Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 16, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | ROYAL CARIBBEAN CRUISES LTD | |
Entity Central Index Key | 884887 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 219,909,660 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Passenger ticket revenues | $1,306,779 | $1,348,203 |
Onboard and other revenues | 508,820 | 539,021 |
Total revenues | 1,815,599 | 1,887,224 |
Cruise operating expenses: | ||
Commissions, transportation and other | 324,418 | 325,865 |
Onboard and other | 116,239 | 123,032 |
Payroll and related | 211,591 | 210,801 |
Food | 119,786 | 118,080 |
Fuel | 205,276 | 244,459 |
Other operating | 245,307 | 281,743 |
Total cruise operating expenses | 1,222,617 | 1,303,980 |
Marketing, selling and administrative expenses | 286,832 | 290,307 |
Depreciation and amortization expenses | 200,468 | 193,735 |
Restructuring charges | 0 | 1,736 |
Operating Income | 105,682 | 97,466 |
Other income (expense): | ||
Interest income | 3,737 | 3,276 |
Interest expense, net of interest capitalized | -70,159 | -68,571 |
Other income (expense) | 5,970 | -5,714 |
Total other income (expense) | -60,452 | -71,009 |
Net Income | 45,230 | 26,457 |
Earnings per Share: | ||
Basic (in dollars per share) | $0.21 | $0.12 |
Diluted (in dollars per share) | $0.20 | $0.12 |
Weighted-Average Shares Outstanding: | ||
Basic (in shares) | 219,626 | 221,295 |
Diluted (in shares) | 220,842 | 222,671 |
Comprehensive Loss | ||
Net Income | 45,230 | 26,457 |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments | -31,544 | 2,470 |
Change in defined benefit plans | -1,493 | -2,031 |
Loss on cash flow derivative hedges | -260,949 | -52,915 |
Total other comprehensive loss | -293,986 | -52,476 |
Comprehensive Loss | ($248,756) | ($26,019) |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $229,705 | $189,241 |
Trade and other receivables, net | 297,073 | 261,392 |
Inventories | 125,063 | 123,490 |
Prepaid expenses and other assets | 299,362 | 226,960 |
Total current assets | 951,203 | 801,083 |
Property and equipment, net | 18,232,115 | 18,193,627 |
Goodwill | 405,422 | 420,542 |
Other assets | 1,280,853 | 1,297,938 |
Total assets | 20,869,593 | 20,713,190 |
Current liabilities | ||
Current portion of long-term debt | 1,089,345 | 799,630 |
Accounts payable | 336,869 | 331,505 |
Accrued interest | 77,848 | 49,074 |
Accrued expenses and other liabilities | 521,408 | 635,138 |
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement | 318,252 | 266,986 |
Customer deposits | 1,992,569 | 1,766,914 |
Total current liabilities | 4,336,291 | 3,849,247 |
Long-term debt | 7,470,260 | 7,644,318 |
Other long-term liabilities | 1,089,132 | 935,266 |
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; 233,696,581 and 233,106,019 shares issued, March 31, 2015 and December 31, 2014, respectively) | 2,337 | 2,331 |
Paid-in capital | 3,257,809 | 3,253,552 |
Retained earnings | 6,554,522 | 6,575,248 |
Accumulated other comprehensive loss | -1,190,980 | -896,994 |
Treasury stock (13,808,683 common shares at cost, March 31, 2015 and December 31, 2014) | -649,778 | -649,778 |
Total shareholders’ equity | 7,973,910 | 8,284,359 |
Total liabilities and shareholders' equity | $20,869,593 | $20,713,190 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 233,696,581 | 233,106,019 |
Treasury stock, common shares | 13,808,683 | 13,808,683 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating Activities | ||
Net income | $45,230 | $26,457 |
Adjustments: | ||
Depreciation and amortization | 200,468 | 193,735 |
Net deferred income tax (benefit) expense | -520 | 2,633 |
Loss (gain) on derivative instruments not designated as hedges | 28,083 | -1,890 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in trade and other receivables, net | 18,095 | -36,332 |
(Increase) decrease in inventories | -2,615 | 6,104 |
Increase in prepaid expenses and other assets | -67,772 | -30,565 |
Increase (decrease) in accounts payable | 9,341 | -13,323 |
Increase (decrease) in accrued interest | 28,774 | -32,002 |
(Decrease) increase in accrued expenses and other liabilities | -53,681 | 7,579 |
Increase in customer deposits | 208,423 | 188,367 |
Other, net | 12,601 | 5,023 |
Net cash provided by operating activities | 426,427 | 315,786 |
Investing Activities | ||
Purchases of property and equipment | -304,644 | -177,791 |
Cash (paid) received on settlement of derivative financial instruments | -45,182 | 4,236 |
Investments in and loans to unconsolidated affiliates | -54,250 | -34,260 |
Cash received on loan to unconsolidated affiliate | 8,280 | 11,610 |
Other, net | -3,780 | -1,165 |
Net cash used in investing activities | -399,576 | -197,370 |
Financing Activities | ||
Debt proceeds | 749,800 | 1,560,000 |
Debt issuance costs | -16,493 | -22,641 |
Repayments of debt | -587,111 | -1,638,146 |
Dividends paid | -131,745 | -76,264 |
Proceeds from exercise of common stock options | 4,615 | 46,630 |
Cash received on settlement of derivative financial instruments | 0 | 22,835 |
Other, net | 587 | 81 |
Net cash provided (used) in financing activities | 19,653 | -107,505 |
Effect of exchange rate changes on cash | -6,040 | 910 |
Net increase in cash and cash equivalents | 40,464 | 11,821 |
Cash and cash equivalents at beginning of period | 189,241 | 204,687 |
Cash and cash equivalents at end of period | 229,705 | 216,508 |
Cash paid during the period for: | ||
Interest, net of amount capitalized | $33,664 | $94,205 |
General
General | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014 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. No material events or other transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of February and March 2015 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended March 31, 2015. | |
We believe the accompanying unaudited consolidated financial statements contain all normal recurring adjustments 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 | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies |
Revenues and Expenses | |
We recognize passenger ticket revenues, revenues from onboard and other goods and services and all associated cruise operating costs for all of our uncompleted voyages on a pro-rata basis. Prior to September 30, 2014, we recognized revenues and cruise operating costs for our shorter voyages (voyages of ten days or less) upon voyage completion while we recognized revenues and cruise operating costs for voyages in excess of ten days on a pro-rata basis. | |
The change to prorate all voyages as of September 30, 2014 forward was not retrospectively applied to prior periods, as the impact of prorating all voyages was immaterial to the respective periods presented. | |
Recent Accounting Pronouncements | |
In May 2014, amended GAAP 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, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
In August 2014, GAAP guidance was issued requiring management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. This guidance will be effective for our annual reporting period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | |
In January 2015, amended GAAP guidance was issued changing the requirements for reporting extraordinary and unusual items in the income statement. The update eliminates the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. A reporting entity may apply the amendments prospectively or retrospectively to all periods presented in the financial statements. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | |
In February 2015, amended GAAP guidance was issued affecting current consolidation guidance. The guidance changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This guidance must be applied using one of two retrospective application methods and will be effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in any interim period. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
In April 2015, amended GAAP guidance was issued simplifying the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. This guidance should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The guidance will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
In April 2015, amended GAAP guidance was issued to provide a practical expedient for the measurement date of an employer's defined benefit obligation and plan assets. The guidance provides a practical expedient for entities with a fiscal year-end that does not coincide with a month-end and for contributions or significant events that occur between the month-end date and an entity's fiscal year end. The guidance will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | |
In April 2015, amended GAAP guidance was issued to clarify a customer’s accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license or if the arrangement should be accounted for as a service contract. This guidance will impact the accounting of software licenses but will not change a customer’s accounting for service contracts. The guidance will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either prospectively or retrospectively. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
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 $127.1 million and $124.1 million for the first quarters of 2015 and 2014, respectively. | |
Reclassifications | |
On January 1, 2015, we adopted ASC 853, Service Concession Arrangements ("ASC 853"), using the modified retrospective approach. Due to the adoption of ASC 853, $41.9 million has been reclassified in the consolidated balance sheet, as of December 31, 2014, from Property and equipment to Other assets in order to conform to the current year presentation. The adoption of this guidance did not have a material impact to our consolidated financial statements as of and for the quarter ended March 31, 2015. | |
For the three months ended March 31, 2014, $2.6 million has been reclassified in the consolidated statements of cash flows from Other, net to Net deferred income tax (benefit) expense within Net cash provided by operating activities in order to conform to the current year presentation. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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 March 31, | ||||||||
2015 | 2014 | |||||||
Net income for basic and diluted earnings per share | $ | 45,230 | $ | 26,457 | ||||
Weighted-average common shares outstanding | 219,626 | 221,295 | ||||||
Dilutive effect of stock options, performance share awards and restricted stock awards | 1,216 | 1,376 | ||||||
Diluted weighted-average shares outstanding | 220,842 | 222,671 | ||||||
Basic earnings per share | $ | 0.21 | $ | 0.12 | ||||
Diluted earnings per share | $ | 0.2 | $ | 0.12 | ||||
Diluted earnings per share does not reflect options to purchase an aggregate of 6,000 shares for the quarter ended March 31, 2014 because the effect of including them would have been antidilutive. There were no antidilutive shares for the quarter ended March 31, 2015. |
LongTerm_Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt |
