Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 24, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | ROYAL CARIBBEAN CRUISES LTD | |
Entity Central Index Key | 884,887 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 219,943,662 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Passenger ticket revenues | $ 1,507,468 | $ 1,455,099 | $ 2,814,247 | $ 2,803,302 |
Onboard and other revenues | 550,854 | 524,944 | 1,059,674 | 1,063,965 |
Total revenues | 2,058,322 | 1,980,043 | 3,873,921 | 3,867,267 |
Cruise operating expenses: | ||||
Commissions, transportation and other | 355,835 | 346,180 | 680,253 | 672,045 |
Onboard and other | 147,105 | 150,606 | 263,344 | 273,638 |
Payroll and related | 218,570 | 209,171 | 430,161 | 419,972 |
Food | 119,407 | 119,184 | 239,193 | 237,264 |
Fuel | 202,565 | 242,804 | 407,841 | 487,263 |
Other operating | 272,927 | 262,729 | 518,234 | 544,472 |
Total cruise operating expenses | 1,316,409 | 1,330,674 | 2,539,026 | 2,634,654 |
Marketing, selling and administrative expenses | 274,148 | 260,988 | 560,980 | 551,295 |
Depreciation and amortization expenses | 206,468 | 192,880 | 406,936 | 386,615 |
Restructuring charges | 0 | (86) | 0 | 1,650 |
Operating Income | 261,297 | 195,587 | 366,979 | 293,053 |
Other income (expense): | ||||
Interest income | 2,772 | 2,630 | 6,509 | 5,906 |
Interest expense, net of interest capitalized | (76,620) | (65,260) | (146,779) | (133,831) |
Other (expense) income | (2,482) | 4,716 | 3,488 | (998) |
Total other income (expense) | (76,330) | (57,914) | (136,782) | (128,923) |
Net Income | $ 184,967 | $ 137,673 | $ 230,197 | $ 164,130 |
Earnings per Share: | ||||
Basic (in dollars per share) | $ 0.84 | $ 0.62 | $ 1.05 | $ 0.74 |
Diluted (in dollars per share) | $ 0.84 | $ 0.62 | $ 1.04 | $ 0.74 |
Weighted-Average Shares Outstanding: | ||||
Basic (in shares) | 219,913 | 222,189 | 219,770 | 221,745 |
Diluted (in shares) | 220,902 | 223,381 | 220,886 | 223,055 |
Comprehensive Income | ||||
Net Income | $ 184,967 | $ 137,673 | $ 230,197 | $ 164,130 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 11,741 | (1,833) | (19,803) | 637 |
Change in defined benefit plans | 3,742 | (2,054) | 2,249 | (4,085) |
Gain (loss) on cash flow derivative hedges | 202,473 | (20,638) | (58,476) | (73,553) |
Total other comprehensive income (loss) | 217,956 | (24,525) | (76,030) | (77,001) |
Comprehensive Income | $ 402,923 | $ 113,148 | $ 154,167 | $ 87,129 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 159,360 | $ 189,241 |
Trade and other receivables, net | 212,454 | 261,392 |
Inventories | 140,228 | 123,490 |
Prepaid expenses and other assets | 292,431 | 226,960 |
Derivative financial instruments | 108,918 | 0 |
Total current assets | 913,391 | 801,083 |
Property and equipment, net | 18,890,338 | 18,193,627 |
Goodwill | 409,836 | 420,542 |
Other assets | 1,181,629 | 1,297,938 |
Total assets | 21,395,194 | 20,713,190 |
Current liabilities | ||
Current portion of long-term debt | 1,188,576 | 799,630 |
Accounts payable | 343,981 | 331,505 |
Accrued interest | 54,072 | 49,074 |
Accrued expenses and other liabilities | 519,080 | 635,138 |
Derivative financial instruments | 468,614 | 266,986 |
Customer deposits | 2,217,215 | 1,766,914 |
Total current liabilities | 4,791,538 | 3,849,247 |
Long-term debt | 7,592,330 | 7,644,318 |
Other long-term liabilities | $ 691,086 | $ 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; 233,733,457 and 233,106,019 shares issued, June 30, 2015 and December 31, 2014, respectively) | 2,337 | 2,331 |
Paid-in capital | 3,267,189 | 3,253,552 |
Retained earnings | 6,673,516 | 6,575,248 |
Accumulated other comprehensive loss | (973,024) | (896,994) |
Treasury stock (13,808,683 common shares at cost, June 30, 2015 and December 31, 2014) | (649,778) | (649,778) |
Total shareholders’ equity | 8,320,240 | 8,284,359 |
Total liabilities and shareholders' equity | $ 21,395,194 | $ 20,713,190 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 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 | 233,733,457 | 233,106,019 |
Treasury stock, common shares | 13,808,683 | 13,808,683 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities | ||
Net income | $ 230,197 | $ 164,130 |
Adjustments: | ||
Depreciation and amortization | 406,936 | 386,615 |
Net deferred income tax expense | 2,534 | 2,934 |
Loss (gain) on derivative instruments not designated as hedges | 16,902 | (10,841) |
Changes in operating assets and liabilities: | ||
Decrease in trade and other receivables, net | 54,272 | 15,903 |
(Increase) decrease in inventories | (17,523) | 7,777 |
Increase in prepaid expenses and other assets | (58,722) | (35,799) |
Increase (decrease) in accounts payable | 14,668 | (41,228) |
Increase (decrease) in accrued interest | 4,998 | (59,019) |
(Decrease) increase in accrued expenses and other liabilities | (39,474) | 45,730 |
Increase in customer deposits | 405,752 | 388,693 |
Other, net | 19,805 | 16,034 |
Net cash provided by operating activities | 1,040,345 | 880,929 |
Investing Activities | ||
Purchases of property and equipment | (1,151,616) | (342,472) |
Cash (paid) received on settlement of derivative financial instruments | (118,521) | 18,096 |
Investments in and loans to unconsolidated affiliates | (54,250) | (68,885) |
Cash received on loans to unconsolidated affiliates | 120,297 | 66,138 |
Other, net | (12,482) | 1,280 |
Net cash used in investing activities | (1,216,572) | (325,843) |
Financing Activities | ||
Debt proceeds | 2,376,001 | 1,846,200 |
Debt issuance costs | (41,171) | (33,627) |
Repayments of debt | (1,992,232) | (2,334,396) |
Dividends paid | (197,718) | (131,857) |
Proceeds from exercise of common stock options | 5,067 | 54,938 |
Cash received on settlement of derivative financial instruments | 0 | 22,835 |
Other, net | 1,156 | 941 |
Net cash provided by (used in) financing activities | 151,103 | (574,966) |
Effect of exchange rate changes on cash | (4,757) | 455 |
Net decrease in cash and cash equivalents | (29,881) | (19,425) |
Cash and cash equivalents at beginning of period | 189,241 | 204,687 |
Cash and cash equivalents at end of period | 159,360 | 185,262 |
Cash paid during the period for: | ||
Interest, net of amount capitalized | $ 120,089 | $ 173,470 |
General
General | 6 Months Ended |
Jun. 30, 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 May and June 2015 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended June 30, 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 Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 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. This guidance as currently stated will be effective for our interim and annual reporting periods beginning after December 15, 2016. However, in July 2015, the FASB voted to delay the effective date for interim and annual reporting periods beginning after December 15, 2017 with early adoption permissible one year earlier; updated guidance to reflect this vote is expected by the end of the third quarter of 2015. 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. 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 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. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements, with the exception of reclassifying debt issuance costs from Other assets to be reflected as a reduction of our current and long-term liabilities. 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. The adoption of this newly issued guidance is not expected to have a material impact to our consolidated financial statements. In July 2015, amended GAAP guidance was issued to simplify the measurement of inventory for all entities. The amendments apply to all inventory that is measured using first-in, first-out or average cost. The guidance requires an entity to measure inventory at the lower of cost and net realizable value. The guidance must be applied prospectively and will be effective for our interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of an interim or annual reporting period. The adoption of this newly issued guidance is not expected to have a material impact 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 $141.7 million and $137.7 million for the second quarters of 2015 and 2014 , respectively, and $268.8 million and $261.8 million for the six months ended June 30, 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, net 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 and six months ended June 30, 2015 . For the six months ended June 30, 2014 , $2.9 million has been reclassified in the consolidated statements of cash flows from Other, net to Net deferred income tax expense within Net cash provided by operating activities in order to conform to the current year presentation. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net income for basic and diluted earnings per share $ 184,967 $ 137,673 $ 230,197 $ 164,130 Weighted-average common shares outstanding 219,913 222,189 219,770 221,745 Dilutive effect of stock options, performance share awards and restricted stock awards 989 1,192 1,116 1,310 Diluted weighted-average shares outstanding 220,902 223,381 220,886 223,055 Basic earnings per share $ 0.84 $ 0.62 $ 1.05 $ 0.74 Diluted earnings per share $ 0.84 $ 0.62 $ 1.04 $ 0.74 There were no antidilutive shares for the quarters and six month periods ended June 30, 2015 and June 30, 2014 , respectively. