Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 17, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'ROYAL CARIBBEAN CRUISES LTD | ' |
Entity Central Index Key | '0000884887 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 222,309,015 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Passenger ticket revenues | $1,455,099 | $1,366,713 | $2,803,302 | $2,760,491 |
Onboard and other revenues | 524,944 | 516,054 | 1,063,965 | 1,033,496 |
Total revenues | 1,980,043 | 1,882,767 | 3,867,267 | 3,793,987 |
Cruise operating expenses: | ' | ' | ' | ' |
Commissions, transportation and other | 346,180 | 316,506 | 672,045 | 639,443 |
Onboard and other | 150,606 | 140,710 | 273,638 | 262,197 |
Payroll and related | 209,171 | 208,975 | 419,972 | 418,898 |
Food | 119,184 | 112,530 | 237,264 | 232,013 |
Fuel | 242,804 | 232,471 | 487,263 | 474,123 |
Other operating | 262,729 | 312,427 | 544,472 | 579,135 |
Total cruise operating expenses | 1,330,674 | 1,323,619 | 2,634,654 | 2,605,809 |
Marketing, selling and administrative expenses | 260,988 | 257,948 | 551,295 | 531,982 |
Depreciation and amortization expenses | 192,880 | 186,184 | 386,615 | 375,548 |
Restructuring charges | -86 | 1,678 | 1,650 | 1,678 |
Operating Income | 195,587 | 113,338 | 293,053 | 278,970 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 2,630 | 3,405 | 5,906 | 7,152 |
Interest expense, net of interest capitalized | -65,260 | -86,877 | -133,831 | -177,059 |
Other income (expense) | 4,716 | -5,119 | -998 | -8,090 |
Total other income (expense) | -57,914 | -88,591 | -128,923 | -177,997 |
Net Income | 137,673 | 24,747 | 164,130 | 100,973 |
Earnings per Share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.62 | $0.11 | $0.74 | $0.46 |
Diluted (in dollars per share) | $0.62 | $0.11 | $0.74 | $0.46 |
Weighted-Average Shares Outstanding: | ' | ' | ' | ' |
Basic (in shares) | 222,189 | 219,502 | 221,745 | 219,301 |
Diluted (in shares) | 223,381 | 220,648 | 223,055 | 220,596 |
Comprehensive Income | ' | ' | ' | ' |
Net Income | 137,673 | 24,747 | 164,130 | 100,973 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Foreign currency translation adjustments | -1,833 | -1,551 | 637 | -5,795 |
Change in defined benefit plans | -2,054 | 5,293 | -4,085 | 5,293 |
(Loss) gain on cash flow derivative hedges | -20,638 | 17,542 | -73,553 | -5,058 |
Total other comprehensive (loss) income | -24,525 | 21,284 | -77,001 | -5,560 |
Comprehensive Income | $113,148 | $46,031 | $87,129 | $95,413 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $185,262 | $204,687 |
Trade and other receivables, net | 293,516 | 259,746 |
Inventories | 143,375 | 151,244 |
Prepaid expenses and other assets | 299,882 | 252,852 |
Derivative financial instruments | 56,305 | 87,845 |
Total current assets | 978,340 | 956,374 |
Property and equipment, net | 17,474,143 | 17,517,752 |
Goodwill | 438,367 | 439,231 |
Other assets | 1,121,361 | 1,159,590 |
Total assets | 20,012,211 | 20,072,947 |
Current liabilities | ' | ' |
Current portion of long-term debt | 494,579 | 1,563,378 |
Accounts payable | 331,462 | 372,226 |
Accrued interest | 44,006 | 103,025 |
Accrued expenses and other liabilities | 576,233 | 563,702 |
Customer deposits | 2,103,140 | 1,664,679 |
Total current liabilities | 3,549,420 | 4,267,010 |
Long-term debt | 7,099,269 | 6,511,426 |
Other long-term liabilities | 514,282 | 486,246 |
Commitments and contingencies (Note 6) | ' | ' |
Shareholders’ equity | ' | ' |
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding) | 0 | 0 |
Common stock ($0.01 par value; 500,000,000 shares authorized; 232,639,334 and 230,782,315 shares issued, June 30, 2014 and December 31, 2013, respectively) | 2,326 | 2,308 |
Paid-in capital | 3,223,832 | 3,159,038 |
Retained earnings | 6,108,116 | 6,054,952 |
Accumulated other comprehensive (loss) income | -71,330 | 5,671 |
Treasury stock (10,308,683 common shares at cost, June 30, 2014 and December 31, 2013) | -413,704 | -413,704 |
Total shareholders’ equity | 8,849,240 | 8,808,265 |
Total liabilities and shareholders' equity | $20,012,211 | $20,072,947 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 232,639,334 | 230,782,315 |
Treasury stock, common shares | 10,308,683 | 10,308,683 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating Activities | ' | ' |
Net income | $164,130 | $100,973 |
Adjustments: | ' | ' |
Depreciation and amortization | 386,615 | 375,548 |
(Gain) loss on derivative instruments not designated as hedges | -10,841 | 25,494 |
Changes in operating assets and liabilities: | ' | ' |
Decrease in trade and other receivables, net | 15,903 | 21,084 |
Decrease in inventories | 7,777 | 4,679 |
Increase in prepaid expenses and other assets | -35,799 | -53,555 |
Decrease in accounts payable | -41,228 | -36,265 |
Decrease in accrued interest | -59,019 | -31,259 |
Increase (decrease) in accrued expenses and other liabilities | 45,730 | -6,513 |
Increase in customer deposits | 388,693 | 272,329 |
Other, net | 18,968 | 273 |
Net cash provided by operating activities | 880,929 | 672,788 |
Investing Activities | ' | ' |
Purchases of property and equipment | -342,472 | -396,073 |
Cash received (paid) on settlement of derivative financial instruments | 18,096 | -25,843 |
Investments in unconsolidated affiliates | -68,885 | -35,757 |
Cash received on loan to unconsolidated affiliate | 66,138 | 11,993 |
Other, net | 1,280 | 781 |
Net cash used in investing activities | -325,843 | -444,899 |
Financing Activities | ' | ' |
Debt proceeds | 1,846,200 | 1,519,464 |
Debt issuance costs | -33,627 | -20,554 |
Repayments of debt | -2,334,396 | -1,670,248 |
Dividends paid | -131,857 | -54,098 |
Proceeds from exercise of common stock options | 54,938 | 6,918 |
Cash received on settlement of derivative financial instruments | 22,835 | 0 |
Other, net | 941 | 742 |
Net cash used in financing activities | -574,966 | -217,776 |
Effect of exchange rate changes on cash | 455 | 206 |
Net (decrease) increase in cash and cash equivalents | -19,425 | 10,319 |
Cash and cash equivalents at beginning of period | 204,687 | 194,855 |
Cash and cash equivalents at end of period | 185,262 | 205,174 |
Cash paid during the period for: | ' | ' |
Interest, net of amount capitalized | 173,470 | 199,288 |
Non cash Investing Activities | ' | ' |
Purchase of property and equipment through asset trade in | $0 | $46,375 |
General
General | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
General | ' |
General | |
Description of Business | |
We are a global cruise company. We own Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisières de France and a 50% joint venture interest in TUI Cruises. | |
Basis for Preparation of Consolidated Financial Statements | |
The unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates. See Note 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of our significant accounting policies. | |
All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. See Note 5. Goodwill and Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method. We consolidate the operating results of Pullmantur and CDF Croisières de France on a two-month lag to allow for more timely preparation of our consolidated financial statements. On March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale during the second quarter of 2014. No material events or other transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of May and June 2014 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended June 30, 2014. | |
We believe the accompanying unaudited consolidated financial statements contain all normal recurring accruals necessary for a fair presentation. Our revenues are seasonal and results for interim periods are not necessarily indicative of results for the entire year. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
Recent Accounting Pronouncements | |
In January 2014, amended guidance was issued regarding the accounting for service concession arrangements. The new guidance defines a service concession as an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates and maintains the grantor’s infrastructure for a specified period of time and in return receives payments from the grantor and or third party user for use of the infrastructure. The guidance prohibits the operating entity from accounting for a service concession arrangement as a lease and from recording the infrastructure used in the arrangement within property plant and equipment. This guidance must be applied using a modified retrospective approach and will be effective for our interim and annual reporting periods beginning after December 15, 2014. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have a material impact on our consolidated financial statements. | |
In April 2014, amended guidance was issued changing the requirements for reporting discontinued operations and enhancing the disclosures in this area. The new guidance requires a disposal of a component of an entity or a group of components of an entity to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The guidance will be effective prospectively for our interim and annual reporting periods beginning after December 15, 2014. The guidance will impact the reporting and disclosures of future disposals, if any. | |
In May 2014, amended guidance was issued to clarify the principles used to recognize revenue for all entities. The guidance is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in the prior accounting guidance. This guidance must be applied using one of two retrospective application methods and will be effective for our interim and annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. We are currently evaluating the impact of the adoption of this newly issued guidance on our consolidated financial statements. | |
Reclassifications | |
For the quarter and six months ended June 30, 2013, $1.7 million has been reclassified in the consolidated statements of comprehensive income (loss) from Marketing, selling and administrative expenses to Restructuring Charges to conform to the current year presentation. | |
Other | |
Revenues and expenses include port costs that vary with guest head counts. The amounts of such port costs included in passenger ticket revenues on a gross basis were $137.7 million and $117.0 million for the second quarters of 2014 and 2013, respectively, and $261.8 million and $232.7 million for the six months ended June 30, 2014 and 2013, respectively. | |
During the second quarter of 2013, we recorded an out-of-period adjustment of approximately $15.2 million to correct an error in the calculation of our liability for our credit card rewards program which understated the liability and overstated income during the fiscal years 2003 through 2013. Because the adjustment, both individually and in the aggregate, was not material to any of the prior years’ financial statements, and the impact of correcting the error was not material to the full year 2013 financial statements, we recorded the correction in the financial statements in the second quarter of 2013. This amount reduced onboard and other revenues in our consolidated statements of comprehensive income (loss). |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Earnings Per Share | ' | |||||||||||||||
Earnings Per Share | ||||||||||||||||
A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data): | ||||||||||||||||
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income for basic and diluted earnings per share | $ | 137,673 | $ | 24,747 | $ | 164,130 | $ | 100,973 | ||||||||
Weighted-average common shares outstanding | 222,189 | 219,502 | 221,745 | 219,301 | ||||||||||||
Dilutive effect of stock options, performance share awards and restricted stock awards | 1,192 | 1,146 | 1,310 | 1,295 | ||||||||||||
Diluted weighted-average shares outstanding | 223,381 | 220,648 | 223,055 | 220,596 | ||||||||||||
Basic earnings per share | $ | 0.62 | $ | 0.11 | $ | 0.74 | $ | 0.46 | ||||||||
Diluted earnings per share | $ | 0.62 | $ | 0.11 | $ | 0.74 | $ | 0.46 | ||||||||
Diluted earnings per share does not reflect options to purchase an aggregate of 2.4 million shares for each of the quarter and six months ended June 30, 2013, respectively, because the effect of including them would have been antidilutive. There were no antidilutive shares for the quarter and six months ended June 30, 2014. |
LongTerm_Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Long-Term Debt | ' |
Long-Term Debt | |
In January 2014, we borrowed $380.0 million under a previously committed unsecured term loan facility. The loan is due and payable at maturity in August 2018. Interest on the loan accrues at a floating rate based on LIBOR plus the applicable margin. The applicable margin varies with our debt rating and was 2.12% as of June 30, 2014. The proceeds of this loan were used to repay our €745.0 million 5.625% unsecured senior notes due January 2014. | |
In January 2014, we amended and restated our €365.0 million unsecured term loan due July 2017. Interest on the amended facility accrues at a floating rate based on EURIBOR plus a margin which varies with our credit rating. The amendment reduced the margin, which at our current credit rating resulted in a decrease from 3.00% to 2.30%. The amendment did not result in the extinguishment of debt. | |
In March 2014, we amended our unsecured term loans for Oasis of the Seas and Allure of the Seas primarily to reduce the margins on those facilities and eliminate the lenders option to exit those facilities in 2015 and 2017, respectively. The interest rate on the $420.0 million floating rate tranche of the Oasis of the Seas term loan was reduced from LIBOR plus 2.10% to LIBOR plus 1.85%. The interest rate on the entire $1.1 billion Allure of the Seas term loan was reduced from LIBOR plus 2.10% to LIBOR plus 1.85%. These amendments did not result in the extinguishment of debt. |
Goodwill_and_Other_Assets
Goodwill and Other Assets | 6 Months Ended |
Jun. 30, 2014 | |
Goodwill and Other Assets | ' |
Goodwill and Other Assets | ' |
Goodwill and Other Assets | |
As of June 30, 2014, the carrying amounts of goodwill and trademarks and trade names attributable to our Pullmantur reporting unit were $151.1 million and $212.7 million, respectively. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets, with an increasing focus on Latin America. The persistent economic instability in these markets has created significant uncertainties in forecasting operating results and future cash flows used in our impairment analyses. We continue to monitor economic events in these markets for their potential impact on Pullmantur’s business and valuation. However, based on our most recent projections, we do not believe an interim impairment evaluation of Pullmantur’s goodwill or trademarks and trade names is warranted as of June 30, 2014. | |
If there are relatively modest changes to the projected future cash flows used in the impairment analyses, especially in Net Yields, or if anticipated transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur's reporting unit’s goodwill and trademarks and trade names may be required. Of these factors, the planned transfers of vessels to the Pullmantur fleet is most significant to the projected future cash flows. If the transfers do not occur, we will likely fail step one of the impairment test. We will continue to monitor these intangible assets for potential impairment and perform interim testing of our goodwill, trademarks or trade names if deemed necessary. | |
Variable Interest Entities | |
A Variable Interest Entity (“VIE”) is an entity in which the equity investors have not provided enough equity to finance the entity’s activities or the equity investors (1) cannot directly or indirectly make decisions about the entity’s activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity’s activities involve or are conducted on behalf of an investor with a disproportionately small voting interest. | |
We have determined that Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair and maintenance facility in which we have a 40% noncontrolling interest, is a VIE. The facility serves cruise and cargo ships, oil and gas tankers, and offshore units. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. We have determined that we are not the primary beneficiary of this facility as we do not have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of June 30, 2014, the net book value of our investment in Grand Bahama, was approximately $57.2 million, consisting of $11.0 million in equity and $46.2 million in loans. As of December 31, 2013, the net book value of our investment in Grand Bahama was approximately $56.1 million, consisting of $6.4 million in equity and $49.7 million in loans. These amounts represent our maximum exposure to loss as we are not contractually required to provide any financial or other support to the facility. The majority of our loans to Grand Bahama are in non-accrual status and the majority of this amount is included within Other assets in our consolidated balance sheets. During the first six months of 2014, we received approximately $3.4 million in principal and interest payments related to loans that are in accrual status from Grand Bahama and recorded income associated with our investment in Grand Bahama. We monitor credit risk associated with these loans through our participation on Grand Bahama’s board of directors along with our review of Grand Bahama’s financial statements and projected cash flows. Based on this review, we believe the risk of loss associated with these loans was not probable as of June 30, 2014. | |
