10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to           

Commission File Number: 1-11884

ROYAL CARIBBEAN CRUISES LTD.

(Exact name of registrant as specified in its charter)

Republic of Liberia	98-0081645
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1050 Caribbean Way, Miami, Florida 33132

(Address of principal executive offices) (zip code)

(305) 539-6000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No ý

There were 222,673,323 shares of common stock outstanding as of October 16, 2014.

ROYAL CARIBBEAN CRUISES LTD.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	40
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	42
Item 1A. Risk Factors	42
Item 6. Exhibits	43
SIGNATURES	44

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited; in thousands, except per share data)

	Quarter Ended September 30,
	2014			2013
Passenger ticket revenues	$	1,786,746		$	1,672,051
Onboard and other revenues	602,016			639,698
Total revenues	2,388,762			2,311,749
Cruise operating expenses:
Commissions, transportation and other	396,916			378,291
Onboard and other	182,658			178,269
Payroll and related	214,260			213,860
Food	120,908			119,104
Fuel	230,818			215,686
Other operating	281,322			311,591
Total cruise operating expenses	1,426,882			1,416,801
Marketing, selling and administrative expenses	239,662			249,954
Depreciation and amortization expenses	192,448			188,541
Restructuring charges	308			12,244
Operating Income	529,462			444,209
Other income (expense):
Interest income	2,117			3,299
Interest expense, net of interest capitalized	(60,100		)	(79,654		)
Extinguishment of unsecured senior notes	—			(4,206		)
Other income	18,769			2,053
	(39,214		)	(78,508		)
Net Income	$	490,248		$	365,701
Earnings per Share:
Basic	$	2.20		$	1.66
Diluted	$	2.19		$	1.65
Weighted-Average Shares Outstanding:
Basic	222,523			219,744
Diluted	223,859			221,004
Comprehensive Income
Net Income	$	490,248		$	365,701
Other comprehensive (loss) income:
Foreign currency translation adjustments	(18,482		)	6,164
Change in defined benefit plans	(1,451		)	5,423
(Loss) gain on cash flow derivative hedges	(249,626		)	61,573
Total other comprehensive (loss) income	(269,559		)	73,160
Comprehensive Income	$	220,689		$	438,861

The accompanying notes are an integral part of these consolidated financial statements.

1

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited; in thousands, except per share data)

	Nine Months Ended September 30,
	2014			2013
Passenger ticket revenues	$	4,590,048		$	4,432,542
Onboard and other revenues	1,665,981			1,673,194
Total revenues	6,256,029			6,105,736
Cruise operating expenses:
Commissions, transportation and other	1,068,961			1,017,734
Onboard and other	456,296			440,466
Payroll and related	634,232			632,758
Food	358,172			351,117
Fuel	718,081			689,809
Other operating	825,794			890,726
Total cruise operating expenses	4,061,536			4,022,610
Marketing, selling and administrative expenses	790,957			781,936
Depreciation and amortization expenses	579,063			564,089
Restructuring charges	1,958			13,922
Operating Income	822,515			723,179
Other income (expense):
Interest income	8,023			10,451
Interest expense, net of interest capitalized	(193,931		)	(256,713		)
Extinguishment of unsecured senior notes	—			(4,206		)
Other income (expense)	17,771			(6,037		)
	(168,137		)	(256,505		)
Net Income	$	654,378		$	466,674
Earnings per Share:
Basic	$	2.95		$	2.13
Diluted	$	2.93		$	2.11
Weighted-Average Shares Outstanding:
Basic	222,007			219,450
Diluted	223,351			220,744
Comprehensive Income
Net Income	$	654,378		$	466,674
Other comprehensive (loss) income:
Foreign currency translation adjustments	(17,845		)	369
Change in defined benefit plans	(5,536		)	10,716
(Loss) gain on cash flow derivative hedges	(323,179		)	56,515
Total other comprehensive (loss) income	(346,560		)	67,600
Comprehensive Income	$	307,818		$	534,274

The accompanying notes are an integral part of these consolidated financial statements.

2

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	As of
	September 30,			December 31,
	2014			2013
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	183,181		$	204,687
Trade and other receivables, net	252,918			259,746
Inventories	136,162			151,244
Prepaid expenses and other assets	273,112			252,852
Derivative financial instruments	14,853			87,845
Total current assets	860,226			956,374
Property and equipment, net	17,211,775			17,517,752
Goodwill	426,538			439,231
Other assets	1,101,371			1,159,590
	$	19,599,910		$	20,072,947
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long-term debt	$	772,245		$	1,563,378
Accounts payable	340,702			372,226
Accrued interest	66,332			103,025
Accrued expenses and other liabilities	719,349			563,702
Customer deposits	1,839,112			1,664,679
Total current liabilities	3,737,740			4,267,010
Long-term debt	6,213,829			6,511,426
Other long-term liabilities	627,313			486,246
Commitments and contingencies (Note 7)
Shareholders’ equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)	—			—
Common stock ($0.01 par value; 500,000,000 shares authorized; 232,967,271 and 230,782,315 shares issued, September 30, 2014 and December 31, 2013, respectively)	2,329			2,308
Paid-in capital	3,241,723			3,159,038
Retained earnings	6,531,569			6,054,952
Accumulated other comprehensive (loss) income	(340,889		)	5,671
Treasury stock (10,308,683 common shares at cost, September 30, 2014 and December 31, 2013)	(413,704		)	(413,704		)
Total shareholders’ equity	9,021,028			8,808,265
	$	19,599,910		$	20,072,947

The accompanying notes are an integral part of these consolidated financial statements.

3

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine Months Ended September 30,
	2014			2013
Operating Activities
Net income	$	654,378		$	466,674
Adjustments:
Depreciation and amortization	579,063			564,089
Loss on derivative instruments not designated as hedges	24,234			8,634
Loss on extinguishment of unsecured senior notes	—			4,206
Loss on sale of ship	17,401			—
Changes in operating assets and liabilities:
Decrease in trade and other receivables, net	69,833			14,278
Decrease (increase) in inventories	13,900			(13,541		)
Increase in prepaid expenses and other assets	(3,596		)	(28,363		)
(Decrease) increase in accounts payable	(33,668		)	43,415
(Decrease) increase in accrued interest	(36,693		)	14,219
Increase in accrued expenses and other liabilities	48,600			29,496
Increase in customer deposits	104,211			131,237
Other, net	21,901			(4,240		)
Net cash provided by operating activities	1,459,564			1,230,104
Investing Activities
Purchases of property and equipment	(559,018		)	(534,046		)
Cash paid on settlement of derivative financial instruments	(14,808		)	(8,451		)
Investments in unconsolidated affiliates	(69,748		)	(60,426		)
Cash received on loan to unconsolidated affiliate	76,167			23,372
Proceeds from sale of ship	220,000			—
Other, net	2,592			1,147
Net cash used in investing activities	(344,815		)	(578,404		)
Financing Activities
Debt proceeds	1,917,550			1,519,464
Debt issuance costs	(49,641		)	(51,720		)
Repayments of debt	(2,958,427		)	(2,065,965		)
Dividends paid	(131,857		)	(54,159		)
Proceeds from exercise of common stock options	65,885			13,626
Cash received on settlement of derivative financial instruments	22,835			—
Other, net	1,422			1,140
Net cash used in financing activities	(1,132,233		)	(637,614		)
Effect of exchange rate changes on cash	(4,022		)	626
Net (decrease) increase in cash and cash equivalents	(21,506		)	14,712
Cash and cash equivalents at beginning of period	204,687			194,855
Cash and cash equivalents at end of period	$	183,181		$	209,567
Supplemental Disclosure
Cash paid during the period for:
Interest, net of amount capitalized	$	208,311		$	232,769
Non cash Investing Activities
Purchase of property and equipment through asset trade-in	$	—		$	46,375

The accompanying notes are an integral part of these consolidated financial statements.

4

ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As used in this Quarterly Report on Form 10-Q,the terms “Royal Caribbean,” the “Company,” “we,” “our” and “us” refer to Royal Caribbean Cruises Ltd. and, depending on the context, Royal Caribbean Cruises Ltd.’s consolidated subsidiaries and/or affiliates. The terms “Royal Caribbean International,” “Celebrity Cruises,” “Pullmantur,” “Azamara Club Cruises,” “CDF Croisières de France,” and “TUI Cruises” refer to our cruise brands. However, because TUI Cruises is an unconsolidated investment, our operating results and other disclosures herein do not include TUI Cruises unless otherwise specified.  In accordance with cruise vacation industry practice, the term “berths” is determined based on double occupancy per cabin even though many cabins can accommodate three or more passengers. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013, including the audited consolidated financial statements and related notes included therein.

This Quarterly Report on Form 10-Q also includes trademarks, trade names and service marks of other companies.  Use or display by us of other parties’ trademarks, trade names or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, these other parties other than as described herein.

Note 1. General

Description of Business

We are a global cruise company.  We own Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisières de France and a 50% joint venture interest in TUI Cruises.

Basis for Preparation of Consolidated Financial Statements

The unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates. See Note 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of our significant accounting policies.

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. See Note 6. Goodwill and Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method. We consolidate the operating results of Pullmantur and CDF Croisières de France on a two-month lag to allow for more timely preparation of our consolidated financial statements. On March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale during the second quarter of 2014. See Note 11. Restructuring Charges for further discussion on the Pullmantur sales transaction. No material events or other transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of August and September 2014 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended September 30, 2014.

We believe the accompanying unaudited consolidated financial statements contain all normal recurring accruals necessary for a fair presentation. Our revenues are seasonal and results for interim periods are not necessarily indicative of results for the entire year.

Note 2. Summary of Significant Accounting Policies

Revenues and Expenses

Historically, we recognized revenues and cruise operating costs for our shorter voyages (voyages of ten days or less) upon voyage completion while we recognized revenues and cruise operating costs for voyages in excess of ten days on a pro-rata basis. We followed this completed voyage recognition approach on our shorter voyages because the difference between prorating revenue from such voyages and recognizing such revenue at the completion of the voyage was immaterial to our consolidated financial

5

statements. As of September 30, 2014, we have changed our methodology and recognized passenger ticket revenues, revenues from onboard and other goods and services and all associated cruise operating costs for all of our uncompleted voyages on a pro-rata basis. We believe that recognizing revenues and cruise operating costs on a pro-rata basis for all voyages is preferable as revenues and expenses are recorded in the period in which the revenue generating activities are performed.

The effect of this change was an increase to net income of $16.3 million for each of the quarter and nine months ended September 30, 2014 and was immaterial to these periods. In addition, the change has not been retrospectively applied to prior periods, as the impact of prorating all voyages was immaterial to the respective periods presented.

Recent Accounting Pronouncements

In January 2014, amended guidance was issued regarding the accounting for service concession arrangements. The new guidance defines a service concession as an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates and maintains the grantor’s infrastructure for a specified period of time and in return receives payments from the grantor and or third party user for use of the infrastructure. The guidance prohibits the operating entity from accounting for a service concession arrangement as a lease and from recording the infrastructure used in the arrangement within property plant and equipment. This guidance must be applied using a modified retrospective approach and will be effective for our interim and annual reporting periods beginning after December 15, 2014. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have a material impact to our consolidated financial statements.

In April 2014, amended guidance was issued changing the requirements for reporting discontinued operations and enhancing the disclosures in this area. The new guidance requires a disposal of a component of an entity or a group of components of an entity to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The guidance will be effective prospectively for our interim and annual reporting periods beginning after December 15, 2014. The guidance will impact the reporting and disclosures of future disposals, if any.

In May 2014, amended guidance was issued to clarify the principles used to recognize revenue for all entities. The guidance is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in the prior accounting guidance. This guidance must be applied using one of two retrospective application methods and will be effective for our interim and annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. We are currently evaluating the impact of the adoption of this newly issued guidance to our consolidated financial statements.

In August 2014, guidance was issued requiring management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. This guidance will be effective for our annual reporting period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements.

Other

Revenues and expenses include port costs that vary with guest head counts. The amounts of such port costs included in passenger ticket revenues on a gross basis were $232.7 million and $135.8 million for the third quarters of 2014 and 2013, respectively, and $494.5 million and $368.5 million for the nine months ended September 30, 2014 and 2013, respectively.

Note 3. Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

6

	Quarter Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Net income for basic and diluted earnings per share	$	490,248	$	365,701	$	654,378	$	466,674
Weighted-average common shares outstanding	222,523		219,744		222,007		219,450
Dilutive effect of stock options, performance share awards and restricted stock awards	1,336		1,260		1,344		1,294
Diluted weighted-average shares outstanding	223,859		221,004		223,351		220,744
Basic earnings per share	$	2.20	$	1.66	$	2.95	$	2.13
Diluted earnings per share	$	2.19	$	1.65	$	2.93	$	2.11

Diluted earnings per share does not reflect options to purchase an aggregate of 2.2 million shares for each of the quarter and nine months ended September 30, 2013, respectively, because the effect of including them would have been antidilutive. There were no antidilutive shares for thequarter and nine months ended September 30, 2014.

Note 4. Property and Equipment

In September 2014, we sold Celebrity Century to an unrelated third party for $220.0 million in cash. As part of the sale arrangement, we agreed to charter the Celebrity Century from the buyer until April 2015 to fulfill existing passenger commitments. The sale resulted in a loss of $17.4 million that was recognized within Other operating expenses in our consolidated statements of comprehensive income (loss) for the quarter and nine months ended September 30, 2014.

Note 5. Long-Term Debt

In January 2014, we borrowed $380.0 million under a previously committed unsecured term loan facility. The loan is due and payable at maturity in August 2018. Interest on the loan accrues at a floating rate based on LIBOR plus the applicable margin. The applicable margin varies with our debt rating and was 2.12% as of September 30, 2014. The proceeds of this loan were used to repay our €745.0 million5.625% unsecured senior notes due January 2014.

In January 2014, we amended and restated our €365.0 million unsecured term loan due July 2017. Interest on the amended facility accrues at a floating rate based on EURIBOR plus a margin which varies with our credit rating. The amendment reduced the margin, which at our current credit rating resulted in a decrease from 3.00% to 2.30%. The amendment did not result in the extinguishment of debt.

In March 2014, we amended our unsecured term loans for Oasis of the Seas and Allure of the Seas primarily to reduce the margins on those facilities and eliminate the lenders option to exit those facilities in 2015 and 2017, respectively. The interest rate on the $420.0 million floating rate tranche of the Oasis of the Seas term loan was reduced from LIBOR plus 2.10% to LIBOR plus 1.85%. The interest rate on the entire $1.1 billionAllure of the Seas term loan was reduced from LIBOR plus 2.10% to LIBOR plus 1.85%. These amendments did not result in the extinguishment of debt.

Note 6. Goodwill and Other Assets

As of September 30, 2014, the carrying amounts of goodwill and trademarks and trade names attributable to our Pullmantur reporting unit were $139.5 million and $196.3 million, respectively. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets, with an increasing focus on Latin America. The persistent economic instability in these markets has created significant uncertainties in forecasting operating results and future cash flows used in our impairment analyses. We continue to monitor economic events in these markets for their potential impact on Pullmantur’s business and valuation. However, based on our most recent projections, we do not believe an interim impairment evaluation of Pullmantur’s goodwill or trademarks and trade names is warranted as of September 30, 2014.

