ý
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QUARTERLY 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
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98-0081645
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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Quarter Ended March 31,
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||||||
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2016
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2015
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||||
Passenger ticket revenues
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$
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1,378,167
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$
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1,306,779
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Onboard and other revenues
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539,628
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508,820
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Total revenues
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1,917,795
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1,815,599
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Cruise operating expenses:
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Commissions, transportation and other
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324,890
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324,418
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Onboard and other
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103,654
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116,239
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Payroll and related
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227,441
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211,591
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Food
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121,510
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119,786
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Fuel
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175,862
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205,276
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Other operating
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288,221
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245,307
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Total cruise operating expenses
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1,241,578
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1,222,617
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Marketing, selling and administrative expenses
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302,021
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286,832
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Depreciation and amortization expenses
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210,764
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200,468
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Restructuring charges
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305
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—
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Operating Income
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163,127
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105,682
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Other income (expense):
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Interest income
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2,720
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3,737
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Interest expense, net of interest capitalized
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(65,446
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)
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(70,159
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)
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Other (expense) income (including a $21.7 million loss related to the 2016 elimination of the Pullmantur reporting lag)
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(1,261
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)
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5,970
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(63,987
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)
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(60,452
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)
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Net Income
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$
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99,140
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$
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45,230
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Earnings per Share:
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Basic
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$
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0.46
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$
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0.21
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Diluted
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$
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0.46
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$
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0.20
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Weighted-Average Shares Outstanding:
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Basic
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216,914
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219,626
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Diluted
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217,869
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220,842
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Comprehensive Income
|
|
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Net Income
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$
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99,140
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$
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45,230
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Other comprehensive income (loss):
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Foreign currency translation adjustments
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6,648
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(31,544
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)
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Change in defined benefit plans
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(3,512
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)
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(1,493
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)
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Gain (loss) on cash flow derivative hedges
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2,737
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(260,949
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)
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Total other comprehensive income (loss)
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5,873
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(293,986
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)
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Comprehensive Income (Loss)
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$
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105,013
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$
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(248,756
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)
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As of
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||||||
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March 31,
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December 31,
|
||||
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2016
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2015
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(unaudited)
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Assets
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Current assets
|
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Cash and cash equivalents
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$
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117,360
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$
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121,565
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Trade and other receivables, net
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253,303
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238,972
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Inventories
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121,392
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121,332
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Prepaid expenses and other assets
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279,707
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220,579
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Derivative financial instruments
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120,524
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134,574
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Total current assets
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892,286
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837,022
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Property and equipment, net
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18,828,743
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18,777,778
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Goodwill
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286,852
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286,764
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Other assets
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955,532
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880,479
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$
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20,963,413
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$
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20,782,043
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Liabilities and Shareholders’ Equity
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Current liabilities
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Current portion of long-term debt
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$
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895,490
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$
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899,542
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Accounts payable
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371,854
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302,072
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Accrued interest
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80,888
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38,325
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Accrued expenses and other liabilities
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525,551
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658,601
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Derivative financial instruments
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577,493
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651,866
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Customer deposits
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1,946,668
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1,742,286
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Total current liabilities
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4,397,944
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4,292,692
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Long-term debt
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7,806,690
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7,627,701
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Other long-term liabilities
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871,010
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798,611
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Commitments and contingencies (Note 6)
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Shareholders’ equity
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Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)
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—
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—
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Common stock ($0.01 par value; 500,000,000 shares authorized; 234,544,116 and 233,905,166 shares issued, March 31, 2016 and December 31, 2015, respectively)
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2,345
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2,339
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Paid-in capital
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3,298,515
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3,297,619
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Retained earnings
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6,962,858
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6,944,862
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Accumulated other comprehensive loss
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(1,322,560
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)
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(1,328,433
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)
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Treasury stock (18,697,703 and 15,911,971 common shares at cost, March 31, 2016 and December 31, 2015, respectively)
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(1,053,389
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)
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(853,348
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)
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Total shareholders’ equity
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7,887,769
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8,063,039
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$
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20,963,413
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$
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20,782,043
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Three Months Ended March 31,
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||||||
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2016
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2015
|
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Operating Activities
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Net income
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$
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99,140
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$
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45,230
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Adjustments:
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Depreciation and amortization
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210,764
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200,468
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Net deferred income tax expense (benefit)
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827
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(520
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)
|
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(Gain) loss on derivative instruments not designated as hedges
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(14,455
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)
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28,083
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Changes in operating assets and liabilities:
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Decrease in trade and other receivables, net
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10,094
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18,095
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Decrease (increase) in inventories
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274
