Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Norwegian Cruise Line Holdings Ltd. | |
Entity Central Index Key | 1,513,761 | |
Trading Symbol | nclh | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock Shares Outstanding | 224,689,497 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Passenger ticket | $ 889,866 | $ 786,694 |
Onboard and other | 403,537 | 364,087 |
Total revenue | 1,293,403 | 1,150,781 |
Cruise operating expense | ||
Commissions, transportation and other | 218,340 | 194,140 |
Onboard and other | 70,688 | 68,411 |
Payroll and related | 209,824 | 192,636 |
Fuel | 93,431 | 88,886 |
Food | 50,656 | 46,178 |
Other | 125,152 | 129,547 |
Total cruise operating expense | 768,091 | 719,798 |
Other operating expense | ||
Marketing, general and administrative | 227,015 | 192,044 |
Depreciation and amortization | 131,244 | 119,205 |
Total other operating expense | 358,259 | 311,249 |
Operating income | 167,053 | 119,734 |
Non-operating income (expense) | ||
Interest expense, net | (59,698) | (52,960) |
Other income (expense), net | (1,666) | (2,815) |
Total non-operating income (expense) | (61,364) | (55,775) |
Net income before income taxes | 105,689 | 63,959 |
Income tax expense | (2,534) | (2,049) |
Net income | $ 103,155 | $ 61,910 |
Weighted-average shares outstanding | ||
Basic (in shares) | 227,343,577 | 227,468,526 |
Diluted (in shares) | 229,187,628 | 228,555,952 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.45 | $ 0.27 |
Diluted (in dollars per share) | $ 0.45 | $ 0.27 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 103,155 | $ 61,910 |
Other comprehensive income: | ||
Shipboard Retirement Plan | 105 | 105 |
Cash flow hedges: | ||
Net unrealized gain (loss) | 48,576 | (7,283) |
Amount realized and reclassified into earnings | (1,785) | 9,705 |
Total other comprehensive income | 46,896 | 2,527 |
Total comprehensive income | $ 150,051 | $ 64,437 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 301,748 | $ 176,190 |
Accounts receivable, net | 41,159 | 43,961 |
Inventories | 80,427 | 82,121 |
Prepaid expenses and other assets | 337,441 | 216,065 |
Total current assets | 760,775 | 518,337 |
Property and equipment, net | 11,085,572 | 11,040,488 |
Goodwill | 1,388,931 | 1,388,931 |
Tradenames | 817,525 | 817,525 |
Other long-term assets | 432,182 | 329,588 |
Total assets | 14,484,985 | 14,094,869 |
Current liabilities: | ||
Current portion of long-term debt | 772,187 | 619,373 |
Accounts payable | 65,573 | 53,433 |
Accrued expenses and other liabilities | 535,278 | 513,717 |
Advance ticket sales | 1,720,505 | 1,303,498 |
Total current liabilities | 3,093,543 | 2,490,021 |
Long-term debt | 5,580,290 | 5,688,392 |
Other long-term liabilities | 172,079 | 166,690 |
Total liabilities | 8,845,912 | 8,345,103 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity: | ||
Ordinary shares, $.001 par value; 490,000,000 shares authorized; 234,709,747 shares issued and 224,675,474 shares outstanding at March 31, 2018 and 233,840,523 shares issued and 228,528,562 shares outstanding at December 31, 2017 | 235 | 233 |
Additional paid-in capital | 4,020,584 | 3,998,694 |
Accumulated other comprehensive income (loss) | 73,862 | 26,966 |
Retained earnings | 2,047,152 | 1,963,128 |
Treasury shares (10,034,273 and 5,311,961 ordinary shares at March 31, 2018 and December 31, 2017, respectively, at cost) | (502,760) | (239,255) |
Total shareholders' equity | 5,639,073 | 5,749,766 |
Total liabilities and shareholders' equity | $ 14,484,985 | $ 14,094,869 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Ordinary shares, par value (in dollars per shares) | $ 0.001 | $ 0.001 |
Ordinary shares, authorized | 490,000,000 | 490,000,000 |
Ordinary shares, issued | 234,709,747 | 233,840,523 |
Ordinary shares, outstanding | 224,675,474 | 228,528,562 |
Treasury stock, shares | 10,034,273 | 5,311,961 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net income | $ 103,155 | $ 61,910 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 134,546 | 121,593 |
(Gain) loss on derivatives | (10) | 406 |
Deferred income taxes, net | 809 | 1,186 |
Provision for bad debts and inventory | 1,266 | 323 |
Share-based compensation expense | 28,102 | 18,203 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 1,618 | 14,943 |
Inventories | 1,363 | (5,184) |
Prepaid expenses and other assets | (45,709) | (9,473) |
Accounts payable | 13,163 | 27,423 |
Accrued expenses and other liabilities | (3,180) | (19,321) |
Advance ticket sales | 375,638 | 222,935 |
Net cash provided by operating activities | 610,761 | 434,944 |
Cash flows from investing activities | ||
Additions to property and equipment, net | (143,874) | (117,777) |
Promissory note receipts | 249 | |
Net cash used in investing activities | (143,625) | (117,777) |
Cash flows from financing activities | ||
Repayments of long-term debt | (252,826) | (465,237) |
Proceeds from long-term debt | 290,878 | 236,000 |
Proceeds from employee related plans | 5,961 | 9,466 |
Net share settlement of restricted share units | (12,171) | (4,550) |
Purchases of treasury shares | (263,505) | |
Deferred financing fees | (109,915) | (1,404) |
Net cash used in financing activities | (341,578) | (225,725) |
Net increase in cash and cash equivalents | 125,558 | 91,442 |
Cash and cash equivalents at beginning of period | 176,190 | 128,347 |
Cash and cash equivalents at end of period | $ 301,748 | $ 219,789 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Shares | Total |
Balance at Dec. 31, 2016 | $ 232 | $ 3,890,119 | $ (314,473) | $ 1,201,103 | $ (239,255) | $ 4,537,726 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 18,203 | 18,203 | ||||
Issuance of shares under employee related plans | 9,466 | 9,466 | ||||
Net share settlement of restricted share units | (2,153) | 2,153 | ||||
Change in accounting policy (share-based forfeitures) | (4,550) | (4,550) | ||||
Other comprehensive income, net | 2,527 | 2,527 | ||||
Net income | 61,910 | 61,910 | ||||
Balance at Mar. 31, 2017 | 232 | 3,911,085 | (311,946) | 1,265,166 | (239,255) | 4,625,282 |
Balance at Dec. 31, 2017 | 233 | 3,998,694 | 26,966 | 1,963,128 | (239,255) | 5,749,766 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 28,102 | 28,102 | ||||
Issuance of shares under employee related plans | 2 | 5,959 | 5,961 | |||
Treasury shares | (263,505) | (263,505) | ||||
Net share settlement of restricted share units | (12,171) | (12,171) | ||||
Change in accounting policy (share-based forfeitures) | (12) | (19,131) | (19,143) | |||
Other comprehensive income, net | 46,908 | 46,896 | ||||
Net income | 103,155 | 103,155 | ||||
Balance at Mar. 31, 2018 | $ 235 | $ 4,020,584 | $ 73,862 | $ 2,047,152 | $ (502,760) | $ 5,639,073 |
Description of Business and Org
Description of Business and Organization | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Organization | 1. Description of Business and Organization We are a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. As of March 31, 2018, we had 25 ships with approximately 50,400 Berths, excluding Norwegian Bliss, which was delivered on April 19, 2018 (we refer you to Note 12— “Subsequent Events”). We plan to introduce six additional ships through 2025 and we have an option to introduce two additional ships for delivery in 2026 and 2027, subject to certain conditions. Norwegian Encore is on order for delivery in the fall of 2019. We also have an Explorer Class Ship, Seven Seas Splendor, on order for delivery in the winter of 2020. Project Leonardo will introduce an additional four ships with expected delivery dates through 2025. These additions to our fleet (exclusive of the option for two additional ships) will increase our total Berths to approximately 72,300. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements are unaudited and, in our opinion, contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire fiscal year. Historically, demand for cruises has been strongest during the Northern Hemisphere’s summer months. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017, which are included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. Earnings Per Share A reconciliation between basic and diluted earnings per share was as follows (in thousands, except share and per share data): Three Months Ended 2018 2017 Net income $ 103,155 $ 61,910 Basic weighted-average shares outstanding 227,343,577 227,468,526 Dilutive effect of share awards 1,844,051 1,087,426 Diluted weighted-average shares outstanding 229,187,628 228,555,952 Basic earnings per share $ 0.45 $ 0.27 Diluted earnings per share $ 0.45 $ 0.27 For the three months ended March 31, 2018 and 2017, a total of 3.4 million and 7.5 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive. Revenue and Expense Recognition On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09 (“Topic 606”) - Revenue from Contracts with Customers. Topic 606 supersedes the revenue recognition requirements in Accounting Standards Codification 605 - Revenue Recognition. Using the modified retrospective method, we applied the new requirements to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Nature of goods and services We offer our guests a multitude of cruise fare options when booking a cruise. Our cruise ticket prices generally include cruise fare and a wide variety of onboard activities and amenities, as well as meals and entertainment. In some instances, cruise ticket prices include round-trip airfare to and from the port of embarkation, complimentary beverages, unlimited shore excursions, free internet, pre-cruise hotel packages, and on some of the exotic itineraries, pre or post land packages. Prices vary depending on the particular cruise itinerary, stateroom category selected and the time of year that the voyage takes place. Passenger ticket revenue also includes full ship charters as well as port fees and taxes. During the voyage, we generate onboard and other revenue for additional products and services which are not included in the cruise fare, including casino operations, certain food and beverage, gift shop purchases, spa services, photo services and other similar items. Food and beverage, casino operations and shore excursions are generally managed directly by us while retail shops, spa services, art auctions and internet services may be managed through contracts with third-party concessionaires. These contracts generally entitle us to a fixed percentage of the gross sales derived from these concessions. While some onboard goods and services may be prepaid prior to the voyage, we utilize point-of-sale systems for discrete purchases made onboard. Certain of our product offerings are bundled and we allocate the value of the bundled goods and services between passenger ticket revenue and onboard and other revenue based upon the relative standalone selling prices of those goods and services. Timing of satisfaction of performance obligations and significant payment terms The payment terms and cancellation policies