 31, 2019, our receivables from customers were $4.5 million and $15.3 million, respectively. Beginning 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 or 15 days, depending on the brand, 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 specified time periods, 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 June 30, 2020 and December 31, 2019, our contract liabilities were $66.1 million and $1.4 billion, respectively. Of the amounts included within contract liabilities as of June 30, 2020, approximately 40% were refundable in accordance with our cancellation policies. For the six months ended June 30, 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 due to COVID-19, approximately $38.6 million and $130.6 million in costs to obtain these contracts, consisting of protected commissions and credit card fees, were recognized in earnings during the three and six months ended June 30, 2020, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 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 October 31, 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 and Derivatives” for information on our valuation assumptions. The changes in the carrying amount of goodwill for each reporting unit for the six months ended June 30, 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, June 30, 2020 $ — $ — $ 98,134 $ 98,134 We also 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): June 30, 2020 Weighted- Average Gross Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years) Customer relationships $ 120,000 $ (115,716) $ 4,284 6.0 License 750 (369) 381 10.0 Total intangible assets subject to amortization $ 120,750 $ (116,085) $ 4,665 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Amortization expense $ 2,792 $ 4,622 $ 5,585 $ 9,244 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 | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | 5. Leases In April 2020, the FASB issued interpretive guidance relating to the accounting for lease concessions provided as a result of COVID-19. In this guidance, entities can elect not to apply lease modification accounting with respect to such lease concessions and instead, treat the concession as if it was a part of the existing contract. The Company has elected to not evaluate leases under the lease modification accounting framework for concessions that result from effects of the COVID-19 pandemic. In relation to our rights to use port facilities, we have elected the approach consistent with resolving a contingency, which allows us to remeasure the lease liability and recognize the amount of change in the lease liability as an adjustment to the carrying amount of the associated right-of-use asset. As the full amount of the concession will not be determinable until the force majeure period under the related arrangements have ended, the contingency has not been resolved as of June 30, 2020. During the contingency period, we are recognizing lease expense for these port facilities as incurred. Lease balances were as follows (in thousands): Balance Sheet location June 30, 2020 December 31, 2019 Operating leases Right-of-use assets Other long-term assets $ 228,792 $ 236,604 Current operating lease liabilities Accrued expenses and other liabilities 29,677 39,126 Non-current operating lease liabilities Other long-term liabilities 193,585 207,243 Finance leases Right-of-use assets Property and equipment, net 12,899 13,873 Current finance lease liabilities Current portion of long-term debt 5,698 6,419 Non-current finance lease liabilities Long-term debt 6,913 8,812 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 6. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) for the six months ended June 30, 2020 was as follows (in thousands): Six Months Ended June 30, 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 (251,382) (251,382) — Amounts reclassified into earnings 50,985 50,781 (1) 204 (2) Accumulated other comprehensive income (loss) at end of period $ (495,887) $ (489,963) (3) $ (5,924) Accumulated other comprehensive income (loss) for the six months ended June 30, 2019 was as follows (in thousands): Six Months Ended June 30, 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 loss before reclassifications (2,037) (2,037) — Amounts reclassified into earnings (16,085) (16,274) (1) 189 (2) Accumulated other comprehensive income (loss) at end of period $ (179,769) $ (175,760) $ (4,009) (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 $83.4 million of loss expected to be reclassified into earnings in the next 12 months. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, net | 7. Property and Equipment, net Property and equipment, net increased $353.2 million for the six months ended June 30, 2020 primarily due to the delivery of Seven Seas Splendor in January 2020 and ship improvement projects slightly offset by a $25.5 million impairment of projects that will not be completed, which has been recognized in depreciation and amortization expense. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | 8. Long-Term Debt Revolving Credit Facilities In March 2020, NCLC had borrowed the full amount of $875 million under its existing Revolving Loan Facility maturing on January 2, 2024. As of June 30, 2020 borrowings under the Revolving Loan Facility bear interest at LIBOR plus a margin of 1.50%. 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% Modifications In April 2020, NCLC amended an aggregate amount of $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 its $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 to January 10, 2022. From January 10, 2021 to January 10, 2022, the loan shall accrue interest at a per annum rate based on LIBOR plus a margin of 1.75% in the case of Eurocurrency loans or at a per annum rate based on the base rate plus a margin of 0.75% in the case of base rate loans. 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 certain debt and equity financings, 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. 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 (the “Term A Deferring Lenders”). This revised facility provides that, among other things, (a) amortization payments due within the first year after effectiveness on the loans under the term A loans (the “Term A Loans”) held by the Term A Deferring Lenders 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) that are held by the Term A Deferring Lenders 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. The Term A Loans that are held by lenders other than the Term A Deferring Lenders shall constitute a separate class of loans with the same terms as the Term A Loans under the Fourth Amended and Restated Credit Agreement. In June 2020, NCLC amended the credit facilities secured by Seven Seas Explorer, Seven Seas Splendor, Riviera, Marina, Leonardo One and Leonardo Two to defer amortization with respect to certain of the debt outstanding under the agreements (the “Supplemental Agreements”). The amendments for the Seven Seas Explorer, Seven Seas Splendor, Riviera, Marina, Leonardo One and Leonardo Two facilities summarized below provide $156 million of incremental liquidity to the Company through March 2021 and are subject to certain customary conditions. The Supplemental Agreements of Seven Seas Explorer, Seven Seas Splendor, Riviera, and Marina provide that, among other things, (a) amortization payments due during the Deferral Period on the loans will be deferred and (b) the principal amount so deferred will constitute a separate tranche of loans (the “Deferred Loans”). The Deferred Loans will accrue interest at a floating rate per annum based on six-month LIBOR plus a margin as follows: Margin Explorer newbuild loan 2.80 % Splendor newbuild loan 1.75 % Marina newbuild loan 0.55 % Riviera newbuild loan 0.55 % After the end of the Deferral Period, the Deferred Loans will amortize in an aggregate principal amount equal to 25% per annum of the Deferred Loans, in semiannual installments. Any breach of financial covenants under each respective facility during the Deferral Period under the Supplemental Agreements will not constitute an event of default. In addition, consistent with our amendments to our Hermes-backed credit facilities described above, additional restrictions on restricted payments and certain other covenants