On March 31, 2014, as part of Pullmantur's sale of its non-core businesses, Pullmantur sold the majority of its 49% interest in Pullmantur Air S.A. ("Pullmantur Air"), a small aircraft business that operates four aircraft in support of Pullmantur's operations. Post-sale, we retained a 19% interest in Pullmantur Air as well as 100% ownership of the aircraft, which are now being dry leased to Pullmantur Air. We will continue to utilize the services provided by Pullmantur Air. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale in the second quarter of 2014. As of the date of the sale, we determined that Pullmantur Air was no longer a VIE and have accounted for our 19% investment in Pullmantur Air under the cost method of accounting. | |
Prior to the sale, we determined that Pullmantur Air was a VIE for which we were the primary beneficiary and we consolidated the assets and liabilities of Pullmantur Air in our consolidated balance sheets as of December 31, 2013. We did not separately disclose the assets and liabilities of Pullmantur Air as they were immaterial to our December 31, 2013 consolidated financial statements. See Note 10. Restructuring Charges for further discussion on the Pullmantur sales transaction. | |
Additionally, in connection with the sale of Pullmantur's non-core businesses, Pullmantur sold the majority of its land-based tour operations and travel agency, retaining a 19% noncontrolling interest in both Nautalia Viajes, S.L. ("Nautalia"), a small travel agency network, and Global Tour Operación, S.L. ("Global Tour"), a small tour operations business. We will continue to utilize the services provided by these businesses, in addition to services from other travel agency and tour operations businesses. Consistent with our two-month lag Pullmantur reporting period, we reported the impact of this sale in our consolidated financial statements in the second quarter of 2014. As of the date of the sale, we determined that Nautalia and Global Tour were VIEs for which we were not the primary beneficiaries as we do not have the power to direct the activities that most significantly impact the economic performance of these entities. In accordance with authoritative guidance for nonconsolidated VIEs, we have accounted for our 19% investment in these companies under the equity method of accounting. See Note 10. Restructuring Charges for further discussion on the Pullmantur sales transaction. | |
We also extended a term loan facility to Nautalia due June 30, 2016 and maintained commercial and bank guarantees on behalf of Nautalia, Pullmantur Air and Global Tour for a maximum period of twelve months. As of June 30, 2014, our maximum exposure to loss related to these transactions was $11.7 million. Except for the aforementioned, we are not contractually required to provide any financial or other support to these businesses. See Note 10. Restructuring Charges for further discussion on the sales transaction. | |
We have determined that TUI Cruises GmbH, our 50%-owned joint venture, which operates the brand TUI Cruises, is a VIE. As of June 30, 2014 and December 31, 2013, our investment in TUI Cruises, including equity and loans, was approximately $358.9 million and $354.3 million, respectively. The majority of this amount was included within Other assets in our consolidated balance sheets. In addition, we and TUI AG, our joint venture partner, have each guaranteed the repayment of 50% of a €180.0 million bank loan provided to TUI Cruises due in 2016. Our investment amount and the potential obligations under this guarantee are substantially our maximum exposure to loss. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting. As of June 30, 2014, TUI Cruises’ bank loan that is guaranteed by the shareholders had a remaining balance of €126.0 million, or approximately $172.5 million based on the exchange rate at June 30, 2014. This bank loan amortizes quarterly and is secured by first mortgages on both Mein Schiff 1 and Mein Schiff 2. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable. | |
In connection with our sale of Celebrity Mercury to TUI Cruises in 2011, we provided a debt facility to TUI Cruises in the amount of up to €90.0 million. In February 2014, the maximum amount of the debt facility was increased to €125.0 million and we provided TUI Cruises with the ability to draw upon the available capacity through October 31, 2015. In addition, the interest rate for balances outstanding at the date of the facility increase was decreased from 9.54% per annum to 5.0% per annum. Further amounts drawn bear interest of EURIBOR plus 4.7%. This facility is 50% guaranteed by TUI AG and is secured by second and third mortgages on Mein Schiff 1 and Mein Schiff 2. The outstanding principal amount of the facility as of June 30, 2014 was €51.4 million, or $70.4 million based on the exchange rate at June 30, 2014. | |
During 2012, TUI Cruises entered into a construction agreement with STX Finland to build its second newbuild ship, scheduled for delivery in the second quarter of 2015. TUI Cruises has entered into a credit agreement for the financing of up to 80% of the contract price of the ship. The remaining portion of the contract price of the ship will be funded through either TUI Cruises’ cash flows from operations and/or loans and/or equity contributions from us and TUI AG. The ship construction agreement includes certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through the construction period. In addition, the credit agreements extend this restriction through 2019. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
As of June 30, 2014, the aggregate cost of our four ships on order (excluding TUI Cruises' Mein Schiff 4) was approximately $4.8 billion, of which we had deposited $525.4 million as of such date. Approximately 16.3% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2014. (See Note 9. Fair Value Measurements and Derivative Instruments). | |
In addition to our ships on order, we reached an agreement with STX France in the second quarter of 2014 to build the fourth Oasis-class ship for Royal Caribbean International. This agreement is subject to certain conditions to effectiveness expected to occur in the third quarter of 2014. The ship will have a capacity of approximately 5,450 berths and is expected to enter service in 2018. | |
In April 2014, we entered into a credit agreement for the US dollar financing of a portion of the third Oasis-class ship. The credit agreement makes available to us an unsecured term loan in an amount up to the US dollar equivalent of €178.4 million. The loan amortizes semi-annually and will mature 12 years following delivery of the ship. At our election prior to the ship delivery, interest on the loan will accrue either (1) at a fixed rate of 2.53% (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 1.20%. In connection with this credit agreement, we amended the €892.2 million credit agreement, originally entered into in 2013 to finance the ship, reducing the maximum facility amount to approximately €713.8 million. Both the existing Euro-denominated facility and the new US dollar-denominated facility are 100% guaranteed by Compagnie Française d’Assurance pour le Commerce Extérieur (“COFACE”), the export credit agency of France. | |
Litigation | |
A class action complaint was filed in June 2011 against Royal Caribbean Cruises Ltd. in the United States District Court for the Southern District of Florida on behalf of a purported class of stateroom attendants employed onboard Royal Caribbean International cruise vessels. The complaint alleges that the stateroom attendants were required to pay other crew members to help with their duties and that certain stateroom attendants were required to work back of house assignments without the ability to earn gratuities, in each case in violation of the U.S. Seaman’s Wage Act. Plaintiffs seek judgments for damages, wage penalties and interest in an indeterminate amount. In May 2012, the Court granted our motion to dismiss the complaint on the basis that the applicable collective bargaining agreement requires any such claims to be arbitrated. The United States Court of Appeals, 11th Circuit affirmed the Court's dismissal and denied Plaintiff's petition for re-hearing and re-hearing en banc. We believe the underlying claims made against us are without merit, and we intend to vigorously defend ourselves against them. Because of the inherent uncertainty as to the outcome of this proceeding, we are unable at this time to estimate the possible impact of this matter on us. | |
We are routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows. | |
Other | |
In July 2002, we entered into an operating lease denominated in British pound sterling for the Brilliance of the Seas. The lease payments vary based on sterling LIBOR and are included in Other operating income (expenses) in our consolidated statements of comprehensive income (loss). Brilliance of the Seas lease expense amounts were approximately £3.1 million and £3.1 million, or approximately $5.3 million and $4.8 million, for the quarters ended June 30, 2014 and June 30, 2013, respectively, and were approximately £6.2 million and £6.1 million, or approximately $10.4 million and $9.3 million for the six months ended June 30, 2014 and June 30, 2013, respectively. The lease has a contractual life of 25 years; however, both the lessor and we have certain rights to cancel the lease at year 18 (i.e. 2020) upon advance notice given approximately one year prior to cancellation. In the event of early termination at year 18, we have the option to cause the sale of the vessel at its fair value and to use the proceeds towards the applicable termination payment. Alternatively, we could opt at such time to make a termination payment of approximately £62.6 million, or approximately $107.1 million based on the exchange rate at June 30, 2014, and relinquish our right to cause the sale of the vessel. Under current circumstances we do not believe early termination of this lease is probable. | |
Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable determinations which may be made by the United Kingdom tax authorities. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances, timing or a combination of events that could trigger such indemnifications. The United Kingdom tax authorities are disputing the lessor’s accounting treatment of the lease and the lessor and tax authorities are in discussions on the matter. If the characterization of the lease by the lessor is ultimately determined to be incorrect, we could be required to indemnify the lessor under certain circumstances. The lessor has advised us that they believe their characterization of the lease is correct. Based on the foregoing and our review of available information, we do not believe an indemnification payment is probable. However, if the lessor loses its dispute and we are required to indemnify the lessor, we cannot at this time predict the impact that such an occurrence would have on our financial condition and results of operations. | |
Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable. | |
If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 33% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations. |
Shareholders_Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2014 | |
Equity [Abstract] | ' |
Shareholders' Equity | ' |
Shareholders’ Equity | |
During the first and second quarters of 2014, we declared and paid a cash dividend on our common stock of $0.25 per share. During the first quarter of 2014, we also paid a cash dividend on our common stock of $0.25 per share which was declared during the fourth quarter of 2013. | |
During the first and second quarters of 2013, we declared and paid a cash dividend on our common stock of $0.12 per share. |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income (Loss) | 6 Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ' | |||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||||||||||||||||||
The following table presents the changes in accumulated other comprehensive (loss) income by component for the six months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive loss for the Six Months Ended June 30, 2014 | Accumulated Other Comprehensive loss for the Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||
Changes | Changes in | Foreign | Accumulated other | Changes | Changes in | Foreign | Accumulated other | |||||||||||||||||||||||||
related to | defined | currency | comprehensive loss | related to | defined | currency | comprehensive loss | |||||||||||||||||||||||||
cash flow | benefit plans | translation | cash flow | benefit plans | translation | |||||||||||||||||||||||||||
derivative | adjustments | derivative | adjustments | |||||||||||||||||||||||||||||
hedges | hedges | |||||||||||||||||||||||||||||||
Accumulated comprehensive income (loss) at beginning of the year | $ | 43,324 | $ | (23,994 | ) | $ | (13,659 | ) | $ | 5,671 | $ | (84,505 | ) | $ | (34,823 | ) | $ | (15,188 | ) | $ | (134,516 | ) | ||||||||||
Other comprehensive (loss) income before reclassifications | (77,794 | ) | (4,948 | ) | (1,360 | ) | (84,102 | ) | 18,046 | 3,999 | (5,795 | ) | 16,250 | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 4,241 | 863 | 1,997 | 7,101 | (23,104 | ) | 1,294 | — | (21,810 | ) | ||||||||||||||||||||||
Net current-period other comprehensive (loss) income | (73,553 | ) | (4,085 | ) | 637 | (77,001 | ) | (5,058 | ) | 5,293 | (5,795 | ) | (5,560 | ) | ||||||||||||||||||
Ending balance | $ | (30,229 | ) | $ | (28,079 | ) | $ | (13,022 | ) | $ | (71,330 | ) | $ | (89,563 | ) | $ | (29,530 | ) | $ | (20,983 | ) | $ | (140,076 | ) | ||||||||
The following table presents reclassifications out of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||||||||||
Amount of (Loss) Gain Reclassified from | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss) Income into | ||||||||||||||||||||||||||||||||
Income | ||||||||||||||||||||||||||||||||
Details About Accumulated Other Comprehensive (Loss) Income Components | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Affected Line Item in Statements of | |||||||||||||||||||||||||||
Comprehensive (Loss) Income | ||||||||||||||||||||||||||||||||
(Loss) gain on cash flow derivative hedges: | ||||||||||||||||||||||||||||||||
Cross currency swaps | $ | — | $ | (880 | ) | $ | (261 | ) | $ | (1,751 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||
Foreign currency forward contracts | (450 | ) | (450 | ) | (899 | ) | (899 | ) | Depreciation and amortization expenses | |||||||||||||||||||||||
Foreign currency forward contracts | (238 | ) | (239 | ) | (3,814 | ) | (477 | ) | Other income (expense) | |||||||||||||||||||||||
Foreign currency forward contracts | — | (5 | ) | (57 | ) | (5 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||||||
Fuel swaps | 884 | 9,408 | 790 | 26,236 | Fuel | |||||||||||||||||||||||||||
196 | 7,834 | (4,241 | ) | 23,104 | ||||||||||||||||||||||||||||
Amortization of defined benefit plans: | ||||||||||||||||||||||||||||||||
Actuarial loss | (222 | ) | (876 | ) | (445 | ) | (876 | ) | Payroll and related | |||||||||||||||||||||||
Prior service costs | (209 | ) | (418 | ) | (418 | ) | (418 | ) | Payroll and related | |||||||||||||||||||||||
(431 | ) | (1,294 | ) | (863 | ) | (1,294 | ) | |||||||||||||||||||||||||
Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses: | ||||||||||||||||||||||||||||||||
Foreign cumulative translation | (1,997 | ) | — | (1,997 | ) | — | Other operating | |||||||||||||||||||||||||
Total reclassifications for the period | $ | (2,232 | ) | $ | 6,540 | $ | (7,101 | ) | $ | 21,810 | ||||||||||||||||||||||
Fair_Value_Measurements_and_De
Fair Value Measurements and Derivative Instruments | 6 Months Ended | |||||||||||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Derivative Instruments | ' | |||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||||||||||||||||||||||
The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at June 30, 2014 Using | Fair Value Measurements at December 31, 2013 Using | |||||||||||||||||||||||||||||||||||||||