vary by brand, stateroom category, length of voyage, and country of purchase. A deposit for a future booking is required at or soon after the time of booking. Final payment is normally due between 75 days and 180 days before the voyage. Deposits on advance ticket sales are deferred when received, and include amounts that are refundable. Deferred amounts are subsequently recognized as revenue ratably during the voyage sailing days as services are rendered over time on the ship. Deposits are generally cancellable and refundable prior to sailing, but may be subject to penalties, depending on the timing of cancellation. The inception of substantive cancellation penalties generally coincides with the dates that final payment is due, and penalties generally increase as the voyage sail date approaches. Cancellation fees are recognized in passenger ticket revenue in the month of the cancellation. Onboard goods and services rendered may be paid at disembarkation. A receivable is recognized for onboard goods and services rendered when the voyage is not completed before the end of the period. Cruises that are reserved under full ship charter agreements are subject to the payment terms of the specific agreement and may be either cancelable or non-cancelable. Deposits received on charter voyages are deferred when received and included in advance ticket sales. Deferred amounts are subsequently recognized as revenue ratably over the voyage sailing dates. Financial statement presentation As of January 1, 2018, in connection with the adoption of Topic 606, we reclassified $51.6 million of deferred costs associated with obtaining customer contracts to prepaid expenses and other assets from advance ticket sales. Segment Reporting We have concluded that our business has a single reportable segment. Each brand, Norwegian, Oceania Cruises and Regent, constitutes a business for which discrete financial information is available and management regularly reviews the brand level operating results and, therefore, each brand is considered an operating segment. Our operating segments have similar economic and qualitative characteristics, including similar long-term margins and similar products and services; therefore, we aggregate all of the operating segments into one reportable segment. Although we sell cruises on an international basis, our passenger ticket revenue is primarily attributed to U.S.-sourced guests who make reservations in the U.S. Revenue attributable to U.S.-sourced guests has historically approximated 75-80%. No other individual country’s revenues exceed 10% in any given period. Disaggregation of Revenue Revenue and cash flows are affected by economic factors in various geographical regions. Revenues by destination were as follows (in thousands): Three Months Ended 2018 2017 North America $ 875,179 $ 850,671 Europe 31,070 26,162 Asia-Pacific 267,718 133,430 Other 119,436 140,518 $ 1,293,403 $ 1,150,781 Contract Balances Receivables from customers are included within accounts receivables, net. As of March 31, 2018 and January 1, 2018, our receivables from customers were $12.2 million and $13.8 million, respectively. Contract liabilities represent the Company’s obligation to transfer goods and services to a customer. A customer deposit held for a future cruise is generally considered a contract liability only when final payment is both due and paid by the customer and is usually recognized in earnings within 180 days of becoming a contract. Other deposits held and included within advance ticket sales or other long-term liabilities are not considered contract liabilities as they are largely cancelable and refundable. Our contract liabilities are included within advance ticket sales. As of March 31, 2018 and January 1, 2018, our contract liabilities were $1.2 billion and $1.0 billion, respectively. Of the amounts included within contract liabilities, approximately 50% were refundable in accordance with our cancellation policies. For the three months ended March 31, 2018, $0.8 billion of revenue recognized was included in the contract liability balance at the beginning of the period. Our revenue is seasonal and based on the demand for cruises. Historically, the seasonality of the North American cruise industry generally results in the greatest demand for cruises during the Northern Hemisphere’s summer months. This predictable seasonality in demand has resulted in fluctuations by quarter in our revenue and results of operations. The seasonality of our results is increased due to ships being taken out of service for regularly scheduled Dry-docks, which we typically schedule during non-peak demand periods. This seasonality will result in higher contract liability balances as a result of an increased number of reservations preceding peak demand periods. The addition of new ships also increases the contract liability balances prior to a new ship’s delivery, as staterooms are usually made available for reservation prior to the inaugural cruise. Norwegian Bliss, with approximately 4,000 berths, adding 8% capacity to our fleet, was delivered on April 19, 2018 (we refer you to Note 12— “Subsequent Events”). Practical Expedients and Exemptions We do not disclose information about remaining performance obligations that have original expected durations of one year or less. We recognize revenue in an amount that corresponds directly with the value to the customer of our performance completed to date. Variable consideration, which will be determined based on a future rate and passenger count, is excluded from the disclosure and these amounts are not material. These variable non-disclosed contractual amounts relate to our non-cancelable charter agreements and a leasing arrangement with a certain port, both of which are long-term in nature. Amounts that are fixed in nature due to the application of minimum guarantees are also not material and are not disclosed. Contract Costs Management expects that incremental commissions and credit card fees paid as a result of obtaining ticket contracts are recoverable; therefore, we recognize these amounts as assets when they are paid prior to the voyage. Costs of air tickets and port taxes and fees that fulfill future performance obligations are also considered recoverable and are recorded as assets. As of March 31, 2018, $115.0 million of costs incurred to obtain customers and $25.0 million of costs to fulfill contracts with customers are recognized as assets within prepaid expenses and other assets. Incremental commissions, credit card fees, air ticket costs, and port taxes and fees are recognized ratably over the voyage sailing dates, concurrent with associated revenue, and are primarily in commission, transportation and other expense. Impacts on Financial Statements The adoption of Topic 606 does not change the timing, classification or amount of revenue recognized from customers in our consolidated financial statements nor does it change the timing, classification or amount of incremental costs to obtain and fulfill those contracts with customers. Therefore, the adoption had no impact on our consolidated statement of operations or consolidated statement of comprehensive income. The following table summarizes the impacts of Topic 606 adoption on our consolidated balance sheet which has been adjusted for deferred contract costs that would have been included, net, in Advance ticket sales as of March 31, 2018 (in thousands): As reported Adjustments Balances without Prepaid expenses and other assets $ 337,441 $ (68,230 ) $ 269,211 Total assets 14,484,985 (68,230 ) 14,416,755 Advance ticket sales 1,720,505 (68,230 ) 1,652,275 Total liabilities and shareholders’ equity $ 14,484,985 $ (68,230 ) $ 14,416,755 The following table summarizes the impacts of our adoption of Topic 606 on our consolidated statement of cash flows for the three months ended March 31, 2018 (in thousands): As reported Adjustments Balances without Changes in operating assets and liabilities: Prepaid expenses and other assets $ (45,709 ) $ 16,631 $ (29,078 ) Advance ticket sales 375,638 (16,631 ) 359,007 Net cash provided by operating activities $ 610,761 $ — $ 610,761 Foreign Currency The majority of our transactions are settled in U.S. dollars. We translate assets and liabilities of our foreign subsidiaries at exchange rates in effect at the balance sheet date. Gains or losses resulting from transactions denominated in other currencies are recognized in our consolidated statements of operations within other income (expense), net and such losses were approximately $1.8 million and $2.8 million for the three months ended March 31, 2018 and 2017, respectively. Depreciation and Amortization Expense The amortization of deferred financing fees is included in depreciation and amortization expense in the consolidated statements of cash flows; however, for purposes of the consolidated statements of operations they are included in interest expense, net. Recently Issued and Adopted Accounting Guidance In December 2017, the Tax Cuts and Jobs Act (“the Act”) was enacted. Among other provisions, the Act reduces the U.S. federal corporate tax rate from 35% to 21%. The SEC staff issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes required by the Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. As of March 31, 2018, we have not completed the accounting for the tax effects of enactment of the Act; however, as described below, we have made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change. The most significant impact of the Act for the Company was a $7.4 million reduction of the value of net deferred tax liabilities (which represent future tax expenses) that was recorded in 2017 as a discrete tax benefit as a result of lowering the U.S. corporate income tax rate from 35% to 21%. The tax benefit represents a provisional amount and the Company’s current best estimates. Any adjustments recorded to the provisional amount through the end of 2018 will be included in income from operations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company’s current interpretation of the Act and may change as the Company receives additional clarification and implementation guidance. Other aspects of the Act are either not applicable or not expected to have a material impact on the Company’s financial statements. In January 2017, the Financial Accounting Standards Board issued ASU No. 2017-04 which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The guidance is effective for annual or any interim goodwill impairment tests in years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect to early adopt this guidance. We will evaluate the impact of this guidance to our consolidated financial statements upon adoption of the guidance. On January 1, 2018, we adopted ASU No. 2016-16 which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. This adoption resulted in a cumulative-effect adjustment of $19.1 million to retained earnings. This amount