were added. The above noted amendments resulted in aggregate modification costs of $16.2 million and a loss on extinguishment of debt of $5.0 million, which are recognized in interest expense, net. Secured Notes In May 2020, NCLC conducted a private offering of $675.0 million aggregate principal amount of 12.25% senior secured notes due May 15, 2024 (the “2024 Senior Secured Notes”) at 99% original issue discount. The 2024 Senior Secured Notes 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 2024 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 2024 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 prior to February 15, 2022, NCLC may choose to redeem up to 35% of the aggregate principal amount of the 2024 Senior Secured Notes, with the net proceeds of certain equity offerings, subject to certain restrictions, at a redemption price equal to 112.25% of the principal amount of the 2024 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 2024 Senior Secured Notes issued remains outstanding following such redemption. The 2024 Senior Secured Notes are 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 2024 Senior Secured Notes are also guaranteed by our subsidiaries that own the property that secures the 2024 Senior Secured Notes as well as certain additional subsidiaries whose assets will not secure the 2024 Senior Secured Notes. The indenture governing the 2024 Senior Secured Notes includes requirements that, 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 their assets. Exchangeable Notes In May 2020, NCLC conducted a private offering of $862.5 million aggregate principal amount of 6.00% exchangeable senior notes due May 15, 2024 (the “2024 Exchangeable Notes”). The 2024 Exchangeable Notes are guaranteed by NCLH on a senior basis. Holders may exchange their 2024 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 2024 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 2024 Exchangeable Notes (equivalent to an initial exchange price of approximately $13.75 per ordinary share). The maximum exchange rate is 89.4454 and reflects potential adjustments to the initial exchange rate, which would only be made in the event of certain make-whole fundamental changes or tax redemption events. The maximum exchange rate referred to above is also subject to adjustment for any stock split, stock dividend or similar transaction. The 2024 Exchangeable Notes pay interest at 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 June 1, 2026 (the “Private Exchangeable Notes”). The Private Exchangeable Notes Transaction closed on May 28, 2020. The Private Exchangeable Notes 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 has certain registration rights in respect of NCLH’s ordinary shares underlying the Private Exchangeable Notes and is subject to certain customary transfer, voting and standstill restrictions. The Private Exchangeable Notes are 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). The maximum exchange rate is 90.9090 and reflects potential adjustments to the initial exchange rate, which would only be made in the event of certain make-whole fundamental changes or tax redemption events. The maximum exchange rate referred to above is also subject to adjustment for any stock split, stock dividend or similar transaction. 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. The Private Exchangeable Notes contain a beneficial conversion feature, which resulted from a significant increase in our share price between the execution of the agreement and the issuance of the notes. A beneficial conversion feature is a nondetachable conversion feature that is “in-the-money” at the commitment date. The in-the-money portion, also known as the intrinsic value of the option, is recorded in equity, with an offsetting discount to the carrying amount of convertible debt to which it is attached. The discount is amortized to interest expense over the life of the debt with adjustments to amortization upon full or partial conversions of the debt. The beneficial conversion feature for the Private Exchangeable Notes is $131.2 million and is recognized within additional paid-in capital. The net carrying amounts of the liability components of our exchangeable notes consist of the following (in thousands): June 30, 2020 Principal amount $ 1,262,500 Less: Unamortized debt discount, including deferred financing fees (173,577) Net carrying value $ 1,088,923 The remaining period over which the unamortized debt discount will be recognized as non-cash interest expense is 3.9 years and 5.9 years for the 2024 Exchangeable Notes and Private Exchangeable Notes, respectively. The following table presents the interest expense recognized related to the exchangeable notes (in thousands): Three and Six Months Ended June 30, 2020 Interest expense, including amortization of debt discounts and coupon interest $ 12,529 The effective interest rate is 7.09% and 17.45% for the 2024 Exchangeable Notes and the Private Exchangeable Notes, respectively. As of June 30, 2020, the if-converted value above par was $143.1 million on available shares of 33.1 million and $168.1 million on available shares of 62.7 million for the Private Exchangeable Notes and 2024 Exchangeable Notes, respectively. Debt Repayments The following are scheduled principal repayments on our long-term debt including finance lease obligations as of June 30, 2020 for each of the next five years (in thousands): Year Amount July 1, 2020 - June 30, 2021 $ 337,338 July 1, 2021 - June 30, 2022 1,858,011 July 1, 2022 - June 30, 2023 775,009 July 1, 2023 - June 30, 2024 4,389,872 July 1, 2024 - June 30, 2025 1,113,479 Thereafter 2,215,306 Total $ 10,689,015 Debt Covenants At June 30, 2020, we were in compliance with all of our debt covenants. As part of the Hermes debt holiday and the Supplemental Agreements, we have obtained lender consents to waive compliance with 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. July Offerings In July 2020, NCLC conducted a private offering of $750.0 million aggregate principal amount of 10.25% senior secured notes due February 1, 2026 (the “2026 Senior Secured Notes”). The 2026 Senior Secured Notes pay interest at 10.25% per annum, semiannually on February 1 and August 1 of each year, commencing on February 1, 2021, to holders of record at the close of business on the immediately preceding January 15 and July 15, respectively. NCLC may redeem the 2026 Senior Secured Notes, in whole or part, at any time prior to August 1, 2023, 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 2026 Senior Secured Notes, in whole or in part, on or after August 1, 2023, at the redemption prices set forth in the indenture for the 2026 Senior Secures Notes plus accrued and unpaid interest to, but excluding, the redemption date. At any time prior to August 1, 2023, NCLC may choose to redeem up to 35% of the aggregate principal amount of the 2026 Senior Secured Notes with the net proceeds of certain equity offerings, subject to certain restrictions, at a redemption price equal to 110.25% of the principal amount of the 2026 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 2026 Senior Secured Notes issued remains outstanding following such redemption. NCLC used a portion of the proceeds from the 2026 Senior Secured Notes to repay the $675 million plus accrued and unpaid interest outstanding under the Epic Credit Facility, which was secured by the Norwegian Epic. Following the termination of the Epic Credit Facility, the vessel owned and operated by Norwegian Epic, Ltd. was released as collateral, thereby enabling the 2026 Senior Secured Notes and certain of the related guarantees to be secured by a first-priority security interest in, among other things and subject to certain agreed security principles, the Norwegian Epic. The indenture governing the 2026 Senior Secured Notes includes requirements that, 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 their assets. Also in July 2020, NCLC conducted a private offering of $450.0 million aggregate principal amount of 5.375% exchangeable senior notes due August 1, 2025 (the “2025 Exchangeable Notes”). The 2025 Exchangeable Notes are guaranteed by NCLH on a senior basis. Holders may exchange their 2025 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 2025 Exchangeable Notes, into a number of NCLH’s ordinary shares based on the exchange rate. The exchange rate will initially be 53.3333 ordinary shares per $1,000 principal amount of 2025 Exchangeable Notes (equivalent to an initial exchange price of approximately $18.75 per ordinary share). The maximum exchange rate is 66.6666 and reflects potential adjustments to the initial exchange rate, which would only be made in the event of certain make-whole fundamental changes or tax redemption events. The maximum exchange rate referred to above is also subject to adjustment for any stock split, stock dividend or similar transaction. The 2025 Exchangeable Notes pay interest at |