In April 2015, we took delivery of Anthem of the Seas. To finance the purchase, we borrowed $742.1 million under a previously committed unsecured term loan which is 95% guaranteed by Euler Hermes Deutschland AG ("Hermes"), the official export credit agency of Germany. The loan amortizes semi-annually over 12 years and bears interest at LIBOR plus a margin of 1.30%, currently totaling 1.71%. In addition, during 2012, we entered into forward-starting interest rate swap agreements which effectively converted the floating rate available to us per the credit agreement to a fixed rate, including the applicable margin, of 3.86% effective April 2015 through the remaining term of the loan. See Note 9. Fair Value Measurements and Derivative Instruments for further information regarding these agreements. |
Goodwill_and_Other_Assets
Goodwill and Other Assets | 3 Months Ended |
Mar. 31, 2015 | |
Goodwill and Other Assets | |
Goodwill and Other Assets | Goodwill and Other Assets |
As of March 31, 2015, the carrying amounts of goodwill and trademarks and trade names attributable to our Pullmantur reporting unit were $118.6 million and $166.9 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 March 31, 2015. | |
If there are changes to the projected future cash flows used in the impairment analyses, especially in Net Yields, or if an anticipated transfer of a vessel from one of our other cruise brands to the Pullmantur fleet does 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 transfer of a vessel to the Pullmantur fleet is most significant to the projected future cash flows. If the transfer does not occur, we will likely fail step one of the the goodwill impairment test and record an impairment loss related to our trademarks and tradenames. We will continue to monitor these intangible assets for potential impairment and perform interim testing of our goodwill, trademark or trade names if deemed necessary. | |
Other Assets | |
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 TUI Cruises GmbH, our 50%-owned joint venture, which operates the brand TUI Cruises, is a VIE. As of March 31, 2015 and December 31, 2014, our investment in TUI Cruises, including equity and loans, was approximately $363.7 million and $370.1 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 May 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 March 31, 2015, TUI Cruises’ bank loan that is guaranteed by the shareholders had a remaining balance of €112.5 million, or approximately $120.8 million based on the exchange rate at March 31, 2015. 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 and maturing in June 2018. During 2014, we made several amendments to the facility, including increasing the maximum amount of the facility to €125.0 million and providing TUI Cruises with the ability to draw upon the available capacity through December 31, 2015 to fund installment payments for its newbuild ships. Any amounts drawn under the facility to fund newbuild installments mature in March 2016. Interest under the loan accrues at the rate of 5.0% per annum. 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 March 31, 2015 was €95.0 million, or $102.0 million based on the exchange rate at March 31, 2015. | |
TUI Cruises currently has three newbuild ships on order with STX Finland: Mein Schiff 4, scheduled for delivery in the second quarter of 2015, Mein Schiff 5, scheduled for delivery in the second quarter of 2016 and Mein Schiff 6, scheduled for delivery in the second quarter of 2017. TUI Cruises has in place commitments for the financing of up to 80% of the contract price of each ship on order. The remaining portion of the contract price of the ships will be funded through TUI Cruises’ cash flows from operations and/or shareholder loans (via the debt facility described above or otherwise) and/or equity contributions from us and TUI AG. The various ship construction and credit agreements include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through 2019. | |
In March 2015, we announced the pending sale of Splendour of the Seas to TUI Cruises. The sale will be completed for €188.0 million in April 2016 in order to retain the future revenues to be generated for sailings through that date. After the sale, TUI Cruises will lease the ship to Thomson Cruises, which will operate the ship. The purchase price will be financed by us under a secured credit agreement to be repaid over 10 years. The resulting term loan will be 50% guaranteed by TUI AG and will be secured by a first mortgage on the ship. Interest will accrue at the rate of 6.25% per annum. We executed certain forward contracts to lock in the sales price of the ship at approximately $213.0 million. We expect to recognize a gain on the sale, which we do not expect will have a material effect to our consolidated financial statements. | |
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 March 31, 2015, the net book value of our investment in Grand Bahama was approximately $53.9 million, consisting of $7.8 million in equity and $46.1 million in loans. As of December 31, 2014, the net book value of our investment in Grand Bahama was approximately $53.8 million, consisting of $7.7 million in equity and $46.1 million in loans. These amounts represent our maximum exposure to loss. 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. For the quarter ended March 31, 2015 and March 31, 2014, we received approximately $0.1 million and $0.8 million, respectively, in principal and interest payments related to a loan that is in accrual status from 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 March 31, 2015. | |
We have determined that Skysea Holding, in which we have a 35% noncontrolling interest, is a VIE for which we are not the primary beneficiary, as we do not have the power to direct the activities that most significantly impact the entity's economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. In addition, we and Ctrip.com International Ltd, which also owns 35% of Skysea Holding, each provided a debt facility to a wholly owned subsidiary of Skysea Holding in the amount of $80.0 million. Interest under these facilities, which mature in January 2030, initially accrues at a rate of 3.0% per annum with an increase of at least 0.5% every two years. The facilities, which are pari passu to each other, are each 100% guaranteed by Skysea Holding and are secured by a first priority mortgage on the ship, Celebrity Century, which we sold to a wholly owned subsidiary of Skysea Holding in September 2014. As of March 31, 2015 and December 31, 2014, our investment in Skysea Holding and its subsidiaries, including equity and loans, was approximately $106.1 million and $106.3 million, respectively. The majority of this amount was included within Other assets in our consolidated balance sheets. Our investment amount is substantially our maximum exposure to loss. As of March 31, 2015, Skysea Holding and its subsidiaries have not commenced operations. | |
We have determined that both Nautalia Viajes, S.L. ("Nautalia"), a small travel agency network, and Global Tour Operación, S.L. ("Global Tour"), a small tour operations business, in which we have a 19% noncontrolling interest, are VIEs. We have determined that we are not the primary beneficiary of these entities as we do not have the power to direct the activities that most significantly impact the entities' economic performance. Accordingly, we do not consolidate these entities and we account for these investments under the equity method of accounting. As of March 31, 2015 and December 31, 2014, the impact of these entities was not material to our consolidated financial statements. | |
Our share of income from investments accounted for under the equity method of accounting, including the entities discussed above, was $9.2 million and $5.0 million for the quarters ended March 31, 2015 and March 31, 2014, respectively, and was recorded within Other income (expense). | |
As of March 31, 2015 and December 31, 2014, our notes receivable balance reported within Trade and other receivables, net was $75.4 million and $38.0 million, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
In January 2015, we entered into a financing arrangement for the US dollar financing of the fourth Oasis-class ship. Through the financing arrangement, we have the right, but not the obligation, to satisfy the obligations to be incurred upon delivery and acceptance of the vessel under the shipbuilding contract by assuming, at delivery and acceptance, the debt indirectly incurred by the shipbuilder during the construction of the ship. The amount assumed under this arrangement is not to exceed the US Dollar equivalent of €931.2 million, or approximately $1.0 billion, based on the exchange rate at March 31, 2015. The loan, upon assumption at the date of actual delivery, will amortize semi-annually and will mature 12 years following delivery of the ship. At our election, interest on the loan will accrue either (1) at a fixed rate 3.82% (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 1.10%. | |
In February 2015, we reached conditional agreements with STX France to build two ships of a new generation of Celebrity Cruises ships, known as "Project Edge." The agreement is subject to certain conditions to effectiveness expected to occur later this year. The ships will each have a capacity of approximately 2,900 berths and are expected to enter service in the fourth quarter of 2018 and the first half of 2020. | |
As of March 31, 2015, the aggregate cost of our ships on order, not including the "Project Edge" ships and the TUI Cruises' ships on order, was approximately $4.9 billion, of which we had deposited $554.2 million as of such date. Approximately 25.1% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at March 31, 2015. (See Note 9. Fair Value Measurements and Derivative Instruments). | |
Litigation | |
As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2014, 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 alleged 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. In May 2012, the district 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 district court’s dismissal and denied the plaintiffs’ petition for re-hearing and re-hearing en banc. In October 2014, the United States Supreme Court denied the plaintiffs’ request to review the order compelling arbitration. Subsequently, approximately 575 crew members submitted demands for arbitration. The demands make substantially the same allegations as in the federal court complaint and are similarly seeking damages, wage penalties and interest in an indeterminate amount. Unlike the federal court complaint, the demands for arbitration are being brought individually by each of the crew members and not on behalf of a purported class of stateroom attendants. At this time, we are unable to estimate the possible impact of this matter on us. However, we believe the underlying claims made against us are without merit, and we intend to vigorously defend ourselves against them. | |
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 | |
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 | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity |
During the first quarter of 2015, we declared and paid a cash dividend on our common stock of $0.30 per share. During the first quarter of 2015, we also paid a cash dividend on our common stock of $0.30 per share which was declared during the fourth quarter of 2014. | |
During the first quarter 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. |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive (Loss) Income | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive (Loss) Income | Changes in Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||
The following table presents the changes in accumulated other comprehensive income (loss) by component for the quarter ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2015 | Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||
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 (loss) income at beginning of the year | $ | (826,026 | ) | $ | (31,207 | ) | $ | (39,761 | ) | $ | (896,994 | ) | $ | 43,324 | $ | (23,994 | ) | $ | (13,659 | ) | $ | 5,671 | ||||||||||
Other comprehensive (loss) income before reclassifications | (315,597 | ) | (2,056 | ) | (31,544 | ) | (349,197 | ) | (57,352 | ) | (2,462 | ) | 2,470 | (57,344 | ) | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | 54,648 | 563 | — | 55,211 | 4,437 | 431 | — | 4,868 | ||||||||||||||||||||||||
Net current-period other comprehensive (loss) income | (260,949 | ) | (1,493 | ) | (31,544 | ) | (293,986 | ) | (52,915 | ) | (2,031 | ) | 2,470 | (52,476 | ) | |||||||||||||||||
Ending balance | $ | (1,086,975 | ) | $ | (32,700 | ) | $ | (71,305 | ) | $ | (1,190,980 | ) | $ | (9,591 | ) | $ | (26,025 | ) | $ | (11,189 | ) | $ | (46,805 | ) | ||||||||
The following table presents reclassifications out of accumulated other comprehensive income (loss) for the quarter ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||||||||||||||||||
Amount of Gain (Loss) Reclassified from | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) into Income | ||||||||||||||||||||||||||||||||
Details About Accumulated Other | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Affected Line Item in Statements of | |||||||||||||||||||||||||||||
Comprehensive Income (Loss) Components | Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||
Loss on cash flow derivative hedges: | ||||||||||||||||||||||||||||||||
Cross currency swaps | $ | — | $ | (261 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||||||||
Foreign currency forward contracts | (718 | ) | (449 | ) | Depreciation and amortization expenses | |||||||||||||||||||||||||||
Foreign currency forward contracts | (238 | ) | (3,576 | ) | Other income (expense) | |||||||||||||||||||||||||||
Foreign currency forward contracts | — | (57 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||||||||||
Fuel swaps | (53,692 | ) | (94 | ) | Fuel | |||||||||||||||||||||||||||
(54,648 | ) | (4,437 | ) | |||||||||||||||||||||||||||||
Amortization of defined benefit plans: | ||||||||||||||||||||||||||||||||
Actuarial loss | (354 | ) | (222 | ) | Payroll and related | |||||||||||||||||||||||||||
Prior service costs | (209 | ) | (209 | ) | Payroll and related | |||||||||||||||||||||||||||
(563 | ) | (431 | ) | |||||||||||||||||||||||||||||
Total reclassifications for the period | $ | (55,211 | ) | $ | (4,868 | ) |
Fair_Value_Measurements_and_De
Fair Value Measurements and Derivative Instruments | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
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, categorized based upon the fair value hierarchy, are as follows (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at March 31, 2015 Using | Fair Value Measurements at December 31, 2014 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) | $ | 229,705 | $ | 229,705 | $ | 229,705 | $ | — | $ | — | $ | 189,241 | $ | 189,241 | $ | 189,241 | $ | — | $ | — | ||||||||||||||||||||
Total Assets | $ | 229,705 | $ | 229,705 | $ | 229,705 | $ | — | $ | — | $ | 189,241 | $ | 189,241 | $ | 189,241 | $ | — | $ | — | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Long-term debt (including current portion of long-term debt)(5) | $ | 8,502,921 | $ | 8,863,909 | $ | 1,868,909 | $ | 6,995,000 | $ | — | $ | 8,391,301 | $ | 8,761,414 | $ | 1,859,361 | $ | 6,902,053 | $ | — | ||||||||||||||||||||
Total Liabilities | $ | 8,502,921 | $ | 8,863,909 | $ | 1,868,909 | $ | 6,995,000 | $ | — | $ | 8,391,301 | $ | 8,761,414 | $ | 1,859,361 | $ | 6,902,053 | $ | — | ||||||||||||||||||||
(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 March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of cash and marketable securities with original maturities of less than 90 days. | ||||||||||||||||||||||||||||||||||||||||
(5) Consists of unsecured revolving credit facilities, senior notes, senior debentures and 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 March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||||||||||||||||||
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 March 31, 2015 Using | Fair Value Measurements at December 31, 2014 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) | $ | 131,128 | $ | — | $ | 131,128 | $ | — | $ | 63,981 | $ | — | $ | 63,981 | $ | — | ||||||||||||||||||||||||
Investments(5) | $ | 5,575 | 5,575 | — | — | $ | 5,531 | 5,531 | — | — | ||||||||||||||||||||||||||||||
Total Assets | $ | 136,703 | $ | 5,575 | $ | 131,128 | $ | — | $ | 69,512 | $ | 5,531 | $ | 63,981 | $ | — | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments(6) | $ | 968,464 | $ | — | $ | 968,464 | $ | — | $ | 767,635 | $ | — | $ | 767,635 | $ | — | ||||||||||||||||||||||||
Total Liabilities | $ | 968,464 | $ | — | $ | 968,464 | $ | — | $ | 767,635 | $ | — | $ | 767,635 | $ | — | ||||||||||||||||||||||||
(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 March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of foreign currency forward contracts, 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 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. | ||||||||||||||||||||||||||||||||||||||||
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 March 31, 2015 or December 31, 2014, 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 March 31, 2015 and December 31, 2014, 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 March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
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 | $ | 131,128 | $ | (128,020 | ) | $ | — | $ | 3,108 | $ | 63,981 | $ | (63,981 | ) | $ | — | $ | — | ||||||||||||||||||||||
Total | $ | 131,128 | $ | (128,020 | ) | $ | — | $ | 3,108 | $ | 63,981 | $ | (63,981 | ) | $ | — | $ | — | ||||||||||||||||||||||
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 March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
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 | $ | (968,464 | ) | $ | 128,020 | $ | — | $ | (840,444 | ) | $ | (767,635 | ) | $ | 63,981 | $ | — | $ | (703,654 | ) | ||||||||||||||||||||
Total | $ | (968,464 | ) | $ | 128,020 | $ | — | $ | (840,444 | ) | $ | (767,635 | ) | $ | 63,981 | $ | — | $ | (703,654 | ) | ||||||||||||||||||||
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. As of March 31, 2015, our exposure under our derivative instruments was approximately $3.1 million. As of December 31, 2014, we did not have any exposure under our derivative instruments. 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 until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments and the changes in the fair value of derivatives designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive loss 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 and derivative instrument cash flows from hedges of foreign currency risk on debt payments as financing 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 March 31, 2015, approximately 28.2% of our long-term debt was effectively fixed as compared to 28.5% as of December 31, 2014. 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 March 31, 2015 and December 31, 2014, 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 $245.0 million as of March 31, 2015, 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 3.89%. 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 March 31, 2015 and December 31, 2014, we maintained forward-starting interest rate swap agreements that hedge the anticipated unsecured amortizing term loan that will finance our purchase of Anthem of the Seas. 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 March 31, 2015 and December 31, 2014, we maintained interest rate swap agreements on our Celebrity Reflection term loan. Our interest rate swap agreements effectively converted the interest rate on a portion of the Celebrity Reflection unsecured amortizing term loan balance of approximately $545.4 million from LIBOR plus 0.40% to a fixed rate (including applicable margin) of 2.85% through the term of the loan. Furthermore, at March 31, 2015 and December 31, 2014, we maintained interest rate swap agreements on our Quantum of the Seas term loan. Our interest rate swap agreements effectively converted the interest rate on a portion of the Quantum of the Seas unsecured amortizing term loan balance of approximately $735.0 million from LIBOR plus 1.30% to a fixed rate of 3.74% (inclusive of margin) 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 March 31, 2015 and December 31, 2014 was $2.9 billion. | ||||||||||||||||||||||||||||||||||||||||
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 March 31, 2015, the aggregate cost of our ships on order, not including the "Project Edge" ships and the TUI Cruises' ships on order, was approximately $4.9 billion, of which we had deposited $554.2 million as of such date. Approximately 25.1% and 28.8% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at March 31, 2015 and December 31, 2014, 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 and, from time to time, we utilize cross-currency swap agreements 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 first quarter of 2015, we maintained an average of approximately $398.2 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 (loss) gain, of approximately $(28.1) million and $1.9 million, respectively, during the quarter ended March 31, 2015 and March 31, 2014, 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. As of March 31, 2015, we maintained foreign currency forward contracts of €415.6 million, or approximately $446.4 million based on the exchange rate at March 31, 2015, and designated them as hedges of a portion of our net investments in Pullmantur and TUI Cruises. 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 March 31, 2015 and December 31, 2014 was $3.1 billion and $3.0 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 €75.8 million and €139.4 million, or approximately $81.5 million and $168.7 million, as of March 31, 2015 and December 31, 2014, 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 to mitigate the financial impact of fluctuations in fuel prices. | ||||||||||||||||||||||||||||||||||||||||
Our fuel swap agreements are accounted for as cash flow hedges. At March 31, 2015, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2018. As of March 31, 2015 and December 31, 2014, we had the following outstanding fuel swap agreements: | ||||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
