ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Republic of Liberia
|
|
98-0081645
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
(Do not check if a smaller reporting company)
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Passenger ticket revenues
|
$
|
1,893,152
|
|
|
$
|
1,899,956
|
|
Onboard and other revenues
|
676,392
|
|
|
663,785
|
|
||
Total revenues
|
2,569,544
|
|
|
2,563,741
|
|
||
Cruise operating expenses:
|
|
|
|
|
|
||
Commissions, transportation and other
|
409,597
|
|
|
400,933
|
|
||
Onboard and other
|
157,041
|
|
|
159,887
|
|
||
Payroll and related
|
210,764
|
|
|
214,081
|
|
||
Food
|
126,223
|
|
|
125,732
|
|
||
Fuel
|
160,752
|
|
|
178,772
|
|
||
Other operating
|
253,892
|
|
|
260,718
|
|
||
Total cruise operating expenses
|
1,318,269
|
|
|
1,340,123
|
|
||
Marketing, selling and administrative expenses
|
273,637
|
|
|
259,327
|
|
||
Depreciation and amortization expenses
|
240,150
|
|
|
229,328
|
|
||
Operating Income
|
737,488
|
|
|
734,963
|
|
||
Other income (expense):
|
|
|
|
|
|
||
Interest income
|
4,693
|
|
|
6,472
|
|
||
Interest expense, net of interest capitalized
|
(73,233
|
)
|
|
(82,610
|
)
|
||
Equity investment income
|
85,120
|
|
|
46,539
|
|
||
Other expense
|
(1,226
|
)
|
|
(12,107
|
)
|
||
|
15,354
|
|
|
(41,706
|
)
|
||
Net Income
|
$
|
752,842
|
|
|
$
|
693,257
|
|
Earnings per Share:
|
|
|
|
|
|
||
Basic
|
$
|
3.51
|
|
|
$
|
3.23
|
|
Diluted
|
$
|
3.49
|
|
|
$
|
3.21
|
|
Weighted-Average Shares Outstanding:
|
|
|
|
|
|
||
Basic
|
214,694
|
|
|
214,819
|
|
||
Diluted
|
215,824
|
|
|
215,667
|
|
||
Comprehensive Income
|
|
|
|
|
|
||
Net Income
|
$
|
752,842
|
|
|
$
|
693,257
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||
Foreign currency translation adjustments
|
5,889
|
|
|
4,043
|
|
||
Change in defined benefit plans
|
(1,990
|
)
|
|
(5,051
|
)
|
||
Gain on cash flow derivative hedges
|
230,245
|
|
|
95,536
|
|
||
Total other comprehensive income
|
234,144
|
|
|
94,528
|
|
||
Comprehensive Income
|
$
|
986,986
|
|
|
$
|
787,785
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Passenger ticket revenues
|
$
|
4,892,760
|
|
|
$
|
4,794,653
|
|
Onboard and other revenues
|
1,880,618
|
|
|
1,792,145
|
|
||
Total revenues
|
6,773,378
|
|
|
6,586,798
|
|
||
Cruise operating expenses:
|
|
|
|
|
|
||
Commissions, transportation and other
|
1,060,176
|
|
|
1,060,391
|
|
||
Onboard and other
|
395,472
|
|
|
399,739
|
|
||
Payroll and related
|
636,861
|
|
|
671,955
|
|
||
Food
|
369,198
|
|
|
371,759
|
|
||
Fuel
|
508,914
|
|
|
531,283
|
|
||
Other operating
|
780,257
|
|
|
857,161
|
|
||
Total cruise operating expenses
|
3,750,878
|
|
|
3,892,288
|
|
||
Marketing, selling and administrative expenses
|
874,957
|
|
|
852,435
|
|
||
Depreciation and amortization expenses
|
710,836
|
|
|
661,712
|
|
||
Operating Income
|
1,436,707
|
|
|
1,180,363
|
|
||
Other income (expense):
|
|
|
|
|
|
||
Interest income
|
16,756
|
|
|
14,875
|
|
||
Interest expense, net of interest capitalized
|
(230,182
|
)
|
|
(226,803
|
)
|
||
Equity investment income
|
120,359
|
|
|
94,832
|
|
||
Other expense (including a $21.7 million loss related to the first quarter 2016 elimination of the Pullmantur reporting lag)
|
(6,546
|
)
|
|
(40,965
|
)
|
||
|
(99,613
|
)
|
|
(158,061
|
)
|
||
Net Income
|
$
|
1,337,094
|
|
|
$
|
1,022,302
|
|
Earnings per Share:
|
|
|
|
|
|
||
Basic
|
$
|
6.22
|
|
|
$
|
4.74
|
|
Diluted
|
$
|
6.19
|
|
|
$
|
4.72
|
|
Weighted-Average Shares Outstanding:
|
|
|
|
|
|
||
Basic
|
214,882
|
|
|
215,663
|
|
||
Diluted
|
215,905
|
|
|
216,575
|
|
||
Comprehensive Income
|
|
|
|
|
|
||
Net Income
|
$
|
1,337,094
|
|
|
$
|
1,022,302
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||
Foreign currency translation adjustments
|
14,210
|
|
|
8,423
|
|
||
Change in defined benefit plans
|
(6,280
|
)
|
|
(12,148
|
)
|
||
Gain on cash flow derivative hedges
|
381,660
|
|
|
254,624
|
|
||
Total other comprehensive income
|
389,590
|
|
|
250,899
|
|
||
Comprehensive Income
|
$
|
1,726,684
|
|
|
$
|
1,273,201
|
|
|
As of
|
||||||
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
139,950
|
|
|
$
|
132,603
|
|
Trade and other receivables, net
|
285,332
|
|
|
291,899
|
|
||
Inventories
|
119,949
|
|
|
114,087
|
|
||
Prepaid expenses and other assets
|
200,125
|
|
|
209,716
|
|
||
Derivative financial instruments
|
52,796
|
|
|
—
|
|
||
Total current assets
|
798,152
|
|
|
748,305
|
|
||
Property and equipment, net
|
19,688,872
|
|
|
20,161,427
|
|
||
Goodwill
|
288,517
|
|
|
288,386
|
|
||
Other assets
|
1,323,773
|
|
|
1,112,206
|
|
||
|
$
|
22,099,314
|
|
|
$
|
22,310,324
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
1,515,708
|
|
|
$
|
1,285,735
|
|
Accounts payable
|
384,536
|
|
|
305,313
|
|
||
Accrued interest
|
92,914
|
|
|
46,166
|
|
||
Accrued expenses and other liabilities
|
748,442
|
|
|
692,322
|
|
||
Derivative financial instruments
|
89,333
|
|
|
146,592
|
|
||
Customer deposits
|
2,226,179
|
|
|
1,965,473
|
|
||
Total current liabilities
|
5,057,112
|
|
|
4,441,601
|
|
||
Long-term debt
|
6,076,499
|
|
|
8,101,701
|
|
||
Other long-term liabilities
|
530,215
|
|
|
645,610
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
|
|
||
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)
|
—
|
|
|
—
|
|
||
Common stock ($0.01 par value; 500,000,000 shares authorized; 235,134,180 and 234,613,486 shares issued, September 30, 2017 and December 31, 2016, respectively)
|
2,351
|
|
|
2,346
|
|
||
Paid-in capital
|
3,375,969
|
|
|
3,328,517
|
|
||
Retained earnings
|
8,862,369
|
|
|
7,860,341
|
|
||
Accumulated other comprehensive loss
|
(526,894
|
)
|
|
(916,484
|
)
|
||
Treasury stock (21,059,191 and 20,019,237 common shares at cost, September 30, 2017 and December 31, 2016, respectively)
|
(1,278,307
|
)
|
|
(1,153,308
|
)
|
||
Total shareholders’ equity
|
10,435,488
|
|
|
9,121,412
|
|
||
|
$
|
22,099,314
|
|
|
$
|
22,310,324
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating Activities
|
|
|
|
|
|
||
Net income
|
$
|
1,337,094
|
|
|
$
|
1,022,302
|
|
Adjustments:
|
|
|
|
|
|
||
Depreciation and amortization
|
710,836
|
|
|
661,712
|
|
||
Net deferred income tax expense
|
516
|
|
|
1,601
|
|
||
(Gain) loss on derivative instruments not designated as hedges
|
(56,836
|
)
|
|
6,353
|
|
||
Share-based compensation expense
|
52,469
|
|
|
22,041
|
|
||
Equity investment income
|
(120,359
|
)
|
|
(94,832
|
)
|
||
Amortization of debt issuance costs
|
37,562
|
|
|
39,425
|
|
||
Gain on sale of property and equipment
|
(30,902
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Decrease in trade and other receivables, net
|
16,245
|
|
|
9,823
|
|
||
Increase in inventories
|
(6,131
|
)
|
|
(6,379
|
)
|
||
Decrease (increase) in prepaid expenses and other assets
|
10,211
|
|
|
(8,794
|
)
|
||
Increase (decrease) in accounts payable
|
77,436
|
|
|
(17,313
|
)
|
||
Increase in accrued interest
|
46,748
|
|
|
56,787
|
|
||
Increase in accrued expenses and other liabilities
|
12,870
|
|
|
17,929
|
|
||
Increase in customer deposits
|
256,855
|
|
|
197,277
|
|
||
Dividends received from unconsolidated affiliates
|
107,267
|
|
|
71,370
|
|
||
Other, net
|
2,720
|
|
|
21,650
|
|
||
Net cash provided by operating activities
|
2,454,601
|
|
|
2,000,952
|
|
||
Investing Activities
|
|
|
|
|
|
||
Purchases of property and equipment
|
(387,335
|
)
|
|
(2,313,831
|
)
|
||
Cash received (paid) on settlement of derivative financial instruments
|
57,004
|
|
|
(172,878
|
)
|
||
Investments in and loans to unconsolidated affiliates
|
—
|
|
|
(8,611
|
)
|
||
Cash received on loans to unconsolidated affiliates
|
31,633
|
|
|
22,470
|
|
||
Proceeds from the sale of property and equipment
|
230,000
|
|
|
—
|
|
||
Other, net
(1)
|
(9,313
|
)
|
|
(44,709
|
)
|
||
Net cash used in investing activities
|
(78,011
|
)
|
|
(2,517,559
|
)
|
||
Financing Activities
|
|
|
|
|
|
||
Debt proceeds
|
3,682,000
|
|
|
6,038,560
|
|
||
Debt issuance costs
|
(25,987
|
)
|
|
(83,793
|
)
|
||
Repayments of debt
|
(5,598,198
|
)
|
|
(4,818,262
|
)
|
||
Purchases of treasury stock
|
(124,999
|
)
|
|
(299,959
|
)
|
||
Dividends paid
|
(309,162
|
)
|
|
(243,557
|
)
|
||
Proceeds from exercise of common stock options
|
2,499
|
|
|
1,782
|
|
||
Other, net
|
4,137
|
|
|
2,179
|
|
||
Net cash (used in) provided by financing activities
|
(2,369,710
|
)
|
|
596,950
|
|
||
Effect of exchange rate changes on cash
|
467
|
|
|
(23,480
|
)
|
||
Net increase in cash and cash equivalents
|
7,347
|
|
|
56,863
|
|
||
Cash and cash equivalents at beginning of period
|
132,603
|
|
|
121,565
|
|
||
Cash and cash equivalents at end of period
|
$
|
139,950
|
|
|
$
|
178,428
|
|
Supplemental Disclosure
|
|
|
|
|
|
||
Cash paid during the period for:
|
|
|
|
|
|
||
Interest, net of amount capitalized
|
$
|
147,789
|
|
|
$
|
140,335
|
|
Non-cash Investing Activities
|
|
|
|
|
|
||
Notes receivable issued upon sale of property and equipment
|
$
|
—
|
|
|
$
|
213,042
|
|
|
Quarter Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income for basic and diluted earnings per share
|
$
|
752,842
|
|
|
$
|
693,257
|
|
|
$
|
1,337,094
|
|
|
$
|
1,022,302
|
|
Weighted-average common shares outstanding
|
214,694
|
|
|
214,819
|
|
|
214,882
|
|
|
215,663
|
|
||||
Dilutive effect of stock options, performance share awards and restricted stock awards
|
1,130
|
|
|
848
|
|
|
1,023
|
|
|
912
|
|
||||
Diluted weighted-average shares outstanding
|
215,824
|
|
|
215,667
|
|
|
215,905
|
|
|
216,575
|
|
||||
Basic earnings per share
|
$
|
3.51
|
|
|
$
|
3.23
|
|
|
$
|
6.22
|
|
|
$
|
4.74
|
|
Diluted earnings per share
|
$
|
3.49
|
|
|
$
|
3.21
|
|
|
$
|
6.19
|
|
|
$
|
4.72
|
|
|
|
Quarter Ended September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||
Share of equity income from investments
|
|
$
|
85,120
|
|
|
$
|
46,539
|
|
|
$
|
120,359
|
|
|
$
|
94,832
|
|
Dividends received
|
|
$
|
49,865
|
|
|
$
|
47,491
|
|
|
$
|
107,267
|
|
|
$
|
71,370
|
|
|
|
Quarter Ended September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||
Revenues
|
|
$
|
14,054
|
|
|
$
|
9,300
|
|
|
$
|
39,987
|
|
|
$
|
17,888
|
|
Expenses
|
|
$
|
3,770
|
|
|
$
|
2,410
|
|
|
$
|
11,503
|
|
|
$
|
8,930
|
|
|
Accumulated Other Comprehensive Income (Loss) for the Nine Months Ended September 30, 2017
|
|
Accumulated Other Comprehensive Income (Loss) for the Nine Months Ended September 30, 2016
|
||||||||||||||||||||||||||||
|
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
|
$
|
(820,850
|
)
|
|
$
|
(28,083
|
)
|
|
$
|
(67,551
|
)
|
|
$
|
(916,484
|
)
|
|
$
|
(1,232,073
|
)
|
|
$
|
(26,447
|
)
|
|
$
|
(69,913
|
)
|
|
$
|
(1,328,433
|
)
|
Other comprehensive income (loss) before reclassifications
|
230,341
|
|
|
(7,130
|
)
|
|
14,210
|
|
|
237,421
|
|
|
(9,150
|
)
|
|
(13,521
|
)
|
|
8,423
|
|
|
(14,248
|
)
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
|
151,319
|
|
|
850
|
|
|
—
|
|
|
152,169
|
|
|
263,774
|
|
|
1,373
|
|
|
—
|
|
|
265,147
|
|
||||||||
Net current-period other comprehensive income (loss)
|
381,660
|
|
|
(6,280
|
)
|
|
14,210
|
|
|
389,590
|
|
|
254,624
|
|
|
(12,148
|
)
|
|
8,423
|
|
|
250,899
|
|
||||||||
Ending balance
|
$
|
(439,190
|
)
|
|
$
|
(34,363
|
)
|
|
$
|
(53,341
|
)
|
|
$
|
(526,894
|
)
|
|
$
|
(977,449
|
)
|
|
$
|
(38,595
|
)
|
|
$
|
(61,490
|
)
|
|
$
|
(1,077,534
|
)
|
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
|
|
|
||||||||||||||
Details About Accumulated Other Comprehensive Income (Loss) Components
|
|
Quarter Ended September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
|
Affected Line Item in Statements of
Comprehensive Income (Loss) |
||||||||
Loss on cash flow derivative hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
|
$
|
(7,860
|
)
|
|
$
|
(11,953
|
)
|
|
$
|
(24,580
|
)
|
|
$
|
(32,019
|
)
|
|
Interest expense, net of interest capitalized
|
Foreign currency forward contracts
|
|
(2,710
|
)
|
|
(2,710
|
)
|
|
(8,130
|
)
|
|
(5,408
|
)
|
|
Depreciation and amortization expenses
|
||||
Foreign currency forward contracts
|
|
(1,512
|
)
|
|
(3,465
|
)
|
|
(9,187
|
)
|
|
(10,206
|
)
|
|
Other expense
|
||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