Fair Value Measurements and Der
Fair Value Measurements and Derivatives | 6 Months Ended |
Jun. 30, 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 June 30, 2020, we had fuel swaps which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 1.1 million metric tons of our projected fuel purchases, maturing through December 31, 2023. As of June 30, 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 63 thousand metric tons of fuel as these forecasted transactions were no longer probable of occurring. The agreements mature through December 31, 2020. As of June 30, 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 June 30, 2020. As of June 30, 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 June 30, 2020. The derivatives measured at fair value and the respective location in the consolidated balance sheets include the following (in thousands): Assets Liabilities June 30, December 31, June 30, 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 67,658 18,257 Other long-term liabilities — 683 77,694 17,763 Foreign currency contracts Prepaid expenses and other assets 180 — — — Other long-term assets 4,055 — — — Accrued expenses and other liabilities — — 30,151 33,475 Other long-term liabilities — 169 167,517 118,500 Interest rate contracts Accrued expenses and other liabilities — — 8,820 2,178 Other long-term liabilities — — 3,009 1,861 Total derivatives designated as hedging instruments $ 4,235 $ 3,429 $ 354,849 $ 192,034 Derivative Contracts Not Designated as Hedging Instruments Fuel contracts Accrued expenses and other liabilities $ — $ — $ 8,194 $ — Total derivatives not designated as hedging instruments $ — $ — $ 8,194 $ — Total derivatives $ 4,235 $ 3,429 $ 363,043 $ 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 June 30, 2020 Amounts Offset Amounts Not Offset Net Amounts Assets $ 4,235 $ — $ 4,235 $ (4,235) $ — Liabilities 363,043 — 363,043 (363,043) — 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 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Fuel contracts $ 27,769 $ (16,577) Fuel $ (13,878) $ 9,885 Fuel contracts — — Other income (expense), net (11,964) — Foreign currency contracts 27,694 4,181 Depreciation and amortization (1,266) (703) Interest rate contracts (985) (4,793) Interest expense, net (1,674) 92 Total gain (loss) recognized in other comprehensive income $ 54,478 $ (17,189) $ (28,782) $ 9,274 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 Six Months Six Months Six Months Six Months Ended Ended Ended Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Fuel contracts $ (170,708) $ 79,931 Fuel $ (20,095) $ 17,403 Fuel contracts — — Other income (expense), net (26,284) — Foreign currency contracts (70,193) (76,097) Depreciation and amortization (2,395) (1,406) Interest rate contracts (10,481) (5,871) Interest expense, net (2,007) 277 Total gain (loss) recognized in other comprehensive income $ (251,382) $ (2,037) $ (50,781) $ 16,274 The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands): Three Months Ended June 30, 2020 Three Months Ended June 30, 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 $ 48,992 $ 179,252 $ 114,537 $ (14,418) $ 100,531 $ 156,271 $ 65,969 Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income Fuel contracts (13,878) — — — 9,885 — — Foreign currency contracts — (1,266) — — — (703) — Interest rate contracts — — (1,674) — — — 92 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 — — — (11,964) — — — Six Months Ended June 30, 2020 Six Months Ended June 30, 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 $ 174,016 $ 377,449 $ 183,444 $ (8,595) $ 198,784 $ 326,012 $ 139,472 Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income Fuel contracts (20,095) — — — 17,403 — — Foreign currency contracts — (2,395) — — — (1,406) — Interest rate contracts — — (2,007) — — — 277 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 — — — (26,284) — — — The effects of derivatives not designated as hedging instruments on the consolidated statements of operations include the following (in thousands): Amount of Gain (Loss) Recognized in Income Three Months Ended Six Months Ended June 30, June 30, Location of Gain (Loss) 2020 2019 2020 2019 Derivatives not designated as hedging instruments Fuel contracts Other income (expense), net $ 3,646 $ — $ 3,646 $ — Long-Term Debt As of June 30, 2020 and December 31, 2019, the fair value of our long-term debt, including the current portion, was $11,142.8 million and $6,957.8 million, respectively, which was $590.2 million higher and $31.3 million higher, respectively, than the carrying values, excluding deferred financing costs. 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 revolving and term loan facilities was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities. The fair value of our exchangeable notes considers observable risk-free rates; credit spreads of the same of similar instruments; and share prices, tenors, and historical and implied volatilities which are sourced from observable market data. The inputs are considered to be Level 2 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 or from an increase in share values. 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 used discounted future cash flows and other market data to determine the fair value of the reporting units at March 31, 2020, which are all considered Level 3 inputs. Our discounted cash flow valuation reflected 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 used 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 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 | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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 (163,792) — — 50.39 — — Outstanding as of June 30, 2020 4,706,541 114,583 208,333 51.97 59.43 59.43 4.93 — 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 six months ended June 30, 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 2,396,824 35.81 611,808 (1) 35.59 — — Vested (1,599,412) 54.20 (181,682) 56.33 — — Forfeited or expired (186,914) 47.45 (63,026) 47.45 — — Non-vested as of June 30, 2020 3,856,123 43.72 1,496,496 48.04 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Payroll and related expense $ 5,029 $ 4,681 $ 9,731 $ 8,485 Marketing, general and administrative expense 17,360 24,970 45,416 48,165 Total share-based compensation expense $ 22,389 $ 29,651 $ 55,147 $ 56,650 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 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 2023 and 2025. Each of the Allura Class Ships will be approximately 67,000 Gross Tons and 1,200 Berths. The impacts of COVID-19 on the shipyards where our ships are under construction (or will be constructed) have resulted in some delays in expected ship deliveries, and the impacts of COVID-19 could result in additional delays in ship deliveries in the future, which may be prolonged. The combined contract prices of the nine ships on order for delivery as of June 30, 2020 was approximately €7.1 billion, or $8.0 billion based on the euro/U.S. dollar exchange rate as of June 30, 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. On July 31, 2020, a consolidated amended class action complaint was filed by lead plaintiff’s counsel. The complaint asserts 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. The complaint seeks 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 March 10, 2020. We believe that the allegations contained in the complaint are without merit and intend to defend the complaint vigorously. We cannot predict at this point the length of time that this action 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 On August 27, 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 which was subsequently denied. We believe we have meritorious defenses to the claims and intend to vigorously defend these matters. As of June 30, 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 $0.9 billion at June 30, 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. Currently, we have agreed to provide a reserve consisting of $70 million of cash and preliminarily agreed to provide second priority liens on certain ships with a collective equity value of approximately $700 million based on appraisals as of December 31, 2019, which could be increased or decreased based on certain conditions. If we do not meet an agreed upon minimum liquidity in the future, we may be required to pledge additional collateral and/or post cash reserves or take other actions that may reduce our liquidity. Collateral may be released upon satisfaction of certain financial metrics. |