Description | Total Carrying Amount | Total Fair Value | Level 1(1) | Level 2(2) | Level 3(3) | Total Carrying Amount | Total Fair Value | Level 1(1) | Level 2(2) | Level 3(3) | ||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents(4) | $ | 185,262 | $ | 185,262 | $ | 185,262 | $ | — | $ | — | $ | 204,687 | $ | 204,687 | $ | 204,687 | $ | — | $ | — | ||||||||||||||||||||
Total Assets | $ | 185,262 | $ | 185,262 | $ | 185,262 | $ | — | $ | — | $ | 204,687 | $ | 204,687 | $ | 204,687 | $ | — | $ | — | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Long-term debt (including current portion of long-term debt)(5) | $ | 7,538,280 | $ | 7,909,833 | $ | 1,902,445 | $ | 6,007,388 | $ | — | $ | 8,020,061 | $ | 8,431,220 | $ | 2,888,255 | $ | 5,542,965 | $ | — | ||||||||||||||||||||
Total Liabilities | $ | 7,538,280 | $ | 7,909,833 | $ | 1,902,445 | $ | 6,007,388 | $ | — | $ | 8,020,061 | $ | 8,431,220 | $ | 2,888,255 | $ | 5,542,965 | $ | — | ||||||||||||||||||||
(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. | ||||||||||||||||||||||||||||||||||||||||
(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company. | ||||||||||||||||||||||||||||||||||||||||
(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of cash and marketable securities with original maturities of less than 90 days. | ||||||||||||||||||||||||||||||||||||||||
(5) Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations. | ||||||||||||||||||||||||||||||||||||||||
Other Financial Instruments | ||||||||||||||||||||||||||||||||||||||||
The carrying amounts of accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||
Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at June 30, 2014 Using | Fair Value Measurements at December 31, 2013 Using | |||||||||||||||||||||||||||||||||||||||
Description | Total | Level 1(1) | Level 2(2) | Level 3(3) | Total | Level 1(1) | Level 2(2) | Level 3(3) | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments(4) | $ | 80,112 | $ | — | $ | 80,112 | $ | — | $ | 188,576 | $ | — | $ | 188,576 | $ | — | ||||||||||||||||||||||||
Investments(5) | 5,973 | 5,973 | — | — | 6,044 | 6,044 | — | — | ||||||||||||||||||||||||||||||||
Total Assets | $ | 86,085 | $ | 5,973 | $ | 80,112 | $ | — | $ | 194,620 | $ | 6,044 | $ | 188,576 | $ | — | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments(6) | $ | 74,431 | $ | — | $ | 74,431 | $ | — | $ | 100,260 | $ | — | $ | 100,260 | $ | — | ||||||||||||||||||||||||
Total Liabilities | $ | 74,431 | $ | — | $ | 74,431 | $ | — | $ | 100,260 | $ | — | $ | 100,260 | $ | — | ||||||||||||||||||||||||
(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. | ||||||||||||||||||||||||||||||||||||||||
(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company. | ||||||||||||||||||||||||||||||||||||||||
(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of foreign currency forward contracts, foreign currency collar options, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type. | ||||||||||||||||||||||||||||||||||||||||
(5) Consists of exchange-traded equity securities and mutual funds. | ||||||||||||||||||||||||||||||||||||||||
(6) Consists of interest rate swaps, fuel swaps and foreign currency forward contracts. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type. | ||||||||||||||||||||||||||||||||||||||||
The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of June 30, 2014 or December 31, 2013, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement. | ||||||||||||||||||||||||||||||||||||||||
We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, no cash collateral was received or pledged under our ISDA agreements. See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments. | ||||||||||||||||||||||||||||||||||||||||
The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties: | ||||||||||||||||||||||||||||||||||||||||
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | |||||||||||||||||||||||||||||||||
Recognized | Received | Derivative Assets | Recognized | Received | Derivative Assets | |||||||||||||||||||||||||||||||||||
Derivative Liabilities | Derivative Assets | |||||||||||||||||||||||||||||||||||||||
In thousands of dollars | ||||||||||||||||||||||||||||||||||||||||
Derivatives subject to master netting agreements | $ | 80,112 | $ | (42,808 | ) | — | $ | 37,304 | $ | 188,576 | $ | (91,627 | ) | — | $ | 96,949 | ||||||||||||||||||||||||
Total | $ | 80,112 | $ | (42,808 | ) | — | $ | 37,304 | $ | 188,576 | $ | (91,627 | ) | — | $ | 96,949 | ||||||||||||||||||||||||
The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties: | ||||||||||||||||||||||||||||||||||||||||
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | |||||||||||||||||||||||||||||||||
Recognized | Pledged | Derivative Liabilities | Recognized | Pledged | Derivative Liabilities | |||||||||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||
In thousands of dollars | ||||||||||||||||||||||||||||||||||||||||
Derivatives subject to master netting agreements | $ | (74,431 | ) | $ | 42,808 | — | $ | (31,623 | ) | $ | (100,260 | ) | $ | 91,627 | — | $ | (8,633 | ) | ||||||||||||||||||||||
Total | $ | (74,431 | ) | $ | 42,808 | — | $ | (31,623 | ) | $ | (100,260 | ) | $ | 91,627 | — | $ | (8,633 | ) | ||||||||||||||||||||||
Concentrations of Credit Risk | ||||||||||||||||||||||||||||||||||||||||
We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. In addition, our exposure under our derivative instruments was approximately $38.5 million and $92.5 million as of June 30, 2014 and December 31, 2013, respectively, and was limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, all of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us. | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We manage these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, we do not hold or issue derivative financial instruments for trading or other speculative purposes. We monitor our derivative positions using techniques including market valuations and sensitivity analyses. | ||||||||||||||||||||||||||||||||||||||||
We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. | ||||||||||||||||||||||||||||||||||||||||
At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge. | ||||||||||||||||||||||||||||||||||||||||
Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation. | ||||||||||||||||||||||||||||||||||||||||
On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e. interest rate, foreign currency and fuel). We perform regression analyses over an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. The determination of ineffectiveness is based on the amount of dollar offset between the change in fair value of the derivative instrument and the change in fair value of the hedged item at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is immediately recognized in earnings and reported in Other income (expense) in our consolidated statements of comprehensive income (loss). | ||||||||||||||||||||||||||||||||||||||||
Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities. | ||||||||||||||||||||||||||||||||||||||||
We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities. | ||||||||||||||||||||||||||||||||||||||||
Interest Rate Risk | ||||||||||||||||||||||||||||||||||||||||
Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments. At June 30, 2014, approximately 22.4% of our long-term debt was effectively fixed as compared to 34.6% as of December 31, 2013. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense. | ||||||||||||||||||||||||||||||||||||||||
Market risk associated with our long-term fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At June 30, 2014 and December 31, 2013, we maintained interest rate swap agreements on the $420.0 million fixed rate portion of our Oasis of the Seas unsecured amortizing term loan and on the $650.0 million unsecured senior notes due 2022. The interest rate swap agreements on Oasis of the Seas debt effectively changed the interest rate on the balance of the unsecured term loan, which was $262.5 million as of June 30, 2014, from a fixed rate of 5.41% to a LIBOR-based floating rate equal to LIBOR plus 3.87%, currently approximately 4.20%. The interest rate swap agreements on the $650.0 million unsecured senior notes effectively changed the interest rate of the unsecured senior notes from a fixed rate of 5.25% to a LIBOR-based floating rate equal to LIBOR plus 3.63%, currently approximately 3.86%. These interest rate swap agreements are accounted for as fair value hedges. | ||||||||||||||||||||||||||||||||||||||||
Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. At June 30, 2014 and December 31, 2013, we maintained forward-starting interest rate swap agreements that hedge the anticipated unsecured amortizing term loans that will finance our purchase of Quantum of the Seas and Anthem of the Seas. Forward-starting interest rate swaps hedging the Quantum of the Seas loan will effectively convert the interest rate for $735.0 million of the anticipated loan balance from LIBOR plus 1.30% to a fixed rate of 3.74% (inclusive of margin) beginning in October 2014. Forward-starting interest rate swaps hedging the Anthem of the Seas loan will effectively convert the interest rate for $725.0 million of the anticipated loan balance from LIBOR plus 1.30% to a fixed rate of 3.86% (inclusive of margin) beginning in April 2015. These interest rate swap agreements are accounted for as cash flow hedges. | ||||||||||||||||||||||||||||||||||||||||
In addition, at June 30, 2014 and December 31, 2013, we maintained interest rate swap agreements that effectively converted the interest rate on a portion of the Celebrity Reflection unsecured amortizing term loan balance of approximately $572.7 million from LIBOR plus 0.40% to a fixed rate (including applicable margin) of 2.85% through the term of the loan. These interest rate swap agreements are accounted for as cash flow hedges. | ||||||||||||||||||||||||||||||||||||||||
The notional amount of interest rate swap agreements related to outstanding debt and on our current unfunded financing arrangements as of June 30, 2014 and December 31, 2013 was $2.9 billion and $3.0 billion, respectively. | ||||||||||||||||||||||||||||||||||||||||
Foreign Currency Exchange Rate Risk | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts, collar options and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates. As of June 30, 2014, the aggregate cost of our ships on order was approximately $4.8 billion, of which we had deposited $525.4 million as of such date. Approximately 16.3% and 36.3% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at June 30, 2014 and December 31, 2013, respectively. The majority of our foreign currency forward contracts, collar options and cross currency swap agreements are accounted for as cash flow, fair value or net investment hedges depending on the designation of the related hedge. | ||||||||||||||||||||||||||||||||||||||||
On a regular basis, we enter into foreign currency forward contracts to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During the second quarter of 2014, we maintained an average of approximately $459.8 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts resulted in a gain (loss), of approximately $9.0 million and $(16.9) million, respectively, during the quarter ended June 30, 2014 and June 30, 2013, respectively, and approximately $10.8 million and $(25.5) million, during the six months ended June 30, 2014 and June 30, 2013, respectively, that were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive income (loss). | ||||||||||||||||||||||||||||||||||||||||
We consider our investments in our foreign operations to be denominated in relatively stable currencies and of a long-term nature. In January 2014, we entered into €415.6 million foreign currency forward contracts and designated them as hedges of a portion of our net investments in Pullmantur and TUI Cruises as of June 30, 2014. These forward currency contracts mature in April 2016. | ||||||||||||||||||||||||||||||||||||||||
The notional amount of outstanding foreign exchange contracts including our forward contracts and collar options as of June 30, 2014 and December 31, 2013 was $3.4 billion and $2.5 billion, respectively. | ||||||||||||||||||||||||||||||||||||||||
Non-Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments in Pullmantur and TUI Cruises of approximately €124.9 million and €544.9 million, or approximately $171.0 million and $750.8 million, as of June 30, 2014 and December 31, 2013, respectively. | ||||||||||||||||||||||||||||||||||||||||
Fuel Price Risk | ||||||||||||||||||||||||||||||||||||||||
Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements and fuel call options to mitigate the financial impact of fluctuations in fuel prices. | ||||||||||||||||||||||||||||||||||||||||
Our fuel swap agreements are accounted for as cash flow hedges. At June 30, 2014, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2017. As of June 30, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements: | ||||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
30-Jun-14 | 31-Dec-13 | |||||||||||||||||||||||||||||||||||||||
(metric tons) | ||||||||||||||||||||||||||||||||||||||||
2014 | 731,000 | 762,000 | ||||||||||||||||||||||||||||||||||||||
2015 | 720,000 | 665,000 | ||||||||||||||||||||||||||||||||||||||
2016 | 526,000 | 372,000 | ||||||||||||||||||||||||||||||||||||||
2017 | 229,000 | 74,000 | ||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
(% hedged) | ||||||||||||||||||||||||||||||||||||||||
Projected fuel purchases for year: | ||||||||||||||||||||||||||||||||||||||||
2014 | 55 | % | 57 | % | ||||||||||||||||||||||||||||||||||||
2015 | 51 | % | 45 | % | ||||||||||||||||||||||||||||||||||||
2016 | 35 | % | 25 | % | ||||||||||||||||||||||||||||||||||||
2017 | 15 | % | 5 | % | ||||||||||||||||||||||||||||||||||||
At June 30, 2014 and December 31, 2013, $8.5 million and $9.5 million, respectively, of estimated unrealized net (loss) gain associated with our cash flow hedges pertaining to fuel swap agreements were expected to be reclassified to earnings from Accumulated other comprehensive (loss) income within the next twelve months. Reclassification is expected to occur as a result of fuel consumption associated with our hedged forecasted fuel purchases. | ||||||||||||||||||||||||||||||||||||||||
The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows: | ||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||||||||||
Balance Sheet Location | As of June 30, 2014 | As of December 31, 2013 | Balance Sheet Location | As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | Fair Value | Fair Value | |||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments under ASC 815-20(1) | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Other assets | $ | 1,640 | $ | 56,571 | Other long-term liabilities | $ | 51,387 | $ | 66,920 | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | Derivative financial instruments | 30,214 | 61,596 | Accrued expenses and other liabilities | — | — | ||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other assets | 9,582 | 13,783 | Other long-term liabilities | 2,636 | — | ||||||||||||||||||||||||||||||||||
Foreign currency collar options | Derivative financial instruments | 13,439 | — | Other long-term liabilities | — | — | ||||||||||||||||||||||||||||||||||
Foreign currency collar options | Other assets | — | 22,172 | Other long-term liabilities | — | — | ||||||||||||||||||||||||||||||||||
Fuel swaps | Derivative financial instruments | 10,738 | 10,902 | Accrued expenses and other liabilities | 3,029 | 1,657 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other assets | 12,585 | 8,205 | Other long-term liabilities | 5,167 | 9,052 | ||||||||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments under 815-20 | $ | 78,198 | $ | 173,229 | $ | 62,219 | $ | 77,629 | ||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments under ASC 815-20 | ||||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Derivative financial instruments | $ | 1,914 | $ | 15,347 | Accrued expenses and other liabilities | $ | 12,212 | $ | 22,631 | ||||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments under 815-20 | 1,914 | 15,347 | 12,212 | 22,631 | ||||||||||||||||||||||||||||||||||||
Total derivatives | $ | 80,112 | $ | 188,576 | $ | 74,431 | $ | 100,260 | ||||||||||||||||||||||||||||||||
(1) Accounting Standard Codification 815-20 “Derivatives and Hedging.” | ||||||||||||||||||||||||||||||||||||||||
The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows: | ||||||||||||||||||||||||||||||||||||||||
Carrying Value | ||||||||||||||||||||||||||||||||||||||||
Non-derivative instrument designated as hedging instrument under ASC 815-20 | Balance Sheet Location | As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Foreign currency debt | Current portion of long-term debt | $ | — | $ | 477,442 | |||||||||||||||||||||||||||||||||||