(metric tons) | ||||||||||||||||||||||||||||||||||||||||
2015 | 539,000 | 806,000 | ||||||||||||||||||||||||||||||||||||||
2016 | 805,000 | 802,000 | ||||||||||||||||||||||||||||||||||||||
2017 | 598,000 | 525,000 | ||||||||||||||||||||||||||||||||||||||
2018 | 300,000 | 226,000 | ||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
(% hedged) | ||||||||||||||||||||||||||||||||||||||||
Projected fuel purchases: | ||||||||||||||||||||||||||||||||||||||||
2015 | 52 | % | 58 | % | ||||||||||||||||||||||||||||||||||||
2016 | 55 | % | 55 | % | ||||||||||||||||||||||||||||||||||||
2017 | 40 | % | 35 | % | ||||||||||||||||||||||||||||||||||||
2018 | 20 | % | 15 | % | ||||||||||||||||||||||||||||||||||||
At March 31, 2015 and December 31, 2014, $220.8 million and $223.1 million, respectively, of estimated unrealized net loss associated with our cash flow hedges pertaining to fuel swap agreements were expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months. Reclassification is expected to occur as the 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 March 31, 2015 | As of December 31, 2014 | Balance Sheet Location | As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||
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 | $ | 821 | $ | — | Other long-term liabilities | $ | 80,429 | $ | 65,768 | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | Derivative financial instruments | — | — | Derivative financial instruments | 28,368 | 17,619 | ||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other assets | 130,292 | 63,981 | Other long-term liabilities | 318,789 | 164,627 | ||||||||||||||||||||||||||||||||||
Foreign currency collar options | Derivative financial instruments | — | — | Derivative financial instruments | 69,857 | 21,855 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Derivative financial instruments | — | — | Derivative financial instruments | 200,402 | 227,512 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other assets | 15 | — | Other long-term liabilities | 235,739 | 270,254 | ||||||||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments under 815-20 | $ | 131,128 | $ | 63,981 | $ | 933,584 | $ | 767,635 | ||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments under ASC 815-20 | ||||||||||||||||||||||||||||||||||||||||
Fuel swaps | Derivative financial instruments | — | — | Derivative financial instruments | 19,624 | — | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other Assets | — | — | Other long-term liabilities | 15,256 | — | ||||||||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments under 815-20 | — | — | 34,880 | — | ||||||||||||||||||||||||||||||||||||
Total derivatives | $ | 131,128 | $ | 63,981 | $ | 968,464 | $ | 767,635 | ||||||||||||||||||||||||||||||||
(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 | Balance Sheet Location | As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||
hedging instrument under ASC 815-20 | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Foreign currency debt | Long-term debt | $ | 81,451 | $ | 168,718 | |||||||||||||||||||||||||||||||||||
$ | 81,451 | $ | 168,718 | |||||||||||||||||||||||||||||||||||||
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 under ASC 815-20 Fair Value Hedging Relationships | Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item | Amount of Gain (Loss) | Amount of Gain (Loss) | |||||||||||||||||||||||||||||||||||||
Recognized in | Recognized in | |||||||||||||||||||||||||||||||||||||||
Income on Derivative | Income on Hedged Item | |||||||||||||||||||||||||||||||||||||||
Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Interest expense, net of interest capitalized | $ | 2,976 | $ | 3,069 | $ | 3,882 | $ | 5,542 | |||||||||||||||||||||||||||||||
Interest rate swaps | Other income (expense) | 15,152 | 12,510 | (12,341 | ) | (11,435 | ) | |||||||||||||||||||||||||||||||||
$ | 18,128 | $ | 15,579 | $ | (8,459 | ) | $ | (5,893 | ) | |||||||||||||||||||||||||||||||
The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows: | ||||||||||||||||||||||||||||||||||||||||
Derivatives | Amount of Gain (Loss) Recognized in | Location of | Amount of Gain (Loss) Reclassified from | Location of Gain (Loss) | Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||
under ASC 815-20 Cash Flow | Accumulated Other | Gain (Loss) | Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion) | Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ||||||||||||||||||||||||||||||||||||
Hedging | Comprehensive Income (Loss) on Derivative | Reclassified | ||||||||||||||||||||||||||||||||||||||
Relationships | (Effective Portion) | from | ||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||||
Other Comprehensive | ||||||||||||||||||||||||||||||||||||||||
Loss into Income | ||||||||||||||||||||||||||||||||||||||||
(Effective | ||||||||||||||||||||||||||||||||||||||||
Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Portion) | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | ||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Cross currency swaps | $ | — | $ | — | Interest expense, net of interest capitalized | $ | — | $ | (261 | ) | Other income (expense) | $ | — | $ | — | |||||||||||||||||||||||||
Interest rate swaps | (29,028 | ) | (34,525 | ) | Other income (expense) | — | — | Other income (expense) | 38 | (19 | ) | |||||||||||||||||||||||||||||
Foreign currency forward contracts | (172,822 | ) | 1,195 | Depreciation and amortization expenses | (718 | ) | (449 | ) | Other income (expense) | — | (20 | ) | ||||||||||||||||||||||||||||
Foreign currency forward contracts | — | — | Other income (expense) | (238 | ) | (3,576 | ) | Other income (expense) | — | — | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | — | — | Interest expense, net of interest capitalized | — | (57 | ) | Other income (expense) | — | — | |||||||||||||||||||||||||||||||
Foreign currency collar options | (64,833 | ) | (2,607 | ) | Depreciation and amortization expenses | — | — | Other income (expense) | — | — | ||||||||||||||||||||||||||||||
Fuel swaps | (48,914 | ) | (21,415 | ) | Fuel | (53,692 | ) | (94 | ) | Other income (expense) | 182 | (1,632 | ) | |||||||||||||||||||||||||||
$ | (315,597 | ) | $ | (57,352 | ) | $ | (54,648 | ) | $ | (4,437 | ) | $ | 220 | $ | (1,671 | ) | ||||||||||||||||||||||||
The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows: | ||||||||||||||||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion) | Location of Gain (Loss) in Income | Amount of Gain (Loss) Recognized in Income | ||||||||||||||||||||||||||||||||||||||
(Ineffective | (Ineffective Portion and Amount Excluded from | |||||||||||||||||||||||||||||||||||||||
Portion and Amount Excluded from Effectiveness | Effectiveness Testing) | |||||||||||||||||||||||||||||||||||||||
Non-derivative instruments under ASC 815-20 Net | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Testing) | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||||||
Investment Hedging Relationships | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Foreign Currency Debt | $ | 12,137 | $ | 4,374 | Other income (expense) | $ | — | $ | — | |||||||||||||||||||||||||||||||
$ | 12,137 | $ | 4,374 | $ | — | $ | — | |||||||||||||||||||||||||||||||||
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 | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||||||||
Designated as Hedging | Gain (Loss) Recognized in | |||||||||||||||||||||||||||||||||||||||
Instruments under ASC | Income on Derivatives | |||||||||||||||||||||||||||||||||||||||
815-20 | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other income (expense) | $ | (28,083 | ) | $ | 1,881 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other income (expense) | (129 | ) | (1,222 | ) | |||||||||||||||||||||||||||||||||||
$ | (28,212 | ) | $ | 659 | ||||||||||||||||||||||||||||||||||||
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 rated 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 March 31, 2015 and December 31, 2014 were $80.4 million and $65.8 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 March 31, 2015, we were not required to post collateral for any of our derivative transactions. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014 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. No material events or other transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of February and March 2015 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended March 31, 2015. | |
We believe the accompanying unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair presentation. Our revenues are seasonal and results for interim periods are not necessarily indicative of results for the entire year. | |
Revenue and Expense Recognition | Revenues and Expenses |
We recognize passenger ticket revenues, revenues from onboard and other goods and services and all associated cruise operating costs for all of our uncompleted voyages on a pro-rata basis. Prior to September 30, 2014, we recognized revenues and cruise operating costs for our shorter voyages (voyages of ten days or less) upon voyage completion while we recognized revenues and cruise operating costs for voyages in excess of ten days on a pro-rata basis. | |
The change to prorate all voyages as of September 30, 2014 forward was not retrospectively applied to prior periods, as the impact of prorating all voyages was immaterial to the respective periods presented. | |
New Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, amended GAAP 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, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
In August 2014, GAAP guidance was issued requiring management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. This guidance will be effective for our annual reporting period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | |
In January 2015, amended GAAP guidance was issued changing the requirements for reporting extraordinary and unusual items in the income statement. The update eliminates the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. A reporting entity may apply the amendments prospectively or retrospectively to all periods presented in the financial statements. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | |
In February 2015, amended GAAP guidance was issued affecting current consolidation guidance. The guidance changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This guidance must be applied using one of two retrospective application methods and will be effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in any interim period. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
In April 2015, amended GAAP guidance was issued simplifying the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. This guidance should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The guidance will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