Other Income (Expense), Net
Other Income (Expense), Net | 6 Months Ended |
Jun. 30, 2020 | |
Other Income And Expenses [Abstract] | |
Other Income (Expense), Net | 12. Other Income (Expense), Net For the three months ended June 30, 2020, other income (expense), net consisted of an expense of $14.4 million primarily due to losses from foreign currency exchange and losses on fuel hedges released into earnings as a result of the forecasted transactions no longer being probable. For the six months ended June 30, 2020, other income (expense), net consisted of expense of $8.6 million primarily due to losses on fuel hedges released into earnings as a result of the forecasted transactions no longer being probable offset by gains from foreign currency exchange. For the three and six months ended June 30, 2019, other income (expense), net was income of $3.6 million and |
Income Tax Benefit
Income Tax Benefit | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Benefit | 13. Income Tax Benefit For the three and six months ended June 30, 2020, we had an income tax benefit of $9.1 million and $15.3 million, respectively. For the three and six months ended June 30, 2019, we had income tax expense of $6.1 million and an income tax benefit of $27.7 million, respectively. For the three and six months ended June 30, 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. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 14. Supplemental Cash Flow Information For the six months ended June 30, 2020 and 2019, we had non-cash investing activities in connection with property and equipment of $7.2 million and $33.6 million, respectively. |
Related Party Disclosures
Related Party Disclosures | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Disclosures | 15. Related Party Disclosures NCLC, as issuer, NCLH, as guarantor, and U.S. Bank National Association, as trustee are all parties to an indenture, dated May 28, 2020 (the “Indenture”) related to the Private Exchangeable Notes, which are currently held by the Private Investor. The terms of the Indenture are more fully described under Note 8 — “Long-Term Debt”. Based on the initial exchange rate, the Private Investor beneficially owned approximately 11% of NCLH’s outstanding ordinary shares as of June 30, 2020. The initial exchange rate in the Private Exchangeable Notes may be adjusted in the event of certain make-whole fundamental changes or tax redemption events (each, as described in the Indenture), but the maximum number of NCLH ordinary shares issuable upon an exchange in the event of such an adjustment would not exceed 46,577,947 . The Private Exchangeable Notes also contain certain anti-dilution provisions that could subject the exchange rate to additional adjustment if certain events occur. NCLH, NCLC and the Private Investor also entered into an investor rights agreement dated May 28, 2020 (the “Investor Rights Agreement”) which provides that, among other things, the Private Investor is entitled to nominate one person who will be appointed to the board of directors of NCLH until the first date on which the Private Investor no longer beneficially owns in the aggregate at least 50% of the number of NCLH’s ordinary shares issuable upon exchange of the Private Exchangeable Notes beneficially owned by the Private Investor in the aggregate as of May 28, 2020 (subject to certain adjustments). The Investor Rights Agreement also provides for customary registration rights for the Private Investor and its affiliates, including demand and piggyback registration rights, contains customary transfer restrictions and provides that the Private Investor and its affiliates are subject to a voting agreement with respect to certain matters during a specified period of time. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events In July 2020, NCLH offered 19,166,667 ordinary shares, par value $0.001 per share to the public at a price of $15.00 per share, which includes 2,500,000 ordinary shares issued in connection with the underwriters’ full exercise of their option to acquire additional ordinary shares. Underwriting discounts and commissions were $0.525 per share. The net proceeds from the offering were $277.4 million after deducting the underwriters’ discounts and commissions, but before other fees and expenses. Both NCLH and NCLC undertook actions related to debt financing and equity-linked financing in July 2020, which are described in |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 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 October 31, 2020. On March 14, 2020, concurrent with our and the broader cruise industry’s original suspension, the U.S. Centers for Disease Control and Prevention (“CDC”) issued a No Sail Order through April 13, 2020, which was subsequently extended through July 24, 2020. On July 16, 2020, the CDC extended its No Sail Order 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 based on specific public health or other considerations or (c) September 30, 2020. In addition, the duration of any voluntary suspensions we have implemented and the resumption of operations outside of the United States will be dependent, in part, on the severity and duration of the COVID-19 pandemic, the status of the CDC’s No Sail Order, the lifting of 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 COVID-19 pandemic, 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 and financial condition cannot be quantified at this time, but we expect to report a net loss for the year ending December 31, 2020. Since March 2020, we have taken several actions to bolster our financial condition while our global cruise voyages are suspended. In March 2020, NCLC borrowed the full amount of $1.55 billion under its $875 million Revolving Loan Facility and its $675 million Epic Credit Facility, dated as of March 5, 2020. million was used to repay in full and terminate the Epic Credit Facility. Refer to Note 8 – “Long-Term Debt” for further information on the debt financings and Note 16 – “Subsequent Events” for further information on the equity financing. The Company has also undertaken several proactive cost reduction and cash conservation measures to mitigate the financial and operational impacts of COVID-19, through the reduction of capital expenditures and operating expenses, including food, fuel, insurance, port charges and reduced crew manning of vessels during the suspension, resulting in lower crew payroll expense. In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , 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 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; however, demand for cruises during the summer months of 2020 has been materially 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 July 8, 2020. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Earnings (Loss) Per Share | Earnings (Loss) 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net income (loss) $ (715,243) $ 240,190 $ (2,596,215) $ 358,347 Basic weighted-average shares outstanding 239,342,745 215,426,441 226,486,772 216,328,943 Dilutive effect of share awards — 1,384,325 — 1,508,062 Diluted weighted-average shares outstanding 239,342,745 216,810,766 226,486,772 217,837,005 Basic earnings (loss) per share $ (2.99) $ 1.11 $ (11.46) $ 1.66 Diluted earnings (loss) per share $ (2.99) $ 1.11 $ (11.46) $ 1.65 For the three months ended June 30, 2020 and 2019, a total of 59.2 million and 3.6 million shares, respectively, and for the six months ended June 30, 2020 and 2019, a total of 33.1 million and 4.5 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 loss of $10.2 million and $3.3 million for the three months ended June 30, 2020 and 2019, respectively, and a gain of $9.7 million and a loss of $4.3 million for the six months ended June 30, 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) | 6 Months Ended |