Foreign currency debt | Long-term debt | 171,035 | 273,354 | |||||||||||||||||||||||||||||||||||||
$ | 171,035 | $ | 750,796 | |||||||||||||||||||||||||||||||||||||
The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows: | ||||||||||||||||||||||||||||||||||||||||
Derivatives and related Hedged Items | Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item | Amount of Gain (Loss) Recognized in Income on Derivative | Amount of (Loss) Gain Recognized in Income on Hedged Item | |||||||||||||||||||||||||||||||||||||
under ASC 815-20 Fair Value Hedging | ||||||||||||||||||||||||||||||||||||||||
Relationships | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Interest expense, net of interest capitalized | $ | 3,067 | $ | 2,498 | $ | 6,136 | $ | 3,277 | $ | 3,925 | $ | 9,323 | $ | 9,467 | $ | 18,599 | |||||||||||||||||||||||
Interest rate swaps | Other income (expense) | 14,931 | (57,675 | ) | 27,441 | (59,244 | ) | (11,621 | ) | 54,761 | (23,056 | ) | 56,173 | |||||||||||||||||||||||||||
$ | 17,998 | $ | (55,177 | ) | $ | 33,577 | $ | (55,967 | ) | $ | (7,696 | ) | $ | 64,084 | $ | (13,589 | ) | $ | 74,772 | |||||||||||||||||||||
The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows: | ||||||||||||||||||||||||||||||||||||||||
Derivatives | Amount of (Loss) Gain Recognized in | Location of | Amount of Gain (Loss) Reclassified from | |||||||||||||||||||||||||||||||||||||
under ASC 815-20 Cash Flow | Accumulated Other | Gain (Loss) | Accumulated Other Comprehensive (Loss) Income into | |||||||||||||||||||||||||||||||||||||
Hedging | Comprehensive (Loss) Income on Derivative (Effective | Reclassified | Income (Effective Portion) | |||||||||||||||||||||||||||||||||||||
Relationships | Portion) | from | ||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||||
Other Comprehensive | ||||||||||||||||||||||||||||||||||||||||
(Loss) Gain into Income | ||||||||||||||||||||||||||||||||||||||||
(Effective | ||||||||||||||||||||||||||||||||||||||||
Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Portion) | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Cross currency swaps | — | — | — | — | Interest expense, net of interest capitalized | — | (880 | ) | (261 | ) | (1,751 | ) | ||||||||||||||||||||||||||||
Interest rate swaps | (32,221 | ) | 80,800 | (66,745 | ) | 93,488 | Other income (expense) | — | — | — | — | |||||||||||||||||||||||||||||
Foreign currency forward contracts | (10,437 | ) | 6,087 | (9,243 | ) | (8,995 | ) | Depreciation and amortization expenses | (450 | ) | (450 | ) | (899 | ) | (899 | ) | ||||||||||||||||||||||||
Foreign currency forward contracts | — | — | — | — | Other income (expense) | (238 | ) | (239 | ) | (3,814 | ) | (477 | ) | |||||||||||||||||||||||||||
Foreign currency forward contracts | — | — | — | — | Interest expense, net of interest capitalized | — | (5 | ) | (57 | ) | (5 | ) | ||||||||||||||||||||||||||||
Foreign currency collar options | (6,127 | ) | 3,714 | (8,734 | ) | (11,247 | ) | Depreciation and amortization expenses | — | — | — | — | ||||||||||||||||||||||||||||
Fuel swaps | 28,344 | (65,225 | ) | 6,928 | (55,200 | ) | Fuel | 884 | 9,408 | 790 | 26,236 | |||||||||||||||||||||||||||||
$ | (20,441 | ) | $ | 25,376 | $ | (77,794 | ) | $ | 18,046 | $ | 196 | $ | 7,834 | $ | (4,241 | ) | $ | 23,104 | ||||||||||||||||||||||
Location of | Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||||||
Gain (Loss) | ||||||||||||||||||||||||||||||||||||||||
Derivatives | Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||
under ASC 815- | ||||||||||||||||||||||||||||||||||||||||
20 Cash Flow | ||||||||||||||||||||||||||||||||||||||||
Hedging | ||||||||||||||||||||||||||||||||||||||||
Relationships | ||||||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Other income (expense) | (76 | ) | 373 | (95 | ) | 427 | |||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other income (expense) | (7 | ) | (5 | ) | (27 | ) | (10 | ) | |||||||||||||||||||||||||||||||
Fuel swaps | Other income (expense) | 2,094 | (3,649 | ) | 462 | (4,369 | ) | |||||||||||||||||||||||||||||||||
$ | 2,011 | $ | (3,281 | ) | $ | 340 | $ | (3,952 | ) | |||||||||||||||||||||||||||||||
The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows: | ||||||||||||||||||||||||||||||||||||||||
Non-derivative | Amount of Gain (Loss) Recognized in Other | Location of | Amount of Gain (Loss) Recognized in Income | |||||||||||||||||||||||||||||||||||||
instruments under ASC 815- | Comprehensive Income (Loss) (Effective Portion) | Gain (Loss) | (Ineffective Portion and Amount Excluded from | |||||||||||||||||||||||||||||||||||||
20 Net | in Income | Effectiveness Testing) | ||||||||||||||||||||||||||||||||||||||
Investment | (Ineffective | |||||||||||||||||||||||||||||||||||||||
Hedging | Portion and Amount | |||||||||||||||||||||||||||||||||||||||
Relationships | Excluded | |||||||||||||||||||||||||||||||||||||||
from | ||||||||||||||||||||||||||||||||||||||||
Effectiveness | ||||||||||||||||||||||||||||||||||||||||
Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Testing) | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Foreign Currency Debt | $ | 256 | $ | (7,978 | ) | $ | 4,630 | $ | 4,754 | Other income (expense) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
$ | 256 | $ | (7,978 | ) | $ | 4,630 | $ | 4,754 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows: | ||||||||||||||||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||||||||||||||||||||||||||||||||||||||||
Derivatives Not | Location of Gain | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||
Designated as Hedging | (Loss) Recognized in | |||||||||||||||||||||||||||||||||||||||
Instruments under ASC | Income on Derivatives | |||||||||||||||||||||||||||||||||||||||
815-20 | ||||||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other income (expense) | $ | 8,889 | $ | (18,669 | ) | $ | 10,770 | $ | (27,280 | ) | |||||||||||||||||||||||||||||
Fuel swaps | Other income (expense) | 285 | (61 | ) | (937 | ) | 48 | |||||||||||||||||||||||||||||||||
Fuel call options | Other income (expense) | — | (121 | ) | — | 37 | ||||||||||||||||||||||||||||||||||
$ | 9,174 | $ | (18,851 | ) | $ | 9,833 | $ | (27,195 | ) | |||||||||||||||||||||||||||||||
Credit Related Contingent Features | ||||||||||||||||||||||||||||||||||||||||
Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings remain below specified levels. Specifically, if on the fifth anniversary of entering into a derivative transaction or on any succeeding fifth-year anniversary our credit ratings for our senior unsecured debt were to be below BBB- by Standard & Poor’s and Baa3 by Moody’s, then each counterparty to such derivative transaction with whom we are in a net liability position that exceeds the applicable minimum call amount may demand that we post collateral in an amount equal to the net liability position. The amount of collateral required to be posted following such event will change each time our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to, or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. Currently, our senior unsecured debt credit rating is BB with a positive outlook by Standard & Poor’s and Ba1 with a stable outlook by Moody’s. We currently have five interest rate derivative hedges that have a term of at least five years. The aggregate fair values of all derivative instruments with such credit-related contingent features in net liability positions as of June 30, 2014 and December 31, 2013 were $51.4 million and $66.9 million, respectively, which do not include the impact of any such derivatives in net asset positions. The earliest that any of the five interest rate derivative hedges will reach their fifth anniversary is November 2016. Therefore, as of June 30, 2014, we were not required to post collateral for any of our derivative transactions. |
Restructuring_and_Related_Char
Restructuring and Related Charges | 6 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||||||
Restructuring and Related Charges | ' | |||||||||||||||||||||||
Restructuring Charges | ||||||||||||||||||||||||
For the quarter ended June 30, 2014 and June 30, 2013, we incurred $(0.1) million and $1.7 million, respectively, and for both of the six months ended June 30, 2014 and June 30, 2013, we incurred $1.7 million of restructuring charges in connection with our broad profitability improvement program. The following are the profitability initiatives that are at different stages of implementation. | ||||||||||||||||||||||||
Consolidation of Global Sales, Marketing, General and Administrative Structure | ||||||||||||||||||||||||
One of our profitability initiatives relates to restructuring and consolidation of our global sales, marketing and general and administrative structure. Activities related to this initiative include the consolidation of most of our call centers located outside of the United States and the establishment of brand dedicated sales, marketing and revenue management teams in key priority markets. This resulted in the elimination of approximately 500 shore-side positions in 2013, primarily from our international markets, resulting in recognition of a liability for one-time termination benefits during the year ended December 31, 2013. Additionally, we incurred contract termination costs and other related costs consisting of legal and consulting fees to implement this initiative. | ||||||||||||||||||||||||
For the quarter and six months ended June 30, 2014, we did not incur significant restructuring exit costs associated with this initiative. For both the quarter and six months ended June 30, 2013, we incurred $1.7 million of restructuring exit costs associated with this initiative. | ||||||||||||||||||||||||
The following table summarizes our restructuring exit costs related to the above initiative (in thousands): | ||||||||||||||||||||||||
Beginning Balance January 1, 2014 | Accruals | Payments | Ending Balance June 30, 2014 | Cumulative | Expected | |||||||||||||||||||
Charges | Additional | |||||||||||||||||||||||
Incurred | Expenses | |||||||||||||||||||||||
to be | ||||||||||||||||||||||||
Incurred | ||||||||||||||||||||||||
Termination benefits | $ | 8,315 | $ | (577 | ) | $ | 4,984 | $ | 2,754 | $ | 9,061 | $ | — | |||||||||||
Contract termination costs | 126 | 5 | 59 | $ | 72 | 4,147 | — | |||||||||||||||||
Other related costs | 1,397 | 150 | 244 | $ | 1,303 | 4,529 | — | |||||||||||||||||
Total | $ | 9,838 | $ | (422 | ) | $ | 5,287 | $ | 4,129 | $ | 17,737 | $ | — | |||||||||||
In connection with this initiative, we incurred approximately $1.7 million and $7.4 million of other costs during the quarter and six months ended June 30, 2014, respectively, that primarily consisted of call center transition costs and accelerated depreciation on leasehold improvements and were classified within Marketing, selling and administrative expenses and Depreciation and amortization expenses in our consolidated statements of comprehensive income (loss). | ||||||||||||||||||||||||
During the second quarter of 2014, we completed activities related to this initiative and do not expect to incur any restructuring exit or other additional costs. | ||||||||||||||||||||||||
Pullmantur Restructuring | ||||||||||||||||||||||||
Restructuring Exit Costs | ||||||||||||||||||||||||
A second initiative relates to Pullmantur’s focus on its cruise business and its expansion in Latin America. Activities related to this initiative include the sale of Pullmantur's non-core businesses and placing operating management closer to the Latin American market. This resulted in the elimination of approximately 100 Pullmantur shore-side positions and recognition of a liability for one-time termination benefits during the year ended December 31, 2013. In the second quarter of 2014, we elected not to execute the dismissal of approximately 30 of the positions which resulted in a partial reversal of the liability. Additionally, we incurred contract termination costs and other related costs consisting of legal and consulting fees to implement this initiative. During the second quarter of 2014, we continued with activities related to this initiative. | ||||||||||||||||||||||||
As a result of these actions, we incurred restructuring exit costs of $0.3 million and $2.1 million for the quarter and six months ended June 30, 2014, which are reported within Restructuring charges in our consolidated statements of comprehensive income (loss). Included in these amounts is a $0.7 million reversal of termination benefits due to the reinstatement of certain Pullmantur shore-side positions. We do not expect to incur additional restructuring exit costs to complete this initiative. | ||||||||||||||||||||||||
The following table summarizes our restructuring exit costs related to the above initiative (in thousands): | ||||||||||||||||||||||||
Beginning Balance January 1, 2014 | Accruals | Payments | Ending Balance June 30, 2014 | Cumulative | Expected | |||||||||||||||||||
Charges | Additional | |||||||||||||||||||||||
Incurred | Expenses | |||||||||||||||||||||||
to be | ||||||||||||||||||||||||
Incurred(1) | ||||||||||||||||||||||||
Termination benefits | $ | 3,910 | $ | 1,362 | $ | 1,224 | $ | 4,048 | $ | 5,272 | $ | 103 | ||||||||||||
Contract termination costs | 847 | — | — | $ | 847 | 847 | (845 | ) | ||||||||||||||||
Other related costs | 516 | 710 | 626 | $ | 600 | 1,226 | — | |||||||||||||||||
Total | $ | 5,273 | $ | 2,072 | $ | 1,850 | $ | 5,495 | $ | 7,345 | $ | (742 | ) | |||||||||||
-1 | These amounts relate to restructuring exit costs associated with our Pullmantur restructuring. | |||||||||||||||||||||||
In connection with this initiative, we incurred approximately $5.3 million and $6.5 million of other costs during the quarter and six months ended June 30, 2014, respectively, associated with placing operating management closer to the Latin American market that was classified within Marketing, selling and administrative expenses in our consolidated statements of comprehensive income (loss). We expect to incur an additional amount for such costs of approximately $6.0 million through the end of 2014. | ||||||||||||||||||||||||
Sale of Pullmantur Non-core Businesses | ||||||||||||||||||||||||
As part of our Pullmantur related initiatives, on March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. In connection with the sale agreement, we retained a 19% interest in each of the non-core businesses as well as 100% ownership of the aircraft which are being dry leased to Pullmantur Air. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale in the second quarter of 2014. See Note 1. General for information on the basis on which we prepare our consolidated financial statements and Note 5. Goodwill and Other Assets for the accounting of our 19% retained interest. | ||||||||||||||||||||||||
The sale resulted in a $0.8 million gain reported in the second quarter of 2014, inclusive of the release of cumulative translation adjustment losses, which is classified within Other operating expenses in our consolidated statements of comprehensive income (loss). As part of the sale, we agreed to maintain commercial and bank guarantees on behalf of the buyer for a maximum period of twelve months and extended a term loan facility to Nautalia due June 30, 2016. In addition, as of June 30, 2014, we recorded the fair value of the guarantees and a loss reserve for the loan amount drawn, offsetting the gain recognized by $2.9 million. See Note 8. Changes in Accumulated Other Comprehensive Income (Loss) for further information on the release of the foreign currency translation losses. | ||||||||||||||||||||||||
The non-core businesses met the accounting criteria to be classified as held for sale during the fourth quarter of 2013 which resulted in restructuring related impairment charges of $20.0 million in 2013 to adjust the carrying value of assets held for sale to their fair value, less cost to sell. As of December 31, 2013, assets and liabilities held for sale were not material to our consolidated balance sheet and no longer exist as of June 30, 2014. The businesses did not meet the criteria for discontinued operations reporting as a result of our significant continuing involvement. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting | ' |
Basis for Preparation of Consolidated Financial Statements | |
The unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates. See Note 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of our significant accounting policies. | |
All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. See Note 5. Goodwill and Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method. We consolidate the operating results of Pullmantur and CDF Croisières de France on a two-month lag to allow for more timely preparation of our consolidated financial statements. On March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale during the second quarter of 2014. No material events or other transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of May and June 2014 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended June 30, 2014. | |