captures the write-off of previously unamortized deferred income tax expense from past intra-entity transfers involving assets other than inventory, not previously recognized under U.S. GAAP. The adoption does not have an impact on continuing operations, net income or any other financial statement line items for the current period. On January 1, 2018, we adopted ASU No. 2017-12 which simplifies the accounting for derivatives. For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. Upon adoption, the guidance required a cumulative effect adjustment, relating to the elimination of the separate measurement of ineffectiveness for cash flow hedges, to accumulated other comprehensive income (loss) with a corresponding adjustment to the opening balance of retained earnings, which was not material to our financial statements (we refer you to Note 7. “Fair Value Measurements and Derivatives”). |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 3. Intangible Assets The carrying amounts of intangible assets subject to amortization are included within other long-term assets. The gross carrying amounts of intangible assets, the related accumulated amortization, the net carrying amounts and the weighted-average amortization periods of the Company’s intangible assets are listed in the following tables (in thousands, except amortization period): March 31, 2018 Gross Carrying Accumulated Net Carrying Weighted- Customer relationships $ 120,000 $ (73,088 ) $ 46,912 6.0 Licenses 3,368 (1,883 ) 1,485 5.6 Total intangible assets subject to amortization $ 123,368 $ (74,971 ) $ 48,397 December 31, 2017 Gross Carrying Accumulated Net Carrying Weighted- Customer relationships $ 120,000 $ (66,866 ) $ 53,134 6.0 Licenses 3,368 (1,601 ) 1,767 5.6 Non-compete agreements 660 (660 ) — 1.0 Total intangible assets subject to amortization $ 124,028 $ (69,127 ) $ 54,901 The aggregate amortization expense is as follows (in thousands): Three Months Ended 2018 2017 Amortization expense $ 6,504 $ 7,915 The following table sets forth the Company’s estimated aggregate amortization expense for each of the five years below (in thousands): Year ended December 31, Amortization 2019 $ 18,489 2020 9,906 2021 75 2022 75 2023 75 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 4. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) for the three months ended March 31, 2018 was as follows (in thousands): Accumulated Change Change Accumulated other comprehensive income (loss) at beginning of period $ 26,966 $ 33,861 $ (6,895 ) Current period other comprehensive income before reclassifications 48,576 48,576 — Amounts reclassified into earnings (1,680 ) (1,785 )(1) 105 (2) Accumulated other comprehensive income (loss) at end of period $ 73,862 $ 80,652 (3) $ (6,790 ) (1) We refer you to Note 7— “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations. (2) Amortization of prior-service cost and actuarial loss reclassified to other income (expense). (3) Includes $9.5 million of gain expected to be reclassified into earnings in the next 12 months. Accumulated other comprehensive income (loss) for the three months ended March 31, 2017 was as follows (in thousands): Accumulated Change Change Accumulated other comprehensive income (loss) at beginning of period $ (314,473 ) $ (307,618 ) $ (6,855 ) Current period other comprehensive income before reclassifications (7,283 ) (7,283 ) — Amounts reclassified into earnings 9,810 9,705 (1) 105 (2) Accumulated other comprehensive income (loss) at end of period $ (311,946 ) $ (305,196 ) $ (6,750 ) (1) We refer you to Note 7— “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations. (2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 5. Property and Equipment, net Property and equipment, net increased $45.1 million for the three months ended March 31, 2018 primarily due to ships under construction and ship improvement projects. Norwegian Bliss was delivered on April 19, 2018 (we refer you to Note 12— “Subsequent Events”). |
Related Party Disclosures
Related Party Disclosures | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Disclosures | 6. Related Party Disclosures In March 2018, as part of a public equity offering of our ordinary shares owned by the Apollo Holders and Genting HK, we repurchased 4,722,312 of our ordinary shares sold in the offering for approximately $263.5 million pursuant to our then existing share repurchase program. As of March 31, 2018, the ownership percentages of NCLH’s ordinary shares were as follows: Shareholder Number of Percentage Apollo Holders 15,728,782 7.0 % Genting HK 3,148,307 1.4 % |
Fair Value Measurements and Der
Fair Value Measurements and Derivatives | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Fair Value Measurements and Derivatives | 7. Fair Value Measurements and Derivatives Fair value is defined as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability). Fair Value Hierarchy The following hierarchy for inputs used in measuring fair value should maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available: Level 1 — Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement dates. Level 2 — Significant other observable inputs that are used by market participants in pricing the asset or liability based on market data obtained from independent sources. Level 3 — Significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available. Derivatives We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We attempt to minimize these risks through a combination of our normal operating and financing activities and through the use of derivatives. We assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of our hedged forecasted transactions. We use regression analysis for this hedge relationship and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivative and the hedged forecasted transaction. There are no amounts excluded from the assessment of hedge effectiveness and there are no credit-risk-related contingent features in our derivative agreements. We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivatives, is not considered significant, as we primarily conduct business with large, well-established financial institutions that we have established relationships with and that have credit risks acceptable to us or the credit risk is spread out among a large number of creditors. We do not anticipate non-performance by any of our significant counterparties. As of March 31, 2018, we had fuel swaps maturing through December 31, 2020 which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 1.1 million metric tons of our projected fuel purchases. As of March 31, 2018, we had foreign currency forward contracts, matured foreign currency options and matured foreign currency collars which are used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. The notional amount of our foreign currency forward contracts was €1.9 billion, or $2.3 billion based on the euro/U.S. dollar exchange rate as of March 31, 2018. As of March 31, 2018, we had interest rate swap agreements to hedge our exposure to interest rate movements and to manage our interest expense. The notional amount of outstanding debt associated with the interest rate swap agreements was $218.6 million as of March 31, 2018. The following table sets forth our derivatives measured at fair value and discloses the balance sheet location (in thousands): Asset Liability Balance Sheet location March 31, December 31, March 31, December 31, Fuel contracts designated as hedging instruments Prepaid expenses and other assets $ 17,637 $ 19,220 $ 3,089 $ 2,406 Other long-term assets 14,540 19,854 4,152 3,469 Accrued expenses and other liabilities 60 — 3,107 3,348 Other long-term liabilities 130 576 2,913 2,148 Foreign currency contracts designated as hedging instruments Prepaid expenses and other assets 78,438 52,300 71 730 Other long-term assets 112,777 85,081 — — Interest contracts designated as hedging instruments Accrued expenses and other liabilities — — 332 1,020 Total derivatives designated as hedging instruments $ 223,582 $ 177,031 $ 13,664 $ 13,121 The fair values of swap and forward contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The Company determines the value of options and collars utilizing an option pricing model based on inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets. The option pricing model used by the Company is an industry standard model for valuing options and is used by the broker/dealer community. The inputs to this option pricing model are the option strike price, underlying price, risk-free rate of interest, time to expiration, and volatility. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. Our derivatives and financial instruments were categorized as Level 2 in the fair value hierarchy, and we had no derivatives or financial instruments categorized as Level 1 or Level 3. Our derivative contracts include rights of offset with our counterparties. We have elected to net certain assets and liabilities within counterparties when the rights of offset exist. We are not required to post cash collateral related to our derivative instruments. The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands): March 31, 2018 Gross Amounts Gross Total Net Gross Net Amounts Assets $ 223,392 $ (7,312 ) $ 216,080 $ (117,233 ) $ 98,847 Liabilities 6,352 (190 ) 6,162 (332 ) 5,830 December 31, 2017 Gross Amounts Gross Total Net Gross Net Amounts Assets $ 176,455 $ (6,605 ) $ 169,850 $ (127,924 ) $ 41,926 Liabilities 6,516 (576 ) 5,940 (1,020 ) 4,920 The effects of cash flow hedge accounting on accumulated other comprehensive income (loss) were as follows (in thousands): Derivatives Amount of gain or (loss) recognized in other comprehensive income Location of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Fuel contracts $ (6,012 ) $ (26,203 ) Fuel $ 3,525 $ (8,003 ) Foreign currency contracts 54,493 18,636 Depreciation and amortization expense (1,159 ) (857 ) Interest rate contracts 95 284 Interest expense, net (581 ) (845 ) Total gain (loss) recognized in other comprehensive income $ 48,576 $ (7,283 ) $ 1,785 $ (9,705 ) The effects of cash flow hedge accounting on the consolidated financial statements of operations were as follows (in thousands): For the three months ended March 31, 2018 For the three months ended March 31, 2017 Fuel Depreciation and amortization Interest expense, net Fuel Depreciation and amortization Interest expense, net Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded $ 93,431 $ 131,244 $ 59,698 $ 88,886 $ 119,205 $ 52,960 The effects of cash flow hedges: Fuel contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income 3,525 — — (8,003 ) — — Foreign currency contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income — (1,159 ) — — (857 ) — Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income — — (581 ) — — (845 ) Long-Term Debt As of March 31, 2018 and December 31, 2017, the fair value of our long-term debt, including the current portion, was $6,457.9 million and $6,448.6 million, respectively, which was $5.8 million lower and $23.5 million higher, respectively, than the carrying values. The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below market rates at the measurement dates. The fair value of our long-term debt was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities resulting in Level 2 inputs in the fair value hierarchy. Market risk associated with our long-term variable rate debt is the potential increase in interest expense from an increase in interest rates. The calculation of the fair value of our long-term debt is considered a Level 2 input. Other The carrying amounts reported in the consolidated balance sheets of all other financial assets and liabilities approximate fair value. |