|
Other operating
|
||||
Foreign currency collar options
|
|
(602
|
)
|
|
(601
|
)
|
|
(1,806
|
)
|
|
(1,806
|
)
|
|
Depreciation and amortization expenses
|
||||
Fuel swaps
|
|
1,758
|
|
|
2,760
|
|
|
6,533
|
|
|
9,356
|
|
|
Other expense
|
||||
Fuel swaps
|
|
(32,386
|
)
|
|
(64,654
|
)
|
|
(114,149
|
)
|
|
(223,484
|
)
|
|
Fuel
|
||||
|
|
(43,312
|
)
|
|
(80,623
|
)
|
|
(151,319
|
)
|
|
(263,774
|
)
|
|
|
||||
Amortization of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Actuarial loss
|
|
(293
|
)
|
|
(285
|
)
|
|
(850
|
)
|
|
(1,373
|
)
|
|
Payroll and related
|
||||
|
|
(293
|
)
|
|
(285
|
)
|
|
(850
|
)
|
|
(1,373
|
)
|
|
|
||||
Total reclassifications for the period
|
|
$
|
(43,605
|
)
|
|
$
|
(80,908
|
)
|
|
$
|
(152,169
|
)
|
|
$
|
(265,147
|
)
|
|
|
|
|
Fair Value Measurements at September 30, 2017 Using
|
|
Fair Value Measurements at December 31, 2016 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)
|
|
$
|
139,950
|
|
|
$
|
139,950
|
|
|
$
|
139,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
132,603
|
|
|
$
|
132,603
|
|
|
$
|
132,603
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets
|
|
$
|
139,950
|
|
|
$
|
139,950
|
|
|
$
|
139,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
132,603
|
|
|
$
|
132,603
|
|
|
$
|
132,603
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Long-term debt (including current portion of long-term debt)
(5)
|
|
$
|
7,557,801
|
|
|
$
|
8,111,168
|
|
|
$
|
—
|
|
|
$
|
8,111,168
|
|
|
$
|
—
|
|
|
$
|
9,347,051
|
|
|
$
|
9,859,266
|
|
|
$
|
—
|
|
|
$
|
9,859,266
|
|
|
$
|
—
|
|
Total Liabilities
|
|
$
|
7,557,801
|
|
|
$
|
8,111,168
|
|
|
$
|
—
|
|
|
$
|
8,111,168
|
|
|
$
|
—
|
|
|
$
|
9,347,051
|
|
|
$
|
9,859,266
|
|
|
$
|
—
|
|
|
$
|
9,859,266
|
|
|
$
|
—
|
|
(1)
|
Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
|
(2)
|
Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.
|
(3)
|
Inputs that are unobservable. The Company did not use any Level 3 inputs as of
September 30, 2017
and
December 31, 2016
.
|
(4)
|
Consists of cash and marketable securities with original maturities of less than
90
days.
|
(5)
|
Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. This does not include our capital lease obligations.
|
|
|
Fair Value Measurements at September 30, 2017 Using
|
|
Fair Value Measurements at December 31, 2016 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)
|
|
$
|
221,258
|
|
|
$
|
—
|
|
|
$
|
221,258
|
|
|
$
|
—
|
|
|
$
|
19,397
|
|
|
$
|
—
|
|
|
$
|
19,397
|
|
|
$
|
—
|
|
Investments
(5)
|
|
$
|
3,237
|
|
|
3,237
|
|
|
—
|
|
|
—
|
|
|
$
|
3,576
|
|
|
3,576
|
|
|
—
|
|
|
—
|
|
||||||
Total Assets
|
|
$
|
224,495
|
|
|
$
|
3,237
|
|
|
$
|
221,258
|
|
|
$
|
—
|
|
|
$
|
22,973
|
|
|
$
|
3,576
|
|
|
$
|
19,397
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(6)
|
|
$
|
189,163
|
|
|
$
|
—
|
|
|
$
|
189,163
|
|
|
$
|
—
|
|
|
$
|
373,497
|
|
|
$
|
—
|
|
|
$
|
373,497
|
|
|
$
|
—
|
|
Total Liabilities
|
|
$
|
189,163
|
|
|
$
|
—
|
|
|
$
|
189,163
|
|
|
$
|
—
|
|
|
$
|
373,497
|
|
|
$
|
—
|
|
|
$
|
373,497
|
|
|
$
|
—
|
|
(1)
|
Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
|
(2)
|
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.
|
(3)
|
Inputs that are unobservable. The Company did not use any Level 3 inputs as of
September 30, 2017
and
December 31, 2016
.
|
(4)
|
Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.
|
(5)
|
Consists of exchange-traded equity securities and mutual funds reported within
Other assets
in our consolidated balance sheets.
|
(6)
|
Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
||||||||||||||||||||||||||||||
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||||
|
|
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
|
|
$
|
221,258
|
|
|
$
|
(117,065
|
)
|
|
$
|
—
|
|
|
$
|
104,193
|
|
|
$
|
19,397
|
|
|
$
|
(19,397
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
221,258
|
|
|
$
|
(117,065
|
)
|
|
$
|
—
|
|
|
$
|
104,193
|
|
|
$
|
19,397
|
|
|
$
|
(19,397
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
||||||||||||||||||||||||||||||
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||||
|
|
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
|
|
$
|
(189,163
|
)
|
|
$
|
117,065
|
|
|
$
|
—
|
|
|
$
|
(72,098
|
)
|
|
$
|
(373,497
|
)
|
|
$
|
19,397
|
|
|
$
|
7,213
|
|
|
$
|
(346,887
|
)
|
Total
|
|
$
|
(189,163
|
)
|
|
$
|
117,065
|
|
|
$
|
—
|
|
|
$
|
(72,098
|
)
|
|
$
|
(373,497
|
)
|
|
$
|
19,397
|
|
|
$
|
7,213
|
|
|
$
|
(346,887
|
)
|
Debt Instrument
|
Swap Notional as of September 30, 2017
(In thousands)
|
Maturity
|
Debt Fixed Rate
|
Swap Floating Rate: LIBOR plus
|
All-in Swap Floating Rate as of September 30, 2017
|
||
Oasis of the Seas
term loan
|
$
|
157,500
|
|
October 2021
|
5.41%
|
3.87%
|
5.29%
|
Unsecured senior notes
|
650,000
|
|
November 2022
|
5.25%
|
3.63%
|
4.95%
|
|
|
$
|
807,500
|
|
|
|
|
|
Debt Instrument
|
Swap Notional as of September 30, 2017
(In thousands)
|
Maturity
|
Debt Floating Rate
|
All-in Swap Fixed Rate
|
|||
Celebrity Reflection
term loan
|
$
|
409,063
|
|
October 2024
|
LIBOR plus
|
0.40%
|
2.85%
|
Quantum of the Seas
term loan
|
581,875
|
|
October 2026
|
LIBOR plus
|
1.30%
|
3.74%
|
|
Anthem of the Seas
term loan
|
604,167
|
|
April 2027
|
LIBOR plus
|
1.30%
|
3.86%
|
|
Ovation of the Seas
term loan
|
760,833
|
|
April 2028
|
LIBOR plus
|
1.00%
|
3.16%
|
|
Harmony of the Seas
term loan
(1)
|
751,362
|
|
May 2028
|
EURIBOR plus
|
1.15%
|
2.26%
|
|
|
$
|
3,107,300
|
|
|
|
|
|
|
Fuel Swap Agreements
|
||||
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||
|
(% hedged)
|
||||
Projected fuel purchases:
|
|
|
|
|
|
2017
|
65
|
%
|
|
60
|
%
|
2018
|
56
|
%
|
|
44
|
%
|
2019
|
47
|
%
|
|
35
|
%
|
2020
|
36
|
%
|
|
20
|
%
|
2021
|
14
|
%
|
|
—
|
|
|
|
Fair Value of Derivative Instruments
|
||||||||||||||||||
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
|
Balance Sheet Location
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
|
Balance Sheet Location
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||||||