Jun. 30, 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net income (loss) $ (715,243) $ 240,190 $ (2,596,215) $ 358,347 Basic weighted-average shares outstanding 239,342,745 215,426,441 226,486,772 216,328,943 Dilutive effect of share awards — 1,384,325 — 1,508,062 Diluted weighted-average shares outstanding 239,342,745 216,810,766 226,486,772 217,837,005 Basic earnings (loss) per share $ (2.99) $ 1.11 $ (11.46) $ 1.66 Diluted earnings (loss) per share $ (2.99) $ 1.11 $ (11.46) $ 1.65 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 North America $ 3,366 $ 968,466 $ 954,422 $ 1,951,455 Europe 9,701 508,435 23,036 542,187 Asia-Pacific — 67,239 150,921 290,006 South America — 3,765 76,306 94,068 Other 3,862 116,372 59,126 190,191 Total revenue $ 16,929 $ 1,664,277 $ 1,263,811 $ 3,067,907 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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, June 30, 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 | June 30, 2020 Weighted- Average Gross Carrying Accumulated Net Carrying Amortization Amount Amortization Amount Period (Years) Customer relationships $ 120,000 $ (115,716) $ 4,284 6.0 License 750 (369) 381 10.0 Total intangible assets subject to amortization $ 120,750 $ (116,085) $ 4,665 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Amortization expense $ 2,792 $ 4,622 $ 5,585 $ 9,244 |
Schedule of aggregate amortization expense | 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 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) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of lease balances | Lease balances were as follows (in thousands): Balance Sheet location June 30, 2020 December 31, 2019 Operating leases Right-of-use assets Other long-term assets $ 228,792 $ 236,604 Current operating lease liabilities Accrued expenses and other liabilities 29,677 39,126 Non-current operating lease liabilities Other long-term liabilities 193,585 207,243 Finance leases Right-of-use assets Property and equipment, net 12,899 13,873 Current finance lease liabilities Current portion of long-term debt 5,698 6,419 Non-current finance lease liabilities Long-term debt 6,913 8,812 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Six Months Ended June 30, 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 (251,382) (251,382) — Amounts reclassified into earnings 50,985 50,781 (1) 204 (2) Accumulated other comprehensive income (loss) at end of period $ (495,887) $ (489,963) (3) $ (5,924) Six Months Ended June 30, 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 loss before reclassifications (2,037) (2,037) — Amounts reclassified into earnings (16,085) (16,274) (1) 189 (2) Accumulated other comprehensive income (loss) at end of period $ (179,769) $ (175,760) $ (4,009) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 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 deferred loans | Margin Explorer newbuild loan 2.80 % Splendor newbuild loan 1.75 % Marina newbuild loan 0.55 % Riviera newbuild loan 0.55 % |
Schedule of liability components of exchangeable notes | The net carrying amounts of the liability components of our exchangeable notes consist of the following (in thousands): June 30, 2020 Principal amount $ 1,262,500 Less: Unamortized debt discount, including deferred financing fees (173,577) Net carrying value $ 1,088,923 |
Schedule of interest expense related to exchangeable notes | The following table presents the interest expense recognized related to the exchangeable notes (in thousands): Three and Six Months Ended June 30, 2020 Interest expense, including amortization of debt discounts and coupon interest $ 12,529 |
Schedule of principal repayments on long-term debt including finance lease obligations | The following are scheduled principal repayments on our long-term debt including finance lease obligations as of June 30, 2020 for each of the next five years (in thousands): Year Amount July 1, 2020 - June 30, 2021 $ 337,338 July 1, 2021 - June 30, 2022 1,858,011 July 1, 2022 - June 30, 2023 775,009 July 1, 2023 - June 30, 2024 4,389,872 July 1, 2024 - June 30, 2025 1,113,479 Thereafter 2,215,306 Total $ 10,689,015 |
Fair Value Measurements and D_2
Fair Value Measurements and Derivatives (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, December 31, June 30, 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 67,658 18,257 Other long-term liabilities — 683 77,694 17,763 Foreign currency contracts Prepaid expenses and other assets 180 — — — Other long-term assets 4,055 — — — Accrued expenses and other liabilities — — 30,151 33,475 Other long-term liabilities — 169 167,517 118,500 Interest rate contracts Accrued expenses and other liabilities — — 8,820 2,178 Other long-term liabilities — — 3,009 1,861 Total derivatives designated as hedging instruments $ 4,235 $ 3,429 $ 354,849 $ 192,034 Derivative Contracts Not Designated as Hedging Instruments Fuel contracts Accrued expenses and other liabilities $ — $ — $ 8,194 $ — Total derivatives not designated as hedging instruments $ — $ — $ 8,194 $ — Total derivatives $ 4,235 $ 3,429 $ 363,043 $ 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 June 30, 2020 Amounts Offset Amounts Not Offset Net Amounts Assets $ 4,235 $ — $ 4,235 $ (4,235) $ — Liabilities 363,043 — 363,043 (363,043) — 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 June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Fuel contracts $ 27,769 $ (16,577) Fuel $ (13,878) $ 9,885 Fuel contracts — — Other income (expense), net (11,964) — Foreign currency contracts 27,694 4,181 Depreciation and amortization (1,266) (703) Interest rate contracts (985) (4,793) Interest expense, net (1,674) 92 Total gain (loss) recognized in other comprehensive income $ 54,478 $ (17,189) $ (28,782) $ 9,274 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 Six Months Six Months Six Months Six Months Ended Ended Ended Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Fuel contracts $ (170,708) $ 79,931 Fuel $ (20,095) $ 17,403 Fuel contracts — — Other income (expense), net (26,284) — Foreign currency contracts (70,193) (76,097) Depreciation and amortization (2,395) (1,406) Interest rate contracts (10,481) (5,871) Interest expense, net (2,007) 277 Total gain (loss) recognized in other comprehensive income $ (251,382) $ (2,037) $ (50,781) $ 16,274 |
Schedule of cash flow hedge accounting on the consolidated financial statements of operations | 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 Six Months Six Months Six Months Six Months Ended Ended Ended Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Fuel contracts $ (170,708) $ 79,931 Fuel $ (20,095) $ 17,403 Fuel contracts — — Other income (expense), net (26,284) — Foreign currency contracts (70,193) (76,097) Depreciation and amortization (2,395) (1,406) Interest rate contracts (10,481) (5,871) Interest expense, net (2,007) 277 Total gain (loss) recognized in other comprehensive income $ (251,382) $ (2,037) $ (50,781) $ 16,274 |
Schedule of effects of foreign currency contracts not designated as hedging instruments | The effects of derivatives not designated as hedging instruments on the consolidated statements of operations include the following (in thousands): Amount of Gain (Loss) Recognized in Income Three Months Ended Six Months Ended June 30, June 30, Location of Gain (Loss) 2020 2019 2020 2019 Derivatives not designated as hedging instruments Fuel contracts Other income (expense), net $ 3,646 $ — $ 3,646 $ — |
Employee Benefits and Compens_2
Employee Benefits and Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 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 (163,792) — — 50.39 — — Outstanding as of June 30, 2020 4,706,541 114,583 208,333 51.97 59.43 59.43 4.93 — |