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 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% . During 2012, we entered into forward-starting interest rate swap agreements for $725.0 million of the loan which effectively converted the floating rate available to us per the credit agreement to a fixed rate on this portion of the loan, 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. In June 2015, we amended and restated our $1.1 billion unsecured revolving credit facility due July 2016. The amendment reduced the applicable margin and facility fee and extended the termination date to June 2020. The applicable margin and facility fee vary with our debt rating and were 1.50% and 0.25% , respectively, as of June 30, 2015. We have the ability to increase the capacity of the amended facility by an additional $300 million , subject to the receipt of additional or increased lender commitments, and to extend the termination date by up to two years, subject to lender consent. Additionally in July 2015, we amended our $1.2 billion unsecured revolving credit facility due August 2018 to reduce pricing in line with the amended pricing of the $1.1 billion unsecured revolving credit facility. These amendments did not result in the extinguishment of debt. In July 2015, we also amended our $380.0 million , €365.0 million , $290.0 million and $65.0 million unsecured term loans due at various dates from 2016 through 2019 to reduce the applicable margins, which is now 1.75% for each loan based on our current debt rating. The termination date of the $290 million unsecured term loan was extended from February 2016 to February 2018. None of these amendments resulted in the extinguishment of debt. |
Goodwill and Other Assets
Goodwill and Other Assets | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Other Assets | |
Goodwill and Other Assets | Goodwill and Other Assets As of June 30, 2015 , the carrying amounts of goodwill and trademarks and trade names attributable to our Pullmantur reporting unit were $123.0 million and $173.1 million , respectively. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets. The persistent economic instability in these markets has resulted in changes to our operating strategy for this brand since its acquisition. This has created significant uncertainty in forecasting operating results and future cash flows used in our impairment analyses. Most recently, during the first half of 2015, consumer confidence and discretionary spending in Latin America were negatively impacted by slower growing economies and current expectations point to continued weakness through the end of 2015. We continue to monitor economic events in these markets for their potential impact on Pullmantur’s business and valuation. During the quarter ended June 30, 2015, due to weakness in Latin America and its currencies as well as the opportunity to optimize deployment of our vessels, we made a strategic decision to defer the scheduled transfer of a vessel from one of our other cruise brands to the Pullmantur fleet. As a result of the deferral, we performed an interim impairment evaluation of Pullmantur's goodwill and trademarks and trade names and determined that the fair value of Pullmantur's reporting unit exceeded its carrying value by approximately 25% and the fair value of Pullmantur's trademarks and trade names exceeded its carrying value by approximately 3% , resulting in no impairment in Pullmantur's goodwill and trademarks and trade names as of June 30, 2015. We estimated the fair value of the Pullmantur reporting unit using a probability-weighted discounted cash flow model. The estimation of future cash flows requires our significant judgment when making assumptions of expected revenues, operating costs, marketing, selling and administrative expenses, interest rates, ship additions and retirements as well as assumptions regarding the cruise vacation industry’s competitive environment and general and economic business conditions, among other factors. Of these assumptions, the planned transfer of a vessel to the Pullmantur fleet is most significant to these projected cash flows. If the transfer does not occur, we will likely fail step one of the goodwill impairment test and record an impairment loss related to our trademarks and trade names. In addition, if there are other unfavorable changes to the projected future cash flows used in the impairment analyses, it is reasonably possible that an impairment charge of Pullmantur's reporting unit’s goodwill and trademarks and trade names may be required. We continue to monitor these intangible assets for potential impairment and will perform interim testing of our goodwill, trademark or trade names, if deemed necessary, prior to our annual impairment evaluation to be performed during the fourth quarter of 2015. 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 June 30, 2015 and December 31, 2014 , our investment, including equity and loans, in TUI Cruises was approximately $294.4 million and $370.1 million , respectively. As of June 30, 2015 , 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 bank loan originally borrowed by TUI Cruises in 2011 and refinanced in May 2015. In connection with the refinancing, the principal amount of the loan was increased by €40.0 million , resulting in an outstanding principal amount of €148.0 million as of June 30, 2015 , or approximately $164.9 million based on the exchange rate at June 30, 2015 . In addition the maturity date was extended from May 2016 to May 2022. Notwithstanding this, the lenders have agreed to release each shareholder's guarantee in 2018. The loan continues to amortize quarterly and to be secured by first mortgages on the Mein Schiff 1 and Mein Schiff 2 vessels. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable. The €40 million of additional proceeds received by TUI Cruises in connection with the refinancing of the bank loan discussed above were used during the second quarter of 2015 to repay in full the outstanding balance of the debt facility we originally provided to TUI Cruises in 2011 in connection with our sale of Celebrity Mercury . Our investment amount and the potential obligations under this guarantee are substantially our maximum exposure to loss. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties, which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting. As of June 30, 2015 , TUI Cruises has four newbuild ships on order with Meyer Turku scheduled to be delivered in each of 2016, 2017, 2018 and 2019. 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 with a €150.0 million bank facility and TUI Cruises’ cash flows from operations. 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 37.55% through 2021. In March 2015, we announced the pending sale of Splendour of the Seas to TUI Cruises. The sale for €188.0 million is scheduled to be completed 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 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 June 30, 2015 , the net book value of our investment in Grand Bahama was approximately $55.0 million , consisting of $12.0 million in equity and $43.0 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. During the six months ended June 30, 2015 and June 30, 2014 , we received approximately $3.1 million and $3.4 million , respectively, in principal and interest payments related to a loan that is in accrual status from Grand Bahama, which was paid in full during the quarter ended June 30, 2015. The remaining amount of our loan to Grand Bahama is in non-accrual status and is included within Other assets in our consolidated balance sheets. We monitor credit risk associated with this loan 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 the outstanding loan is not probable as of June 30, 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 through maturity. 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, Golden Era , formerly known as Celebrity Century , which we sold to a wholly owned subsidiary of Skysea Holding in September 2014. As of June 30, 2015 and December 31, 2014 , our investment in Skysea Holding and its subsidiaries, including equity and loans, was approximately $104.8 million and $106.3 million , respectively. This amount was included within Other assets in our consolidated balance sheets. Our investment amount is substantially our maximum exposure to loss. During the quarter ended June 30, 2015, Skysea Holding and its subsidiaries commenced operations through the brand SkySea Cruises. 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 June 30, 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 $14.7 million and $4.0 million for the quarters ended June 30, 2015 and June 30, 2014 , respectively, and $23.8 million and $9.0 million for the six months ended June 30, 2015 and June 30, 2014 , respectively, and was recorded within Other income (expense) . