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(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Republic of Liberia
(State or other jurisdiction of
incorporation or organization)
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98-0081645
(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01 per share
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a
smaller reporting company)
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Smaller reporting company
o
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Year
|
|
North America(1)
|
|
Europe(2)
|
2010
|
|
3.1%
|
|
1.1%
|
2011
|
|
3.4%
|
|
1.1%
|
2012
|
|
3.3%
|
|
1.2%
|
2013
|
|
3.4%
|
|
1.2%
|
2014
|
|
3.5%
|
|
1.3%
|
(1)
|
Source: Our estimates are based on a combination of data obtained from publicly available sources including the International Monetary Fund and Cruise Lines International Association ("CLIA"). Rates are based on cruise guests carried for at least two consecutive nights. Includes the United States of America and Canada.
|
(2)
|
Source: Our estimates are based on a combination of data obtained from publicly available sources including the International Monetary Fund and CLIA Europe, formerly European Cruise Council.
|
Year
|
|
Weighted-Average
Supply of
Berths
Marketed
Globally(1)
|
|
Royal Caribbean Cruises Ltd. Total Berths
|
|
Global
Cruise Guests(1) |
|
North American
Cruise
Guests(2)
|
|
European
Cruise
Guests (3)
|
2010
|
|
391,000
|
|
92,300
|
|
18,800,000
|
|
10,781,000
|
|
5,540,000
|
2011
|
|
412,000
|
|
92,650
|
|
20,227,000
|
|
11,625,000
|
|
5,894,000
|
2012
|
|
425,000
|
|
98,650
|
|
20,898,000
|
|
11,640,000
|
|
6,139,000
|
2013
|
|
432,000
|
|
98,750
|
|
21,300,000
|
|
11,816,000
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6,399,000
|
2014
|
|
448,000
|
|
105,750
|
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22,006,063
|
|
12,260,238
|
|
6,535,365
|
(1)
|
Source: Our estimates of the number of global cruise guests and the weighted-average supply of berths marketed globally are based on a combination of data that we obtain from various publicly available cruise industry trade information sources including Seatrade Insider, Cruise Industry News and CLIA. In addition, our estimates incorporate our own statistical analysis utilizing the same publicly available cruise industry data as a base.
|
(2)
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Source: CLIA based on cruise guests carried for at least two consecutive nights (see number 1 above). Includes the United States of America and Canada.
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(3)
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Source: CLIA Europe, formerly European Cruise Council, (see number 2 above).
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•
|
protect the health, safety and security of our guests and employees and protect the environment in which our vessels and organization operate,
|
•
|
strengthen and support our human capital in order to better serve our global guest base and grow our business,
|
•
|
further strengthen our consumer engagement in order to enhance our revenues,
|
•
|
increase the awareness and market penetration of our brands globally,
|
•
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focus on cost efficiency, manage our operating expenditures and ensure adequate cash and liquidity, with the overall goal of maximizing our return on invested capital and long-term shareholder value,
|
•
|
strategically invest in our fleet through the upgrade and maintenance of existing ships and the transfer of key innovations across each brand, while prudently expanding our fleet with new state-of-the-art cruise ships,
|
•
|
capitalize on the portability and flexibility of our ships by deploying them into those markets and itineraries that provide opportunities to optimize returns, while continuing our focus on existing key markets,
|
•
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further enhance our technological capabilities to service customer preferences and expectations in an innovative manner, while supporting our strategic focus on profitability, and
|
•
|
maintain strong relationships with travel agencies, which continue to be the principal industry distribution channel, while enhancing our consumer outreach programs.
|
Ship
|
Year Ship
Built |
|
Year Ship
Entered Service (1) |
|
Approximate
Berths |
|
Primary Areas of Operation
|
Royal Caribbean International
|
|
|
|
|
|
|
|
Anthem of the Seas
|
2015
|
|
2015
|
|
4,150
|
|
Europe, Eastern/Western/Southern Caribbean, Bahamas
|
Quantum of the Seas
|
2014
|
|
2014
|
|
4,150
|
|
Bahamas, Eastern/Southern Caribbean, Asia
|
Allure of the Seas
|
2010
|
|
2010
|
|
5,400
|
|
Eastern/Western Caribbean, Europe
|
Oasis of the Seas
|
2009
|
|
2009
|
|
5,450
|
|
Eastern/Western Caribbean
|
Independence of the Seas
|
2008
|
|
2008
|
|
3,600
|
|
Eastern/Western Caribbean
|
Liberty of the Seas
|
2007
|
|
2007
|
|
3,600
|
|
Eastern/Western Caribbean, Bermuda, Canada
|
Freedom of the Seas
|
2006
|
|
2006
|
|
3,600
|
|
Eastern/Western Caribbean
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Jewel of the Seas
|
2004
|
|
2004
|
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2,100
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Alaska, Southern Caribbean
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Mariner of the Seas
|
2003
|
|
2003
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3,100
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Asia
|
Serenade of the Seas
|
2003
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|
2003
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2,100
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Southern Caribbean, Europe, Canada
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Navigator of the Seas
|
2002
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2002
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3,250
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Eastern/Western Caribbean
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Brilliance of the Seas
|
2002
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2002
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2,100
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Europe, Western Caribbean, Canada
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Adventure of the Seas
|
2001
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2001
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3,100
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Southern Caribbean
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Radiance of the Seas
|
2001
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2001
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2,100
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Alaska, Australia/New Zealand
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Explorer of the Seas
|
2000
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2000
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3,100
|
|
Eastern/Southern Caribbean, Europe, Australia/New Zealand
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Voyager of the Seas
|
1999
|
|
1999
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|
3,250
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|
Asia, Australia/New Zealand
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Vision of the Seas
|
1998
|
|
1998
|
|
2,000
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Western Caribbean, Europe
|
Enchantment of the Seas
|
1997
|
|
1997
|
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2,250
|
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Bahamas
|
Rhapsody of the Seas
|
1997
|
|
1997
|
|
2,000
|
|
Europe, South America
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Grandeur of the Seas
|
1996
|
|
1996
|
|
1,950
|
|
Southern/Eastern/Western Caribbean, Bermuda, Canada
|
Splendour of the Seas
|
1996
|
|
1996
|
|
1,800
|
|
Europe, Dubai
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Legend of the Seas
|
1995
|
|
1995
|
|
1,800
|
|
Eastern/Southern Caribbean, Asia, Australia/New Zealand
|
Majesty of the Seas
|
1992
|
|
1992
|
|
2,350
|
|
Bahamas
|
Celebrity Cruises
|
|
|
|
|
|
|
|
Celebrity Reflection
|
2012
|
|
2012
|
|
3,000
|
|
Europe, Eastern/Western Caribbean
|
Celebrity Silhouette
|
2011
|
|
2011
|
|
2,850
|
|
Europe, Eastern/Western Caribbean
|
Celebrity Eclipse
|
2010
|
|
2010
|
|
2,850
|
|
Europe, Southern Caribbean
|
Celebrity Equinox
|
2009
|
|
2009
|
|
2,850
|
|
Europe, Eastern/Western/Southern Caribbean
|
Celebrity Solstice
|
2008
|
|
2008
|
|
2,850
|
|
Alaska, Australia/New Zealand
|
Celebrity Constellation
|
2002
|
|
2002
|
|
2,150
|
|
Short Caribbean, Eastern Caribbean, Europe
|
Celebrity Summit
|
2001
|
|
2001
|
|
2,150
|
|
Southern Caribbean, Bermuda, Canada
|
Celebrity Infinity
|
2001
|
|
2001
|
|
2,150
|
|
Alaska, Panama Canal, S. America
|
Celebrity Millennium
|
2000
|
|
2000
|
|
2,150
|
|
Alaska, Asia
|
Celebrity Century
(2)
|
1995
|
|
1995
|
|
1,800
|
|
Asia
|
Celebrity Xpedition
|
2001
|
|
2004
|
|
100
|
|
Galapagos Islands
|
Ship
|
Year Ship
Built |
|
Year Ship
Entered Service (1) |
|
Approximate
Berths |
|
Primary Areas of Operation
|
Azamara Club Cruises
|
|
|
|
|
|
|
|
Azamara Quest
|
2000
|
|
2007
|
|
700
|
|
Europe, Asia
|
Azamara Journey
|
2000
|
|
2007
|
|
700
|
|
Europe, Asia, Central/South America, Eastern/Western and Southern Caribbean, Panama Canal
|
Pullmantur
(3)
|
|
|
|
|
|
|
|
Monarch
|
1991
|
|
2013
|
|
2,350
|
|
Southern Caribbean
|
Empress
|
1990
|
|
2008
|
|
1,600
|
|
Europe, Brazil
|
Sovereign
|
1988
|
|
2008
|
|
2,300
|
|
Europe, Brazil
|
CDF Croisières de France
|
|
|
|
|
|
|
|
Horizon
|
1990
|
|
2010
|
|
1,400
|
|
Europe, Southern Caribbean
|
Zenith
(4)
|
1992
|
|
2014
|
|
1,400
|
|
Europe, Brazil
|
TUI Cruises
|
|
|
|
|
|
|
|
Mein Schiff 4
|
2015
|
|
2015
|
|
2,500
|
|
Northern Europe, Canary Islands
|
Mein Schiff 3
|
2014
|
|
2014
|
|
2,500
|
|
Europe, Canary Islands
|
Mein Schiff 2
|
1997
|
|
2011
|
|
1,900
|
|
Europe, Middle East, Southern Caribbean
|
Mein Schiff 1
|
1996
|
|
2009
|
|
1,900
|
|
Europe, Canary Islands, Southern Caribbean
|
Total
|
|
112,450
|
|
|
(1)
|
The year a ship entered service refers to the year in which the ship commenced cruise revenue operations for the brand.
|
(2)
|
Celebrity Century
was built in 1995. In September 2014,
Celebrity Century
was sold to Skysea Holdings International Ltd. As part of the sale agreement, we agreed to charter the
Celebrity Century
from the buyer through April 2015 in order to fulfill existing passenger commitments. After the end of the charter period, the ship will be operated by the brand SkySea Cruises.
|
(3)
|
Does not include Pullmantur’s
Ocean Dream
as it was delivered to an unrelated third-party in April 2012 as part of a six-year bareboat charter agreement. The charter agreement provides a renewal option exercisable by the unrelated third-party for an additional four years.
|
(4)
|
Zenith
was redeployed from Pullmantur to CDF Croisières de France in January 2014.
|
Ship
|
Expected to
Enter Service
|
|
Approximate
Berths
|
|
Royal Caribbean International—
|
|
|
|
|
Quantum-class:
|
|
|
|
|
Anthem of the Seas
|
2nd Quarter 2015
|
|
4,150
|
|
Ovation of the Seas
|
2nd Quarter 2016
|
|
4,150
|
|
Oasis-class:
|
|
|
|
|
Oasis 3
|
2nd Quarter 2016
|
|
5,450
|
|
Oasis 4
|
2nd Quarter 2018
|
|
5,450
|
|
TUI Cruises (50% joint venture)—
|
|
|
|
|
Mein Schiff 4
|
2nd Quarter 2015
|
|
2,500
|
|
Mein Schiff 5
|
3rd Quarter 2016
|
|
2,500
|
|
Mein Schiff 6
|
2nd Quarter 2017
|
|
2,500
|
|
Total Berths
|
|
26,700
|
|
|
Year Ended December 31,
|
|||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|||||
Passengers Carried
|
5,149,952
|
|
|
4,884,763
|
|
|
4,852,079
|
|
|
4,850,010
|
|
|
4,585,920
|
|
Passenger Cruise Days
|
36,710,966
|
|
|
35,561,772
|
|
|
35,197,783
|
|
|
34,818,335
|
|
|
32,251,217
|
|
Available Passenger Cruise Days (APCD)
|
34,773,915
|
|
|
33,974,852
|
|
|
33,705,584
|
|
|
33,235,508
|
|
|
30,911,073
|
|
Occupancy
|
105.6
|
%
|
|
104.7
|
%
|
|
104.4
|
%
|
|
104.8
|
%
|
|
104.3
|
%
|
Name
|
Age
|
|
Position
|
Richard D. Fain
|
67
|
|
Chairman, Chief Executive Officer and Director
|
Adam M. Goldstein
|
55
|
|
President and Chief Operating Officer
|
Michael W. Bayley
|
56
|
|
President and Chief Executive Officer, Royal Caribbean International
|
Lisa Lutoff-Perlo
|
57
|
|
President and Chief Executive Officer, Celebrity Cruises
|
Lawrence Pimentel
|
63
|
|
President and Chief Executive Officer, Azamara Club Cruises
|
Jorge Vilches
|
41
|
|
President and Chief Executive Officer, Pullmantur
|
Jason T. Liberty
|
39
|
|
Chief Financial Officer
|
Harri U. Kulovaara
|
62
|
|
Executive Vice President, Maritime
|
Bradley H. Stein
|
59
|
|
Senior Vice President, General Counsel, Chief Compliance Officer
|
Henry L. Pujol
|
47
|
|
Senior Vice President, Chief Accounting Officer
|
|
NYSE
Common Stock
|
|
OSE
Common Stock
(1)
|
||||
|
High
|
|
Low
|
|
High
|
|
Low
|
2014
|
|
|
|
|
|
|
|
Fourth Quarter
|
$83.90
|
|
$52.32
|
|
638.00
|
|
347.00
|
Third Quarter
|
$69.31
|
|
$53.66
|
|
439.60
|
|
332.00
|
Second Quarter
|
$57.38
|
|
$49.65
|
|
349.00
|
|
300.00
|
First Quarter
|
$54.93
|
|
$45.95
|
|
332.60
|
|
284.20
|
2013
|
|
|
|
|
|
|
|
Fourth Quarter
|
$47.66
|
|
$35.97
|
|
292.60
|
|
216.10
|
Third Quarter
|
$40.71
|
|
$33.31
|
|
241.80
|
|
201.40
|
Second Quarter
|
$38.62
|
|
$31.35
|
|
224.90
|
|
178.00
|
First Quarter
|
$38.56
|
|
$31.72
|
|
213.50
|
|
184.10
|
(1)
|
Denominated in Norwegian kroner, as listed in the price history database available at www.oslobors.no
|
Period
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum number of shares that may yet be purchased under the plans or programs
|
November 1, 2014-November 30, 2014
(1)
|
3,500,000
|
|
$67.45
|
|
—
|
|
—
|
Total this quarter
|
3,500,000
|
|
$67.45
|
|
—
|
|
—
|
|
12/09
|
|
12/10
|
|
12/11
|
|
12/12
|
|
12/13
|
|
12/14
|
Royal Caribbean Cruises Ltd
.