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(2,615
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)
|
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Increase in prepaid expenses and other assets
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(50,524
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)
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(67,772
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)
|
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Increase in accounts payable
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68,515
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9,341
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|
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Increase in accrued interest
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42,564
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28,774
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|
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Decrease in accrued expenses and other liabilities
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(53,108
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)
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(53,681
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)
|
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Increase in customer deposits
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178,316
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208,423
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|
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Other, net
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(14,511
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)
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12,601
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Net cash provided by operating activities
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477,896
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426,427
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Investing Activities
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Purchases of property and equipment
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(249,840
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)
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(304,644
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)
|
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Cash received (paid) on settlement of derivative financial instruments
|
13,101
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(45,182
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)
|
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Investments in and loans to unconsolidated affiliates
|
—
|
|
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(54,250
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)
|
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Cash received on loans to unconsolidated affiliates
|
7,104
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|
|
8,280
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|
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Other, net
|
(7,111
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)
|
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(3,780
|
)
|
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Net cash used in investing activities
|
(236,746
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)
|
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(399,576
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)
|
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Financing Activities
|
|
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|
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Debt proceeds
|
1,519,000
|
|
|
749,800
|
|
||
Debt issuance costs
|
(22,566
|
)
|
|
(16,493
|
)
|
||
Repayments of debt
|
(1,382,270
|
)
|
|
(587,111
|
)
|
||
Purchases of treasury stock
|
(200,040
|
)
|
|
—
|
|
||
Dividends paid
|
(162,890
|
)
|
|
(131,745
|
)
|
||
Proceeds from exercise of common stock options
|
1,345
|
|
|
4,615
|
|
||
Other, net
|
659
|
|
|
587
|
|
||
Net cash (used in) provided by financing activities
|
(246,762
|
)
|
|
19,653
|
|
||
Effect of exchange rate changes on cash
|
1,407
|
|
|
(6,040
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
(4,205
|
)
|
|
40,464
|
|
||
Cash and cash equivalents at beginning of period
|
121,565
|
|
|
189,241
|
|
||
Cash and cash equivalents at end of period
|
$
|
117,360
|
|
|
$
|
229,705
|
|
Supplemental Disclosure
|
|
|
|
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Cash paid during the period for:
|
|
|
|
|
|
||
Interest, net of amount capitalized
|
$
|
18,670
|
|
|
$
|
33,664
|
|
|
Quarter Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net income for basic and diluted earnings per share
|
$
|
99,140
|
|
|
$
|
45,230
|
|
Weighted-average common shares outstanding
|
216,914
|
|
|
219,626
|
|
||
Dilutive effect of stock options, performance share awards and restricted stock awards
|
955
|
|
|
1,216
|
|
||
Diluted weighted-average shares outstanding
|
217,869
|
|
|
220,842
|
|
||
Basic earnings per share
|
$
|
0.46
|
|
|
$
|
0.21
|
|
Diluted earnings per share
|
$
|
0.46
|
|
|
$
|
0.20
|
|
|
Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2016
|
|
Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2015
|
||||||||||||||||||||||||||||
|
Changes
related to cash flow derivative hedges |
|
Changes in
defined benefit plans |
|
Foreign
currency translation adjustments |
|
Accumulated other
comprehensive loss |
|
Changes
related to cash flow derivative hedges |
|
Changes in
defined benefit plans |
|
Foreign
currency translation adjustments |
|
Accumulated other
comprehensive loss |
||||||||||||||||
Accumulated comprehensive loss at beginning of the year
|
$
|
(1,232,073
|
)
|
|
$
|
(26,447
|
)
|
|
$
|
(69,913
|
)
|
|
$
|
(1,328,433
|
)
|
|
$
|
(826,026
|
)
|
|
$
|
(31,207
|
)
|
|
$
|
(39,761
|
)
|
|
$
|
(896,994
|
)
|
Other comprehensive (loss) income before reclassifications
|
(99,659
|
)
|
|
(3,797
|
)
|
|
6,648
|
|
|
(96,808
|
)
|
|
(322,383
|
)
|
|
(2,056
|
)
|
|
(31,544
|
)
|
|
(355,983
|
)
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
|
102,396
|
|
|
285
|
|
|
—
|
|
|
102,681
|
|
|
61,434
|
|
|
563
|
|
|
—
|
|
|
61,997
|
|
||||||||
Net current-period other comprehensive income (loss)
|
2,737
|
|
|
(3,512
|
)
|
|
6,648
|
|
|
5,873
|
|
|
(260,949
|
)
|
|
(1,493
|
)
|
|
(31,544
|
)
|
|
(293,986
|
)
|
||||||||
Ending balance
|
$
|
(1,229,336
|
)
|
|
$
|
(29,959
|
)
|
|
$
|
(63,265
|
)
|
|
$
|
(1,322,560
|
)
|
|
$
|
(1,086,975
|
)
|
|
$
|
(32,700
|
)
|
|
$
|
(71,305
|
)
|
|
$
|
(1,190,980
|
)
|
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
|
|
|
||||||
Details About Accumulated Other
Comprehensive Income (Loss) Components |
|
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
|
Affected Line Item in Statements of
Comprehensive Income (Loss) |
||||
Loss on cash flow derivative hedges:
|
|
|
|
|
|
|
|
|||
Interest rate swaps
|
|
$
|
(9,128
|
)
|
|
$
|
(6,786
|
)
|
|
Interest expense, net of interest capitalized
|
Foreign currency forward contracts
|
|
(718
|
)
|
|
(718
|
)
|
|
Depreciation and amortization expenses
|
||
Foreign currency forward contracts
|
|
6,087
|
|
|
(238
|
)
|
|
Other (expense) income
|
||
Foreign currency collar options
|
|
(602
|
)
|
|
—
|
|
|
Depreciation and amortization expenses
|
||
Fuel swaps
|
|
(7,335
|
)
|
|
—
|
|
|
Other (expense) income
|
||
Fuel swaps
|
|
(90,700
|
)
|
|
(53,692
|
)
|
|
Fuel
|
||
|
|
(102,396
|
)
|
|
(61,434
|
)
|
|
|
||
Amortization of defined benefit plans:
|
|
|
|
|
|
|
|
|||
Actuarial loss
|
|
(285
|
)
|
|
(354
|
)
|
|
Payroll and related
|
||
Prior service costs
|
|
—
|
|
|
(209
|
)
|
|
Payroll and related
|
||
|
|
(285
|
)
|
|
(563
|
)
|
|
|
||
Total reclassifications for the period
|
|
$
|
(102,681
|
)
|
|
$
|
(61,997
|
)
|
|
|
|
|
Fair Value Measurements at March 31, 2016 Using
|
|
Fair Value Measurements at December 31, 2015 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)
|
|
$
|
117,360
|
|
|
$
|
117,360
|
|
|
$
|
117,360
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
121,565
|
|
|
$
|
121,565
|
|
|
$
|
121,565
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets
|
|
$
|
117,360
|
|
|
$
|
117,360
|
|
|
$
|
117,360
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
121,565
|
|
|
$
|
121,565
|
|
|
$
|
121,565
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Long-term debt (including current portion of long-term debt)
(5)
|
|
$
|
8,655,603
|
|
|
$
|
9,039,755
|
|
|
$
|
1,546,938
|
|
|
$
|
7,492,817
|
|
|
$
|
—
|
|
|
$
|
8,478,473
|
|
|
$
|
8,895,009
|
|
|
$
|
1,536,629
|
|
|
$
|
7,358,380
|
|
|
$
|
—
|
|
Total Liabilities
|
|
$
|
8,655,603
|
|
|
$
|
9,039,755
|
|
|
$
|
1,546,938
|
|
|
$
|
7,492,817
|
|
|
$
|
—
|
|
|
$
|
8,478,473
|
|
|
$
|
8,895,009
|
|
|
$
|
1,536,629
|
|
|
$
|
7,358,380
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements at March 31, 2016 Using
|
|
Fair Value Measurements at December 31, 2015 Using
|
||||||||||||||||||||||||||||
Description
|
|
Total
|
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
|
Total
|
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(4)
|
|
$
|
137,463
|
|
|
$
|
—
|
|
|
$
|
137,463
|
|
|
$
|
—
|
|
|
$
|
134,574
|
|
|
$
|
—
|
|
|
$
|
134,574
|
|
|
$
|
—
|
|
Investments
(5)
|
|
$
|
3,804
|
|
|
3,804
|
|
|
—
|
|
|
—
|
|
|
$
|
3,965
|
|
|
3,965
|
|
|
—
|
|
|
—
|
|
||||||
Total Assets
|
|
$
|
141,267
|
|
|
$
|
3,804
|
|
|
$
|
137,463
|
|
|
$
|
—
|
|
|
$
|
138,539
|
|
|
$
|
3,965
|
|
|
$
|
134,574
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(6)
|
|
$
|
1,017,967
|
|
|
$
|
—
|
|
|
$
|
1,017,967
|
|
|
$
|
—
|
|
|
$
|
1,044,292
|
|
|
$
|
—
|
|
|
$
|
1,044,292
|
|
|
$
|
—
|
|
Total Liabilities
|
|
$
|
1,017,967
|
|
|
$
|
—
|
|
|
$
|
1,017,967
|
|
|
$
|
—
|
|
|
$
|
1,044,292
|
|
|
$
|
—
|
|
|
$
|
1,044,292
|
|
|
$
|
—
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
||||||||||||||||||||||||||||||
|
|
As of March 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives subject to master netting agreements
|
|
$
|
137,463
|
|
|
$
|
(137,463
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
134,574
|
|
|
$
|
(129,815
|
)
|
|
$
|
—
|
|
|
$
|
4,759
|
|
Total
|
|
$
|
137,463
|
|
|
$
|
(137,463
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
134,574
|
|
|
$
|
(129,815
|
)
|
|
$
|
—
|
|
|
$
|
4,759
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
||||||||||||||||||||||||||||||
|
|
As of March 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives subject to master netting agreements
|
|
$
|
(1,017,967
|
)
|
|
$
|
137,463
|
|
|
$
|
—
|
|
|
$
|
(880,504
|
)
|
|
$
|
(1,044,292
|
)
|
|
$
|
129,815
|
|
|
$
|
—
|
|
|
$
|
(914,477
|
)
|
Total
|
|
$
|
(1,017,967
|
)
|
|
$
|
137,463
|
|
|
$
|
—
|
|
|
$
|
(880,504
|
)
|
|
$
|
(1,044,292
|
)
|
|
$
|
129,815
|
|
|
$
|
—
|
|
|
$
|
(914,477
|
)
|
|
Fuel Swap Agreements
|
||||
|
As of March 31, 2016
|
|
As of December 31, 2015
|
||
|
(% hedged)
|
||||
Projected fuel purchases:
|
|
|
|
|
|
2016
|
65
|
%
|
|
65
|
%
|
2017
|
60
|
%
|
|
59
|
%
|
2018
|
40
|
%
|
|
40
|
%
|
2019
|
20
|
%
|
|
15
|
%
|
2020
|
5
|
%
|
|
—
|
|
|
|
Fair Value of Derivative Instruments
|
||||||||||||||||||
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
|
Balance Sheet Location
|
|
As of March 31, 2016
|
|
As of December 31, 2015
|
|
Balance Sheet Location
|
|
As of March 31, 2016
|
|
As of December 31, 2015
|
||||||||
|
|
|
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
|
|
$
|
13,046
|
|
|
$
|
—
|
|
|
Other long-term liabilities
|
|
$
|
139,805
|
|
|
$
|
67,371
|
|
Foreign currency forward contracts
|
|
Derivative financial instruments
|
|
78,179
|
|
|
93,996
|
|
|
Derivative financial instruments
|
|
139,456
|
|
|
320,873
|
|
||||
Fuel swaps
|
|
Derivative financial instruments
|
|
—
|
|
|
—
|
|
|
Derivative financial instruments
|
|
284,336
|
|
|
307,475
|
|
||||
Fuel swaps
|
|
Other assets
|
|
3,893
|
|
|
—
|
|
|
Other long-term liabilities
|
|
300,669
|
|
|
325,055
|
|
||||
Total derivatives designated as hedging instruments under 815-20
|
|
|
|
95,118
|
|
|
93,996
|
|
|
|
|
864,266
|
|
|
1,020,774
|
|
||||
Derivatives not designated as hedging instruments under ASC 815-20
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
Derivative financial instruments
|
|
$
|
33,779
|
|
|
$
|
32,339
|
|
|
Derivative financial instruments
|
|
$
|
129,817
|
|
|
$
|
—
|
|
Fuel swaps
|
|
Derivative financial instruments
|
|
8,566
|
|
|
8,239
|
|
|
Derivative financial instruments
|
|
23,884
|
|
|
23,518
|
|
||||
Total derivatives not designated as hedging instruments under 815-20
|
|
|
|
42,345
|
|
|
40,578
|
|
|
|
|
153,701
|
|
|
23,518
|
|
||||
Total derivatives
|
|
|
|
$
|
137,463
|
|
|
$
|
134,574
|
|
|
|
|
$
|
1,017,967
|
|
|
$
|
1,044,292
|
|
Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships
|
|
Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item
|
|
Amount of Gain (Loss)
Recognized in Income on Derivative |
|
Amount of Gain (Loss)
Recognized in Income on Hedged Item |
||||||||||||
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
|
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
Interest expense, net of interest capitalized
|
|
$
|
2,362
|
|
|
$
|
2,976
|
|
|
$
|
3,925
|
|
|
$
|
3,882
|
|
Interest rate swaps
|
|
Other (expense) income
|
|
26,268
|
|
|
15,152
|
|
|
(23,700
|
)
|
|
(12,341
|
)
|
||||
|
|
|
|
$
|
28,630
|
|
|
$
|
18,128
|
|
|
$
|
(19,775
|
)
|
|
$
|
(8,459
|
)
|
Derivatives
under ASC 815-20 Cash Flow Hedging Relationships |
|
Amount of Gain (Loss) Recognized in
Accumulated Other Comprehensive Income (Loss) on Derivative
(Effective Portion)
|
|
Location of
Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) |
|
Amount of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion) |
||||||||||||
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
|
|
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
|||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
(97,371
|
)
|
|
$
|
(35,815
|
)
|
|
Interest expense, net of interest capitalized
|
|
$
|
(9,128
|
)
|
|
$
|
(6,786
|
)
|
Interest rate swaps
|
|
—
|
|
|
—
|
|
|
Other (expense) income
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts
|
|
46,049
|
|
|
(172,822
|
)
|
|
Depreciation and amortization expenses
|
|
(718
|
)
|
|
(718
|
)
|
||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
Other (expense) income
|
|
6,087
|
|
|
(238
|
)
|
||||
Foreign currency collar options
|
|
—
|
|
|
(64,833
|
)
|
|
Depreciation and amortization expenses
|
|
(602
|
)
|
|
—
|
|
||||
Fuel swaps
|
|
—
|
|
|
—
|
|
|
Other (expense) income
|
|
(7,335
|
)
|
|
—
|
|
||||
Fuel swaps
|
|
(48,337
|
)
|
|
(48,913
|
)
|
|
Fuel
|
|
(90,700
|
)
|
|
(53,692
|
)
|
||||
|
|
$
|
(99,659
|
)
|
|
$
|
(322,383
|
)
|
|
|
|
$
|
(102,396
|
)
|
|
$
|
(61,434
|
)
|
Derivatives under
ASC 815-20
Cash Flow Hedging
Relationships
|
|
Location of Gain (Loss)
Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |
|
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
||
Interest rate swaps
|
|
Other (expense) income
|
|
(900
|
)
|
|
—
|
|
||
Interest rate swaps
|
|
Other (expense) income
|
|
—
|
|
|
38
|
|
||
Fuel swaps
|
|
Other (expense) income
|
|
(16
|
)
|
|
182
|
|
||
|
|
|
|
$
|
(916
|
)
|
|
$
|
220
|
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)
|
||||||
Non-derivative instruments under ASC 815-20 Net
Investment Hedging Relationships |
|
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
||||
(In thousands)
|
|
|
|
|
|
|
||
Foreign Currency Debt
|
|
$
|
—
|
|
|
$
|
12,137
|
|
|
|
$
|
—
|
|
|
$
|
12,137
|
|
|
|
|
|
Amount of Gain (Loss) Recognized in Income on Derivatives
|
||||||
Derivatives Not
Designated as Hedging Instruments under ASC 815-20 |
|
Location of
Gain (Loss) Recognized in Income on Derivatives |
|
Quarter Ended March 31, 2016
|
|
Quarter Ended March 31, 2015
|
||||
(In thousands)
|
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts
|
|
Other (expense) income
|
|
$
|
14,455
|
|
|
$
|
(28,083
|
)
|
Fuel swaps
|
|
Other (expense) income
|
|
22
|
|
|
(129
|
)
|
||
|
|
|
|
$
|
14,477
|
|
|
$
|
(28,212
|
)
|
|
|
Beginning
Balance January 1, 2016 |
|
Accruals
|
|
Payments
|
|
Ending Balance March 31, 2016
|
|
Cumulative
Charges Incurred |
||||||||||
Termination benefits
|
|
$
|
—
|
|
|
$
|
237
|
|
|
$
|
—
|
|
|
$
|
237
|
|
|
$
|
237
|
|
Contract termination costs
|
|
|
—
|
|
|
|
68
|
|
|
|
—
|
|
|
|
68
|
|
|
|
68
|
|
Other related costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
$
|
—
|
|
|
$
|
305
|
|
|
$
|
—
|
|
|
$
|
305
|
|
|
$
|
305
|
|
•
|
a review 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 quarter ended
March 31, 2016
compared to the same period in
2015
;
|
•
|
a discussion of our business outlook, including our expectations for selected financial items for the
second
quarter and full year of
2016
; 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.