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 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 June 30, 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. In June 2015, we entered into an agreement with Meyer Werft to build the fourth Quantum-class ship for Royal Caribbean International. We have also received a commitment for the unsecured financing of up to 80% of the ship’s contract price. Hermes has agreed to guarantee to the lenders payment of 95% of the financing. The ship will have a capacity of approximately 4,150 berths and is expected to enter service in the second quarter of 2019. As of June 30, 2015 , the aggregate cost of our ships on order, not including the "Project Edge" ships and the TUI Cruises' ships on order, was approximately $5.0 billion , of which we had deposited $385.8 million as of such date. Approximately 42.9% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 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. In April 2015, the Alaska Department of Environmental Conservation issued Notices of Violation to Royal Caribbean International and Celebrity Cruises seeking monetary penalties for alleged violations of the Alaska Marine Visible Emission Standards that occurred over the past five years on certain of our vessels. We believe we have meritorious defenses to the allegations and we are cooperating with the state of Alaska. We do not believe that the ultimate outcome of these claims will have a material adverse impact on our financial condition or results of operations and cash flows. 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 our ship financing facilities, which we may be unable to replace on similar terms. Our other debt agreements also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by (i) any person or (ii) in the case of our public debt securities, by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity During the first and second quarters 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 and second 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 Co
Changes in Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 2015 and 2014 (in thousands): Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2015 Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2014 Changes Changes in Foreign Accumulated other Changes Changes in Foreign Accumulated other 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 (183,646 ) 1,249 (19,803 ) (202,200 ) (84,000 ) (4,948 ) (1,360 ) (90,308 ) Amounts reclassified from accumulated other comprehensive (loss) income 125,170 1,000 — 126,170 10,447 863 1,997 13,307 Net current-period other comprehensive (loss) income (58,476 ) 2,249 (19,803 ) (76,030 ) (73,553 ) (4,085 ) 637 (77,001 ) Ending balance $ (884,502 ) $ (28,958 ) $ (59,564 ) $ (973,024 ) $ (30,229 ) $ (28,079 ) $ (13,022 ) $ (71,330 ) The following table presents reclassifications out of accumulated other comprehensive income (loss) for the quarter and six months ended June 30, 2015 and 2014 (in thousands): Amount of Gain (Loss) Reclassified from Details About Accumulated Other Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Affected Line Item in Statements of (Loss) gain on cash flow derivative hedges: Cross currency swaps $ — $ — $ — $ (261 ) Interest expense, net of interest capitalized Interest rate swaps (9,962 ) (3,078 ) (16,748 ) (6,206 ) Interest expense, net of interest capitalized Foreign currency forward contracts (685 ) (450 ) (1,402 ) (899 ) Depreciation and amortization expenses Foreign currency forward contracts (239 ) (238 ) (477 ) (3,814 ) Other income (expense) Foreign currency forward contracts — — — (57 ) Interest expense, net of interest capitalized Foreign currency collar options (435 ) — (435 ) — Depreciation and amortization expenses Fuel swaps (52,416 ) 884 (106,108 ) 790 Fuel (63,737 ) (2,882 ) (125,170 ) (10,447 ) Amortization of defined benefit plans: Actuarial loss (354 ) (222 ) (707 ) (445 ) Payroll and related Prior service costs (84 ) (209 ) (293 ) (418 ) Payroll and related (438 ) (431 ) (1,000 ) (863 ) Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses: Foreign cumulative translation — (1,997 ) — (1,997 ) Other operating Total reclassifications for the period $ (64,175 ) $ (5,310 ) $ (126,170 ) $ (13,307 ) |
Fair Value Measurements and Der
Fair Value Measurements and Derivative Instruments | 6 Months Ended |
Jun. 30, 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 June 30, 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) $ 159,360 $ 159,360 $ 159,360 $ — $ — $ 189,241 $ 189,241 $ 189,241 $ — $ — Total Assets $ 159,360 $ 159,360 $ 159,360 $ — $ — $ 189,241 $ 189,241 $ 189,241 $ — $ — Liabilities: Long-term debt (including current portion of long-term debt) (5) $ 8,727,026 $ 9,078,893 $ 1,839,643 $ 7,239,250 $ — $ 8,391,301 $ 8,761,414 $ 1,859,361 $ 6,902,053 $ — Total Liabilities $ 8,727,026 $ 9,078,893 $ 1,839,643 $ 7,239,250 $ — $ 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 June 30, 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 June 30, 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 June 30, 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) $ 118,046 $ — $ 118,046 $ — $ 63,981 $ — $ 63,981 $ — Investments (5) $ 4,312 4,312 — — $ 5,531 5,531 — — Total Assets $ 122,358 $ 4,312 $ 118,046 $ — $ 69,512 $ 5,531 $ 63,981 $ — Liabilities: Derivative financial instruments (6) $ 726,610 $ — $ 726,610 $ — $ 767,635 $ — $ 767,635 $ — Total Liabilities $ 726,610 $ — $ 726,610 $ — $ 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 June 30, 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 June 30, 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 June 30, 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 June 30, 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 (In thousands of dollars) Derivatives subject to master netting agreements $ 118,046 $ (116,059 ) $ — $ 1,987 $ 63,981 $ (63,981 ) $ — $ — Total $ 118,046 $ (116,059 ) $ — $ 1,987 $ 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 June 30, 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 (In thousands of dollars) Derivatives subject to master netting agreements $ (726,610 ) $ 116,059 $ — $ (610,551 ) $ (767,635 ) $ 63,981 $ — $ (703,654 ) Total $ (726,610 ) $ 116,059 $ — $ (610,551 ) $ (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 June 30, 2015 , our exposure under our derivative instruments was approximately $1.6 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 notional 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 June 30, 2015 , approximately 35.0% 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 June 30, 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 $227.5 million as of June 30, 2015 , from a fixed rate of 5.41% to a LIBOR-based floating rate equal to LIBOR plus 3.87% , currently approximately 4.28% . 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 3.91% . 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. In May 2015, we entered into forward-starting interest rate swap agreements that hedge the anticipated unsecured amortizing term loan that will finance our purchase of Harmony of the Seas . Forward-starting interest rate swaps hedging the Harmony of the Seas loan will effectively convert the interest rate for €693.4 million , or approximately $772.5 million based on the exchange rate at June 30, 2015 , of the anticipated loan balance from EURIBOR plus 1.15% to a fixed rate of 2.26% (inclusive of margin) beginning in May 2016. These interest rate swap agreements are accounted for as cash flow hedges. In addition, at June 30, 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 $518.1 million from LIBOR plus 0.40% to a fixed rate (including applicable margin) of 2.85% through the term of the loan. Additionally, at June 30, 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 $704.4 million from LIBOR plus 1.30% to a fixed rate of 3.74% (inclusive of margin) through the term of the loan. Furthermore, at June 30, 2015 , we maintained interest rate swap agreements on our Anthem of the Seas term loan. Our interest rate swap agreements effectively converted the interest rate on a portion of the Anthem of the Seas unsecured amortizing term loan balance of approximately $725.0 million from LIBOR plus 1.30% to a fixed rate of 3.86% (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 June 30, 2015 and December 31, 2014 was $3.6 billion and $2.9 billion , respectively. Foreign Currency Exchange Rate Risk Derivative Instruments Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts, collar options and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates. As of June 30, 2015 , the aggregate cost of our ships on order, not including the "Project Edge" ships and the TUI Cruises' ships on order, was approximately $5.0 billion , of which we had deposited $385.8 million as of such date. Approximately 42.9% and 28.8% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at June 30, 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 second quarter of 2015 , we maintained an average of approximately $480.4 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts resulted in a gain (loss), of approximately $11.2 million and $9.0 million , respectively, during the quarters ended June 30, 2015 and June 30, 2014 , respectively, and