|
100.00
|
|
185.92
|
|
98.79
|
|
137.68
|
|
195.65
|
|
346.17
|
S&P 500
|
100.00
|
|
115.06
|
|
117.49
|
|
136.30
|
|
180.44
|
|
205.14
|
Dow Jones US Travel & Leisure
|
100.00
|
|
141.39
|
|
150.84
|
|
170.95
|
|
248.70
|
|
289.40
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
8,073,855
|
|
|
$
|
7,959,894
|
|
|
$
|
7,688,024
|
|
|
$
|
7,537,263
|
|
|
$
|
6,752,504
|
|
Operating income
(1)(3)
|
$
|
941,859
|
|
|
$
|
798,148
|
|
|
$
|
403,110
|
|
|
$
|
931,628
|
|
|
$
|
802,633
|
|
Net income
(1)(2)(3)
|
$
|
764,146
|
|
|
$
|
473,692
|
|
|
$
|
18,287
|
|
|
$
|
607,421
|
|
|
$
|
515,653
|
|
Per Share Data—Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
3.45
|
|
|
$
|
2.16
|
|
|
$
|
0.08
|
|
|
$
|
2.80
|
|
|
$
|
2.40
|
|
Weighted-average shares
|
221,658
|
|
|
219,638
|
|
|
217,930
|
|
|
216,983
|
|
|
215,026
|
|
|||||
Per Share Data—Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
3.43
|
|
|
$
|
2.14
|
|
|
$
|
0.08
|
|
|
$
|
2.77
|
|
|
$
|
2.37
|
|
Weighted-average shares and potentially dilutive shares
|
223,044
|
|
|
220,941
|
|
|
219,457
|
|
|
219,229
|
|
|
217,711
|
|
|||||
Dividends declared per common share
|
$
|
1.10
|
|
|
$
|
0.74
|
|
|
$
|
0.44
|
|
|
$
|
0.20
|
|
|
$
|
—
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
20,713,190
|
|
|
$
|
20,072,947
|
|
|
$
|
19,827,930
|
|
|
$
|
19,804,405
|
|
|
$
|
19,653,829
|
|
Total debt, including capital leases
|
$
|
8,443,948
|
|
|
$
|
8,074,804
|
|
|
$
|
8,489,947
|
|
|
$
|
8,495,853
|
|
|
$
|
9,150,116
|
|
Common stock
|
$
|
2,331
|
|
|
$
|
2,308
|
|
|
$
|
2,291
|
|
|
$
|
2,276
|
|
|
$
|
2,262
|
|
Total shareholders' equity
|
$
|
8,284,359
|
|
|
$
|
8,808,265
|
|
|
$
|
8,308,749
|
|
|
$
|
8,407,823
|
|
|
$
|
7,900,752
|
|
(1)
|
Amounts for 2014 include restructuring charges of
$4.3 million
. Amounts for 2013 include restructuring charges of
$23.4 million
and an impairment charge of
$33.5 million
to write down the assets held for sale related to the Pullmantur non-core businesses and certain long-lived assets, consisting of aircraft owned and operated by Pullmantur Air, to their fair value (See Note 16.
Restructuring and Related Impairment Charges
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further information). Amounts for 2012 include an impairment charge of
$385.4 million
to write down Pullmantur's goodwill to its implied fair value and to write down trademarks and trade names and certain long-lived assets, consisting of aircraft owned and operated by Pullmantur Air, to their fair value. (See
Valuation of Goodwill, Indefinite-Lived Intangible Assets and Long-Lived Assets
under Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
for more information regarding the impairment of these assets).
|
(2)
|
Amounts for 2014 include a $33.5 million tax benefit related to the reversal of a deferred tax asset valuation allowance due to Spanish tax reform. (See Note 12.
Income Taxes
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further information). Amounts for 2012 include a
$33.7 million
charge to record a 100% valuation allowance related to our deferred tax assets for Pullmantur. In addition, in 2012, we reduced the deferred tax liability related to Pullmantur's trademarks and trade names and recorded a deferred tax benefit of
$5.2 million
. These adjustments resulted in a net deferred tax charge of
$28.5 million
recorded within
Other income (expense)
. (See
Valuation of Goodwill, Indefinite-Lived Intangible Assets and Long-Lived Assets
under Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
for more information regarding these transactions).
|
(3)
|
Amounts for 2014 include an aggregate increase to operating income and net income of
$53.2 million
due to the change in our voyage proration methodology (See Note 2.
Summary of Significant Accounting Policies
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further information).
|
•
|
a review of our critical accounting policies and of our financial presentation, including discussion of certain operational and financial metrics we utilize to assist us in managing our business;
|
•
|
a discussion of our results of operations for the year ended
December 31, 2014
compared to the same period in
2013
and the year ended
December 31, 2013
compared to the same period in
2012
;
|
•
|
a discussion of our business outlook, including our expectations for selected financial items for the
first
quarter and full year of
2015
; and
|
•
|
a discussion of our liquidity and capital resources, including our future capital and contractual commitments and potential funding sources.
|
•
|
Passenger ticket revenues
, which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships; and
|
•
|
Onboard and other revenues
, which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, cancellation fees, sales of vacation protection insurance and pre- and post-cruise tours. Additionally, revenue related to Pullmantur's travel agency network, land-based tours and air charter business to third parties are included in onboard and other revenues through the date of the sale of Pullmantur's non-core businesses further discussed below.
Onboard and other revenues
include revenues we receive from independent third-party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships.
|
•
|
Commissions, transportation and other expenses
, which consist of those costs directly associated with passenger ticket revenues, including travel agent commissions, air and other transportation expenses, port costs that vary with passenger head counts and related credit card fees;
|
•
|
Onboard and other expenses
, which consist of the direct costs associated with onboard and other revenues, including the costs of products sold onboard our ships, vacation protection insurance premiums, costs associated with pre- and post-cruise tours and related credit card fees as well as the minimal costs associated with concession revenues, as the costs are mostly incurred by third-party concessionaires;
|
•
|
Payroll and related expenses
, which consist of costs for shipboard personnel (costs associated with our shoreside personnel are included in marketing, selling and administrative expenses);
|
•
|
Food expenses
, which include food costs for both guests and crew;
|
•
|
Fuel expenses
, which include fuel and related delivery and storage costs, including the financial impact of fuel swap agreements; and
|
•
|
Other operating expenses
, which consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel related insurance and entertainment. Additionally, costs associated with Pullmantur's travel agency network, land-based tours and air charter business to third parties are included in other operating expenses through the date of the sale of Pullmantur's non-core businesses further discussed below.
|
•
|
Total revenues increased
1.4%
to
$8.1 billion
from
$8.0 billion
in
2013
primarily due to an increase in overall capacity and ticket prices.
|
•
|
Cruise operating expenses of
$5.3 billion
for
2014
remained consistent with
2013
.
|
•
|
Interest expense, net of interest capitalized of
$258.3 million
decreased
22.3%
, or $74.1 million, for the year ended December 31,
2014
as compared to December 31,
2013
. The decrease was primarily due to lower interest rates and, to a lesser extent, a lower average debt level. See Note 7.
Long-Term Debt
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further information.
|
•
|
During 2014, we took delivery of
Quantum of the Seas
. To finance the purchase, we borrowed
$791.1 million
under a previously committed 12-year unsecured term loan which is 95% guaranteed by Hermes. Refer to Note 7.
Long-Term Debt
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further information.
|
•
|
In September 2014, we sold
Celebrity Century
to a subsidiary of Skysea Holding for
$220.0 million
in cash. The sale resulted in a loss of
$17.4 million
that was recognized within
Other operating
expenses in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2014. Subsequently, we acquired a 35% equity stake in Skysea Holding in November 2014 to operate a new cruise brand known as SkySea Cruises. Refer to Note 5.
Property and Equipment
and Note 6.
Other Assets
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further information.
|
•
|
As of September 30, 2014, we changed our voyage proration methodology and recognized passenger ticket revenues, revenues from onboard and other goods and services and all associated cruise operating costs for all of our uncompleted voyages, including voyages of ten days or less, on a pro-rata basis. The effect of this change was an increase to net income of
$53.2 million
for the year ended December 31, 2014. Refer to Note 2.
Summary of Significant Accounting Policies
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further information.
|
•
|
During the fourth quarter of 2014, Spain adopted tax reform legislation that, among other things, amended the net operating loss carryforward rules. As a result, we reversed a portion of the deferred tax asset valuation allowance recorded in 2012 which resulted in a deferred tax benefit of
$33.5 million
. Refer to Note 12.
Income Taxes
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further discussion on the transaction.
|
•
|
On March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. Refer to Note 16.
Restructuring and Related Charges
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further discussion on the sales transaction.
|
•
|
In December 2014, we terminated the leasing of
Brilliance of the Seas
under the 25-year operating lease originally entered into in July 2002, denominated in British pound sterling. As part of the agreement, we purchased the
Brilliance of the Seas
for a net settlement purchase price of approximately
£175.4 million
or
$275.4 million
. Refer to Note 5.
Property and Equipment
to our consolidated financial statements under Item 8.
Financial Statements and Supplementary Data
for further discussion on the transaction.
|
•
|
During 2014, we entered into an agreement with STX France S.A. to build the fourth Oasis-class ship for Royal Caribbean International. Refer to Note 15.
Commitments and Contingencies
to our consolidated financial statements for further information.
|
•
|
During the fourth quarter of 2014, we repurchased from A. Wilhelmsen AS, our largest shareholder,
3.5 million
shares of our common stock. Refer to Note 8.
Shareholders' Equity
to our consolidated financial statements for further information.
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Passenger ticket revenues
|
73.0
|
%
|
|
71.9
|
%
|
|
72.8
|
%
|
Onboard and other revenues
|
27.0
|
|
|
28.1
|
|
|
27.2
|
|
Total revenues
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Cruise operating expenses:
|
|
|
|
|
|
|||
Commissions, transportation and other
|
17.0
|
|
|
16.5
|
|
|
16.8
|
|
Onboard and other
|
7.2
|
|
|
7.1
|
|
|
6.9
|
|
Payroll and related
|
10.5
|
|
|
10.6
|
|
|
10.8
|
|
Food
|
5.9
|
|
|
5.9
|
|
|
5.8
|
|
Fuel
|
11.7
|
|
|
11.6
|
|
|
11.8
|
|
Other operating
|
13.3
|
|
|
14.9
|
|
|
15.0
|
|
Total cruise operating expenses
|
65.7
|
|
|
66.7
|
|
|
67.1
|
|
Marketing, selling and administrative expenses
|
13.0
|
|
|
13.1
|
|
|
13.2
|
|
Depreciation and amortization expenses
|
9.6
|
|
|
9.5
|
|
|
9.5
|
|
Impairment of Pullmantur related assets
|
—
|
|
|
—
|
|
|
5.0
|
|
Restructuring and related impairment charges
|
0.1
|
|
|
0.7
|
|
|
—
|
|
Operating income
|
11.7
|
|
|
10.0
|
|
|
5.2
|
|
Other expense
|
(2.2
|
)
|
|
(4.1
|
)
|
|
(5.0
|
)
|
Net income
|
9.5
|
%
|
|
6.0
|
%
|
|
0.2
|
%
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Passengers Carried
|
5,149,952
|
|
|
4,884,763
|
|
|
4,852,079
|
|
Passenger Cruise Days
|
36,710,966
|
|
|
35,561,772
|
|
|
35,197,783
|
|
APCD
|
34,773,915
|
|
|
33,974,852
|
|
|
33,705,584
|
|
Occupancy
|
105.6
|
%
|
|
104.7
|
%
|
|
104.4
|
%
|
|
Year Ended December 31,
|
||||||||||||||
|
2014
|
|
2014
On a Constant Currency basis |
|
2013
|
|
2012
|
||||||||
Passenger ticket revenues
|
$
|
5,893,847
|
|
|
$
|
5,956,386
|
|
|
$
|
5,722,718
|
|
|
$
|
5,594,595
|
|
Onboard and other revenues
|
2,180,008
|
|
|
2,184,683
|
|
|
2,237,176
|
|
|
2,093,429
|
|
||||
Total revenues
|
8,073,855
|
|
|
8,141,069
|
|
|
7,959,894
|
|
|
7,688,024
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Commissions, transportation and other
|
1,372,785
|
|
|
1,383,339
|
|
|
1,314,595
|
|
|
1,289,255
|
|
||||
Onboard and other
|
582,750
|
|
|
585,631
|
|
|
568,615
|
|
|
529,453
|
|
||||
Net revenues including divested businesses
|
6,118,320
|
|
|
6,172,099
|
|
|
6,076,684
|
|
|
5,869,316
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Net revenues related to divested businesses prior to sales transaction
|
35,656
|
|
|
34,403
|
|
|
218,350
|
|
|
189,527
|
|
||||
Net Revenues
|
$
|
6,082,664
|
|
|
$
|
6,137,696
|
|
|
$
|
5,858,334
|
|
|
$
|
5,679,789
|
|
|
|
|
|
|
|
|
|
||||||||
APCD
|
34,773,915
|
|
|
34,773,915
|
|
|
33,974,852
|
|
|
33,705,584
|
|
||||
Gross Yields
|
$
|
232.18
|
|
|
$
|
234.11
|
|
|
$
|
234.29
|
|
|
$
|
228.09
|
|
Net Yields
|
$
|
174.92
|
|
|
$
|
176.50
|
|
|
$
|
172.43
|
|
|
$
|
168.51
|
|
|
Year Ended December 31,
|
||||||||||||||
|
2014
|
|
2014 On a
Constant Currency basis |
|
2013
|
|
2012
|
||||||||
Total cruise operating expenses
|
$
|
5,306,281
|
|
|
$
|
5,329,013
|
|
|
$
|
5,305,270
|
|
|
$
|
5,157,434
|
|
Marketing, selling and administrative expenses
|
1,048,952
|
|
|
1,048,921
|
|
|
1,044,819
|
|
|
1,011,543
|
|
||||
Gross Cruise Costs
|
6,355,233
|
|
|
6,377,934
|
|
|
6,350,089
|
|
|
6,168,977
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Commissions, transportation and other
|
1,372,785
|
|
|
1,383,339
|
|
|
1,314,595
|
|
|
1,289,255
|
|
||||
Onboard and other
|
582,750
|
|
|
585,631
|
|
|
568,615
|
|
|
529,453
|
|
||||
Net Cruise Costs including divested businesses
|
4,399,698
|
|
|
4,408,964
|
|
|
4,466,879
|
|
|
4,350,269
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Net Cruise Costs related to divested businesses prior to sales transaction
|
47,854
|
|
|
46,158
|
|
|
224,864
|
|
|
199,596
|
|
||||
Other initiative costs included within cruise operating expenses and marketing, selling and administrative expenses
|
18,972
|
|
|
19,354
|
|
|
—
|
|
|
—
|
|
||||
Loss on sale of ship included within other operating expenses
|
17,401
|
|
|
17,401
|
|
|
—
|
|
|
—
|
|
||||
Net Cruise Costs
|
4,315,471
|
|
|
4,326,051
|
|
|
4,242,015
|
|
|
4,150,673
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Fuel
|
947,391
|
|
|
950,945
|
|
|
924,414
|
|
|
909,691
|
|
||||
Net Cruise Costs Excluding Fuel
|
$
|
3,368,080
|
|
|
$
|
3,375,106
|
|
|
$
|
3,317,601
|
|
|
$
|
3,240,982
|
|
|
|
|
|
|
|
|
|
||||||||
APCD
|
34,773,915
|
|
|
34,773,915
|
|
|
33,974,852
|
|
|
33,705,584
|
|
||||
Gross Cruise Costs per APCD
|
$
|
182.76
|
|
|
$
|
183.41
|
|
|
$
|
186.91
|
|
|
$
|
183.03
|
|
Net Cruise Costs per APCD
|
$
|
124.10
|
|
|
$
|
124.41
|
|
|
$
|
124.86
|
|
|
$
|
123.14
|
|
Net Cruise Cost Excluding Fuel per APCD
|
$
|
96.86
|
|
|
$
|
97.06
|
|
|
$
|
97.65
|
|
|
$
|
96.16
|
|
|
As of December 31,
|
||||||
|
2014
|
|
2013
|
||||
Long-term debt, net of current portion
|
$
|
7,644,318
|
|
|
$
|
6,511,426
|
|
Current portion of long-term debt
|
799,630
|
|
|
1,563,378
|
|
||
Total debt
|
8,443,948
|
|
|
8,074,804
|
|
||
Less: Cash and cash equivalents
|
189,241
|
|
|
204,687
|
|
||
Net Debt
|
$
|
8,254,707
|
|
|
$
|
7,870,117
|
|
Total shareholders' equity
|
$
|
8,284,359
|
|
|
$
|
8,808,265
|
|
Total debt
|
8,443,948
|
|
|
8,074,804
|
|
||
Total debt and shareholders' equity
|
$
|
16,728,307
|
|
|
$
|
16,883,069
|
|
Debt-to-Capital
|
50.5
|
%
|
|
47.8
|
%
|
||
Net Debt
|
$
|
8,254,707
|
|
|
$
|
7,870,117
|
|
Net Debt and shareholders' equity
|
$
|
16,539,066
|
|
|
$
|
16,678,382
|
|
Net Debt-to-Capital
|
49.9
|
%
|
|
47.2
|
%
|
|
As Reported
|
|
Constant Currency
|
Net Yields
|
(0.5%) to 1.5%
|
|
2.5% to 4.5%
|
Net Cruise Costs per APCD
|
(4.5%) to (5.5%)
|
|
(3.0%) to (4.0%)
|
Net Cruise Costs per APCD, excluding Fuel
|
(1.5%) to (0.5%)
|
|
1% or better
|
Capacity Increase
|
5.5%
|
|
|
Depreciation and Amortization
|
$840 to $850 million
|
|
|
Interest Expense, net
|
$260 to $270 million
|
|
|
Fuel Consumption (metric tons)
|
1,400,000
|
|
|
Fuel Expenses
|
$806 million
|
|
|
Percent Hedged (fwd consumption)
|
52%
|
|
|
Impact of 10% change in fuel prices
|
$25 million
|
|
|
Adjusted Earnings per Share — Diluted
|
$4.65 to $4.85
|
|
|
|
As Reported
|
|
Constant Currency
|
Net Yields
|
Approx. (5.0%)
|
|
(1.5%) to (2.0%)
|
Net Cruise Costs per APCD
|
(3.5%) to (4.0%)
|
|
Approx. (2.0%)
|
Net Cruise Costs per APCD, excluding Fuel
|
Flat to up 1%
|
|
2.0% to 3.0%
|
Capacity Increase
|
3.8%
|
|
|
Depreciation and Amortization
|
$195 to $205 million
|
|
|
Interest Expense, net
|
$60 to $70 million
|
|
|
Fuel Consumption (metric tons)
|
353,000
|
|
|
Fuel Expenses
|
$207 million
|
|
|
Percent Hedged (fwd consumption)
|
54%
|
|
|
Impact of 10% change in fuel prices
|
$7 million
|
|
|
Adjusted Earnings per Share
—
Diluted
|
$0.10 to $0.15
|
|
|
•
|
a
2.4%
increase in capacity, which increased
Passenger ticket revenues
by
$134.6 million
. The increase in capacity was primarily due to the addition of
Quantum of the Seas
which entered service in October 2014 and the transfer of
Monarch of the Seas
to Pullmantur in April 2013 reducing capacity in 2013 due to the two-month lag further discussed in Note 1.