|
|
|
Fair Value
|
|
Fair Value
|
|
|
Fair Value
|
|
Fair Value
|
||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments under ASC 815-20
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
Other assets
|
|
$
|
1,760
|
|
|
$
|
5,246
|
|
|
Other long-term liabilities
|
|
$
|
52,611
|
|
|
$
|
57,679
|
|
Foreign currency forward contracts
|
|
Derivative financial instruments
|
|
45,583
|
|
|
—
|
|
|
Derivative financial instruments
|
|
—
|
|
|
5,574
|
|
||||
Foreign currency forward contracts
|
|
Other assets
|
|
136,534
|
|
|
—
|
|
|
Other long-term liabilities
|
|
4,479
|
|
|
68,165
|
|
||||
Fuel swaps
|
|
Derivative financial instruments
|
|
7,213
|
|
|
—
|
|
|
Derivative financial instruments
|
|
81,981
|
|
|
129,486
|
|
||||
Fuel swaps
|
|
Other assets
|
|
29,721
|
|
|
13,608
|
|
|
Other long-term liabilities
|
|
40,517
|
|
|
95,125
|
|
||||
Total derivatives designated as hedging instruments under 815-20
|
|
|
|
220,811
|
|
|
18,854
|
|
|
|
|
179,588
|
|
|
356,029
|
|
||||
Derivatives not designated as hedging instruments under ASC 815-20
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel swaps
|
|
Derivative financial instruments
|
|
—
|
|
|
—
|
|
|
Derivative financial instruments
|
|
7,352
|
|
|
11,532
|
|
||||
Fuel swaps
|
|
Other Assets
|
|
447
|
|
|
543
|
|
|
Other long-term liabilities
|
|
2,223
|
|
|
5,936
|
|
||||
Total derivatives not designated as hedging instruments under 815-20
|
|
|
|
447
|
|
|
543
|
|
|
|
|
9,575
|
|
|
17,468
|
|
||||
Total derivatives
|
|
|
|
$
|
221,258
|
|
|
$
|
19,397
|
|
|
|
|
$
|
189,163
|
|
|
$
|
373,497
|
|
|
|
|
|
Carrying Value
|
||||||
Non-derivative instrument designated as
hedging instrument under ASC 815-20 |
|
Balance Sheet Location
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||
(In thousands)
|
|
|
|
|
|
|
||||
Foreign currency debt
|
|
Current portion of long-term debt
|
|
$
|
69,023
|
|
|
$
|
61,601
|
|
Foreign currency debt
|
|
Long-term debt
|
|
215,863
|
|
|
249,624
|
|
||
|
|
|
|
$
|
284,886
|
|
|
$
|
311,225
|
|
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 September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
|
Quarter Ended September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
|
Interest expense, net of interest capitalized
|
|
$
|
600
|
|
|
$
|
1,737
|
|
|
$
|
2,642
|
|
|
$
|
6,075
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,203
|
|
Interest rate swaps
|
|
Other expense
|
|
(545
|
)
|
|
(7,662
|
)
|
|
3,275
|
|
|
28,592
|
|
|
1,013
|
|
|
7,423
|
|
|
(841
|
)
|
|
(24,878
|
)
|
||||||||
|
|
|
|
$
|
55
|
|
|
$
|
(5,925
|
)
|
|
$
|
5,917
|
|
|
$
|
34,667
|
|
|
$
|
1,013
|
|
|
$
|
7,423
|
|
|
$
|
(841
|
)
|
|
$
|
(17,675
|
)
|
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 September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
|
|
Quarter Ended September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
|||||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
$
|
(3,154
|
)
|
|
$
|
6,598
|
|
|
$
|
(24,703
|
)
|
|
$
|
(126,505
|
)
|
|
Interest expense, net of interest capitalized
|
|
$
|
(7,860
|
)
|
|
$
|
(11,953
|
)
|
|
$
|
(24,580
|
)
|
|
$
|
(32,019
|
)
|
Foreign currency forward contracts
|
|
122,211
|
|
|
11,405
|
|
|
221,861
|
|
|
22,715
|
|
|
Depreciation and amortization expenses
|
|
(2,710
|
)
|
|
(2,710
|
)
|
|
(8,130
|
)
|
|
(5,408
|
)
|
||||||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other expense
|
|
(1,512
|
)
|
|
(3,465
|
)
|
|
(9,187
|
)
|
|
(10,206
|
)
|
||||||||
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other operating
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
||||||||
Foreign currency collar options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Depreciation and amortization expenses
|
|
(602
|
)
|
|
(601
|
)
|
|
(1,806
|
)
|
|
(1,806
|
)
|
||||||||
Fuel swaps
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other expense
|
|
1,758
|
|
|
2,760
|
|
|
6,533
|
|
|
9,356
|
|
||||||||
Fuel swaps
|
|
67,878
|
|
|
(3,090
|
)
|
|
33,183
|
|
|
94,640
|
|
|
Fuel
|
|
(32,386
|
)
|
|
(64,654
|
)
|
|
(114,149
|
)
|
|
(223,484
|
)
|
||||||||
|
|
$
|
186,935
|
|
|
$
|
14,913
|
|
|
$
|
230,341
|
|
|
$
|
(9,150
|
)
|
|
|
|
$
|
(43,312
|
)
|
|
$
|
(80,623
|
)
|
|
$
|
(151,319
|
)
|
|
$
|
(263,774
|
)
|
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 September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Other expense
|
|
—
|
|
|
90
|
|
|
—
|
|
|
(1,152
|
)
|
||||
Foreign currency forward contracts
|
|
Other expense
|
|
75
|
|
|
—
|
|
|
100
|
|
|
(57
|
)
|
||||
Fuel swaps
|
|
Other expense
|
|
3,351
|
|
|
(8
|
)
|
|
1,014
|
|
|
(3,949
|
)
|
||||
|
|
|
|
$
|
3,426
|
|
|
$
|
82
|
|
|
$
|
1,114
|
|
|
$
|
(5,158
|
)
|
|
|
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 September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign Currency Debt
|
|
$
|
7,949
|
|
|
$
|
(3,382
|
)
|
|
$
|
34,206
|
|
|
$
|
1,313
|
|
|
|
$
|
7,949
|
|
|
$
|
(3,382
|
)
|
|
$
|
34,206
|
|
|
$
|
1,313
|
|
|
|
|
|
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 September 30, 2017
|
|
Quarter Ended September 30, 2016
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Other expense
|
|
$
|
21,951
|
|
|
$
|
(2,464
|
)
|
|
$
|
57,019
|
|
|
$
|
(11,712
|
)
|
Fuel swaps
|
|
Other expense
|
|
(175
|
)
|
|
(1,172
|
)
|
|
(255
|
)
|
|
(1,224
|
)
|
||||
|
|
|
|
$
|
21,776
|
|
|
$
|
(3,636
|
)
|
|
$
|
56,764
|
|
|
$
|
(12,936
|
)
|
•
|
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 and nine months ended
September 30, 2017
compared to the same periods in
2016
;
|
•
|
a discussion of our business outlook, including our expectations for selected financial items for the
fourth
quarter and full year of
2017
; 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 our bareboat charter, 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
);
|
•
|
Food expenses
, which include food costs for both guests and crew;
|
•
|
Fuel expenses
, which include fuel and related delivery, storage and emission consumable costs and 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.