Onboard and other revenues
also includes 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 as well as revenues received for procurement and management related services we perform on behalf of our unconsolidated affiliates.
|
•
|
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 and costs incurred for the procurement and management related services we perform on behalf of our unconsolidated affiliates;
|
•
|
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
);
|
•
|
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, entertainment and gains and /or losses related to the sale of our ships, if any.
|
•
|
The effect of changes in foreign currency exchange rates related to our passenger ticket and onboard and other revenue transactions and cruise operating expenses denominated in currencies other than the United States dollar, resulted in a decrease to total revenues of
$65.3 million
for the quarter ended March 31, 2016 as compared to the same period in
2015
and a decrease to cruise operating expenses of
$18.8 million
for the quarter ended March 31, 2016 as compared to the same period in
2015
;
|
•
|
Total revenues, excluding the unfavorable effect of changes in foreign currency exchange rates increased
$167.5
million for the quarter ended March 31, 2016 as compared to the same period in
2015
. The increase was primarily due to an increase in ticket prices and capacity.
|
•
|
Total Cruise operating expenses, excluding the favorable effect of changes in foreign currency exchange rates, increased $37.8 million for the quarter ended March 31, 2016 as compared to the same period in 2015. The increase was primarily due to an increase in capacity.
|
•
|
Effective January 1, 2016, we eliminated Pullmantur's and CDF Croisières de France's two-month reporting lag to be consistent with the fiscal calendar of the Company. As a result of this change, the results of Pullmantur and CDF Croisières de France for November and December 2015, in addition to the three months ended March 31, 2016, are included in our statement of comprehensive income (loss) for the quarter ended March 31, 2016. The effect of this change was a decrease to net income of
$21.7 million
and this amount is reported within
Other (expense) income
in our consolidated statements
|
•
|
In April 2016, we took delivery of
Ovation of the Seas
. To finance the purchase, we borrowed
$841.8 million
under a previously committed
12-year
unsecured term loan, which is
95%
guaranteed by Hermes. Refer to Note 5.
Long-Term Debt
to our consolidated financial statements for further information.
|
|
Quarter Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
|
|
% of Total
Revenues |
|
|
|
% of Total
Revenues |
||||||
Passenger ticket revenues
|
$
|
1,378,167
|
|
|
71.9
|
%
|
|
$
|
1,306,779
|
|
|
72.0
|
%
|
Onboard and other revenues
|
539,628
|
|
|
28.1
|
%
|
|
508,820
|
|
|
28.0
|
%
|
||
Total revenues
|
1,917,795
|
|
|
100.0
|
%
|
|
1,815,599
|
|
|
100.0
|
%
|
||
Cruise operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||
Commissions, transportation and other
|
324,890
|
|
|
16.9
|
%
|
|
324,418
|
|
|
17.9
|
%
|
||
Onboard and other
|
103,654
|
|
|
5.4
|
%
|
|
116,239
|
|
|
6.4
|
%
|
||
Payroll and related
|
227,441
|
|
|
11.9
|
%
|
|
211,591
|
|
|
11.7
|
%
|
||
Food
|
121,510
|
|
|
6.3
|
%
|
|
119,786
|
|
|
6.6
|
%
|
||
Fuel
|
175,862
|
|
|
9.2
|
%
|
|
205,276
|
|
|
11.3
|
%
|
||
Other operating
|
288,221
|
|
|
15.0
|
%
|
|
245,307
|
|
|
13.5
|
%
|
||
Total cruise operating expenses
|
1,241,578
|
|
|
64.7
|
%
|
|
1,222,617
|
|
|
67.3
|
%
|
||
Marketing, selling and administrative expenses
|
302,021
|
|
|
15.7
|
%
|
|
286,832
|
|
|
15.8
|
%
|
||
Depreciation and amortization expenses
|
210,764
|
|
|
11.0
|
%
|
|
200,468
|
|
|
11.0
|
%
|
||
Restructuring charges
|
305
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Operating Income
|
163,127
|
|
|
8.5
|
%
|
|
105,682
|
|
|
5.8
|
%
|
||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest income
|
2,720
|
|
|
0.1
|
%
|
|
3,737
|
|
|
0.2
|
%
|
||
Interest expense, net of interest capitalized
|
(65,446
|
)
|
|
(3.4
|
)%
|
|
(70,159
|
)
|
|
(3.9
|
)%
|
||
Other (expense) income
|
(1,261
|
)
|
|
(0.1
|
)%
|
|
5,970
|
|
|
0.3
|
%
|
||
|
(63,987
|
)
|
|
(3.3
|
)%
|
|
(60,452
|
)
|
|
(3.3
|
)%
|
||
Net Income
|
$
|
99,140
|
|
|
5.2
|
%
|
|
$
|
45,230
|
|
|
2.5
|
%
|
Diluted Earnings per Share
|
$
|
0.46
|
|
|
|
|
|
$
|
0.20
|
|
|
|
|
|
Quarter Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Adjusted Net Income
|
$
|
123,956
|
|
|
$
|
45,230
|
|
Net income
|
99,140
|
|
|
45,230
|
|
||
Net Adjustments to Net Income- Increase
|
$
|
24,816
|
|
|
$
|
—
|
|
Adjustments to Net Income:
|
|
|
|
||||
Net loss related to the elimination of the Pullmantur reporting lag
|
$
|
21,656
|
|
|
—
|
|
|
Restructuring charges
|
305
|
|
|
—
|
|
||
Other initiative costs
|
2,855
|
|
|
—
|
|
||
Net Adjustments to Net Income- Increase
|
$
|
24,816
|
|
|
$
|
—
|
|
|
|
|
|
||||
Basic:
|
|
|
|
|
|
||
Earnings per Share
|
$
|
0.46
|
|
|
$
|
0.21
|
|
Adjusted Earnings per Share
|
$
|
0.57
|
|
|
$
|
0.21
|
|
|
|
|
|
||||
Diluted:
|
|
|
|
||||
Earnings per Share
|
$
|
0.46
|
|
|
$
|
0.20
|
|
Adjusted Earnings per Share
|
$
|
0.57
|
|
|
$
|
0.20
|
|
|
|
|
|
||||
Weighted-Average Shares Outstanding:
|
|
|
|
||||
Basic
|
216,914
|
|
|
219,626
|
|
||
Diluted
|
217,869
|
|
|
220,842
|
|
|
Quarter Ended March 31,
|
||||||||||
|
2016
|
|
2016 On a Constant Currency Basis
|
|
2015
|
||||||
Passenger ticket revenues
|
$
|
1,378,167
|
|
|
$
|
1,438,485
|
|
|
$
|
1,306,779
|
|
Onboard and other revenues
|
539,628
|
|
|
544,591
|
|
|
508,820
|
|
|||
Total revenues
|
1,917,795
|
|
|
1,983,076
|
|
|
1,815,599
|
|
|||
Less:
|
|
|
|
|
|
|
|
|
|||
Commissions, transportation and other
|
324,890
|
|
|
337,298
|
|
|
324,418
|
|
|||
Onboard and other
|
103,654
|
|
|
104,977
|
|
|
116,239
|
|
|||
Net Revenues
|
$
|
1,489,251
|
|
|
$
|
1,540,801
|
|
|
$
|
1,374,942
|
|
|
|
|
|
|
|
||||||
APCD
|
9,192,563
|
|
|
9,192,563
|
|
|
8,778,945
|
|
|||
Gross Yields
|
$
|
208.62
|
|
|
$
|
215.73
|
|
|
$
|
206.81
|
|
Net Yields
|
$
|
162.01
|
|
|
$
|
167.61
|
|
|
$
|
156.62
|
|
|
Quarter Ended March 31,
|
||||||||||
|
2016
|
|
2016 On a Constant Currency Basis
|
|
2015
|
||||||
Total cruise operating expenses
|
$
|
1,241,578
|
|
|
$
|
1,260,440
|
|
|
$
|
1,222,617
|
|
Marketing, selling and administrative expenses
|
302,021
|
|
|
306,797
|
|
|
286,832
|
|
|||
Gross Cruise Costs
|
1,543,599
|
|
|
1,567,237
|
|
|
1,509,449
|
|
|||
Less:
|
|
|
|
|
|
|
|
|
|||
Commissions, transportation and other
|
324,890
|
|
|
337,298
|
|
|
324,418
|
|
|||
Onboard and other
|
103,654
|
|
|
104,977
|
|
|
116,239
|
|
|||
Net Cruise Costs including other initiative costs
|
1,115,055
|
|
|
1,124,962
|
|
|
1,068,792
|
|
|||
Less:
|
|
|
|
|
|
|
|
|
|||
Other initiative costs included within cruise operating expenses
|
2,491
|
|
|
2,551
|
|
|
—
|
|
|||
Net Cruise Costs
|
1,112,564
|
|
|
1,122,411
|
|
|
1,068,792
|
|
|||
Less:
|
|
|
|
|
|
||||||
Fuel
(1)
|
175,438
|
|
|
176,015
|
|
|
205,276
|
|
|||
Net Cruise Costs Excluding Fuel
|
$
|
937,126
|
|
|
$
|
946,396
|
|
|
$
|
863,516
|
|
|
|
|
|
|
|
||||||
APCD
|
9,192,563
|
|
|
9,192,563
|
|
|
8,778,945
|
|
|||
Gross Cruise Costs per APCD
|
$
|
167.92
|
|
|
$
|
170.49
|
|
|
$
|
171.94
|
|
Net Cruise Cost per APCD
|
$
|
121.03
|
|
|
$
|
122.10
|
|
|
$
|
121.74
|
|
Net Cruise Costs Excluding Fuel per APCD
|
$
|
101.94
|
|
|
$
|
102.95
|
|
|
$
|
98.36
|
|
|
As Reported
|
Constant Currency
|
Net Yields
|
1.3% to 2.8%
|
2.5% to 4.0%
|
Net Cruise Costs per APCD
|
(1.5%) to (2.0%)
|
(1.3%) to (1.8%)
|
Net Cruise Costs per APCD, Excluding Fuel
|
1.0% or less
|
Approx. 1.0%
|
Capacity Increase
|
6.0%
|
|
Depreciation and Amortization
|
$898 to $908 million
|
|
Interest Expense, net
|
$282 to $292 million
|
|
Fuel Consumption (metric tons)
|
1,411,000
|
|
Fuel Expenses
|
$734 million
|
|
Percent Hedged (fwd consumption)
|
65%
|
|
Impact of 10% change in fuel prices
|
$11 million
|
|
Adjusted Earnings per Share-Diluted
|
$6.15 to $6.35
|
|
|
As Reported
|
Constant Currency
|
Net Yields
|
Approx. Flat
|
Approx. 1.0%
|
Net Cruise Costs per APCD
|
Flat to (1.0%)
|
Flat to (1.0%)
|
Net Cruise Costs per APCD, Excluding Fuel
|
1.5% to 2.0%
|
Approx. 2.0%
|
Capacity Increase
|
5.7%
|
|
Depreciation and Amortization
|
$220 to $225 million
|
|
Interest Expense, net
|
$71 to $76 million
|
|
Fuel Consumption (metric tons)
|
353,000
|
|
Fuel Expenses
|
$191 million
|
|
Percent Hedged (fwd consumption)
|
67%
|
|
Impact of 10% change in fuel prices
|
$4 million
|
|
Adjusted Earnings per Share-Diluted
|
Approx. $1.00
|
|
Ranking
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY 2016
|
1
|
|
AUD
|
|
GBP
|
|
GBP
|
|
AUD
|
|
GBP
|
2
|
|
CAD
|
|
AUD
|
|
CNH
|
|
GBP
|
|
CNH
|
3
|
|
GBP
|
|
CAD
|
|
EUR
|
|
CNH
|
|
AUD
|
4
|
|
CNH
|
|
CNH
|
|
CAD
|
|
CAD
|
|
CAD
|
5
|
|
BRL
|
|
BRL
|
|
AUD
|
|
SGD
|
|
EUR
|
Currency Abbreviation
|
|
Currency
|
AUD
|
|
Australian Dollar
|
BRL
|
|
Brazilian Real
|
CAD
|
|
Canadian Dollar
|
CNH
|
|
Chinese Yuan
|
EUR
|
|
Euro
|
GBP
|
|
British Pound
|
MXN
|
|
Mexican Peso
|
SGD
|
|
Singapore Dollar
|
•
|
an increase of $70.1 million in ticket prices driven by higher pricing on
Anthem of the Seas
as well as higher pricing on Caribbean sailings and, to a lesser extent, our other core itineraries; and
|
•
|
a
4.7%
increase in capacity, which increased
passenger ticket revenues
by
$61.6 million
.