If there are relatively modest changes to the projected future cash flows used in the impairment analyses, especially in Net Yields, or if anticipated transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur's reporting unit’s goodwill and trademarks and trade names may be required. Of these factors, the planned transfers of vessels to the Pullmantur fleet is most significant to the projected future cash flows. If the transfers do not occur, we will likely fail step one of the impairment test. We will evaluate these intangible assets for potential impairment during our annual impairment test scheduled for the fourth quarter of 2014.

Variable Interest Entities

7

A Variable Interest Entity (“VIE”) is an entity in which the equity investors have not provided enough equity to finance the entity’s activities or the equity investors (1) cannot directly or indirectly make decisions about the entity’s activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity’s activities involve or are conducted on behalf of an investor with a disproportionately small voting interest.

We have determined that Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair and maintenance facility in which we have a 40% noncontrolling interest, is a VIE. The facility serves cruise and cargo ships, oil and gas tankers, and offshore units.  We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. We have determined that we are not the primary beneficiary of this facility as we do not have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of September 30, 2014, the net book value of our investment in Grand Bahama, was approximately $54.3 million, consisting of $8.2 million in equity and $46.1 million in loans. As of December 31, 2013, the net book value of our investment in Grand Bahama was approximately $56.1 million, consisting of $6.4 million in equity and $49.7 million in loans. These amounts represent our maximum exposure to loss as we are not contractually required to provide any financial or other support to the facility. The majority of our loans to Grand Bahama are in non-accrual status and the majority of this amount is included within Other assets in our consolidated balance sheets. During the first nine months of 2014, we received approximately $3.6 million in principal and interest payments related to loans that are in accrual status from Grand Bahama and recorded income associated with our investment in Grand Bahama. We monitor credit risk associated with these loans through our participation on Grand Bahama’s board of directors along with our review of Grand Bahama’s financial statements and projected cash flows. Based on this review, we believe the risk of loss associated with these loans was not probable as of September 30, 2014.

On March 31, 2014, as part of Pullmantur's sale of its non-core businesses, Pullmantur sold the majority of its 49% interest in Pullmantur Air S.A. ("Pullmantur Air"), a small aircraft business that operates four aircraft in support of Pullmantur's operations. Post-sale, we retained a 19% interest in Pullmantur Air as well as 100% ownership of the aircraft, which are now being dry leased to Pullmantur Air. We will continue to utilize the services provided by Pullmantur Air. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale in the second quarter of 2014. As of the date of the sale, we determined that Pullmantur Air was no longer a VIE and have accounted for our 19% investment in Pullmantur Air under the cost method of accounting.

Prior to the sale, we determined that Pullmantur Air was a VIE for which we were the primary beneficiary and we consolidated the assets and liabilities of Pullmantur Air in our consolidated balance sheets as of December 31, 2013. We did not separately disclose the assets and liabilities of Pullmantur Air as they were immaterial to our December 31, 2013 consolidated financial statements. See Note 11. Restructuring Charges for further discussion on the sales transaction.

Additionally, in connection with the sale of Pullmantur's non-core businesses, Pullmantur sold the majority of its land-based tour operations and travel agency, retaining a 19% noncontrolling interest in both Nautalia Viajes, S.L. ("Nautalia"), a small travel agency network, and Global Tour Operación, S.L. ("Global Tour"), a small tour operations business. We will continue to utilize the services provided by these businesses, in addition to services from other travel agency and tour operations businesses. Consistent with our two-month lag Pullmantur reporting period, we reported the impact of this sale in our consolidated financial statements in the second quarter of 2014. As of the date of the sale, we determined that Nautalia and Global Tour were VIEs for which we were not the primary beneficiaries as we do not have the power to direct the activities that most significantly impact the economic performance of these entities. In accordance with authoritative guidance for nonconsolidated VIEs, we have accounted for our 19% investment in these companies under the equity method of accounting.

We also extended a term loan facility to Nautalia due June 30, 2016 and maintained commercial and bank guarantees on behalf of Nautalia, Pullmantur Air and Global Tour for a maximum period of twelve months from the date of sale. As of September 30, 2014, our maximum exposure to loss related to these transactions was $10.4 million. Except for the aforementioned, we are not contractually required to provide any financial or other support to these businesses.

We have determined that TUI Cruises GmbH, our 50%-owned joint venture, which operates the brand TUI Cruises, is a VIE. As of September 30, 2014 and December 31, 2013, our investment in TUI Cruises, including equity and loans, was approximately $350.8 million and $354.3 million, respectively. The majority of this amount was included within Other assets in our consolidated balance sheets. In addition, we and TUI AG, our joint venture partner, have each guaranteed the repayment of 50% of a €180.0 million bank loan provided to TUI Cruises due in 2016. Our investment amount and the potential obligations under this guarantee are substantially our maximum exposure to loss. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between

8

ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting. As of September 30, 2014, TUI Cruises’ bank loan that is guaranteed by the shareholders had a remaining balance of €121.5 million, or approximately $153.5 million based on the exchange rate at September 30, 2014. This bank loan amortizes quarterly and is secured by first mortgages on both Mein Schiff 1 and Mein Schiff 2. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable.

In connection with our sale of Celebrity Mercury to TUI Cruises in 2011, we provided a debt facility to TUI Cruises in the amount of up to €90.0 million and maturing in June 2018. During 2014, we made several amendments to the facility, including increasing the maximum amount of the facility to €125.0 million and providing TUI Cruises with the ability to draw upon the available capacity through December 31, 2015 to fund installment payments for its newbuild ships. Any amounts drawn under the facility to fund newbuild installments mature in March 2016. Interest under the loan accrues at the rate of 5.0% per annum. This facility is 50% guaranteed by TUI AG and is secured by second and third mortgages on Mein Schiff 1 and Mein Schiff 2. The outstanding principal amount of the facility as of September 30, 2014 was €45.7 million, or $57.7 million based on the exchange rate at September 30, 2014.

TUI Cruises currently has three newbuild ships on order with STX Finland: Mein Schiff 4, scheduled for delivery in the second quarter of 2015, Mein Schiff 5, scheduled for delivery in the second quarter of 2016 and Mein Schiff 6, scheduled for delivery in the second quarter of 2017. TUI Cruises has in place commitments for the financing of up to 80% of the contract price of each ship on order. The remaining portion of the contract price of the ships will be funded through TUI Cruises’ cash flows from operations and/or shareholder loans (via the debt facility described above or otherwise) and/or equity contributions from us and TUI AG. The various ship construction and credit agreements include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through 2019.

Note 7. Commitments and Contingencies

As of September 30, 2014, the aggregate cost of our five ships on order (excluding TUI Cruises' ships on order) was approximately $6.0 billion, of which we had deposited $571.4 million as of such date. Approximately 29.3% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at September 30, 2014. (See Note 10. Fair Value Measurements and Derivative Instruments).

In April 2014, we entered into a credit agreement for the US dollar financing of a portion of the third Oasis-class ship. The credit agreement makes available to us an unsecured term loan in an amount up to the US dollar equivalent of €178.4 million. The loan amortizes semi-annually and will mature 12 years following delivery of the ship. At our election, prior to the ship delivery, interest on the loan will accrue either (1) at a fixed rate of 2.53% (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 1.20%. In connection with this credit agreement, we amended the €892.2 million credit agreement, originally entered into in 2013 to finance the ship, reducing the maximum facility amount to approximately €713.8 million. Both the existing Euro-denominated facility and the new US dollar-denominated facility are 100% guaranteed by Compagnie Française d’Assurance pour le Commerce Extérieur (“COFACE”), the export credit agency of France.

In August 2014, our conditional agreement with STX France to build the fourth Oasis-class ship for Royal Caribbean International became effective. We received commitments for the unsecured financing of the ship for up to 80% of the ship’s contract price through a facility to be guaranteed 100% by COFACE. The ship will have a capacity of approximately 5,450 berths and is expected to enter service in the second quarter of 2018.

Litigation

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2013, a class action complaint was filed in June 2011 against Royal Caribbean Cruises Ltd. in the United States District Court for the Southern District of Florida on behalf of a purported class of stateroom attendants employed onboard Royal Caribbean International cruise vessels. The complaint alleged that the stateroom attendants were required to pay other crew members to help with their duties and that certain stateroom attendants were required to work back of house assignments without the ability to earn gratuities, in each case in violation of the U.S. Seaman’s Wage Act. In May 2012, the district court granted our motion to dismiss the complaint on the basis that the applicable collective bargaining agreement requires any such claims to be arbitrated. The United States Court of Appeals, 11th Circuit, affirmed the district court’s dismissal and denied the plaintiffs’ petition for re-hearing and re-hearing en banc. In October 2014, the United States Supreme Court denied the plaintiffs’ request to review the order compelling arbitration. Shortly thereafter, in excess of 450 crew members submitted demands for arbitration. The demands make substantially the same allegations as in the federal court complaint and are similarly seeking damages, wage penalties and interest in an indeterminate amount. Unlike the

9

federal court complaint, the demands for arbitration are being brought individually by each of the crew members and not on behalf of a purported class of stateroom attendants. At this time, we are unable to estimate the possible impact of this matter on us. However, we believe the underlying claims made against us are without merit, and we intend to vigorously defend ourselves against them.

We are routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

Other

In July 2002, we entered into an operating lease denominated in British pound sterling for the Brilliance of the Seas. The lease payments vary based on sterling LIBOR and are included in Other operating income (expenses) in our consolidated statements of comprehensive income (loss). Brilliance of the Seas lease expense amounts were approximately £3.1 million and £3.1 million, or approximately $5.1 million and $4.8 million, for the quarters ended September 30, 2014 and September 30, 2013, respectively, and were approximately £9.3 million and £9.2 million, or approximately $15.4 million and $14.1 million for the nine months ended September 30, 2014 and September 30, 2013, respectively. The lease has a contractual life of 25 years; however, both the lessor and we have certain rights to cancel the lease at year 18 (i.e. 2020) upon advance notice given approximately one year prior to cancellation. In the event of early termination at year 18, we have the option to cause the sale of the vessel at its fair value and to use the proceeds towards the applicable termination payment. Alternatively, we could opt at such time to make a termination payment of approximately £62.6 million, or approximately $101.5 million based on the exchange rate at September 30, 2014, and relinquish our right to cause the sale of the vessel. Although we do not believe that exercise of this early termination provision is probable, we evaluate, from time to time, our alternatives under the lease, including the potential purchase of the vessel.

Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable determinations which may be made by the United Kingdom tax authorities. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances, timing or a combination of events that could trigger such indemnifications. The United Kingdom tax authorities are disputing the lessor’s accounting treatment of the lease and the lessor and tax authorities are in discussions on the matter. If the characterization of the lease by the lessor is ultimately determined to be incorrect, we could be required to indemnify the lessor under certain circumstances. The lessor has advised us that they believe their characterization of the lease is correct. Based on the foregoing and our review of available information, we do not believe an indemnification payment is probable. However, if the lessor loses its dispute and we are required to indemnify the lessor, we cannot at this time predict the impact that such an occurrence would have on our financial condition and results of operations.

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable.

If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 33% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

Note 8. Shareholders’ Equity

In September 2014, we declared a cash dividend on our common stock of $0.30 per share which was paid in the fourth quarter of 2014. During the first and second quarters of 2014, we declared and paid a cash dividend on our common stock of $0.25 per share. During the first quarter of 2014, we also paid a cash dividend on our common stock of $0.25 per share which was declared during the fourth quarter of 2013.

10

During the third quarter of 2013, we declared a cash dividend on our common stock of $0.25 per share which was paid in the fourth quarter of 2013. We declared and paid a cash dividend on our common stock of $0.12 per share during the first and second quarters of 2013.

Note 9. Changes in Accumulated Other Comprehensive (Loss) Income

The following table presents the changes in accumulated other comprehensive (loss) income by component for the nine months ended September 30, 2014 and 2013 (in thousands):

	Accumulated Other Comprehensive loss for the Nine Months Ended September 30, 2014												Accumulated Other Comprehensive loss for the Nine Months Ended September 30, 2013
	Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss			Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss
Accumulated comprehensive income (loss) at beginning of the year	$	43,324		$	(23,994	)	$	(13,659	)	$	5,671		$	(84,505	)	$	(34,823	)	$	(15,188	)	$	(134,516	)
Other comprehensive (loss) income before reclassifications	(330,103		)	(6,829		)	(19,842		)	(356,774		)	109,154			8,774			369			118,297
Amounts reclassified from accumulated other comprehensive income (loss)	6,924			1,293			1,997			10,214			(52,639		)	1,942			—			(50,697		)
Net current-period other comprehensive (loss) income	(323,179		)	(5,536		)	(17,845		)	(346,560		)	56,515			10,716			369			67,600
Ending balance	$	(279,855	)	$	(29,530	)	$	(31,504	)	$	(340,889	)	$	(27,990	)	$	(24,107	)	$	(14,819	)	$	(66,916	)

The following table presents reclassifications out of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2014 and 2013 (in thousands):

	Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive (Loss) Income into Income
Details About Accumulated Other Comprehensive (Loss) Income Components	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013			Affected Line Item in Statements of Comprehensive (Loss) Income
(Loss) gain on cash flow derivative hedges:
Cross currency swaps	$	—		$	(890	)	$	(261	)	$	(2,641	)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(450		)	(449		)	(1,348		)	(1,348		)	Depreciation and amortization expenses
Foreign currency forward contracts	(238		)	19,089			(4,052		)	18,612			Other income (expense)
Foreign currency forward contracts	—			(217		)	(57		)	(222		)	Interest expense, net of interest capitalized
Fuel swaps	(1,996		)	12,002			(1,206		)	38,238			Fuel
	(2,684		)	29,535			(6,924		)	52,639
Amortization of defined benefit plans:
Actuarial loss	(222		)	(438		)	(666		)	(1,315		)	Payroll and related
Prior service costs	(209		)	(209		)	(627		)	(627		)	Payroll and related
	(431		)	(647		)	(1,293		)	(1,942		)
Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses:
Foreign cumulative translation	—			—			(1,997		)	—			Other operating
Total reclassifications for the period	$	(3,115	)	$	28,888		$	(10,214	)	$	50,697

11

Note 10. Fair Value Measurements and Derivative Instruments

Fair Value Measurements

The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows (in thousands):

	Fair Value Measurements at September 30, 2014 Using										Fair Value Measurements at December 31, 2013 Using
Description	Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)		Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Cash and cash equivalents(4)	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Total Assets	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Liabilities:
Long-term debt (including current portion of long-term debt)(5)	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—
Total Liabilities	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2014 and December 31, 2013.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations.