|
•
|
The estimated negative impact resulting from third quarter 2017 hurricane-related disruptions was approximately $0.20 per share on a diluted basis to our net income and Adjusted Net Income for the quarter and nine months ended September 30, 2017.
|
•
|
The effect of changes in foreign currency exchange rates related to our passenger ticket and onboard and other revenue transactions denominated in currencies other than the United States dollar, resulted in an increase in total revenues of
$14.8 million
for the quarter and a decrease of
$16.6 million
for the
nine
months ended
September 30, 2017
, respectively, as compared to the same periods in
2016
.
|
•
|
Total revenues, excluding the effect of changes in foreign currency exchange rates, decreased
$9.0 million
and increased
$203.2 million
for the quarter and
nine
months ended
September 30, 2017
, respectively, as compared to the same periods in
2016
. The decrease during the quarter was due to the decrease in capacity, including the hurricane-related disruptions during the third quarter of 2017, and the increase during the nine months was primarily due to an increase in ticket prices and onboard spending on a per passenger basis, which are further discussed below.
|
•
|
Total cruise operating expenses decreased
$21.9 million
and
$141.4 million
for the quarter and
nine
months ended
September 30, 2017
, respectively, as compared to the same periods in
2016
. The decreases were primarily due to the decrease in capacity, which is further discussed below. Additionally, we recognized a
$30.9 million
gain on the sale of
Legend of the Seas
in March 2017.
|
•
|
The effect of changes in foreign currency exchange rates related to our cruise operating expenses, denominated in currencies other than the United States dollar, was immaterial to our consolidated statements of comprehensive income (loss) for the quarter and
nine
months ended
September 30, 2017
.
|
•
|
In May 2017, TUI Cruises, our 50% joint venture, took delivery of
Mein Schiff 6
.
|
•
|
During the second quarter of 2017, we entered into agreements with Meyer Turku to build two "Project Icon" ships. In October 2017, we entered into credit agreements for the unsecured financing of these ships for up to
80%
of each ship's contract price. Refer to Note 7.
Commitments and Contingencies
to our consolidated financial statements for further information.
|
•
|
During the third quarter of 2017, we entered into an agreement to purchase a ship for our Azamara Club Cruises brand. The sale is expected to be completed with the delivery of the ship scheduled for March 2018.
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
|
|
% of Total
Revenues |
|
|
|
% of Total
Revenues |
|
|
|
% of Total
Revenues |
|
|
|
% of Total
Revenues |
||||||||||||
Passenger ticket revenues
|
$
|
1,893,152
|
|
|
73.7
|
%
|
|
$
|
1,899,956
|
|
|
74.1
|
%
|
|
$
|
4,892,760
|
|
|
72.2
|
%
|
|
$
|
4,794,653
|
|
|
72.8
|
%
|
Onboard and other revenues
|
676,392
|
|
|
26.3
|
%
|
|
663,785
|
|
|
25.9
|
%
|
|
1,880,618
|
|
|
27.8
|
%
|
|
1,792,145
|
|
|
27.2
|
%
|
||||
Total revenues
|
2,569,544
|
|
|
100.0
|
%
|
|
2,563,741
|
|
|
100.0
|
%
|
|
6,773,378
|
|
|
100.0
|
%
|
|
6,586,798
|
|
|
100.0
|
%
|
||||
Cruise operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commissions, transportation and other
|
409,597
|
|
|
15.9
|
%
|
|
400,933
|
|
|
15.6
|
%
|
|
1,060,176
|
|
|
15.7
|
%
|
|
1,060,391
|
|
|
16.1
|
%
|
||||
Onboard and other
|
157,041
|
|
|
6.1
|
%
|
|
159,887
|
|
|
6.2
|
%
|
|
395,472
|
|
|
5.8
|
%
|
|
399,739
|
|
|
6.1
|
%
|
||||
Payroll and related
|
210,764
|
|
|
8.2
|
%
|
|
214,081
|
|
|
8.4
|
%
|
|
636,861
|
|
|
9.4
|
%
|
|
671,955
|
|
|
10.2
|
%
|
||||
Food
|
126,223
|
|
|
4.9
|
%
|
|
125,732
|
|
|
4.9
|
%
|
|
369,198
|
|
|
5.5
|
%
|
|
371,759
|
|
|
5.6
|
%
|
||||
Fuel
|
160,752
|
|
|
6.3
|
%
|
|
178,772
|
|
|
7.0
|
%
|
|
508,914
|
|
|
7.5
|
%
|
|
531,283
|
|
|
8.1
|
%
|
||||
Other operating
|
253,892
|
|
|
9.9
|
%
|
|
260,718
|
|
|
10.2
|
%
|
|
780,257
|
|
|
11.5
|
%
|
|
857,161
|
|
|
13.0
|
%
|
||||
Total cruise operating expenses
|
1,318,269
|
|
|
51.3
|
%
|
|
1,340,123
|
|
|
52.3
|
%
|
|
3,750,878
|
|
|
55.4
|
%
|
|
3,892,288
|
|
|
59.1
|
%
|
||||
Marketing, selling and administrative expenses
|
273,637
|
|
|
10.6
|
%
|
|
259,327
|
|
|
10.1
|
%
|
|
874,957
|
|
|
12.9
|
%
|
|
852,435
|
|
|
12.9
|
%
|
||||
Depreciation and amortization expenses
|
240,150
|
|
|
9.3
|
%
|
|
229,328
|
|
|
8.9
|
%
|
|
710,836
|
|
|
10.5
|
%
|
|
661,712
|
|
|
10.0
|
%
|
||||
Operating Income
|
737,488
|
|
|
28.7
|
%
|
|
734,963
|
|
|
28.7
|
%
|
|
1,436,707
|
|
|
21.2
|
%
|
|
1,180,363
|
|
|
17.9
|
%
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income
|
4,693
|
|
|
0.2
|
%
|
|
6,472
|
|
|
0.3
|
%
|
|
16,756
|
|
|
0.2
|
%
|
|
14,875
|
|
|
0.2
|
%
|
||||
Interest expense, net of interest capitalized
|
(73,233
|
)
|
|
(2.9
|
)%
|
|
(82,610
|
)
|
|
(3.2
|
)%
|
|
(230,182
|
)
|
|
(3.4
|
)%
|
|
(226,803
|
)
|
|
(3.4
|
)%
|
||||
Equity investment income
|
85,120
|
|
|
3.3
|
%
|
|
46,539
|
|
|
1.8
|
%
|
|
120,359
|
|
|
1.8
|
|
|
94,832
|
|
|
1.4
|
%
|
||||
Other expense
|
(1,226
|
)
|
|
—
|
%
|
|
(12,107
|
)
|
|
(0.5
|
)%
|
|
(6,546
|
)
|
|
(0.1
|
)%
|
|
(40,965
|
)
|
|
(0.6
|
)%
|
||||
|
15,354
|
|
|
0.6
|
%
|
|
(41,706
|
)
|
|
(1.6
|
)%
|
|
(99,613
|
)
|
|
(1.5
|
)%
|
|
(158,061
|
)
|
|
(2.4
|
)%
|
||||
Net Income
|
$
|
752,842
|
|
|
29.3
|
%
|
|
$
|
693,257
|
|
|
27.0
|
%
|
|
$
|
1,337,094
|
|
|
19.7
|
%
|
|
$
|
1,022,302
|
|
|
15.5
|
%
|
Diluted Earnings per Share
|
$
|
3.49
|
|
|
|
|
|
$
|
3.21
|
|
|
|
|
|
$
|
6.19
|
|
|
|
|
|
$
|
4.72
|
|
|
|
|
|