In April 2015, amended GAAP guidance was issued to provide a practical expedient for the measurement date of an employer's defined benefit obligation and plan assets. The guidance provides a practical expedient for entities with a fiscal year-end that does not coincide with a month-end and for contributions or significant events that occur between the month-end date and an entity's fiscal year end. The guidance will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements. | |
In April 2015, amended GAAP guidance was issued to clarify a customer’s accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license or if the arrangement should be accounted for as a service contract. This guidance will impact the accounting of software licenses but will not change a customer’s accounting for service contracts. The guidance will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either prospectively or retrospectively. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our consolidated financial statements. | |
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 $127.1 million and $124.1 million for the first quarters of 2015 and 2014, respectively. | |
Reclassification | Reclassifications |
On January 1, 2015, we adopted ASC 853, Service Concession Arrangements ("ASC 853"), using the modified retrospective approach. Due to the adoption of ASC 853, $41.9 million has been reclassified in the consolidated balance sheet, as of December 31, 2014, from Property and equipment to Other assets in order to conform to the current year presentation. The adoption of this guidance did not have a material impact to our consolidated financial statements as of and for the quarter ended March 31, 2015. | |
For the three months ended March 31, 2014, $2.6 million has been reclassified in the consolidated statements of cash flows from Other, net to Net deferred income tax (benefit) expense within Net cash provided by operating activities in order to conform to the current year presentation. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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 March 31, | ||||||||
2015 | 2014 | |||||||
Net income for basic and diluted earnings per share | $ | 45,230 | $ | 26,457 | ||||
Weighted-average common shares outstanding | 219,626 | 221,295 | ||||||
Dilutive effect of stock options, performance share awards and restricted stock awards | 1,216 | 1,376 | ||||||
Diluted weighted-average shares outstanding | 220,842 | 222,671 | ||||||
Basic earnings per share | $ | 0.21 | $ | 0.12 | ||||
Diluted earnings per share | $ | 0.2 | $ | 0.12 | ||||
Changes_in_Accumulated_Other_C1
Changes in Accumulated Other Comprehensive (Loss) Income (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
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 income (loss) by component for the quarter ended March 31, 2015 and 2014 (in thousands): | |||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2015 | Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||
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 (loss) income at beginning of the year | $ | (826,026 | ) | $ | (31,207 | ) | $ | (39,761 | ) | $ | (896,994 | ) | $ | 43,324 | $ | (23,994 | ) | $ | (13,659 | ) | $ | 5,671 | ||||||||||
Other comprehensive (loss) income before reclassifications | (315,597 | ) | (2,056 | ) | (31,544 | ) | (349,197 | ) | (57,352 | ) | (2,462 | ) | 2,470 | (57,344 | ) | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | 54,648 | 563 | — | 55,211 | 4,437 | 431 | — | 4,868 | ||||||||||||||||||||||||
Net current-period other comprehensive (loss) income | (260,949 | ) | (1,493 | ) | (31,544 | ) | (293,986 | ) | (52,915 | ) | (2,031 | ) | 2,470 | (52,476 | ) | |||||||||||||||||
Ending balance | $ | (1,086,975 | ) | $ | (32,700 | ) | $ | (71,305 | ) | $ | (1,190,980 | ) | $ | (9,591 | ) | $ | (26,025 | ) | $ | (11,189 | ) | $ | (46,805 | ) | ||||||||
Schedule of reclassifications out of accumulated other comprehensive income (loss) | The following table presents reclassifications out of accumulated other comprehensive income (loss) for the quarter ended March 31, 2015 and 2014 (in thousands): | |||||||||||||||||||||||||||||||
Amount of Gain (Loss) Reclassified from | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) into Income | ||||||||||||||||||||||||||||||||
Details About Accumulated Other | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Affected Line Item in Statements of | |||||||||||||||||||||||||||||
Comprehensive Income (Loss) Components | Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||
Loss on cash flow derivative hedges: | ||||||||||||||||||||||||||||||||
Cross currency swaps | $ | — | $ | (261 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||||||||
Foreign currency forward contracts | (718 | ) | (449 | ) | Depreciation and amortization expenses | |||||||||||||||||||||||||||
Foreign currency forward contracts | (238 | ) | (3,576 | ) | Other income (expense) | |||||||||||||||||||||||||||
Foreign currency forward contracts | — | (57 | ) | Interest expense, net of interest capitalized | ||||||||||||||||||||||||||||
Fuel swaps | (53,692 | ) | (94 | ) | Fuel | |||||||||||||||||||||||||||
(54,648 | ) | (4,437 | ) | |||||||||||||||||||||||||||||
Amortization of defined benefit plans: | ||||||||||||||||||||||||||||||||
Actuarial loss | (354 | ) | (222 | ) | Payroll and related | |||||||||||||||||||||||||||
Prior service costs | (209 | ) | (209 | ) | Payroll and related | |||||||||||||||||||||||||||
(563 | ) | (431 | ) | |||||||||||||||||||||||||||||
Total reclassifications for the period | $ | (55,211 | ) | $ | (4,868 | ) |
Fair_Value_Measurements_and_De1
Fair Value Measurements and Derivative Instruments (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | 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 March 31, 2015 | As of December 31, 2014 | Balance Sheet Location | As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||
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 | $ | 821 | $ | — | Other long-term liabilities | $ | 80,429 | $ | 65,768 | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | Derivative financial instruments | — | — | Derivative financial instruments | 28,368 | 17,619 | ||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other assets | 130,292 | 63,981 | Other long-term liabilities | 318,789 | 164,627 | ||||||||||||||||||||||||||||||||||
Foreign currency collar options | Derivative financial instruments | — | — | Derivative financial instruments | 69,857 | 21,855 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Derivative financial instruments | — | — | Derivative financial instruments | 200,402 | 227,512 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other assets | 15 | — | Other long-term liabilities | 235,739 | 270,254 | ||||||||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments under 815-20 | $ | 131,128 | $ | 63,981 | $ | 933,584 | $ | 767,635 | ||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments under ASC 815-20 | ||||||||||||||||||||||||||||||||||||||||
Fuel swaps | Derivative financial instruments | — | — | Derivative financial instruments | 19,624 | — | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other Assets | — | — | Other long-term liabilities | 15,256 | — | ||||||||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments under 815-20 | — | — | 34,880 | — | ||||||||||||||||||||||||||||||||||||
Total derivatives | $ | 131,128 | $ | 63,981 | $ | 968,464 | $ | 767,635 | ||||||||||||||||||||||||||||||||
(1) Accounting Standard Codification 815-20 “Derivatives and Hedging.” | ||||||||||||||||||||||||||||||||||||||||
Non Derivative 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 | Balance Sheet Location | As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||
hedging instrument under ASC 815-20 | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Foreign currency debt | Long-term debt | $ | 81,451 | $ | 168,718 | |||||||||||||||||||||||||||||||||||
$ | 81,451 | $ | 168,718 | |||||||||||||||||||||||||||||||||||||
Schedule of Price Risk Derivatives | As of March 31, 2015 and December 31, 2014, we had the following outstanding fuel swap agreements: | |||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
(metric tons) | ||||||||||||||||||||||||||||||||||||||||
2015 | 539,000 | 806,000 | ||||||||||||||||||||||||||||||||||||||
2016 | 805,000 | 802,000 | ||||||||||||||||||||||||||||||||||||||
2017 | 598,000 | 525,000 | ||||||||||||||||||||||||||||||||||||||
2018 | 300,000 | 226,000 | ||||||||||||||||||||||||||||||||||||||
Fuel Swap Agreements | ||||||||||||||||||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
(% hedged) | ||||||||||||||||||||||||||||||||||||||||
Projected fuel purchases: | ||||||||||||||||||||||||||||||||||||||||
2015 | 52 | % | 58 | % | ||||||||||||||||||||||||||||||||||||
2016 | 55 | % | 55 | % | ||||||||||||||||||||||||||||||||||||
2017 | 40 | % | 35 | % | ||||||||||||||||||||||||||||||||||||
2018 | 20 | % | 15 | % | ||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Nonrecurring | Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||
The estimated fair value of our financial instruments that are not measured at fair value, categorized based upon the fair value hierarchy, are as follows (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at March 31, 2015 Using | Fair Value Measurements at December 31, 2014 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) | $ | 229,705 | $ | 229,705 | $ | 229,705 | $ | — | $ | — | $ | 189,241 | $ | 189,241 | $ | 189,241 | $ | — | $ | — | ||||||||||||||||||||
Total Assets | $ | 229,705 | $ | 229,705 | $ | 229,705 | $ | — | $ | — | $ | 189,241 | $ | 189,241 | $ | 189,241 | $ | — | $ | — | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Long-term debt (including current portion of long-term debt)(5) | $ | 8,502,921 | $ | 8,863,909 | $ | 1,868,909 | $ | 6,995,000 | $ | — | $ | 8,391,301 | $ | 8,761,414 | $ | 1,859,361 | $ | 6,902,053 | $ | — | ||||||||||||||||||||
Total Liabilities | $ | 8,502,921 | $ | 8,863,909 | $ | 1,868,909 | $ | 6,995,000 | $ | — | $ | 8,391,301 | $ | 8,761,414 | $ | 1,859,361 | $ | 6,902,053 | $ | — | ||||||||||||||||||||
(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 March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of cash and marketable securities with original maturities of less than 90 days. | ||||||||||||||||||||||||||||||||||||||||
(5) Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. Does not include our capital lease obligations. | ||||||||||||||||||||||||||||||||||||||||
Non Derivative Instruments Qualifying and Designated as Hedging Instruments in Net Investment Hedges | The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows: | |||||||||||||||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion) | Location of Gain (Loss) in Income | Amount of Gain (Loss) Recognized in Income | ||||||||||||||||||||||||||||||||||||||
(Ineffective | (Ineffective Portion and Amount Excluded from | |||||||||||||||||||||||||||||||||||||||
Portion and Amount Excluded from Effectiveness | Effectiveness Testing) | |||||||||||||||||||||||||||||||||||||||
Non-derivative instruments under ASC 815-20 Net | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Testing) | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||||||
Investment Hedging Relationships | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Foreign Currency Debt | $ | 12,137 | $ | 4,374 | Other income (expense) | $ | — | $ | — | |||||||||||||||||||||||||||||||