Employee Benefits and Compensat
Employee Benefits and Compensation Plans | 3 Months Ended |
Mar. 31, 2018 | |
Post employment Benefits [Abstract] | |
Employee Benefits and Compensation Plans | 8. Employee Benefits and Compensation Plans Share Option Awards The following is a summary of option activity under NCLH’s Amended and Restated 2013 Performance Incentive Plan for the three months ended March 31, 2018: Number of Share Option Weighted-Average Exercise Weighted- Aggregate Time- Performance- Market- Time- Performance- Market- (years) (in thousands) Outstanding as of January 1, 2018 6,580,898 373,969 208,333 $ 49.18 $ 31.39 $ 59.43 6.99 $ 50,021 Granted — 208,335 — — 59.43 — — — Exercised (117,805 ) — — 39.27 — — — — Forfeited and cancelled (60,083 ) (52,084 ) — 52.08 59.43 — — — Outstanding as of March 31, 2018 6,403,010 530,220 208,333 $ 49.34 $ 39.65 $ 59.43 6.77 $ 47,171 Restricted Ordinary Share Awards The following is a summary of restricted NCLH ordinary share activity for the three months ended March 31, 2018: Number of Weighted- Non-vested as of January 1, 2018 858 $ 58.33 Granted — — Vested (429 ) 58.25 Forfeited or expired — — Non-vested and expected to vest as of March 31, 2018 429 $ 58.41 Restricted Share Unit Awards On March 1, 2018, NCLH granted 1.6 million time-based restricted share unit awards to our employees which vest equally over three years. Additionally, on February 27, 2018 and March 1, 2018, NCLH granted 0.3 million and 0.5 million performance-based restricted share units, respectively, to certain members of our management team which vest upon the achievement of certain pre-established performance targets. The following is a summary of restricted share unit activity for the three months ended March 31, 2018: Number of Weighted- Number of Weighted- Number of Weighted- Non-vested as of January 1, 2018 2,555,477 $ 50.86 — $ — 50,000 $ 59.43 Granted 1,606,156 56.74 843,998 56.58 — — Vested (938,637 ) 56.68 — Forfeited or expired (39,872 ) 52.72 (12,500 ) 59.43 — — Non-vested and expected to vest as of March 31, 2018 3,183,124 $ 53.90 831,498 $ 55.94 50,000 $ 59.43 The share-based compensation expense for the three months ended March 31, 2018 was $28.1 million of which $24.7 million was recorded in marketing, general and administrative expense and $3.4 million was recorded in payroll and related expense. The share-based compensation expense for the three months ended March 31, 2017 was $18.2 million of which $17.4 million was recorded in marketing, general and administrative expense and $0.8 million was recorded in payroll and related expense. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Ship Construction Contracts Project Leonardo will introduce an additional four ships with expected delivery dates through 2025 and we have an option to introduce two additional ships for delivery in 2026 and 2027, subject to certain conditions. Each of the four Project Leonardo ships is approximately 140,000 Gross Tons with approximately 3,300 Berths. We have an Explorer Class Ship, Seven Seas Splendor, on order for delivery in the winter of 2020. This ship is approximately 55,000 Gross Tons and 750 Berths. Norwegian Bliss was delivered on April 19, 2018 (we refer you to Note 12— “Subsequent Events”). We have one additional Breakaway Plus Class Ship, Norwegian Encore, on order for delivery in the fall of 2019. Each of Norwegian Bliss and Norwegian Encore is approximately 168,000 Gross Tons with approximately 4,000 Berths. The combined contract price of these seven ships (exclusive of the option for two additional ships) was approximately €5.6 billion, or $6.9 billion based on the euro/U.S. dollar exchange rate as of March 31, 2018. We have obtained export credit financing for the ships which is expected to fund approximately 80% of the contract price of each ship expected to be delivered through 2025, subject to certain conditions. For ships expected to be delivered after 2023, the contract prices are subject to adjustment under certain circumstances. In connection with the contracts to build these ships, we do not anticipate any contractual breach or cancellation to occur. However, if any were to occur, it could result in, among other things, the forfeiture of prior deposits or payments made by us, subject to certain refund guarantees, and potential claims and impairment losses which may materially impact our business, financial condition and results of operations. Litigation In the normal course of our business, various claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount of our liability is typically limited to our deductible amount. Nonetheless, the ultimate outcome of these claims and lawsuits that are not covered by insurance cannot be determined at this time. We have evaluated our overall exposure with respect to all of our threatened and pending litigation and, to the extent required, we have accrued amounts for all estimable probable losses associated with our deemed exposure. We are currently unable to estimate any other potential contingent losses beyond those accrued, as discovery is not complete nor is adequate information available to estimate such range of loss or potential recovery. However, based on our current knowledge, we do not believe that the aggregate amount or range of reasonably possible losses with respect to these matters will be material to our consolidated results of operations, financial condition or cash flows. We intend to vigorously defend our legal position on all claims and, to the extent necessary, seek recovery. |
Other Income (Expense), Net
Other Income (Expense), Net | 3 Months Ended |
Mar. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | 10. Other Income (Expense), Net For the three months ended March 31, 2018, other income (expense), net was a $1.7 million expense, primarily due to foreign currency exchange losses. For the three months ended March 31, 2017, the $2.8 million expense was due to foreign currency exchange and fuel swap derivative losses. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 11. Supplemental Cash Flow Information For the three months ended March 31, 2018 and 2017, we had non-cash investing activities in connection with property and equipment of $25.7 million and $23.0 million, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On April 19, 2018, we took delivery of Norwegian Bliss. To finance the payment due upon delivery, we had export financing in place for 80% of the contract price. The associated $850.0 million term loan bears interest at 3.92% with a maturity date of April 19, 2030. Principal and interest payments shall be paid semiannually. On April 17, 2018, the Board of Directors of NCLH approved a three-year share repurchase program under which NCLH may purchase up to $1.0 billion of its ordinary shares (the “Repurchase Program”). Pursuant to the Repurchase Program, NCLH may repurchase its ordinary shares from time to time, in amounts, at prices and at such times as it deems appropriate, subject to market conditions and other considerations. On April 4, 2018, we redeemed $135.0 million principal amount of the $700.0 million aggregate principal amount of outstanding 4.750% Senior Notes due 2021 (the “Notes”) at a price equal to 100% of the principal amount of the Notes being redeemed and paid the premium of $5.2 million and accrued interest of $1.9 million. The redemption also resulted in a write off of $1.2 million of certain fees. Following the partial redemption, $565.0 million aggregate principal amount of Notes remained outstanding. The redemption of the Notes resulted in a reclassification of $135.0 million to short-term debt in the consolidated balance sheet as of March 31, 2018. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are unaudited and, in our opinion, contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire fiscal year. Historically, demand for cruises has been strongest during the Northern Hemisphere’s summer months. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017, which are included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. |
Earnings Per Share | Earnings Per Share A reconciliation between basic and diluted earnings per share was as follows (in thousands, except share and per share data): Three Months Ended 2018 2017 Net income $ 103,155 $ 61,910 Basic weighted-average shares outstanding 227,343,577 227,468,526 Dilutive effect of share awards 1,844,051 1,087,426 Diluted weighted-average shares outstanding 229,187,628 228,555,952 Basic earnings per share $ 0.45 $ 0.27 Diluted earnings per share $ 0.45 $ 0.27 For the three months ended March 31, 2018 and 2017, a total of 3.4 million and 7.5 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive. |