General
to our consolidated financial statements.
Passenger ticket revenues
also includes the impact of the change in our voyage proration methodology; and
|
•
|
an increase in ticket prices driven by greater demand for close-in European and Asian sailings, which was partially offset by a decrease in ticket prices for Caribbean sailings, all of which contributed to a
$99.1 million
increase in
Passenger ticket revenues.
|
•
|
a
$45.5 million
increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our ship upgrade programs and other revenue enhancing initiatives, including various beverage initiatives, the addition and promotion of specialty restaurants, the increased revenue associated with internet and other telecommunication services and other onboard activities;
|
•
|
a
$46.0 million
increase attributable to the
2.4%
increase in capacity noted above, which includes the impact of the change in our voyage proration; and
|
•
|
a
$28.7 million
increase in other revenue of which the largest driver is attributable to an out-of-period adjustment of approximately
$13.9 million
that was recorded in 2013 to correct the calculation of our liability for our credit card rewards program.
|
•
|
a
$119.4 million
increase attributable to the
2.4%
increase in capacity noted above, which includes the impact of the change in our voyage proration methodology;
|
•
|
a
$37.8 million
increase in head taxes mainly attributable to itinerary changes;
|
•
|
the loss recognized on the sale of
Celebrity Century
of
$17.4 million
; and
|
•
|
a
$12.5 million
increase primarily attributable to vessel maintenance due to the timing of scheduled drydocks.
|
•
|
a
$138.0 million
decrease in expenses related to Pullmantur's non-core businesses that were sold in 2014 as noted above;
|
•
|
a
$16.3 million
decrease in commissions expense attributable to shifts in our distribution channels; and
|
•
|
a
$15.0 million
decrease in shore excursion expense attributable to itinerary changes and lower costs incurred.
|
•
|
an increase in ticket prices for European sailings and certain deployment initiatives, including but not limited to increased deployment in Australia and Asia
,
all of which contributed to a $117.6 million increase in
Passenger ticket revenues
; and
|
•
|
a 0.8% increase in capacity, which increased
Passenger ticket revenues
by $44.6 million. The increase in capacity was primarily due to the addition of
Celebrity Reflection
which entered service in October 2012. This increase was partially offset by the transfer of
Ocean Dream
to an unrelated third-party in April 2012 as part of a six year bareboat charter agreement and the transfer of
Monarch of the Seas
to Pullmantur in April 2013 reducing capacity due to the two-month lag further discussed in Note 1.
General
.
|
•
|
a $101.7 million increase in onboard revenue primarily due to higher spending on a per passenger basis due to revenue enhancing initiatives as a result of our ship upgrade programs and an increase in shore excursion revenues attributable to certain deployment initiatives particularly in Australia.
Onboard and other revenues
included concession revenues of $316.3 million in 2013 and $288.6 million in 2012;
|
•
|
a $28.3 million increase in revenues related to Pullmantur’s travel agency network and air charter business due to the addition of new tour packages; and
|
•
|
a $14.8 million increase attributable to the 0.8% increase in capacity noted above.
|
•
|
a $39.6 million increase attributable to the 0.8% increase in capacity noted above;
|
•
|
a $22.6 million increase in crew expenses related to higher medical expenses and, to a lesser extent, an increase in crew movement related to deployment changes;
|
•
|
a $21.1 million increase in expenses related to Pullmantur’s travel agency network and air charter business noted above;
|
•
|
a $16.4 million increase in food expenses due to higher costs on a per passenger basis related to our new culinary initiatives and itinerary changes;
|
•
|
a $12.1 million increase in expenses attributable to the impact of the unscheduled drydocks for
Celebrity Millennium
and
Grandeur of the Seas
and the 2012 gain from the sale of
Oceanic
which did not recur in 2013; and
|
•
|
an $8.6 million increase in shore excursion expenses attributable to itinerary changes noted above.
|
•
|
a $29.8 decrease in deferred income tax expense as a result of a 100% valuation allowance recorded in connection with Pullmantur's deferred tax assets in 2012 partially offset by a reduction in Pullmantur's deferred tax liability and resulting tax benefit related to a 2013 impairment of Pullmantur's long-lived assets and a 2012 impairment charge of Pullmantur's trademarks and trade names; and
|
•
|
income of $32.0 million from our equity method investments in 2013 as compared to income of $23.8 million in 2012.
|
|
Payments due by period
|
||||||||||||||||||
|
|
|
Less than
|
|
1-3
|
|
3-5
|
|
More than
|
||||||||||
|
Total
|
|
1 year
|
|
years
|
|
years
|
|
5 years
|
||||||||||
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating lease obligations
(1)
|
$
|
189,519
|
|
|
$
|
18,154
|
|
|
$
|
28,750
|
|
|
$
|
17,618
|
|
|
$
|
124,997
|
|
Interest on long-term debt
(2)
|
1,150,946
|
|
|
245,162
|
|
|
344,430
|
|
|
214,598
|
|
|
346,756
|
|
|||||
Other
(3)
|
843,262
|
|
|
214,817
|
|
|
303,590
|
|
|
197,012
|
|
|
127,843
|
|
|||||
Investing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
|||||||||
Ship purchase obligations
(4)
|
3,673,286
|
|
|
946,752
|
|
|
1,770,213
|
|
|
956,321
|
|
|
—
|
|
|||||
Other
(5)
|
58,811
|
|
|
58,811
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Financing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
|||||||||
Long-term debt obligations
(6)
|
8,391,302
|
|
|
790,920
|
|
|
2,765,464
|
|
|
2,307,677
|
|
|
2,527,241
|
|
|||||
Capital lease obligations
(7)
|
52,646
|
|
|
8,710
|
|
|
11,525
|
|
|
6,603
|
|
|
25,808
|
|
|||||
Other
(8)
|
88,610
|
|
|
25,652
|
|
|
37,375
|
|
|
19,099
|
|
|
6,484
|
|
|||||
Total
|
$
|
14,448,382
|
|
|
$
|
2,308,978
|
|
|
$
|
5,261,347
|
|
|
$
|
3,718,928
|
|
|
$
|
3,159,129
|
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
ROYAL CARIBBEAN CRUISES LTD.
(Registrant)
|
|
By:
|
/s/ JASON T. LIBERTY
|
|
Jason T. Liberty
Chief Financial Officer
(Principal Financial Officer and duly authorized signatory)
|
/s/ RICHARD D. FAIN
|
Richard D. Fain
Director, Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
/s/ JASON T. LIBERTY
|
Jason T. Liberty
Chief Financial Officer
(Principal Financial Officer)
|
|
/s/ HENRY L. PUJOL
|
Henry L. Pujol
Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)
|
|
*
|
Bernard W. Aronson
Director
|
|
*
|
John F. Brock
Director |
|
*
|
William L. Kimsey
Director
|
|
*
|
Ann S. Moore
Director
|
|
*
|
Eyal M. Ofer
Director
|
|
*
|
Thomas J. Pritzker
Director
|
|
*
|
William K. Reilly
Director
|
|
*
|
Bernt Reitan
Director
|
|
*
|
Vagn O. Sørensen
Director
|
|
*
|
Arne Alexander Wilhelmsen
Director
|
*By:
|
/s/ JASON T. LIBERTY
|
|
Jason T. Liberty,
as Attorney-in-Fact
|
Exhibit
|
Description
|
3.1
|
— Restated Articles of Incorporation of the Company, as amended (composite) (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-3, File No. 333-158161, filed with the Securities and Exchange Commission (the ‘‘Commission’’)) on March 23, 2009.
|
|
|
3.2
|
— Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 11, 2013).
|
|
|
4.1
|
— Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., successor to NationsBank of Georgia, National Association, as Trustee (incorporated by reference to Exhibit 2.4 to the Company’s 1994 Annual Report on Form 20-F, File No. 1-11884).
|
|
|
4.2
|
— Sixth Supplemental Indenture dated as of October 14, 1997 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 2.11 to the Company’s 1997 Annual Report on Form 20-F, File No. 1-11884).
|
|
|
4.3
|
— Eighth Supplemental Indenture dated as of March 16, 1998 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 2.13 to the Company’s 1997 Annual Report on Form 20-F, File No. 1-11884).
|
|
|
4.4
|
— Fifteenth Supplemental Indenture dated as of June 12, 2006 to Indenture dated as of July 15, 1994 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.14 to the Company’s 2006 Annual Report on Form 10-K).
|
|
|
4.5
|
— Form of Indenture dated as of July 31, 2006 between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (No. 333-136186) filed with the Commission on July 31, 2006).
|
|
|
4.6
|
— First Supplemental Indenture dated as of July 6, 2009 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 2, 2009).
|
|
|
4.7
|
— Second Supplemental Indenture dated as of November 7, 2012 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 7, 2012).
|
|
|
10.1
|
— Amended and Restated Registration Rights Agreement dated as of July 30, 1997 among the Company, A. Wilhelmsen AS., Cruise Associates, Monument Capital Corporation, Archinav Holdings, Ltd. and Overseas Cruiseship, Inc. (incorporated by reference to Exhibit 2.20 to the Company’s 1997 Annual Report on Form 20-F, File No. 1-11884).
|
|
|
10.2
|
— Assignment and Amendment to the US$875,000,000 Amended and Restated Credit Agreement dated as of July 15, 2011 among the Company, the various financial institutions party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 19, 2011).
|
|
|
10.3
|
— Assignment and Amendment to the Credit Agreement, dated as of August 23, 2013, among the Company, the various financial institutions as are or shall become parties thereto and Nordea Bank Finland plc, New York Branch, as administrative agent for the lender parties (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 26, 2013).
|
|
|
10.4
|
— Assignment and Amendment Deed to Hull No. 691 Credit Agreement, dated as of February 17, 2012, among Celebrity Solstice V Inc., the Company and KfW IPEX-BANK GMBH, in its capacity as agent for Hermes, administrative agent and lender (incorporated by reference to Exhibit 10.6 to the Company’s 2011 Annual Report on Form 10-K).
|
|
|
10.5
|
— Amendment No. 1 to Amended and Restated Credit Agreement dated March 7, 2014 among the Company, the various financial institutions as are parties to the Credit Agreement and BNP PARIBAS FORTIS S.A./N.V., as administrative agent for the lenders (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014).
|
|
|
10.6
|
— Amendment No. 1 to Amended and Restated Credit Agreement dated March 7, 2014 among the Company, the various financial institutions as are parties to the Credit Agreement and SKANDINAVISKA ENSKILDA BANKEN AB, as administrative agent for the lenders (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014).