Other Financial Instruments

The carrying amounts of accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at September 30, 2014 and December 31, 2013.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at September 30, 2014 Using								Fair Value Measurements at December 31, 2013 Using
Description	Total		Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Derivative financial instruments(4)	$	57,937	$	—	$	57,937	$	—	$	188,576	$	—	$	188,576	$	—
Investments(5)	$	5,678	5,678		—		—		$	6,044	6,044		—		—
Total Assets	$	63,615	$	5,678	$	57,937	$	—	$	194,620	$	6,044	$	188,576	$	—
Liabilities:
Derivative financial instruments(6)	$	275,036	$	—	$	275,036	$	—	$	100,260	$	—	$	100,260	$	—
Total Liabilities	$	275,036	$	—	$	275,036	$	—	$	100,260	$	—	$	100,260	$	—

12

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2014 and December 31, 2013.

(4) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(5) Consists of exchange-traded equity securities and mutual funds.

(6) Consists of interest rate swaps, fuel swaps, foreign currency forward contracts and foreign currency collar options. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of September 30, 2014 or December 31, 2013, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our consolidated balance sheets.

As of September 30, 2014 and December 31, 2013, no cash collateral was received or pledged under our ISDA agreements. See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments.

The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties:

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 30, 2014									As of December 31, 2013
	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities			Cash Collateral Received		Net Amount of Derivative Assets		Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets			Cash Collateral Received		Net Amount of Derivative Assets
In thousands of dollars
Derivatives subject to master netting agreements	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949
Total	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949

The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties:

13

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 30, 2014										As of December 31, 2013
	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities			Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Pledged		Net Amount of Derivative Liabilities
In thousands of dollars
Derivatives subject to master netting agreements	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)
Total	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. As of September 30, 2014 we did not have any exposure under our derivative instruments. As of December 31, 2013 we had exposure under our derivative instruments of approximately $92.5 million, which was limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, all of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

Derivative Instruments

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We manage these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, we do not hold or issue derivative financial instruments for trading or other speculative purposes. We monitor our derivative positions using techniques including market valuations and sensitivity analyses.

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments.

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation.

14

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e. interest rate, foreign currency and fuel). We perform regression analyses over an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. The determination of ineffectiveness is based on the amount of dollar offset between the change in fair value of the derivative instrument and the change in fair value of the hedged item at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is immediately recognized in earnings and reported in Other income (expense) in our consolidated statements of comprehensive income (loss).

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities and derivative instrument cash flows from hedges of foreign currency risk on debt payments as financing activities.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments. At September 30, 2014, approximately 24.4% of our long-term debt was effectively fixed as compared to 34.6% as of December 31, 2013. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

Market risk associated with our long-term fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At September 30, 2014 and December 31, 2013, we maintained interest rate swap agreements on the $420.0 million fixed rate portion of our Oasis of the Seas unsecured amortizing term loan and on the $650.0 million unsecured senior notes due 2022. The interest rate swap agreements on Oasis of the Seas debt effectively changed the interest rate on the balance of the unsecured term loan, which was $262.5 million as of September 30, 2014, from a fixed rate of 5.41% to a LIBOR-based floating rate equal to LIBOR plus 3.87%, currently approximately 4.20%. The interest rate swap agreements on the $650.0 million unsecured senior notes effectively changed the interest rate of the unsecured senior notes from a fixed rate of 5.25% to a LIBOR-based floating rate equal to LIBOR plus 3.63%, currently approximately 3.86%. These interest rate swap agreements are accounted for as fair value hedges.

Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. At September 30, 2014 and December 31, 2013, we maintained forward-starting interest rate swap agreements that hedge the anticipated unsecured amortizing term loans that will finance our purchase of Quantum of the Seas and Anthem of the Seas. Forward-starting interest rate swaps hedging the Quantum of the Seas loan will effectively convert the interest rate for $735.0 million of the anticipated loan balance from LIBOR plus 1.30% to a fixed rate of 3.74% (inclusive of margin) beginning in October 2014. Forward-starting interest rate swaps hedging the Anthem of the Seas loan will effectively convert the interest rate for $725.0 million of the anticipated loan balance from LIBOR plus 1.30% to a fixed rate of 3.86% (inclusive of margin) beginning in April 2015. These interest rate swap agreements are accounted for as cash flow hedges.

In addition, at September 30, 2014 and December 31, 2013, we maintained interest rate swap agreements that effectively converted the interest rate on a portion of the Celebrity Reflection unsecured amortizing term loan balance of approximately $572.7 million from LIBOR plus 0.40% to a fixed rate (including applicable margin) of 2.85% through the term of the loan. These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of interest rate swap agreements related to outstanding debt and on our current unfunded financing arrangements as of September 30, 2014 and December 31, 2013 was $2.9 billion and $3.0 billion, respectively.

Foreign Currency Exchange Rate Risk

15

Derivative Instruments

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts, collar options and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates. As of September 30, 2014, the aggregate cost of our ships on order was approximately $6.0 billion, of which we had deposited $571.4 million as of such date. Approximately 29.3% and 36.3% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at September 30, 2014 and December 31, 2013, respectively. The majority of our foreign currency forward contracts, collar options and cross currency swap agreements are accounted for as cash flow, fair value or net investment hedges depending on the designation of the related hedge.

On a regular basis, we enter into foreign currency forward contracts to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During the third quarter of 2014, we maintained an average of approximately $556.7 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts resulted in a (loss) gain, of approximately $(35.1) million and $16.9 million, respectively, during the quarter ended September 30, 2014 and September 30, 2013, respectively, and approximately $(24.2) million and $(8.6) million, during the nine months ended September 30, 2014 and September 30, 2013, respectively, that were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive income (loss).

We consider our investments in our foreign operations to be denominated in relatively stable currencies and of a long-term nature. In January 2014, we entered into €415.6 million foreign currency forward contracts and designated them as hedges of a portion of our net investments in Pullmantur and TUI Cruises as of September 30, 2014. These forward currency contracts mature in April 2016.

The notional amount of outstanding foreign exchange contracts including our forward contracts and collar options as of September 30, 2014 and December 31, 2013 was $3.5 billion and $2.5 billion, respectively.

Non-Derivative Instruments

We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments in Pullmantur and TUI Cruises of approximately €134.4 million and €544.9 million, or approximately $169.8 million and $750.8 million, as of September 30, 2014 and December 31, 2013, respectively.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements and fuel call options to mitigate the financial impact of fluctuations in fuel prices.

Our fuel swap agreements are accounted for as cash flow hedges. At September 30, 2014, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2017. As of September 30, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements:

	Fuel Swap Agreements
	September 30, 2014	December 31, 2013
	(metric tons)
2014	731,000	762,000
2015	778,000	665,000
2016	600,000	372,000
2017	306,000	74,000

16

	Fuel Swap Agreements
	As of September 30, 2014		As of December 31, 2013
	(% hedged)
Projected fuel purchases for year:
2014	54	%	57	%
2015	56	%	45	%
2016	41	%	25	%
2017	20	%	5	%

At September 30, 2014 and December 31, 2013, $(33.7) million and $9.5 million, respectively, of estimated unrealized net (loss) gain associated with our cash flow hedges pertaining to fuel swap agreements were expected to be reclassified to earnings from Accumulated other comprehensive (loss) income within the next twelve months. Reclassification is expected to occur as a result of fuel consumption associated with our hedged forecasted fuel purchases.

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows:

	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of September 30, 2014		As of December 31, 2013		Balance Sheet Location	As of September 30, 2014		As of December 31, 2013
		Fair Value		Fair Value			Fair Value		Fair Value
In thousands
Derivatives designated as hedging instruments under ASC 815-20(1)
Interest rate swaps	Other assets	$	2,384	$	56,571	Other long-term liabilities	$	50,688	$	66,920
Foreign currency forward contracts	Derivative financial instruments	2,882		61,596		Accrued expenses and other liabilities	29,304		—
Foreign currency forward contracts	Other assets	40,682		13,783		Other long-term liabilities	99,437		—
Foreign currency collar options	Derivative financial instruments	—		—		Accrued expenses and other liabilities	8,465		—
Foreign currency collar options	Other assets	—		22,172		Accrued expenses and other liabilities	—		—
Fuel swaps	Derivative financial instruments	—		10,902		Accrued expenses and other liabilities	37,768		1,657
Fuel swaps	Other assets	18		8,205		Other long-term liabilities	27,016		9,052
Total derivatives designated as hedging instruments under ASC 815-20		$	45,966	$	173,229		$	252,678	$	77,629
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	11,971	$	15,347	Accrued expenses and other liabilities	$	22,358	$	22,631
Total derivatives not designated as hedging instruments under ASC 815-20		11,971		15,347			22,358		22,631
Total derivatives		$	57,937	$	188,576		$	275,036	$	100,260

(1)Accounting Standard Codification 815-20 “Derivatives and Hedging.”

17

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows:

		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of September 30, 2014		As of December 31, 2013
In thousands
Foreign currency debt	Current portion of long-term debt	$	—	$	477,442
Foreign currency debt	Long-term debt	169,819		273,354
		$	169,819	$	750,796

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows:

Derivatives and related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative										Amount of Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended September 30, 2014			Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013			Quarter Ended September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	3,063		$	3,022	$	9,199	$	6,299		$	3,968	$	9,503		$	13,435		$	28,102
Interest rate swaps	Other income (expense)	(3,010		)	958		24,431		(58,286		)	3,934		(620		)	(19,122		)	55,553
		$	53		$	3,980	$	33,630	$	(51,987	)	$	7,902	$	8,883		$	(5,687	)	$	83,655

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows:

18

Derivatives under ASC  815-20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive (Loss) Income on Derivative (Effective Portion)												Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive (Loss) Gain into Income (Effective Portion)	Amount of (Loss) Gain reclassified from Accumulated Other Comprehensive (Loss) Income into Income (Effective Portion)
	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Cross currency swaps	$	—		$	—		$	—		$	—		Interest expense, net of interest capitalized	$	—		$	(890	)	$	(261	)	$	(2,641	)
Interest rate swaps	4,437			(5,816		)	(62,309		)	87,672			Other income (expense)	—			—			—			—
Foreign currency forward contracts	(163,387		)	47,338			(172,629		)	38,343			Depreciation and amortization expenses	(450		)	(449		)	(1,348		)	(1,348		)
Foreign currency forward contracts	—			—			—			—			Other income (expense)	(238		)	19,089			(4,052		)	18,612
Foreign currency forward contracts	—			—			—			—			Interest expense, net of interest capitalized	—			(217		)	(57		)	(222		)
Foreign currency collar options	(21,904		)	16,801			(30,638		)	5,554			Depreciation and amortization expenses	—			—			—			—
Fuel swaps	(71,456		)	32,785			(64,527		)	(22,415		)	Fuel	(1,996		)	12,002			(1,206		)	38,238
	$	(252,310	)	$	91,108		$	(330,103	)	$	109,154			$	(2,684	)	$	29,535		$	(6,924	)	$	52,639

	Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivatives under ASC 815- 20 Cash Flow Hedging Relationships		Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Other income (expense)	$	17		$	(7	)	$	(78	)	$	420
Foreign currency forward contracts	Other income (expense)	15			15			(12		)	5
Fuel swaps	Other income (expense)	(8,069		)	(953		)	(7,607		)	(5,322		)
		$	(8,037	)	$	(945	)	$	(7,697	)	$	(4,897	)

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows:

19

Non-derivative  instruments under ASC 815- 20 Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income (Effective Portion)										Location of Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Quarter Ended September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014		Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013
In thousands
Foreign Currency Debt	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)	Other income (expense)	$	—	$	—	$	—	$	—
	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)		$	—	$	—	$	—	$	—

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows:

		Amount of (Loss) Gain Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of (Loss) Gain Recognized in Income on Derivatives	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Foreign currency forward contracts	Other income (expense)	$	(35,175	)	$	16,789		$	(24,405	)	$	(10,491	)
Fuel swaps	Other income (expense)	(220		)	220			(1,157		)	268
Fuel call options	Other income (expense)	—			(38		)	—			(1		)
		$	(35,395	)	$	16,971		$	(25,562	)	$	(10,224	)

Credit Related Contingent Features

Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings remain below specified levels. Specifically, if on the fifth anniversary of entering into a derivative transaction or on any succeeding fifth-year anniversary our credit ratings for our senior unsecured debt were to be below BBB- by Standard & Poor’s and Baa3 by Moody’s, then each counterparty to such derivative transaction with whom we are in a net liability position that exceeds the applicable minimum call amount may demand that we post collateral in an amount equal to the net liability position. The amount of collateral required to be posted following such event will change each time our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to, or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. Currently, our senior unsecured debt credit rating is BB with a positive outlook by Standard & Poor’s and Ba1 with a stable outlook by Moody’s. We currently have five interest rate derivative hedges that have a term of at least five years.  The aggregate fair values of all derivative instruments with such credit-related contingent features in net liability positions as of September 30, 2014 and December 31, 2013 were $50.7 million and $66.9 million, respectively, which do not include the impact of any such derivatives in net asset positions. The earliest that any of the five interest rate derivative hedges will reach their fifth anniversary is November 2016. Therefore, as of September 30, 2014, we were not required to post collateral for any of our derivative transactions.

Note 11.  Restructuring Charges

For the quarter ended September 30, 2014 and September 30, 2013, we incurred $0.3 million and $12.2 million, respectively, and for the nine months ended September 30, 2014 and September 30, 2013, we incurred $2.0 million and $13.9 million, respectively, of restructuring charges in connection with our broad profitability improvement program. The following are the profitability initiatives.

Consolidation of Global Sales, Marketing, General and Administrative Structure

One of our profitability initiatives relates to restructuring and consolidation of our global sales, marketing and general and administrative structure. Activities related to this initiative include the consolidation of most of our call centers located outside of the United States and the establishment of brand dedicated sales, marketing and revenue management teams in key priority markets.

20

This resulted in the elimination of approximately 500 shore-side positions in 2013, primarily from our international markets, resulting in recognition of a liability for one-time termination benefits during the year ended December 31, 2013. Additionally, we incurred contract termination costs and other related costs consisting of legal and consulting fees to implement this initiative.

For the quarter and nine months ended September 30, 2014, we incurred $1.2 million and $0.8 million, respectively, in restructuring exit costs associated with this initiative, which are reported within Restructuring charges in our consolidated statements of comprehensive income (loss). The costs incurred in the third quarter of 2014 related to discretionary bonus payments paid to persons whose positions were eliminated as part of our restructuring activities. For the quarter and nine months ended September 30, 2013, we incurred $12.2 million and $13.9 million, respectively, of restructuring exit costs associated with this initiative.