approximately $(16.9) million and $10.8 million , during the six months ended June 30, 2015 and June 30, 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 June 30, 2015 , we maintained foreign currency forward contracts of €415.6 million , or approximately $463.0 million based on the exchange rate at June 30, 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 June 30, 2015 and December 31, 2014 was $2.5 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 €141.9 million and €139.4 million , or approximately $158.1 million and $168.7 million , as of June 30, 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 June 30, 2015 , we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2018. As of June 30, 2015 and December 31, 2014 , we had the following outstanding fuel swap agreements: Fuel Swap Agreements As of June 30, 2015 As of December 31, 2014 (metric tons) 2015 361,000 806,000 2016 805,000 802,000 2017 598,000 525,000 2018 300,000 226,000 Fuel Swap Agreements As of June 30, 2015 As of December 31, 2014 (% hedged) Projected fuel purchases: 2015 53 % 58 % 2016 55 % 55 % 2017 40 % 35 % 2018 20 % 15 % At June 30, 2015 and December 31, 2014 , $176.4 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 June 30, 2015 As of December 31, 2014 Balance Sheet Location As of June 30, 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 $ 7,266 $ — Other long-term liabilities $ 62,402 $ 65,768 Foreign currency forward contracts Derivative financial instruments 107,900 — Derivative financial instruments 291,503 17,619 Foreign currency forward contracts Other assets — 63,981 Other long-term liabilities 8,545 164,627 Foreign currency collar options Derivative financial instruments — — Derivative financial instruments — 21,855 Fuel swaps Derivative financial instruments 1,018 — Derivative financial instruments 162,512 227,512 Fuel swaps Other assets 1,862 — Other long-term liabilities 174,513 270,254 Total derivatives designated as hedging instruments under 815-20 118,046 63,981 699,475 767,635 Derivatives not designated as hedging instruments under ASC 815-20 Fuel swaps Derivative financial instruments — — Derivative financial instruments 14,599 — Fuel swaps Other Assets — — Other long-term liabilities 12,536 — Total derivatives not designated as hedging instruments under 815-20 — — 27,135 — Total derivatives $ 118,046 $ 63,981 $ 726,610 $ 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 June 30, 2015 As of December 31, 2014 (In thousands) Foreign currency debt Long-term debt $ 158,119 $ 168,718 $ 158,119 $ 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) Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Interest rate swaps Interest expense, net of interest capitalized $ 2,872 $ 3,067 $ 5,848 $ 6,136 $ 3,925 $ 3,925 $ 7,807 $ 9,467 Interest rate swaps Other income (expense) (15,713 ) 14,931 (561 ) 27,441 14,348 (11,621 ) 2,007 (23,056 ) $ (12,841 ) $ 17,998 $ 5,287 $ 33,577 $ 18,273 $ (7,696 ) $ 9,814 $ (13,589 ) 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 (Effective Portion) Location of Amount of Gain (Loss) Reclassified from Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Cross currency swaps $ — $ — $ — $ — Interest expense, net of interest capitalized $ — $ — $ — $ (261 ) Interest rate swaps 29,666 (35,301 ) (6,149 ) (72,951 ) Interest expense, net of interest capitalized (9,962 ) (3,078 ) (16,748 ) (6,206 ) Foreign currency forward contracts 42,229 (10,437 ) (130,593 ) (9,243 ) Depreciation and amortization expenses (685 ) (450 ) (1,402 ) (899 ) Foreign currency forward contracts — — — — Other income (expense) (239 ) (238 ) (477 ) (3,814 ) Foreign currency forward contracts — — — — Interest expense, net of interest capitalized — — — (57 ) Foreign currency collar options 240 (6,127 ) (64,593 ) (8,734 ) Depreciation and amortization expenses (435 ) — (435 ) — Fuel swaps 66,603 28,344 17,689 6,928 Fuel (52,416 ) 884 (106,108 ) 790 $ 138,738 $ (23,521 ) $ (183,646 ) $ (84,000 ) $ (63,737 ) $ (2,882 ) $ (125,170 ) $ (10,447 ) Derivatives Location of Gain (Loss) Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Interest rate swaps Other income (expense) 183 (76 ) 221 (95 ) Foreign currency forward contracts Other income (expense) — (7 ) — (27 ) Fuel swaps Other income (expense) (600 ) 2,094 (418 ) 462 $ (417 ) $ 2,011 $ (197 ) $ 340 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) Non-derivative instruments under ASC 815-20 Net Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Foreign Currency Debt $ (2,746 ) $ 256 $ 9,391 $ 4,630 $ (2,746 ) $ 256 $ 9,391 $ 4,630 There was no amount recognized in income (ineffective portion and amount excluded from effectiveness testing) for the quarters and six month periods ended June 30, 2015 and June 30, 2014 , respectively. 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 June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Foreign currency forward contracts Other income (expense) $ 11,181 $ 8,889 $ (16,902 ) $ 10,770 Fuel swaps Other income (expense) 16 285 (113 ) (937 ) $ 11,197 $ 9,174 $ (17,015 ) $ 9,833 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 six interest rate derivative hedges that have a term of at least five years. The aggregate fair values of all derivative instruments with such credit-related contingent features in net liability positions as of June 30, 2015 and December 31, 2014 were $62.4 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 six interest rate derivative hedges will reach their fifth anniversary is November 2016. Therefore, as of June 30, 2015 , we were not required to post collateral for any of our derivative transactions. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 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. |
Basis of Consolidation | 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 May and June 2015 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended June 30, 2015 . |
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. This guidance as currently stated will be effective for our interim and annual reporting periods beginning after December 15, 2016. However, in July 2015, the FASB voted to delay the effective date for interim and annual reporting periods beginning after December 15, 2017 with early adoption permissible one year earlier; updated guidance to reflect this vote is expected by the end of the third quarter of 2015. 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. 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 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. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements, with the exception of reclassifying debt issuance costs from Other assets to be reflected as a reduction of our current and long-term liabilities. 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. The adoption of this newly issued guidance is not expected to have a material impact 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 $141.7 million and $137.7 million for the second quarters of 2015 and 2014 , respectively, and $268.8 million and $261.8 million for the six months ended June 30, 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, net 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 and six months ended June 30, 2015 . For the six months ended June 30, 2014 , $2.9 million has been reclassified in the consolidated statements of cash flows from Other, net to Net deferred income tax 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) | 6 Months Ended |
Jun. 30, 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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net income for basic and diluted earnings per share $ 184,967 $ 137,673 $ 230,197 $ 164,130 Weighted-average common shares outstanding 219,913 222,189 219,770 221,745 Dilutive effect of stock options, performance share awards and restricted stock awards 989 1,192 1,116 1,310 Diluted weighted-average shares outstanding 220,902 223,381 220,886 223,055 Basic earnings per share $ 0.84 $ 0.62 $ 1.05 $ 0.74 Diluted earnings per share $ 0.84 $ 0.62 $ 1.04 $ 0.74 |
Changes in Accumulated Other 17
Changes in Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 2015 and 2014 (in thousands): Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2015 Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2014 Changes Changes in Foreign Accumulated other Changes Changes in Foreign Accumulated other 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 (183,646 ) 1,249 (19,803 ) (202,200 ) (84,000 ) (4,948 ) (1,360 ) (90,308 ) Amounts reclassified from accumulated other comprehensive (loss) income 125,170 1,000 — 126,170 10,447 863 1,997 13,307 Net current-period other comprehensive (loss) income (58,476 ) 2,249 (19,803 ) (76,030 ) (73,553 ) (4,085 ) 637 (77,001 ) Ending balance $ (884,502 ) $ (28,958 ) $ (59,564 ) $ (973,024 ) $ (30,229 ) $ (28,079 ) $ (13,022 ) $ (71,330 ) |