|
Exhibit
|
Description
|
|
|
10.7
|
— Hull No. S-697 Credit Agreement, dated as of June 8, 2011, between Company, the Lenders from time to time party thereto and KfW-IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger, as amended on February 17, 2012 and May 10, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the Quarterly Period ended June 30, 2012).
|
|
|
10.8
|
— Amendment Agreement in connection with the Credit Agreement in respect of Hull No. S-698, dated as of February 17, 2012, between the Company, the Lenders from time to time party thereto and KfW-IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger (incorporated by reference to Exhibit 10.10 to the Company’s 2011 Annual Report on Form 10-K).
|
|
|
10.9
|
— Amendment and Restatement Agreement dated as of April 15, 2014 in respect of a Facility Agreement dated as of July 9, 2013 between the Company, the Lenders from time to time party thereto, Société Générale, as Facility Agent and Mandated Lead Arranger, BNP Paribas, as Documentation Bank and Mandated Lead Arranger, and HSBC France, as Mandated Lead Arranger (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 21, 2014).
|
|
|
10.10
|
— Hull No. S-699 Credit Agreement, dated as of November 27, 2013, between the Company, as the Borrower, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 3, 2013).
|
|
|
10.11
|
— Facility Agreement dated as of April 15, 2014 between the Company, the Lenders from time to time party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Facility Agent, Documentation Bank and Mandated Lead Arranger, Banco Santander, S.A., as COFACE Agent and Mandated Lead Arranger, and KfW IPEX-BANK GmbH, as Mandated Lead Arranger (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 21, 2014)
|
|
|
10.12
|
— Novation Agreement, dated as of January 30, 2015, between Frosaitomi Finance Ltd., Royal Caribbean Cruises Ltd., Citibank International Limited, Citicorp Trustee Company Limited, Citibank N.A., London Branch and the banks and financial institutions as a lender parties thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 5, 2015)
|
|
|
10.13
|
— Office Building Lease Agreement dated July 25, 1989 between Miami-Dade County and the Company, as amended (incorporated by reference to Exhibits 10.116 and 10.117 to the Company’s Registration Statement on Form F-1, File No. 33-46157, filed with the Commission and Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 5, 2011).
|
|
|
10.14
|
— Office Building Lease Agreement dated January 18, 1994 between Miami-Dade County and the Company (incorporated by reference to Exhibit 2.13 to the Company’s 1993 Annual Report on Form 20-F, File No. 1-11884 and Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 5, 2011).
|
|
|
10.15
|
— Multi-Tenant Office Lease Agreement dated May 3, 2000, as amended through January 26, 2010, between the Company and RT Miramar II, LLC (incorporated by reference to Exhibit 4.6 to the Company’s 2003 Annual Report on Form 20-F and Exhibit 10.17 to the Company’s 2009 Annual Report on Form 10-K).
|
|
|
10.16
|
— Lease Agreement dated January 24, 2005, as amended through March 20, 2006, between the Company and RC Springfield 2007, LLC (formerly Workstage-Oregon, LLC) (incorporated by reference to Exhibit 10.7 to the Company’s 2004 Annual Report on Form 10-K, Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005 and Exhibit 10.12 to the Company’s 2007 Annual Report on Form 10-K).
|
|
|
10.17
|
— Royal Caribbean Cruises Ltd. 2000 Stock Award Plan, as amended and restated through September 18, 2006 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 8, 2005 and Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 22, 2006).
|
|
|
10.18
|
— Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan, as amended to date (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014).
|
|
|
10.19
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Stock Option Award Agreement—Incentive Options (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008).
|
|
|
10.20
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Stock Option Award Agreement—Nonqualified shares (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008).
|
|
|
Exhibit
|
Description
|
10.21
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Restricted Stock Unit Agreement for grants made in 2011, 2012, 2013 and December 2014 (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008).
|
|
|
10.22
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Restricted Stock Unit Agreement for grants made in February 2014 and 2015 (incorporated by reference to Exhibit 10.23 to the Company’s 2013 Annual Report on Form 10-K).
|
|
|
10.23
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Restricted Stock Unit Agreement—Director Grants (incorporated by reference to Exhibit 10.31 to the Company’s 2010 Annual Report on Form 10-K).
|
|
|
10.24
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Performance Share Agreement for grants made in 2012 and 2013 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on February 22, 2012).
|
|
|
10.25
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Performance Share Agreement for grants made in February 2014 (incorporated by reference to Exhibit 10.23 to the Company’s 2013 Annual Report on Form 10-K).
|
|
|
10.26
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Performance Share Agreement for grants made in December 2014.*
|
|
|
10.27
|
— Form of Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan Performance Share Agreement for grants made in February 2015.*
|
|
|
10.28
|
— Employment Agreement dated December 31, 2012 between the Company and Richard D. Fain (incorporated by reference to Exhibit 10.22 to the Company’s 2012 Annual Report on Form 10-K).
|
|
|
10.29
|
— Employment Agreement dated December 31, 2012 between the Company and Adam M. Goldstein (incorporated by reference to Exhibit 10.23 to the Company’s 2012 Annual Report on Form 10-K).
|
|
|
10.30
|
— Employment Agreement dated December 31, 2012 between Celebrity Cruises Inc. and Michael W. Bayley (incorporated by reference to Exhibit 10.24 to the Company’s 2012 Annual Report on Form 10-K).
|
|
|
10.31
|
— Employment Agreement dated December 31, 2012 between the Company and Harri U. Kulovaara (incorporated by reference to Exhibit 10.26 to the Company’s 2012 Annual Report on Form 10-K).
|
|
|
10.32
|
— Employment Agreement dated May 20, 2013 between the Company and Jason T. Liberty (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013).
|
|
|
10.33
|
— Form of First Amendment to Employment Agreement dated as of February 6, 2015 (entered into between the Company and each of Messrs. Fain, Goldstein, Bayley, Kulovaara and Liberty).*
|
|
|
10.34
|
— Royal Caribbean Cruises Ltd. Executive Short-Term Bonus Plan, as amended to date (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014).
|
|
|
10.35
|
— Royal Caribbean Cruises Ltd. et. al. Non Qualified Deferred Compensation Plan, formerly Royal Caribbean Cruises Ltd. et. al. Non Qualified 401(k) Plan, as amended through November 11, 2008 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on December 8, 2005, Exhibit 10.29 to the Company’s 2006 Annual Report on Form 10-K, Exhibit 10.28 to the Company’s 2007 Annual Report on Form 10-K, Exhibit 10.29 to the Company’s 2007 Annual Report on Form 10-K and Exhibit 10.36 to the Company’s 2008 Annual Report on Form 10-K).
|
|
|
10.36
|
— Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan as amended through November 11, 2008 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on December 8, 2005, Exhibit 10.31 to the Company’s 2006 Annual Report on Form 10-K, Exhibit 10.31 to the Company’s 2007 Annual Report on Form 10-K, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008 and Exhibit 10.38 to the Company’s 2008 Annual Report on Form 10-K).
|
|
|
10.37
|
— Summary of Royal Caribbean Cruises Ltd. Board of Directors Compensation.*
|
|
|
10.38
|
— Cruise Policy for Members of the Board of Directors of the Company (incorporated by reference to Exhibit 10.35 to the Company’s 2013 Annual Report on Form 10-K).
|
Exhibit
|
Description
|
|
|
12.1
|
— Statement regarding computation of fixed charge coverage ratio*
|
|
|
21.1
|
— List of Subsidiaries*
|
|
|
23.1
|
— Consent of PricewaterhouseCoopers LLP, an independent registered certified public accounting firm*
|
|
|
23.2
|
— Consent of Drinker Biddle & Reath LLP*
|
|
|
24.1
|
— Power of Attorney*
|
|
|
31.1
|
— Certification of Richard D. Fain required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*
|
|
|
31.2
|
— Certification of Jason T. Liberty required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*
|
|
|
32.1
|
— Certification of Richard D. Fain and Jason T. Liberty pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code**
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
101
|
—The following financial statements from Royal Caribbean Cruises Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on February 23, 2015, formatted in XBRL, as follows:
|
|
|
(i)
|
the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2014, 2013 and 2012;
|
|
(ii)
|
the Consolidated Balance Sheets at December 31, 2014 and 2013;
|
|
(iii)
|
the Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012;
|
|
(iv)
|
the Consolidated Statements of Shareholders' Equity for the years ended December 31, 2014, 2013 and 2012; and
|
|
(v)
|
the Notes to the Consolidated Financial Statements, tagged in summary and detail.
|
|
Page
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Passenger ticket revenues
|
$
|
5,893,847
|
|
|
$
|
5,722,718
|
|
|
$
|
5,594,595
|
|
Onboard and other revenues
|
2,180,008
|
|
|
2,237,176
|
|
|
2,093,429
|
|
|||
Total revenues
|
8,073,855
|
|
|
7,959,894
|
|
|
7,688,024
|
|
|||
Cruise operating expenses:
|
|
|
|
|
|
||||||
Commissions, transportation and other
|
1,372,785
|
|
|
1,314,595
|
|
|
1,289,255
|
|
|||
Onboard and other
|
582,750
|
|
|
568,615
|
|
|
529,453
|
|
|||
Payroll and related
|
847,641
|
|
|
841,737
|
|
|
828,198
|
|
|||
Food
|
478,130
|
|
|
469,653
|
|
|
449,649
|
|
|||
Fuel
|
947,391
|
|
|
924,414
|
|
|
909,691
|
|
|||
Other operating
|
1,077,584
|
|
|
1,186,256
|
|
|
1,151,188
|
|
|||
Total cruise operating expenses
|
5,306,281
|
|
|
5,305,270
|
|
|
5,157,434
|
|
|||
Marketing, selling and administrative expenses
|
1,048,952
|
|
|
1,044,819
|
|
|
1,011,543
|
|
|||
Depreciation and amortization expenses
|
772,445
|
|
|
754,711
|
|
|
730,493
|
|
|||
Impairment of Pullmantur related assets
|
—
|
|
|
—
|
|
|
385,444
|
|
|||
Restructuring and related impairment charges
|
4,318
|
|
|
56,946
|
|
|
—
|
|
|||
|
7,131,996
|
|
|
7,161,746
|
|
|
7,284,914
|
|
|||
Operating Income
|
941,859
|
|
|
798,148
|
|
|
403,110
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
10,344
|
|
|
13,898
|
|
|
21,331
|
|
|||
Interest expense, net of interest capitalized
|
(258,299
|
)
|
|
(332,422
|
)
|
|
(355,785
|
)
|
|||
Extinguishment of unsecured senior notes
|
—
|
|
|
(4,206
|
)
|
|
(7,501
|
)
|
|||
Other income (expense) (including $33.5 million deferred tax benefit related to the reversal of a valuation allowance in 2014 and ($28.5) million net deferred tax expense related to impairments in 2012)
|
70,242
|
|
|
(1,726
|
)
|
|
(42,868
|
)
|
|||
|
(177,713
|
)
|
|
(324,456
|
)
|
|
(384,823
|
)
|
|||
Net Income
|
$
|
764,146
|
|
|
$
|
473,692
|
|
|
$
|
18,287
|
|
Basic Earnings per Share:
|
|
|
|
|
|
||||||
Net income
|
$
|
3.45
|
|
|
$
|
2.16
|
|
|
$
|
0.08
|
|
Diluted Earnings per Share:
|
|
|
|
|
|
||||||
Net income
|
$
|
3.43
|
|
|
$
|
2.14
|
|
|
$
|
0.08
|
|
Comprehensive (Loss) Income
|
|
|
|
|
|
||||||
Net Income
|
$
|
764,146
|
|
|
$
|
473,692
|
|
|
$
|
18,287
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(26,102
|
)
|
|
1,529
|
|
|
(2,764
|
)
|
|||
Change in defined benefit plans
|
(7,213
|
)
|
|
10,829
|
|
|
(4,567
|
)
|
|||
(Loss) gain on cash flow derivative hedges
|
(869,350
|
)
|
|
127,829
|
|
|
(51,247
|
)
|
|||
Total other comprehensive (loss) income
|
(902,665
|
)
|
|
140,187
|
|
|
(58,578
|
)
|
|||
Comprehensive (Loss) Income
|
$
|
(138,519
|
)
|
|
$
|
613,879
|
|
|
$
|
(40,291
|
)
|
|
As of December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(in thousands, except share data)
|
||||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
189,241
|
|
|
$
|
204,687
|
|
Trade and other receivables, net
|
261,392
|
|
|
259,746
|
|
||
Inventories
|
123,490
|
|
|
151,244
|
|
||
Prepaid expenses and other assets
|
226,960
|
|
|
252,852
|
|
||
Derivative financial instruments
|
—
|
|
|
87,845
|
|
||
Total current assets
|
801,083
|
|
|
956,374
|
|
||
Property and equipment, net
|
18,235,568
|
|
|
17,517,752
|
|
||
Goodwill
|
420,542
|
|
|
439,231
|
|
||
Other assets
|
1,255,997
|
|
|
1,159,590
|
|
||
|
$
|
20,713,190
|
|
|
$
|
20,072,947
|
|
Liabilities and Shareholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
799,630
|
|
|
$
|
1,563,378
|
|
Accounts payable
|
331,505
|
|
|
372,226
|
|
||
Accrued interest
|
49,074
|
|
|
103,025
|
|
||
Accrued expenses and other liabilities
|
635,138
|
|
|
539,414
|
|
||
Derivative financial instruments
|
266,986
|
|
|
24,288
|
|
||
Customer deposits
|
1,766,914
|
|
|
1,664,679
|
|
||
Total current liabilities
|
3,849,247
|
|
|
4,267,010
|
|
||
Long-term debt
|
7,644,318
|
|
|
6,511,426
|
|
||
Other long-term liabilities
|
935,266
|
|
|
486,246
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Shareholders' equity
|
|
|
|
||||
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)
|
—
|
|
|
—
|
|
||
Common stock ($0.01 par value; 500,000,000 shares authorized; 233,106,019 and 230,782,315 shares issued, December 31, 2014 and December 31, 2013, respectively)
|
2,331
|
|
|
2,308
|
|
||
Paid-in capital
|
3,253,552
|
|
|
3,159,038
|
|
||
Retained earnings
|
6,575,248
|
|
|
6,054,952
|
|
||
Accumulated other comprehensive (loss) income
|
(896,994
|
)
|
|
5,671
|
|
||