The following table summarizes our restructuring exit costs related to the above initiative (in thousands):

	Beginning Balance January 1, 2014		Accruals		Payments		Ending Balance September 30, 2014		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	8,315	$	647	$	6,991	$	1,971	$	10,285	$	—
Contract termination costs	$	126	8		59		$	75	4,150		—
Other related costs	$	1,397	150		244		$	1,303	4,529		500
Total	$	9,838	$	805	$	7,294	$	3,349	$	18,964	$	500

In connection with this initiative, we incurred approximately $7.4 million of other costs during the nine months ended September 30, 2014 that primarily consisted of call center transition costs and accelerated depreciation on leasehold improvements and were classified within Marketing, selling and administrative expenses and Depreciation and amortization expenses in our consolidated statements of comprehensive income (loss). For the quarter ended September 30, 2014, we did not incur any additional other costs associated with this initiative. We do not expect to incur any further material restructuring exit or other additional costs related to this initiative.

Pullmantur Restructuring

Restructuring Exit Costs

In the fourth quarter of 2013, we moved forward with an initiative related to Pullmantur’s focus on its cruise business and its expansion in Latin America. Activities related to this initiative include the sale of Pullmantur's non-core businesses and placing operating management closer to the Latin American market. This resulted in the elimination of approximately 100 Pullmantur shore-side positions and recognition of a liability for one-time termination benefits during the year ended December 31, 2013. In the second quarter of 2014, we elected not to execute the dismissal of approximately 30 of the positions which resulted in a partial reversal of the liability. Additionally, we incurred contract termination costs and other related costs consisting of legal and consulting fees to implement this initiative.

As a result of these actions, we reversed $0.9 million and incurred $1.2 million of restructuring exit costs for the quarter and nine months ended September 30, 2014, respectively, which are reported within Restructuring charges in our consolidated statements of comprehensive income (loss). For the quarter ended September 30, 2014, we reversed contract termination costs and termination benefits to adjust for actual costs incurred.

21

The following table summarizes our restructuring exit costs related to the above initiative (in thousands):

	Beginning Balance January 1, 2014		Accruals			Payments		Ending Balance September 30, 2014		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	3,910	$	1,036		$	3,488	$	1,458	$	4,946	$	—
Contract termination costs	$	847	(607		)	—		$	240	240		—
Other related costs	$	516	725			855		$	386	1,241		1,080
Total	$	5,273	$	1,154		$	4,343	$	2,084	$	6,427	$	1,080

In connection with this initiative, we incurred approximately $1.3 million and $7.8 million of other costs during the quarter and nine months ended September 30, 2014, respectively, associated with placing operating management closer to the Latin American market that was classified within Marketing, selling and administrative expenses in our consolidated statements of comprehensive income (loss). We do not expect to incur any further material restructuring exit or other additional costs related to this initiative.

Sale of Pullmantur Non-core Businesses

As part of our Pullmantur related initiatives, on March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. In connection with the sale agreement, we retained a 19% interest in each of the non-core businesses as well as 100% ownership of the aircraft which are being dry leased to Pullmantur Air. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale in the second quarter of 2014. See Note 1. General for information on the basis on which we prepare our consolidated financial statements and Note 6. Goodwill and Other Assets for the accounting of our 19% retained interest.

The sale resulted in a$0.8 million gain reported in the second quarter of 2014, inclusive of the release of cumulative translation adjustment losses, which is classified within Other operating expenses in our consolidated statements of comprehensive income (loss). As part of the sale, we agreed to maintain commercial and bank guarantees on behalf of the buyer for a maximum period of twelve months and extended a term loan facility to Nautalia due June 30, 2016. During the second quarter of 2014, we recorded the fair value of the guarantees and a loss reserve for the loan amount drawn, offsetting the gain recognized by $2.9 million. See Note 9. Changes in Accumulated Other Comprehensive Income (Loss) for further information on the release of the foreign currency translation losses.

The non-core businesses met the accounting criteria to be classified as held for sale during the fourth quarter of 2013 which resulted in restructuring related impairment charges of $20.0 million in 2013 to adjust the carrying value of assets held for sale to their fair value, less cost to sell. As of December 31, 2013, assets and liabilities held for sale were not material to our consolidated balance sheet and no longer exist as of September 30, 2014. The businesses did not meet the criteria for discontinued operations reporting as a result of our significant continuing involvement.

22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Concerning Forward-Looking Statements

The discussion under this caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this document includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding guidance (including our expectations for the fourth quarter and full year of 2014 and our earnings and yield estimates for 2015 set forth under the heading "Outlook" below and expectations regarding the timing and results of our Double-Double Program), business and industry prospects or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. Words such as "anticipate," "believe," "could," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," and similar expressions are intended to further identify any of these forward-looking statements. Forward-looking statements reflect management's current expectations but they are based on judgments and are inherently uncertain. Furthermore, they are subject to risks, uncertainties and other factors, that could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2013 and, in particular, the risks discussed under the caption "Risk Factors" in Part I, Item 1A of that report.

All forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date of this document.  Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

The discussion and analysis of our financial condition and results of operations has been organized to present the following:

• a review of our financial presentation, including discussion of certain operational and financial metrics we utilize to assist us in managing our business;

• a discussion of our results of operations for the quarter and nine months ended September 30, 2014 compared to the same period in 2013;

• a discussion of our business outlook, including our expectations for selected financial items for the fourth quarter and full year of 2014; and

• a discussion of our liquidity and capital resources, including our future capital and contractual commitments and potential funding sources.

Critical Accounting Policies

Valuation of Goodwill, Indefinite-Lived Intangible Assets and Long-Lived Assets

As of September 30, 2014, the carrying amounts of goodwill and trademarks and trade names attributable to our Pullmantur reporting unit were $139.5 million and $196.3 million, respectively. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets, with an increasing focus on Latin America. The persistent economic instability in these markets has created significant uncertainties in forecasting operating results and future cash flows used in our impairment analyses. We continue to monitor economic events in these markets for their potential impact on Pullmantur’s business and valuation. However, based on our most recent projections we do not believe an interim impairment evaluation of Pullmantur’s goodwill or trademarks and trade names is warranted as of September 30, 2014.

If there are relatively modest changes to the projected future cash flows used in the impairment analyses, especially in Net Yields, or if anticipated transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur's reporting unit’s goodwill and trademarks and trade names may be required. Of these factors, the planned transfers of vessels to the Pullmantur fleet is most significant to the projected future cash flows. If the transfers do not occur, we will likely fail step one of the impairment test. We will evaluate these intangible assets for potential impairment during our annual impairment test scheduled for the fourth quarter of 2014.

23

For a discussion of our critical accounting policies, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, 2013.

Seasonality

Our revenues are seasonal based on demand for cruises. Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays. In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have focused on deployment to Australia, Latin America and Asia during that period.

Financial Presentation

Description of Certain Line Items

Revenues

Our revenues are comprised of the following:

• Passenger ticket revenues, which consist of revenue recognized from the sale of passenger tickets and the sale of airtransportation to and from our ships; and

• Onboard and other revenues, which consist primarily of revenues from the sale of goods and/or services onboard ourships not included in passenger ticket prices, cancellation fees, sales of vacation protection insurance and pre- and post-cruise tours. Additionally, revenue related to Pullmantur’s travel agency network, land-based tours and air charter business to third parties are included in onboard and other revenues through the date of the sale of Pullmantur's non-core businesses further discussed below. Onboard and other revenues also include revenues we receive from independent third party concessionaires that pay us apercentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships.

Cruise Operating Expenses

Our cruise operating expenses are comprised of the following:

• Commissions, transportation and other expenses, which consist of those costs directly associated with passenger ticketrevenues, including travel agent commissions, air and other transportation expenses, port costs that vary with passenger head counts and related credit card fees;

• Onboard and other expenses, which consist of the direct costs associated with onboard and other revenues, includingthe costs of products sold onboard our ships, vacation protection insurance premiums, costs associated with pre- and post-cruise tours and related credit card fees as well as the minimal costs associated with concession revenues, as the costs are mostly incurred by third-party concessionaires;

• Payroll and related expenses, which consist of costs for shipboard personnel (costs associated with our shoreside personnel are included in marketing, selling and administrative expenses);

•Food expenses, which include food costs for both guests and crew;

• Fuel expenses, which include fuel and related delivery and storage costs, including the financial impact of fuel swapagreements; and

• Other operating expenses, which consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel operating lease costs, vessel related insurance and entertainment. Additionally, costs associated with Pullmantur’s travel agency network, land-based tours and air charter business to third parties are included in other operating expenses through the date of the sale of Pullmantur's non-core businesses further discussed below.

We do not allocate payroll and related expenses, food expenses, fuel expenses or other operating expenses to the expense categories attributable to passenger ticket revenues or onboard and other revenues since they are incurred to provide the total cruise vacation experience.

24

Selected Operational and Financial Metrics

We utilize a variety of operational and financial metrics which are defined below to evaluate our performance and financial condition. As discussed in more detail herein, certain of these metrics are non-GAAP financial measures, which we believe provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Adjusted Earnings per Share represents Adjusted Net Income divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis.

Adjusted Net Income represents net income excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included restructuring charges, other costs related to our profitability initiatives, the estimated impact of the divested Pullmantur non-core businesses, the loss recognized on the sale of Celebrity Century and the impact of the change in our voyage proration. The estimated impact of the divested Pullmantur non-core businesses was arrived at by adjusting the net income (loss) of these businesses for the ownership percentage we retained, as well as for intercompany transactions that are no longer eliminated in our consolidated statements of comprehensive income (loss) subsequent to the sales transaction.

Available Passenger Cruise Days (“APCD”) is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period. We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.

Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses.

Gross Yields represent total revenues per APCD.

Net Cruise Costs and Net Cruise Costs Excluding Fuel represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel expenses (each of which is described above under the Description of Certain Line Items heading). In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations. We have not provided a quantitative reconciliation of projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel due to the significant uncertainty in projecting the costs deducted to arrive at these measures. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful. For the periods prior to the sale of the Pullmantur non-core businesses, Net Cruise Costs excludes the estimated impact of these divested businesses. Net Cruise Costs also excludes initiative costs reported within Marketing, selling and administrative expenses, as well asthe loss recognized on the sale of Celebrity Century included within Other operating expenses.

Net Debt-to-Capital is a ratio which represents total long-term debt, including the current portion of long-term debt, less cash and cash equivalents (“Net Debt”) divided by the sum of Net Debt and total shareholders’ equity. We believe Net Debt and Net Debt-to-Capital, along with total long-term debt and shareholders’ equity are useful measures of our capital structure. A reconciliation of historical Debt-to-Capital to Net Debt-to-Capital is provided below under Results of Operations.

Net Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses (each of which is described above under the Description of Certain Line Items heading). For the periods prior to the sale of the Pullmantur non-core businesses, we have presented Net Revenues excluding the estimated impact of these divested businesses in the financial tables under Results of Operations.

Net Yields represent Net Revenues per APCD. We utilize Net Revenues and Net Yields to manage our business on a day-to-day basis as we believe that it is the most relevant measure of our pricing performance because it reflects the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses and onboard and other expenses. A reconciliation of historical Gross Yields to Net Yields is provided below under Results of Operations. We have not provided a quantitative reconciliation of projected Gross Yields to projected Net Yields due to the significant uncertainty in projecting the costs deducted to arrive at this measure. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful. For the periods prior to the sale of the Pullmantur non-core businesses, Net Yields excludes the estimated impact of these divested businesses.

25

Occupancy, in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days by APCD.  A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.

We believe Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel are our most relevant non-GAAP financial measures. However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses can be affected by changes in currency exchange rates. Although such changes in local currency prices is just one of many elements impacting our revenues and expenses, it can be an important element. For this reason, we also monitor Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel as if the current periods’ currency exchange rates had remained constant with the comparable prior periods’ rates, or on a “Constant Currency” basis.

It should be emphasized that Constant Currency is primarily used for comparing short-term changes and/or projections. Over the longer term, changes in guest sourcing and shifting the amount of purchases between currencies can significantly change the impact of the purely currency-based fluctuations.

The use of certain significant non-GAAP measures, such as Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel, allow us to perform capacity and rate analysis to separate the impact of known capacity changes from other less predictable changes which affect our business. We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance in addition to the standard United States GAAP based financial measures. There are no specific rules or regulations for determining non-GAAP and Constant Currency measures, and as such, there exists the possibility that they may not be comparable to other companies within the industry.

Results of Operations

Summary

Our net income and Adjusted Net Income for the third quarter of 2014 was $490.2 million and $492.9 million or $2.19 and $2.20 per share on a diluted basis, respectively, as compared to net income and Adjusted Net Income of $365.7 million and $377.0 million or $1.65 and $1.71 per share on a diluted basis, respectively, for the third quarter of 2013.

Our net income and Adjusted Net Income for the nine months ended September 30, 2014 was $654.4 million and $685.7 million or $2.93 and $3.07 per share on a diluted basis, respectively, as compared to net income and Adjusted Net Income of $466.7 million and $489.4 million or $2.11 and $2.22 per share on a diluted basis, respectively, for the nine months ended September 30, 2013.

Significant items for the quarter and nine months ended September 30, 2014 include:

• Total revenues increased 3.3% and 2.5% for the quarter and nine months ended September 30, 2014 as compared to the same period in 2013, respectively. These increases were primarily due to an increase in overall capacity and ticket prices for close-in European and Asian sailings, which was partially offset by a decrease in ticket prices for Caribbean sailings.

• Cruise operating expenses increased 0.7% and 1.0% for the quarter and nine months ended September 30, 2014 from the corresponding period in 2013, respectively. These increases were primarily due to an increase in capacity, partially offset by the elimination of operating expenses as a result of the sale of Pullmantur's non-core businesses.

• Interest expense, net of interest capitalized, decreased 24.5% for the quarter and nine months ended September 30, 2014 from the corresponding period in 2013, respectively. The decrease was primarily due to lower interest rates and, to a lesser extent, a lower average debt level.

• During the nine months ended September 30, 2014, we borrowed $380.0 million under a previously committed unsecured term loan facility due August 2018 and repaid our €745.0 million 5.625% unsecured senior notes with proceeds from this term loan facility and our revolving credit facilities. Refer to Note 5. Long-Term Debt to our consolidated financial statements for further information.

26

• In September 2014, we sold Celebrity Century to an unrelated third party for $220.0 million in cash. The sale resulted in a loss of $17.4 million that was recognized within Other operating expenses in our consolidated statements of comprehensive income (loss) for the quarter and nine months ended September 30, 2014. Refer to Note 4. Property and Equipment to our consolidated financial statements for further information.

• As of September 30, 2014, we changed our voyage recognition methodology and recognized passenger ticket revenues, revenues from onboard and other goods and services and all associated cruise operating costs for all of our uncompleted voyages, including voyages of ten days or less, on a pro-rata basis. The effect of this change was an increase to net income of $16.3 million for each of the quarter and nine months ended September 30, 2014. Refer to Note 2. Summary of Significant Accounting Policies to our consolidated financial statements for further information.