$ | 12,137 | $ | 4,374 | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | 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 March 31, 2015 Using | Fair Value Measurements at December 31, 2014 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) | $ | 131,128 | $ | — | $ | 131,128 | $ | — | $ | 63,981 | $ | — | $ | 63,981 | $ | — | ||||||||||||||||||||||||
Investments(5) | $ | 5,575 | 5,575 | — | — | $ | 5,531 | 5,531 | — | — | ||||||||||||||||||||||||||||||
Total Assets | $ | 136,703 | $ | 5,575 | $ | 131,128 | $ | — | $ | 69,512 | $ | 5,531 | $ | 63,981 | $ | — | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments(6) | $ | 968,464 | $ | — | $ | 968,464 | $ | — | $ | 767,635 | $ | — | $ | 767,635 | $ | — | ||||||||||||||||||||||||
Total Liabilities | $ | 968,464 | $ | — | $ | 968,464 | $ | — | $ | 767,635 | $ | — | $ | 767,635 | $ | — | ||||||||||||||||||||||||
(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 March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||||||||||||||||||
(4) Consists of foreign currency forward contracts, 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 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. | ||||||||||||||||||||||||||||||||||||||||
Offsetting Assets | ||||||||||||||||||||||||||||||||||||||||
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||||||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
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 | $ | 131,128 | $ | (128,020 | ) | $ | — | $ | 3,108 | $ | 63,981 | $ | (63,981 | ) | $ | — | $ | — | ||||||||||||||||||||||
Total | $ | 131,128 | $ | (128,020 | ) | $ | — | $ | 3,108 | $ | 63,981 | $ | (63,981 | ) | $ | — | $ | — | ||||||||||||||||||||||
Offsetting Liabilities | ||||||||||||||||||||||||||||||||||||||||
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||||||||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||||||||||||||||||||||||||
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 | $ | (968,464 | ) | $ | 128,020 | $ | — | $ | (840,444 | ) | $ | (767,635 | ) | $ | 63,981 | $ | — | $ | (703,654 | ) | ||||||||||||||||||||
Total | $ | (968,464 | ) | $ | 128,020 | $ | — | $ | (840,444 | ) | $ | (767,635 | ) | $ | 63,981 | $ | — | $ | (703,654 | ) | ||||||||||||||||||||
Not Designated as Hedging Instrument | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | 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 | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||||||||
Designated as Hedging | Gain (Loss) Recognized in | |||||||||||||||||||||||||||||||||||||||
Instruments under ASC | Income on Derivatives | |||||||||||||||||||||||||||||||||||||||
815-20 | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Foreign currency forward contracts | Other income (expense) | $ | (28,083 | ) | $ | 1,881 | ||||||||||||||||||||||||||||||||||
Fuel swaps | Other income (expense) | (129 | ) | (1,222 | ) | |||||||||||||||||||||||||||||||||||
$ | (28,212 | ) | $ | 659 | ||||||||||||||||||||||||||||||||||||
Fair Value Hedging | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | 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 under ASC 815-20 Fair Value Hedging Relationships | Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item | Amount of Gain (Loss) | Amount of Gain (Loss) | |||||||||||||||||||||||||||||||||||||
Recognized in | Recognized in | |||||||||||||||||||||||||||||||||||||||
Income on Derivative | Income on Hedged Item | |||||||||||||||||||||||||||||||||||||||
Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | |||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Interest expense, net of interest capitalized | $ | 2,976 | $ | 3,069 | $ | 3,882 | $ | 5,542 | |||||||||||||||||||||||||||||||
Interest rate swaps | Other income (expense) | 15,152 | 12,510 | (12,341 | ) | (11,435 | ) | |||||||||||||||||||||||||||||||||
$ | 18,128 | $ | 15,579 | $ | (8,459 | ) | $ | (5,893 | ) | |||||||||||||||||||||||||||||||
Cash flow hedge | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | ||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | ||||||||||||||||||||||||||||||||||||||||
Derivatives | Amount of Gain (Loss) Recognized in | Location of | Amount of Gain (Loss) Reclassified from | Location of Gain (Loss) | Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||
under ASC 815-20 Cash Flow | Accumulated Other | Gain (Loss) | Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion) | Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ||||||||||||||||||||||||||||||||||||
Hedging | Comprehensive Income (Loss) on Derivative | Reclassified | ||||||||||||||||||||||||||||||||||||||
Relationships | (Effective Portion) | from | ||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||||
Other Comprehensive | ||||||||||||||||||||||||||||||||||||||||
Loss into Income | ||||||||||||||||||||||||||||||||||||||||
(Effective | ||||||||||||||||||||||||||||||||||||||||
Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Portion) | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | Quarter Ended March 31, 2015 | Quarter Ended March 31, 2014 | ||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Cross currency swaps | $ | — | $ | — | Interest expense, net of interest capitalized | $ | — | $ | (261 | ) | Other income (expense) | $ | — | $ | — | |||||||||||||||||||||||||
Interest rate swaps | (29,028 | ) | (34,525 | ) | Other income (expense) | — | — | Other income (expense) | 38 | (19 | ) | |||||||||||||||||||||||||||||
Foreign currency forward contracts | (172,822 | ) | 1,195 | Depreciation and amortization expenses | (718 | ) | (449 | ) | Other income (expense) | — | (20 | ) | ||||||||||||||||||||||||||||
Foreign currency forward contracts | — | — | Other income (expense) | (238 | ) | (3,576 | ) | Other income (expense) | — | — | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | — | — | Interest expense, net of interest capitalized | — | (57 | ) | Other income (expense) | — | — | |||||||||||||||||||||||||||||||
Foreign currency collar options | (64,833 | ) | (2,607 | ) | Depreciation and amortization expenses | — | — | Other income (expense) | — | — | ||||||||||||||||||||||||||||||
Fuel swaps | (48,914 | ) | (21,415 | ) | Fuel | (53,692 | ) | (94 | ) | Other income (expense) | 182 | (1,632 | ) | |||||||||||||||||||||||||||
$ | (315,597 | ) | $ | (57,352 | ) | $ | (54,648 | ) | $ | (4,437 | ) | $ | 220 | $ | (1,671 | ) | ||||||||||||||||||||||||
General_Details
General (Details) | 3 Months Ended |
Mar. 31, 2015 | |
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 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Significant Accounting Policies | |||
Gross amount of port costs included in passenger ticket revenues | $127.10 | $124.10 | |
Balance sheet reclass from Property and equipment to Other assets | |||
Significant Accounting Policies | |||
Prior Period Reclassification Adjustment | 41.9 | ||
Cash flows reclass from Other to Net deferred income tax (benefit) expense | |||
Significant Accounting Policies | |||
Prior Period Reclassification Adjustment | $2.60 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Net income for basic and diluted earnings per share | $45,230 | $26,457 |
Weighted-average common shares outstanding (shares) | 219,626 | 221,295 |
Dilutive effect of stock options, performance share awards and restricted stock awards (shares) | 1,216 | 1,376 |
Diluted weighted-average shares outstanding (shares) | 220,842 | 222,671 |
Basic earnings per share (in dollars per share) | $0.21 | $0.12 |
Diluted earnings per share (in dollars per share) | $0.20 | $0.12 |
Earnings_Per_Share_Antidilutiv
Earnings Per Share - Antidilutive (Details) (Options and performance shares) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Options and performance shares | |
Antidilutive securities excluded from computation of earnings per share | |
Shares not included in diluted earnings per share | 6 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Anthem of the Seas Unsecured Term Loan | |
Long-Term Debt | |
Unsecured term loan maximum borrowing capacity | $742.10 |
Guarantee percent | 95.00% |
Effective interest rate | 1.71% |
Fixed interest rate | 3.86% |
Anthem of the Seas Unsecured Term Loan | LIBOR | |
Long-Term Debt | |
Margin on floating rate base | 1.30% |
Unsecured Term Loan Maturing Twelve Years After Ship Delivery | |
Long-Term Debt | |
Long term debt, term | 12 years |
Goodwill_and_Other_Assets_Deta
Goodwill and Other Assets (Details) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2011 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | Nautalia | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | Skysea Holding | Skysea Holding | Exquisite Marine Ltd and Skysea Holding [Member] | Equity | Equity | Loans | Loans | Pullmantur | Tradenames and Trademarks | Celebrity Century | Splendour of the Seas | Splendour of the Seas | Trade Accounts Receivable [Member] | Trade Accounts Receivable [Member] | |
Not Primary Beneficiary | Not Primary Beneficiary | Not Primary Beneficiary | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | USD ($) | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | Grand Bahamas Shipyard Ltd. | USD ($) | Pullmantur | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | TUI Cruises GmbH joint venture | USD ($) | USD ($) | ||||||
USD ($) | USD ($) | USD ($) | Not Primary Beneficiary | Not Primary Beneficiary | Not Primary Beneficiary | Not Primary Beneficiary | USD ($) | EUR (€) | USD ($) | EUR (€) | |||||||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||||||||
Goodwill and Other Assets | |||||||||||||||||||||||||
Goodwill | $405,422,000 | $420,542,000 | $118,600,000 | ||||||||||||||||||||||
Indefinite-lived intangible assets | 166,900,000 | ||||||||||||||||||||||||
Percentage of ownership interest | 40.00% | 50.00% | 50.00% | 35.00% | |||||||||||||||||||||
Investments in entity | 53,900,000 | 53,800,000 | 363,700,000 | 370,100,000 | 106,100,000 | 106,300,000 | |||||||||||||||||||
Debt, guaranteed percentage | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||||||||||
Unsecured term loan | 180,000,000 | ||||||||||||||||||||||||
Amount outstanding on bank loan | 120,800,000 | 112,500,000 | |||||||||||||||||||||||
Line of credit provided to TUI Cruises | 125,000,000 | 90,000,000 | |||||||||||||||||||||||
Interest rate on loan provided to related party (as a percent) | 5.00% | 5.00% | 3.00% | 6.25% | 6.25% | ||||||||||||||||||||
Hedged sales price of ship | 213,000,000 | ||||||||||||||||||||||||
Additional borrowing on line of credit provided to TUI Cruises | 102,000,000 | 95,000,000 | |||||||||||||||||||||||
Bank financing commitment percentage | 80.00% | 80.00% | |||||||||||||||||||||||
Reduction of current ownership interest (as a percent) | 37.50% | 37.50% | |||||||||||||||||||||||
Expected sales price of ship | 188,000,000 | ||||||||||||||||||||||||
Advances to Affiliate | 80,000,000 | 46,100,000 | 46,100,000 | ||||||||||||||||||||||
Long term debt, term | 10 years | 10 years | |||||||||||||||||||||||
Underlying equity in net assets | 7,800,000 | 7,700,000 | |||||||||||||||||||||||