Treasury stock (13,808,683 and 10,308,683 common shares at cost, December 31, 2014 and December 31, 2013, respectively)
|
(649,778
|
)
|
|
(413,704
|
)
|
||
Total shareholders' equity
|
8,284,359
|
|
|
8,808,265
|
|
||
|
$
|
20,713,190
|
|
|
$
|
20,072,947
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
764,146
|
|
|
$
|
473,692
|
|
|
$
|
18,287
|
|
Adjustments:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
772,445
|
|
|
754,711
|
|
|
730,493
|
|
|||
Impairment of Pullmantur related assets
|
—
|
|
|
—
|
|
|
385,444
|
|
|||
Restructuring related impairments
|
—
|
|
|
33,514
|
|
|
—
|
|
|||
Net deferred income tax (benefit) expense
|
(44,437
|
)
|
|
(1,842
|
)
|
|
28,939
|
|
|||
Loss on sale of ship
|
17,401
|
|
|
—
|
|
|
—
|
|
|||
Loss (gain) on derivative instruments not designated as hedges
|
48,637
|
|
|
19,287
|
|
|
(2,014
|
)
|
|||
Loss on extinguishment of unsecured senior notes
|
—
|
|
|
4,206
|
|
|
7,501
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Decrease in trade and other receivables, net
|
100,095
|
|
|
95,401
|
|
|
8,026
|
|
|||
Decrease (increase) in inventories
|
26,254
|
|
|
(4,321
|
)
|
|
(1,645
|
)
|
|||
Decrease (increase) in prepaid expenses and other assets
|
41,077
|
|
|
(22,657
|
)
|
|
(1,614
|
)
|
|||
(Decrease) increase in accounts payable
|
(40,651
|
)
|
|
18,957
|
|
|
36,602
|
|
|||
Decrease in accrued interest
|
(53,951
|
)
|
|
(3,341
|
)
|
|
(15,786
|
)
|
|||
Increase (decrease) in accrued expenses and other liabilities
|
70,565
|
|
|
(6,714
|
)
|
|
33,060
|
|
|||
Increase in customer deposits
|
14,885
|
|
|
37,077
|
|
|
103,733
|
|
|||
Cash received on settlement of derivative financial instruments
|
—
|
|
|
—
|
|
|
69,684
|
|
|||
Dividends received from unconsolidated affiliates
|
5,814
|
|
|
5,093
|
|
|
—
|
|
|||
Other, net
|
21,479
|
|
|
9,005
|
|
|
(18,976
|
)
|
|||
Net cash provided by operating activities
|
1,743,759
|
|
|
1,412,068
|
|
|
1,381,734
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(1,811,398
|
)
|
|
(763,777
|
)
|
|
(1,291,499
|
)
|
|||
Cash paid on settlement of derivative financial instruments
|
(68,098
|
)
|
|
(17,338
|
)
|
|
(10,886
|
)
|
|||
Investments in and loans to unconsolidated affiliates
|
(188,595
|
)
|
|
(70,626
|
)
|
|
—
|
|
|||
Cash received on loan to unconsolidated affiliate
|
76,167
|
|
|
23,372
|
|
|
23,512
|
|
|||
Proceeds from sale of ships
|
220,000
|
|
|
—
|
|
|
9,811
|
|
|||
Other, net
|
1,546
|
|
|
3,831
|
|
|
5,739
|
|
|||
Net cash used in investing activities
|
(1,770,378
|
)
|
|
(824,538
|
)
|
|
(1,263,323
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Debt proceeds
|
4,153,958
|
|
|
2,449,464
|
|
|
2,558,474
|
|
|||
Debt issuance costs
|
(72,974
|
)
|
|
(57,622
|
)
|
|
(75,839
|
)
|
|||
Repayments of debt
|
(3,724,218
|
)
|
|
(2,856,481
|
)
|
|
(2,561,290
|
)
|
|||
Purchase of treasury stock
|
(236,074
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(198,952
|
)
|
|
(143,629
|
)
|
|
(117,707
|
)
|
|||
Proceeds from exercise of common stock options
|
70,879
|
|
|
30,125
|
|
|
15,146
|
|
|||
Cash received on settlement of derivative financial instruments
|
22,835
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
2,026
|
|
|
1,517
|
|
|
1,599
|
|
|||
Net cash provided by (used in) financing activities
|
17,480
|
|
|
(576,626
|
)
|
|
(179,617
|
)
|
|||
Effect of exchange rate changes on cash
|
(6,307
|
)
|
|
(1,072
|
)
|
|
(6,125
|
)
|
Net (decrease) increase in cash and cash equivalents
|
(15,446
|
)
|
|
9,832
|
|
|
(67,331
|
)
|
|||
Cash and cash equivalents at beginning of year
|
204,687
|
|
|
194,855
|
|
|
262,186
|
|
|||
Cash and cash equivalents at end of year
|
$
|
189,241
|
|
|
$
|
204,687
|
|
|
$
|
194,855
|
|
Supplemental Disclosures
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest, net of amount capitalized
|
$
|
276,933
|
|
|
$
|
319,476
|
|
|
$
|
341,047
|
|
|
|
|
|
|
|
||||||
Non-Cash Investing Activities
|
|
|
|
|
|
||||||
Purchase of property and equipment through asset trade-in
|
$
|
—
|
|
|
$
|
46,375
|
|
|
$
|
—
|
|
|
Common Stock
|
|
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Treasury Stock
|
|
Total Shareholders' Equity
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Balances at January 1, 2012
|
$
|
2,276
|
|
|
$
|
3,071,759
|
|
|
$
|
5,823,430
|
|
|
$
|
(75,938
|
)
|
|
$
|
(413,704
|
)
|
|
$
|
8,407,823
|
|
Issuance under employee related plans
|
15
|
|
|
38,128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,143
|
|
||||||
Common Stock dividends
|
—
|
|
|
—
|
|
|
(95,979
|
)
|
|
—
|
|
|
—
|
|
|
(95,979
|
)
|
||||||
Dividends declared by Pullmantur Air, S.A.
(1)
|
—
|
|
|
—
|
|
|
(947
|
)
|
|
—
|
|
|
—
|
|
|
(947
|
)
|
||||||
Changes related to cash flow derivative hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,247
|
)
|
|
—
|
|
|
(51,247
|
)
|
||||||
Change in defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,567
|
)
|
|
—
|
|
|
(4,567
|
)
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,764
|
)
|
|
—
|
|
|
(2,764
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
18,287
|
|
|
—
|
|
|
—
|
|
|
18,287
|
|
||||||
Balances at December 31, 2012
|
2,291
|
|
|
3,109,887
|
|
|
5,744,791
|
|
|
(134,516
|
)
|
|
(413,704
|
)
|
|
8,308,749
|
|
||||||
Issuance under employee related plans
|
17
|
|
|
49,151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,168
|
|
||||||
Common Stock dividends
|
—
|
|
|
—
|
|
|
(162,727
|
)
|
|
—
|
|
|
—
|
|
|
(162,727
|
)
|
||||||
Dividends declared by Pullmantur Air, S.A.
(1)
|
—
|
|
|
—
|
|
|
(804
|
)
|
|
—
|
|
|
—
|
|
|
(804
|
)
|
||||||
Changes related to cash flow derivative hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
127,829
|
|
|
—
|
|
|
127,829
|
|
||||||
Change in defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
10,829
|
|
|
—
|
|
|
10,829
|
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
1,529
|
|
|
—
|
|
|
1,529
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
473,692
|
|
|
—
|
|
|
—
|
|
|
473,692
|
|
||||||
Balances at December 31, 2013
|
2,308
|
|
|
3,159,038
|
|
|
6,054,952
|
|
|
5,671
|
|
|
(413,704
|
)
|
|
8,808,265
|
|
||||||
Issuance under employee related plans
|
23
|
|
|
94,514
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94,537
|
|
||||||
Common Stock dividends
|
—
|
|
|
—
|
|
|
(243,550
|
)
|
|
—
|
|
|
—
|
|
|
(243,550
|
)
|
||||||
Dividends declared by non-controlling interest
(2)
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
||||||
Changes related to cash flow derivative hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
(869,350
|
)
|
|
—
|
|
|
(869,350
|
)
|
||||||
Change in defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,213
|
)
|
|
—
|
|
|
(7,213
|
)
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,102
|
)
|
|
—
|
|
|
(26,102
|
)
|
||||||
Purchases of Treasury Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(236,074
|
)
|
|
(236,074
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
764,146
|
|
|
—
|
|
|
—
|
|
|
764,146
|
|
||||||
Balances at December 31, 2014
|
$
|
2,331
|
|
|
$
|
3,253,552
|
|
|
$
|
6,575,248
|
|
|
$
|
(896,994
|
)
|
|
$
|
(649,778
|
)
|
|
$
|
8,284,359
|
|
(1)
|
Dividends declared by Pullmantur Air, S.A. to its non-controlling shareholder.
|
(2)
|
Dividends declared by Falmouth Land Company Limited to its non-controlling shareholder.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Accumulated net gain (loss) on cash flow derivative hedges at beginning of year
|
$
|
43,324
|
|
|
$
|
(84,505
|
)
|
|
$
|
(33,258
|
)
|
Net (loss) gain on cash flow derivative hedges
|
(903,830
|
)
|
|
197,428
|
|
|
58,138
|
|
|||
Net loss (gain) reclassified into earnings
|
34,480
|
|
|
(69,599
|
)
|
|
(109,385
|
)
|
|||
Accumulated net (loss) gain on cash flow derivative hedges at end of year
|
$
|
(826,026
|
)
|
|
$
|
43,324
|
|
|
$
|
(84,505
|
)
|
|
Years
|
Ships
|
generally 30
|
Ship improvements
|
3-20
|
Buildings and improvements
|
10-40
|
Computer hardware and software
|
3-5
|
Transportation equipment and other
|
3-30
|
Leasehold improvements
|
Shorter of remaining lease term or useful life 3-30
|
|
2014
|
|
2013
|
|
2012
|
Passenger ticket revenues:
|
|
|
|
|
|
United States
|
53%
|
|
52%
|
|
51%
|
All other countries
|
47%
|
|
48%
|
|
49%
|
|
Royal
Caribbean International |
|
Pullmantur
|
|
Total
|
||||||
Balance at December 31, 2012
|
$
|
287,436
|
|
|
$
|
145,539
|
|
|
$
|
432,975
|
|
Foreign currency translation adjustment
|
(312
|
)
|
|
6,568
|
|
|
6,256
|
|
|||
Balance at December 31, 2013
|
$
|
287,124
|
|
|
$
|
152,107
|
|
|
$
|
439,231
|
|
Foreign currency translation adjustment
|
(166
|
)
|
|
(18,523
|
)
|
|
(18,689
|
)
|
|||
Balance at December 31, 2014
|
$
|
286,958
|
|
|
$
|
133,584
|
|
|
$
|
420,542
|
|
|
2014
|
|
2013
|
||||
Indefinite-life intangible asset—Pullmantur trademarks and trade names
|
$
|
214,112
|
|
|
$
|
204,866
|
|
Foreign currency translation adjustment
|
(26,074
|
)
|
|
9,246
|
|
||
Total
|
$
|
188,038
|
|
|
$
|
214,112
|
|
|
2014
|
|
2013
|
||||
Ships
|
$
|
21,620,336
|
|
|
$
|
20,858,553
|
|
Ship improvements
|
1,904,524
|
|
|
1,683,644
|
|
||
Ships under construction
|
561,779
|
|
|
563,676
|
|
||
Land, buildings and improvements, including leasehold improvements and port facilities
|
349,339
|
|
|
394,120
|
|
||
Computer hardware and software, transportation equipment and other
|
889,579
|
|
|
771,304
|
|
||
Total property and equipment
|
25,325,557
|
|
|
24,271,297
|
|
||
Less—accumulated depreciation and amortization
|
(7,089,989
|
)
|
|
(6,753,545
|
)
|
||
|
$
|
18,235,568
|
|
|
$
|
17,517,752
|
|
|
2014
|
|
2013
|
||||
$1.1 billion unsecured revolving credit facility, LIBOR plus 1.75%, currently 1.92% and a facility fee of 0.37%, due 2016
|
$
|
713,000
|
|
|
$
|
435,000
|
|
$1.2 billion unsecured revolving credit facility, LIBOR plus 1.75%, currently 1.91% and a facility fee of 0.37%, due 2018
|
778,000
|
|
|
295,000
|
|
||
Unsecured senior notes and senior debentures, 5.25% to 11.88%, due 2015, 2016, 2018, 2022 and 2027
|
1,721,190
|
|
|
1,703,040
|
|
||
€745 million unsecured senior notes, 5.63%, due 2014
|
—
|
|
|
1,028,126
|
|
||
$589 million unsecured term loan, 4.47%, due through 2014
|
—
|
|
|
42,071
|
|
||
$530 million unsecured term loan, LIBOR plus 0.51%, currently 0.83%, due through 2015
|
37,857
|
|
|
113,571
|
|
||
$519 million unsecured term loan, LIBOR plus 0.45%, currently 0.77%, due through 2020
|
259,573
|
|
|
302,835
|
|
||
$420 million unsecured term loan, 5.41%, due through 2021
|
241,827
|
|
|
274,974
|
|
||
$420 million unsecured term loan, LIBOR plus 1.85%, currently 2.17%, due through 2021
|
245,000
|
|
|
280,000
|
|
||
€159.4 million unsecured term loan, EURIBOR plus 1.58%, currently 1.77%, due through 2021
|
112,540
|
|
|
146,452
|
|
||
$524.5 million unsecured term loan, LIBOR plus 0.50%, currently 0.83%, due through 2021
|
305,958
|
|
|
349,667
|
|
||
$566.1 million unsecured term loan, LIBOR plus 0.37%, currently 0.69%, due through 2022
|
353,793
|
|
|
400,966
|
|
||
$1.1 billion unsecured term loan, LIBOR plus 1.85%, currently 2.17%, due through 2022
|
614,203
|
|
|
690,978
|
|
||
$632.0 million unsecured term loan, LIBOR plus 0.40%, currently 0.73%, due through 2023
|
473,969
|
|
|
526,632
|
|
||
$673.5 million unsecured term loan, LIBOR plus 0.40%, currently 0.73%, due through 2024
|
561,228
|
|
|
617,351
|
|
||
$65.0 million unsecured term loan, LIBOR plus 2.12%, currently 2.29%, due through 2019
|
51,100
|
|
|
—
|
|
||
$1.0 million unsecured term loan, 3.00%, due through 2015
|
750
|
|
|
—
|
|
||
$380.0 million unsecured term loan, LIBOR plus 2.12%, currently 2.29%, due through 2018
|
380,000
|
|
|
—
|
|
||
$791.1 million unsecured term loan, LIBOR plus 1.30%, currently 1.62%, due through 2026
|
791,108
|
|
|
—
|
|
||
$290.0 million unsecured term loan, LIBOR plus 2.5%, currently 2.67%, due 2016
|
290,000
|
|
|
290,000
|
|
||
€365 million unsecured term loan, EURIBOR plus 2.30%, currently 2.32%, due 2017
|
441,687
|
|
|
502,934
|
|
||
$7.3 million unsecured term loan, LIBOR plus 2.5%, currently 2.82%, due through 2023
|
4,915
|
|
|
5,391
|
|
||
$30.3 million unsecured term loan, LIBOR plus 3.75%, currently 3.99%, due through 2021
|
13,603
|
|
|
15,073
|
|
||
Capital lease obligations
|
52,647
|
|
|
54,743
|
|
||
|
8,443,948
|
|
|
8,074,804
|
|
||
Less—current portion
|
(799,630
|
)
|
|
(1,563,378
|
)
|
||
Long-term portion
|
$
|
7,644,318
|
|
|
$
|
6,511,426
|
|
Year
|
|
||
2015
|
$
|
799,630
|
|
2016
|
1,856,302
|
|
|
2017
|
920,687
|
|
|
2018
|
1,785,083
|
|
|
2019
|
529,197
|
|
|
Thereafter
|
2,553,049
|
|
|
|
$
|
8,443,948
|
|
|
Employee Stock-Based Compensation
|
||||||||||
Classification of expense
|
2014
|
|
2013
|
|
2012
|
||||||
(In thousands)
|
|
|
|
|
|
||||||
Marketing, selling and administrative expenses
|
$
|
26,116
|
|
|
$
|
21,178
|
|
|
$
|
24,153
|
|
Total compensation expense
|
$
|
26,116
|
|
|
$
|
21,178
|
|
|
$
|
24,153
|
|
|
2012
|
Dividend yield
|
1.5%
|
Expected stock price volatility
|
46.0%
|
Risk-free interest rate
|
1.1%
|
Expected option life
|
6 years
|
Stock Option Activity
|
Number of
Options |
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Term |
|
Aggregate
Intrinsic Value (1) |
||||||
|
|
|
|
|
(years)
|
|
(in thousands)
|
||||||
Outstanding at January 1, 2014
|
2,694,872
|
|
|
$
|
36.30
|
|
|
3.83
|
|
|
$
|
30,080
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
Exercised
|
(1,941,365
|
)
|
|
$
|
36.22
|
|
|
—
|
|
|
—
|
|
|
Canceled
|
(47,456
|
)
|
|
$
|
43.02
|
|
|
—
|
|
|
—
|
|
|
Outstanding at December 31, 2014
|
706,051
|
|
|
$
|
36.03
|
|
|
3.64
|
|
|
$
|
33,182
|
|
Vested and expected to vest at December 31, 2014
|
704,796
|
|
|
$
|
36.02
|
|
|
3.63
|
|
|
$
|
33,130
|
|
Options Exercisable at December 31, 2014
|
622,168
|
|
|
$
|
34.85
|
|
|
3.31
|
|
|
$
|
29,970
|
|
(1)
|
The intrinsic value represents the amount by which the fair value of stock exceeds the option exercise price as of
December 31, 2014
.