Other Items

• On March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. In connection with the sale agreement, we retained a 19% interest in each of the non-core businesses as well as 100% ownership of the aircraft which is being dry leased to Pullmantur Air. Consistent with our Pullmantur reporting two-month lag period, we reported the impact of the sale in our second quarter of 2014, which resulted in a $0.8 million gain, inclusive of the release of cumulative translation adjustment losses. In addition, during the second quarter of 2014, we recognized loss reserves of $2.9 million related to a loan facility extended to Nautalia Viajes, S.L. and debt guarantees maintained on behalf of the buyer. The net loss of the sale was classified within Other operating expenses in our consolidated statements of comprehensive income (loss). Refer to Note 11. Restructuring Charges to our consolidated financial statements for further discussion on the sales transaction.

• In May 2014, TUI Cruises, our 50% joint venture, took delivery of Mein Schiff 3.

• In August 2014, our conditional agreement with STX France S.A. to build the fourth Oasis-class ship for Royal Caribbean International became effective. We also received commitments for the financing of up to 80% of the ship contract price through a facility to be guaranteed 100% by COFACE. Refer to Note 7. Commitments and Contingencies to our consolidated financial statements for further information.

• In September 2014, TUI Cruises entered into construction agreements with STX Finland to build Mein Schiff 5 and 6, scheduled for delivery in the second quarters of 2016 and 2017, respectively.

Operating results for the quarter and nine months ended September 30, 2014 compared to the same period in 2013 are shown in the following table (in thousands, except per share data):

27

	Quarter Ended September 30,										Nine months ended September 30,
	2014					2013					2014					2013
				% of Total Revenues					% of Total Revenues					% of Total Revenues					% of Total Revenues
Passenger ticket revenues	$	1,786,746		74.8	%	$	1,672,051		72.3	%	$	4,590,048		73.4	%	$	4,432,542		72.6	%
Onboard and other revenues	602,016			25.2	%	639,698			27.7	%	1,665,981			26.6	%	1,673,194			27.4	%
Total revenues	2,388,762			100.0	%	2,311,749			100.0	%	6,256,029			100.0	%	6,105,736			100.0	%
Cruise operating expenses:
Commissions, transportation and other	396,916			16.6	%	378,291			16.4	%	1,068,961			17.1	%	1,017,734			16.7	%
Onboard and other	182,658			7.6	%	178,269			7.7	%	456,296			7.3	%	440,466			7.2	%
Payroll and related	214,260			9.0	%	213,860			9.3	%	634,232			10.1	%	632,758			10.4	%
Food	120,908			5.1	%	119,104			5.2	%	358,172			5.7	%	351,117			5.8	%
Fuel	230,818			9.7	%	215,686			9.3	%	718,081			11.5	%	689,809			11.3	%
Other operating	281,322			11.8	%	311,591			13.5	%	825,794			13.2	%	890,726			14.6	%
Total cruise operating expenses	1,426,882			59.7	%	1,416,801			61.3	%	4,061,536			64.9	%	4,022,610			65.9	%
Marketing, selling and administrative expenses	239,662			10.0	%	249,954			10.8	%	790,957			12.6	%	781,936			12.8	%
Depreciation and amortization expenses	192,448			8.1	%	188,541			8.2	%	579,063			9.3	%	564,089			9.2	%
Restructuring charges	308			—		12,244			0.5	%	1,958			—		13,922			0.2	%
Operating Income	529,462			22.2	%	444,209			19.2	%	822,515			13.1	%	723,179			11.8	%
Other income (expense):
Interest income	2,117			0.1	%	3,299			0.1	%	8,023			0.1	%	10,451			0.2	%
Interest expense, net of interest capitalized	(60,100		)	(2.5	)%	(79,654		)	(3.4	)%	(193,931		)	(3.1	)%	(256,713		)	(4.2	)%
Extinguishment of unsecured senior notes	—			—		(4,206		)	(0.2	)%	—			—		(4,206		)	(0.1	)%
Other income (expense)	18,769			0.8	%	2,053			0.1	%	17,771			0.3	%	(6,037		)	(0.1	)%
	(39,214		)	(1.6	)%	(78,508		)	(3.4	)%	(168,137		)	(2.7	)%	(256,505		)	(4.2	)%
Net Income	$	490,248		20.5	%	$	365,701		15.8	%	$	654,378		10.5	%	$	466,674		7.6	%
Diluted Earnings per Share	$	2.19				$	1.65				$	2.93				$	2.11

Adjusted Net Income and Adjusted Earnings per Share were calculated as follows (in thousands, except per share data):

28

	Quarter Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net Income	$	490,248		$	365,701		$	654,378		$	466,674
Restructuring charges	308			12,244			1,958			13,922
Other initiative costs	1,240			—			17,275			—
Estimated impact of divested businesses prior to sales transaction	—			(922		)	11,013			8,774
Loss on sale of ship included within other operating expenses	17,401			—			17,401			—
Impact of voyage proration change	(16,344		)	—			(16,344		)	—
Adjusted Net Income	$	492,853		$	377,023		$	685,681		$	489,370
Weighted-Average Shares Outstanding:
Basic	222,523			219,744			222,007			219,450
Diluted	223,859			221,004			223,351			220,744
Earnings per Share:
Basic	$	2.20		$	1.66		$	2.95		$	2.13
Diluted	$	2.19		$	1.65		$	2.93		$	2.11
Adjusted Earnings per Share:
Basic	$	2.21		$	1.72		$	3.09		$	2.23
Diluted	$	2.20		$	1.71		$	3.07		$	2.22

Selected statistical information is shown in the following table:

	Quarter Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Passengers Carried	1,324,993		1,259,204		3,886,823		3,694,893
Passenger Cruise Days	9,603,329		9,302,555		27,489,584		26,633,114
APCD	8,867,375		8,667,948		25,948,292		25,334,240
Occupancy	108.3	%	107.3	%	105.9	%	105.1	%

Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):

29

	Quarter Ended September 30,						Nine Months Ended September 30,
	2014		2014 On a Constant Currency basis		2013		2014		2014 On a Constant Currency basis		2013
Passenger ticket revenues	$	1,786,746	$	1,773,105	$	1,672,051	$	4,590,048	$	4,616,566	$	4,432,542
Onboard and other revenues	602,016		600,154		639,698		1,665,981		1,664,738		1,673,194
Total revenues	2,388,762		2,373,259		2,311,749		6,256,029		6,281,304		6,105,736
Less:
Commissions, transportation and other	396,916		394,827		378,291		1,068,961		1,072,832		1,017,734
Onboard and other	182,658		182,466		178,269		456,296		456,264		440,466
Net Revenues including divested businesses	1,809,188		1,795,966		1,755,189		4,730,772		4,752,208		4,647,536
Less:
Net Revenues related to divested businesses prior to sales transaction	—		—		70,098		35,656		34,403		142,643
Net Revenues	$	1,809,188	$	1,795,966	$	1,685,091	$	4,695,116	$	4,717,805	$	4,504,893
APCD	8,867,375		8,867,375		8,667,948		25,948,292		25,948,292		25,334,240
Gross Yields	$	269.39	$	267.64	$	266.70	$	241.10	$	242.07	$	241.01
Net Yields	$	204.03	$	202.54	$	194.40	$	180.94	$	181.82	$	177.82

Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel were calculated as follows (in thousands, except APCD and costs per APCD):

30

	Quarter Ended September 30,						Nine Months Ended September 30,
	2014		2014 On a Constant Currency basis		2013		2014		2014 On a Constant Currency basis		2013
Total cruise operating expenses	$	1,426,882	$	1,425,119	$	1,416,801	$	4,061,536	$	4,067,566	$	4,022,610
Marketing, selling and administrative expenses	239,662		238,514		249,954		790,957		787,155		781,936
Gross Cruise Costs	1,666,544		1,663,633		1,666,755		4,852,493		4,854,721		4,804,546
Less:
Commissions, transportation and other	396,916		394,827		378,291		1,068,961		1,072,832		1,017,734
Onboard and other	182,658		182,466		178,269		456,296		456,264		440,466
Net Cruise Costs including divested businesses	1,086,970		1,086,340		1,110,195		3,327,236		3,325,625		3,346,346
Less:
Net Cruise Costs related to divested businesses prior to sales transaction	—		—		67,760		47,854		46,158		151,927
Other initiative costs included within cruise operating expenses and marketing, selling and administrative expenses	1,240		1,186		—		15,036		14,813		—
Loss on sale of ship included within other operating expenses	17,401		17,401		—		17,401		17,401		—
Net Cruise Costs	1,068,329		1,067,753		1,042,435		3,246,945		3,247,253		3,194,419
Less:
Fuel	230,818		231,745		215,686		718,081		721,446		689,809
Net Cruise Costs Excluding Fuel	$	837,511	$	836,008	$	826,749	$	2,528,864	$	2,525,807	$	2,504,610
APCD	8,867,375		8,867,375		8,667,948		25,948,292		25,948,292		25,334,240
Gross Cruise Costs per APCD	$	187.94	$	187.61	$	192.29	$	187.01	$	187.09	$	189.65
Net Cruise Cost per APCD	$	120.48	$	120.41	$	120.26	$	125.13	$	125.14	$	126.09
Net Cruise Costs Excluding Fuel per APCD	$	94.45	$	94.28	$	95.38	$	97.46	$	97.34	$	98.86

Net Debt-to-Capital was calculated as follows (in thousands):

	As of
	September 30,			December 31,
	2014			2013
Long-term debt, net of current portion	$	6,213,829		$	6,511,426
Current portion of long-term debt	772,245			1,563,378
Total debt	6,986,074			8,074,804
Less: Cash and cash equivalents	183,181			204,687
Net Debt	$	6,802,893		$	7,870,117
Total shareholders’ equity	$	9,021,028		$	8,808,265
Total debt	6,986,074			8,074,804
Total debt and shareholders’ equity	$	16,007,102		$	16,883,069
Debt-to-Capital	43.6		%	47.8		%
Net Debt	$	6,802,893		$	7,870,117
Net Debt and shareholders’ equity	$	15,823,921		$	16,678,382
Net Debt-to-Capital	43.0		%	47.2		%

31

2014 Outlook

The Company provided the following guidance for the full year and fourth quarter 2014:

Full Year 2014

	As Reported	Constant Currency
Net Yields	1.5% to 2.0%	Approx. 2.5%
Net Cruise Costs per APCD	Flat to slightly down	Flat to slightly down
Net Cruise Costs per APCD, excluding Fuel	Flat to down 1%	Flat to slightly down
Capacity Increase	2.4%
Depreciation and Amortization	$765 to $770 million
Interest Expense, net	$240 to $250 million
Fuel Consumption (metric tons)	1,359,000
Fuel Expenses	$943 million
Percent Hedged (fwd consumption)	52%
Impact of 10% change in fuel prices	$10 million
Adjusted Earnings per Share-Diluted	Approx. $3.45

Fourth Quarter 2014

	As Reported	Constant Currency
Net Yields	Approx. 2%	Approx. 3.5%
Net Cruise Costs per APCD	Flat to up 1%	Approx. 1%
Net Cruise Costs per APCD, excluding Fuel	1.5% to 2.0%	2% to 3%
Capacity Increase	2.1%
Depreciation and Amortization	$190 to $195 million
Interest Expense, net	$55 to $65 million
Fuel Consumption (metric tons)	339,000
Fuel Expenses	$225 million
Percent Hedged (fwd consumption)	52%
Impact of 10% change in fuel prices	$10 million
Adjusted Earnings per Share-Diluted	$0.35 to $0.40

Full Year 2015 Outlook

We're experiencing strong early booking trends for 2015. Booked load factors and rates are higher than the same time last year and the booking window has extended. We believe that 2015 will be the sixth consecutive year for yield growth and are comfortable with the Street consensus of $4.55 on an Adjusted Earnings per Share basis.

Quarter Ended September 30, 2014 Compared to Quarter Ended September 30, 2013

In this section, references to 2014 refer to the quarter ended September 30, 2014 and references to 2013 refer to the quarter ended September 30, 2013.

Revenues

Total revenues for 2014 increased $77.0 million, or 3.3%, to $2.4 billion in 2014 from $2.3 billion in 2013.

Passenger ticket revenues comprised 74.8% of our 2014 total revenues. Passenger ticket revenues increased by $114.7 million, or 6.9%, to $1.8 billion in 2014 from $1.7 billion in 2013. The increase was primarily due to:

32

• an increase in ticket prices driven by greater demand for close-in European and Asian sailings, which was partially offset by a decrease in ticket prices for Caribbean sailings, all of which contributed to a $62.6 million aggregate increase in passenger ticket revenues;

• a 2.3% increase in capacity, which increased passenger ticket revenues by$38.5 million and includes the impact of the change in our voyage proration; and

• the favorable effect of changes in foreign currency exchange rates related to our passenger ticket revenue transactions denominated in currencies other than the United States dollar of approximately $13.6 million.

The remaining 25.2% of 2014 total revenues was comprised of onboard and other revenues, which decreased $37.7 million, or 5.9%, to $602.0 million in 2014 from $639.7 million in 2013. The decrease in onboard and other revenues was primarily due to a $67.2 million decrease in revenues related to Pullmantur's non-core businesses that were sold in 2014 as noted above. The decrease was partially offset by:

• a $17.6 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our various beverage initiatives, the addition and promotion of specialty restaurants, the increased revenue associated with internet and other telecommunication services and other onboard activities, as a result of our ship revitalization projects and other revenue enhancing initiatives; and

• a $12.8 million increase attributable to the 2.3% increase in capacity noted above, which includes the impact of the change in our voyage proration.

Onboard and other revenues included concession revenues of $84.1 million in 2014 and $81.4 million in 2013.

Cruise Operating Expenses

Total cruise operating expenses increased $10.1 million, or 0.7%, to $1.4 billion. The increase was primarily due to:

• a $31.1 million increase attributable to the 2.3% increase in capacity noted above, which includes the impact of the change in our voyage proration;

• the loss recognized on the sale of Celebrity Century of$17.4 million; and

• a $9.2 million increase in head taxes mainly attributable to itinerary changes.

The increase was partially offset by a $50.9 million decrease in expenses related to Pullmantur's non-core businesses that were sold in 2014 as noted above.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2014 decreased $10.3 million, or 4.1%, to $239.7 million in 2014 from $250.0 million for the same period in 2013. The decrease was primarily due to the sale of Pullmantur's non-core businesses in 2014 as noted above.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2014 increased $3.9 million, or 2.1%, to $192.4 million from $188.5 million in 2013. The increase was primarily due to new shipboard additions associated with our ship revitalization projects and the addition of our new reservations pricing engine in December of 2013.

Restructuring Charges

We incurred restructuring charges of approximately $0.3 million in 2014 compared to $12.2 million in 2013. Refer to Note 11. Restructuring Charges to our consolidated financial statements for further information on our restructuring activities.

Other Income (Expense)

33

Interest expense, net of interest capitalized for 2014decreased $19.6 million, or 24.5%, to $60.1 million from $79.7 million in 2013. The decrease was primarily due to lower interest rates and, to a lesser extent, a lower average debt level.

Other income for 2014 increased $16.7 million or 814.2% to $18.8 million from income of $2.1 million in 2013. The increase was primarily due to income of $25.7 million from our equity method investments as compared to income of $18.0 million in 2013. In addition, we had $3.2 million in foreign exchange gains from the remeasurement of assets and liabilities denominated in foreign currency compared to $5.3 million in losses in 2013.