Principal and interest payments received | 8,280,000 | 11,610,000 | 100,000 | 800,000 | |||||||||||||||||||||
Increase in interest rate | 0.50% | ||||||||||||||||||||||||
Guarantee percent | 100.00% | ||||||||||||||||||||||||
Non controlling interest percentage | 19.00% | ||||||||||||||||||||||||
Income from equity method investments | 9,200,000 | 5,000,000 | |||||||||||||||||||||||
Notes, Loans and Financing Receivable, Gross, Current | $75,400,000 | $38,000,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Cruise ships on order | Unsecured term loan maturing 12 years after ship delivery | Unsecured term loan maturing 12 years after ship delivery | Unsecured term loan maturing 12 years after ship delivery | Oasis Class Ship Term Loans | LIBOR | Celebrity Cruise Ships | Class Action Complaint | |||
USD ($) | Oasis class fourth ship | Oasis class fourth ship | Oasis class fourth ship | Oasis Class Ship Term Loans | Project Edge Class Ship | crew_member | ||||
USD ($) | EUR (€) | Oasis class fourth ship | ship | |||||||
berth | ||||||||||
Commitments and Contingencies | ||||||||||
Anticipated loan balance | $1,000,000,000 | € 931,200,000 | ||||||||
Long term debt, term | 12 years | 12 years | ||||||||
Long term debt, interest rate | 3.82% | |||||||||
Margin on floating rate base | 1.10% | |||||||||
Number of ships on order | 2 | |||||||||
Approximate Berths | 2,900 | |||||||||
Aggregate cost of ships expected to enter service | 4,900,000,000 | |||||||||
Deposit for the purchase of ships expected to enter service | $554,200,000 | |||||||||
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate | 25.10% | 28.80% | ||||||||
Number of crew members submitting demands for arbitration (in excess) | 575 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Debt (Details) | 3 Months Ended |
Mar. 31, 2015 | |
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 | |||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Equity [Abstract] | ||||
Prior quarter dividend paid (in dollars per share) | $0.30 | $0.25 | ||
Dividend paid in the same quarter declared (in dollars per share) | $0.30 | $0.25 | ||
Dividend declared (in dollars per share) | $0.30 | $0.30 | $0.25 | $0.25 |
Changes_in_Accumulated_Other_C2
Changes in Accumulated Other Comprehensive (Loss) Income (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Changes in accumulated other comprehensive loss by component | ||
Accumulated comprehensive (loss) income at beginning of the year | ($896,994) | $5,671 |
Other comprehensive (loss) income before reclassifications | -349,197 | -57,344 |
Amounts reclassified from accumulated other comprehensive (loss) income | 55,211 | 4,868 |
Total other comprehensive loss | -293,986 | -52,476 |
Ending balance | -1,190,980 | -46,805 |
Changes related to cash flow derivative hedges | ||
Changes in accumulated other comprehensive loss by component | ||
Accumulated comprehensive (loss) income at beginning of the year | -826,026 | 43,324 |
Other comprehensive (loss) income before reclassifications | -315,597 | -57,352 |
Amounts reclassified from accumulated other comprehensive (loss) income | 54,648 | 4,437 |
Total other comprehensive loss | -260,949 | -52,915 |
Ending balance | -1,086,975 | -9,591 |
Changes in defined benefit plans | ||
Changes in accumulated other comprehensive loss by component | ||
Accumulated comprehensive (loss) income at beginning of the year | -31,207 | -23,994 |
Other comprehensive (loss) income before reclassifications | -2,056 | -2,462 |
Amounts reclassified from accumulated other comprehensive (loss) income | 563 | 431 |
Total other comprehensive loss | -1,493 | -2,031 |
Ending balance | -32,700 | -26,025 |
Foreign currency translation adjustments | ||
Changes in accumulated other comprehensive loss by component | ||
Accumulated comprehensive (loss) income at beginning of the year | -39,761 | -13,659 |
Other comprehensive (loss) income before reclassifications | -31,544 | 2,470 |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 |
Total other comprehensive loss | -31,544 | 2,470 |
Ending balance | ($71,305) | ($11,189) |
Changes_in_Accumulated_Other_C3
Changes in Accumulated Other Comprehensive (Loss) Income - Reclassifications (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reclassifications out of accumulated other comprehensive loss | ||
Interest expense, net of interest capitalized | ($70,159) | ($68,571) |
Depreciation and amortization expenses | -200,468 | -193,735 |
Other income (expense) | -60,452 | -71,009 |
Fuel | -205,276 | -244,459 |
Net income | 45,230 | 26,457 |
Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income | ||
Reclassifications out of accumulated other comprehensive loss | ||
Net income | -55,211 | -4,868 |
Loss on cash flow derivative hedges: | Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income | ||
Reclassifications out of accumulated other comprehensive loss | ||
Net income | -54,648 | -4,437 |
Loss on cash flow derivative hedges: | Amount of 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 | -261 |
Loss on cash flow derivative hedges: | Amount of 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 | -57 |
Depreciation and amortization expenses | -718 | -449 |
Other income (expense) | -238 | -3,576 |
Loss on cash flow derivative hedges: | Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income | Fuel swaps | ||
Reclassifications out of accumulated other comprehensive loss | ||
Fuel | -53,692 | -94 |
Amortization of defined benefit plans: | Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income | ||
Reclassifications out of accumulated other comprehensive loss | ||
Actuarial loss | -354 | -222 |
Prior service costs | -209 | -209 |
Net income | ($563) | ($431) |
Fair_Value_Measurements_and_De2
Fair Value Measurements and Derivative Instruments (Details) (Fair Value, Measurements, Nonrecurring, USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Level 1 | ||||
Assets: | ||||
Cash and cash equivalents | $229,705 | [1],[2] | $189,241 | [1],[2] |
Total Assets | 229,705 | [2] | 189,241 | [2] |
Liabilities: | ||||
Long-term debt (including current portion of long-term debt) | 1,868,909 | [2],[3] | 1,859,361 | [2],[3] |
Total Liabilities | 1,868,909 | [2] | 1,859,361 | [2] |
Level 2 | ||||
Assets: | ||||
Cash and cash equivalents | 0 | [1] | 0 | [1] |
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Long-term debt (including current portion of long-term debt) | 6,995,000 | [3] | 6,902,053 | [3] |
Total Liabilities | 6,995,000 | 6,902,053 | ||
Level 3 | ||||
Assets: | ||||
Cash and cash equivalents | 0 | [1] | 0 | [1] |
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Long-term debt (including current portion of long-term debt) | 0 | [3] | 0 | [3] |
Total Liabilities | 0 | 0 | ||
Total Carrying Amount | ||||
Assets: | ||||
Cash and cash equivalents | 229,705 | [1] | 189,241 | [1] |
Total Assets | 229,705 | 189,241 | ||
Liabilities: | ||||
Long-term debt (including current portion of long-term debt) | 8,502,921 | [3] | 8,391,301 | [3] |
Total Liabilities | 8,502,921 | 8,391,301 | ||
Total Fair Value | ||||
Assets: | ||||
Cash and cash equivalents | 229,705 | [1] | 189,241 | [1] |
Total Assets | 229,705 | 189,241 | ||
Liabilities: | ||||
Long-term debt (including current portion of long-term debt) | 8,863,909 | [3] | 8,761,414 | [3] |
Total Liabilities | $8,863,909 | $8,761,414 | ||
[1] | Consists of cash and marketable securities with original maturities of less than 90 days. | |||
[2] | 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. | |||
[3] | Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. Does not include our capital lease obligations. |
Fair_Value_Measurements_and_De3
Fair Value Measurements and Derivative Instruments - Recurring (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Assets: | ||||
Derivative financial instruments | $3,108 | $0 | ||
Liabilities: | ||||
Derivative financial instruments | 840,444 | 703,654 | ||
Fair Value, Measurements, Recurring | Level 1 | ||||
Assets: | ||||
Investments | 5,575 | [1],[2] | 5,531 | [1],[2] |
Total Assets | 5,575 | [2] | 5,531 | [2] |
Fair Value, Measurements, Recurring | Level 2 | ||||
Assets: | ||||
Derivative financial instruments | 131,128 | [3],[4] | 63,981 | [3],[4] |
Total Assets | 131,128 | [4] | 63,981 | [4] |
Liabilities: | ||||
Derivative financial instruments | 968,464 | [4],[5] | 767,635 | [4],[5] |
Total Liabilities | 968,464 | [4] | 767,635 | [4] |
Total | Fair Value, Measurements, Recurring | ||||
Assets: | ||||
Derivative financial instruments | 131,128 | [3] | 63,981 | [3] |
Investments | 5,575 | [1] | 5,531 | [1] |
Total Assets | 136,703 | 69,512 | ||
Liabilities: | ||||
Derivative financial instruments | 968,464 | [5] | 767,635 | [5] |
Total Liabilities | $968,464 | $767,635 | ||
[1] | Consists of exchange-traded equity securities and mutual funds. | |||
[2] | 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. | |||
[3] | Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments†table for breakdown by instrument type. | |||
[4] | 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. | |||
[5] | 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. |
Fair_Value_Measurement_and_Der
Fair Value Measurement and Derivative Instruments - Offsetting of Derivative Instruments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | $131,128 | $63,981 |
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | -128,020 | -63,981 |
Net Amount of Derivative Assets | 3,108 | 0 |
Offsetting of Financial Liabilities under Master Netting Agreements [Abstract] | ||
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | -968,464 | -767,635 |
Gross Amount of Eligible Offsetting Recognized Derivative Assets | 128,020 | 63,981 |
Net Amount of Derivative Liabilities | ($840,444) | ($703,654) |
Fair_Value_Measurements_and_De4
Fair Value Measurements and Derivative Instruments - Non-Derivative Instruments (Details) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | 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 | Foreign exchange contracts | Foreign exchange contracts | Pullmantur and TUI Cruises | Pullmantur and TUI Cruises | Pullmantur and TUI Cruises | Pullmantur and TUI Cruises | Pullmantur and TUI Cruises | LIBOR | LIBOR | LIBOR | ||
USD ($) | USD ($) | Quantum of the Seas facility | Fair Value Hedging | Fair Value Hedging | Fair Value Hedging | Fair Value Hedging | Cash flow hedge | Cash flow hedge | USD ($) | USD ($) | Net Investment Hedging | Net Investment Hedging | Net Investment Hedging | Net Investment Hedging | Net Investment Hedging | Interest rate swaps | Interest rate swaps | Interest rate swaps | |||
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 | Celebrity Reflection floating rate debt | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | Fair Value Hedging | Fair Value Hedging | Cash flow hedge | ||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | 5.41% Fixed rate debt | 5.25% Fixed rate debt | Quantum of the Seas facility | |||||||||||||
Derivative Instruments | |||||||||||||||||||||
Fair Value, Concentration of Risk, Derivative Instruments, Assets | $3,100,000 | ||||||||||||||||||||
Derivative instrument, observation period | 3 years | ||||||||||||||||||||