We believe the accompanying unaudited consolidated financial statements contain all normal recurring accruals necessary for a fair presentation. Our revenues are seasonal and results for interim periods are not necessarily indicative of results for the entire year. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In January 2014, amended guidance was issued regarding the accounting for service concession arrangements. The new guidance defines a service concession as an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates and maintains the grantor’s infrastructure for a specified period of time and in return receives payments from the grantor and or third party user for use of the infrastructure. The guidance prohibits the operating entity from accounting for a service concession arrangement as a lease and from recording the infrastructure used in the arrangement within property plant and equipment. This guidance must be applied using a modified retrospective approach and will be effective for our interim and annual reporting periods beginning after December 15, 2014. Early adoption is permitted. | |
Reclassifications | ' |
Reclassifications | |
For the quarter and six months ended June 30, 2013, $1.7 million has been reclassified in the consolidated statements of comprehensive income (loss) from Marketing, selling and administrative expenses to Restructuring Charges to conform to the current year presentation. | |
Other | ' |
Other | |
Revenues and expenses include port costs that vary with guest head counts. The amounts of such port costs included in passenger ticket revenues on a gross basis were $137.7 million and $117.0 million for the second quarters of 2014 and 2013, respectively, and $261.8 million and $232.7 million for the six months ended June 30, 2014 and 2013, respectively. | |
During the second quarter of 2013, we recorded an out-of-period adjustment of approximately $15.2 million to correct an error in the calculation of our liability for our credit card rewards program which understated the liability and overstated income during the fiscal years 2003 through 2013. Because the adjustment, both individually and in the aggregate, was not material to any of the prior years’ financial statements, and the impact of correcting the error was not material to the full year 2013 financial statements, we recorded the correction in the financial statements in the second quarter of 2013. This amount reduced onboard and other revenues in our consolidated statements of comprehensive income (loss). |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Reconciliation Between Basic and Diluted Earnings Per Share | ' | |||||||||||||||
A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data): | ||||||||||||||||
Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income for basic and diluted earnings per share | $ | 137,673 | $ | 24,747 | $ | 164,130 | $ | 100,973 | ||||||||
Weighted-average common shares outstanding | 222,189 | 219,502 | 221,745 | 219,301 | ||||||||||||
Dilutive effect of stock options, performance share awards and restricted stock awards | 1,192 | 1,146 | 1,310 | 1,295 | ||||||||||||
Diluted weighted-average shares outstanding | 223,381 | 220,648 | 223,055 | 220,596 | ||||||||||||
Basic earnings per share | $ | 0.62 | $ | 0.11 | $ | 0.74 | $ | 0.46 | ||||||||
Diluted earnings per share | $ | 0.62 | $ | 0.11 | $ | 0.74 | $ | 0.46 | ||||||||
Changes_in_Accumulated_Other_C1
Changes in Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended | |||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ' | |||||||||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive income (loss) by component | ' | |||||||||||||||||||||||||||||||
The following table presents the changes in accumulated other comprehensive (loss) income by component for the six months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive loss for the Six Months Ended June 30, 2014 | Accumulated Other Comprehensive loss for the Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||
Changes | Changes in | Foreign | Accumulated other | Changes | Changes in | Foreign | Accumulated other | |||||||||||||||||||||||||
related to | defined | currency | comprehensive loss | related to | defined | currency | comprehensive loss | |||||||||||||||||||||||||
cash flow | benefit plans | translation | cash flow | benefit plans | translation | |||||||||||||||||||||||||||
derivative | adjustments | derivative | adjustments | |||||||||||||||||||||||||||||
hedges | hedges | |||||||||||||||||||||||||||||||
Accumulated comprehensive income (loss) at beginning of the year | $ | 43,324 | $ | (23,994 | ) | $ | (13,659 | ) | $ | 5,671 | $ | (84,505 | ) | $ | (34,823 | ) | $ | (15,188 | ) | $ | (134,516 | ) | ||||||||||
Other comprehensive (loss) income before reclassifications | (77,794 | ) | (4,948 | ) | (1,360 | ) | (84,102 | ) | 18,046 | 3,999 | (5,795 | ) | 16,250 | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 4,241 | 863 | 1,997 | 7,101 | (23,104 | ) | 1,294 | — | (21,810 | ) | ||||||||||||||||||||||
Net current-period other comprehensive (loss) income | (73,553 | ) | (4,085 | ) | 637 | (77,001 | ) | (5,058 | ) | 5,293 | (5,795 | ) | (5,560 | ) | ||||||||||||||||||
Ending balance | $ | (30,229 | ) | $ | (28,079 | ) | $ | (13,022 | ) | $ | (71,330 | ) | $ | (89,563 | ) | $ | (29,530 | ) | $ | (20,983 | ) | $ | (140,076 | ) | ||||||||
Schedule of reclassifications out of accumulated other comprehensive income (loss) | ' | |||||||||||||||||||||||||||||||
The following table presents reclassifications out of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||||||||||
Amount of (Loss) Gain Reclassified from | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss) Income into | ||||||||||||||||||||||||||||||||
Income | ||||||||||||||||||||||||||||||||
Details About Accumulated Other Comprehensive (Loss) Income Components | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Affected Line Item in Statements of | |||||||||||||||||||||||||||
Comprehensive (Loss) Income | ||||||||||||||||||||||||||||||||
(Loss) gain on cash flow derivative hedges: | ||||||||||||||||||||||||||||||||
Cross currency swaps | $ | — | $ | (880 | ) | $ | (261 | ) | $ | (1,751 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||
Foreign currency forward contracts | (450 | ) | (450 | ) | (899 | ) | (899 | ) | Depreciation and amortization expenses | |||||||||||||||||||||||
Foreign currency forward contracts | (238 | ) | (239 | ) | (3,814 | ) | (477 | ) | Other income (expense) | |||||||||||||||||||||||
Foreign currency forward contracts | — | (5 | ) | (57 | ) | (5 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||||||
Fuel swaps | 884 | 9,408 | 790 | 26,236 | Fuel | |||||||||||||||||||||||||||
196 | 7,834 | (4,241 | ) | 23,104 | ||||||||||||||||||||||||||||
Amortization of defined benefit plans: | ||||||||||||||||||||||||||||||||
Actuarial loss | (222 | ) | (876 | ) | (445 | ) | (876 | ) | Payroll and related | |||||||||||||||||||||||
Prior service costs | (209 | ) | (418 | ) | (418 | ) | (418 | ) | Payroll and related | |||||||||||||||||||||||
(431 | ) | (1,294 | ) | (863 | ) | (1,294 | ) | |||||||||||||||||||||||||
Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses: | ||||||||||||||||||||||||||||||||
Foreign cumulative translation | (1,997 | ) | — | (1,997 | ) | — | Other operating | |||||||||||||||||||||||||
Total reclassifications for the period | $ | (2,232 | ) | $ | 6,540 | $ | (7,101 | ) | $ | 21,810 | ||||||||||||||||||||||
Fair_Value_Measurements_and_De1
Fair Value Measurements and Derivative Instruments (Tables) | 6 Months Ended | |||||||||||||||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||||||||||||||||||||||
Estimated Fair Value of Financial Instruments that are not Measured at Fair Value on Recurring Basis | ' | |||||||||||||||||||||||||||||||||||||||
The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at June 30, 2014 Using | Fair Value Measurements at December 31, 2013 Using | |||||||||||||||||||||||||||||||||||||||
Description | Total Carrying Amount | Total Fair Value | Level 1(1) | Level 2(2) | Level 3(3) | Total Carrying Amount | Total Fair Value | Level 1(1) | Level 2(2) | Level 3(3) | ||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents(4) | $ | 185,262 | $ | 185,262 | $ | 185,262 | $ | — | $ | — | $ | 204,687 | $ | 204,687 | $ | 204,687 | $ | — | $ | — | ||||||||||||||||||||
Total Assets | $ | 185,262 | $ | 185,262 | $ | 185,262 | $ | — | $ | — | $ | 204,687 | $ | 204,687 | $ | 204,687 | $ | — | $ | — | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Long-term debt (including current portion of long-term debt)(5) | $ | 7,538,280 | $ | 7,909,833 | $ | 1,902,445 | $ | 6,007,388 | $ | — | $ | 8,020,061 | $ | 8,431,220 | $ | 2,888,255 | $ | 5,542,965 | $ | — | ||||||||||||||||||||
Total Liabilities | $ | 7,538,280 | $ | 7,909,833 | $ | 1,902,445 | $ | 6,007,388 | $ | — | $ | 8,020,061 | $ | 8,431,220 | $ | 2,888,255 | $ | 5,542,965 | $ | — | ||||||||||||||||||||
(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. | ||||||||||||||||||||||||||||||||||||||||
(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company. | ||||||||||||||||||||||||||||||||||||||||
(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of cash and marketable securities with original maturities of less than 90 days. | ||||||||||||||||||||||||||||||||||||||||
(5) Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations. | ||||||||||||||||||||||||||||||||||||||||
Company's Financial Instruments Recorded at Fair Value on Recurring Basis | ' | |||||||||||||||||||||||||||||||||||||||
The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at June 30, 2014 Using | Fair Value Measurements at December 31, 2013 Using | |||||||||||||||||||||||||||||||||||||||
Description | Total | Level 1(1) | Level 2(2) | Level 3(3) | Total | Level 1(1) | Level 2(2) | Level 3(3) | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments(4) | $ | 80,112 | $ | — | $ | 80,112 | $ | — | $ | 188,576 | $ | — | $ | 188,576 | $ | — | ||||||||||||||||||||||||
Investments(5) | 5,973 | 5,973 | — | — | 6,044 | 6,044 | — | — | ||||||||||||||||||||||||||||||||
Total Assets | $ | 86,085 | $ | 5,973 | $ | 80,112 | $ | — | $ | 194,620 | $ | 6,044 | $ | 188,576 | $ | — | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments(6) | $ | 74,431 | $ | — | $ | 74,431 | $ | — | $ | 100,260 | $ | — | $ | 100,260 | $ | — | ||||||||||||||||||||||||
Total Liabilities | $ | 74,431 | $ | — | $ | 74,431 | $ | — | $ | 100,260 | $ | — | $ | 100,260 | $ | — | ||||||||||||||||||||||||
(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. | ||||||||||||||||||||||||||||||||||||||||
(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company. | ||||||||||||||||||||||||||||||||||||||||
(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of foreign currency forward contracts, foreign currency collar options, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type. | ||||||||||||||||||||||||||||||||||||||||
(5) Consists of exchange-traded equity securities and mutual funds. | ||||||||||||||||||||||||||||||||||||||||
(6) Consists of interest rate swaps, fuel swaps and foreign currency forward contracts. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type. | ||||||||||||||||||||||||||||||||||||||||
Outstanding Fuel Swap Agreements | ' | |||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements: | ||||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
30-Jun-14 | 31-Dec-13 | |||||||||||||||||||||||||||||||||||||||
(metric tons) | ||||||||||||||||||||||||||||||||||||||||
2014 | 731,000 | 762,000 | ||||||||||||||||||||||||||||||||||||||
2015 | 720,000 | 665,000 | ||||||||||||||||||||||||||||||||||||||
2016 | 526,000 | 372,000 | ||||||||||||||||||||||||||||||||||||||
2017 | 229,000 | 74,000 | ||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
(% hedged) | ||||||||||||||||||||||||||||||||||||||||
Projected fuel purchases for year: | ||||||||||||||||||||||||||||||||||||||||
2014 | 55 | % | 57 | % | ||||||||||||||||||||||||||||||||||||
2015 | 51 | % | 45 | % | ||||||||||||||||||||||||||||||||||||
2016 | 35 | % | 25 | % | ||||||||||||||||||||||||||||||||||||
2017 | 15 | % | 5 | % | ||||||||||||||||||||||||||||||||||||
Fair Value And Line item Caption of Derivative Instruments | ' | |||||||||||||||||||||||||||||||||||||||
The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows: | ||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||||||||||
Balance Sheet Location | As of June 30, 2014 | As of December 31, 2013 | Balance Sheet Location | As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | Fair Value | Fair Value | |||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments under ASC 815-20(1) | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Other assets | $ | 1,640 | $ | 56,571 | Other long-term liabilities | $ | 51,387 | $ | 66,920 | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | Derivative financial instruments | 30,214 | 61,596 | Accrued expenses and other liabilities | — | — | ||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other assets | 9,582 | 13,783 | Other long-term liabilities | 2,636 | — | ||||||||||||||||||||||||||||||||||
Foreign currency collar options | Derivative financial instruments | 13,439 | — | Other long-term liabilities | — | — | ||||||||||||||||||||||||||||||||||
Foreign currency collar options | Other assets | — | 22,172 | Other long-term liabilities | — | — | ||||||||||||||||||||||||||||||||||
Fuel swaps | Derivative financial instruments | 10,738 | 10,902 | Accrued expenses and other liabilities | 3,029 | 1,657 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other assets | 12,585 | 8,205 | Other long-term liabilities | 5,167 | 9,052 | ||||||||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments under 815-20 | $ | 78,198 | $ | 173,229 | $ | 62,219 | $ | 77,629 | ||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments under ASC 815-20 | ||||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Derivative financial instruments | $ | 1,914 | $ | 15,347 | Accrued expenses and other liabilities | $ | 12,212 | $ | 22,631 | ||||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments under 815-20 | 1,914 | 15,347 | 12,212 | 22,631 | ||||||||||||||||||||||||||||||||||||
Total derivatives | $ | 80,112 | $ | 188,576 | $ | 74,431 | $ | 100,260 | ||||||||||||||||||||||||||||||||
(1) Accounting Standard Codification 815-20 “Derivatives and Hedging.” | ||||||||||||||||||||||||||||||||||||||||
Carrying Value and Line Item Caption of Non-derivative Instruments designated as hedging instruments | ' | |||||||||||||||||||||||||||||||||||||||
The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows: | ||||||||||||||||||||||||||||||||||||||||
Carrying Value | ||||||||||||||||||||||||||||||||||||||||
Non-derivative instrument designated as hedging instrument under ASC 815-20 | Balance Sheet Location | As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Foreign currency debt | Current portion of long-term debt | $ | — | $ | 477,442 | |||||||||||||||||||||||||||||||||||
Foreign currency debt | Long-term debt | 171,035 | 273,354 | |||||||||||||||||||||||||||||||||||||
$ | 171,035 | $ | 750,796 | |||||||||||||||||||||||||||||||||||||
Effect of Non-derivative Instruments Qualifying and Designated as net investment Hedging Instruments on Consolidated Financial Statements | ' | |||||||||||||||||||||||||||||||||||||||
The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows: | ||||||||||||||||||||||||||||||||||||||||
Non-derivative | Amount of Gain (Loss) Recognized in Other | Location of | Amount of Gain (Loss) Recognized in Income | |||||||||||||||||||||||||||||||||||||
instruments under ASC 815- | Comprehensive Income (Loss) (Effective Portion) | Gain (Loss) | (Ineffective Portion and Amount Excluded from | |||||||||||||||||||||||||||||||||||||
20 Net | in Income | Effectiveness Testing) | ||||||||||||||||||||||||||||||||||||||
Investment | (Ineffective | |||||||||||||||||||||||||||||||||||||||
Hedging | Portion and Amount | |||||||||||||||||||||||||||||||||||||||
Relationships | Excluded | |||||||||||||||||||||||||||||||||||||||
from | ||||||||||||||||||||||||||||||||||||||||
Effectiveness | ||||||||||||||||||||||||||||||||||||||||
Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Testing) | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Foreign Currency Debt | $ | 256 | $ | (7,978 | ) | $ | 4,630 | $ | 4,754 | Other income (expense) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
$ | 256 | $ | (7,978 | ) | $ | 4,630 | $ | 4,754 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
Derivative Instruments | ' | |||||||||||||||||||||||||||||||||||||||