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 2,396,824 35.81 611,808 (1) 35.59 — — Vested (1,599,412) 54.20 (181,682) 56.33 — — Forfeited or expired (186,914) 47.45 (63,026) 47.45 — — Non-vested as of June 30, 2020 3,856,123 43.72 1,496,496 48.04 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Payroll and related expense $ 5,029 $ 4,681 $ 9,731 $ 8,485 Marketing, general and administrative expense 17,360 24,970 45,416 48,165 Total share-based compensation expense $ 22,389 $ 29,651 $ 55,147 $ 56,650 |
Description of Business and O_2
Description of Business and Organization (Details) | Jun. 30, 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 Winter 2020 and Fall 2023 | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 1 |
Ships Launching Period Through 2023 And 2025 | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 2 |
Ships Launching Period In 2022 And 2027 | Project Leonardo Ships | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 6 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Liquidity and Management's Plan (Details) - USD ($) $ in Thousands | Aug. 11, 2020 | Jun. 30, 2020 | Mar. 31, 2020 |
Debt Instrument [Line Items] | |||
Principal amount outstanding | $ 1,088,923 | ||
Substantial Doubt about Going Concern, within One Year [true false] | false | ||
$675 Million Senior Secured Revolving Loan Facility | |||
Debt Instrument [Line Items] | |||
Principal amount outstanding | $ 675,000 | ||
NCLC | |||
Debt Instrument [Line Items] | |||
Principal amount | 1,550,000 | ||
Payment deferrals | 1,600,000 | ||
Equity offering shares | 41,818,181 | ||
Amount of gross proceeds for common stock | $ 460,000 | ||
Proceeds from debt and equity financing | $ 2,400,000 | ||
Proceed form additional debt and equity financing | $ 1,500,000 | ||
NCLC | $875 Million Senior Secured Revolving Loan Facility | |||
Debt Instrument [Line Items] | |||
Principal amount outstanding | 875,000 | ||
NCLC | $675 Million Senior Secured Revolving Loan Facility | |||
Debt Instrument [Line Items] | |||
Principal amount outstanding | $ 675,000 |
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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (715,243) | $ 240,190 | $ (2,596,215) | $ 358,347 |
Basic weighted-average shares outstanding | 239,342,745 | 215,426,441 | 226,486,772 | 216,328,943 |
Dilutive effect of share awards | 1,384,325 | 1,508,062 | ||
Diluted weighted-average shares outstanding | 239,342,745 | 216,810,766 | 226,486,772 | 217,837,005 |
Basic earnings (loss) per share (in dollars per share) | $ (2.99) | $ 1.11 | $ (11.46) | $ 1.66 |
Diluted earnings (loss) per share (in dollars per share) | $ (2.99) | $ 1.11 | $ (11.46) | $ 1.65 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share | 59.2 | 3.6 | 33.1 | 4.5 |
Foreign currency transaction gain | $ 9.7 | |||
Foreign currency transaction loss | $ 10.2 | $ 3.3 | $ 4.3 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 16,929 | $ 1,664,277 | $ 1,263,811 | $ 3,067,907 |
North America | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 3,366 | 968,466 | 954,422 | 1,951,455 |
Europe | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 9,701 | 508,435 | 23,036 | 542,187 |
Asia-Pacific | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 67,239 | 150,921 | 290,006 | |
South America | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 3,765 | 76,306 | 94,068 | |
Other | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 3,862 | $ 116,372 | $ 59,126 | $ 190,191 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($)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 | $ 4.5 | $ 4.5 | $ 15.3 |
Advanced ticket sales | $ 66.1 | $ 66.1 | $ 1,400 |
Percentage refundable on cancellation | 40.00% | 40.00% | |
Revenue recognized included in contract liability | $ 900 | ||
Costs to obtain contract | $ 38.6 | $ 130.6 | |
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 | 6 Months Ended | |
Jun. 30, 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 | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 120,750 | $ 120,750 |
Accumulated Amortization | (116,085) | (110,500) |
Net Carrying Amount | 4,665 | 10,250 |
Customer relationships | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | 120,000 | 120,000 |
Accumulated Amortization | (115,716) | (110,169) |
Net Carrying Amount | $ 4,284 | $ 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 | (369) | (331) |
Net Carrying Amount | $ 381 | $ 419 |
Weighted- Average Amortization Period (Years) | 10 years | 10 years |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2,792 | $ 4,622 | $ 5,585 | $ 9,244 |
Intangible Assets - Future Esti
Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Amortization Expense | |
2021 | $ 75 |
2022 | 75 |
2023 | 75 |
2024 | 75 |
2025 | $ 44 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other long-term assets | ||
Operating leases | ||
Right-of-use assets | $ 228,792 | $ 236,604 |
Operating lease, right-of-use asset - Extensible List | us-gaap:OtherAssetsNoncurrent | |
Accrued expenses and other liabilities | ||
Operating leases | ||
Current operating lease liabilities | $ 29,677 | 39,126 |
Operating lease liability, current - Extensible list | nclh:AccruedLiabilitiesAndOtherLiabilitiesCurrent | |
Other long-term liabilities | ||
Operating leases | ||
Non-current operating lease liabilities | $ 193,585 | 207,243 |
Operating lease liability, non current - Extensible list | us-gaap:OtherLiabilitiesNoncurrent | |
Property and equipment, net | ||
Finance leases | ||
Right-of-use assets | $ 12,899 | 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 | $ 5,698 | 6,419 |
Finance lease liability, current - Extensible list | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent | |
Long-term debt. | ||
Finance leases | ||
Non-current finance lease liabilities | $ 6,913 | $ 8,812 |
Finance lease liability, noncurrent - Extensible list | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 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 | (251,382) | (2,037) |
Amounts reclassified into earnings | 50,985 | (16,085) |
Accumulated other comprehensive income (loss) at end of period | (495,887) | (179,769) |
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 | (251,382) | (2,037) |
Amounts reclassified into earnings | 50,781 | (16,274) |
Accumulated other comprehensive income (loss) at end of period | (489,963) | (175,760) |
Amount of loss expected to be reclassified into earnings | 83,400 | |
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 | 204 | 189 |
Accumulated other comprehensive income (loss) at end of period | $ (5,924) | $ (4,009) |
Property and Equipment, net (De
Property and Equipment, net (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Property Plant And Equipment [Abstract] | |
Property plant and equipment net increase due to ship improvement projects | $ 353.2 |
Impairments | $ 25.5 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ / shares in Units, € in Millions, shares in Millions | May 08, 2020USD ($) | Jul. 31, 2020USD ($)$ / shares | Jun. 30, 2020USD ($) | May 31, 2020USD ($)D$ / shares | Apr. 30, 2020USD ($)installment | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Apr. 30, 2020EUR (€) |
Debt Instrument [Line Items] | |||||||||||
Principal amount outstanding | $ 1,088,923,000 | $ 1,088,923,000 | $ 1,088,923,000 | ||||||||
Debt modification cost | $ 16,200,000 | ||||||||||
Loss on extinguishment of debt | $ 5,000,000 | 5,014,000 | $ 3,988,000 | ||||||||
Beneficial conversion feature | 131,240,000 | 131,240,000 | |||||||||
Outstanding principal amount of notes | $ 1,262,500,000 | $ 1,262,500,000 | 1,262,500,000 | ||||||||
Interest expense, net | $ 12,529,000 | ||||||||||
Export Credit Backed Securities | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount outstanding | $ 386,000,000 | ||||||||||
Number of installments for amortization | installment | 8 | ||||||||||
Debt holiday period | 12 months | ||||||||||
Supplemental Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Annual debt repayment rate | 25 | ||||||||||
$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 | |||||||||
Repayment of Epic credit facility | $ 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% | ||||||||||
$230 Pride of America Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 230,000,000 | ||||||||||
$230 Pride of America Term Loan | Eurocurrency Loans | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.75% | ||||||||||