|
•
|
a
$25.3 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 and gaming initiatives, the promotion of specialty restaurants, the increased revenue associated with internet and other telecommunication services and other onboard activities; and
|
•
|
a
$22.9 million
increase attributable to the
4.7%
increase in capacity noted above.
|
•
|
a
$57.0 million
increase attributable to the 4.7% increase in capacity noted above;
|
•
|
a
$10.0 million
increase in vessel maintenance due to the costs of scheduled drydocks; and
|
•
|
an
$8.8 million
increase in commissions expense mainly attributable to the increase in ticket prices discussed above.
|
•
|
a
$38.5 million
decrease in fuel expense, excluding the impact of the increase in capacity. Our cost of fuel (net of the financial impact of fuel swap agreements) for 2016 decreased 18.3% per metric ton compared to 2015; and
|
•
|
an approximate
$18.8 million
favorable effect of changes in foreign currency exchange rates related to our cruise operating expenses denominated in currencies other than the United States dollar.
|
Ship
|
|
Expected to Enter
Service
|
|
Approximate
Berths
|
|
Royal Caribbean International —
|
|
|
|
|
|
Quantum-class:
|
|
|
|
|
|
Ovation of the Seas
(1)
|
|
2nd Quarter 2016
|
|
4,150
|
|
Unnamed
|
|
2nd Quarter 2019
|
|
4,150
|
|
Unnamed
|
|
4th Quarter 2020
|
|
4,150
|
|
Oasis-class:
|
|
|
|
|
|
Harmony of the Seas
|
|
2nd Quarter 2016
|
|
5,450
|
|
Unnamed
|
|
2nd Quarter 2018
|
|
5,450
|
|
Celebrity Cruises — Project Edge
|
|
|
|
|
|
Unnamed
|
|
2nd Half 2018
|
|
2,900
|
|
Unnamed
|
|
1st Half 2020
|
|
2,900
|
|
TUI Cruises (50% joint venture)
|
|
|
|
|
|
Mein Schiff 5
|
|
2nd Quarter 2016
|
|
2,500
|
|
Mein Schiff 6
|
|
2nd Quarter 2017
|
|
2,500
|
|
Unnamed
|
|
2nd Quarter 2018
|
|
2,850
|
|
Unnamed
|
|
2nd Quarter 2019
|
|
2,850
|
|
|
|
Total Berths
|
|
39,850
|
|
|
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)
|
$
|
236,797
|
|
|
$
|
23,158
|
|
|
$
|
35,346
|
|
|
$
|
25,336
|
|
|
$
|
152,957
|
|
Interest on long-term debt
(2)
|
1,166,596
|
|
|
242,848
|
|
|
381,724
|
|
|
246,304
|
|
|
295,720
|
|
|||||
Other
(3)
|
827,315
|
|
|
199,852
|
|
|
296,300
|
|
|
236,738
|
|
|
94,425
|
|
|||||
Investing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ship purchase obligations
(4)
|
5,749,681
|
|
|
1,697,451
|
|
|
1,848,437
|
|
|
2,203,793
|
|
|
—
|
|
|||||
Financing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt obligations
(5)
|
8,655,603
|
|
|
887,475
|
|
|
3,181,692
|
|
|
2,271,465
|
|
|
2,314,971
|
|
|||||
Capital lease obligations
(6)
|
46,577
|
|
|
8,015
|
|
|
9,486
|
|
|
7,535
|
|
|
21,541
|
|
|||||
Other
(7)
|
71,277
|
|
|
19,344
|
|
|
33,314
|
|
|
16,503
|
|
|
2,116
|
|
|||||
Total
|
$
|
16,753,846
|
|
|
$
|
3,078,143
|
|
|
$
|
5,786,299
|
|
|
$
|
5,007,674
|
|
|
$
|
2,881,730
|
|
(1)
|
We are obligated under noncancelable operating leases primarily for offices, warehouses and motor vehicles. Amounts represent contractual obligations with initial terms in excess of one year.
|
(2)
|
Long-term debt obligations mature at various dates through fiscal year 2027 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements using the applicable rate at
March 31, 2016
. Debt denominated in other currencies is calculated based on the applicable exchange rate at
March 31, 2016
.
|
(3)
|
Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.
|
(4)
|
Amounts do not include potential obligations which remain subject to cancellation at our sole discretion.
|
(5)
|
Amounts represent debt obligations with initial terms in excess of one year.
|
(6)
|
Amounts represent capital lease obligations with initial terms in excess of one year.
|
(7)
|
Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our revolving credit facilities.
|
Period
|
Total number of shares purchased
(1)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs
|
January 1, 2016 - January 31, 2016
|
—
|
|
—
|
|
—
|
|
$300,000,000
|
February 1, 2016 - February 29, 2016
|
2,113,397
|
|
$70.97
|
|
2,113,397
|
|
$150,000,000
|
March 1, 2016 - March 31, 2016
|
672,335
|
|
$74.37
|
|
672,335
|
|
$100,000,000
|
Total
|
2,785,732
|
|
|
|
2,785,732
|
|
|
10.1
|
|
|
Amendment No. 1 to Hull No. S-699 Credit Agreement, dated as of March 31, 2016, between Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW-IPEX-Bank GmbH, as Hermes Agent and Facility Agent.
|
|
|
|
|
18
|
|
|
Preferability Letter Regarding Change in Accounting Principle
|
|
|
|
|
31.1
|
|
|
Certification of the Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*
|
|
|
|
|
31.2
|
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*
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32.1
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Certifications of the Chairman and Chief Executive Officer and the Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code**
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*
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Filed herewith
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**
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Furnished herewith
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(ii)
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the Consolidated Balance Sheets at
March 31, 2016
and
December 31, 2015
;
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ROYAL CARIBBEAN CRUISES LTD.
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(Registrant)
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/s/ JASON T. LIBERTY
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Jason T. Liberty
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Chief Financial Officer
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April 29, 2016
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(Principal Financial Officer and duly authorized signatory)
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Dated 31 March 2016
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Royal Caribbean Cruises Ltd. (the Borrower)
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(1)
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KfW IPEX-Bank GmbH (the Hermes Agent)
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(2)
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KfW IPEX-Bank GmbH (the Facility Agent)
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(3)
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KfW IPEX-Bank GmbH (as Initial Mandated Lead Arranger)
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(4)
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Banco Santander S.A.
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(5)
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BNP Paribas Fortis S.A./N.V.
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Commerzbank AG, New York Branch
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DNB Bank ASA, Grand Cayman Branch
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HSBC Bank plc
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Norddeutsche Landesbank Girozentrale
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Societe Generale Corporate and Investment Banking
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The Bank of Tokyo Mitsubishi UFJ, Ltd.
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(the Mandated Lead Arrangers)
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and
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certain financial institutions (the Lenders)
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(6)
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Amendment No. 1 in connection with the
Credit Agreement in respect of Hull S699
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Contents
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Clause
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Page
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1
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Interpretation and definitions
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1
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2
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Amendment of the Existing Credit Agreement
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2
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3
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Conditions of Effectiveness of Amended Agreement
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2
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4
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Representations and Warranties
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2
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5
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Incorporation of Terms
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2
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6
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Costs and Expenses
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3
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7
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Counterparts
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3
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8
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Governing Law
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3
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Schedule 1 Amended and Restated Credit Agreement
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(1)
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Royal Caribbean Cruises Ltd.
(a corporation organised and existing under the laws of The Republic of Liberia) (the
Borrower
);
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(2)
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KfW IPEX-Bank GmbH
as facility agent (the
Facility Agent
);
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(3)
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KfW IPEX-Bank GmbH
as Hermes agent (the
Hermes Agent
);
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(4)
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KfW IPEX-Bank GmbH
as initial mandated lead arranger (the
Initial Mandated Lead Arranger
);
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(5)
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Banco Santander S.A.
,
BNP Paribas Fortis S.A./N.V
,
Commerzbank AG
,
New York Branch DNB Bank ASA
,
Grand Cayman Branch
,
HSBC Bank plc
,
Norddeutsche Landesbank Girozentrale
,
Societe Generale Corporate and Investment Banking
and
The Bank of Tokyo Mitsubishi UFJ, Ltd.
as mandated lead arrangers (together with the Initial Mandated Lead Arranger, the
Mandated Lead Arrangers
); and
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(6)
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The financial institutions party thereto as lenders from time to time (the
Lenders
).