Offsetting Liabilities | ' | |||||||||||||||||||||||||||||||||||||||
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | |||||||||||||||||||||||||||||||||
Recognized | Pledged | Derivative Liabilities | Recognized | Pledged | Derivative Liabilities | |||||||||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||
In thousands of dollars | ||||||||||||||||||||||||||||||||||||||||
Derivatives subject to master netting agreements | $ | (74,431 | ) | $ | 42,808 | — | $ | (31,623 | ) | $ | (100,260 | ) | $ | 91,627 | — | $ | (8,633 | ) | ||||||||||||||||||||||
Total | $ | (74,431 | ) | $ | 42,808 | — | $ | (31,623 | ) | $ | (100,260 | ) | $ | 91,627 | — | $ | (8,633 | ) | ||||||||||||||||||||||
Offsetting Assets | ' | |||||||||||||||||||||||||||||||||||||||
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||||||||||||||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||||
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | Gross Amount of Eligible Offsetting | Cash Collateral | Net Amount of | |||||||||||||||||||||||||||||||||
Recognized | Received | Derivative Assets | Recognized | Received | Derivative Assets | |||||||||||||||||||||||||||||||||||
Derivative Liabilities | Derivative Assets | |||||||||||||||||||||||||||||||||||||||
In thousands of dollars | ||||||||||||||||||||||||||||||||||||||||
Derivatives subject to master netting agreements | $ | 80,112 | $ | (42,808 | ) | — | $ | 37,304 | $ | 188,576 | $ | (91,627 | ) | — | $ | 96,949 | ||||||||||||||||||||||||
Total | $ | 80,112 | $ | (42,808 | ) | — | $ | 37,304 | $ | 188,576 | $ | (91,627 | ) | — | $ | 96,949 | ||||||||||||||||||||||||
Not Designated as Hedging Instrument | ' | |||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ' | |||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | ' | |||||||||||||||||||||||||||||||||||||||
The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows: | ||||||||||||||||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Income on Derivatives | ||||||||||||||||||||||||||||||||||||||||
Derivatives Not | Location of Gain | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||
Designated as Hedging | (Loss) Recognized in | |||||||||||||||||||||||||||||||||||||||
Instruments under ASC | Income on Derivatives | |||||||||||||||||||||||||||||||||||||||
815-20 | ||||||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other income (expense) | $ | 8,889 | $ | (18,669 | ) | $ | 10,770 | $ | (27,280 | ) | |||||||||||||||||||||||||||||
Fuel swaps | Other income (expense) | 285 | (61 | ) | (937 | ) | 48 | |||||||||||||||||||||||||||||||||
Fuel call options | Other income (expense) | — | (121 | ) | — | 37 | ||||||||||||||||||||||||||||||||||
$ | 9,174 | $ | (18,851 | ) | $ | 9,833 | $ | (27,195 | ) | |||||||||||||||||||||||||||||||
Fair Value Hedging | ' | |||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ' | |||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | ' | |||||||||||||||||||||||||||||||||||||||
The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows: | ||||||||||||||||||||||||||||||||||||||||
Derivatives and related Hedged Items | Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item | Amount of Gain (Loss) Recognized in Income on Derivative | Amount of (Loss) Gain Recognized in Income on Hedged Item | |||||||||||||||||||||||||||||||||||||
under ASC 815-20 Fair Value Hedging | ||||||||||||||||||||||||||||||||||||||||
Relationships | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Interest expense, net of interest capitalized | $ | 3,067 | $ | 2,498 | $ | 6,136 | $ | 3,277 | $ | 3,925 | $ | 9,323 | $ | 9,467 | $ | 18,599 | |||||||||||||||||||||||
Interest rate swaps | Other income (expense) | 14,931 | (57,675 | ) | 27,441 | (59,244 | ) | (11,621 | ) | 54,761 | (23,056 | ) | 56,173 | |||||||||||||||||||||||||||
$ | 17,998 | $ | (55,177 | ) | $ | 33,577 | $ | (55,967 | ) | $ | (7,696 | ) | $ | 64,084 | $ | (13,589 | ) | $ | 74,772 | |||||||||||||||||||||
Cash flow hedge | ' | |||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ' | |||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | ' | |||||||||||||||||||||||||||||||||||||||
Derivatives | Amount of (Loss) Gain Recognized in | Location of | Amount of Gain (Loss) Reclassified from | |||||||||||||||||||||||||||||||||||||
under ASC 815-20 Cash Flow | Accumulated Other | Gain (Loss) | Accumulated Other Comprehensive (Loss) Income into | |||||||||||||||||||||||||||||||||||||
Hedging | Comprehensive (Loss) Income on Derivative (Effective | Reclassified | Income (Effective Portion) | |||||||||||||||||||||||||||||||||||||
Relationships | Portion) | from | ||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||||
Other Comprehensive | ||||||||||||||||||||||||||||||||||||||||
(Loss) Gain into Income | ||||||||||||||||||||||||||||||||||||||||
(Effective | ||||||||||||||||||||||||||||||||||||||||
Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | Portion) | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Cross currency swaps | — | — | — | — | Interest expense, net of interest capitalized | — | (880 | ) | (261 | ) | (1,751 | ) | ||||||||||||||||||||||||||||
Interest rate swaps | (32,221 | ) | 80,800 | (66,745 | ) | 93,488 | Other income (expense) | — | — | — | — | |||||||||||||||||||||||||||||
Foreign currency forward contracts | (10,437 | ) | 6,087 | (9,243 | ) | (8,995 | ) | Depreciation and amortization expenses | (450 | ) | (450 | ) | (899 | ) | (899 | ) | ||||||||||||||||||||||||
Foreign currency forward contracts | — | — | — | — | Other income (expense) | (238 | ) | (239 | ) | (3,814 | ) | (477 | ) | |||||||||||||||||||||||||||
Foreign currency forward contracts | — | — | — | — | Interest expense, net of interest capitalized | — | (5 | ) | (57 | ) | (5 | ) | ||||||||||||||||||||||||||||
Foreign currency collar options | (6,127 | ) | 3,714 | (8,734 | ) | (11,247 | ) | Depreciation and amortization expenses | — | — | — | — | ||||||||||||||||||||||||||||
Fuel swaps | 28,344 | (65,225 | ) | 6,928 | (55,200 | ) | Fuel | 884 | 9,408 | 790 | 26,236 | |||||||||||||||||||||||||||||
$ | (20,441 | ) | $ | 25,376 | $ | (77,794 | ) | $ | 18,046 | $ | 196 | $ | 7,834 | $ | (4,241 | ) | $ | 23,104 | ||||||||||||||||||||||
Location of | Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||||||
Gain (Loss) | ||||||||||||||||||||||||||||||||||||||||
Derivatives | Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Quarter Ended June 30, 2014 | Quarter Ended June 30, 2013 | Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||
under ASC 815- | ||||||||||||||||||||||||||||||||||||||||
20 Cash Flow | ||||||||||||||||||||||||||||||||||||||||
Hedging | ||||||||||||||||||||||||||||||||||||||||
Relationships | ||||||||||||||||||||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Other income (expense) | (76 | ) | 373 | (95 | ) | 427 | |||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other income (expense) | (7 | ) | (5 | ) | (27 | ) | (10 | ) | |||||||||||||||||||||||||||||||
Fuel swaps | Other income (expense) | 2,094 | (3,649 | ) | 462 | (4,369 | ) | |||||||||||||||||||||||||||||||||
$ | 2,011 | $ | (3,281 | ) | $ | 340 | $ | (3,952 | ) | |||||||||||||||||||||||||||||||
Restructuring_and_Related_Char1
Restructuring and Related Charges (Tables) | 6 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | |||||||||||||||||||||||
Summary of restructuring and related charges | ' | |||||||||||||||||||||||
For the quarter ended June 30, 2014 and June 30, 2013, we incurred $(0.1) million and $1.7 million, respectively, and for both of the six months ended June 30, 2014 and June 30, 2013, we incurred $1.7 million of restructuring charges in connection with our broad profitability improvement program. The following are the profitability initiatives that are at different stages of implementation. | ||||||||||||||||||||||||
Consolidation of Structure | ' | |||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | |||||||||||||||||||||||
Summary of restructuring and related charges | ' | |||||||||||||||||||||||
The following table summarizes our restructuring exit costs related to the above initiative (in thousands): | ||||||||||||||||||||||||
Beginning Balance January 1, 2014 | Accruals | Payments | Ending Balance June 30, 2014 | Cumulative | Expected | |||||||||||||||||||
Charges | Additional | |||||||||||||||||||||||
Incurred | Expenses | |||||||||||||||||||||||
to be | ||||||||||||||||||||||||
Incurred | ||||||||||||||||||||||||
Termination benefits | $ | 8,315 | $ | (577 | ) | $ | 4,984 | $ | 2,754 | $ | 9,061 | $ | — | |||||||||||
Contract termination costs | 126 | 5 | 59 | $ | 72 | 4,147 | — | |||||||||||||||||
Other related costs | 1,397 | 150 | 244 | $ | 1,303 | 4,529 | — | |||||||||||||||||
Total | $ | 9,838 | $ | (422 | ) | $ | 5,287 | $ | 4,129 | $ | 17,737 | $ | — | |||||||||||
Pullmantur | ' | |||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | |||||||||||||||||||||||
Summary of restructuring and related charges | ' | |||||||||||||||||||||||
The following table summarizes our restructuring exit costs related to the above initiative (in thousands): | ||||||||||||||||||||||||
Beginning Balance January 1, 2014 | Accruals | Payments | Ending Balance June 30, 2014 | Cumulative | Expected | |||||||||||||||||||
Charges | Additional | |||||||||||||||||||||||
Incurred | Expenses | |||||||||||||||||||||||
to be | ||||||||||||||||||||||||
Incurred(1) | ||||||||||||||||||||||||
Termination benefits | $ | 3,910 | $ | 1,362 | $ | 1,224 | $ | 4,048 | $ | 5,272 | $ | 103 | ||||||||||||
Contract termination costs | 847 | — | — | $ | 847 | 847 | (845 | ) | ||||||||||||||||
Other related costs | 516 | 710 | 626 | $ | 600 | 1,226 | — | |||||||||||||||||
Total | $ | 5,273 | $ | 2,072 | $ | 1,850 | $ | 5,495 | $ | 7,345 | $ | (742 | ) | |||||||||||
-1 | These amounts relate to restructuring exit costs associated with our Pullmantur restructuring. |
General_Details
General (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Minimum | ' |
General | ' |
Investment in a joint venture, percentage of interest | 20.00% |
Maximum | ' |
General | ' |
Investment in a joint venture, percentage of interest | 50.00% |
TUI Cruises | ' |
General | ' |
Investment in a joint venture, percentage of interest | 50.00% |
Pullmantur and CDF Croisieres de France | ' |
General | ' |
Time lag in consolidation | '2 months |
Pullmantur Air | ' |
General | ' |
Non controlling interest percentage | 19.00% |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Restructuring charges | ($86,000) | $1,678,000 | $1,650,000 | $1,678,000 |
Gross amount of port costs included in passenger ticket revenues | 137,700,000 | 117,000,000 | 261,800,000 | 232,700,000 |
Document Fiscal Year Focus | ' | ' | '2014 | ' |
June 30, 2013 Out of Period Adjustment [Abstract] | ' | ' | ' | ' |
Onboard and other revenues | 524,944,000 | 516,054,000 | 1,063,965,000 | 1,033,496,000 |
Out of Period Adjustment | ' | ' | ' | ' |
June 30, 2013 Out of Period Adjustment [Abstract] | ' | ' | ' | ' |
Onboard and other revenues | ' | $15,200,000 | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net income for basic and diluted earnings per share (in dollars) | $137,673 | $24,747 | $164,130 | $100,973 |
Weighted-average common shares outstanding | 222,189 | 219,502 | 221,745 | 219,301 |
Dilutive effect of stock options, performance share awards and restricted stock awards (in shares) | 1,192 | 1,146 | 1,310 | 1,295 |
Diluted weighted-average shares outstanding | 223,381 | 220,648 | 223,055 | 220,596 |
Basic earnings per share (in dollars per share) | $0.62 | $0.11 | $0.74 | $0.46 |
Diluted earnings per share (in dollars per share) | $0.62 | $0.11 | $0.74 | $0.46 |
Earnings_Per_Share_Antidilutiv
Earnings Per Share - Antidilutive (Details) (Options and performance shares) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Options and performance shares | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' | ' | ' |
Shares not included in diluted earnings per share | 0 | 2.4 | 0 | 2.4 |
LongTerm_Debt_Details
Long-Term Debt (Details) | Jan. 31, 2014 | Jun. 30, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Unsecured Term Loan Due in August 2018 | Unsecured Term Loan Due in August 2018 | Unsecured term loan due July 2017 | Unsecured term loan due July 2017 | Unsecured term loan due July 2017 | Oasis of the Seas term loan | Oasis of the Seas term loan | Oasis of the Seas term loan | Allure of the Seas term loan | Allure of the Seas term loan | Allure of the Seas term loan | Senior Notes | |
USD ($) | LIBOR | EUR (€) | EURIBOR | EURIBOR | USD ($) | LIBOR | LIBOR | USD ($) | LIBOR | LIBOR | Unsecured 5.625% Senior Notes Due 2014 | |
EUR (€) | ||||||||||||
Long-Term Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long term debt, principal amount | $380,000,000 | ' | € 365,000,000 | ' | ' | $420,000,000 | ' | ' | $1,100,000,000 | ' | ' | € 745,000,000 |
Margin on floating rate base (as a percent) | ' | 2.12% | ' | 2.30% | 3.00% | ' | 1.85% | 2.10% | ' | 1.85% | 2.10% | ' |
Long term debt, interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.63% |
Goodwill_and_Other_Assets_Deta
Goodwill and Other Assets (Details) | 6 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | ||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | |
USD ($) | USD ($) | USD ($) | Nautalia | Pullmantur Air | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | Pullmantur | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | Pullmantur Air | Equity | Equity | Loans | Loans | Pullmantur | Tradenames and Trademarks | |
USD ($) | Not Primary Beneficiary | Not Primary Beneficiary | aircraft | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | USD ($) | Pullmantur | ||||||||
USD ($) | USD ($) | Not Primary Beneficiary | Not Primary Beneficiary | Not Primary Beneficiary | Not Primary Beneficiary | USD ($) | ||||||||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||||||||
Goodwill and Other Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $438,367,000 | ' | $439,231,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $151,100,000 | ' |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 212,700,000 |
Percentage of ownership interest | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | 50.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investments in entity | ' | ' | ' | ' | ' | ' | 57,200,000 | 56,100,000 | ' | ' | ' | 358,900,000 | ' | 354,300,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Underlying equity in net assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,000,000 | 6,400,000 | ' | ' | ' | ' |
Advances to Affiliate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 46,200,000 | 49,700,000 | ' | ' |
Principal and interest payments received | 66,138,000 | 11,993,000 | ' | ' | ' | 3,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non controlling interest percentage | ' | ' | ' | 19.00% | 49.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19.00% | ' | ' | ' | ' | ' | ' |
Number of aircraft | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of Ownership on Aircraft | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | 11,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt, guaranteed percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unsecured term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 180,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding on bank loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 172,500,000 | 126,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit provided to TUI Cruises | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000,000 | ' | ' | ' | 90,000,000 | ' | ' | ' | ' | ' | ' | ' |
Interest rate on line of credit provided to TUI Cruises (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | 5.00% | ' | ' | 9.54% | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on line of credit provided to TUI Cruises (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.70% | 4.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional borrowing on line of credit provided to TUI Cruises | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $70,400,000 | € 51,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bank financing commitment percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction of current ownership interest (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 37.50% | 37.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Dec. 31, 2013 |
ship | Cruise ships on order | Unsecured term loan maturing 12 years after ship delivery | Oasis Class Ship Term Loans [Member] | LIBOR | Royal Caribbean International Cruise Ships [Member] | Royal Caribbean International Cruise Ships [Member] | ||
USD ($) | Oasis Class Ship Third [Member] | Unsecured term loan maturing 12 years after ship delivery | Oasis class ship | Oasis class ship | ||||
berth | EUR (€) | Oasis Class Ship Third [Member] | EUR (€) | EUR (€) | ||||