|
Restricted Stock Activity
|
Number of
Awards |
|
Weighted-
Average Grant Date Fair Value |
|||
Non-vested share units at January 1, 2014
|
989,005
|
|
|
$
|
9.26
|
|
Granted
|
472,150
|
|
|
$
|
54.60
|
|
Vested
|
(405,001
|
)
|
|
$
|
51.24
|
|
Canceled
|
(74,601
|
)
|
|
$
|
55.30
|
|
Non-vested share units expected to vest as of December 31, 2014
|
981,553
|
|
|
$
|
10.25
|
|
Performance Stock Activity
|
Number of
Awards |
|
Weighted-
Average Grant Date Fair Value |
|||
Non-vested share units at January 1, 2014
|
459,929
|
|
|
$
|
32.36
|
|
Granted
|
233,831
|
|
|
$
|
56.72
|
|
Vested
|
(7,301
|
)
|
|
$
|
53.81
|
|
Canceled
|
(27,573
|
)
|
|
$
|
54.11
|
|
Non-vested share units expected to vest as of December 31, 2014
|
658,886
|
|
|
$
|
39.86
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income for basic and diluted earnings per share
|
$
|
764,146
|
|
|
$
|
473,692
|
|
|
$
|
18,287
|
|
Weighted-average common shares outstanding
|
221,658
|
|
|
219,638
|
|
|
217,930
|
|
|||
Dilutive effect of stock options, performance share awards and restricted stock awards
|
1,386
|
|
|
1,303
|
|
|
1,527
|
|
|||
Diluted weighted-average shares outstanding
|
223,044
|
|
|
220,941
|
|
|
219,457
|
|
|||
Basic earnings per share:
|
|
|
|
|
|
||||||
Net income
|
$
|
3.45
|
|
|
$
|
2.16
|
|
|
$
|
0.08
|
|
Diluted earnings per share:
|
|
|
|
|
|
||||||
Net income
|
$
|
3.43
|
|
|
$
|
2.14
|
|
|
$
|
0.08
|
|
|
Changes related to cash flow derivative hedges
|
|
Changes in defined
benefit plans |
|
Foreign currency translation adjustments
|
|
Accumulated other comprehensive (loss) income
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Accumulated comprehensive loss at January 1, 2013
|
$
|
(84,505
|
)
|
|
$
|
(34,823
|
)
|
|
$
|
(15,188
|
)
|
|
$
|
(134,516
|
)
|
Other comprehensive income before reclassifications
|
197,428
|
|
|
8,240
|
|
|
1,529
|
|
|
207,197
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(69,599
|
)
|
|
2,589
|
|
|
—
|
|
|
(67,010
|
)
|
||||
Net current-period other comprehensive income
|
127,829
|
|
|
10,829
|
|
|
1,529
|
|
|
140,187
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accumulated comprehensive income (loss) at January 1, 2014
|
43,324
|
|
|
(23,994
|
)
|
|
(13,659
|
)
|
|
5,671
|
|
||||
Other comprehensive loss before reclassifications
|
(903,830
|
)
|
|
(8,937
|
)
|
|
(28,099
|
)
|
|
(940,866
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
34,480
|
|
|
1,724
|
|
|
1,997
|
|
|
38,201
|
|
||||
Net current-period other comprehensive loss
|
(869,350
|
)
|
|
(7,213
|
)
|
|
(26,102
|
)
|
|
(902,665
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Accumulated comprehensive loss at December 31, 2014
|
$
|
(826,026
|
)
|
|
$
|
(31,207
|
)
|
|
$
|
(39,761
|
)
|
|
$
|
(896,994
|
)
|
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive (Loss) Income into Income
|
||||||||
|
|
|
|
|
|
|
||||
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|
Affected Line Item in Statements of Comprehensive Income (Loss)
|
||||
Gain (loss) on cash flow derivative hedges:
|
|
|
|
|
|
|
||||
Cross currency swaps
|
|
$
|
(261
|
)
|
|
$
|
(3,531
|
)
|
|
Interest expense, net of interest capitalized
|
Foreign currency forward contracts
|
|
(1,887
|
)
|
|
(1,797
|
)
|
|
Depreciation and amortization expenses
|
||
Foreign currency forward contracts
|
|
(4,291
|
)
|
|
27,423
|
|
|
Other (expense) income
|
||
Foreign currency forward contracts
|
|
(57
|
)
|
|
(440
|
)
|
|
Interest expense, net of interest capitalized
|
||
Fuel swaps
|
|
(27,984
|
)
|
|
47,944
|
|
|
Fuel
|
||
|
|
(34,480
|
)
|
|
69,599
|
|
|
|
||
Amortization of defined benefit plans:
|
|
|
|
|
|
|
||||
Actuarial loss
|
|
(888
|
)
|
|
(1,753
|
)
|
|
Payroll and related
|
||
Prior service costs
|
|
(836
|
)
|
|
(836
|
)
|
|
Payroll and related
|
||
|
|
(1,724
|
)
|
|
(2,589
|
)
|
|
|
||
Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses:
|
|
|
|
|
|
|
||||
Foreign cumulative translation
|
|
(1,997
|
)
|
|
—
|
|
|
Other operating
|
||
Total reclassifications for the period
|
|
$
|
(38,201
|
)
|
|
$
|
67,010
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2014 Using
|
|
|
|
Fair Value Measurements at December 31, 2013 Using
|
||||||||||||||||||||||||||||||||
Description
|
Total Carrying Amount
|
|
Total Fair Value
|
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
|
Total Carrying Amount
|
|
Total Fair Value
|
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and cash equivalents
(4)
|
$
|
189,241
|
|
|
$
|
189,241
|
|
|
$
|
189,241
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
204,687
|
|
|
$
|
204,687
|
|
|
$
|
204,687
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets
|
$
|
189,241
|
|
|
$
|
189,241
|
|
|
$
|
189,241
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
204,687
|
|
|
$
|
204,687
|
|
|
$
|
204,687
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Long-term debt (including current portion of long-term debt)
(5)
|
$
|
8,391,301
|
|
|
$
|
8,761,414
|
|
|
$
|
1,859,361
|
|
|
$
|
6,902,053
|
|
|
$
|
—
|
|
|
$
|
8,020,061
|
|
|
$
|
8,431,220
|
|
|
$
|
2,888,255
|
|
|
$
|
5,542,965
|
|
|
$
|
—
|
|
Total Liabilities
|
$
|
8,391,301
|
|
|
$
|
8,761,414
|
|
|
$
|
1,859,361
|
|
|
$
|
6,902,053
|
|
|
$
|
—
|
|
|
$
|
8,020,061
|
|
|
$
|
8,431,220
|
|
|
$
|
2,888,255
|
|
|
$
|
5,542,965
|
|
|
$
|
—
|
|
(1)
|
Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
|
(2)
|
Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.
|
(3)
|
Inputs that are unobservable. The Company did not use any Level 3 inputs as of
December 31, 2014
and
December 31, 2013
.
|
(4)
|
Consists of cash and marketable securities with original maturities of less than 90 days.
|
(5)
|
Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. Does not include our capital lease obligations.
|
|
Fair Value Measurements at December 31, 2014 Using
|
|
Fair Value Measurements at December 31, 2013 Using
|
||||||||||||||||||||||||||||
Description
|
Total Fair Value
|
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
|
Total Fair Value
|
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments
(4)
|
$
|
63,981
|
|
|
$
|
—
|
|
|
$
|
63,981
|
|
|
$
|
—
|
|
|
$
|
188,576
|
|
|
$
|
—
|
|
|
$
|
188,576
|
|
|
$
|
—
|
|
Investments
(5)
|
$
|
5,531
|
|
|
5,531
|
|
|
—
|
|
|
—
|
|
|
$
|
6,044
|
|
|
6,044
|
|
|
—
|
|
|
—
|
|
||||||
Total Assets
|
$
|
69,512
|
|
|
$
|
5,531
|
|
|
$
|
63,981
|
|
|
$
|
—
|
|
|
$
|
194,620
|
|
|
$
|
6,044
|
|
|
$
|
188,576
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments
(6)
|
$
|
767,635
|
|
|
$
|
—
|
|
|
$
|
767,635
|
|
|
$
|
—
|
|
|
$
|
100,260
|
|
|
$
|
—
|
|
|
$
|
100,260
|
|
|
$
|
—
|
|
Total Liabilities
|
$
|
767,635
|
|
|
$
|
—
|
|
|
$
|
767,635
|
|
|
$
|
—
|
|
|
$
|
100,260
|
|
|
$
|
—
|
|
|
$
|
100,260
|
|
|
$
|
—
|
|
(1)
|
Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
|
(2)
|
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options' contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.
|
(3)
|
Inputs that are unobservable. The Company did not use any Level 3 inputs as of
December 31, 2014
and
December 31, 2013
.
|
(4)
|
Consists of foreign currency forward contracts, foreign currency collar options, interest rate swaps and fuel swaps. Please refer to the "Fair Value of Derivative Instruments" table for breakdown by instrument type.
|
(5)
|
Consists of exchange-traded equity securities and mutual funds.
|
(6)
|
Consists of interest rate swaps, fuel swaps, foreign currency forward contracts and foreign currency collar options. Please refer to the "Fair Value of Derivative Instruments" table for breakdown by instrument type.
|
|
Fair Value Measurements at December 31, 2013 Using
|
||||||||||||||
Description
|
Total Carrying Amount
|
|
Total Fair Value
|
|
Level 3
|
|
Total Impairment
|
||||||||
Long-lived assets
—
Pullmantur aircraft
(1)
|
$
|
49,507
|
|
|
$
|
49,507
|
|
|
$
|
49,507
|
|
|
$
|
13,529
|
|
Assets held for sale
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,985
|
|
(1)
|
For 2013, we estimated the fair value of our long-lived assets using an undiscounted cash flow model. A significant assumption in performing the undiscounted cash flow test was the number of years during which we expect to use these aircraft. Additionally, as of
December 31, 2013
, the expected operating use of the aircraft modified the expected cash flows.
|
(2)
|
For 2013, we estimated the fair value of assets held for sale related to the sale of Pullmantur's non-core businesses. This resulted in an impairment of
$20.0 million
mostly consisting of
$18.2 million
for property and equipment. See Note 16.
Restructuring and Related Impairment Charges
for further discussion.