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(A)
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The Borrower, the Facility Agent, the Hermes Agent and the Lenders are parties to a credit agreement dated 27 November 2013 (the
Existing Credit Agreement
), in respect of the vessel with Hull number S-699 (the
Vessel
) whereby it was agreed that the Lenders would make available to the Borrower, upon the terms and conditions therein, a US dollar loan facility (the
Facility
) calculated on the amount equal to the sum of (a) up to eighty per cent (80%) of the Contract Price (as defined in the Existing Credit Agreement) of the Vessel but which Contract Price will not exceed EUR 777,000,000 and (b) up to 100% of the Hermes Fee (as defined therein).
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(B)
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The Parties wish to amend the Existing Credit Agreement to the extent set out in this Amendment.
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1
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Interpretation and definitions
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1.1
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Definitions in the Existing Credit Agreement
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(a)
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Unless the context otherwise requires or unless otherwise defined in this Amendment, words and expressions defined in the Existing Credit Agreement shall have the same meanings when used in this Amendment.
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(b)
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The principles of construction set out in the Existing Credit Agreement shall have effect as if set out in this Amendment.
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1.2
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In this Amendment:
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1.3
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Third party rights
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1.4
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Designation
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2
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Amendment of the Existing Credit Agreement
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3
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Conditions of Effectiveness of Amended Agreement
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4
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Representations and Warranties
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5
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Incorporation of Terms
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6
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Costs and Expenses
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7
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Counterparts
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8
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Governing Law
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TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
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SECTION 1.1. Defined Terms
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2
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SECTION 1.2. Use of Defined Terms
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13
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SECTION 1.3. Cross-References
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14
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SECTION 1.4. Application of this Agreement to KfW IPEX as an Option A Lender
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14
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SECTION 1.5. Accounting and Financial Determinations
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14
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ARTICLE II COMMITMENTS AND BORROWING PROCEDURES
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SECTION 2.1. Commitment
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15
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SECTION 2.2. Commitment of the Lenders; Termination and Reduction of Commitments
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15
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SECTION 2.3. Borrowing Procedure
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15
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SECTION 2.4. Funding
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17
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ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
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SECTION 3.1. Repayments
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17
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SECTION 3.2. Prepayment
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17
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SECTION 3.3. Interest Provisions.
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18
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SECTION 3.3.1. Rates.
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18
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SECTION 3.3.2. Election of Floating Rate.
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18
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SECTION 3.3.3. Conversion to Floating Rate.
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19
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SECTION 3.3.4. Post-Maturity Rates.
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19
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SECTION 3.3.5. Payment Dates.
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19
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SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks
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20
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SECTION 3.4. Commitment Fees.
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20
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SECTION 3.4.1. Payment.
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21
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SECTION 3.5. CIRR Fees.
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21
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SECTION 3.5.1. Payment.
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21
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SECTION 3.6. Other Fees.
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21
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ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
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SECTION 4.1. LIBO Rate Lending Unlawful.
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22
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SECTION 4.2. Deposits Unavailable
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23
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SECTION 4.3. Increased LIBO Rate Loan Costs, etc.
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24
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SECTION 4.4. Funding Losses
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25
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SECTION 4.4.1. Indemnity
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25
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SECTION 4.5. Increased Capital Costs
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28
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SECTION 4.6. Taxes
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28
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SECTION 4.7. Reserve Costs
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30
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SECTION 4.8. Payments, Computations, etc.
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31
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SECTION 4.9. Replacement Lenders, etc.
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32
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SECTION 4.10. Sharing of Payments
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33
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SECTION 4.10.1. Payments to Lenders
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33
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SECTION 4.10.2. Redistribution of payments
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33
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SECTION 4.10.3. Recovering Lender's rights
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33
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SECTION 4.10.4. Reversal of redistribution
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34
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SECTION 4.10.5. Exceptions
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34
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SECTION 4.11. Set-off
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34
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SECTION 4.12. Use of Proceeds
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34
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ARTICLE V CONDITIONS TO BORROWING
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SECTION 5.1. Advance of the Loan
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35
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SECTION 5.1.1. Resolutions, etc.
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35
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SECTION 5.1.2. Opinions of Counsel
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36
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SECTION 5.1.3. Hermes Insurance Policy
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36
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SECTION 5.1.4. Closing Fees, Expenses, etc.
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36
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SECTION 5.1.5. Compliance with Warranties, No Default, etc
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36
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SECTION 5.1.6. Loan Request
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37
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SECTION 5.1.7. Foreign Exchange Counterparty Confirmations.
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37
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SECTION 5.1.8. Pledge Agreement.
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37
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ARTICLE VI REPRESENTATIONS AND WARRANTIES
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SECTION 6.1. Organization, etc.
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37
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SECTION 6.2. Due Authorization, Non-Contravention, etc.
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38
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SECTION 6.3. Government Approval, Regulation, etc.
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38
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SECTION 6.4. Compliance with Laws
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38
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SECTION 6.5. Validity, etc.
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39
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SECTION 6.6. No Default, Event of Default or Prepayment Event
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39
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SECTION 6.7. Litigation
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39
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SECTION 6.8. The Purchased Vessel
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39
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SECTION 6.9. Obligations rank pari passu
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40
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SECTION 6.10. Withholding, etc.
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40
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SECTION 6.11. No Filing, etc. Required
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40
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SECTION 6.12. No Immunity
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40
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SECTION 6.13. Investment Company Act
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40
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SECTION 6.14. Regulation U
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40
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SECTION 6.15. Accuracy of Information
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40
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ARTICLE VII COVENANTS
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SECTION 7.1. Affirmative Covenants
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41
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SECTION 7.1.1. Financial Information, Reports, Notices, etc.
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41
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SECTION 7.1.2. Approvals and Other Consents.
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42
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SECTION 7.1.3. Compliance with Laws, etc.
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42
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SECTION 7.1.4. The Purchased Vessel.
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43
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SECTION 7.1.5. Insurance
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43
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SECTION 7.1.6. Books and Records
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44
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SECTION 7.1.7. Hermes Insurance Policy/Federal Republic of Germany Requirement
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44
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SECTION 7.1.8. Notice of written amendments to Construction Contract
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44
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SECTION 7.2. Negative Covenants
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44
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SECTION 7.2.1. Business Activities
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44
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SECTION 7.2.2. Indebtedness
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45
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SECTION 7.2.3. Liens
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45
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SECTION 7.2.4. Financial Condition
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47
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SECTION 7.2.5. Investments
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48
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SECTION 7.2.6. Consolidation, Merger, etc.
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48
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SECTION 7.2.7. Asset Dispositions, etc.
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49
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SECTION 7.2.8. [RESERVED]
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49
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SECTION 7.2.9. Construction Contract
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49
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SECTION 7.3. Limitation in respect of Certain Representations, Warranties and Covenants
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49
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ARTICLE VIII EVENTS OF DEFAULT
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SECTION 8.1. Listing of Events of Default
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50
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SECTION 8.1.1. Non-Payment of Obligations
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50
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SECTION 8.1.2. Breach of Warranty
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50
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SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations
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50
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SECTION 8.1.4. Default on Other Indebtedness
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50
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SECTION 8.1.5. Bankruptcy, Insolvency, etc. :
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51
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SECTION 8.2. Action if Bankruptcy
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52
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SECTION 8.3. Action if Other Event of Default
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52
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ARTICLE IX PREPAYMENT EVENTS
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SECTION 9.1. Listing of Prepayment Events
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52
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SECTION 9.1.1. Change of Control
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52
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SECTION 9.1.2. [RESERVED]
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52
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SECTION 9.1.3. Unenforceability
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53
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SECTION 9.1.4. Approvals
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53
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SECTION 9.1.5. Non-Performance of Certain Covenants and Obligations
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53
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SECTION 9.1.6. Judgments
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53
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SECTION 9.1.7. Condemnation, etc.
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53
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SECTION 9.1.8. Arrest
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53
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SECTION 9.1.9. Sale/Disposal of the Purchased Vessel
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53
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SECTION 9.1.10. Delayed Delivery of the Purchased Vessel
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54
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SECTION 9.1.11. Termination of the Construction Contract
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54
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SECTION 9.2. Mandatory Prepayment
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54
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ARTICLE X THE FACILITY AGENT AND THE HERMES AGENT
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SECTION 10.1. Actions
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54
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SECTION 10.2. Indemnity
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55
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SECTION 10.3. Funding Reliance, etc
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55
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SECTION 10.4. Exculpation
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56
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SECTION 10.5. Successor
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56
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SECTION 10.6. Loans by the Facility Agent
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57
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SECTION 10.7. Credit Decisions
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57
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SECTION 10.8. Copies, etc
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57
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SECTION 10.9. The Agents’ Rights
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58
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SECTION 10.10. The Facility Agent’s Duties
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58
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SECTION 10.11. Employment of Agents
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58
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SECTION 10.12. Distribution of Payments
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59
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SECTION 10.13. Reimbursement
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59
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SECTION 10.14. Instructions
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59
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SECTION 10.15. Payments
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59
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SECTION 10.16. “Know your customer” Checks
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59
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SECTION 10.17. No Fiduciary Relationship
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60
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ARTICLE XI MISCELLANEOUS PROVISIONS
|
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SECTION 11.1. Waivers, Amendments, etc.
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60
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SECTION 11.2. Notices
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61
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SECTION 11.3. Payment of Costs and Expenses
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62
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SECTION 11.4. Indemnification
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62
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SECTION 11.5. Survival
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64
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SECTION 11.6. Severability
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64
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SECTION 11.7. Headings
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64
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SECTION 11.8. Execution in Counterparts; Effectiveness.
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64
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SECTION 11.9. Third Party Rights
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64
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SECTION 11.10. Successors and Assigns
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64
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SECTION 11.11. Sale and Transfer of the Loan; Participations in the Loan
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65
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SECTION 11.11.1. Assignments
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65
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SECTION 11.11.2. Participations
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67
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SECTION 11.11.3. Register
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68
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SECTION 11.12. Other Transactions
|
68
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SECTION 11.13. Hermes Insurance Policy.
|
68
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SECTION 11.13.1. Terms of Hermes Insurance Policy
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68
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SECTION 11.13.2. Obligations of the Borrower.
|
69
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SECTION 11.13.3. Obligations of the Hermes Agent and the Lenders.
|
70
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SECTION 11.14. Law and Jurisdiction
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71
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SECTION 11.14.1. Governing Law
|
71
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SECTION 11.14.2. Jurisdiction
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71
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SECTION 11.14.3. Alternative Jurisdiction
|
71
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SECTION 11.14.4. Service of Process
|
71
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SECTION 11.15. Confidentiality
|
72
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SECTION 11.16. CIRR requirements
|
72
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EXHIBITS
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Exhibit A - Form of Loan Request
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Exhibit B-1 - Form of Opinion of Liberian Counsel to Borrower
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Exhibit B-2 - Form of Opinion of English Counsel to Facility Agent and Lenders
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Exhibit B-3 - Form of Opinion of German Counsel to Facility Agent and Lenders
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Exhibit B-4 - Form of Opinion of US Tax Counsel to Lenders
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Exhibit C - Form of Lender Assignment Agreement
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Exhibit D - Form of Option A Refinancing Agreement
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Exhibit E - Form of Pledge Agreement
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(A)
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The Borrower and Meyer Werft GmbH, Papenburg (the “
Builder
”) have entered on May 30, 2013 into a Contract for the Construction and Sale of Hull No. S-699 (as amended from time to time, the “
Construction Contract
”) pursuant to which the Builder has agreed to design, construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number S-699 (the “
Purchased Vessel
”);
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(B)
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The Lenders have agreed to make available to the Borrower, upon the terms and conditions contained herein, a US dollar loan facility calculated on the amount (the “
Maximum Loan Amount
”) equal to the sum of (x) up to eighty per cent (80%) of the Contract Price (as defined below) of the Purchased Vessel (as defined below), as adjusted from time to time in accordance with the Construction Contract to reflect, among other adjustments, change orders, but which Contract Price shall not exceed for this purpose EUR 777,000,000 (the “
Contract Price Proceeds
”) and (y) up to 100% of the Hermes Fee (as defined below) (the “
Hermes Fee Proceeds
”) and being made available in the US Dollar Equivalent of that Maximum Loan Amount;
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(C)
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The Contract Price Proceeds will be provided to the Borrower two (2) Business Days prior to the delivery of the Purchased Vessel for the purpose of paying a portion of the Contract Price in connection with the Borrower’s purchase of the Purchased Vessel. The Hermes Fee Proceeds will be provided on the Disbursement Date and paid as set forth in Section 2.3(c) and (d).