$230 Pride of America Term Loan | 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 | ||||||||||
Annual debt repayment rate | 25 | ||||||||||
$260 Million Norwegian Jewel Term Loan | Eurocurrency Loans | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.50% | ||||||||||
$260 Million Norwegian Jewel Term Loan | Base Rate Loans | Base rate loans | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.50% | ||||||||||
Private Exchangeable Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 400,000,000 | ||||||||||
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 | 82.6446 | ||||||||||
Initial exchange price | $ / shares | $ 12.10 | ||||||||||
Remaining discount amortization period | 5 years 10 months 24 days | ||||||||||
Percentage of Effective interest rate | 17.45% | 17.45% | 17.45% | ||||||||
If-converted value above par value | $ 143,100,000 | ||||||||||
Shares available | shares | 33.1 | ||||||||||
Private Exchangeable Notes | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Ordinary share exchange rate | 90.9090 | ||||||||||
Private Exchangeable Notes | Accreted Interest [Member] | Debt Instrument, First Year Post Issuance | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest Rate | 7.00% | ||||||||||
Private Exchangeable Notes | Accreted Interest [Member] | Debt Instrument, Four Years Following First Year Post Issuance | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest Rate | 4.50% | ||||||||||
Private Exchangeable Notes | Cash Interest | Debt Instrument, Four Years Following First Year Post Issuance | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest Rate | 3.00% | ||||||||||
Private Exchangeable Notes | Cash Interest | Debt Instrument, Final Year Prior To Maturity | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest Rate | 7.50% | ||||||||||
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% | ||||||||||
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% | ||||||||||
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% | ||||||||||
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% | ||||||||||
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 | 72.7273 | ||||||||||
Initial exchange price | $ / shares | $ 13.75 | ||||||||||
Remaining discount amortization period | 3 years 10 months 24 days | ||||||||||
Percentage of Effective interest rate | 7.09% | 7.09% | 7.09% | ||||||||
If-converted value above par value | $ 168,100,000 | ||||||||||
Shares available | shares | 62.7 | ||||||||||
Exchangeable Senior Secured Notes Due 2024 | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Ordinary share exchange rate | 89.4454 | ||||||||||
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 | ||||||||||
Deferred Term A Loans | Fifth Amended And Restated Credit Agreement | Eurocurrency Loans | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.50% | ||||||||||
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% | ||||||||||
Deferred Loans | Supplemental Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount outstanding | $ 156,000,000 | $ 156,000,000 | $ 156,000,000 | ||||||||
Explorer Newbuild Loan | Six Months London Interbank Offered Rate Libor | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.80% | ||||||||||
Splendor Newbuild Loan | Six Months London Interbank Offered Rate Libor | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.75% | ||||||||||
Marina Newbuild Loan | Six Months London Interbank Offered Rate Libor | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.55% | ||||||||||
Riviera Newbuild Loan | Six Months London Interbank Offered Rate Libor | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.55% | ||||||||||
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 | 2025 Exchangeable Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 450,000,000 | ||||||||||
Interest Rate | 5.375% | ||||||||||
Debt instrument amount | $ 1,000 | ||||||||||
Ordinary share exchange rate | 53.3333 | ||||||||||
Initial exchange price | $ / shares | $ 18.75 | ||||||||||
Subsequent Event | 2025 Exchangeable Notes | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Ordinary share exchange rate | 66.6666 | ||||||||||
Subsequent Event | 2026 Senior Secured Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 750,000,000 | ||||||||||
Interest Rate | 10.25% | ||||||||||
Percentage of principal amount of debt redeemed | 35.00% | ||||||||||
Percentage of thresholds, after percentage | 65.00% | ||||||||||
Subsequent Event | 2026 Senior Secured Notes | Debt Redemption Prior To August 1, 2023 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price as a percentage of face amount | 100.00% | ||||||||||
Subsequent Event | 2026 Senior Secured Notes | Debt Redemption On Or Prior To August 1, 2023 [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price as a percentage of face amount | 110.25% | ||||||||||
NCLC | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount | $ 1,550,000,000 | 1,550,000,000 | |||||||||
NCLC | $875 Million Senior Secured Revolving Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount outstanding | 875,000,000 | $ 875,000,000 | |||||||||
NCLC | $875 Million Senior Secured Revolving Loan Facility | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.50% | ||||||||||
NCLC | $675 Million Senior Secured Revolving Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount outstanding | $ 675,000,000 | $ 675,000,000 |
Long-Term Debt - Liability Comp
Long-Term Debt - Liability Components of Exchangeable Notes (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
Principal amount | $ 1,262,500 |
Less: Unamortized debt discount, including deferred financing fees | (173,577) |
Net carrying value | $ 1,088,923 |
Long-Term Debt - Interest Expen
Long-Term Debt - Interest Expense Related to the Exchangeable Notes (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Debt Disclosure [Abstract] | |
Interest expense, including amortization of debt discounts and coupon interest | $ 12,529 |
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 | Jun. 30, 2020USD ($) |
Long Term Debt And Finance Lease Obligations Rolling Maturity [Abstract] | |
July 1, 2020 - June 30, 2021 | $ 337,338 |
July 1, 2021 - June 30, 2022 | 1,858,011 |
July 1, 2022 - June 30, 2023 | 775,009 |
July 1, 2023 - June 30, 2024 | 4,389,872 |
July 1, 2024 - June 30, 2025 | 1,113,479 |
Thereafter | 2,215,306 |
Total | $ 10,689,015 |
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 | Jun. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 4,235 | $ 277 |
Derivative liabilities, fair value | 363,043 | 192,034 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 4,235 | 3,429 |
Derivative liabilities, fair value | 354,849 | 192,034 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 8,194 | 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 | 67,658 | 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 | 77,694 | 17,763 |
Fuel contracts | Derivatives 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 | 8,194 | 0 |
Foreign currency contracts | Designated as Hedging Instrument | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 180 | 0 |
Derivative liabilities, fair value | 0 | 0 |
Foreign currency contracts | Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 4,055 | 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 | 30,151 | 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 | 167,517 | 118,500 |
Interest rate swap | Designated as Hedging Instrument | Accrued expenses and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 8,820 | 2,178 |
Interest rate swap | Designated as Hedging Instrument | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | 3,009 | 1,861 |
Total derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 4,235 | 3,429 |
Derivative liabilities, fair value | $ 363,043 | $ 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 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Gross Amounts, Assets | $ 4,235 | $ 277 |
Total Net Amounts, Assets | 4,235 | 277 |
Gross Amounts Not Offset, Assets | (4,235) | |
Net Amounts, Assets | 277 | |
Gross Amounts, Liabilities | 363,043 | 192,034 |
Gross Amounts Offset, Liabilities | (3,152) | |
Total Net Amounts, Liabilities | 363,043 | 188,882 |