Revenue and Expense Recognition | Revenue and Expense Recognition On January 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09 (“Topic 606”) - Revenue from Contracts with Customers. Topic 606 supersedes the revenue recognition requirements in Accounting Standards Codification 605 - Revenue Recognition. Using the modified retrospective method, we applied the new requirements to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Nature of goods and services We offer our guests a multitude of cruise fare options when booking a cruise. Our cruise ticket prices generally include cruise fare and a wide variety of onboard activities and amenities, as well as meals and entertainment. In some instances, cruise ticket prices include round-trip airfare to and from the port of embarkation, complimentary beverages, unlimited shore excursions, free internet, pre-cruise hotel packages, and on some of the exotic itineraries, pre or post land packages. Prices vary depending on the particular cruise itinerary, stateroom category selected and the time of year that the voyage takes place. Passenger ticket revenue also includes full ship charters as well as port fees and taxes. During the voyage, we generate onboard and other revenue for additional products and services which are not included in the cruise fare, including casino operations, certain food and beverage, gift shop purchases, spa services, photo services and other similar items. Food and beverage, casino operations and shore excursions are generally managed directly by us while retail shops, spa services, art auctions and internet services may be managed through contracts with third-party concessionaires. These contracts generally entitle us to a fixed percentage of the gross sales derived from these concessions. While some onboard goods and services may be prepaid prior to the voyage, we utilize point-of-sale systems for discrete purchases made onboard. Certain of our product offerings are bundled and we allocate the value of the bundled goods and services between passenger ticket revenue and onboard and other revenue based upon the relative standalone selling prices of those goods and services. Timing of satisfaction of performance obligations and significant payment terms The payment terms and cancellation policies vary by brand, stateroom category, length of voyage, and country of purchase. A deposit for a future booking is required at or soon after the time of booking. Final payment is normally due between 75 days and 180 days before the voyage. Deposits on advance ticket sales are deferred when received, and include amounts that are refundable. Deferred amounts are subsequently recognized as revenue ratably during the voyage sailing days as services are rendered over time on the ship. Deposits are generally cancellable and refundable prior to sailing, but may be subject to penalties, depending on the timing of cancellation. The inception of substantive cancellation penalties generally coincides with the dates that final payment is due, and penalties generally increase as the voyage sail date approaches. Cancellation fees are recognized in passenger ticket revenue in the month of the cancellation. Onboard goods and services rendered may be paid at disembarkation. A receivable is recognized for onboard goods and services rendered when the voyage is not completed before the end of the period. Cruises that are reserved under full ship charter agreements are subject to the payment terms of the specific agreement and may be either cancelable or non-cancelable. Deposits received on charter voyages are deferred when received and included in advance ticket sales. Deferred amounts are subsequently recognized as revenue ratably over the voyage sailing dates. Financial statement presentation As of January 1, 2018, in connection with the adoption of Topic 606, we reclassified $51.6 million of deferred costs associated with obtaining customer contracts to prepaid expenses and other assets from advance ticket sales. Segment Reporting We have concluded that our business has a single reportable segment. Each brand, Norwegian, Oceania Cruises and Regent, constitutes a business for which discrete financial information is available and management regularly reviews the brand level operating results and, therefore, each brand is considered an operating segment. Our operating segments have similar economic and qualitative characteristics, including similar long-term margins and similar products and services; therefore, we aggregate all of the operating segments into one reportable segment. Although we sell cruises on an international basis, our passenger ticket revenue is primarily attributed to U.S.-sourced guests who make reservations in the U.S. Revenue attributable to U.S.-sourced guests has historically approximated 75-80%. No other individual country’s revenues exceed 10% in any given period. Disaggregation of Revenue Revenue and cash flows are affected by economic factors in various geographical regions. Revenues by destination were as follows (in thousands): Three Months Ended 2018 2017 North America $ 875,179 $ 850,671 Europe 31,070 26,162 Asia-Pacific 267,718 133,430 Other 119,436 140,518 $ 1,293,403 $ 1,150,781 Contract Balances Receivables from customers are included within accounts receivables, net. As of March 31, 2018 and January 1, 2018, our receivables from customers were $12.2 million and $13.8 million, respectively. Contract liabilities represent the Company’s obligation to transfer goods and services to a customer. A customer deposit held for a future cruise is generally considered a contract liability only when final payment is both due and paid by the customer and is usually recognized in earnings within 180 days of becoming a contract. Other deposits held and included within advance ticket sales or other long-term liabilities are not considered contract liabilities as they are largely cancelable and refundable. Our contract liabilities are included within advance ticket sales. As of March 31, 2018 and January 1, 2018, our contract liabilities were $1.2 billion and $1.0 billion, respectively. Of the amounts included within contract liabilities, approximately 50% were refundable in accordance with our cancellation policies. For the three months ended March 31, 2018, $0.8 billion of revenue recognized was included in the contract liability balance at the beginning of the period. Our revenue is seasonal and based on the demand for cruises. Historically, the seasonality of the North American cruise industry generally results in the greatest demand for cruises during the Northern Hemisphere’s summer months. This predictable seasonality in demand has resulted in fluctuations by quarter in our revenue and results of operations. The seasonality of our results is increased due to ships being taken out of service for regularly scheduled Dry-docks, which we typically schedule during non-peak demand periods. This seasonality will result in higher contract liability balances as a result of an increased number of reservations preceding peak demand periods. The addition of new ships also increases the contract liability balances prior to a new ship’s delivery, as staterooms are usually made available for reservation prior to the inaugural cruise. Norwegian Bliss, with approximately 4,000 berths, adding 8% capacity to our fleet, was delivered on April 19, 2018 (we refer you to Note 12— “Subsequent Events”). Practical Expedients and Exemptions We do not disclose information about remaining performance obligations that have original expected durations of one year or less. We recognize revenue in an amount that corresponds directly with the value to the customer of our performance completed to date. Variable consideration, which will be determined based on a future rate and passenger count, is excluded from the disclosure and these amounts are not material. These variable non-disclosed contractual amounts relate to our non-cancelable charter agreements and a leasing arrangement with a certain port, both of which are long-term in nature. Amounts that are fixed in nature due to the application of minimum guarantees are also not material and are not disclosed. Contract Costs Management expects that incremental commissions and credit card fees paid as a result of obtaining ticket contracts are recoverable; therefore, we recognize these amounts as assets when they are paid prior to the voyage. Costs of air tickets and port taxes and fees that fulfill future performance obligations are also considered recoverable and are recorded as assets. As of March 31, 2018, $115.0 million of costs incurred to obtain customers and $25.0 million of costs to fulfill contracts with customers are recognized as assets within prepaid expenses and other assets. Incremental commissions, credit card fees, air ticket costs, and port taxes and fees are recognized ratably over the voyage sailing dates, concurrent with associated revenue, and are primarily in commission, transportation and other expense. Impacts on Financial Statements The adoption of Topic 606 does not change the timing, classification or amount of revenue recognized from customers in our consolidated financial statements nor does it change the timing, classification or amount of incremental costs to obtain and fulfill those contracts with customers. Therefore, the adoption had no impact on our consolidated statement of operations or consolidated statement of comprehensive income. The following table summarizes the impacts of Topic 606 adoption on our consolidated balance sheet which has been adjusted for deferred contract costs that would have been included, net, in Advance ticket sales as of March 31, 2018 (in thousands): As reported Adjustments Balances without Prepaid expenses and other assets $ 337,441 $ (68,230 ) $ 269,211 Total assets 14,484,985 (68,230 ) 14,416,755 Advance ticket sales 1,720,505 (68,230 ) 1,652,275 Total liabilities and shareholders’ equity $ 14,484,985 $ (68,230 ) $ 14,416,755 The following table summarizes the impacts of our adoption of Topic 606 on our consolidated statement of cash flows for the three months ended March 31, 2018 (in thousands): As reported Adjustments Balances without Changes in operating assets and liabilities: Prepaid expenses and other assets $ (45,709 ) $ 16,631 $ (29,078 ) Advance ticket sales 375,638 (16,631 ) 359,007 Net cash provided by operating activities $ 610,761 $ — $ 610,761 |
Foreign Currency | Foreign Currency The majority of our transactions are settled in U.S. dollars. We translate assets and liabilities of our foreign subsidiaries at exchange rates in effect at the balance sheet date. Gains or losses resulting from transactions denominated in other currencies are recognized in our consolidated statements of operations within other income (expense), net and such losses were approximately $1.8 million and $2.8 million for the three months ended March 31, 2018 and 2017, respectively. |
Depreciation and Amortization Expense | Depreciation and Amortization Expense The amortization of deferred financing fees is included in depreciation and amortization expense in the consolidated statements of cash flows; however, for purposes of the consolidated statements of operations they are included in interest expense, net. |