Extinguishment of unsecured senior notes, decreased $4.2 million in 2014 as compared to the same period in 2013 as we did not repurchase any unsecured notes in 2014.

Net Yields

Net Yields increased 4.9% in 2014 compared to 2013 primarily due to the increase in passenger ticket revenues noted above. Net Yields increased 4.2% in 2014 compared to 2013 on a Constant Currency basis.

Net Cruise Costs

Net Cruise Costs increased 2.5% in 2014 compared to 2013 primarily due to the increase in capacity. Net Cruise Costs per APCD and Net Cruise Costs per APCD on a Constant Currency basis remained consistent compared to 2013.

Net Cruise Costs Excluding Fuel

Net Cruise Costs Excluding Fuel per APCD remained consistent compared to 2013.

Other Comprehensive (Loss) Income

(Loss) gain on cash flow derivative hedges

Loss on cash flow derivative hedges in 2014 was $249.6 million compared to a Gain on cash flow derivative hedges of $61.6 million in 2013. The change of $311.2 million was primarily due to a decrease in the forward rates of Euro and fuel during 2014 compared to an increase in those forward rates during 2013.

Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013

In this section, references to 2014 refer to the nine months ended September 30, 2014 and references to 2013 refer to the nine months ended September 30, 2013.

Revenues

Total revenues for 2014 increased $150.3 million, or 2.5%, to $6.3 billion in 2014 from $6.1 billion in 2013.

Passenger ticket revenues comprised 73.4% of our 2014 total revenues. Passenger ticket revenues increased by $157.5 million, or 3.6%, to $4.6 billion in 2014 from $4.4 billion in 2013. The increase was primarily due to:

• a 2.4% increase in capacity, which increased passenger ticket revenues by $107.4 million and includes the impact of the change in our voyage proration; and

• an increase in ticket prices driven by greater demand for close-in European and Asian sailings, which was partially offset by a decrease in ticket prices for Caribbean sailings, all of which contributed to a $76.6 million aggregate increase in passenger ticket revenues.

The increase was partially offset by the unfavorable effect of changes in foreign currency exchange rates related to our passenger ticket revenue transactions denominated in currencies other than the United States dollar of approximately $26.5 million.

The remaining 26.6% of 2014 total revenues was comprised of onboard and other revenues, which decreased $7.2 million, or 0.4%. The decrease in onboard and other revenues was primarily due to $103.0 million in revenues related to Pullmantur's non-core businesses that were sold in 2014 as noted above.

34

The decrease was partially offset by:

• a $36.2 million increase attributable to the 2.4% increase in capacity noted above, which includes the impact of the change in our voyage proration;

• a $35.9 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our various beverage initiatives, the addition and promotion of specialty restaurants, the increased revenue associated with Internet and other telecommunication services and other onboard activities, as a result of our ship revitalization projects and other revenue enhancing initiatives; and

• a $23.1 million increase in other revenue primarily attributable to an out-of-period adjustment of approximately $13.9 million that was recorded in 2013 to correct the calculation of our liability for our credit card rewards program.

Onboard and other revenues included concession revenues of $238.8 million in 2014 and $233.1 million in 2013.

Cruise Operating Expenses

Total cruise operating expenses increased $38.9 million, or 1.0%, to $4.1 billion in 2014 from $4.0 billion in 2013. The increase was primarily due to:

• a $93.9 million increase attributable to a 2.4% increase in capacity noted above, which includes the impact of the change in our voyage proration;

• the loss recognized on the sale of Celebrity Century of $17.4 million; and

• a $16.4 million increase in air expense primarily due to the increased activity in our air transportation programs.

The increase was partially offset by:

• a $79.9 million decrease in expenses related to Pullmantur's non-core businesses that were sold in 2014 as noted above; and

• a $12.9 million decrease in commissions expense mainly attributable to shifts in our distribution channels.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses increased $9.0 million, or 1.2%, to $791.0 million from $781.9 million in 2013. The increase was primarily due to an increase in other costs associated with our restructuring activities. Refer to Note 11. Restructuring Charges to our consolidated financial statements for further information on our restructuring activities.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2014 increased $15.0 million, or 2.7%, to $579.1 million from $564.1 million in 2013. The increase was driven by new shipboard additions associated with our ship revitalization projects, the addition of our new reservations pricing engine in December of 2013 and the accelerated depreciation on leasehold improvements associated with our restructuring initiatives.

Restructuring Charges

We incurred restructuring charges of approximately $2.0 million in 2014 compared to $13.9 million in 2013. Refer to Note 11. Restructuring Charges to our consolidated financial statements for further information on our restructuring activities.

Other Income (Expense)

Interest expense, net of interest capitalized for 2014decreased $62.8 million, or 24.5%, to $193.9 million from $256.7 million in 2013. The decrease was primarily due to lower interest rates and, to a lesser extent, a lower average debt level.

Other income in 2014 was $17.8 million compared to Other expense of $6.0 million in 2013. The increase in income of $23.8 million or 394.4% was primarily due to ineffectiveness gains of $8.3 million from our interest rate swap agreements compared to

35

ineffectiveness losses of $6.0 million in 2013 and to income of $34.7 million from our equity method investments compared to income of $25.3 million in 2013.

Extinguishment of unsecured senior notes, decreased $4.2 million in 2014 as compared to the same period in 2013 as we did not repurchase any unsecured notes in 2014.

Net Yields

Net Yields increased 1.8% in 2014 compared to 2013 primarily due to the increase in passenger ticket revenues noted above. Net Yields increased 2.2% in 2014 compared to 2013 on a Constant Currency basis.

Net Cruise Costs

Net Cruise Costs increased 1.6% in 2014 compared to 2013 primarily due to the increase in capacity noted above. Net Cruise Costs per APCD and Net Cruise Costs per APCD on a Constant Currency basis decreased 0.8% in 2014 compared to 2013 primarily due to the decrease in commissions noted above.

Net Cruise Costs Excluding Fuel

Net Cruise Costs Excluding Fuel per APCD decreased 1.4% in 2014 compared to 2013 and decreased 1.5% in 2014 compared to 2013 on a Constant Currency basis.

Other Comprehensive (Loss) Income

(Loss) gain on cash flow derivative hedges

Loss on cash flow derivative hedges in 2014 was $323.2 million compared to a Gain on cash flow derivative hedges of $56.5 million in 2013. The change of $379.7 million was primarily due to a decrease in the forward rates of Euro, fuel and LIBOR during 2014 compared to an increase in the forward rates of Euro and LIBOR during 2013.

Future Application of Accounting Standards

Refer to Note 2. Summary of Significant Accounting Policies to our consolidated financial statements for further information on Recent Accounting Pronouncements.

Liquidity and Capital Resources

Sources and Uses of Cash

Cash flow generated from operations provides us with a significant source of liquidity. Net cash provided by operating activities increased $229.5 million to $1.5 billion for the first nine months of 2014 compared to $1.2 billion for the same period in 2013. The change in cash provided by operating activities was primarily attributable to a $51.1 million increase in cash receipts from customer deposits and the timing of payments to vendors in 2014 as compared to 2013.

Net cash used in investing activities was $344.8 million for the first nine months of 2014 compared to $578.4 million for the same period in 2013. The decrease was primarily attributable to cash received of $220.0 million in 2014 for the sale of Celebrity Century which did not occur in 2013 and a $52.8 million increase in cash received from repayments of a loan to an unconsolidated affiliate in 2014 compared to 2013. The additional cash receipts were primarily offset by the increase in capital expenditures of $25.0 million in 2014 compared to 2013.

Net cash used in financing activities was $1.1 billion for the first nine months of 2014 compared to $637.6 million for the same period in 2013. This change was primarily due to an increase of $892.5 million in repayments of debt and an increase of dividends paid of $77.7 million, partially offset by a $398.1 million increase in debt proceeds and a $52.3 million increase in the proceeds from the exercise of common stock options. The increase in repayments of debt and proceeds from issuance of debt was primarily due to a higher level of bond maturities, and higher drawings and repayments on our revolving credit facilities, in 2014.

Future Capital Commitments

Capital Expenditures

36

Our brands, including our 50% joint venture, TUI Cruises, have eight ships on order. As of September 30, 2014, the expected dates that our ships on order will enter service and their approximate berths are as follows:

Ship	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Quantum-class:
Quantum of the Seas	4th Quarter 2014	4,150
Anthem of the Seas	2nd Quarter 2015	4,150
Ovation of the Seas	2nd Quarter 2016	4,150
Oasis-class:
Unnamed	2nd Quarter 2016	5,450
Unnamed	2nd Quarter 2018	5,450
TUI Cruises (50% joint venture)(1)
Mein Schiff 4	2nd Quarter 2015	2,500
Mein Schiff 5	2nd Quarter 2016	2,500
Mein Schiff 6	2nd Quarter 2017	2,500
	Total Berths	30,850

(1) Mein Schiff 3 was placed into service during the second quarter of 2014.

Our future capital commitments consist primarily of new ship orders. As of September 30, 2014, we had three Quantum-class ships and two Oasis-class ships on order for our Royal Caribbean International brand with an aggregate capacity of approximately 23,350 berths.

As of September 30, 2014, the aggregate cost of our five ships on order (excluding TUI Cruises' ships on order) was approximately $6.0 billion, of which we had deposited $571.4 million as of such date. Approximately 29.3% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at September 30, 2014. (See Note 7. Commitments and Contingencies and Note 10. Fair Value Measurements and Derivative Instruments to our consolidated financial statements under Item 1. Financial Statements).

As of September 30, 2014, we anticipate overall full year capital expenditures will be approximately $1.4 billion for 2014, $1.4 billion for 2015, $2.2 billion for 2016, $0.3 billion for 2017 and $1.5 billion for 2018.

Contractual Obligations

As of September 30, 2014, our contractual obligations were as follows (in thousands):

37

	Payments due by period
			Less than		1-3		3-5		More than
	Total		1 year		years		years		5 years
Operating Activities:
Operating lease obligations(1)(2)	$	334,169	$	31,325	$	56,871	$	46,604	$	199,369
Interest on long-term debt(3)	977,591		209,170		286,711		177,854		303,856
Other(4)	836,336		166,373		275,989		205,286		188,688
Investing Activities:	0
Ship purchase obligations(5)	4,551,195		1,642,961		1,909,870		998,364		—
Other(6)	74,029		74,029		—		—		—
Financing Activities:	0
Long-term debt obligations(7)	6,931,171		763,147		2,295,386		1,627,962		2,244,676
Capital lease obligations(8)	54,903		9,098		12,449		6,898		26,458
Other(9)	96,299		26,017		38,876		21,756		9,650
Total	$	13,855,693	$	2,922,120	$	4,876,152	$	3,084,724	$	2,972,697

(1) We are obligated under noncancelable operating leases primarily for a ship, offices, warehouses and motor vehicles. Amounts represent contractual obligations with initial terms in excess of one year.

(2) Under the Brilliance of the Seas lease agreement, we may be required to make a termination payment of approximately £62.6 million, or approximately $101.5 million based on the exchange rate at September 30, 2014, if the lease is canceled in 2020. This amount is included in the more than 5 years column. Interest on the Brilliance of the Seas lease agreement is calculated based on the applicable variable interest rate at September 30, 2014.

(3) Long-term debt obligations mature at various dates through fiscal year 2027 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including interest swapped using the applicable rate at September 30, 2014. Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2014.

(4) Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.

(5) Amounts do not include potential obligations which remain subject to cancellation at our sole discretion.

(6) Amount represents unused commitment on loan to unconsolidated affiliate.

(7)Amounts represent debt obligations with initial terms in excess of one year.

(8)Amounts represent capital lease obligations with initial terms in excess of one year.

(9)Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our revolving credit facilities.

As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships or the purchase of existing ships. We continuously consider potential acquisitions and strategic alliances. If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations.

Off-Balance Sheet Arrangements

In July 2002, we entered into an operating lease denominated in British pound sterling for the Brilliance of the Seas. The lease payments vary based on sterling LIBOR and are included in Other operating income (expenses) in our consolidated statements of comprehensive income (loss). Brilliance of the Seas lease expense amounts were approximately £3.1 million and £3.1 million, or approximately $5.1 million and $4.8 million, for the quarters ended September 30, 2014 and September 30, 2013, respectively, and were approximately £9.3 million and £9.2 million, or approximately $15.4 million and $14.1 million for the nine months ended September 30, 2014 and September 30, 2013, respectively. The lease has a contractual life of 25 years; however, both the lessor and we have certain rights to cancel the lease at year 18 (i.e. 2020) upon advance notice given approximately one year prior to cancellation. In the event of early termination at year 18, we have the option to cause the sale of the vessel at its fair value and to use the proceeds towards the applicable termination payment. Alternatively, we could opt at such time to make a termination payment of approximately £62.6 million, or approximately $101.5 million based on the exchange rate at September 30, 2014 and relinquish our right to cause the sale of the vessel. Although we do not believe that exercise of this early termination provision is probable, we evaluate, from time to time, our alternatives under the lease, including the potential purchase of the vessel.

38

Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable determinations which may be made by the United Kingdom tax authorities. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances, timing or a combination of events that could trigger such indemnifications. The United Kingdom tax authorities are disputing the lessor’s accounting treatment of the lease and the lessor and tax authorities are in discussions on the matter. If the characterization of the lease is ultimately determined to be incorrect, we could be required to indemnify the lessor under certain circumstances. The lessor has advised us that they believe their characterization of the lease by the lessor is correct. Based on the foregoing and our review of available information, we do not believe an indemnification payment is probable. However, if the lessor loses its dispute and we are required to indemnify the lessor, we cannot at this time predict the impact that such an occurrence would have on our financial condition and results of operations.

We and TUI AG have each guaranteed repayment of 50% of an €180.0 million amortizing bank loan provided to TUI Cruises which is due 2016. As of September 30, 2014, €121.5 million, or approximately $153.5 million based on the exchange rate at September 30, 2014, remains outstanding. Based on current facts and circumstances, we do not believe potential obligations under this guarantee are probable.

TUI Cruises entered into various ship construction and credit agreements that include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through 2019.

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business.  There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification obligation is probable.

Other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

Funding Needs and Sources

We have significant contractual obligations of which our debt service obligations and the capital expenditures associated with our ship purchases represent our largest funding needs. As of September 30, 2014, we have approximately $2.9 billion in contractual obligations due through September 30, 2015 of which approximately $763.1 million relates to debt maturities and $1.6 billion relates to the acquisition of Quantum of the Seas and Anthem of the Seas along with progress payments on our other ship purchases. We have historically relied on a combination of cash flows provided by operations, drawdowns under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund these obligations.