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a)
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net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to
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b)
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the sum of:
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a)
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any Interest Period which would otherwise end on a day which is not a Business Day shall end on the next Business Day to occur, except if such Business Day does not fall in the same calendar month, the Interest Period will end on the last Business Day in that calendar month, the interest amount due in respect of the Interest Period in question and in respect of the next following Interest Period being adjusted accordingly; and
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b)
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if any Interest Period is altered by the application of a) above, the subsequent Interest Period shall end on the day on which it would have ended if the preceding Interest Period had not been so altered.
|
a)
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any loan or advance made by such Person to any other Person (excluding commission, travel, expense and similar advances to officers and employees made in the ordinary course of business); and
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b)
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any ownership or similar interest held by such Person in any other Person.
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a)
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subject to
Section 3.3.6
, if no such offered quotation appears on Reuters LIBOR01 Page (or any successor page) at the relevant time, the LIBO Rate shall be the rate per annum certified by the Facility Agent to be the average of the rates quoted by the Reference Banks as the rate at which each of the Reference Banks was (or would have been) offered deposits of Dollars by prime banks in the London interbank market in an amount approximately equal to the amount of the Loan and for a period of six months; and
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b)
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for the purposes of determining the post-maturity rate of interest under
Section 3.3.4
, the LIBO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Facility Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees.
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(a)
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for the EUR amount payable in respect of the final (delivery) instalment of the Contract Price (excluding the portion thereof comprising the Buyer's Allowance), the total of such EUR amount converted to a corresponding Dollar amount as determined using the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amount of EUR with Dollars for the payment of that final installment of the Contract Price and including in such weighted average the spot rates for any EUR amounts due that have not been hedged by the Borrower;
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(b)
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for all EUR amounts payable in respect of the Buyer's Allowance, the total of such EUR amounts converted to a corresponding Dollar amount as determined using the USD-to-EUR rate used by the Borrower to convert the relevant USD amount of the amount of the Buyer's Allowance into EUR for the purpose of the Builder invoicing the same to the Borrower in EUR in accordance with the Construction Contract; and
|
(c)
|
for the calculation and payment of the Hermes Fee in Dollars, the amount thereof in EUR converted to a corresponding Dollar amount as determined by Hermes on the basis of the latest rate for the purchase of EUR with Dollars to be published by the German Federal Ministry of Finance prior to the time that Hermes issues its invoice for the Hermes Fee.
|
a)
|
Each Lender will make its portion of the Loan available to the Borrower in accordance with
Section 2.3
two (2) Business Days prior to the delivery of the Purchased Vessel to the Borrower under the Construction Contract. The commitment of each Lender described in this
Section 2.2
(herein referred to as its “
Commitment
”) shall be the commitment of such Lender to make available to the Borrower its portion of the Loan hereunder expressed as the initial amount set forth opposite such Lender’s name on its signature page attached hereto or, in the case of any Lender that becomes a Lender pursuant to an assignment pursuant to
Section 11.11.1
, the amount set forth as such Lender’s Commitment in the related Lender Assignment Agreement, in each case as such amount may be reduced from time to time pursuant to
Section 2.2(b)
or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to
Section 11.11.1
. Notwithstanding the foregoing, each Lender’s Commitment shall terminate on the earlier of (i) the Commitment Termination Date if the Purchased Vessel is not delivered prior to such date and (ii) the delivery of the Purchased Vessel.
|
b)
|
The Borrower may, by notice to the Facility Agent, at any time (i) prior to the date that is not less than 62 days prior to the expected Disbursement Date, without premium or penalty, terminate, or from time to time reduce, the Commitments and (ii) prior to the date on which the Commitments have been terminated but less than 62 days prior to the expected Disbursement Date, and subject to
Section 4.4
, terminate, or from time to time reduce, the Commitments. Any such termination or reduction of the Commitments shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments. Where the Commitments are cancelled in full or in part the Borrower shall pay on the date of such cancellation all amounts, including any fees and commissions which have accrued but remain unpaid at such date, which are due and owing to the Facility Agent and the Lenders at such date to the extent that such amounts, other than principal of the Loan, are the subject of invoices from the Facility Agent to the Borrower received by the Borrower not less than two (2) Business Days prior to the date of such cancellation. Otherwise, such amounts shall be payable by the Borrower following the date of such cancellation upon the second (2
nd
) Business Day following receipt of the relevant invoices.
|
c)
|
If any Lender shall default in its obligations under
Section 2.1
, the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Lender.
|
a)
|
The Borrower shall deliver a Loan Request and the documents required to be delivered pursuant to
Section 5.1.1(a)
to the Facility Agent on or before 11:00 a.m., London time, not less than two (2) Business Days in advance of the date that is two (2) Business Days prior to the anticipated Delivery Date. The aggregate amount of the Loan to be advanced shall not exceed the US Dollar Maximum Loan Amount.
|
b)
|
The Facility Agent shall promptly notify each Lender of any Loan Request by forwarding a copy thereof to each Lender, together with its attachments. On the terms and subject to the conditions of this Agreement, the Loan shall be made on the Business Day specified in such Loan Request. On or before 2:00 p.m., London time, on the Business Day specified in such Loan Request, the Lenders shall, without any set-off or counterclaim, deposit with the Facility Agent same day Dollar funds in an amount equal to such Lender’s Percentage of the requested Loan. Such deposit will be made to an account which the Facility Agent shall specify from time to time by notice to the Lenders. To the extent funds are so received from the Lenders, the Facility Agent shall, without any set-off or counterclaim, make such funds available to the Borrower on the Business Day specified in the Loan Request by wire transfer of same day funds to the account or accounts the Borrower shall have specified in its Loan Request.
|
c)
|
The Borrower shall, upon receipt of the Dollar funds into the account referred to in
Section 2.3(b)
above, (i) complete the purchase of EUR with its counterparties or otherwise as set out in the Loan Request (by authorising and instructing the Facility Agent to remit the necessary Dollar funds to the said counterparties) and shall procure the payment of all EUR proceeds of such transactions to the EUR Pledged Account no later than the Business Day immediately following the Business Day specified in the Loan Request and (ii) to the extent of any such Dollar funds as shall not be used to purchase EUR, shall procure (by authorising and instructing the Facility Agent accordingly) the payment of such Dollar funds to the Dollar Pledged Account on the Disbursement Date.
|
d)
|
Upon the date of delivery to the Borrower of the Purchased Vessel, the Facility Agent shall direct that moneys standing to the credit of the Pledged Accounts shall, in the manner set out in the Loan Request and in accordance with the requirements and provisions of the Pledge Agreement, be disbursed as follows:
|
i)
|
in EUR, to the account of the Builder, as designated by the Builder and identified by the Borrower in the Loan Request, to the extent necessary to meet the final instalment of the Contract Price (including any portion thereof attributable to the Buyer's Allowance); and
|
ii)
|
in Dollars, (y) to Hermes in payment of the Second Fee; and (z) to the account of the Borrower, as designated by the Borrower and identified by the Borrower in the Loan Request, in reimbursement of the First Fee and in respect of any additional amounts standing to the Dollar Pledged Account as of the date of such disbursement,
|
a)
|
Subject to
Section 3.1 b)
, the Borrower shall repay the Loan in 24 equal semi-annual installments, with the first instalment to fall due on the date falling six (6) months after the Delivery Date and the final instalment to fall due on the date of Final Maturity.
|
b)
|
If, on the date of delivery of the Purchased Vessel, the outstanding principal amount of the Loan exceeds the US Dollar Maximum Loan Amount (as a result of a reduction in the Contract Price after the Disbursement Date and before the delivery of the Purchased Vessel), the Borrower shall repay the Loan in an amount equal to such excess within two (2) Business Days after the date of delivery of the Purchased Vessel. Any such partial prepayment shall be applied
pro rata
in satisfaction of the remaining repayment installments of the Loan.
|
c)
|
No such amounts repaid by the Borrower pursuant to this
Section 3.1
may be re-borrowed under the terms of this Agreement.
|
a)
|
may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan;
provided
that:
|
i)
|
all such voluntary prepayments shall require (x) for prepayments on or after the Disbursement Date made prior to delivery of the Purchased Vessel in respect of the advance made on the Disbursement Date, at least two (2) Business Days’ prior written notice to the Facility Agent, and (y) for all other prepayments, at least 30 calendar days’ prior written notice, if all or any portion of the Loan is a Fixed Rate Loan, and at least five (5) Business Days’ (or, if such prepayment is to be made on the last day
|
ii)
|
all such voluntary partial prepayments shall be in an aggregate minimum amount of $10,000,000 and a multiple of $1,000,000 (or in the remaining amount of the Loan) and shall be applied in inverse order of maturity or ratably among all remaining installments, as the Borrower shall designate to the Facility Agent,
in satisfaction of the remaining repayment installments of the Loan; and
|
b)
|
shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to
Section 8.2
or
8.3
or the mandatory prepayment of the Loan pursuant to
Section 9.2
, repay the Loan.
|
a)
|
By written notice to the Facility Agent delivered prior to the date that is not less than 62 days prior to the expected Disbursement Date, the Borrower may elect, without incurring any liability to make any payments pursuant to
Section 4.4
or to pay any other indemnity or compensation obligation, to pay interest on the Loan at the Floating Rate.
|
b)
|
By written notice to the Facility Agent delivered less than 62 days prior to the expected Disbursement Date, the Borrower may elect, subject to
Section 4.4
, to pay interest on the Loan at the Floating Rate.