Recently Issued and Adopted Accounting Guidance | Recently Issued and Adopted Accounting Guidance In December 2017, the Tax Cuts and Jobs Act (“the Act”) was enacted. Among other provisions, the Act reduces the U.S. federal corporate tax rate from 35% to 21%. The SEC staff issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes required by the Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. As of March 31, 2018, we have not completed the accounting for the tax effects of enactment of the Act; however, as described below, we have made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change. The most significant impact of the Act for the Company was a $7.4 million reduction of the value of net deferred tax liabilities (which represent future tax expenses) that was recorded in 2017 as a discrete tax benefit as a result of lowering the U.S. corporate income tax rate from 35% to 21%. The tax benefit represents a provisional amount and the Company’s current best estimates. Any adjustments recorded to the provisional amount through the end of 2018 will be included in income from operations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company’s current interpretation of the Act and may change as the Company receives additional clarification and implementation guidance. Other aspects of the Act are either not applicable or not expected to have a material impact on the Company’s financial statements. In January 2017, the Financial Accounting Standards Board issued ASU No. 2017-04 which simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The guidance is effective for annual or any interim goodwill impairment tests in years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect to early adopt this guidance. We will evaluate the impact of this guidance to our consolidated financial statements upon adoption of the guidance. On January 1, 2018, we adopted ASU No. 2016-16 which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. This adoption resulted in a cumulative-effect adjustment of $19.1 million to retained earnings. This amount captures the write-off of previously unamortized deferred income tax expense from past intra-entity transfers involving assets other than inventory, not previously recognized under U.S. GAAP. The adoption does not have an impact on continuing operations, net income or any other financial statement line items for the current period. On January 1, 2018, we adopted ASU No. 2017-12 which simplifies the accounting for derivatives. For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. Upon adoption, the guidance required a cumulative effect adjustment, relating to the elimination of the separate measurement of ineffectiveness for cash flow hedges, to accumulated other comprehensive income (loss) with a corresponding adjustment to the opening balance of retained earnings, which was not material to our financial statements (we refer you to Note 7. “Fair Value Measurements and Derivatives”). |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of reconciliation between basic and diluted earnings per share | Three Months Ended 2018 2017 Net income $ 103,155 $ 61,910 Basic weighted-average shares outstanding 227,343,577 227,468,526 Dilutive effect of share awards 1,844,051 1,087,426 Diluted weighted-average shares outstanding 229,187,628 228,555,952 Basic earnings per share $ 0.45 $ 0.27 Diluted earnings per share $ 0.45 $ 0.27 |
Schedule of revenues by destination | Three Months Ended 2018 2017 North America $ 875,179 $ 850,671 Europe 31,070 26,162 Asia-Pacific 267,718 133,430 Other 119,436 140,518 $ 1,293,403 $ 1,150,781 |
Schedule of impacts of Topic 606 adoption on consolidated balance sheet | As reported Adjustments Balances without Prepaid expenses and other assets $ 337,441 $ (68,230 ) $ 269,211 Total assets 14,484,985 (68,230 ) 14,416,755 Advance ticket sales 1,720,505 (68,230 ) 1,652,275 Total liabilities and shareholders’ equity $ 14,484,985 $ (68,230 ) $ 14,416,755 |
Schedule of impacts of adoption of Topic 606 on consolidated statement of cash flows | As reported Adjustments Balances without Changes in operating assets and liabilities: Prepaid expenses and other assets $ (45,709 ) $ 16,631 $ (29,078 ) Advance ticket sales 375,638 (16,631 ) 359,007 Net cash provided by operating activities $ 610,761 $ — $ 610,761 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of gross carrying amounts, related accumulated amortization, net carrying amounts and the weighted-average amortization periods of intangible assets | March 31, 2018 Gross Carrying Accumulated Net Carrying Weighted- Customer relationships $ 120,000 $ (73,088 ) $ 46,912 6.0 Licenses 3,368 (1,883 ) 1,485 5.6 Total intangible assets subject to amortization $ 123,368 $ (74,971 ) $ 48,397 December 31, 2017 Gross Carrying Accumulated Net Carrying Weighted- Customer relationships $ 120,000 $ (66,866 ) $ 53,134 6.0 Licenses 3,368 (1,601 ) 1,767 5.6 Non-compete agreements 660 (660 ) — 1.0 Total intangible assets subject to amortization $ 124,028 $ (69,127 ) $ 54,901 |
Schedule of aggregate amortization expense | Three Months Ended 2018 2017 Amortization expense $ 6,504 $ 7,915 |
Schedule of estimated future aggregate amortization expense | Year ended December 31, Amortization 2019 $ 18,489 2020 9,906 2021 75 2022 75 2023 75 |
Accumulated Other Comprehensi23
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Accumulated Change Change Accumulated other comprehensive income (loss) at beginning of period $ 26,966 $ 33,861 $ (6,895 ) Current period other comprehensive income before reclassifications 48,576 48,576 — Amounts reclassified into earnings (1,680 ) (1,785 )(1) 105 (2) Accumulated other comprehensive income (loss) at end of period $ 73,862 $ 80,652 (3) $ (6,790 ) (1) We refer you to Note 7— “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations. (2) Amortization of prior-service cost and actuarial loss reclassified to other income (expense). (3) Includes $9.5 million of gain expected to be reclassified into earnings in the next 12 months. Accumulated Change Change Accumulated other comprehensive income (loss) at beginning of period $ (314,473 ) $ (307,618 ) $ (6,855 ) Current period other comprehensive income before reclassifications (7,283 ) (7,283 ) — Amounts reclassified into earnings 9,810 9,705 (1) 105 (2) Accumulated other comprehensive income (loss) at end of period $ (311,946 ) $ (305,196 ) $ (6,750 ) (1) We refer you to Note 7— “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations. (2) Amortization of prior-service cost and actuarial loss reclassified to payroll and related expense. |
Related Party Disclosures (Tabl
Related Party Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of derivatives measured at fair value and discloses the balance sheet location | Shareholder Number of Percentage Apollo Holders 15,728,782 7.0 % Genting HK 3,148,307 1.4 % |
Fair Value Measurements and D25
Fair Value Measurements and Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of derivatives measured at fair value and discloses the balance sheet location | Asset Liability Balance Sheet location March 31, December 31, March 31, December 31, Fuel contracts designated as hedging instruments Prepaid expenses and other assets $ 17,637 $ 19,220 $ 3,089 $ 2,406 Other long-term assets 14,540 19,854 4,152 3,469 Accrued expenses and other liabilities 60 — 3,107 3,348 Other long-term liabilities 130 576 2,913 2,148 Foreign currency contracts designated as hedging instruments Prepaid expenses and other assets 78,438 52,300 71 730 Other long-term assets 112,777 85,081 — — Interest contracts designated as hedging instruments Accrued expenses and other liabilities — — 332 1,020 Total derivatives designated as hedging instruments $ 223,582 $ 177,031 $ 13,664 $ 13,121 |
Schedule of discloses the gross and net amounts recognized within assets and liabilities | March 31, 2018 Gross Amounts Gross Total Net Gross Net Amounts Assets $ 223,392 $ (7,312 ) $ 216,080 $ (117,233 ) $ 98,847 Liabilities 6,352 (190 ) 6,162 (332 ) 5,830 December 31, 2017 Gross Amounts Gross Total Net Gross Net Amounts Assets $ 176,455 $ (6,605 ) $ 169,850 $ (127,924 ) $ 41,926 Liabilities 6,516 (576 ) 5,940 (1,020 ) 4,920 |
Schedule of cash flow hedge accounting on accumulated other comprehensive income | Derivatives Amount of gain or (loss) recognized in other comprehensive income Location of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Fuel contracts $ (6,012 ) $ (26,203 ) Fuel $ 3,525 $ (8,003 ) Foreign currency contracts 54,493 18,636 Depreciation and amortization expense (1,159 ) (857 ) Interest rate contracts 95 284 Interest expense, net (581 ) (845 ) Total gain (loss) recognized in other comprehensive income $ 48,576 $ (7,283 ) $ 1,785 $ (9,705 ) |
Schedule of cash flow hedge accounting on the consolidated financial statements of operations | For the three months ended March 31, 2018 For the three months ended March 31, 2017 Fuel Depreciation and amortization Interest expense, net Fuel Depreciation and amortization Interest expense, net Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded $ 93,431 $ 131,244 $ 59,698 $ 88,886 $ 119,205 $ 52,960 The effects of cash flow hedges: Fuel contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income 3,525 — — (8,003 ) — — Foreign currency contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income — (1,159 ) — — (857 ) — Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income — — (581 ) — — (845 ) |
Employee Benefits and Compens26
Employee Benefits and Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Post employment Benefits [Abstract] | |
Summary of stock option activity | Number of Share Option Weighted-Average Exercise Weighted- Aggregate Time- Performance- Market- Time- Performance- Market- (years) (in thousands) Outstanding as of January 1, 2018 6,580,898 373,969 208,333 $ 49.18 $ 31.39 $ 59.43 6.99 $ 50,021 Granted — 208,335 — — 59.43 — — — Exercised (117,805 ) — — 39.27 — — — — Forfeited and cancelled (60,083 ) (52,084 ) — 52.08 59.43 — — — Outstanding as of March 31, 2018 6,403,010 530,220 208,333 $ 49.34 $ 39.65 $ 59.43 6.77 $ 47,171 |
Schedule of summary of restricted ordinary share activity | Number of Weighted- Non-vested as of January 1, 2018 858 $ 58.33 Granted — — Vested (429 ) 58.25 Forfeited or expired — — Non-vested and expected to vest as of March 31, 2018 429 $ 58.41 |
Schedule of summary of restricted share unit activity | Number of Weighted- Number of Weighted- Number of Weighted- Non-vested as of January 1, 2018 2,555,477 $ 50.86 — $ — 50,000 $ 59.43 Granted 1,606,156 56.74 843,998 56.58 — — Vested (938,637 ) 56.68 — Forfeited or expired (39,872 ) 52.72 (12,500 ) 59.43 — — Non-vested and expected to vest as of March 31, 2018 3,183,124 $ 53.90 831,498 $ 55.94 50,000 $ 59.43 |
Description of Business and O27
Description of Business and Organization (Detail Textuals) | 3 Months Ended |
Mar. 31, 2018CruiseShipBerth | |
Description Of Business And Organization [Line Items] | |
Number of cruises ships | 25 |
Capacity of ship, berths | Berth | 50,400 |
Project Leonardo | |
Description Of Business And Organization [Line Items] | |
Increased number of berths | Berth | 72,300 |
Ships launching period through 2025 | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 6 |
Ships launching period through 2025 | Project Leonardo | |
Description Of Business And Organization [Line Items] | |
Number of cruises ships | 4 |
Capacity of ship, berths | Berth | 3,300 |
Number of additional ships | 4 |
Ships launching period in 2026 and 2027 | |
Description Of Business And Organization [Line Items] | |
Number of additional ships | 2 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Reconciliation between Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income | $ 103,155 | $ 61,910 |
Basic weighted-average shares outstanding (in shares) | 227,343,577 | 227,468,526 |
Dilutive effect of share awards | 1,844,051 | 1,087,426 |
Diluted weighted-average shares outstanding (in shares) | 229,187,628 | 228,555,952 |
Basic earnings per share (in dollars per share) | $ 0.45 | $ 0.27 |