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 and six months ended June 30, 2015 and 2014 (in thousands): Amount of Gain (Loss) Reclassified from Details About Accumulated Other Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Affected Line Item in Statements of (Loss) gain on cash flow derivative hedges: Cross currency swaps $ — $ — $ — $ (261 ) Interest expense, net of interest capitalized Interest rate swaps (9,962 ) (3,078 ) (16,748 ) (6,206 ) Interest expense, net of interest capitalized Foreign currency forward contracts (685 ) (450 ) (1,402 ) (899 ) Depreciation and amortization expenses Foreign currency forward contracts (239 ) (238 ) (477 ) (3,814 ) Other income (expense) Foreign currency forward contracts — — — (57 ) Interest expense, net of interest capitalized Foreign currency collar options (435 ) — (435 ) — Depreciation and amortization expenses Fuel swaps (52,416 ) 884 (106,108 ) 790 Fuel (63,737 ) (2,882 ) (125,170 ) (10,447 ) Amortization of defined benefit plans: Actuarial loss (354 ) (222 ) (707 ) (445 ) Payroll and related Prior service costs (84 ) (209 ) (293 ) (418 ) Payroll and related (438 ) (431 ) (1,000 ) (863 ) Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses: Foreign cumulative translation — (1,997 ) — (1,997 ) Other operating Total reclassifications for the period $ (64,175 ) $ (5,310 ) $ (126,170 ) $ (13,307 ) |
Fair Value Measurements and D18
Fair Value Measurements and Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2015 As of December 31, 2014 Balance Sheet Location As of June 30, 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 $ 7,266 $ — Other long-term liabilities $ 62,402 $ 65,768 Foreign currency forward contracts Derivative financial instruments 107,900 — Derivative financial instruments 291,503 17,619 Foreign currency forward contracts Other assets — 63,981 Other long-term liabilities 8,545 164,627 Foreign currency collar options Derivative financial instruments — — Derivative financial instruments — 21,855 Fuel swaps Derivative financial instruments 1,018 — Derivative financial instruments 162,512 227,512 Fuel swaps Other assets 1,862 — Other long-term liabilities 174,513 270,254 Total derivatives designated as hedging instruments under 815-20 118,046 63,981 699,475 767,635 Derivatives not designated as hedging instruments under ASC 815-20 Fuel swaps Derivative financial instruments — — Derivative financial instruments 14,599 — Fuel swaps Other Assets — — Other long-term liabilities 12,536 — Total derivatives not designated as hedging instruments under 815-20 — — 27,135 — Total derivatives $ 118,046 $ 63,981 $ 726,610 $ 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 June 30, 2015 As of December 31, 2014 (In thousands) Foreign currency debt Long-term debt $ 158,119 $ 168,718 $ 158,119 $ 168,718 |
Schedule of Price Risk Derivatives | As of June 30, 2015 and December 31, 2014 , we had the following outstanding fuel swap agreements: Fuel Swap Agreements As of June 30, 2015 As of December 31, 2014 (metric tons) 2015 361,000 806,000 2016 805,000 802,000 2017 598,000 525,000 2018 300,000 226,000 Fuel Swap Agreements As of June 30, 2015 As of December 31, 2014 (% hedged) Projected fuel purchases: 2015 53 % 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 June 30, 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) $ 159,360 $ 159,360 $ 159,360 $ — $ — $ 189,241 $ 189,241 $ 189,241 $ — $ — Total Assets $ 159,360 $ 159,360 $ 159,360 $ — $ — $ 189,241 $ 189,241 $ 189,241 $ — $ — Liabilities: Long-term debt (including current portion of long-term debt) (5) $ 8,727,026 $ 9,078,893 $ 1,839,643 $ 7,239,250 $ — $ 8,391,301 $ 8,761,414 $ 1,859,361 $ 6,902,053 $ — Total Liabilities $ 8,727,026 $ 9,078,893 $ 1,839,643 $ 7,239,250 $ — $ 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 June 30, 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) Non-derivative instruments under ASC 815-20 Net Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Foreign Currency Debt $ (2,746 ) $ 256 $ 9,391 $ 4,630 $ (2,746 ) $ 256 $ 9,391 $ 4,630 |
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 June 30, 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) $ 118,046 $ — $ 118,046 $ — $ 63,981 $ — $ 63,981 $ — Investments (5) $ 4,312 4,312 — — $ 5,531 5,531 — — Total Assets $ 122,358 $ 4,312 $ 118,046 $ — $ 69,512 $ 5,531 $ 63,981 $ — Liabilities: Derivative financial instruments (6) $ 726,610 $ — $ 726,610 $ — $ 767,635 $ — $ 767,635 $ — Total Liabilities $ 726,610 $ — $ 726,610 $ — $ 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 June 30, 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 June 30, 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 (In thousands of dollars) Derivatives subject to master netting agreements $ 118,046 $ (116,059 ) $ — $ 1,987 $ 63,981 $ (63,981 ) $ — $ — Total $ 118,046 $ (116,059 ) $ — $ 1,987 $ 63,981 $ (63,981 ) $ — $ — |
Offsetting Liabilities | Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements As of June 30, 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 (In thousands of dollars) Derivatives subject to master netting agreements $ (726,610 ) $ 116,059 $ — $ (610,551 ) $ (767,635 ) $ 63,981 $ — $ (703,654 ) Total $ (726,610 ) $ 116,059 $ — $ (610,551 ) $ (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 June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Foreign currency forward contracts Other income (expense) $ 11,181 $ 8,889 $ (16,902 ) $ 10,770 Fuel swaps Other income (expense) 16 285 (113 ) (937 ) $ 11,197 $ 9,174 $ (17,015 ) $ 9,833 |
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) Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Interest rate swaps Interest expense, net of interest capitalized $ 2,872 $ 3,067 $ 5,848 $ 6,136 $ 3,925 $ 3,925 $ 7,807 $ 9,467 Interest rate swaps Other income (expense) (15,713 ) 14,931 (561 ) 27,441 14,348 (11,621 ) 2,007 (23,056 ) $ (12,841 ) $ 17,998 $ 5,287 $ 33,577 $ 18,273 $ (7,696 ) $ 9,814 $ (13,589 ) |
Cash flow hedge | |
Derivative Instruments | |
Derivative Instruments, Gain (Loss) | Derivatives Location of Gain (Loss) Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Interest rate swaps Other income (expense) 183 (76 ) 221 (95 ) Foreign currency forward contracts Other income (expense) — (7 ) — (27 ) Fuel swaps Other income (expense) (600 ) 2,094 (418 ) 462 $ (417 ) $ 2,011 $ (197 ) $ 340 Derivatives Amount of Gain (Loss) Recognized in (Effective Portion) Location of Amount of Gain (Loss) Reclassified from Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (In thousands) Cross currency swaps $ — $ — $ — $ — Interest expense, net of interest capitalized $ — $ — $ — $ (261 ) Interest rate swaps 29,666 (35,301 ) (6,149 ) (72,951 ) Interest expense, net of interest capitalized (9,962 ) (3,078 ) (16,748 ) (6,206 ) Foreign currency forward contracts 42,229 (10,437 ) (130,593 ) (9,243 ) Depreciation and amortization expenses (685 ) (450 ) (1,402 ) (899 ) Foreign currency forward contracts — — — — Other income (expense) (239 ) (238 ) (477 ) (3,814 ) Foreign currency forward contracts — — — — Interest expense, net of interest capitalized — — — (57 ) Foreign currency collar options 240 (6,127 ) (64,593 ) (8,734 ) Depreciation and amortization expenses (435 ) — (435 ) — Fuel swaps 66,603 28,344 17,689 6,928 Fuel (52,416 ) 884 (106,108 ) 790 $ 138,738 $ (23,521 ) $ (183,646 ) $ (84,000 ) $ (63,737 ) $ (2,882 ) $ (125,170 ) $ (10,447 ) |
General (Details)
General (Details) - Jun. 30, 2015 | Total |
Maximum | |
General | |
Investment in a joint venture, percentage of interest | 50.00% |
Minimum | |
General | |
Investment in a joint venture, percentage of interest | 20.00% |
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 Accoun20
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Significant Accounting Policies | |||||
Gross amount of port costs included in passenger ticket revenues | $ 141.7 | $ 137.7 | $ 268.8 | $ 261.8 | |
Balance sheet reclass from Property, plant and equipment to Other assets | |||||
Significant Accounting Policies | |||||
Prior Period Reclassification Adjustment | $ 41.9 | ||||
Cash flows reclass from Other, net to Net deferred income tax (benefit) expense | |||||
Significant Accounting Policies | |||||
Prior Period Reclassification Adjustment | $ 2.9 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net income for basic and diluted earnings per share | $ 184,967 | $ 137,673 | $ 230,197 | $ 164,130 |
Weighted-average common shares outstanding (shares) | 219,913 | 222,189 | 219,770 | 221,745 |
Dilutive effect of stock options, performance share awards and restricted stock awards (shares) | 989 | 1,192 | 1,116 | 1,310 |
Diluted weighted-average shares outstanding (shares) | 220,902 | 223,381 | 220,886 | 223,055 |
Basic earnings per share (in dollars per share) | $ 0.84 | $ 0.62 | $ 1.05 | $ 0.74 |
Diluted earnings per share (in dollars per share) | $ 0.84 | $ 0.62 | $ 1.04 | $ 0.74 |
Long-Term Debt (Details)
Long-Term Debt (Details) € in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | |
Jul. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Jul. 31, 2015EUR (€) | |
Anthem of the Seas Unsecured Term Loan | |||
Long-Term Debt | |||
Guarantee Percent | 95.00% | ||
Anthem of the Seas Unsecured Term Loan | LIBOR | |||
Long-Term Debt | |||
Unsecured term loan maximum borrowing capacity | $ 742.1 | ||
Long term debt, term | 12 years | ||
Margin on floating rate base | 1.30% | ||
Effective interest rate | 1.71% | ||
Revolving Credit Facility Due in June 2020 | LIBOR | |||
Long-Term Debt | |||