|
c)
|
By written notice to the Facility Agent no later than 2:00 p.m. Frankfurt time 32 days prior to the end of an Interest Period, the Borrower may elect, subject to
Section 4.4
, to pay interest on the Loan for the remainder of the term of the Loan at the Floating Rate, with effect from the end of that Interest Period.
|
d)
|
Any election made under any of
Section 3.3.2.a)
,
Section 3.3.2.b)
or
Section 3.3.2.c)
may only be made one time during the term of the Loan and shall be irrevocable.
|
a)
|
each Interest Payment Date;
|
b)
|
each Repayment Date;
|
c)
|
the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and
|
d)
|
on that portion of the Loan the repayment of which is accelerated pursuant to
Section 8.2
or
Section 8.3
, immediately upon such acceleration.
|
a)
|
Dollar deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market, or
|
b)
|
by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate loans for the relevant Interest Period, or
|
c)
|
the cost to Option B Lenders that in the aggregate hold more than 50% of the aggregate outstanding principal amount of the Loan then held by Option B Lenders, if any Lender shall have entered into an Option B Interest Make-Up Agreement, of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the LIBO Rate (provided that no Option B Lender may exercise its rights under this Section 4.2(c)) for amounts up to the difference between such Option B Lender’s cost of obtaining matching deposits on the date such Option B Lender becomes a Lender hereunder less the LIBO Rate on such date),
|
a.
|
subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in
Section 4.6
, withholding taxes); or
|
b.
|
change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or
|
c.
|
impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in
Section 4.5
and the reserve costs described in
Section 4.7
) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (
provided
that such Lender shall, unless prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or
|
d.
|
impose on any Lender any other condition affecting its portion of the Loan or any part thereof,
|
i)
|
if at the time interest is calculated at the Floating Rate on such Lender’s portion of the Loan, any conversion or repayment or prepayment or acceleration of the principal amount of such Lender’s portion of the Loan on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment (including payments made in accordance with
Section 3.1(b))
;
|
ii)
|
if at the time interest is calculated at the Fixed Rate on such Lender’s portion of the Loan, any repayment or prepayment or acceleration of the principal amount of such Lender’s portion of the Loan, other than any repayment made on the date scheduled for such repayment;
|
iii)
|
an election by the Borrower of the Floating Rate in accordance with
Section 3.3.2.b)
or
Section 3.3.2.c)
;
|
iv)
|
a reduction or termination of the Commitments by the Borrower pursuant to
Section 2.2.b)(ii)
; or
|
v)
|
the Loan not being made in accordance with the Loan Request therefor due to the fault of the Borrower or as a result of any of the conditions precedent set forth in Article V not being satisfied,
|
a.
|
if at that time interest is calculated at the Floating Rate on such Lender’s portion of the Loan, pay directly to the Facility Agent for the account of such Lender an amount (the “
Floating Rate Indemnity Amount
”) equal to the amount by which:
|
(i)
|
interest calculated at the Floating Rate which such Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share in the Loan to the last day of the applicable Interest Period,
|
(ii)
|
the amount which such Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period; or
|
b.
|
if at that time interest is calculated at the Fixed Rate on such Lender’s portion of the Loan, pay to the Facility Agent the sum of:
|
(A)
|
an amount equal to the amount by which:
|
(i)
|
interest calculated at the Fixed Rate which such Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share of the Loan to the final scheduled date for the repayment of Loan in full pursuant to
Section 3.1
,
|
(ii)
|
the amount by which such Lender would be able to obtain by placing an equal amount to the amount received by it on deposit and receiving interest equal to the money market rate then applicable to Dollars on the Reuters page “ICAP1” (the “
Reinvestment Rate
”),
|
(B)
|
an amount equal to the Floating Rate Indemnity Amount (and assuming for the purpose of this calculation that the interest on the Loan is calculated at the Floating Rate and not the Fixed Rate).
|
a.
|
pay directly to the relevant authority the full amount required to be so withheld or deducted;
|
b.
|
promptly forward to the Facility Agent an official receipt or other documentation satisfactory to the Facility Agent evidencing such payment to such authority; and
|
c.
|
pay to the Facility Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.
|
b.
|
(i) Each Option A Lender hereby instructs the Facility Agent to remit all payments of interest made with respect to any portion of the Loan held by such Option A Lender to the Refinancing Bank (A) less (x) the Fixed Rate Margin and (y) the CIRR administrative fee of 0.39% but plus (z) an agreed refinancing margin and agreed bank margin, if interest on the portion of the Loan made by that Lender is then calculated at the Fixed Rate,
or
(B) less (x) the Floating Rate Margin but plus (y) an agreed refinancing margin and bank margin, if interest on that portion of the Loan is then calculated at the Floating Rate.
|
c.
|
The Facility Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in clause (a) of this Section, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Facility Agent for the account of such Lender without any set-off, deduction or counterclaim. All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (a) of the definition of the term “
Interest Period
”) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.
|
(a)
|
the Recovering Lender shall, within three (3) Business Days, notify details of the receipt or recovery to the Facility Agent;
|
(b)
|
the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Lender would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with the said Section 4.8, without taking account of any taxes which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
|
(c)
|
the Recovering Lender shall, within three (3) Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "
Sharing Payment
") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Lender as its share of any payment to be made, in accordance with any applicable provisions of this Agreement.
|
a.
|
each Sharing Lender shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Lender an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Lender for its proportion of any interest on the Sharing Payment which that Recovering Lender is required to pay) (the "
Redistributed Amount
"); and
|
b.
|
as between the Borrower and each relevant Sharing Lender, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by the Borrower.
|
a.
|
This Section 4.10 shall not apply to the extent that the Recovering Lender would not, after making any payment pursuant to this Section 4.10, have a valid and enforceable claim against the Borrower.
|
b.
|
A Recovering Lender is not obliged to share with any other Lender any amount which the Recovering Lender has received or recovered as a result of taking legal or arbitration proceedings, if:
|
(i)
|
it notified the other Lender of the legal or arbitration proceedings; and
|
(ii)
|
the other Lender had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
|
a.
|
Watson Farley & Williams LLP, counsel to the Borrower, as to Liberian Law, covering the matters set forth in
Exhibit B-1
hereto;
|
b.
|
Norton Rose Fulbright LLP, counsel to the Facility Agent and the Lenders, covering the matters set forth in
ExhibitB-2
hereto; and
|
c.
|
Norton Rose Fulbright LLP, counsel to the Facility Agent and the Lenders as to German law, an opinion addressed to the Facility Agent and the Lenders covering the matters set forth in
Exhibit
B-3
hereto.
|
d.
|
Clifford Chance US LLP, United States tax counsel to the Facility Agent for the benefit of Lenders, covering the matters set forth in
Exhibit B-4
hereto,
|
a.
|
the representations and warranties set forth in
Article VI
(excluding, however, those set forth in Section 6.10) shall be true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material
|
b.
|
no Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event shall have then occurred and be continuing.
|
a.
|
certified as true (by the Builder) copies of the reimbursement request and supporting documents received by the Builder from the Borrower pursuant to Article XVII.1(b) of the Construction Contract in relation to the incurred Buyer’s Allowance;
|
b.
|
a copy of the final invoice from the Builder showing the amount of the Contract Price (including the Buyer’s Allowance) and the portion thereof payable to the Builder on the Delivery Date under the Construction Contract; and
|
c.
|
copies of the wire transfers for all payments by the Borrower to the Builder under the Construction Contract in respect of the Contract Price.
|
a.
|
contravene the Borrower’s Organic Documents;
|
b.
|
contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;
|
c.
|
contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;
|
d.
|
contravene any contractual restriction binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect; or
|
e.
|
result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.
|
a.
|
The Borrower is in compliance with all applicable laws, rules, regulations and orders, except to the extent that the failure to so comply does not and would not reasonably be expected to have a Material Adverse Effect.
|
b.
|
The Borrower has implemented and maintains in effect policies and procedures designed to procure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Borrower and its Subsidiaries and, to the knowledge of the Borrower, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions, in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in
|
c.
|
The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.
|
a.
|
legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,
|
b.
|
registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,
|
c.
|
classed as required by
Section 7.1.4(b)
,
|
d.
|
free of all recorded Liens, other than Liens permitted by
Section 7.2.3
,
|
e.
|
insured against loss or damage in compliance with
Section 7.1.5
, and
|
f.
|
exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries.
|
a.
|
as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;
|
b.
|
as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;
|
c.
|
together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in
Section 7.2.4
(in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Facility Agent);
|
d.
|
as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;
|
e.
|
as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;
|
f.
|
promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and
|
g.
|
such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Facility Agent may from time to time reasonably request;
|
a.
|
in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of
Section 7.2.6
);
|
b.
|
in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;
|
c.
|
the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings;
|
d.
|
compliance with all applicable Environmental Laws;
|
e.
|
compliance with all anti-money laundering laws and Anti-Corruption Laws applicable to the Borrower, including by not making or causing to be made any offer, gift or payment, consideration or benefit of any kind to anyone, either directly or indirectly, as an inducement or reward for the performance of any of the transactions
|
f.
|
the Borrower will maintain in effect policies and procedures designed to procure compliance by the Borrower, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions.
|
a.
|
from the Delivery Date, cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries,
provided
that the Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly owned Subsidiaries and (ii) on a time charter with a stated duration not in excess of one year;
|
b.
|
from the Delivery Date, cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing;
|
c.
|
from the Delivery Date, provide the following to the Facility Agent with respect to the Purchased Vessel:
|
d.
|
within seven days after the Delivery Date, provide the following to the Facility Agent with respect to the Purchased Vessel:
|
a.
|
Indebtedness secured by Liens of the type described in
Section 7.2.3
;
|
b.
|
Indebtedness owing to the Borrower or a wholly owned direct or indirect Subsidiary of the Borrower;
|
c.
|
Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Effective Date;
|
d.
|
Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted to be secured under
Section 7.2.3(d)
, at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) (x) 5.0% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $735,000,000;
|
e.
|
[RESERVED]; and
|
f.
|
obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.
|
a.
|
[RESERVED];
|
b.
|
Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Effective Date) acquired after the Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of
|
c.
|
the Construction Mortgage but only to the extent that the same is discharged on the Delivery Date;
|
d.
|
in addition to other Liens permitted under this
Section 7.2.3
, Liens securing Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under
Section 7.2.2(d)
, at any one time outstanding not exceeding the greater of (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) (x) 5.0% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $735,000,000,
provided
that, with respect to each such item of Indebtedness, the fair market value of the assets subject to Liens securing such Indebtedness (determined at the time of the creation of such Lien) shall not exceed two times the aggregate principal amount of such Indebtedness (and for purposes of this clause (c), the fair market value of any assets shall be determined by (i) in the case of any Vessel, by an Approved Appraiser selected by the Borrower and (ii) in the case of any other assets, by an officer of the Borrower or by the board of directors of the Borrower);
|
e.