Diluted earnings per share (in dollars per share) | $ 0.45 | $ 0.27 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule Of Significant Accounting Policies [Line Items] | ||
Revenues | $ 1,293,403 | $ 1,150,781 |
North America | ||
Schedule Of Significant Accounting Policies [Line Items] | ||
Revenues | 875,179 | 850,671 |
Europe | ||
Schedule Of Significant Accounting Policies [Line Items] | ||
Revenues | 31,070 | 26,162 |
Asia-Pacific | ||
Schedule Of Significant Accounting Policies [Line Items] | ||
Revenues | 267,718 | 133,430 |
Other | ||
Schedule Of Significant Accounting Policies [Line Items] | ||
Revenues | $ 119,436 | $ 140,518 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Prepaid expenses and other assets | $ 337,441 | $ 216,065 |
Total assets | 14,484,985 | 14,094,869 |
Advance ticket sales | 1,720,505 | 1,303,498 |
Total liabilities and shareholders' equity | 14,484,985 | $ 14,094,869 |
Adjustments | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Prepaid expenses and other assets | (68,230) | |
Total assets | (68,230) | |
Advance ticket sales | (68,230) | |
Total liabilities and shareholders' equity | (68,230) | |
Balances without adoption of Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Prepaid expenses and other assets | 269,211 | |
Total assets | 14,416,755 | |
Advance ticket sales | 1,652,275 | |
Total liabilities and shareholders' equity | $ 14,416,755 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | $ (45,709) | $ (9,473) |
Advance ticket sales | 375,638 | 222,935 |
Net cash provided by operating activities | 610,761 | $ 434,944 |
Adjustments | ||
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 16,631 | |
Advance ticket sales | (16,631) | |
Net cash provided by operating activities | 0 | |
Balances without adoption of Topic 606 | ||
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (29,078) | |
Advance ticket sales | 359,007 | |
Net cash provided by operating activities | $ 610,761 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Detail Textuals) $ in Thousands, shares in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)Berthshares | Mar. 31, 2017USD ($)shares | Dec. 31, 2017USD ($) | |
Schedule Of Significant Accounting Policies [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | shares | 3.4 | 7.5 | |
Deferred costs | $ 51,600 | ||
Foreign currency transaction gain (loss) | $ 1,800 | $ 2,800 | |
U.S. corporate income tax rate | 21.00% | 35.00% | |
Capacity of ship, berths | Berth | 50,400 | ||
Receivables from customers included in accounts receivable, net | $ 12,200 | $ 13,800 | |
Contract with customer liability | $ 1,200,000 | $ 1,000,000 | |
Percentage refundable on cancellation | 50.00% | ||
Revenue recognized included in contract liability | $ 800,000 | ||
Net cumulative effect of the change | 19,143 | $ 4,550 | |
Costs incurred to obtain customers | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Capitalized contract cost | 115,000 | ||
Costs to fulfill contracts with customers | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Capitalized contract cost | 25,000 | ||
Retained Earnings | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Net cumulative effect of the change | $ 19,131 | ||
Norwegian Bliss | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Capacity of ship, berths | Berth | 4,000 | ||
Percentage of capacity to fleet | 8.00% | ||
Minimum | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Final payment period before voyage | 75 days | ||
Maximum | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Final payment period before voyage | 180 days | ||
Revenue | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Concentration risk, benchmark | No other individual country's revenues exceed 10% in any given period. | ||
Revenue | Minimum | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Percentage of revenue attributable to U.S.- sourced passengers | 75.00% | ||
Revenue | Maximum | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Percentage of revenue attributable to U.S.- sourced passengers | 80.00% |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 123,368 | $ 124,028 |
Intangible assets subject to amortization, Accumulated Amortization | (74,971) | (69,127) |
Intangible assets subject to amortization, Net Carrying Amount | 48,397 | 54,901 |
Customer relationships | ||
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | 120,000 | 120,000 |
Intangible assets subject to amortization, Accumulated Amortization | (73,088) | (66,866) |
Intangible assets subject to amortization, Net Carrying Amount | $ 46,912 | $ 53,134 |
Weighted- Average Amortization Period (Years) | 6 years | 6 years |
Licenses | ||
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 3,368 | $ 3,368 |
Intangible assets subject to amortization, Accumulated Amortization | (1,883) | (1,601) |
Intangible assets subject to amortization, Net Carrying Amount | $ 1,485 | $ 1,767 |
Weighted- Average Amortization Period (Years) | 5 years 7 months 6 days | 5 years 7 months 6 days |
Non-compete agreements | ||
Schedule Of Intangible Assets [Line Items] | ||
Intangible assets subject to amortization, Gross Carrying Amount | $ 660 | |
Intangible assets subject to amortization, Accumulated Amortization | (660) | |
Intangible assets subject to amortization, Net Carrying Amount | $ 0 | |
Weighted- Average Amortization Period (Years) | 1 year |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 6,504 | $ 7,915 |
Intangible Assets (Details 2)
Intangible Assets (Details 2) $ in Thousands | Mar. 31, 2018USD ($) |
Amortization Expense | |
2,019 | $ 18,489 |
2,020 | 9,906 |
2,021 | 75 |
2,022 | 75 |
2,023 | $ 75 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | $ 26,966 | |||
Accumulated other comprehensive income (loss) at end of period | 73,862 | |||
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | 26,966 | $ (314,473) | ||
Current period other comprehensive income before reclassifications | 48,576 | (7,283) | ||
Amounts reclassified into earnings | (1,680) | 9,810 | ||
Accumulated other comprehensive income (loss) at end of period | 73,862 | (311,946) | ||
Change Related to Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | 33,861 | (307,618) | ||
Current period other comprehensive income before reclassifications | 48,576 | (7,283) | ||
Amounts reclassified into earnings | [1] | (1,785) | 9,705 | |
Accumulated other comprehensive income (loss) at end of period | 80,652 | [2] | (305,196) | |
Change Related to Shipboard Retirement Plan | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) at beginning of period | (6,895) | (6,855) | ||
Current period other comprehensive income before reclassifications | 0 | 0 | ||
Amounts reclassified into earnings | [3] | 105 | 105 | |
Accumulated other comprehensive income (loss) at end of period | $ (6,790) | $ (6,750) | ||
[1] | We refer you to Note 7 "Fair Value Measurements and Derivatives" for the affected line items in the consolidated statements of operations. | |||
[2] | Includes $9.5 million of gain expected to be reclassified into earnings in the next 12 months. | |||
[3] | Amortization of prior-service cost and actuarial loss reclassified to other income (expense). |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Income (Loss) (Parentheticals) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Statement Of Income And Comprehensive Income [Abstract] | |
Amount expected to be reclassified into earnings | $ 9.5 |
Property and Equipment, net (De
Property and Equipment, net (Detail Textuals) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Property, Plant and Equipment [Abstract] | |
Property plant and equipment net increase due to ship improvement projects and ships under construction | $ 45.1 |
Related Party Disclosures (Deta
Related Party Disclosures (Details) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Number of Shares | 224,675,474 | 228,528,562 |
Apollo Holders | ||
Related Party Transaction [Line Items] | ||
Number of Shares | 15,728,782 | |
Percentage Ownership | 7.00% | |
Genting HK | ||
Related Party Transaction [Line Items] | ||
Number of Shares | 3,148,307 | |
Percentage Ownership | 1.40% |
Related Party Disclosures (De40
Related Party Disclosures (Detail Textuals) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
Related Party Transactions [Abstract] | |
Number of ordinary shares | shares | 4,722,312 |
Value of shares to be issued under repurchase program | $ | $ 263.5 |
Fair Value Measurements and D41
Fair Value Measurements and Derivatives - Derivatives measured at fair value and discloses balance sheet location (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 223,392 | $ 6,352 |
Derivative liabilities, fair value | 176,455 | 6,516 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 223,582 | 177,031 |
Derivative liabilities, fair value | 13,664 | 13,121 |
Fuel swaps | Designated as Hedging Instrument | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 17,637 | 19,220 |
Derivative liabilities, fair value | 3,089 | 2,406 |
Fuel swaps | Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 14,540 | 19,854 |
Derivative liabilities, fair value | 4,152 | 3,469 |
Fuel swaps | Designated as Hedging Instrument | Accrued expenses and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 60 | 0 |
Derivative liabilities, fair value | 3,107 | 3,348 |
Fuel swaps | Designated as Hedging Instrument | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 130 | 576 |
Derivative liabilities, fair value | 2,913 | 2,148 |
Foreign currency forward contracts | Designated as Hedging Instrument | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 78,438 | 52,300 |
Derivative liabilities, fair value | 71 | 730 |
Foreign currency forward contracts | Designated as Hedging Instrument | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 112,777 | 85,081 |
Derivative liabilities, fair value | 0 | 0 |
Interest rate swaps | Designated as Hedging Instrument | Accrued expenses and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 0 |
Derivative liabilities, fair value | $ 332 | $ 1,020 |
Fair Value Measurements and D42
Fair Value Measurements and Derivatives - Amounts Recognized Within Assets and Liabilities Based on Right of Offset (Details 1) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Gross Amounts, Assets | $ 223,392 | $ 6,352 |
Gross Amounts Offset, Assets | (7,312) | (190) |
Total Net Amounts, Assets | 216,080 | 6,162 |
Gross Amounts Not Offset, Assets | (117,233) | (332) |
Net Amounts, Assets | 98,847 | 5,830 |
Gross Amounts, Liabilities | 176,455 | 6,516 |
Gross Amounts Offset, Liabilities | (6,605) | (576) |
Total Net Amounts, Liabilities | 169,850 | 5,940 |
Gross Amounts Not Offset, Liabilities | (127,924) | (1,020) |
Net Amounts, Liabilities | $ 41,926 | $ 4,920 |
Fair Value Measurements and D43
Fair Value Measurements and Derivatives - Effects of Derivatives Designated as Cash Flow Hedges (Details 2) - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain or (loss) recognized in other comprehensive income | $ 48,576 | $ (7,283) |