Commitments and Contingencies | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Ships on Order | 4 | ' | ' | ' | ' | ' | ' | ' |
Aggregate cost of ships expected to enter service | ' | ' | $4,800,000,000 | ' | ' | ' | ' | ' |
Deposit for the purchase of ships expected to enter service | ' | ' | 525,400,000 | ' | ' | ' | ' | ' |
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate | 16.30% | 36.30% | ' | ' | ' | ' | ' | ' |
Approximate Berths | ' | ' | 5,450 | ' | ' | ' | ' | ' |
Long term debt, principal amount | ' | ' | ' | 178,400,000 | ' | ' | ' | ' |
Long term debt, term | ' | ' | ' | '12 years | ' | ' | ' | ' |
Long term debt, interest rate | ' | ' | ' | 2.53% | ' | ' | ' | ' |
Margin on floating rate base (as a percent) | ' | ' | ' | ' | ' | 1.20% | ' | ' |
Anticipated loan balance | ' | ' | ' | ' | ' | ' | € 713,800,000 | € 892,200,000 |
Guarantee Percent | ' | ' | ' | ' | 100.00% | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies - Leases (Details) (Brilliance of the Seas) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Jul. 31, 2002 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 |
USD ($) | GBP (£) | USD ($) | GBP (£) | USD ($) | GBP (£) | USD ($) | GBP (£) | ||
Commitments and Contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating lease | ' | $5.30 | £ 3.1 | $4.80 | £ 3.1 | $10.40 | £ 6.2 | $9.30 | £ 6.1 |
Initial lease expiration period | '25 years | ' | ' | ' | ' | ' | ' | ' | ' |
Optional lease cancellation period | '18 years | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum period of prior notice to cancel lease | '1 year | ' | ' | ' | ' | ' | ' | ' | ' |
Future payment if lease terminated | ' | $107.10 | £ 62.6 | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Debt (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure | ' |
Stated or notional amounts included in the indemnification clauses | $0 |
Change of control provisions in debt covenants | ' |
Number of months considered to determine requirement of prepayment of debts | '24 months |
Line of Credit | Minimum | ' |
Change of control provisions in debt covenants | ' |
Debt instrument covenant, minimum percentage of ownership by a person | 33.00% |
Debt Securities | Minimum | ' |
Change of control provisions in debt covenants | ' |
Debt instrument covenant, minimum percentage of ownership by a person | 50.00% |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 3 Months Ended | |||
Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | Mar. 31, 2013 | |
Equity [Abstract] | ' | ' | ' | ' |
Dividend declared in the same quarter paid (in dollars per share) | $0.25 | $0.25 | $0.12 | $0.12 |
Dividend paid in the same quarter declared (in dollars per share) | $0.25 | $0.25 | $0.12 | $0.12 |
Prior quarter dividend paid (in dollars per share) | ' | $0.25 | ' | ' |
Changes_in_Accumulated_Other_C2
Changes in Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Changes in accumulated other comprehensive loss by component | ' | ' | ' | ' |
Accumulated comprehensive loss at beginning of the year | ' | ' | $5,671 | ($134,516) |
Other comprehensive income before reclassifications | ' | ' | -84,102 | 16,250 |
Amounts reclassified from accumulated other comprehensive loss | ' | ' | 7,101 | -21,810 |
Total other comprehensive (loss) income | -24,525 | 21,284 | -77,001 | -5,560 |
Ending balance | -71,330 | -140,076 | -71,330 | -140,076 |
Changes related to cash flow derivative hedges | ' | ' | ' | ' |
Changes in accumulated other comprehensive loss by component | ' | ' | ' | ' |
Accumulated comprehensive loss at beginning of the year | ' | ' | 43,324 | -84,505 |
Other comprehensive income before reclassifications | ' | ' | -77,794 | 18,046 |
Amounts reclassified from accumulated other comprehensive loss | ' | ' | 4,241 | -23,104 |
Total other comprehensive (loss) income | ' | ' | -73,553 | -5,058 |
Ending balance | -30,229 | -89,563 | -30,229 | -89,563 |
Changes in defined benefit plans | ' | ' | ' | ' |
Changes in accumulated other comprehensive loss by component | ' | ' | ' | ' |
Accumulated comprehensive loss at beginning of the year | ' | ' | -23,994 | -34,823 |
Other comprehensive income before reclassifications | ' | ' | -4,948 | 3,999 |
Amounts reclassified from accumulated other comprehensive loss | ' | ' | 863 | 1,294 |
Total other comprehensive (loss) income | ' | ' | -4,085 | 5,293 |
Ending balance | -28,079 | -29,530 | -28,079 | -29,530 |
Foreign currency translation adjustments | ' | ' | ' | ' |
Changes in accumulated other comprehensive loss by component | ' | ' | ' | ' |
Accumulated comprehensive loss at beginning of the year | ' | ' | -13,659 | -15,188 |
Other comprehensive income before reclassifications | ' | ' | -1,360 | -5,795 |
Amounts reclassified from accumulated other comprehensive loss | ' | ' | 1,997 | 0 |
Total other comprehensive (loss) income | ' | ' | 637 | -5,795 |
Ending balance | ($13,022) | ($20,983) | ($13,022) | ($20,983) |
Changes_in_Accumulated_Other_C3
Changes in Accumulated Other Comprehensive Income (Loss) - Reclassifications (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Interest expense, net of interest capitalized | ($65,260) | ($86,877) | ($133,831) | ($177,059) |
Depreciation and amortization expenses | -192,880 | -186,184 | -386,615 | -375,548 |
Other income (expense) | -57,914 | -88,591 | -128,923 | -177,997 |
Fuel | -242,804 | -232,471 | -487,263 | -474,123 |
Net income | 137,673 | 24,747 | 164,130 | 100,973 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Net income | -2,232 | 6,540 | -7,101 | 21,810 |
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Net income | 196 | 7,834 | -4,241 | 23,104 |
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Cross currency swaps | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Interest expense, net of interest capitalized | 0 | -880 | -261 | -1,751 |
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Foreign currency forward contracts | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Interest expense, net of interest capitalized | 0 | -5 | -57 | -5 |
Depreciation and amortization expenses | -450 | -450 | -899 | -899 |
Other income (expense) | -238 | -239 | -3,814 | -477 |
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Fuel swaps | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Fuel | 884 | 9,408 | 790 | 26,236 |
Amortization of defined benefit plans: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Actuarial loss | -222 | -876 | -445 | -876 |
Prior service costs | -209 | -418 | -418 | -418 |
Net income | -431 | -1,294 | -863 | -1,294 |
Release of foreign cumulative translation due to sale of business: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive loss | ' | ' | ' | ' |
Other income (expense) | ($1,997) | $0 | ($1,997) | $0 |
Fair_Value_Measurements_and_De2
Fair Value Measurements and Derivative Instruments (Details) (Fair Value, Measurements, Nonrecurring, USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Total | ' | ' | ||
Assets: | ' | ' | ||
Cash and cash equivalents | $185,262 | [1] | $204,687 | [1] |
Total Assets | 185,262 | 204,687 | ||
Liabilities: | ' | ' | ||
Long-term debt (including current portion of long-term debt) | 7,909,833 | [2] | 8,431,220 | [2] |
Total Liabilities | 7,909,833 | 8,431,220 | ||
Level 1 | ' | ' | ||
Assets: | ' | ' | ||
Cash and cash equivalents | 185,262 | [1],[3] | 204,687 | [1],[3] |
Total Assets | 185,262 | [3] | 204,687 | [3] |
Liabilities: | ' | ' | ||
Long-term debt (including current portion of long-term debt) | 1,902,445 | [2],[3] | 2,888,255 | [2],[3] |
Total Liabilities | 1,902,445 | [3] | 2,888,255 | [3] |
Level 2 | ' | ' | ||
Assets: | ' | ' | ||
Cash and cash equivalents | 0 | [1],[4] | 0 | [1],[4] |
Total Assets | 0 | [4] | 0 | [4] |
Liabilities: | ' | ' | ||
Long-term debt (including current portion of long-term debt) | 6,007,388 | [2],[4] | 5,542,965 | [2],[4] |
Total Liabilities | 6,007,388 | [4] | 5,542,965 | |
Level 3 | ' | ' | ||
Assets: | ' | ' | ||
Cash and cash equivalents | 0 | [1],[5] | 0 | [1],[5] |
Total Assets | 0 | [5] | 0 | [5] |
Liabilities: | ' | ' | ||
Long-term debt (including current portion of long-term debt) | 0 | [2],[5] | 0 | [2],[5] |
Total Liabilities | 0 | [5] | 0 | [5] |
Reported Value Measurement | ' | ' | ||
Assets: | ' | ' | ||
Cash and cash equivalents | 185,262 | [1] | 204,687 | [1] |
Total Assets | 185,262 | 204,687 | ||
Liabilities: | ' | ' | ||
Long-term debt (including current portion of long-term debt) | 7,538,280 | [2] | 8,020,061 | [2] |
Total Liabilities | $7,538,280 | $8,020,061 | ||
[1] | Consists of cash and marketable securities with original maturities of less than 90 days. | |||
[2] | Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations. | |||
[3] | Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. | |||
[4] | Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company. | |||
[5] | Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2014 and December 31, 2013. |
Fair_Value_Measurements_and_De3
Fair Value Measurements and Derivative Instruments - Recurring (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Assets: | ' | ' | ||
Derivative financial instruments | $37,304 | $96,949 | ||
Liabilities: | ' | ' | ||
Derivative financial instruments | 31,623 | 8,633 | ||
Fair Value, Measurements, Recurring | Total | ' | ' | ||
Assets: | ' | ' | ||
Derivative financial instruments | 80,112 | [1] | 188,576 | [1] |
Investments | 5,973 | [2] | 6,044 | [2] |
Total Assets | 86,085 | 194,620 | ||
Liabilities: | ' | ' | ||
Derivative financial instruments | 74,431 | [3] | 100,260 | [3] |
Total Liabilities | 74,431 | 100,260 | ||
Fair Value, Measurements, Recurring | Level 1 | ' | ' | ||
Assets: | ' | ' | ||
Investments | 5,973 | [2],[4] | 6,044 | [2],[4] |
Total Assets | 5,973 | [4] | 6,044 | [4] |
Fair Value, Measurements, Recurring | Level 2 | ' | ' | ||
Assets: | ' | ' | ||
Derivative financial instruments | 80,112 | [1],[5] | 188,576 | [1],[5] |
Total Assets | 80,112 | [5] | 188,576 | [5] |
Liabilities: | ' | ' | ||
Derivative financial instruments | 74,431 | [3],[5] | 100,260 | [3],[5] |
Total Liabilities | $74,431 | [5] | $100,260 | [5] |
[1] | Consists of foreign currency forward contracts, foreign currency collar options, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments†table for breakdown by instrument type. | |||
[2] | Consists of exchange-traded equity securities and mutual funds. | |||
[3] | Consists of interest rate swaps, fuel swaps and foreign currency forward contracts. Please refer to the “Fair Value of Derivative Instruments†table for breakdown by instrument type. | |||
[4] | Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. | |||
[5] | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company. |
Fair_Value_Measurement_and_Der
Fair Value Measurement and Derivative Instruments - Offsetting of Derivative Instruments (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Offsetting of Financial Assets under Master Netting Agreements [Abstract] | ' | ' |
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | $80,112 | $188,576 |
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | -42,808 | -91,627 |
Net Amount of Derivative Assets | 37,304 | 96,949 |
Offsetting of Financial Liabilities under Master Netting Agreements [Abstract] | ' | ' |
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | -74,431 | -100,260 |
Gross Amount of Eligible Offsetting Recognized Derivative Assets | 42,808 | 91,627 |
Net Amount of Derivative Liabilities | ($31,623) | ($8,633) |
Fair_Value_Measurements_and_De4
Fair Value Measurements and Derivative Instruments - Non-Derivative Instruments (Details) | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Oct. 31, 2014 | Jun. 30, 2014 | Apr. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Interest rate swaps | Foreign exchange contracts | Foreign exchange contracts | Pullmantur and TUI Cruises | Pullmantur and TUI Cruises | Pullmantur and TUI Cruises | Pullmantur and TUI Cruises | |
USD ($) | USD ($) | Fair Value Hedging | Fair Value Hedging | Fair Value Hedging | Fair Value Hedging | Cash flow hedge | Cash flow hedge | Cash flow hedge | Cash flow hedge | Cash flow hedge | Cash flow hedge | USD ($) | USD ($) | Net Investment Hedging | Net Investment Hedging | Net Investment Hedging | Net Investment Hedging | |||
5.41% Fixed rate debt | 5.41% Fixed rate debt | 5.25% Fixed rate debt | 5.25% Fixed rate debt | Quantum of the Seas facility | Quantum of the Seas facility | Anthem of the Seas facility | Anthem of the Seas facility | Celebrity Reflection floating rate debt | Celebrity Reflection floating rate debt | USD ($) | EUR (€) | USD ($) | EUR (€) | |||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Forecast | USD ($) | Forecast | USD ($) | USD ($) | |||||||||||
Derivative Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exposure under foreign currency forward contracts, foreign currency collar options, fuel call options, interest rate and fuel swap agreements | $38,500,000 | $92,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative instrument, observation period | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of long-term debt with fixed interest rate | 22.40% | 34.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unsecured term loan | ' | ' | ' | ' | 420,000,000 | 420,000,000 | 650,000,000 | 650,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt amount | ' | ' | ' | ' | 262,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 171,035,000 | ' | 750,796,000 | ' |
Interest rate on hedged debt (as a percent) | ' | ' | ' | ' | 5.41% | ' | 5.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative floating rate base | ' | ' | ' | ' | 'LIBOR | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional interest above LIBOR rate (as a percent) | ' | ' | ' | ' | 3.87% | ' | 3.63% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative variable rate of interest (as a percent) | ' | ' | ' | ' | 4.20% | ' | 3.86% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Anticipated loan balance | ' | ' | ' | ' | ' | ' | ' | ' | 735,000,000 | ' | 725,000,000 | ' | 572,700,000 | 600,000,000 | ' | ' | ' | ' | ' | ' |
Additional interest above LIBOR rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 1.30% | ' | 1.30% | ' | 0.40% | 0.40% | ' | ' | ' | ' | ' | ' |
Notional amount | ' | ' | 2,900,000,000 | 3,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,400,000,000 | 2,500,000,000 | ' | ' | ' | ' |
Fixed rate on converted debt (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.74% | ' | 3.86% | 2.85% | 2.85% | ' | ' | ' | ' | ' | ' |
Carrying value of non-derivative instrument designated as hedging instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $171,000,000 | € 124,900,000 | $750,800,000 | € 544,900,000 |
Fair_Value_Measurements_and_De5
Fair Value Measurements and Derivative Instruments - Derivative Instruments (Details) | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jan. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | |
Interest rate swaps | Interest rate swaps | Forward Contracts | Forward Contracts | Forward Contracts | Forward Contracts | Forward Contracts | Forward Contracts | Foreign exchange contracts | Foreign exchange contracts | Cruise ships on order | |||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Not Designated | Designated as Hedging Instrument | USD ($) | USD ($) | USD ($) | |||
USD ($) | EUR (€) | ||||||||||||
Gains and losses from derivatives involved in hedging relationships | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate cost of ships on order, including the conditional agreement for a third Quantum - class ship | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,800,000,000 |
Amount deposited for cost of ships on order, including the conditional agreement for a third Quantum - class ship | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 525,400,000 |
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate | 16.30% | 36.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount | ' | ' | 2,900,000,000 | 3,000,000,000 | ' | ' | ' | ' | 459,800,000 | 415,600,000 | 3,400,000,000 | 2,500,000,000 | ' |
Change in fair value of foreign currency forward contracts recognized in earnings | ' | ' | ' | ' | $9,000,000 | ($16,900,000) | $10,800,000 | ($25,500,000) | ' | ' | ' | ' | ' |
Fair_Value_Measurements_and_De6
Fair Value Measurements and Derivative Instruments - Fuel Price Risk (Details) (Fuel Price Risk, USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative Instruments | ' | ' |
Estimated unrealized net gains associated with cash flow hedges pertaining to fuel swap agreements expected to be reclassified to earnings from accumulated other comprehensive income loss | $8.50 | $9.50 |
Swaps 2014 | ' | ' |
Derivative Instruments | ' | ' |
Fuel Swap Agreements (metric tons) | 731,000 | 762,000 |
Percentage of projected requirements | 55.00% | 57.00% |
Swaps 2015 | ' | ' |
Derivative Instruments | ' | ' |
Fuel Swap Agreements (metric tons) | 720,000 | 665,000 |