|
Liens on assets acquired after the Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;
|
f.
|
Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;
|
g.
|
Liens securing Government-related Obligations;
|
h.
|
Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;
|
i.
|
Liens of carriers, warehousemen, mechanics, material-men and landlords incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings;
|
j.
|
Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;
|
k.
|
Liens for current crew’s wages and salvage;
|
l.
|
Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;
|
m.
|
Liens on Vessels that:
|
n.
|
normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;
|
o.
|
Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business; and
|
p.
|
Liens on cash or Cash Equivalents securing obligations in respect of Hedging Instruments permitted under
Section 7.2.2(f)
or securing letters of credit that support such obligations.
|
a.
|
Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.
|
b.
|
Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter.
|
c.
|
Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000
plus
(ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).
|
a.
|
the Borrower or any direct or indirect wholly owned Subsidiary of the Borrower; and
|
b.
|
other Investments by the Principal Subsidiaries in an aggregate amount not to exceed $100,000,000 at any time outstanding.
|
a.
|
any such Subsidiary may (i) liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by
Section 7.2.7
; and
|
b.
|
so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:
|
a.
|
sales of assets (including, without limitation, Vessels) so long as at the time of any such sale:
|
b.
|
sales of capital stock of any Principal Subsidiary of the Borrower so long as a sale of all of the assets of such Subsidiary would be permitted under the foregoing clause (a);
|
c.
|
sales of capital stock of any Subsidiary other than a Principal Subsidiary;
|
d.
|
sales of other assets in the ordinary course of business; and
|
e.
|
sales of assets between or among the Borrower and Subsidiaries of the Borrower.
|
a.
|
generally fail to pay, or admit in writing its inability to pay, its debts as they become due;
|
b.
|
apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;
|
c.
|
in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days,
provided
that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the
|
d.
|
permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 60 days undismissed,
provided
that the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their respective rights under the Loan Documents; or
|
e.
|
take any corporate action authorizing, or in furtherance of, any of the foregoing.
|
a.
|
enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5) Business Days after the commencement of such enforcement proceedings; or
|
b.
|
there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.
|
a.
|
modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;
|
b.
|
modify this
Section 11.1
or change the definition of “Required Lenders” shall be made without the consent of each Lender;
|
c.
|
increase the Commitment of any Lender shall be made without the consent of such Lender;
|
d.
|
reduce any fees described in
Article III
payable to any Lender shall be made without the consent of such Lender;
|
e.
|
extend the Commitment Termination Date of any Lender shall be made without the consent of such Lender;
|
f.
|
extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or
|
g.
|
affect adversely the interests, rights or obligations of the Facility Agent in its capacity as such shall be made without consent of the Facility Agent.
|
a.
|
except to the extent permitted under
Section 7.2.6
, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Facility Agent and each Lender; and
|
b.
|
the rights of sale, assignment and transfer of the Lenders are subject to
Section 11.11
.
|
a.
|
written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Facility Agent by such Lender and such Assignee Lender;
|
b.
|
such Assignee Lender shall have executed and delivered to the Borrower and the Facility Agent a Lender Assignment Agreement, accepted by the Facility Agent and, if the applicable portion of the Loan is a Fixed Rate Loan, any other agreements
|
c.
|
the processing fees described below shall have been paid.
|
a.
|
no participation contemplated in this
Section 11.11.2
shall relieve such Lender from its obligations hereunder;
|
b.
|
such Lender shall remain solely responsible for the performance of its obligations hereunder;
|
c.
|
the Borrower and the Facility Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;
|
d.
|
no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in
clauses (b)
through
(f)
of
Section 11.1
;
|
e.
|
the Borrower shall not be required to pay any amount under
Sections 4.2(c)
,
4.3
,
4.4
,
4.5
,
4.6
and
4.7
that is greater than the amount which it would have been required to pay had no participating interest been sold; and
|
f.
|
each Lender that sells a participation under this
Section 11.11.2
shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each of the Participant’s interest in that Lender’s portion of the Loan, Commitments or other interests hereunder (the “
Participant Register
”). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.
|
g.
|
KfW IPEX may not sell participating interests pursuant to this
Section 11.11.2
that, when taken together with Loans and/or Commitments sold by KfW IPEX pursuant to
Section 11.11.1
, result in KfW IPEX’s share of the aggregate principal amount of the Loan and/or the aggregate Commitments being less than 50% of the total Loan or total Commitments, without the written consent of the Borrower (which consent shall not be required following the occurrence and during the continuance of an Event of Default or a Prepayment Event).
|
(a)
|
The Hermes Insurance Policy will cover 95% of the Loan.
|
(b)
|
The Hermes Fee will equal 2.37% of the aggregate principal amount of the Loan as at the Delivery Date.
|
(c)
|
The parties have entered into this Agreement on the basis that the Hermes Insurance Policy shall contain the following terms and should such terms not be included within the Hermes Insurance Policy, then the Borrower may cancel the Commitment(s):
|
(i)
|
25% of the Hermes Fee as in effect on the date of issuance of the Hermes Insurance Policy (“
First Fee
”) will be payable to the Hermes Agent or Hermes in Dollars within two (2) Business Days of receipt by the Borrower of demand from the Hermes Agent following the later to occur of (i) the issue of the Hermes Insurance Policy and (ii) the Effective Date;
|
(ii)
|
the balance of the Hermes Fee (being the amount thereof under paragraph (b) above less the First Fee) (“
Second Fee
”) will be payable in Dollars to the Hermes Agent or Hermes on the Delivery Date ;
|
(iii)
|
if the Commitments are cancelled in full by the Borrower or the Lenders on or prior to the Delivery Date (including, for the avoidance of doubt, subsequent to disbursement of the Loan and prepayment thereof by the Borrower under Section 3.7), Hermes shall be required to reimburse the Hermes Agent the amount of the First Fee less an administration fee (such administration fee to be no greater than 5% of the amount refunded but in any event not exceeding EUR 2,500);
|
(iv)
|
if the Commitments are cancelled in part by the Borrower on or prior to the Delivery Date (including, for the avoidance of doubt, subsequent to disbursement of the Loan and prepayment thereof by the Borrower under Section 3.7), Hermes shall be required to reimburse the Hermes Agent an amount equal to a corresponding proportion of the First Fee, based on the proportion of the aggregate Commitments prior to such cancellation to the aggregate Commitments after giving effect to such cancellation, less an administration fee (such administration fee to be no greater than 5% of the amount refunded but in any event not exceeding EUR 2,500); and
|
(v)
|
if, after the Delivery Date, the Borrower prepays all or part of the Loan in accordance with this Agreement, Hermes shall be required to reimburse the Hermes Agent an amount equal to a corresponding proportion of the unexpired portion of the Hermes Fee, having regard to the amount of the prepayment and the remaining term of the Loan less the sum of (x) a break funding fee equal to 20% of the unexpired portion of the Hermes Fee and (y) an administration fee (such fee to be no greater than 5% of the amount refunded but in any event not exceeding EUR 2,500).
|
(a)
|
Provided that the Hermes Insurance Policy complies with
Section 11.13.1
, the Borrower shall pay (a) the First Fee to the Hermes Agent or Hermes in accordance with section 11.13.1(c)(i) and (b) the Second Fee to the Hermes Agent or Hermes on the Delivery Date. In each case, if received by the Hermes Agent, the Hermes Agent shall pay such amount to Hermes.
|
(b)
|
Provided that the Hermes Insurance Policy complies with
Section 11.13.1
, the Borrower shall pay to the Hermes Agent or Hermes an issue fee of EUR 12,500 for the issue of the Hermes Insurance Policy at the same time that the First Fee is payable.
|
(a)
|
Promptly upon receipt of the Hermes Insurance Policy from Hermes, the Hermes Agent shall (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) send a copy thereof to the Borrower.
|
(b)
|
The Hermes Agent shall perform such acts or provide such information which are, acting reasonably, within its power so to perform or so to provide, as required by Hermes under the Hermes Insurance Policy and as are necessary to ensure that the Lenders obtain the support of Hermes pursuant to the Hermes Insurance Policy.
|
(c)
|
The Hermes Agent shall (in the circumstances described in
Section 11.13.1(c)(iii)
,
(iv)
or
(v))
:
|
(i)
|
make written requests to Hermes seeking a reimbursement of the Hermes Fee promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to Hermes by the Hermes Agent pursuant to the terms of the Hermes Insurance Policy) provide a copy of the request to the Borrower;
|
(ii)
|
use its reasonable endeavours to maximize the amount of any reimbursement of the Hermes Fee to which the Hermes Agent is entitled;
|
(iii)
|
pay to the Borrower the full amount of any reimbursement of the Hermes Fee that the Hermes Agent receives from Hermes within two (2) Business Days of receipt with same day value; and
|
(iv)
|
relay the good faith concerns of the Borrower to Hermes regarding the amount it is required to pay to Hermes or the amount of any reimbursement to which the Hermes Agent is entitled, it being agreed
|
(d)
|
Each Lender will co‑operate with the Hermes Agent, the Facility Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the Hermes Insurance Policy and each Interest Make‑Up Agreement (as defined in and entered into in accordance with the Terms and Conditions) continue in full force and effect and shall indemnify and hold harmless each other Lender in the event that the Hermes Insurance Policy or such Interest Make‑Up Agreement (as the case may be) does not continue in full force and effect due to its gross negligence or willful default.
|
(i)
|
the government of the Federal Republic of Germany, the Federal Audit Court or any authorised representatives specified by these bodies shall be authorised at any time to inspect and make or demand copies of the records, accounts, documents and other deeds of any or all of the Lenders relating to this Agreement;
|
(ii)
|
in the course of its activity as the Facility Agent, the Facility Agent may:
|
(a)
|
provide the government of the Federal Republic of Germany with information concerning the transactions to be handled by it under this Agreement; and
|
(b)
|
disclose information concerning the subsidized transaction contemplated by this Agreement in the context of internationally agreed consultation/notification proceedings and statutory specifications, including information received from the Lenders relating to this Agreement; and
|
(iii)
|
the Facility Agent and (to the extent the Lenders have entered into an Option A Refinancing Agreement with the Refinancing Bank) the Lenders are entitled to disclose to the Refinancing Bank:
|
(a)
|
circumstances pertaining to the Loan, proper repayment and collateralization;
|
(b)
|
extraordinary events which may jeopardize the proper servicing of the Loan;
|
(c)
|
any information required by the Refinancing Bank with respect to the proper use of any refinancing funds granted to the respective Lender in respect of the Loan; and
|
(d)
|
the Loan Documents;
|
Date: April 29, 2016
|
|
|
|
/s/
|
RICHARD D. FAIN
|
|
|
Richard D. Fain
|
|
|
Chairman and
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: April 29, 2016
|
|
|
|
/s/
|
JASON T. LIBERTY
|
|
|
Jason T. Liberty
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date: April 29, 2016
|
|
||
|
|
||
|
|
||
|
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)
|