Margin on floating rate base | 1.50% | ||
Current borrowing capacity | $ 1,100 | ||
Credit agency fees percentage of outstanding loan balance | 0.25% | ||
Additional amount allowed to increase credit facility | $ 300 | ||
Amendment to debt | Revolving Credit Facility Due In August 2018 | LIBOR | |||
Long-Term Debt | |||
Margin on floating rate base | 1.50% | ||
Current borrowing capacity | $ 1,200 | ||
Credit agency fees percentage of outstanding loan balance | 0.25% | ||
Additional amount allowed to increase credit facility | $ 300 | ||
Amendment to debt | Unsecured Term Loan LIBOR Plus 1 Point 75 Percent Due August 2018 | LIBOR | |||
Long-Term Debt | |||
Unsecured term loan maximum borrowing capacity | $ 380 | ||
Margin on floating rate base | 1.75% | ||
Amendment to debt | Unsecured Term Loan EURIBOR Plus 1 point 75 Percent Due July 2017 | LIBOR | |||
Long-Term Debt | |||
Unsecured term loan maximum borrowing capacity | € | € 365 | ||
Margin on floating rate base | 1.75% | ||
Amendment to debt | Unsecured Term Loan LIBOR Plus 1 Point 75 Percent Due February 2018 | LIBOR | |||
Long-Term Debt | |||
Unsecured term loan maximum borrowing capacity | $ 290 | ||
Margin on floating rate base | 1.75% | ||
Amendment to debt | Unsecured Term Loan LIBOR Plus 1 Point 75 Percent Due December 2019 | LIBOR | |||
Long-Term Debt | |||
Unsecured term loan maximum borrowing capacity | $ 65 | ||
Margin on floating rate base | 1.75% | ||
Interest rate swaps | Anthem of the Seas Unsecured Term Loan | |||
Long-Term Debt | |||
Unsecured term loan, maximum borrowing commitment per ship | $ 725 | ||
Fixed interest rate | 3.86% |
Goodwill and Other Assets (Deta
Goodwill and Other Assets (Details) - Cruise Ships on Order $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2015EUR (€) | Jun. 30, 2014USD ($) | Jun. 30, 2015EUR (€) | Dec. 31, 2014USD ($) | |
Goodwill and Other Assets | |||||||
Goodwill | $ 409,836 | $ 409,836 | $ 420,542 | ||||
Principal and interest payments received | 120,297 | $ 66,138 | |||||
Income from equity method investments | $ 14,700 | $ 4,000 | $ 23,800 | 9,000 | |||
Nautalia | |||||||
Goodwill and Other Assets | |||||||
Non controlling interest percentage | 19.00% | 19.00% | 19.00% | ||||
Grand Bahamas Shipyard Ltd. | Not Primary Beneficiary | |||||||
Goodwill and Other Assets | |||||||
Percentage of ownership interest | 40.00% | 40.00% | 40.00% | ||||
Investments in entity | $ 55,000 | $ 55,000 | 53,800 | ||||
Advances to Affiliate | 43,000 | 43,000 | 46,100 | ||||
Underlying equity in net assets | $ 12,000 | 12,000 | 7,700 | ||||
Principal and interest payments received | $ 3,100 | $ 3,400 | |||||
TUI Cruises GmbH joint venture | |||||||
Goodwill and Other Assets | |||||||
Percentage of ownership interest | 50.00% | 50.00% | 50.00% | ||||
Investments in entity | $ 294,400 | $ 294,400 | 370,100 | ||||
Debt, guaranteed percentage | 50.00% | 50.00% | |||||
Current borrowing capacity increase | € | € 40,000,000 | ||||||
Additional amount outstanding on line of credit provided to TUI Cruises | $ 164,900 | $ 164,900 | € 148,000,000 | ||||
Percentage of bank committed financing | 80.00% | 80.00% | 80.00% | ||||
Unsecured term loan | € | € 150,000,000 | ||||||
Reduction of current ownership interest (as a percent) | 37.55% | 37.55% | 37.55% | ||||
Skysea Holding | |||||||
Goodwill and Other Assets | |||||||
Percentage of ownership interest | 35.00% | 35.00% | 35.00% | ||||
Investments in entity | $ 104,800 | $ 104,800 | $ 106,300 | ||||
Debt, guaranteed percentage | 100.00% | 100.00% | |||||
Interest rate on loan provided to related party (as a percent) | 3.00% | 3.00% | 3.00% | ||||
Advances to Affiliate | $ 80,000 | $ 80,000 | |||||
Increase in interest rate every two years | 0.50% | 0.50% | |||||
Goodwill | Pullmantur | |||||||
Goodwill and Other Assets | |||||||
Goodwill | $ 123,000 | $ 123,000 | |||||
Percentage of fair value in excess of carrying amount | 25.00% | 25.00% | 25.00% | ||||
Tradenames and Trademarks | Pullmantur | |||||||
Goodwill and Other Assets | |||||||
Indefinite-lived intangible assets | $ 173,100 | $ 173,100 | |||||
Percentage of fair value in excess of carrying amount | 3.00% | 3.00% | 3.00% | ||||
Splendour of the Seas | TUI Cruises GmbH joint venture | |||||||
Goodwill and Other Assets | |||||||
Debt, guaranteed percentage | 50.00% | 50.00% | |||||
Expected sales price of ship | € | € 188,000,000 | ||||||
Long term debt, term | 10 years | 10 years | |||||
Interest rate on loan provided to related party (as a percent) | 6.25% | 6.25% | 6.25% | ||||
Hedged sales price of ship | $ 213,000 | $ 213,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($)berth | Jan. 31, 2015USD ($) | Dec. 31, 2014crew_member | Jun. 30, 2015USD ($)berth | Feb. 28, 2015shipberth | Jan. 31, 2015EUR (€) | |
Commitments and Contingencies | ||||||
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate | 42.90% | 28.80% | 42.90% | |||
Cruise ships on order | ||||||
Commitments and Contingencies | ||||||
Aggregate cost of ships on order, not including TUI cruises and Project Edge ships on order | $ 5,000 | |||||
Deposit for the purchase of ships expected to enter service | $ 385.8 | $ 385.8 | ||||
Unsecured term loan maturing 12 years after ship delivery | Oasis class fourth ship | ||||||
Commitments and Contingencies | ||||||
Anticipated loan balance | $ 1,000 | € 931.2 | ||||
Oasis Class Ship Term Loans | Oasis class fourth ship | ||||||
Commitments and Contingencies | ||||||
Long term debt, term | 12 years | |||||
Long term debt, interest rate | 3.82% | 3.82% | ||||
Quantum of the Seas Term Loan [Member] | Quantum Class Ship | ||||||
Commitments and Contingencies | ||||||
Percentage of bank committed financing | 80.00% | 80.00% | ||||
Guarantee Percent | 95.00% | |||||
LIBOR | Oasis Class Ship Term Loans | Oasis class fourth ship | ||||||
Commitments and Contingencies | ||||||
Margin on floating rate base | 1.10% | |||||
Celebrity Cruise Ships | Project Edge Class Ship | ||||||
Commitments and Contingencies | ||||||
Number of ships on order | ship | 2 | |||||
Approximate Berths | berth | 2,900 | |||||
Royal Caribbean International Cruise Ships | Quantum Class Ship | ||||||
Commitments and Contingencies | ||||||
Approximate Berths | berth | 4,150 | 4,150 | ||||
Class Action Complaint | ||||||
Commitments and Contingencies | ||||||
Number of crew members submitting demands for arbitration (in excess) | crew_member | 575 |
Commitments and Contingencies -
Commitments and Contingencies - Debt (Details) - Jun. 30, 2015 | Total |
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) - $ / shares | 3 Months Ended | |||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Equity [Abstract] | ||||||
Dividend declared (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.25 | $ 0.25 | $ 0.25 |
Common Stock, Dividends, Per Share, Cash Paid | $ 0.30 | 0.30 | $ 0.25 | 0.25 | ||
Common Stock, Dividend Declared Prior Period, Paid Current Period | $ 0.30 | $ 0.25 |
Changes in Accumulated Other 27
Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 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 | (202,200) | (90,308) | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 126,170 | 13,307 | ||
Total other comprehensive income (loss) | $ 217,956 | $ (24,525) | (76,030) | (77,001) |
Ending balance | (973,024) | (71,330) | (973,024) | (71,330) |
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 | (183,646) | (84,000) | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 125,170 | 10,447 | ||
Total other comprehensive income (loss) | (58,476) | (73,553) | ||
Ending balance | (884,502) | (30,229) | (884,502) | (30,229) |
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 | 1,249 | (4,948) | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 1,000 | 863 | ||
Total other comprehensive income (loss) | 2,249 | (4,085) | ||
Ending balance | (28,958) | (28,079) | (28,958) | (28,079) |
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 | (19,803) | (1,360) | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 1,997 | ||
Total other comprehensive income (loss) | (19,803) | 637 | ||
Ending balance | $ (59,564) | $ (13,022) | $ (59,564) | $ (13,022) |
Changes in Accumulated Other 28
Changes in Accumulated Other Comprehensive (Loss) Income - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reclassifications out of accumulated other comprehensive loss | ||||
Interest expense, net of interest capitalized | $ (76,620) | $ (65,260) | $ (146,779) | $ (133,831) |
Depreciation and amortization expenses | (206,468) | (192,880) | (406,936) | (386,615) |
Other income (expense) | 76,330 | 57,914 | 136,782 | 128,923 |
Fuel | (202,565) | (242,804) | (407,841) | (487,263) |
Net income | 184,967 | 137,673 | 230,197 | 164,130 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Net income | (64,175) | (5,310) | (126,170) | (13,307) |
Loss on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Net income | (63,737) | (2,882) | (125,170) | (10,447) |
Loss on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Cross currency swaps | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Interest expense, net of interest capitalized | 0 | 0 | 0 | (261) |