Quarter Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Income
|
$
|
752,842
|
|
|
$
|
693,257
|
|
|
$
|
1,337,094
|
|
|
$
|
1,022,302
|
|
Adjusted Net income
|
752,842
|
|
|
690,911
|
|
|
1,337,094
|
|
|
1,050,031
|
|
||||
Net Adjustments to Net Income- (Decrease) Increase
|
$
|
—
|
|
|
$
|
(2,346
|
)
|
|
$
|
—
|
|
|
$
|
27,729
|
|
Adjustments to Net Income:
|
|
|
|
|
|
|
|
||||||||
Net loss related to the elimination of the Pullmantur reporting lag
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
21,656
|
|
||
Net gain related to the sale of the Pullmantur and CDF Croisières de France brands
|
—
|
|
|
(3,834
|
)
|
|
—
|
|
|
(3,834
|
)
|
||||
Restructuring charges
|
—
|
|
|
1,897
|
|
|
—
|
|
|
6,627
|
|
||||
Other initiative costs
|
—
|
|
|
(409
|
)
|
|
—
|
|
|
3,280
|
|
||||
Net Adjustments to Net Income- (Decrease) Increase
|
$
|
—
|
|
|
$
|
(2,346
|
)
|
|
$
|
—
|
|
|
$
|
27,729
|
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per Share
|
$
|
3.51
|
|
|
$
|
3.23
|
|
|
$
|
6.22
|
|
|
$
|
4.74
|
|
Adjusted Earnings per Share
|
$
|
3.51
|
|
|
$
|
3.22
|
|
|
$
|
6.22
|
|
|
$
|
4.87
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted:
|
|
|
|
|
|
|
|
||||||||
Earnings per Share
|
$
|
3.49
|
|
|
$
|
3.21
|
|
|
$
|
6.19
|
|
|
$
|
4.72
|
|
Adjusted Earnings per Share
|
$
|
3.49
|
|
|
$
|
3.20
|
|
|
$
|
6.19
|
|
|
$
|
4.85
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-Average Shares Outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
214,694
|
|
|
214,819
|
|
|
214,882
|
|
|
215,663
|
|
||||
Diluted
|
215,824
|
|
|
215,667
|
|
|
215,905
|
|
|
216,575
|
|
|
Quarter Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
(1)
|
||||
Passengers Carried
|
1,512,363
|
|
|
1,558,224
|
|
|
4,371,235
|
|
|
4,365,144
|
|
Passenger Cruise Days
|
10,189,900
|
|
|
10,727,918
|
|
|
30,100,035
|
|
|
30,367,048
|
|
APCD
|
9,214,470
|
|
|
9,766,482
|
|
|
27,646,779
|
|
|
28,503,681
|
|
Occupancy
|
110.6
|
%
|
|
109.8
|
%
|
|
108.9
|
%
|
|
106.5
|
%
|
|
Quarter Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2017
|
|
2017 On a Constant Currency Basis
|
|
2016
|
|
2017
|
|
2017 On a Constant Currency Basis
|
|
2016
|
||||||||||||
Passenger ticket revenues
|
$
|
1,893,152
|
|
|
$
|
1,880,360
|
|
|
$
|
1,899,956
|
|
|
$
|
4,892,760
|
|
|
$
|
4,907,927
|
|
|
$
|
4,794,653
|
|
Onboard and other revenues
|
676,392
|
|
|
674,382
|
|
|
663,785
|
|
|
1,880,618
|
|
|
1,882,049
|
|
|
1,792,145
|
|
||||||
Total revenues
|
2,569,544
|
|
|
2,554,742
|
|
|
2,563,741
|
|
|
6,773,378
|
|
|
6,789,976
|
|
|
6,586,798
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commissions, transportation and other
|
409,597
|
|
|
406,500
|
|
|
400,933
|
|
|
1,060,176
|
|
|
1,062,632
|
|
|
1,060,391
|
|
||||||
Onboard and other
|
157,041
|
|
|
155,818
|
|
|
159,887
|
|
|
395,472
|
|
|
394,316
|
|
|
399,739
|
|
||||||
Net Revenues including other initiative costs
|
2,002,906
|
|
|
1,992,424
|
|
|
2,002,921
|
|
|
5,317,730
|
|
|
5,333,028
|
|
|
5,126,668
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other initiative costs included within Net Revenues
|
—
|
|
|
—
|
|
|
(1,843
|
)
|
|
—
|
|
|
—
|
|
|
(1,843
|
)
|
||||||
Net Revenues
|
$
|
2,002,906
|
|
|
$
|
1,992,424
|
|
|
$
|
2,004,764
|
|
|
$
|
5,317,730
|
|
|
$
|
5,333,028
|
|
|
$
|
5,128,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
APCD
|
9,214,470
|
|
|
9,214,470
|
|
|
9,766,482
|
|
|
27,646,779
|
|
|
27,646,779
|
|
|
28,503,681
|
|
||||||
Gross Yields
|
$
|
278.86
|
|
|
$
|
277.25
|
|
|
$
|
262.50
|
|
|
$
|
245.00
|
|
|
$
|
245.60
|
|
|
$
|
231.09
|
|
Net Yields
|
$
|
217.37
|
|
|
$
|
216.23
|
|
|
$
|
205.27
|
|
|
$
|
192.35
|
|
|
$
|
192.90
|
|
|
$
|
179.92
|
|
|
Quarter Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2017
|
|
2017 On a Constant Currency Basis
|
|
2016
|
|
2017
|
|
2017 On a Constant Currency Basis
|
|
2016
|
||||||||||||
Total cruise operating expenses
|
$
|
1,318,269
|
|
|
$
|
1,311,964
|
|
|
$
|
1,340,123
|
|
|
$
|
3,750,878
|
|
|
$
|
3,753,441
|
|
|
$
|
3,892,288
|
|
Marketing, selling and administrative expenses
(1)
|
273,637
|
|
|
273,121
|
|
|
257,430
|
|
|
874,957
|
|
|
881,067
|
|
|
845,808
|
|
||||||
Gross Cruise Costs
|
1,591,906
|
|
|
1,585,085
|
|
|
1,597,553
|
|
|
4,625,835
|
|
|
4,634,508
|
|
|
4,738,096
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commissions, transportation and other
|
409,597
|
|
|
406,500
|
|
|
400,933
|
|
|
1,060,176
|
|
|
1,062,632
|
|
|
1,060,391
|
|
||||||
Onboard and other
|
157,041
|
|
|
155,818
|
|
|
159,887
|
|
|
395,472
|
|
|
394,316
|
|
|
399,739
|
|
||||||
Net Cruise Costs including other initiative costs
|
1,025,268
|
|
|
1,022,767
|
|
|
1,036,733
|
|
|
3,170,187
|
|
|
3,177,560
|
|
|
3,277,966
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net gain related to the sale of Pullmantur and CDF Croisières de France brands included within other operating expenses
|
—
|
|
|
—
|
|
|
(3,834
|
)
|
|
—
|
|
|
—
|
|
|
(3,834
|
)
|
||||||
Other initiative costs included within cruise operating expenses and marketing, selling and administrative expenses
|
—
|
|
|
—
|
|
|
(2,252
|
)
|
|
—
|
|
|
—
|
|
|
1,073
|
|
||||||
Net Cruise Costs
|
1,025,268
|
|
|
1,022,767
|
|
|
1,042,819
|
|
|
3,170,187
|
|
|
3,177,560
|
|
|
3,280,727
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fuel
(2)
|
160,752
|
|
|
160,751
|
|
|
178,772
|
|
|
508,914
|
|
|
508,911
|
|
|
530,859
|
|
||||||
Net Cruise Costs Excluding Fuel
|
$
|
864,516
|
|
|
$
|
862,016
|
|
|
$
|
864,047
|
|
|
$
|
2,661,273
|
|
|
$
|
2,668,649
|
|
|
$
|
2,749,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
APCD
|
9,214,470
|
|
|
9,214,470
|
|
|
9,766,482
|
|
|