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
||||||||||||||||||||||||||||||
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||||||||||||||||||||||||||
|
|
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized Derivative Liabilities |
|
Cash Collateral
Received |
|
Net Amount of
Derivative Assets |
|
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized Derivative Assets |
|
Cash Collateral
Received |
|
Net Amount of
Derivative Assets |
||||||||||||||||
(In thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives subject to master netting agreements
|
|
$
|
63,981
|
|
|
$
|
(63,981
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
188,576
|
|
|
$
|
(91,627
|
)
|
|
$
|
—
|
|
|
$
|
96,949
|
|
Total
|
|
$
|
63,981
|
|
|
$
|
(63,981
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
188,576
|
|
|
$
|
(91,627
|
)
|
|
$
|
—
|
|
|
$
|
96,949
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
||||||||||||||||||||||||||||||
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||||||||||||||||||||||||||
|
|
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized Derivative Assets |
|
Cash Collateral
Pledged |
|
Net Amount of
Derivative Liabilities |
|
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized Derivative Liabilities |
|
Cash Collateral
Pledged |
|
Net Amount of
Derivative Liabilities |
||||||||||||||||
(In thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives subject to master netting agreements
|
|
$
|
(767,635
|
)
|
|
$
|
63,981
|
|
|
$
|
—
|
|
|
$
|
(703,654
|
)
|
|
$
|
(100,260
|
)
|
|
$
|
91,627
|
|
|
$
|
—
|
|
|
$
|
(8,633
|
)
|
Total
|
|
$
|
(767,635
|
)
|
|
$
|
63,981
|
|
|
$
|
—
|
|
|
$
|
(703,654
|
)
|
|
$
|
(100,260
|
)
|
|
$
|
91,627
|
|
|
$
|
—
|
|
|
$
|
(8,633
|
)
|
|
Fuel Swap Agreements
|
||||
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||
|
(metric tons)
|
||||
2014
|
—
|
|
|
762,000
|
|
2015
|
806,000
|
|
|
665,000
|
|
2016
|
802,000
|
|
|
372,000
|
|
2017
|
525,000
|
|
|
74,000
|
|
2018
|
226,000
|
|
|
—
|
|
|
Fuel Swap Agreements
|
||||
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||
|
(% hedged)
|
||||
Projected fuel purchases for year:
|
|
|
|
||
2014
|
—
|
|
|
57
|
%
|
2015
|
58
|
%
|
|
45
|
%
|
2016
|
55
|
%
|
|
25
|
%
|
2017
|
35
|
%
|
|
5
|
%
|
2018
|
15
|
%
|
|
—
|
%
|
|
Fair Value of Derivative Instruments
|
||||||||||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
Balance Sheet
Location |
|
As of December 31, 2014
|
|
As of December 31, 2013
|
|
Balance Sheet
Location |
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||||||
|
|
Fair Value
|
|
Fair Value
|
|
|
Fair Value
|
|
Fair Value
|
||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments under ASC 815-20
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
Other assets
|
|
$
|
—
|
|
|
$
|
56,571
|
|
|
Other long-term liabilities
|
|
$
|
65,768
|
|
|
$
|
66,920
|
|
Foreign currency forward contracts
|
Derivative financial instruments
|
|
—
|
|
|
61,596
|
|
|
Derivative financial instruments
|
|
17,619
|
|
|
—
|
|
||||
Foreign currency forward contracts
|
Other assets
|
|
63,981
|
|
|
13,783
|
|
|
Other long-term liabilities
|
|
164,627
|
|
|
—
|
|
||||
Foreign currency collar options
|
Other assets
|
|
—
|
|
|
22,172
|
|
|
Other long-term liabilities
|
|
—
|
|
|
—
|
|
||||
Foreign currency collar options
|
Derivative financial instruments
|
|
—
|
|
|
—
|
|
|
Derivative financial instruments
|
|
21,855
|
|
|
—
|
|
||||
Fuel swaps
|
Derivative financial instruments
|
|
—
|
|
|
10,902
|
|
|
Derivative financial instruments
|
|
227,512
|
|
|
1,657
|
|
||||
Fuel swaps
|
Other assets
|
|
—
|
|
|
8,205
|
|
|
Other long-term liabilities
|
|
270,254
|
|
|
9,052
|
|
||||
Total derivatives designated as hedging instruments under ASC 815-20
|
|
|
63,981
|
|
|
173,229
|
|
|
|
|
767,635
|
|
|
77,629
|
|
||||
Derivatives not designated as hedging instruments under ASC 815-20
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
Derivative Financial Instruments
|
|
—
|
|
|
15,347
|
|
|
Derivative financial instruments
|
|
—
|
|
|
22,631
|
|
||||
Total derivatives not designated as hedging instruments under ASC 815-20
|
|
|
—
|
|
|
15,347
|
|
|
|
|
—
|
|
|
22,631
|
|
||||
Total derivatives
|
|
|
$
|
63,981
|
|
|
$
|
188,576
|
|
|
|
|
$
|
767,635
|
|
|
$
|
100,260
|
|
(1)
|
Accounting Standard Codification 815-20 "
Derivatives and Hedging."
|
|
|
|
|
Carrying Value
|
||||||
Non-derivative instrument designated as
hedging instrument under ASC 815-20 |
|
Balance Sheet Location
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||
(In thousands)
|
|
|
|
|
|
|
||||
Foreign currency debt
|
|
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
477,442
|
|
Foreign currency debt
|
|
Long-term debt
|
|
168,718
|
|
|
273,354
|
|
||
|
|
|
|
$
|
168,718
|
|
|
$
|
750,796
|
|
|
|
Location of Gain
(Loss) Recognized in Income on Derivative and Hedged Item |
|
Amount of Gain (Loss)
Recognized in Income on Derivative |
|
Amount of (Loss) Gain
Recognized in Income on Hedged Item |
||||||||||||
Derivatives and related Hedged Items
under ASC 815-20 Fair Value Hedging Relationships |
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
Interest expense, net of interest capitalized
|
|
$
|
12,217
|
|
|
$
|
9,354
|
|
|
$
|
17,403
|
|
|
$
|
37,745
|
|
Interest rate swaps
|
|
Other income (expense)
|
|
42,530
|
|
|
(71,630
|
)
|
|
(34,304
|
)
|
|
68,743
|
|
||||
|
|
|
|
$
|
54,747
|
|
|
$
|
(62,276
|
)
|
|
$
|
(16,901
|
)
|
|
$
|
106,488
|
|
|
|
Amount of (Loss) Gain
Recognized in OCI on Derivative (Effective Portion) |
|
Location of
(Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) |
|
Amount of (Loss) Gain
Reclassified from Accumulated OCI into Income (Effective Portion) |
|
Location of
(Loss) Gain Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |
|
Amount of (Loss) Gain
Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness testing) |
||||||||||||||||||
Derivatives under
ASC 815-20 Cash Flow Hedging Relationships |
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross currency swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest Expense
|
|
$
|
(261
|
)
|
|
$
|
(3,531
|
)
|
|
Other income (expense)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
|
(97,851
|
)
|
|
111,223
|
|
|
Other income (expense)
|
|
—
|
|
|
—
|
|
|
Other income (expense)
|
|
(99
|
)
|
|
431
|
|
||||||
Foreign currency forward contracts
|
|
(246,627
|
)
|
|
68,364
|
|
|
Depreciation and amortization expenses
|
|
(1,887
|
)
|
|
(1,797
|
)
|
|
Other income (expense)
|
|
(34
|
)
|
|
9
|
|
||||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
Other income (expense)
|
|
(4,291
|
)
|
|
27,423
|
|
|
Other income (expense)
|
|
—
|
|
|
—
|
|
||||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
Interest expense
|
|
(57
|
)
|
|
(440
|
)
|
|
Other income (expense)
|
|
—
|
|
|
—
|
|
||||||
Foreign currency collar options
|
|
(44,028
|
)
|
|
13,199
|
|
|
Depreciation and amortization expenses
|
|
—
|
|
|
—
|
|
|
Other income (expense)
|
|
—
|
|
|
—
|
|
||||||
Fuel swaps
|
|
(515,324
|
)
|
|
4,642
|
|
|
Fuel
|
|
(27,984
|
)
|
|
47,944
|
|
|
Other income (expense)
|
|
(14,936
|
)
|
|
(3,413
|
)
|
||||||
|
|
$
|
(903,830
|
)
|
|
$
|
197,428
|
|
|
|
|
$
|
(34,480
|
)
|
|
$
|
69,599
|
|
|
|
|
$
|
(15,069
|
)
|
|
$
|
(2,973
|
)
|
|
|
Amount of Gain (Loss)
Recognized in OCI (Effective Portion) |
|
Location of Gain
(Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) |
|
Amount of Gain (Loss) Recognized in Income
(Ineffective Portion and Amount Excluded from Effectiveness Testing) |
||||||||||||
Non-derivative instruments under ASC 815-20
Net Investment Hedging Relationships |
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Debt
|
|
$
|
25,382
|
|
|
$
|
(34,295
|
)
|
|
Other income (expense)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
25,382
|
|
|
$
|
(34,295
|
)
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Amount of Gain (Loss) Recognized
in Income on Derivative |
||||||
Derivatives Not Designated as Hedging
Instruments under ASC 815-20 |
|
Location of Gain (Loss)
Recognized in Income on Derivative |
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
||||
(In thousands)
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Other income (expense)
|
|
$
|
(48,791
|
)
|
|
$
|
(21,244
|
)
|
Fuel swaps
|
|
Other income (expense)
|
|
(1,795
|
)
|
|
243
|
|
||
Fuel call options
|
|
Other income (expense)
|
|
—
|
|
|
(23
|
)
|
||
|
|
|
|
$
|
(50,586
|
)
|
|
$
|
(21,024
|
)
|
Year
|
|
||
2015
|
$
|
18,154
|
|
2016
|
16,279
|
|
|
2017
|
12,471
|
|
|
2018
|
9,919
|
|
|
2019
|
7,699
|
|
|
Thereafter
|
124,997
|
|
|
|
$
|
189,519
|
|
Year
|
|
||
2015
|
$
|
214,817
|
|
2016
|
149,336
|
|
|
2017
|
154,253
|
|
|
2018
|
82,010
|
|
|
2019
|
115,002
|
|
|
Thereafter
|
127,843
|
|
|
|
$
|
843,261
|
|
|
2014
|
|
2013
|
||||
Restructuring exit costs
|
$
|
4,318
|
|
|
$
|
23,432
|
|
Impairment charges
|
—
|
|
|
33,514
|
|
||
Restructuring and related impairment charges
|
$
|
4,318
|
|
|
$
|
56,946
|
|
|
Beginning
Balance January 1, 2013 |
|
Accruals
|
|
Payments
|
|
Beginning
Balance January 1, 2014 |
|
Accruals
|
|
Payments
|
|
Ending Balance December 31, 2014
|
|
Cumulative
Charges Incurred |
|
Expected
Additional Expenses to be Incurred |
||||||||||||||||||
Termination benefits
|
$
|
—
|
|
|
$
|
9,638
|
|
|
$
|
1,323
|
|
|
$
|
8,315
|
|
|
$
|
917
|
|
|
$
|
8,926
|
|
|
$
|
306
|
|
|
$
|
10,555
|
|
|
$
|
—
|
|
Contract termination costs
|
—
|
|
|
4,142
|
|
|
4,016
|
|
|
126
|
|
|
(58
|
)
|
|
68
|
|
|
—
|
|
|
4,084
|
|
|
—
|
|
|||||||||
Other related costs
|
—
|
|
|
4,379
|
|
|
2,982
|
|
|
1,397
|
|
|
234
|
|
|
1,334
|
|
|
297
|
|
|
4,613
|
|
|
—
|
|
|||||||||
Total
|
$
|
—
|
|
|
$
|
18,159
|
|
|
$
|
8,321
|
|
|
$
|
9,838
|
|
|
$
|
1,093
|
|
|
$
|
10,328
|
|
|
$
|
603
|
|
|
$
|
19,252
|
|
|
$
|
—
|
|
|
Beginning
Balance January 1, 2013 |
|
Accruals
|
|
Payments
|
|
Beginning
Balance January 1, 2014 |
|
Accruals
|
|
Payments
|
|
Ending Balance December 31, 2014
|
|
Cumulative
Charges Incurred |
|
Expected
Additional Expenses to be Incurred(2) |
||||||||||||||||||
Termination benefits
|
$
|
—
|
|
|
$
|
3,910
|
|
|
$
|
—
|
|
|
$
|
3,910
|
|
|
$
|
3,084
|
|
|
$
|
4,879
|
|
|
$
|
2,115
|
|
|
$
|
6,994
|
|
|
$
|
—
|
|
Contract termination costs
|
—
|
|
|
847
|
|
|
—
|
|
|
847
|
|
|
(607
|
)
|
|
—
|
|
|
240
|
|
|
240
|
|
|
—
|
|
|||||||||
Other related costs
|
—
|
|
|
516
|
|
|
—
|
|
|
516
|
|
|
748
|
|
|
1,264
|
|
|
—
|
|
|
1,264
|
|
|
—
|
|
|||||||||
Total
|
$
|
—
|
|
|
$
|
5,273
|
|
|
$
|
—
|
|
|
$
|
5,273
|
|
|
$
|
3,225
|
|
|
$
|
6,143
|
|
|
$
|
2,355
|
|
|
$
|
8,498
|
|
|
$
|
—
|
|
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||
Total revenues
(1)
|
$
|
1,887,224
|
|
|
$
|
1,911,220
|
|
|
$
|
1,980,043
|
|
|
$
|
1,882,767
|
|
|
$
|
2,388,762
|
|
|
$
|
2,311,749
|
|
|
$
|
1,817,826
|
|
|
$
|
1,854,158
|
|
Operating income
(2)(3)(4)
|
$
|
97,466
|
|
|
$
|
165,632
|
|
|
$
|
195,587
|
|
|
$
|
113,338
|
|
|
$
|
529,462
|
|
|
$
|
444,209
|
|
|
$
|
119,344
|
|
|
$
|
74,969
|
|
Net income
(2)(3)(4)
|
$
|
26,457
|
|
|
$
|
76,226
|
|
|
$
|
137,673
|
|
|
$
|
24,747
|
|
|
$
|
490,248
|
|
|
$
|
365,701
|
|
|
$
|
109,768
|
|
|
$
|
7,018
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.12
|
|
|
$
|
0.35
|
|
|
$
|
0.62
|
|
|
$
|
0.11
|
|
|
$
|
2.20
|
|
|
$
|
1.66
|
|
|
$
|
0.50
|
|
|
$
|
0.03
|
|
Diluted
|
$
|
0.12
|
|
|
$
|
0.35
|
|
|
$
|
0.62
|
|
|
$
|
0.11
|
|
|
$
|
2.19
|
|
|
$
|
1.65
|
|
|
$
|
0.49
|
|
|
$
|
0.03
|
|
Dividends declared per share
|
$
|
0.25
|
|
|
$
|
0.12
|
|
|
$
|
0.25
|
|
|
$
|
0.12
|
|
|
$
|
0.30
|
|
|
$
|
0.25
|
|
|
$
|
0.30
|
|
|
$
|
0.25
|
|
(1)
|
Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere's summer months and holidays.
|
(2)
|
Amounts for the fourth quarter of 2013 include an impairment charge of
$33.5 million
to write down the assets held for sale related to the businesses to be sold and certain long-lived assets, consisting of aircraft owned and operated by Pullmantur Air, to their fair value.
|
(3)
|
Amounts for the third and fourth quarters of 2014 include an aggregate increase to operating income and net income of
$16.3 million
and
$36.8 million
, respectively, due to the change in our voyage proration methodology as of September 30, 2014. Amounts for the third quarter of 2014 also include a loss of
$17.4 million
due to the sale of
Celebrity Century
.
|
(4)
|
Amounts for the fourth quarter of 2014 include a
$33.5 million
tax benefit related to the reversal of a deferred tax asset valuation allowance due to Spanish tax reform. See Note 12.
Income Taxes
for further information.
|
Name of Grantee
|
|
Grant Date
|
|
Target Number of Performance Shares
|
|
Value of Each Performance Share on Date of Grant
|
|
Service Vesting Date
|
|
Performance Period
|
|
Royal Caribbean Cruises Ltd.
|
|
Grantee:
|
|
|
|
|
|
|
By: ___________________________
|
|
______________________
|
Jason T. Liberty
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
required under regulations adopted under the Dodd Frank Wall Street Reform and Consumer Protection Act;
|
•
|
the Company’s financial statements covering the Performance Period are restated due to material non-compliance with financial reporting requirements prior to the Service Vesting Date; or
|
•
|
the Committee determines, in consultation with the Company’s Audit Committee, that there is a high likelihood that an out-of-period adjustment to the Company’s financial statements covering the Performance Period would
|
Name of Grantee
|
|
Grant Date
|
|
Target Number of Performance Shares
|
|
Value of Each Performance Share on Date of Grant
|
|
Service Vesting Date
|
|
Performance Period
|
|
Forfeiture; Early Vesting Events
|
Unless otherwise specified in this Agreement, the Performance Shares remain subject to forfeiture if Grantee has a Termination of Service prior to the Service Vesting Date.