Loss on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Interest rate swaps | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Interest expense, net of interest capitalized | (9,962) | (3,078) | (16,748) | (6,206) |
Loss on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Foreign currency forward contracts | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Interest expense, net of interest capitalized | 0 | 0 | 0 | (57) |
Depreciation and amortization expenses | (685) | (450) | (1,402) | (899) |
Other income (expense) | 239 | (238) | (477) | (3,814) |
Loss on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Foreign currency collar options | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Depreciation and amortization expenses | (435) | 0 | (435) | 0 |
Loss on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Fuel swaps | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Fuel | (52,416) | 884 | (106,108) | 790 |
Amortization of defined benefit plans: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Actuarial loss | (354) | (222) | (707) | (445) |
Prior service costs | (84) | (209) | (293) | (418) |
Net income | (438) | (431) | (1,000) | (863) |
Accumulated Translation Adjustment | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | ||||
Reclassifications out of accumulated other comprehensive loss | ||||
Other income (expense) | $ 0 | $ 1,997 | $ 0 | $ 1,997 |
Fair Value Measurements and D29
Fair Value Measurements and Derivative Instruments (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Level 1 | |||
Assets: | |||
Cash and cash equivalents | [1],[2] | $ 159,360 | $ 189,241 |
Total Assets | [2] | 159,360 | 189,241 |
Liabilities: | |||
Long-term debt (including current portion of long-term debt) | [2],[3] | 1,839,643 | 1,859,361 |
Total Liabilities | [2] | 1,839,643 | 1,859,361 |
Level 2 | |||
Assets: | |||
Cash and cash equivalents | [1] | 0 | 0 |
Total Assets | 0 | 0 | |
Liabilities: | |||
Long-term debt (including current portion of long-term debt) | [3] | 7,239,250 | 6,902,053 |
Total Liabilities | 7,239,250 | 6,902,053 | |
Level 3 | |||
Assets: | |||
Cash and cash equivalents | [1] | 0 | 0 |
Total Assets | 0 | 0 | |
Liabilities: | |||
Long-term debt (including current portion of long-term debt) | [3] | 0 | 0 |
Total Liabilities | 0 | 0 | |
Total Carrying Amount | |||
Assets: | |||
Cash and cash equivalents | [1] | 159,360 | 189,241 |
Total Assets | 159,360 | 189,241 | |
Liabilities: | |||
Long-term debt (including current portion of long-term debt) | [3] | 8,727,026 | 8,391,301 |
Total Liabilities | 8,727,026 | 8,391,301 | |
Total Fair Value | |||
Assets: | |||
Cash and cash equivalents | [1] | 159,360 | 189,241 |
Total Assets | 159,360 | 189,241 | |
Liabilities: | |||
Long-term debt (including current portion of long-term debt) | [3] | 9,078,893 | 8,761,414 |
Total Liabilities | $ 9,078,893 | $ 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 D30
Fair Value Measurements and Derivative Instruments - Recurring (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Assets: | |||
Derivative financial instruments | $ 1,987 | $ 0 | |
Liabilities: | |||
Derivative financial instruments | 610,551 | 703,654 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Assets: | |||
Investments | [1],[2] | 4,312 | 5,531 |
Total Assets | [2] | 4,312 | 5,531 |
Fair Value, Measurements, Recurring | Level 2 | |||
Assets: | |||
Derivative financial instruments | [3],[4] | 118,046 | 63,981 |
Total Assets | [4] | 118,046 | 63,981 |
Liabilities: | |||
Derivative financial instruments | [4],[5] | 726,610 | 767,635 |
Total Liabilities | [4] | 726,610 | 767,635 |
Total | Fair Value, Measurements, Recurring | |||
Assets: | |||
Derivative financial instruments | [3] | 118,046 | 63,981 |
Investments | [1] | 4,312 | 5,531 |
Total Assets | 122,358 | 69,512 | |
Liabilities: | |||
Derivative financial instruments | [5] | 726,610 | 767,635 |
Total Liabilities | $ 726,610 | $ 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 Deri
Fair Value Measurement and Derivative Instruments - Offsetting of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Offsetting of Financial Assets under Master Netting Agreements [Abstract] | ||
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | $ 118,046 | $ 63,981 |
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | (116,059) | (63,981) |
Net Amount of Derivative Assets | 1,987 | 0 |
Offsetting of Financial Liabilities under Master Netting Agreements [Abstract] | ||
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | (726,610) | (767,635) |
Gross Amount of Eligible Offsetting Recognized Derivative Assets | 116,059 | 63,981 |
Net Amount of Derivative Liabilities | $ (610,551) | $ (703,654) |
Fair Value Measurements and D32
Fair Value Measurements and Derivative Instruments - Non-Derivative Instruments (Details) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2015EUR (€) | Dec. 31, 2014USD ($) | Dec. 31, 2014EUR (€) | Jun. 30, 2015EUR (€) | |
Derivative Instruments | |||||
Fair Value, Concentration of Risk, Derivative Instruments, Assets | $ 1,600,000 | ||||
Derivative instrument, observation period | 3 years | 3 years | |||
Percentage of debt bearing fixed interest | 35.00% | 28.50% | 35.00% | ||
Interest rate swaps | |||||
Derivative Instruments | |||||
Notional amount | $ 3,600,000,000 | $ 2,900,000,000 | |||
Interest rate swaps | Quantum of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Fixed rate on converted debt | 3.74% | 3.74% | |||
Interest rate swaps | Anthem of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Fixed rate on converted debt | 3.86% | 3.86% | |||
Unsecured term loan, maximum borrowing commitment per ship | $ 725,000,000 | ||||
Interest rate swaps | Fair Value Hedging | 5.41% Fixed rate debt | |||||
Derivative Instruments | |||||
Unsecured term loan | 420,000,000 | 420,000,000 | |||
Debt amount | $ 227,500,000 | ||||
Interest rate on hedged debt (as a percent) | 5.41% | 5.41% | |||
Interest rate swaps | Fair Value Hedging | 5.25% Fixed rate debt | |||||
Derivative Instruments | |||||
Unsecured term loan | $ 650,000,000 | 650,000,000 | |||
Interest rate on hedged debt (as a percent) | 5.25% | 5.25% | |||
Interest rate swaps | Cash flow hedge | Harmony of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Anticipated loan balance | $ 772,500,000 | € 693,400,000 | |||
Interest rate swaps | Cash flow hedge | Quantum of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Additional interest above LIBOR rate | 1.15% | 1.15% | |||
Fixed rate on converted debt | 2.26% | 2.26% | |||
Unsecured term loan, maximum borrowing commitment per ship | $ 704,400,000 | ||||
Interest rate swaps | Cash flow hedge | Celebrity Reflection floating rate debt | |||||
Derivative Instruments | |||||
Additional interest above LIBOR rate | 0.40% | 0.40% | |||
Fixed rate on converted debt | 2.85% | 2.85% | |||
Unsecured term loan, maximum borrowing commitment per ship | $ 518,100,000 | ||||
Interest rate swaps | Cash flow hedge | Anthem of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Unsecured term loan, maximum borrowing commitment per ship | 725,000,000 | ||||
Foreign exchange contracts | |||||
Derivative Instruments | |||||
Notional amount | 2,500,000,000 | 3,000,000,000 | |||
Pullmantur and TUI Cruises | Net Investment Hedging | |||||
Derivative Instruments | |||||
Debt amount | 158,119,000 | 168,718,000 | |||
Carrying value of non-derivative instrument designated as hedging instrument | $ 158,100,000 | € 141,900,000 | $ 168,700,000 | € 139,400,000 | |
LIBOR | Anthem of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Additional interest above LIBOR rate | 1.30% | 1.30% | |||
LIBOR | Interest rate swaps | Fair Value Hedging | 5.41% Fixed rate debt | |||||
Derivative Instruments | |||||
Additional interest above LIBOR rate (as a percent) | 3.87% | 3.87% | |||
Derivative, Variable rate of interest (as a percent) | 4.28% | 4.28% | |||
LIBOR | Interest rate swaps | Fair Value Hedging | 5.25% Fixed rate debt | |||||
Derivative Instruments | |||||
Additional interest above LIBOR rate (as a percent) | 3.63% | 3.63% | |||
Derivative, Variable rate of interest (as a percent) | 3.91% | 3.91% | |||
LIBOR | Interest rate swaps | Cash flow hedge | Quantum of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Additional interest above LIBOR rate | 1.30% | 1.30% | |||
LIBOR | Interest rate swaps | Cash flow hedge | Anthem of the Seas Unsecured Term Loan | |||||
Derivative Instruments | |||||
Additional interest above LIBOR rate | 1.30% | 1.30% |
Fair Value Measurements and D33
Fair Value Measurements and Derivative Instruments - Derivative Instruments (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015EUR (€) | Dec. 31, 2014USD ($) | |
Gains and losses from derivatives involved in hedging relationships | ||||||
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate | 42.90% | 42.90% | 42.90% | 28.80% | ||
Interest rate swaps | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Notional amount | $ 3,600 | $ 3,600 | $ 2,900 | |||
Forward Contracts | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Change in fair value of foreign currency forward contracts recognized in earnings | 11.2 | $ 9 | (16.9) | $ 10.8 | ||