27,646,779
|
|
|
27,646,779
|
|
|
28,503,681
|
|
||||||
Gross Cruise Costs per APCD
|
$
|
172.76
|
|
|
$
|
172.02
|
|
|
$
|
163.58
|
|
|
$
|
167.32
|
|
|
$
|
167.63
|
|
|
$
|
166.23
|
|
Net Cruise Costs per APCD
|
$
|
111.27
|
|
|
$
|
111.00
|
|
|
$
|
106.78
|
|
|
$
|
114.67
|
|
|
$
|
114.93
|
|
|
$
|
115.10
|
|
Net Cruise Costs Excluding Fuel per APCD
|
$
|
93.82
|
|
|
$
|
93.55
|
|
|
$
|
88.47
|
|
|
$
|
96.26
|
|
|
$
|
96.53
|
|
|
$
|
96.47
|
|
|
As Reported
|
Constant Currency
|
Net Yields
|
Approx. 6.0%
|
Approx. 6.0%
|
Net Cruise Costs per APCD
|
1.0% to 1.5%
|
Approx. 1.5%
|
Net Cruise Costs per APCD, Excluding Fuel
|
Approx. 2.0%
|
Approx. 2.0%
|
Capacity Decrease
|
(2.4%)
|
|
Depreciation and Amortization
|
Approx. $950 million
|
|
Interest Expense, net
|
Approx. $280 million
|
|
Fuel Consumption (metric tons)
|
1,315,800
|
|
Fuel Expenses
|
$686 million
|
|
Percent Hedged (fwd consumption)
|
65%
|
|
Impact of 10% change in fuel prices
|
$7 million
|
|
1% Change in Currency
|
$4 million
|
|
1% Change in Net Yield
|
$16 million
|
|
1% Change in NCC ex Fuel
|
$9 million
|
|
1% Change in LIBOR
|
$6 million
|
|
Adjusted Earnings per Share-Diluted
|
$7.35 to $7.40
|
|
|
As Reported
|
Constant Currency
|
Net Yields
|
Approx. 3.5%
|
2.0% to 2.5%
|
Net Cruise Costs per APCD
|
Approx. 7.0%
|
Approx. 6.5%
|
Net Cruise Costs per APCD, Excluding Fuel
|
Approx. 9.0%
|
Approx. 8.5%
|
Capacity Decrease
|
(0.6%)
|
|
Depreciation and Amortization
|
Approx. $240 million
|
|
Interest Expense, net
|
Approx. $65 million
|
|
Fuel Consumption (metric tons)
|
334,800
|
|
Fuel Expenses
|
$177 million
|
|
Percent Hedged (fwd consumption)
|
65%
|
|
Impact of 10% change in fuel prices
|
$7 million
|
|
1% Change in Currency
|
$4 million
|
|
1% Change in Net Yield
|
$16 million
|
|
1% Change in NCC ex Fuel
|
$9 million
|
|
1% Change in LIBOR
|
$6 million
|
|
Adjusted Earnings per Share-Diluted
|
$1.15 to $1.20
|
|
Ranking
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY 2017
|
1
|
|
AUD
|
|
GBP
|
|
GBP
|
|
AUD
|
|
GBP
|
2
|
|
CAD
|
|
CNH
|
|
CNH
|
|
GBP
|
|
AUD
|
3
|
|
GBP
|
|
AUD
|
|
EUR
|
|
CAD
|
|
CAD
|
4
|
|
CNH
|
|
CAD
|
|
CAD
|
|
EUR
|
|
CNH
|
5
|
|
BRL
|
|
MXN
|
|
MXN
|
|
CNH
|
|
EUR
|
Currency Abbreviation
|
|
Currency
|
AUD
|
|
Australian Dollar
|
BRL
|
|
Brazilian Real
|
CAD
|
|
Canadian Dollar
|
CNH
|
|
Chinese Yuan
|
EUR
|
|
Euro
|
GBP
|
|
British Pound
|
MXN
|
|
Mexican Peso
|
•
|
an
$88.0 million
increase in ticket prices driven by the improvement in our ticket price on a per passenger basis due to the exit of the Pullmantur ships
,
as well as higher pricing on North America and Europe sailings. The increase in ticket prices was partially offset by lower pricing on Asia/Pacific sailings; and
|
•
|
a favorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of approximately
$12.8 million
.
|
•
|
a
$30.7 million
increase in onboard revenue attributable to higher spending on a per passenger basis due to our revenue enhancing initiatives, including beverage package sales and promotions, new strategies and promotion on specialty restaurants and the increased revenue associated with internet and other telecommunication services. The increase is also attributable to port activities mainly due to itinerary changes; and
|
•
|
a
$13.8 million
increase in other revenue primarily due to charter revenue and management fees earned from Pullmantur Holdings.
|
•
|
a
$14.6 million
increase in commissions expense mainly due to the increase in ticket prices discussed above and changes in commission incentives;
|
•
|
a
$10.2 million
increase in head taxes due to itinerary changes;
|
•
|
a
$9.6 million
increase in other operating expenses primarily due to an immaterial gain recognized in 2016 as a result of the sale of our majority interest in Pullmantur Holdings; and
|
•
|
an
$8.7 million
increase in payroll and related expenses due to an increase in crew benefits.
|
•
|
a
3.0%
decrease in capacity, which decreased
passenger ticket revenues
by
$144.2 million
primarily due to the sale of our majority interest in Pullmantur Holdings during the third quarter of 2016, the sale of
Splendour of the Seas
in the second quarter of 2016 and the sale of
Legend of the Seas
in first quarter of 2017, which was partially offset by an increase in capacity due to the addition of
Ovation of the Seas
and
Harmony of the Seas
into our fleet during the second quarter of 2016; and
|
•
|
an approximate
$15.2 million
unfavorable effect of changes in foreign currency exchange rates related to our passenger ticket revenue transactions denominated in currencies other than the United States dollar.
|
•
|
a
$99.8 million
increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our revenue enhancing initiatives, including beverage package sales and promotions, gaming initiatives, new strategies and promotions on specialty restaurants and the increased revenue associated with internet and other telecommunication services. The increase is also attributable to port activities mainly due to itinerary changes; and
|
•
|
a
$39.4 million
increase in other revenue primarily due to charter revenue and management fees earned from Pullmantur Holdings.
|
•
|
a
$116.6 million
decrease attributable to the
3.0%
decrease in capacity noted above;
|
•
|
a
$30.9 million
gain resulting from the sale of
Legend of the Seas
in 2017 compared to an immaterial gain from the sale of
Splendour of the Seas
in 2016;
|
•
|
a
$32.6 million
decrease in air expense due to itinerary changes and lower ticket costs; and
|
•
|
a
$23.9 million
decrease in vessel maintenance primarily due to the timing of scheduled drydocks.