Percentage of projected requirements | 51.00% | 45.00% |
Swaps 2016 | ' | ' |
Derivative Instruments | ' | ' |
Fuel Swap Agreements (metric tons) | 526,000 | 372,000 |
Percentage of projected requirements | 35.00% | 25.00% |
Swaps 2017 | ' | ' |
Derivative Instruments | ' | ' |
Fuel Swap Agreements (metric tons) | 229,000 | 74,000 |
Percentage of projected requirements | 15.00% | 5.00% |
Fair_Value_Measurements_and_De7
Fair Value Measurements and Derivative Instruments - Balance Sheet (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Asset Derivatives | ' | ' | ||
Asset Derivatives | $80,112 | $188,576 | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 74,431 | 100,260 | ||
Designated as Hedging Instrument | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 78,198 | [1] | 173,229 | [1] |
Liability Derivatives | ' | ' | ||
Liability Derivatives | 62,219 | [1] | 77,629 | [1] |
Designated as Hedging Instrument | Foreign currency collar options | Other assets | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 0 | [1] | 22,172 | [1] |
Designated as Hedging Instrument | Foreign currency collar options | Other long-term Liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 0 | [1] | 0 | [1] |
Not Designated as Hedging Instrument | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 1,914 | 15,347 | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 12,212 | 22,631 | ||
Interest rate swaps | Designated as Hedging Instrument | Other assets | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 1,640 | [1] | 56,571 | [1] |
Interest rate swaps | Designated as Hedging Instrument | Other long-term Liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 51,387 | [1] | 66,920 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Other assets | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 9,582 | [1] | 13,783 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Derivative financial instruments | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 30,214 | [1] | 61,596 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Other long-term Liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 2,636 | [1] | 0 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Accrued expenses and other liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 0 | [1] | 0 | [1] |
Foreign currency forward contracts | Not Designated as Hedging Instrument | Derivative financial instruments | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 1,914 | 15,347 | ||
Foreign currency forward contracts | Not Designated as Hedging Instrument | Accrued expenses and other liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 12,212 | 22,631 | ||
Foreign currency collar options | Designated as Hedging Instrument | Derivative financial instruments | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 13,439 | [1] | 0 | [1] |
Foreign currency collar options | Designated as Hedging Instrument | Other long-term Liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 0 | [1] | 0 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Other assets | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 12,585 | [1] | 8,205 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Derivative financial instruments | ' | ' | ||
Asset Derivatives | ' | ' | ||
Asset Derivatives | 10,738 | [1] | 10,902 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Other long-term Liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | 5,167 | [1] | 9,052 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Accrued expenses and other liabilities | ' | ' | ||
Liability Derivatives | ' | ' | ||
Liability Derivatives | $3,029 | [1] | $1,657 | [1] |
[1] | Accounting Standard Codification 815-20 “Derivatives and Hedging.†|
Fair_Value_Measurements_and_De8
Fair Value Measurements and Derivative Instruments - Balance Sheet Hedging Instruments (Details) (Foreign currency debt, Pullmantur and TUI Cruises) | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
USD ($) | EUR (€) | USD ($) | EUR (€) | Current portion of long-term debt | Current portion of long-term debt | Long-term debt | Long-term debt | |
USD ($) | USD ($) | USD ($) | USD ($) | |||||
Net investment hedge | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying Value of Non-derivative instrument Designated as hedging instrument | $171,035,000 | ' | $750,796,000 | ' | $0 | $477,442,000 | $171,035,000 | $273,354,000 |
Notional Amount of Nonderivative Instruments | $171,000,000 | € 124,900,000 | $750,800,000 | € 544,900,000 | ' | ' | ' | ' |
Fair_Value_Measurements_and_De9
Fair Value Measurements and Derivative Instruments - Income Statement Hedging Instruments (Details) (Fair Value Hedging, USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivative | $17,998 | ($55,177) | $33,577 | ($55,967) |
Amount of Gain (Loss) Recognized in Income on Hedged Item | -7,696 | 64,084 | -13,589 | 74,772 |
Interest rate swaps | Interest expense, net of interest capitalized | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivative | 3,067 | 2,498 | 6,136 | 3,277 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | 3,925 | 9,323 | 9,467 | 18,599 |
Interest rate swaps | Other income (expense) | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivative | 14,931 | -57,675 | 27,441 | -59,244 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | ($11,621) | $54,761 | ($23,056) | $56,173 |
Recovered_Sheet1
Fair Value Measurements and Derivative Instruments - Designated Cash Flow Hedges (Details) (Cash flow hedge, USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) | ($20,441) | $25,376 | ($77,794) | $18,046 |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 196 | 7,834 | -4,241 | 23,104 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 2,011 | -3,281 | 340 | -3,952 |
Cross currency swaps | Interest expense, net of interest capitalized | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 0 | -880 | -261 | -1,751 |
Interest rate swaps | Other income (expense) | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) | -32,221 | 80,800 | -66,745 | 93,488 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | -76 | 373 | -95 | 427 |
Foreign currency forward contracts | Other income (expense) | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | -238 | -239 | -3,814 | -477 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | -7 | -5 | -27 | -10 |
Foreign currency forward contracts | Depreciation and amortization expenses | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) | -10,437 | 6,087 | -9,243 | -8,995 |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | -450 | -450 | -899 | -899 |
Foreign currency forward contracts | Interest expense, net of interest capitalized | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 0 | -5 | -57 | -5 |
Foreign currency collar options | Depreciation and amortization expenses | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) | -6,127 | 3,714 | -8,734 | -11,247 |
Fuel swaps | Swaps | Other income (expense) | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 2,094 | -3,649 | 462 | -4,369 |
Fuel swaps | Swaps | Fuel cost | ' | ' | ' | ' |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) | 28,344 | -65,225 | 6,928 | -55,200 |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | $884 | $9,408 | $790 | $26,236 |
Recovered_Sheet2
Fair Value Measurements and Derivative Instruments - Non-Derivative Net Investment (Details) (Foreign currency debt, USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Net investment hedge | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | $256 | ($7,978) | $4,630 | $4,754 |
Amount of Ineffectiveness on Net Investment Hedges | 0 | 0 | 0 | 0 |
Other income (expense) | ' | ' | ' | ' |
Net investment hedge | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | 256 | -7,978 | 4,630 | 4,754 |
Amount of Ineffectiveness on Net Investment Hedges | $0 | $0 | $0 | $0 |
Recovered_Sheet3
Fair Value Measurements and Derivative Instruments - Derivatives Not Designated as Hedging Instruments (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Derivative Instruments | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivatives | ' | ' | $10,841 | ($25,494) |
Other income (expense) | ' | ' | ' | ' |
Derivative Instruments | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivatives | 9,174 | -18,851 | 9,833 | -27,195 |
Foreign exchange contracts | Other income (expense) | ' | ' | ' | ' |
Derivative Instruments | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivatives | 8,889 | -18,669 | 10,770 | -27,280 |
Fuel swaps | Fuel swaps | Other income (expense) | ' | ' | ' | ' |
Derivative Instruments | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivatives | 285 | -61 | -937 | 48 |
Fuel swaps | Options | Other income (expense) | ' | ' | ' | ' |
Derivative Instruments | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivatives | $0 | ($121) | $0 | $37 |
Recovered_Sheet4
Fair Value Measurements and Derivative Instruments - Credit Features (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | ||||
In Thousands, unless otherwise specified | Moody's, Baa3 Rating | Moody's, Ba1 Rating | Standard & Poor's, BBB- Rating | Standard & Poor's, BB Rating | Interest rate contracts | Designated as Hedging Instrument | Designated as Hedging Instrument | Other long-term Liabilities | Other long-term Liabilities | Derivative Maturity More than Five Years | ||||||
Minimum | hedge | Designated as Hedging Instrument | Designated as Hedging Instrument | Minimum | ||||||||||||
Interest rate swaps | Interest rate swaps | |||||||||||||||
Derivative Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Credit ratings for senior debt | ' | ' | 'Baa3 | 'Ba1 | 'BBB- | 'BB | ' | ' | ' | ' | ' | ' | ||||
Maturity of interest rate instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ||||
Liability Derivatives | $74,431 | $100,260 | ' | ' | ' | ' | ' | $62,219 | [1] | $77,629 | [1] | $51,387 | [1] | $66,920 | [1] | ' |
Number of derivative instruments | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ||||
[1] | Accounting Standard Codification 815-20 “Derivatives and Hedging.†|
Restructuring_and_Related_Char2
Restructuring and Related Charges (Details) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | |||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | ||||
Pullmantur Air | Consolidation of Structure | Pullmantur | Pullmantur | Pullmantur | Marketing, Selling and Administrative and Depreciation and Amortization Expenses | Marketing, Selling and Administrative and Depreciation and Amortization Expenses | Marketing, Selling and Administrative and Depreciation and Amortization Expenses | Marketing, Selling and Administrative and Depreciation and Amortization Expenses | Restructuring and Related Impairment Charges | Restructuring and Related Impairment Charges | Pullmantur Air | Pullmantur | Pullmantur | Other Operating Expenses | Termination benefits | Termination benefits | Termination benefits | Commercial and Bank Guarantees | ||||||||
shore_side_position | shore_side_position | shore_side_position | Consolidation of Structure | Consolidation of Structure | Pullmantur | Pullmantur | Pullmantur | Pullmantur | Restructuring and Related Impairment Charges | Pullmantur Air | Consolidation of Structure | Pullmantur | Restructuring and Related Impairment Charges | Other Operating Expenses | ||||||||||||
Pullmantur | Pullmantur Air | |||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring charges | ($86,000) | $1,678,000 | $1,650,000 | $1,678,000 | ' | ($422,000) | ' | ' | ' | ' | ' | ' | ' | $300,000 | $2,072,000 | ' | ' | ' | ' | ($577,000) | $1,362,000 | $700,000 | ' | |||
Number of shore-side positions eliminated | ' | ' | ' | ' | ' | 500 | ' | ' | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Restructuring and Related Cost, Number of Positions not Executed | ' | ' | ' | ' | ' | ' | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Expected additional expenses to be incurred | ' | ' | ' | ' | ' | 0 | ' | -742,000 | [1] | ' | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | 0 | [2] | 103,000 | [1] | ' | ' |
Additional incremental costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | 7,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Expected additional other costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,300,000 | 6,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Non controlling interest percentage | ' | ' | ' | ' | 49.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19.00% | ' | ' | ' | ' | ' | ' | ' | |||
Percentage of Ownership on Aircraft | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' | |||
Gain (loss) on sale of non-core businesses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | 2,900,000 | |||
Restructuring related impairments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $20,000,000 | ' | ' | ' | ' | ' | |||
[1] | These amounts relate to restructuring exit costs associated with our Pullmantur restructuring. | |||||||||||||||||||||||||
[2] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjhkZjYyMzgyMWFlYzQwMzliZGU4MDUxNTY3OTZhMmM0fFRleHRTZWxlY3Rpb246NTk4Nzk3MjlENzA0NTI3REJCNjk5RUUzOUNERjZGQjgM} |
Restructuring_and_Related_Char3
Restructuring and Related Charges Rollforward (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Accruals | ($86) | $1,678 | $1,650 | $1,678 | |
Consolidation of Structure | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 9,838 | ' | |
Accruals | ' | ' | -422 | ' | |
Payments | ' | ' | 5,287 | ' | |
Balance at the end of the period | 4,129 | ' | 4,129 | ' | |
Cumulative Charges Incurred | ' | ' | 17,737 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | 0 | ' | |
Pullmantur | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 5,273 | ' | |
Payments | ' | ' | 1,850 | ' | |
Balance at the end of the period | 5,495 | ' | 5,495 | ' | |
Cumulative Charges Incurred | ' | ' | 7,345 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | -742 | [1] | ' |
Termination benefits | Consolidation of Structure | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 8,315 | ' | |
Accruals | ' | ' | -577 | ' | |
Payments | ' | ' | 4,984 | ' | |
Balance at the end of the period | 2,754 | ' | 2,754 | ' | |
Cumulative Charges Incurred | ' | ' | 9,061 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | 0 | [2] | ' |
Termination benefits | Pullmantur | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 3,910 | ' | |
Accruals | ' | ' | 1,362 | ' | |
Payments | ' | ' | 1,224 | ' | |
Balance at the end of the period | 4,048 | ' | 4,048 | ' | |
Cumulative Charges Incurred | ' | ' | 5,272 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | 103 | [1] | ' |
Contract termination costs | Consolidation of Structure | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 126 | ' | |
Accruals | ' | ' | 5 | ' | |
Payments | ' | ' | 59 | ' | |
Balance at the end of the period | 72 | ' | 72 | ' | |
Cumulative Charges Incurred | ' | ' | 4,147 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | 0 | [2] | ' |
Contract termination costs | Pullmantur | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 847 | ' | |
Accruals | ' | ' | 0 | ' | |
Payments | ' | ' | 0 | ' | |
Balance at the end of the period | 847 | ' | 847 | ' | |
Cumulative Charges Incurred | ' | ' | 847 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | -845 | [1] | ' |
Other related costs | Consolidation of Structure | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 1,397 | ' | |
Accruals | ' | ' | 150 | ' | |
Payments | ' | ' | 244 | ' | |
Balance at the end of the period | 1,303 | ' | 1,303 | ' | |
Cumulative Charges Incurred | ' | ' | 4,529 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | 0 | [2] | ' |
Other related costs | Pullmantur | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Balance at the beginning of the period | ' | ' | 516 | ' | |
Accruals | ' | ' | 710 | ' | |
Payments | ' | ' | 626 | ' | |
Balance at the end of the period | 600 | ' | 600 | ' | |
Cumulative Charges Incurred | ' | ' | 1,226 | ' | |
Expected Additional Expenses to be Incurred | ' | ' | 0 | [1] | ' |
Restructuring and Related Impairment Charges | Pullmantur | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Accruals | 300 | ' | 2,072 | ' | |
Restructuring and Related Impairment Charges | Termination benefits | Pullmantur | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Accruals | ' | ' | 700 | ' | |
Marketing, Selling and Administrative and Depreciation and Amortization Expenses [Member] | Pullmantur | ' | ' | ' | ' | |
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | |
Expected Additional Expenses to be Incurred | ' | ' | $6,000 | ' | |
[1] | These amounts relate to restructuring exit costs associated with our Pullmantur restructuring. | ||||
[2] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjhkZjYyMzgyMWFlYzQwMzliZGU4MDUxNTY3OTZhMmM0fFRleHRTZWxlY3Rpb246NTk4Nzk3MjlENzA0NTI3REJCNjk5RUUzOUNERjZGQjgM} |