Percentage of debt bearing fixed interest | 28.20% | 28.50% | |||||||||||||||||||
Unsecured term loan | 420,000,000 | 420,000,000 | 650,000,000 | 650,000,000 | |||||||||||||||||
Debt amount | 245,000,000 | 81,451,000 | 168,718,000 | ||||||||||||||||||
Interest rate on hedged debt (as a percent) | 5.41% | 5.25% | |||||||||||||||||||
Additional interest above LIBOR rate (as a percent) | 3.87% | 3.63% | |||||||||||||||||||
Derivative, Variable rate of interest (as a percent) | 4.20% | 3.89% | |||||||||||||||||||
Anticipated loan balance | 725,000,000 | 545,400,000 | |||||||||||||||||||
Additional interest above LIBOR rate | 1.30% | 0.40% | 1.30% | ||||||||||||||||||
Notional amount | 2,900,000,000 | 2,900,000,000 | 3,100,000,000 | 3,000,000,000 | |||||||||||||||||
Fixed rate on converted debt | 3.74% | 3.86% | 2.85% | ||||||||||||||||||
Unsecured Term Loan Maximum Borrowing Commintment Per Ship | 735,000,000 | ||||||||||||||||||||
Carrying value of non-derivative instrument designated as hedging instrument | $81,500,000 | € 75,800,000 | $168,700,000 | € 139,400,000 |
Fair_Value_Measurements_and_De5
Fair Value Measurements and Derivative Instruments - Derivative Instruments (Details) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Jan. 31, 2014 | Jan. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 |
Interest rate swaps | Interest rate swaps | Forward Contracts | Forward Contracts | Forward Contracts | Forward Contracts | Forward Contracts | Foreign exchange contracts | Foreign exchange contracts | Cruise ships on order | |||
USD ($) | USD ($) | USD ($) | USD ($) | Not Designated | Designated as Hedging Instrument | Designated as Hedging Instrument | USD ($) | 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 | $4,900,000,000 | |||||||||||
Amount deposited for cost of ships on order, including the conditional agreement for a third Quantum - class ship | 554,200,000 | |||||||||||
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate | 25.10% | 28.80% | ||||||||||
Notional amount | 2,900,000,000 | 2,900,000,000 | 398,200,000 | 446,400,000 | 415,600,000 | 3,100,000,000 | 3,000,000,000 | |||||
Change in fair value of foreign currency forward contracts recognized in earnings | ($28,100,000) | $1,900,000 |
Fair_Value_Measurements_and_De6
Fair Value Measurements and Derivative Instruments - Fuel Price Risk (Details) (Fuel Price Risk, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | $220.80 | $223.10 |
Swaps 2015 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 539,000 | 806,000 |
Percentage of projected requirements | 52.00% | 58.00% |
Swaps 2016 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 805,000 | 802,000 |
Percentage of projected requirements | 55.00% | 55.00% |
Swaps 2017 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 598,000 | 525,000 |
Percentage of projected requirements | 40.00% | 35.00% |
Swaps 2018 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 300,000 | 226,000 |
Percentage of projected requirements | 20.00% | 15.00% |
Fair_Value_Measurements_and_De7
Fair Value Measurements and Derivative Instruments - Balance Sheet (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Asset Derivatives | ||||
Asset Derivatives | $131,128 | $63,981 | ||
Liability Derivatives | ||||
Liability Derivatives | 968,464 | 767,635 | ||
Designated as Hedging Instrument | ||||
Asset Derivatives | ||||
Asset Derivatives | 131,128 | [1] | 63,981 | [1] |
Liability Derivatives | ||||
Liability Derivatives | 933,584 | [1] | 767,635 | [1] |
Designated as Hedging Instrument | Foreign currency collar options | Other assets | ||||
Asset Derivatives | ||||
Asset Derivatives | 0 | [1] | 0 | [1] |
Designated as Hedging Instrument | Foreign currency collar options | Other long-term Liabilities | ||||
Liability Derivatives | ||||
Liability Derivatives | 69,857 | [1] | 21,855 | [1] |
Not Designated as Hedging Instrument | ||||
Asset Derivatives | ||||
Asset Derivatives | 0 | 0 | ||
Liability Derivatives | ||||
Liability Derivatives | 34,880 | 0 | ||
Interest rate swaps | Designated as Hedging Instrument | Other assets | ||||
Asset Derivatives | ||||
Asset Derivatives | 821 | [1] | 0 | [1] |
Interest rate swaps | Designated as Hedging Instrument | Other long-term Liabilities | ||||
Liability Derivatives | ||||
Liability Derivatives | 80,429 | [1] | 65,768 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Other assets | ||||
Asset Derivatives | ||||
Asset Derivatives | 130,292 | [1] | 63,981 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Derivative financial instruments | ||||
Asset Derivatives | ||||
Asset Derivatives | 0 | [1] | 0 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Other long-term Liabilities | ||||
Liability Derivatives | ||||
Liability Derivatives | 318,789 | [1] | 164,627 | [1] |
Foreign currency forward contracts | Designated as Hedging Instrument | Accrued expenses and other liabilities | ||||
Liability Derivatives | ||||
Liability Derivatives | 28,368 | [1] | 17,619 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Other assets | ||||
Asset Derivatives | ||||
Asset Derivatives | 15 | [1] | 0 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Derivative financial instruments | ||||
Asset Derivatives | ||||
Asset Derivatives | 0 | [1] | 0 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Other long-term Liabilities | ||||
Liability Derivatives | ||||
Liability Derivatives | 235,739 | [1] | 270,254 | [1] |
Fuel swaps | Designated as Hedging Instrument | Swaps | Accrued expenses and other liabilities | ||||
Liability Derivatives | ||||
Liability Derivatives | 200,402 | [1] | 227,512 | [1] |
Fuel swaps | Not Designated as Hedging Instrument | Swaps | Other assets | ||||
Asset Derivatives | ||||
Asset Derivatives | 0 | 0 | ||
Fuel swaps | Not Designated as Hedging Instrument | Swaps | Derivative financial instruments | ||||
Asset Derivatives | ||||
Asset Derivatives | 0 | 0 | ||
Liability Derivatives | ||||
Liability Derivatives | 19,624 | 0 | ||
Fuel swaps | Not Designated as Hedging Instrument | Swaps | Other long-term Liabilities | ||||
Liability Derivatives | ||||
Liability Derivatives | $15,256 | $0 | ||
[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, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Net investment hedge | ||
Carrying Value of Non-derivative instrument Designated as hedging instrument | $81,451 | $168,718 |
Long-term debt | ||
Net investment hedge | ||
Carrying Value of Non-derivative instrument Designated as hedging instrument | $81,451 | $168,718 |
Fair_Value_Measurements_and_De9
Fair Value Measurements and Derivative Instruments - Income Statement Hedging Instruments (Details) (Fair Value Hedging, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ||
Amount of Gain (Loss) Recognized in Income on Derivative | $18,128 | $15,579 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | -8,459 | -5,893 |
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 | 2,976 | 3,069 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | 3,882 | 5,542 |
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 | 15,152 | 12,510 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | ($12,341) | ($11,435) |
Recovered_Sheet1
Fair Value Measurements and Derivative Instruments - Designated Cash Flow Hedges (Details) (Cash flow hedge, USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
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) | ($315,597,000) | ($57,352,000) |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | -54,648,000 | -4,437,000 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 220,000 | -1,671,000 |
Cross currency 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) | 0 | 0 |
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 | -261,000 |
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) | -29,028,000 | -34,525,000 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 38,000 | -19,000 |
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) | -238,000 | -3,576,000 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | 0 | -20,000 |
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) | -172,822,000 | 1,195,000 |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | -718,000 | -449,000 |
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 | -57,000 |
Foreign currency collar options | 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) | 0 | 0 |
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) | -64,833,000 | -2,607,000 |
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) | 182,000 | -1,632,000 |
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) | -48,914,000 | -21,415,000 |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | ($53,692,000) | ($94,000) |
Recovered_Sheet2
Fair Value Measurements and Derivative Instruments - Non-Derivative Net Investment (Details) (Foreign currency debt, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net investment hedge | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | $12,137 | $4,374 |
Amount of Ineffectiveness on Net Investment Hedges | 0 | 0 |
Other income (expense) | ||
Net investment hedge | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | 12,137 | 4,374 |
Amount of Ineffectiveness on Net Investment Hedges | $0 | $0 |
Recovered_Sheet3
Fair Value Measurements and Derivative Instruments - Derivatives Not Designated as Hedging Instruments (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative Instruments | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ($28,083) | $1,890 |
Other income (expense) | ||
Derivative Instruments | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | -28,212 | 659 |
Foreign exchange contracts | Other income (expense) | ||
Derivative Instruments | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | -28,083 | 1,881 |
Fuel swaps | Fuel swaps | Other income (expense) | ||
Derivative Instruments | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | ($129) | ($1,222) |
Recovered_Sheet4
Fair Value Measurements and Derivative Instruments - Credit Features (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | ||
Derivative Instruments | ||||
Liability Derivatives | 968,464 | $767,635 | ||
Moody's, Baa3 Rating | ||||
Derivative Instruments | ||||
Credit ratings for senior debt | Baa3 | |||
Moody's, Ba1 Rating | ||||
Derivative Instruments | ||||
Credit ratings for senior debt | Ba1 | |||
Standard & Poor's, BBB- Rating | Minimum | ||||
Derivative Instruments | ||||
Credit ratings for senior debt | BBB- | |||
Standard & Poor's, BB Rating | ||||
Derivative Instruments | ||||
Credit ratings for senior debt | BB | |||
Interest rate contracts | ||||
Derivative Instruments | ||||
Number of derivative instruments | 5 | |||
Designated as Hedging Instrument | ||||
Derivative Instruments | ||||
Liability Derivatives | 933,584 | [1] | 767,635 | [1] |
Other long-term Liabilities | Designated as Hedging Instrument | Interest rate swaps | ||||
Derivative Instruments | ||||
Liability Derivatives | 80,429 | [1] | $65,768 | [1] |
Derivative Maturity More than Five Years | Minimum | ||||
Derivative Instruments | ||||
Maturity of interest rate instrument | 5 years | |||
[1] | Accounting Standard Codification 815-20 “Derivatives and Hedging.†|