We had a working capital deficit of $2.9 billion as of September 30, 2014 as compared to a working capital deficit of $3.3 billion as of December 31, 2013. Included within our working capital deficit is $772.2 million and $1.6 billion of current portion of long-term debt, including capital leases, as of September 30, 2014 and December 31, 2013, respectively. The decrease in working capital deficit was primarily due to the decrease in current maturities of long-term debt. Similar to others in our industry, we operate with a substantial working capital deficit. This deficit is mainly attributable to the fact that, under our business model, a vast majority of our passenger ticket receipts are collected in advance of the applicable sailing date. These advance passenger receipts remain a current liability until the sailing date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our revolving credit facilities and other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for the applicable future sailing or otherwise, pay down our revolving credit facilities, invest in long term investments or any other use of cash. In addition, we have a relatively low-level of accounts receivable and rapid turnover results in a limited investment in inventories. We generate substantial cash flows from operations and our business model, along with our unsecured revolving credit facilities, has historically allowed us to maintain this working capital deficit and still meet our operating, investing and financing needs. We expect that we will continue to have working capital deficits in the future.

39

As of September 30, 2014, we have on order three Quantum-class ships and two Oasis-class ships each of which has committed unsecured bank financing arrangements which include sovereign financing guarantees. Refer to Note 7. Commitments and Contingencies to our consolidated financial statements for further information.

In January 2014, we repaid our €745.0 million 5.625% unsecured senior notes with proceeds from our $380.0 million unsecured term loan facility and our revolving credit facilities and we amended and restated our €365.0 million unsecured term loan due July 2017 primarily to reduce the margin on the facility. Additionally, in March 2014, we amended our unsecured term loans for Oasis of the Seas and Allure of the Seas primarily to reduce the margins on those facilities and eliminate the lenders option to exit those facilities in 2015 and 2017, respectively. Refer to Note 5. Long-Term Debt to our consolidated financial statements for further information.

As of September 30, 2014, our liquidity was $1.6 billion, consisting of approximately $183.2 million in cash and cash equivalents and $1.4 billion available under our unsecured credit facilities. We anticipate that our cash flows from operations and our current financing arrangements, as described above, will be adequate to meet our capital expenditures and debt repayments over the next twelve-month period.

We continue our implementation of a broad profitability improvement program with initiatives aimed at improving our returns on invested capital. One of those initiatives, commenced in the third quarter of 2013, relates to realizing economies of scale and improving service delivery to our travel partners and guests by restructuring and consolidating our global sales, marketing and general and administrative structure. A second initiative, commenced in the fourth quarter of 2013, relates to Pullmantur’s focus on its cruise business and expansion in Latin America. We expect to incur an estimated remaining amount of $6 million of cash outlays, mostly through the end of 2014, to complete these initiatives. We believe the cash outlays will be offset by increased cash inflows from the expected cost savings.

We also continue to implement a number of initiatives to reduce energy consumption and, by extension, fuel costs. These include the design of more fuel efficient ships and the implementation of other hardware and energy efficiencies.

If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 33% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

Debt Covenants

Certain of our financing agreements contain covenants that require us, among other things, to maintain minimum net worth of at least $6.2 billion, a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%.  The fixed charge coverage ratio is calculated by dividing net cash from operations for the past four quarters by the sum of dividend payments plus scheduled principal debt payments in excess of any new financings for the past four quarters. Our minimum net worth and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive (loss) income on total shareholders’ equity. We are well in excess of all debt covenant requirements as of September 30, 2014. The specific covenants and related definitions can be found in the applicable debt agreements, the majority of which have been previously filed with the Securities and Exchange Commission.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our market risks, refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant developments or material changes since the date of our Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chairman and Chief Executive Officer and Senior Vice President, Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined

40

in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Based upon such evaluation, our Chairman and Chief Executive Officer and Senior Vice President, Chief Financial Officer concluded that those controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chairman and Chief Executive Officer and our Senior Vice President, Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Readers are cautioned that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

41

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2013, a class action complaint was filed in June 2011 against Royal Caribbean Cruises Ltd. in the United States District Court for the Southern District of Florida on behalf of a purported class of stateroom attendants employed onboard Royal Caribbean International cruise vessels. The complaint alleged that the stateroom attendants were required to pay other crew members to help with their duties and that certain stateroom attendants were required to work back of house assignments without the ability to earn gratuities, in each case in violation of the U.S. Seaman’s Wage Act. In May 2012, the district court granted our motion to dismiss the complaint on the basis that the applicable collective bargaining agreement requires any such claims to be arbitrated. The United States Court of Appeals, 11th Circuit, affirmed the district court’s dismissal and denied the plaintiffs’ petition for re-hearing and re-hearing en banc. In October 2014, the United States Supreme Court denied the plaintiffs’ request to review the order compelling arbitration. Shortly thereafter, in excess of 450 crew members submitted demands for arbitration. The demands make substantially the same allegations as in the federal court complaint and are similarly seeking damages, wage penalties and interest in an indeterminate amount. Unlike the federal court complaint, the demands for arbitration are being brought individually by each of the crew members and not on behalf of a purported class of stateroom attendants. At this time, we are unable to estimate the possible impact of this matter on us. However, we believe the underlying claims made against us are without merit, and we intend to vigorously defend ourselves against them.

We are also routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

Item 1A. Risk Factors

The risk factors that affect our business and financial results are discussed in “Item 1A. Risk Factors” in the 2013 Annual Report on Form 10-K and there has been no material change to these risk factors since previously disclosed. We wish to caution the reader that the risk factors discussed in “Item 1A. Risk Factors” in our 2013 Annual Report on Form 10-K, and those described elsewhere in this report or other Securities and Exchange Commission filings, could cause future results to differ materially from those stated in any forward-looking statements.

42

Item 6. Exhibits

10.1	2008 Equity Incentive Plan, as amended*
31.1	Certification of the Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*
31.2	Certification of the Senior Vice President, Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*
32.1	Certifications of the Chairman and Chief Executive Officer and the Senior Vice President, Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code**

*	Filed herewith
**	Furnished herewith

Interactive Data File

101 The following financial statements from Royal Caribbean Cruises Ltd.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, as filed with the SEC on October 23, 2014, formatted in XBRL, as follows:

(i)the Consolidated Statements of Comprehensive Income (Loss) for the quarter ended September 30, 2014 and 2013;

(ii)the Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2014 and 2013;

(iii) the Consolidated Balance Sheets at September 30, 2014 and December 31, 2013;

(iv)the Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013; and

(v)the Notes to the Consolidated Financial Statements, tagged in summary and detail.

43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ROYAL CARIBBEAN CRUISES LTD.
	(Registrant)
	/s/ JASON T. LIBERTY
		Jason T. Liberty
		Senior Vice President,
		Chief Financial Officer
October 23, 2014		(Principal Financial Officer and duly authorized signatory)

44

EX-10.1

Exhibit 10.1

Royal Caribbean Cruises Ltd.

2008 Equity Incentive Plan

Table of Contents

Section		Page
1.	Purpose and Effectiveness	1
2.	Definitions and Rules of Construction	1
3.	Eligibility and Participation	4
4.	Stock Subject to Plan	5
5.	Forms and Terms of Awards Under the Plan	5
6.	Exercises of Stock Options	12
7.	Events Affecting Plan Reserve or Plan Awards	13
8.	Administration	15
9.	Government Regulations and Registration of Shares	16
10.	Miscellaneous Provisions	17
11.	Amendment and Termination of this Plan	18

Section 1. Purpose and Effectiveness

(A)The purpose of this 2008 Equity Incentive Plan (the “Plan”) is to promote the success of Royal Caribbean Cruises Ltd., a Liberian corporation (the “Company”), by providing a method whereby both employees and directors of the Company and its Affiliates may be encouraged to increase their proprietary interest in the Company’s business. By offering incentive compensation opportunities that are based on the Company’s common stock, the Plan will motivate Participants to achieve long-range goals, further identify their interests with those of the Company’s other shareholders, and promote the long-term financial interest of the Company. The Plan is further intended to aid in attracting and retaining persons of exceptional ability and leadership qualities to become officers, employees, and directors of the Company and its Affiliates.

(B)The Plan was adopted by the Board of Directors on March 7, 2008 and shall be subject to approval at the 2008 annual meeting of the Company’s shareholders. Any Awards granted under the Plan prior to such shareholder approval shall be conditioned upon such shareholder approval and shall be null and void if such approval is not obtained.

(C)No Awards may be granted under the Plan following the 2018 annual meeting of the Company’s shareholders.

Section 2. Definitions and Rules of Construction

(A)Defined Terms. Capitalized terms not defined elsewhere in the Plan shall have the following meanings (whether used in the singular or plural):

- 1 –

(i)“Affiliate” means any business entity, regardless of whether organized as a corporation, limited liability company, partnership or any other legal form, in which the Company has (i) an ownership of 50% or greater, or (ii) in the sole discretion of the Committee, a significant interest.

(ii)“Agreement” means a written instrument, which need not be executed by the Participant, that sets out the terms of the grant of an Award, as any such Agreement may be supplemented or amended from time to time.

(iii)“Award” means any award or benefit granted under the Plan, as further defined in Section 5(A) of the Plan.

(iv)“Beneficiary” means the individual(s) designated by the Participant to succeed to his/her rights in all Awards granted to him/her under the Plan in the eventuality of his/her death or Disability.

(v)“Board” means the Board of Directors of the Company.

(vi)“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific Code section shall include any successor section.

(vii)“Committee” means the Compensation Committee of the Board.

(viii)“Company” means Royal Caribbean Cruises Ltd., a Liberian corporation and any successor entity.

(ix)“Date of Grant” means the date on which the Committee takes the corporate actions necessary to fix the major terms of an Award to a specified Eligible Individual, including, in the case of an Option, the number of Shares subject to the Option and the applicable Exercise Price.

(x)“Director” means a duly elected or appointed member of the Board or the Board of Directors of an Affiliate.

(xi)“Disability” means permanent and total disability as defined in Section 22(e) of the Code.

(xii)“Eligible Individual” means an Employee or Director who is described in Section 3(A) of the Plan.

(xiii)“Employee” means an individual who is employed by the Company or any Affiliate.

(xiv)“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific ERISA section shall include any successor section.

- 2 –

(xv)“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific Exchange Act section shall include any successor section.

(xvi)“Executive Officer” means executive officer as defined in Rule 3b-7 under the Exchange Act, provided that, if the Board has designated the executive officers of the Company for purposes of reporting under the Exchange Act, the designation by the Board shall be conclusive for purposes of the Plan.

(xvii)“Exercise Price” means the price that must be paid by an Optionee upon exercise of an Option to purchase a share of Stock.

(xviii)“Fair Market Value” of a Share of Stock as of any date means the mean between the highest and lowest reported sale prices of the Stock (i) on the date on the principal exchange or market on which the Stock is then listed or admitted to trading, or (ii) if the day is not a date on which such exchange or market is open, the last preceding date on which there was a sale of such Stock on such exchange or market, or (iii) as otherwise determined by the Committee if the Stock is not listed on an Exchange.

(xix)“Option” means a right to purchase from the Company a stated number of Shares at an Exercise Price and for a period of time established by the Committee.

(xx)“Optionee” means an Eligible Individual who has received an Option under this Plan, for the period of time during which such Option is held in whole or in part.

(xxi)“Option Shares” means, with respect to any Option granted under this Plan, the Stock that may be acquired upon the exercise of such Option.

(xxii)“Participant” means an Eligible Individual who has received an Award under this Plan.

(xxiii)“Plan” means this Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan, as amended from time to time.

(xxiv) “Secretary” means the secretary of the Company or his/her designee.

(xxv)“Settlement Date” means the date on which Stock, cash, cash equivalents, or any combination thereof are transferred by the Company to a Participant with respect to, and in settlement of, a prior contractual commitment made by the Company to such Participant under the Plan in the form of Restricted Stock Units, Stock Appreciation Rights or Performance Shares.

(xxvi)“Shares” or “Stock” mean shares of the common stock of the Company, par value $.01, subject to any adjustments made under Section 7 of the Plan or by operation of law.

- 3 –

(xxvii) “Subsidiary” of the Company means any present or future subsidiary (as that term is defined in Section 424(f) of the Code) of the Company An entity shall be deemed a subsidiary of the Company for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained.

(xxviii) “Substitute Awards“ shall mean Awards granted in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or with which the Company combines.

(xxix)“Termination of Service”, “Terminate” or “Termination” occurs when a Participant ceases to be an Employee of, or ceases to be a Director of, the Company and its Affiliates, as the case may be, for any reason.

(xxx)“Vest”, “Vested”, and “Vesting” means, with respect to any portion of an Award, that the Award will not be forfeited by the Participant pursuant to the provisions of this Plan in the event the Participant Terminates Service with the Company or any Affiliate.

(xxxi)“Vesting Date” with respect to any Award granted hereunder means the date on which such Award becomes Vested, as designated in or determined in accordance with the Plan and with the Agreement with respect to such Award. If more than one Vesting Date is designated for an Award, reference in the Plan to a Vesting Date in respect of such Award shall be deemed to refer to each part of such Award and the Vesting Date for such part.

(B)Rules of Construction. Where the context permits, words in any gender shall include the other gender, words in the singular shall include the plural, and the plural shall include the singular.

Section 3. Eligibility and Participation

(A) The persons who shall be eligible to participate in the Plan and to receive Awards shall be such Employees (including officers) and Directors as the Committee, in its sole discretion, shall select. Awards may be made to Eligible Individuals who hold or have held Awards under this Plan or any similar plan or other awards under any other plan of the Company. Holders of Options and other types of Awards granted by a company acquired by the Company or with which the Company combines are eligible for grant of Substitute Awards hereunder. Any member of the Committee shall be eligible to receive Awards while serving on the Committee.

(B) Awards may be granted by the Committee at any time and from time to time to new Participants, or to then Participants, or to a greater or lesser number of Participants, and may include or exclude previous Participants, as the Committee shall determine. All Awards made to members of the Board shall be recommended by the Committee and approved by the full Board. Except as required by this Plan, Awards granted at different times need not contain similar provisions. The Committee’s determinations under the Plan (including without limitation, determinations of which individuals, if any, are to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among individuals who receive, or are eligible to receive, under the Plan.

- 4 –

Section 4. Stock Subject to Plan

(A) Subject to the following provisions of this Section 4 and to the provisions of Section 7, the maximum number of Shares with respect to which any Awards may be granted, including Awards of Incentive Options as defined in Section 5(A)(i), during the term of the Plan shall be 11,000,000. During any calendar year, no one individual shall be granted, under this Plan, Awards with respect to more than 500,000 Shares. Shares underlying Substitute Awards shall not reduce the number of Shares remaining available for issuance hereunder.

(B)During the term of this Plan, the Company will at all times reserve and keep available the number of Shares that shall be sufficient to satisfy the requirements of this Plan. Shares will be made available from the currently authorized but unissued shares of the Company or from shares currently held or subsequently reacquired by the Company as treasury shares, including shares purchased in the open market or in private transactions.

(C) The grant of any Award hereunder shall count, equal in number to the Shares represented by such Award as determined under Section 4(A), towards the share maximum indicated in Section 4(A). To the extent that (i) any outstanding Option for any reason expires, is terminated, forfeited or canceled without having been exercised, or if any other Award is forfeited or otherwise does not result in the delivery of Shares by the Company, and (ii) any Shares covered by an Award are not delivered because the Award is settled in cash, such Shares shall be deemed to have not been delivered and shall be restored to the share maximum.