Forward Contracts | Not Designated | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Notional amount | 480.4 | 480.4 | ||||
Forward Contracts | Designated as Hedging Instrument | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Notional amount | 463 | 463 | € 415.6 | |||
Foreign exchange contracts | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Notional amount | 2,500 | 2,500 | $ 3,000 | |||
Cruise ships on order | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Aggregate cost of ships on order, not including TUI cruises and Project Edge ships on order | 5,000 | |||||
Amount deposited for cost of ships on order, including the conditional agreement for a third Quantum - class ship | $ 385.8 | $ 385.8 |
Fair Value Measurements and D34
Fair Value Measurements and Derivative Instruments - Fuel Price Risk (Details) - Fuel Price Risk $ in Millions | Jun. 30, 2015USD ($)T | Dec. 31, 2014USD ($)T |
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 | $ | $ 176.4 | $ 223.1 |
Swaps 2,015 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 361,000 | 806,000 |
Percentage of projected requirements | 53.00% | 58.00% |
Swaps 2,016 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 805,000 | 802,000 |
Percentage of projected requirements | 55.00% | 55.00% |
Swaps 2,017 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 598,000 | 525,000 |
Percentage of projected requirements | 40.00% | 35.00% |
Swaps 2,018 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 300,000 | 226,000 |
Percentage of projected requirements | 20.00% | 15.00% |
Fair Value Measurements and D35
Fair Value Measurements and Derivative Instruments - Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Asset Derivatives | |||
Asset Derivatives | $ 118,046 | $ 63,981 | |
Liability Derivatives | |||
Liability Derivatives | 726,610 | 767,635 | |
Designated as Hedging Instrument | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 118,046 | 63,981 |
Liability Derivatives | |||
Liability Derivatives | [1] | 699,475 | 767,635 |
Designated as Hedging Instrument | Foreign currency collar options | Other assets | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 0 | 0 |
Designated as Hedging Instrument | Foreign currency collar options | Derivative financial instruments | |||
Liability Derivatives | |||
Liability Derivatives | [1] | 0 | 21,855 |
Not Designated as Hedging Instrument | |||
Asset Derivatives | |||
Asset Derivatives | 0 | 0 | |
Liability Derivatives | |||
Liability Derivatives | 27,135 | 0 | |
Interest rate swaps | Designated as Hedging Instrument | Other assets | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 7,266 | 0 |
Interest rate swaps | Designated as Hedging Instrument | Other long-term Liabilities | |||
Liability Derivatives | |||
Liability Derivatives | [1] | 62,402 | 65,768 |
Foreign currency forward contracts | Designated as Hedging Instrument | Other assets | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 0 | 63,981 |
Foreign currency forward contracts | Designated as Hedging Instrument | Derivative financial instruments | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 107,900 | 0 |
Liability Derivatives | |||
Liability Derivatives | [1] | 291,503 | 17,619 |
Foreign currency forward contracts | Designated as Hedging Instrument | Other long-term Liabilities | |||
Liability Derivatives | |||
Liability Derivatives | [1] | 8,545 | 164,627 |
Fuel swaps | Designated as Hedging Instrument | Swaps | Other assets | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 1,862 | 0 |
Fuel swaps | Designated as Hedging Instrument | Swaps | Derivative financial instruments | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 1,018 | 0 |
Liability Derivatives | |||
Liability Derivatives | [1] | 162,512 | 227,512 |
Fuel swaps | Designated as Hedging Instrument | Swaps | Other long-term Liabilities | |||
Liability Derivatives | |||
Liability Derivatives | [1] | 174,513 | 270,254 |
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 | 14,599 | 0 | |
Fuel swaps | Not Designated as Hedging Instrument | Swaps | Other long-term Liabilities | |||
Liability Derivatives | |||
Liability Derivatives | $ 12,536 | $ 0 | |
[1] | Accounting Standard Codification 815-20 “Derivatives and Hedging.” |
Fair Value Measurements and D36
Fair Value Measurements and Derivative Instruments - Balance Sheet Hedging Instruments (Details) - Foreign currency debt - Pullmantur and TUI Cruises - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Net investment hedge | ||
Carrying Value of Non-derivative instrument Designated as hedging instrument | $ 158,119 | $ 168,718 |
Long-term debt | ||
Net investment hedge | ||
Carrying Value of Non-derivative instrument Designated as hedging instrument | $ 158,119 | $ 168,718 |
Fair Value Measurements and D37
Fair Value Measurements and Derivative Instruments - Income Statement Hedging Instruments (Details) - Fair Value Hedging - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ||||
Amount of Gain (Loss) Recognized in Income on Derivative | $ (12,841) | $ 17,998 | $ 5,287 | $ 33,577 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | 18,273 | (7,696) | 9,814 | (13,589) |
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 | 2,872 | 3,067 | 5,848 | 6,136 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | 3,925 | 3,925 | 7,807 | 9,467 |
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 | (15,713) | 14,931 | (561) | 27,441 |
Amount of Gain (Loss) Recognized in Income on Hedged Item | $ 14,348 | $ (11,621) | $ 2,007 | $ (23,056) |
Fair Value Measurements and D38
Fair Value Measurements and Derivative Instruments - Designated Cash Flow Hedges (Details) - Cash flow hedge - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 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) | $ 138,738 | $ (23,521) | $ (183,646) | $ (84,000) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | (63,737) | (2,882) | (125,170) | (10,447) |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Ineffective Portion) | (417) | 2,011 | (197) | 340 |
Cross currency swaps | Interest expense, net of interest capitalized | ||||
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 | 0 | (261) |
Interest rate swaps | 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 (Ineffective Portion) | 183 | (76) | 221 | (95) |
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 Other Comprehensive Income on Derivative (Effective Portion) | 29,666 | (35,301) | (6,149) | (72,951) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | (9,962) | (3,078) | (16,748) | (6,206) |
Foreign currency forward contracts | 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) | (239) | (238) | (477) | (3,814) |
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Ineffective Portion) | 0 | (7) | 0 | (27) |
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) | 42,229 | (10,437) | (130,593) | (9,243) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | (685) | (450) | (1,402) | (899) |
Foreign currency forward contracts | Interest expense, net of interest capitalized | ||||
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 | 0 | (57) |
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) | 240 | (6,127) | (64,593) | (8,734) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | (435) | 0 | (435) | 0 |
Fuel swaps | Swaps | 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 (Ineffective Portion) | (600) | 2,094 | (418) | 462 |
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) | 66,603 | 28,344 | 17,689 | 6,928 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | $ (52,416) | $ 884 | $ (106,108) | $ 790 |
Fair Value Measurements and D39
Fair Value Measurements and Derivative Instruments - Non-Derivative Net Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Foreign currency debt | ||||
Net investment hedge | ||||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | $ (2,746) | $ 256 | $ 9,391 | $ 4,630 |
Fair Value Measurements and D40
Fair Value Measurements and Derivative Instruments - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | $ (16,902) | $ 10,841 | ||
Other income (expense) | ||||
Derivative Instruments | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | $ 11,197 | $ 9,174 | (17,015) | 9,833 |
Foreign exchange contracts | Other income (expense) | ||||
Derivative Instruments | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | 11,181 | 8,889 | (16,902) | 10,770 |
Fuel swaps | Fuel swaps | Other income (expense) | ||||
Derivative Instruments | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | $ 16 | $ 285 | $ (113) | $ (937) |
Fair Value Measurements and D41
Fair Value Measurements and Derivative Instruments - Credit Features (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015USD ($)hedge | Dec. 31, 2014USD ($) | ||
Derivative Instruments | |||
Liability Derivatives | $ 726,610 | $ 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 | hedge | 6 | ||
Designated as Hedging Instrument | |||
Derivative Instruments | |||
Liability Derivatives | [1] | $ 699,475 | 767,635 |
Other long-term Liabilities | Designated as Hedging Instrument | Interest rate swaps | |||
Derivative Instruments | |||
Liability Derivatives | [1] | $ 62,402 | $ 65,768 |
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.” |