A.
Death or Disability Prior to End of Performance Period
If the Grantee has a Termination of Service by reason of his/her death or Disability:
•
prior to the end of the Performance Period, the Grantee shall vest in a number of Performance Shares equal to the Target Number of Performance Shares; or
•
after the end of the Performance Period, the Grantee shall vest in a number of Performance Shares equal to the Actual Number of Performance Shares.
B.
Change in Control Event Prior to End of Performance Period
If (i) there is a Change in Control of the Company and (ii) within 12 months of such change, the Grantee has an Involuntary Termination of Service (a “
Change in Control Vesting Event
”):
•
prior to the end of the Performance Period, the Grantee shall vest in a number of Performance Shares equal to the Estimated Number of Performance Shares; or
•
after the end of the Performance Period, the Grantee shall vest in a number of Performance Shares equal to the Actual Number of Performance Shares.
C.
Other Provisions
1
.
Definitions
For purposes of this Agreement, the following terms shall, when capitalized, have the following meanings:
“
Applicable Age Requirement
” means the age of 62 or above.
“
Applicable Service Requirement
” means 15 years of continuous employment by the Company or an Affiliate of the Company.
“
Estimated Number of Performance Shares
” means, at any time prior to the end of the Performance Period, the Compensation Committee’s (the “Committee”) then best estimate of the Actual Number of Performance Shares.
“
Grant Date Qualifying Grantee
” means a Grantee who meets both of the Qualifying Criteria as of the Grant Date.
“
Involuntary Termination of Service
” means a Termination of Service by reason of action by the Company without Cause, action by the Grantee for Good Reason or, if Grantee is a member of the Board of Directors, failure of the Grantee to be nominated for election or elected.
“
Qualifying Criteria
” means, collectively, the Applicable Age Requirement and the Applicable Service Requirement.
|
|
2.
Involuntary Termination of Service
If the Grantee is a Grant Date Qualifying Grantee and has an Involuntary Termination of Service during the period commencing on the Grant Date and ending on the second anniversary of the Grant Date, the Grantee shall vest in a number of Performance Shares equal to the Estimated Number of Performance Shares.
If the Grantee (i) is not a Grant Date Qualifying Grantee but meets both of the Qualifying Criteria prior to the second anniversary of the Grant Date and (ii) has an Involuntary Termination of Service during the period commencing on the date he or she first meets both of the Qualifying Criteria and ending on the second anniversary of the Grant Date, the Grantee shall vest in a number of Performance Shares equal to the Estimated Number of Performance Shares.
3.
Continuation of Vesting
If the Grantee is a Grant Date Qualifying Grantee and has a Termination of Service for any reason (other than by reason of death Disability or a Change of Control Vesting Event) within the period commencing on the second anniversary of the Grant Date and ending on the Service Vesting Date, then, notwithstanding such Termination of Service or any other provision of this Agreement or the Plan, the Performance Shares will continue to vest on the Service Vesting Date.
If the Grantee (i) is not a Grant Date Qualifying Grantee but meets both of the Qualifying Criteria prior to the Service Vesting Date and (ii) has a Termination of Service for any reason (other than by reason of death, Disability or a Change of Control Vesting Event) within the period commencing on the later of (x) the second anniversary of the Grant Date and (y) the date he or she first meets both of the Service Criteria and ending on the Service Vesting Date, then, notwithstanding such Termination of Service or any other provision of this Agreement or the Plan, the Performance Shares will continue to vest on the Service Vesting Date.
|
Settlement of Performance Shares
|
This Agreement will be settled by the delivery to the Grantee of one Share for each Performance Share on the Vesting Date. Performance Shares that vest early upon, death, Disability, a Change in Control Vesting Event or an Involuntary Termination of Service will be settled by the delivery to the Grantee (or his estate) of one Share for each Performance Share within 60 days following the Termination of Service.
|
Standard Terms and Conditions
|
Please refer to
Schedule B
, incorporated herein by reference, which sets forth standard terms and conditions applicable to the grant of Performance Shares.
|
•
|
required under regulations adopted under the Dodd Frank Wall Street Reform and Consumer Protection Act;
|
•
|
the Company’s financial statements covering the Performance Period are restated due to material non-compliance with financial reporting requirements within two years of the end of the Performance Period; or
|
•
|
the Committee determines, in consultation with the Company’s Audit Committee, that there is a high likelihood that an out-of-period adjustment to the Company’s financial statements covering the Performance Period would be deemed to be material because there is alleged misconduct of one or more participants hereunder associated with the adjustment and, absent the adjustment, the benefits payable hereunder to such participant(s) would be materially greater,
|
1.
|
NON-COMPETITION
.
Section 11 (a) and (b) of the Employment Agreement shall be each be amended to state as follows:
|
(a)
|
while employed under this Agreement (i) work for (in any capacity, including without limitation as a director, officer or employee) any other entity engaged in cruises, with a minimum fleet size of 1,000 berths (including ships under construction or publicly announced to be built), or cruise related businesses of any such entity or (ii) recruit, or otherwise influence or attempt to induce employees of Company to leave the employment of Company; and
|
(b)
|
for the
two (2) year
period immediately following the termination of Executive's employment pursuant to this Agreement (the "
Non-competition Period
"), for any reason, serve as or be a consultant to or employee, officer, agent, director or owner of another entity engaged in cruises, with a minimum fleet size of 1,000 berths (including ships under construction or publicly announced to be built), or cruise related businesses of any such entity. Executive further agrees that during the Non-competition Period, he or she shall not: (i) employ or seek to employ any person who is then employed or retained by Company or its affiliates (or who was so employed or retained at any time within the six (6) month period prior to the last day of Executive’s employment with Company); or (ii) solicit, induce, or influence any proprietor, partner, stockholder, lender, director, officer, employee, joint venturer, investor, consultant, agent, lessor, supplier, customer or any other person or entity which has a business relationship with Company or its affiliates at any time during the Non-competition Period, to discontinue or reduce or modify the extent of such relationship with Company or any of its subsidiaries.
|
2.
|
MISCELLANEOUS.
|
a.
|
Except as amended by this First Amendment, the Employment Agreement shall remain in full force and effect in accordance with its stated terms.
|
b.
|
This First Amendment shall be subject to and governed by the laws of the State of Florida, without regard to the conflicts of laws principles thereof.
|
c.
|
This First Amendment may be executed in any number of counterparts, each of which shall constitute and original and all of which together shall constitute one and the same instrument.
|
Cash Compensation
|
|
Amount
|
Annual Board Retainer
|
|
$80,000
|
Annual Lead Director Retainer
|
|
50,000
|
Annual Audit Committee Chairman Retainer
|
|
30,000
|
Annual Audit Committee Member Retainer
|
|
20,000
|
Annual Compensation Committee Chairman Retainer
|
|
20,000
|
Annual Compensation Committee Member Retainer
|
|
10,000
|
Annual Committee Chairman Retainer (All Other Committees)
|
|
10,000
|
Annual Committee Member Retainer (All Other Committees)
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
764,146
|
|
|
$
|
473,692
|
|
|
$
|
18,287
|
|
|
$
|
607,421
|
|
|
$
|
515,653
|
|
Income tax (benefit) expense
|
|
(20,896
|
)
|
|
24,937
|
|
|
55,518
|
|
|
20,673
|
|
|
20,266
|
|
|||||
Income from equity investees, net of distributions
|
|
(45,362
|
)
|
|
(26,071
|
)
|
|
(21,078
|
)
|
|
(118
|
)
|
|
(200
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
299,410
|
|
|
364,515
|
|
|
383,575
|
|
|
409,246
|
|
|
409,065
|
|
|||||
Capitalized interest
|
|
(28,827
|
)
|
|
(17,878
|
)
|
|
(13,281
|
)
|
|
(13,986
|
)
|
|
(28,093
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings
|
|
$
|
968,471
|
|
|
$
|
819,165
|
|
|
$
|
423,021
|
|
|
$
|
1,023,236
|
|
|
$
|
916,691
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
(1)
|
|
$
|
287,126
|
|
|
$
|
350,299
|
|
|
$
|
369,062
|
|
|
$
|
396,402
|
|
|
$
|
399,300
|
|
Interest portion of rent expense
(2)
|
|
12,284
|
|
|
14,216
|
|
|
14,513
|
|
|
12,844
|
|
|
9,765
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
$
|
299,410
|
|
|
$
|
364,515
|
|
|
$
|
383,575
|
|
|
$
|
409,246
|
|
|
$
|
409,065
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|
3.2x
|
|
|
2.2x
|
|
|
1.1x
|
|
|
2.5x
|
|
|
2.2x
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
(1)
Interest expense includes capitalized interest and amortization of deferred financing expenses.
|
||
(2)
Interest portion of rent expense represents actual interest charges for the
Brilliance of the Seas
operating lease and, for all other rentals, we have assumed that one-third of rent expense is representative of the interest factor.
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NAME
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INCORPORATION
|
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Adventure of the Seas Inc.
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Liberia
|
|
Allure of the Seas Inc.
|
Liberia
|
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Azamara Journey Inc.
|
Liberia
|
|
Azamara Quest Inc.
|
Liberia
|
|
Brilliance of the Seas Shipping Inc.
|
Liberia
|
|
CDF Croisieres de France, SAS
|
France
|
|
Celebrity Cruise Lines Inc.
|
Cayman Islands
|
|
Celebrity Cruises Holdings Inc.
|
Liberia
|
|
Celebrity Cruises Inc., doing business as Celebrity Cruises
|
Liberia
|
|
Celebrity Eclipse Inc.
|
Liberia
|
|
Celebrity Equinox Inc.
|
Liberia
|
|
Celebrity Reflection Inc.
|
Liberia
|
|
Celebrity Silhouette Inc.
|
Liberia
|
|
Celebrity Solstice Inc.
|
Liberia
|
|
Constellation Inc.
|
Liberia
|
|
Enchantment of the Seas Inc.
|
Liberia
|
|
Explorer of the Seas Inc.
|
Liberia
|
|
Freedom of the Seas Inc.
|
Liberia
|
|
GG Operations Inc.
|
Delaware
|
|
Grandeur of the Seas Inc.
|
Liberia
|
|
Greensboro S.L.
|
Spain
|
|
Independence of the Seas Inc.
|
Liberia
|
|
Infinity Inc.
|
Liberia
|
|
Island for Science, Inc.
|
Indiana
|
|
Islas Galapagos Turismo y Vapores CA
|
Ecuador
|
|
Jewel of the Seas Inc.
|
Liberia
|
|
Labadee Investments Limited
|
Cayman Islands
|
|
Legend of the Seas Inc.
|
Liberia
|
|
Liberty of the Seas Inc.
|
Liberia
|
|
Majesty of the Seas Inc.
|
Liberia
|
|
Mariner of the Seas Inc.
|
Liberia
|
|
Millennium Inc.
|
Liberia
|
|
Navigator of the Seas Inc.
|
Liberia
|
|
Oasis of the Seas Inc.
|
Liberia
|
|
Pullmantur, S.A.
|
Spain
|
|
Pullmantur Cruises, S.L.
|
Spain
|
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Pullmantur Cruises Atlantic Limited
|
Malta
|
|
Pullmantur Cruises Empress Limited
|
Malta
|
|
Pullmantur Cruises Pacific Dream Limited
|
Malta
|
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Pullmantur Cruises Ship Management Limited
|
Malta
|
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Pullmantur Cruises Sovereign Limited
|
Malta
|
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NAME
|
INCORPORATION
|
|
Pullmantur Cruises Ship Management Limited
|
Malta
|
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Pullmantur Cruises Sovereign Limited
|
Malta
|
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Pullmantur Cruises Zenith Limited
|
Malta
|
|
Pullmantur Ship Management Limited
|
Bahamas
|
|
Quantum of the Seas Inc.
|
Liberia
|
|
Radiance of the Seas Inc.
|
Liberia
|
|
RCL Cruises Limited
|
England and Wales
|
|
RCL Holdings Cooperatief U.A.
|
Netherlands
|
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RCL Investments Limited
|
England and Wales
|
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RCL (UK) Limited
|
England and Wales
|
|
Rhapsody of the Seas Inc.
|
Liberia
|
|
Royal Caribbean Cruise Lines AS
|
Norway
|
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Royal Caribbean Cruises (Asia) Pte. Limited
|
Singapore
|
|
Royal Caribbean Cruises Services (China) Company Limited
|
China
|
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Royal Caribbean Holdings de Espana S.L.
|
Spain
|
|
Royal Caribbean Holdings de Panama S. de R.L.
|
Panama
|
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Serenade of the Seas Inc.
|
Liberia
|
|
Societe Labadee Nord, S.A.
|
Haiti
|
|
Splendour of the Seas Inc.
|
Liberia
|
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Summit Inc.
|
Liberia
|
|
TourTrek SEZC Limited
|
Cayman Islands
|
|
Vision of the Seas Inc.
|
Liberia
|
|
Voyager of the Seas Inc.
|
Liberia
|
|
White Sand Inc.
|
Liberia
|
|
XP Tours S.A.
|
Ecuador
|
|
|
|
|
|
|
|
|
|
/s/ Bernard W. Aronson
|
|
|
|
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/s/ Thomas J. Pritzker
|
|
Bernard W. Aronson
|
|
|
|
|
Thomas J. Pritzker
|
|
Director
|
|
|
|
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Director
|
|
|
|
|
|
|
|
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/s/ John F. Brock
|
|
|
|
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/s/ William K. Reilly
|
|
John F. Brock
|
|
|
|
|
William K. Reilly
|
|
Director
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
/s/ William L. Kimsey
|
|
|
|
|
/s/ Bernt Reitan
|
|
William L. Kimsey
|
|
|
|
|
Bernt Reitan
|
|
Director
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
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/s/ Ann S. Moore
|
|
|
|
|
/s/ Vagn O. Sørensen
|
|
Ann S. Moore
|
|
|
|
|
Vagn O. Sørensen
|
|
Director
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
/s/ Eyal Ofer
|
|
|
|
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/s/ Arne Alexander Wilhelmsen
|
|
Eyal Ofer
|
|
|
|
|
Arne Alexander Wilhelmsen
|
|
Director
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Royal Caribbean Cruises Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 23, 2015
|
|
|
|
/s/ Richard D. Fain
|
|
|
Richard D. Fain
|
|
|
Chairman and
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Royal Caribbean Cruises Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 23, 2015
|
|
|
|
/s/ Jason T. Liberty
|
|
|
Jason T. Liberty
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date:
|
February 23, 2015
|
|
|
|
|
|
|
|
|
By:
|
/s/ Richard D. Fain
|
|
|
|
Richard D. Fain
|
|
|
|
Chairman and
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
By:
|
/s/ Jason T. Liberty
|
|
|
|
Jason T. Liberty
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|