Amount reclassified from accumulated other comprehensive income (loss) into fuel expense | 1,785 | (9,705) |
Fuel Swaps | Fuel | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain or (loss) recognized in other comprehensive income | (6,012) | (26,203) |
Amount reclassified from accumulated other comprehensive income (loss) into fuel expense | 3,525 | (8,003) |
Foreign currency forward contracts | Depreciation and amortization expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain or (loss) recognized in other comprehensive income | 54,493 | 18,636 |
Amount reclassified from accumulated other comprehensive income (loss) into fuel expense | (1,159) | (857) |
Interest Rate Swap | Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain or (loss) recognized in other comprehensive income | 95 | 284 |
Amount reclassified from accumulated other comprehensive income (loss) into fuel expense | $ (581) | $ (845) |
Fair Value Measurements and D44
Fair Value Measurements and Derivatives (Details 3) - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivatives Fair Value [Line Items] | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income | $ 1,785 | $ (9,705) |
Fuel Swaps | Fuel | ||
Derivatives Fair Value [Line Items] | ||
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded | 93,431 | 88,886 |
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income | 3,525 | (8,003) |
Foreign currency forward contracts | Depreciation and amortization expense | ||
Derivatives Fair Value [Line Items] | ||
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded | 131,244 | 119,205 |
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income | (1,159) | (857) |
Interest Rate Swap | Interest expense, net | ||
Derivatives Fair Value [Line Items] | ||
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded | 59,698 | 52,960 |
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income | $ (581) | $ (845) |
Fair Value Measurements and D45
Fair Value Measurements and Derivatives (Detail Textuals) Metric_Ton in Millions, $ in Millions, € in Billions | 3 Months Ended | ||
Mar. 31, 2018USD ($)Metric_Ton | Mar. 31, 2018EUR (€)Metric_Ton | Dec. 31, 2017USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of long-term debt | $ 6,457.9 | $ 6,448.6 | |
Fair value of long-term debt in excess of carrying value | $ 5.8 | $ 23.5 | |
Fuel Swaps | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative maturing date | Dec. 31, 2020 | ||
Projected fuel purchases | Metric_Ton | 1.1 | 1.1 | |
Foreign Currency Forward Contracts | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Notional amount of derivatives | $ 2,300 | € 1.9 | |
Interest Rate Swap | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Notional amount of derivatives | $ 218.6 |
Employee Benefits and Compens46
Employee Benefits and Compensation Plans - Summary of Share Option Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | ||
Options Outstanding, Weighted- Average Contractual Term | 6 years 11 months 27 days | 6 years 9 months 7 days |
Options Outstanding, Aggregate Intrinsic Value | $ 50,021 | $ 47,171 |
Time Based Options | ||
Number of Share Option Awards | ||
Outstanding as of January 1, 2018 | 6,580,898 | |
Granted | 0 | |
Exercised | (117,805) | |
Forfeited and cancelled | (60,083) | |
Outstanding as of March 31, 2018 | 6,403,010 | 6,580,898 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2018 | $ 49.18 | |
Granted | 0 | |
Exercised | 39.27 | |
Forfeited and cancelled | 52.08 | |
Outstanding as of March 31, 2018 | $ 49.34 | $ 49.18 |
Performance Based Options | ||
Number of Share Option Awards | ||
Outstanding as of January 1, 2018 | 373,969 | |
Granted | 208,335 | |
Exercised | 0 | |
Forfeited and cancelled | (52,084) | |
Outstanding as of March 31, 2018 | 530,220 | 373,969 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2018 | $ 31.39 | |
Granted | 59.43 | |
Exercised | 0 | |
Forfeited and cancelled | 59.43 | |
Outstanding as of March 31, 2018 | $ 39.65 | $ 31.39 |
Market-Based Awards | ||
Number of Share Option Awards | ||
Outstanding as of January 1, 2018 | 208,333 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited and cancelled | 0 | |
Outstanding as of March 31, 2018 | 208,333 | 208,333 |
Weighted-Average Exercise Price | ||
Outstanding as of January 1, 2018 | $ 59.43 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited and cancelled | 0 | |
Outstanding as of March 31, 2018 | $ 59.43 | $ 59.43 |
Employee Benefits and Compens47
Employee Benefits and Compensation Plans - Summary of Restricted Share Activity (Details 1) - Time-Based Awards - Restricted Stock | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2018 | shares | 858 |
Granted | shares | 0 |
Vested | shares | (429) |
Forfeited or expired | shares | 0 |
Non-vested and expected to vest as of March 31, 2018 | shares | 429 |
Weighted-Average Grant-Date Fair Value | |
Non-vested as of January 1, 2018 | $ / shares | $ 58.33 |
Granted | $ / shares | 0 |
Vested | $ / shares | 58.25 |
Forfeited or expired | $ / shares | 0 |
Non-vested and expected to vest as of March 31, 2018 | $ / shares | $ 58.41 |
Employee Benefits and Compens48
Employee Benefits and Compensation Plans - Summary of Restricted Unit Activity (Details 2) - Restricted share units | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Time-Based Awards | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2018 | shares | 2,555,477 |
Granted | shares | 1,606,156 |
Vested | shares | (938,637) |
Forfeited or expired | shares | (39,872) |
Non-vested and expected to vest as of March 31, 2018 | shares | 3,183,124 |
Weighted- Average Grant-Date Fair Value | |
Non-vested as of January 1, 2018 | $ / shares | $ 50.86 |
Granted | $ / shares | 56.74 |
Vested | $ / shares | 56.68 |
Forfeited or expired | $ / shares | 52.72 |
Non-vested and expected to vest as of March 31, 2018 | $ / shares | $ 53.90 |
Performance-Based Awards | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2018 | shares | 0 |
Granted | shares | 843,998 |
Vested | shares | 0 |
Forfeited or expired | shares | (12,500) |
Non-vested and expected to vest as of March 31, 2018 | shares | 831,498 |
Weighted- Average Grant-Date Fair Value | |
Non-vested as of January 1, 2018 | $ / shares | $ 0 |
Granted | $ / shares | 56.58 |
Vested | $ / shares | 0 |
Forfeited or expired | $ / shares | 59.43 |
Non-vested and expected to vest as of March 31, 2018 | $ / shares | $ 55.94 |
Market-Based Awards | |
Number of Restricted Share Awards | |
Non-vested as of January 1, 2018 | shares | 50,000 |
Granted | shares | 0 |
Vested | shares | 0 |
Forfeited or expired | shares | 0 |
Non-vested and expected to vest as of March 31, 2018 | shares | 50,000 |
Weighted- Average Grant-Date Fair Value | |
Non-vested as of January 1, 2018 | $ / shares | $ 59.43 |
Granted | $ / shares | 0 |
Vested | $ / shares | 0 |
Forfeited or expired | $ / shares | 0 |
Non-vested and expected to vest as of March 31, 2018 | $ / shares | $ 59.43 |
Employee Benefits and Compens49
Employee Benefits and Compensation Plans (Detail Textuals) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 28,102 | $ 18,203 |
Time-Based Awards | Awarded on March 1, 2018 | Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted share unit awards granted | 1.6 | |
Vesting period for stock based awards | 3 years | |
Performance Based Units | Awarded on March 1, 2018 | Members of management team | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted share unit awards granted | 0.5 | |
Performance Based Units | Awarded on February 27, 2018 | Members of management team | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted share unit awards granted | 0.3 | |
Marketing, general and administrative expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 24,700 | 17,400 |
Payroll and related expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 3,400 | $ 800 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail Textuals) - 3 months ended Mar. 31, 2018 € in Billions, $ in Billions | USD ($)CruiseShipBerthGross_Ton | EUR (€)CruiseShipBerthGross_Ton |
Commitments and Contingencies Disclosure [Line Items] | ||
Number of cruises ships | 25 | 25 |
Capacity of berths | Berth | 50,400 | 50,400 |
Ships launching period through 2025 | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Number of additional ships | 6 | |
Ships launching period through 2025 | Project Leonardo | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Number of cruises ships | 4 | 4 |
Capacity of ship, tons | Gross_Ton | 140,000 | 140,000 |
Capacity of berths | Berth | 3,300 | 3,300 |
Number of additional ships | 4 | |
Ships launching period in 2026 and 2027 | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Number of additional ships | 2 | |
Ship order delivery in winter 2020 | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Capacity of ship, tons | Gross_Ton | 55,000 | 55,000 |
Capacity of berths | Berth | 750 | 750 |
Ship Construction Contracts | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Number of cruises ships | 7 | 7 |
Aggregate contract price of new ships based on the euro/U.S. dollar exchange rate | $ 6.9 | € 5.6 |
Export credit facility financing as percentage of contract price | 80.00% | 80.00% |
Ship Construction Contracts | Breakaway plus class ships | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Number of cruises ships | 1 | 1 |
Capacity of ship, tons | Gross_Ton | 168,000 | 168,000 |
Capacity of berths | Berth | 4,000 | 4,000 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Income and Expenses [Abstract] | ||
Other income (expense), net | $ (1,666) | $ (2,815) |
Supplemental Cash Flow Inform52
Supplemental Cash Flow Information (Detail Textuals) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||
Non-cash investing activity in connection with property and equipment | $ 25.7 | $ 23 |
Subsequent Events (Detail Textu
Subsequent Events (Detail Textuals) - USD ($) $ in Millions | Apr. 04, 2018 | Apr. 19, 2018 | Apr. 17, 2018 | Mar. 31, 2018 |
Subsequent Event [Line Items] | ||||
Value of shares to be issued under repurchase program | $ 263.5 | |||
Subsequent Event | Senior notes | ||||
Subsequent Event [Line Items] | ||||
Term loan amount | $ 700 | |||
Interest rate | 4.75% | |||
Redemption amount | $ 135 | |||
Percentage of principal amount of redeemed | 100.00% | |||
Debt premium amount | $ 5.2 | |||
Debt accrued interest | 1.9 | |||
Write-off deferred financing fees | 1.2 | |||
Outstanding amount-after partial redemption | $ 565 | |||
Subsequent Event | Share repurchase program | Board of Directors | ||||
Subsequent Event [Line Items] | ||||
Value of shares to be issued under repurchase program | $ 1,000 | |||
Share repurchase program period | 3 years | |||
Subsequent Event | Norwegian Bliss | ||||
Subsequent Event [Line Items] | ||||
Contract price percentage | 80.00% | |||
Term loan amount | $ 850 | |||
Interest rate | 3.92% | |||
Maturity date | Apr. 19, 2030 |