Gross Amounts Not Offset, Liabilities | $ (363,043) | (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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | $ 54,478 | $ (17,189) | $ (251,382) | $ (2,037) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (28,782) | 9,274 | (50,781) | 16,274 |
Fuel contracts | Fuel | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 27,769 | (16,577) | (170,708) | 79,931 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (13,878) | 9,885 | (20,095) | 17,403 |
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 | (11,964) | (26,284) | ||
Foreign currency contracts | Depreciation and amortization | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 27,694 | 4,181 | (70,193) | (76,097) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (1,266) | (703) | (2,395) | (1,406) |
Interest rate swap | Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (985) | (4,793) | (10,481) | (5,871) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | $ (1,674) | $ 92 | $ (2,007) | $ 277 |
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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Fuel | $ 48,992 | $ 100,531 | $ 174,016 | $ 198,784 |
Depreciation and amortization | 179,252 | 156,271 | 377,449 | 326,012 |
Interest expense, net | 114,537 | 65,969 | 183,444 | 139,472 |
Other income (expense), net | (14,418) | 3,616 | (8,595) | 3,182 |
Cash Flow Hedging | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | (28,782) | 9,274 | (50,781) | 16,274 |
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 | (13,878) | 9,885 | (20,095) | 17,403 |
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 | (11,964) | (26,284) | ||
Cash Flow Hedging | Fuel contracts | Other (Income) Expense, net | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
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 | (11,964) | (26,284) | ||
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 | (1,266) | (703) | (2,395) | (1,406) |
Cash Flow Hedging | Interest rate swap | Interest expense, net | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | $ (1,674) | $ 92 | $ (2,007) | $ 277 |
Fair Value Measurements and D_7
Fair Value Measurements and Derivatives - Effects of Derivatives Not Designated as Hedging Instruments on Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Derivatives not designated as hedging instruments | Cash Flow Hedging | Other income (expense), net | Fuel contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of Gain (Loss) Recognized in Income | $ 3,646 | $ 3,646 |
Fair Value Measurements and D_8
Fair Value Measurements and Derivatives (Details) kT in Thousands, MT in Millions, $ in Millions, € in Billions | 6 Months Ended | ||
Jun. 30, 2020EUR (€)kTMT | Jun. 30, 2020USD ($)kTMT | Dec. 31, 2019USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of long-term debt | $ 11,142.8 | $ 6,957.8 | |
Fair value of long-term debt in excess of carrying value | $ 590.2 | $ 31.3 | |
Fuel swaps | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative maturing date | Dec. 31, 2023 | ||
Projected fuel purchases | MT | 1.1 | 1.1 | |
Fuel swaps | Derivatives not designated as hedging instruments | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative maturing date | Dec. 31, 2020 | ||
Projected fuel purchases | kT | 63 | 63 | |
Foreign currency contracts | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Notional amount of derivatives | € 2 | $ 2,200 | |
Interest rate swap | |||
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 | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Weighted-Average Contractual Term (years) | ||
Options Outstanding, Weighted-Average Contractual Term | 4 years 11 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 | (163,792) | |
Outstanding as of June 30, 2020 | 4,706,541 | 4,918,554 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2020 | $ 51.84 | |
Exercised | 44.38 | |
Forfeited and cancelled | 50.39 | |
Outstanding as of June 30, 2020 | $ 51.97 | $ 51.84 |
Performance-Based Option Awards | ||
Number of Share Option Awards | ||
Outstanding as of January 1, 2020 | 115,489 | |
Exercised | (906) | |
Outstanding as of June 30, 2020 | 114,583 | 115,489 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2020 | $ 59.11 | |
Exercised | 19 | |
Outstanding as of June 30, 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 June 30, 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 June 30, 2020 | $ 59.43 | $ 59.43 |
Employee Benefits and Compens_5
Employee Benefits and Compensation Plans - Summary of Restricted Unit Activity (Details) - Restricted Share Units | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Time-Based RSU Awards | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2020 | shares | 3,245,625 |
Granted | shares | 2,396,824 |
Vested | shares | (1,599,412) |
Forfeited or expired | shares | (186,914) |
Non-vested as of June 30, 2020 | shares | 3,856,123 |
Weighted- Average Grant-Date Fair Value | |
Non-vested as of January 1, 2020 | $ / shares | $ 54.94 |
Granted | $ / shares | 35.81 |
Vested | $ / shares | 54.20 |
Forfeited or expired | $ / shares | 47.45 |
Non-vested as of June 30, 2020 | $ / shares | $ 43.72 |
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 | (63,026) |
Non-vested as of June 30, 2020 | shares | 1,496,496 |
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 | 47.45 |
Non-vested as of June 30, 2020 | $ / shares | $ 48.04 |
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 June 30, 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 June 30, 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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 22,389 | $ 29,651 | $ 55,147 | $ 56,650 |
Payroll and related | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total share-based compensation expense | 5,029 | 4,681 | 9,731 | 8,485 |
Marketing, general and administrative expense | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 17,360 | $ 24,970 | $ 45,416 | $ 48,165 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions, € in Billions | Mar. 12, 2020item | Aug. 31, 2019item | Jun. 30, 2020EUR (€)item | Jun. 30, 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 | $ | $ 900 | |||
Credit Card Processors | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Minimum liquidity reserve, cash | $ | 70 | |||
Equity value of second priority liens | $ | $ 700 | |||
Ship Construction Contracts | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of additional ships | 9 | 9 | ||
Aggregate contract price of new ships | € 7.1 | $ 8,000 | ||
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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Income And Expenses [Abstract] | ||||
Other income (expense), net | $ (14,418) | $ 3,616 | $ (8,595) | $ 3,182 |
Income Tax Benefit (Details)
Income Tax Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Income tax benefit (expense) | $ (9,123) | $ 6,138 | $ (15,296) | $ (27,660) | |
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 | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Non-cash investing activity in connection with property and equipment | $ 7.2 | $ 33.6 |
Related Party Disclosures (Deta
Related Party Disclosures (Details) - shares | May 28, 2020 | Jun. 30, 2020 |
Private Exchangeable Notes | ||
Related Party Transaction [Line Items] | ||
Shares issuable upon exchange | 33,100,000 | |
NCLC | Private Exchangeable Notes | Maximum | ||
Related Party Transaction [Line Items] | ||
Shares issuable upon exchange | 46,577,947 | |
L Catterton [Member] | ||
Related Party Transaction [Line Items] | ||
Beneficial ownership percentage | 11.00% | |
L Catterton [Member] | Minimum | ||
Related Party Transaction [Line Items] | ||
Investor ownership threshold | 50.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jul. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | |||
Ordinary shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Net proceeds from offering | $ 441,935 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of ordinary shares issued | 19,166,667 | ||
Ordinary shares, par value (in dollars per share) | $ 0.001 | ||
Share Price | 15 | ||
Underwriting discounts and commissions per share | $ 0.525 | ||
Net proceeds from offering | $ 277,400 | ||
Subsequent Event | Over-Allotment Option | |||
Subsequent Event [Line Items] | |||
Number of ordinary shares issued | 2,500,000 |