|
Ship
|
|
Expected to Enter
Service
|
|
Approximate
Berths
|
|
Royal Caribbean International —
|
|
|
|
|
|
Oasis-class:
|
|
|
|
|
|
Symphony of the Seas
|
|
1st Quarter 2018
|
|
5,450
|
|
Unnamed
|
|
2nd Quarter 2021
|
|
5,450
|
|
Quantum-class:
|
|
|
|
|
|
Spectrum of the Seas
|
|
2nd Quarter 2019
|
|
4,150
|
|
Unnamed
|
|
4th Quarter 2020
|
|
4,150
|
|
Project Icon:
|
|
|
|
|
|
Unnamed
|
|
2nd Quarter 2022
|
|
5,650
|
|
Unnamed
|
|
2nd Quarter 2024
|
|
5,650
|
|
Celebrity Cruises — Edge-class:
|
|
|
|
|
|
Celebrity Edge
|
|
4th Quarter 2018
|
|
2,900
|
|
Celebrity Beyond
|
|
2nd Quarter 2020
|
|
2,900
|
|
Unnamed
|
|
4th Quarter 2021
|
|
2,900
|
|
Unnamed
|
|
4th Quarter 2022
|
|
2,900
|
|
TUI Cruises (50% joint venture)
(1)
—
|
|
|
|
|
|
Unnamed
|
|
2nd Quarter 2018
|
|
2,850
|
|
Unnamed
|
|
1st Quarter 2019
|
|
2,850
|
|
Total Berths
|
|
|
|
47,800
|
|
(1)
|
TUI Cruises plans to offset this additional capacity through the planned transfer of the their first two ships,
Mein Schiff 1
and
Mein Schiff 2
, to an affiliate of TUI AG, our joint venture partner in TUI Cruises, in 2018 and 2019, respectively.
|
|
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)
|
$
|
242,989
|
|
|
$
|
28,742
|
|
|
$
|
42,299
|
|
|
$
|
24,910
|
|
|
$
|
147,038
|
|
Interest on long-term debt
(2)
|
1,073,803
|
|
|
233,134
|
|
|
352,304
|
|
|
246,912
|
|
|
241,453
|
|
|||||
Other
(3)
|
850,768
|
|
|
170,063
|
|
|
297,523
|
|
|
165,395
|
|
|
217,787
|
|
|||||
Investing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ship purchase obligations
(4)
|
10,692,368
|
|
|
1,658,774
|
|
|
2,751,170
|
|
|
4,230,704
|
|
|
2,051,720
|
|
|||||
Financing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt obligations
(5)
|
7,557,801
|
|
|
1,511,773
|
|
|
1,991,501
|
|
|
1,209,893
|
|
|
2,844,634
|
|
|||||
Capital lease obligations
(6)
|
34,406
|
|
|
3,935
|
|
|
7,051
|
|
|
8,272
|
|
|
15,148
|
|
|||||
Other
(7)
|
33,684
|
|
|
8,525
|
|
|
20,012
|
|
|
5,147
|
|
|
—
|
|
|||||
Total
|
$
|
20,485,819
|
|
|
$
|
3,614,946
|
|
|
$
|
5,461,860
|
|
|
$
|
5,891,233
|
|
|
$
|
5,517,780
|
|
(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 2028 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
September 30, 2017
. Debt denominated in other currencies is calculated based on the applicable exchange rate at
September 30, 2017
.
|
(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
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
(1)
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs
|
July 1, 2017 - July 31, 2017
|
—
|
|
—
|
|
—
|
|
$500,000,000
|
August 1, 2017 - August 31, 2017
|
827,826
|
|
$120.78
|
|
827,826
|
|
$400,000,000
|
September 1, 2017 - September 30, 2017
|
212,128
|
|
$117.83
|
|
212,128
|
|
$375,000,000
|
Total
|
1,039,954
|
|
|
|
1,039,954
|
|
|
10.1
|
|
|
|
|
|
|
|
10.2
|
|
|
|
|
|
|
|
10.3
|
|
|
|
|
|
|
|
10.4
|
|
|
|
|
|
|
|
10.5
|
|
|
|
|
|
|
|
10.6
|
|
|
|
|
|
|
|
10.7
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
*
|
|
Filed herewith
|
**
|
|
Furnished herewith
|
(ii)
|
the Consolidated Balance Sheets at
September 30, 2017
and
December 31, 2016
;
|
|
|
ROYAL CARIBBEAN CRUISES LTD.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
/s/ JASON T. LIBERTY
|
|
|
Jason T. Liberty
|
|
|
Executive Vice President, Chief Financial Officer
|
November 7, 2017
|
|
(Principal Financial Officer and duly authorized signatory)
|
Taxes
|
(a)
FICA/Medicare Taxes
. U.S. employees of the Company and/or its Affiliates will be subject to FICA/Medicare tax on each Vesting Date based on the Fair Market Value of the Shares underlying the Units that Vest on such Vesting Date.
(b)
U.S. Federal Income Taxes
. U.S. employees of the Company and/or its Affiliates will be subject to U.S. federal income tax on each Vesting Date based on the Fair Market Value of the Shares underlying the Units that Vest on such Vesting Date.
(c)
Tax Consequences for Non-U.S. Residents.
Grantees who are neither citizens nor resident aliens of the U.S. should consult with their financial/tax advisor regarding both the U.S. and non-U.S. tax consequences of the receipt of this award and subsequent settlement/receipt of the Shares.
(d)
Grantee will be solely responsible for the payment of all such taxes, as well as for any other state, local or non-U.S. taxes that may be related to Grantee’s receipt of the Units and/or Shares.
|
Restrictive Covenants
|
The Grantee acknowledges and recognizes that his or her services to be rendered to the Company and/or its Affiliates are of a special and unusual character that have a unique value to Company and the conduct of its business, the loss of which cannot adequately be compensated by damages in an action at law. In view of the unique value to Company of the services of Grantee, and because of the confidential information to be obtained by or disclosed to Grantee, and as a material inducement to Company providing this grant of Units to Grantee, Grantee agrees to the provisions of
Schedule A
attached hereto (the “Restrictive Covenants”). For the avoidance of doubt, the Restrictive Covenants contained in this Agreement are in addition to, and not in lieu of, any other restrictive covenants or similar covenants or agreements between Grantee and the Company or any of its Affiliates, including but not limited to, any employment agreement between Grantee and the Company or any of its Affiliates.
|
Miscellaneous
|
(a) This Agreement shall not confer upon an employee any right to continue employment with the Company or any Affiliate, nor shall this Agreement interfere in any way with the Company’s or Affiliate’s right to terminate such employment at any time.
(b) Subject to the terms of the Plan, the Committee may terminate, amend, or modify the Plan;
provided, however
, that no such termination, amendment, or modification of the Plan may in any way adversely affect Grantee’s rights under this Agreement without Grantee’s consent.
(c) This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or stock exchanges as may be required.
(d) To the extent not preempted by U.S. federal law, this Agreement shall be governed and interpreted in accordance with the laws of the State of Florida, except that no effect shall be given to any conflicts of laws principles that would require the application of the laws of a state or territory other than Florida. Additionally, the Parties agree that the federal and state courts located in the Southern District of Florida or Miami-Dade County, Florida will have personal jurisdiction over them to hear all disputes regarding, or related to, this Agreement. The Parties further agree that venue will be proper only in the Southern District of Florida or Miami-Dade County, Florida and they waive all objections to that venue.
|
Additional Terms for Participants in China
|
To the extent Grantee (i) is employed by the Company or one of its Affiliates in and (ii) is a citizen of the People’s Republic of China, the Units shall be subject to such additional or substitute terms as shall be set forth in Schedule B attached hereto.
|
Signatures
|
By the signatures below, the Grantee and the authorized representative of the Company acknowledge agreement to this Restricted Stock Unit Agreement as of the Grant Date specified above.
Royal Caribbean Cruises Ltd.
By: ______________________________
Grantee: _________________________
|
Date: November 7, 2017
|
|
|
|
/s/
|
RICHARD D. FAIN
|
|
|
Richard D. Fain
|
|
|
Chairman and
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: November 7, 2017
|
|
|
|
/s/
|
JASON T. LIBERTY
|
|
|
Jason T. Liberty
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date: November 7, 2017
|
|
||
|
|
||
|
|
||
|
By:
|
/s/
|
RICHARD D. FAIN
|
|
|
Richard D. Fain
|
|
|
|
Chairman and
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
||
|
By:
|
/s/
|
JASON T. LIBERTY
|
|
|
Jason T. Liberty
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|