Section 5. Forms and Terms of Awards Under the Plan

(A)In General. The Committee may grant any of the following types of Awards, either singly or in combination with other Awards:

(i)Incentive Stock Options. An incentive stock option (an “Incentive Option”) is any Option that complies with the requirements of Section 422 of the Code.

(ii)Nonqualified Stock Options. A nonqualified stock option (a “Nonqualified Option”) is any Option that is not an Incentive Option.

(iii)Stock Appreciation Rights. A Stock Appreciation Right is an Award in the form of a right to receive, upon surrender of the right, but without other payment an amount based on appreciation in the value of Stock over a base price established in the Award payable in Stock, at times and upon conditions (which may include a Change of Control), as may be approved by the Committee.

(iv)Stock Awards. Stock awards may be in the form of Shares not subject to any restrictions or limitations imposed by this Plan (“Bonus Stock”), or of Restricted Stock. Restricted Stock is an Award of Shares that is issued to a Participant such that the Participant is thereupon the legal owner of such Shares with all of the attendant rights and privileges of ownership, but remains subject to a risk of forfeiture of such ownership back to the Company for a period of time specified on the Date of Grant. Such forfeiture may be conditioned on the continued performance of services or the achievement of individual, divisional, or corporate goals. Restricted Stock will also be subject to restrictions on transfer

- 5 –

and such other restrictions on incidents of ownership as the Committee may determine, for the same period of time as the risk of forfeiture.

(v)Restricted Stock Units. A Restricted Stock Unit is an Award payable in cash or Stock and represented by a bookkeeping credit, in which both the number of Shares and the Settlement Date (subject to any subsequent deferral election by the Participant) are fixed on the Date of Grant. The value of each Restricted Stock Unit equals the Fair Market Value of a share of Stock, as such value may change up to the date the Restricted Stock Unit is settled. Further, the settlement of the Award may be made contingent, in the sole discretion of the Committee, upon (A) solely continued service, or (B) other limitations or restrictions. Restricted Stock Units are not outstanding shares of Stock and do not entitle a Participant to voting or other rights or dividends with respect to Stock, unless and until actually paid out in the form of Stock. The restrictions and limitations imposed on Restricted Stock Unit Awards may vary among Participants and from year to year, and the Committee may assign varying titles to different forms of Restricted Stock Units.

(vi)Performance Shares. A Performance Share is a variable Award payable in cash or Stock and represented by a bookkeeping credit, in which the number of Shares (or value thereof) to be transferred to the Participant at the end of a performance measurement period will be a function of both continued service and the relevant achievement of individual, divisional or corporate goals. The value of each Performance Share equals the Fair Market Value of a share of Stock, as such value may change up to the date the Performance Share is settled.

(B)Provisions Applicable to All Forms of Awards.

(i)     Subsequent to the grant of any Award, the Committee may, at any time     before     the complete expiration of such Award, accelerate the time or times at which such Award may become nontransferable, exercisable and/or settled, in whole or in part.

(ii)    To the extent that the Company is required to withhold any Federal, state or other taxes in respect of any compensation income realized by the Participant in respect of shares acquired pursuant to an Award, or in respect of the exercise, settlement, or vesting of any such Awards, then the Company shall deduct from either Shares or any payments of any kind otherwise due to such Participant the aggregate amount of such Federal, state or other taxes required to be so withheld. If such payments are insufficient to satisfy such Federal, state or other taxes, then such Participant will be required to pay to the Company, or make other arrangements satisfactory to the Company regarding payment to the Company of, the aggregate amount of any such taxes. All matters with respect to the total amount of taxes to be withheld in respect of any such compensation income shall be determined by the Company in its sole discretion.

(C)Provisions Applicable to Options and Stock Appreciation Rights.

(i)    Subject to the limitations of the Plan, the Committee shall designate from time to time those Eligible Individuals to be granted Options, the time when each Option shall be granted, the number of Shares subject to such Option, whether such Option is an Incentive Option or a Nonqualified Option, and the Exercise Price of the Option Shares. Options shall be evidenced by Agreements in such form and containing such terms and

- 6 –

provisions not inconsistent with the provisions of the Plan as the Committee may from time to time approve. Each Optionee shall be notified of such grant and a written Agreement shall be delivered by the Company to the Optionee. Subject to the other provisions of the Plan, the same person may receive Incentive Options and Nonqualified Options at the same time and pursuant to the same Agreement, provided that Incentive Options and Nonqualified Options are clearly designated as such.

(ii)    Option Agreements may provide that the grant of any Option under the Plan, or that Stock acquired pursuant to the exercise of any Option, shall be subject to such other conditions (whether or not applicable to an Option or Stock received by any other Optionee) as the Committee determines appropriate, including, without limitation, provisions conditioning exercise upon the occurrence of certain events or performance or the passage of time, provisions to assist the Optionee in financing the purchase of Stock through the exercise of Options, provisions for forfeiture, restrictions on resale or other disposition of shares acquired pursuant to the exercise of Options, provisions conditioning the grant of the Option or future Options upon the Optionee retaining ownership of Shares acquired upon exercise for a stated period of time, and provisions to comply with federal and state securities laws and federal and state income tax and other payroll tax withholding requirements.

(iii)    The price at which Shares may be purchased upon exercise of an Option shall be fixed by the Committee on the Date of Grant and may not be less than 100% of the Fair Market Value of the Option Shares on the Date of Grant or, if specified by the Committee, on a date subsequent to the Date of Grant that is identified as the effective date of the Award. All Options shall specify the term during which the Option may be exercised, which shall be in all cases ten years or less.

(iv)    No Option may be exercised in part or in full before the date(s) therefore set forth in its terms, other than in the event of acceleration as provided in Section 7. No Option may be exercisedafter the Option expires by its terms as set forth in the applicable Agreement. In the case of an Option that is exercisable in installments, installments that are exercisable and not exercised shall remain exercisable during the term of the Option. The grant of an Option shall impose no obligation on the Optionee to exercise such Option.

(v)    Subject to the terms of the Plan and the applicable Agreement, Options and Stock Appreciation Rights shall be subject to vesting during a period of at least one year following the date of grant, provided that Options and Stock Appreciation Rights may vest in part on a pro-rata basis prior to the expiration of any vesting period, and provided, further, that up to five percent of Shares available for grant under this Plan may be granted without regard to the requirements of this sentence.

(vi)    No Option shall be transferable other than by will or the laws of descent and distribution, other than pursuant to an order issued by a court of competent jurisdiction in connection with the divorce or bankruptcy of the Participant. During the lifetime of the Optionee, the Option shall be exercisable only by such Optionee or his/her court-appointed legal representative or transferee. Notwithstanding anything herein to the contrary, the Committee may, in its sole discretion, provide in the applicable Agreement evidencing a Nonqualified Option that the Optionee may transfer, assign or otherwise dispose of an option (i) to his/her spouse, parents, siblings and lineal descendants, (ii) to a trust for the benefit

- 7 –

of the Optionee and any of the foregoing, or (iii) to any corporation or partnership controlled by the Optionee, subject to such conditions or limitations as the Committee may establish to ensure compliance with any rule promulgated pursuant to the Exchange Act, or for other purposes. The terms applicable to the assigned Option shall be the same as those in effect for the Option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Company may deem appropriate. If an Optionee has a Termination of Service by reason of his/her death or Disability prior to the expiration date of his/her Option, or if an Optionee dies subsequent to his/her Termination of Service on account of such Disability but prior to the expiration date of his/her Option, and in either case all or some portion of such Option is Vested and exercisable pursuant to the terms of this Plan and of the Option Agreement, such Option may be exercised by the Optionee or by the Optionee’s estate, personal representative or beneficiary, as the case may be, at any time prior to the earlier of (i) one year following the date of the Optionee’s death or disability, or (ii) the expiration date of such Option.

(vii)    An Optionee or a transferee of an Option shall have no rights as a     shareholder with respect to any Share covered by his/her Option until he/she shall have become the holder of record of such Share, and he/she shall not be entitled to any dividends or distributions or other rights in respect of such Share for which the record date is prior to the date on which he/she shall have become the holder of record thereof.

(viii)    Except in connection with a transaction described in Section 7(A) or in connection with the grant of Substitute Awards, the Committee shall not, without first having obtained the approval of the shareholders of the Company, effect the cancellation of any or all outstanding Options under the Plan and the substitution therefore of new Options covering the same or different number of Shares but with an exercise price per share based on the Fair Market Value per Share on the new option grant date.

(ix)    The Committee shall not, without first having obtained the approval of the shareholders of the Company, repurchase any outstanding Option on any date when the Exercise Price of such Option is greater than the Fair Market Value of a Share of Stock on such date.

- 8 –

(x)    The following additional provisions shall be applicable to Incentive Options, but only if, and to the extent, required by section 422 of the Code:

(a)    Incentive Options shall be specifically designated as such in the applicable Agreement, and may be granted only to those Eligible Individuals who are both (i) Employees of the Company and/or a Subsidiary, and (ii) citizens or resident aliens of the United States.

(b)    To the extent the aggregate Fair Market Value (determined as of the time the Option is granted) of the Stock with respect to which any Incentive Options granted hereunder may be exercisable for the first time by the Optionee in any calendar year (under this Plan or any other compensation plan of the Company or any Subsidiary thereof) exceeds $100,000, such Options shall not be considered Incentive Options.

(c)    No Incentive Option may be granted to an individual who, at the time the Option is granted, owns directly, or indirectly within the meaning of Section 424(d) of the Code, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any Subsidiary thereof, unless such Option (i) has an exercise price of at least 110% of the Fair Market Value of the Stock on the Date of Grant of such option; and (ii) cannot be exercised more than five years after the Date of Grant.

(d)    The Exercise Price for Incentive Options shall not be less than the Fair Market Value of the Stock on the Date of Grant.

(xi)    Each of the above provisions with respect to the granting, vesting, transferability, exercise and repurchase of Options, except to the extent they are applicable solely to (i) the actual purchase of stock and payment of consideration or (ii) Incentive Options, shall also apply to the grant of Stock Appreciation Rights by the Committee under the Plan.

(D)     Provisions Applicable to Restricted Stock and Restricted Stock Units.

(i)     Awards of Restricted Stock and Restricted Stock Units shall be subject to the right of the Company to require forfeiture of such Shares or rights by the Participant in the event that conditions specified by the Committee in the applicable Agreement are not satisfied prior to the end of the applicable vesting period established by the Committee for such Awards. Conditions for repurchase (or forfeiture) may be based on continuing employment or service or achievement of pre-established performance or other goals and objectives. Subject to the terms of the Plan and the applicable Agreement, Restricted Stock or Restricted Stock Units shall be subject to vesting during a period of at least three years following the date of grant, provided that vesting during a period of at least one year following the date of grant is permissible if vesting is conditioned upon the achievement of Performance Goals imposed on the Award pursuant to paragraph (F)(ii) below, and provided, further, that Restricted Stock or Restricted Stock Units may vest in part on a pro-rata basis prior to the expiration of any vesting period, and provided, further, that up to five percent of Shares available for grant under this Plan may be granted without regard to the requirements of this sentence.

(ii)    A Restricted Stock Unit may provide the Participant with the right to receive dividend equivalent payments with respect to Stock subject to the Award (both before and

- 9 –

after the Stock subject to the Award is earned, vested, or acquired) (“Dividend Equivalents”), which payments may be either made currently or credited to an account for the Participant, and may be settled in cash or Stock, as determined by the Committee. Any such settlements, and any such crediting of dividends or dividend equivalents or reinvestment in shares of Stock, may be subject to such conditions, restrictions and contingencies as the Committee shall establish, including the reinvestment of such credited amounts in Stock equivalents. A Participant may not accrue Dividend Equivalents during any calendar year in excess of $500,000.

(iii)    Shares represented by Restricted Stock Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Committee, during the applicable vesting period. Such Shares shall be evidenced in such manner as the Committee may determine. Any certificates issued in respect of such Shares shall be registered in the name of the Participant and, unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). To the extent Shares of a Restricted Stock Award become nonforfeitable, the Company (or such designee) shall deliver such certificates to the Participant or, if the Participant has died, to the Participant’s Beneficiary. Each certificate evidencing stock subject to Restricted Stock Awards shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award. Any attempt to dispose of stock in contravention of such terms, conditions and restrictions shall be ineffective. During the restriction period, the Participant shall have all the rights of a shareholder for all such Shares, including the right to vote and the right to receive dividends thereon as paid.

(E)    Provisions Applicable to Restricted Stock Units and Performance Shares. The Committee may provide in the terms of a Restricted Stock Unit or Performance Share Award for the elective deferral by the Participant of the receipt of the actual payment of cash or Stock otherwise due and payable to the Participant pursuant to such Award. In providing for such deferral, the Committee shall limit eligibility, and shall specify such rules regarding the timing and other features of the deferral, so as to comply with all applicable sections of ERISA, section 409A of the Code, and the constructive receipt and similar doctrines of the internal revenue laws.

(F)Provisions Applicable to Qualified Performance-Based Compensation.

(i)    Designation as Qualified Performance-Based Compensation.   The Committee may structure the terms and provisions of Stock Awards,Restricted Stock Units, Dividend Equivalents or Performance Shares granted to an Employee so that such Awards may constitute “qualified performance-based compensation” under section 162(m) of the Code, in which case the provisions of this paragraph (F) shall apply. The Committee may also grant Options or SARs under which the exercisability of the Options or SARs is subject to the achievement of performance goals as described in this paragraph (F) or otherwise.

(ii)    Performance Goals.   When Awards are made under this paragraph (F), the Committee shall establish in writing (a) the objective performance goals that must be met, (b) the period during which performance will be measured, (c) the maximum amounts that may be paid if the performance goals are met, and (d) any other conditions that the Committee deems appropriate and consistent with the requirements of section 162(m) of the Code for

- 10 –

the Awards to qualify as “qualified performance-based compensation.”  Under 162(m) of the Code the performance goals shall satisfy the requirements for “qualified performance-based compensation,” including the requirement that the achievement of the goals be substantially uncertain at the time they are established and that the performance goals be established in such a way that a third party with knowledge of the relevant facts could determine whether and to what extent the performance goals have been met. The Committee shall not have discretion to increase the amount of compensation that is payable, but may reduce the amount of compensation that is payable, pursuant to Awards identified by the Committee as “qualified performance-based compensation.”

(iii)    Criteria Used for Objective Performance Goals.   The Committee shall use objectively determinable performance goals based on one or more of the following criteria:  stock price, earnings per share, price-earnings multiples, net earnings, operating earnings, revenue, number of days sales outstanding in accounts receivable, productivity, margin, cost management, EBITDA (earnings before interest, taxes, depreciation and amortization), net capital employed, return on assets, shareholder return, return on equity, return on invested capital, growth in assets, unit volume, occupancy rates, sales, cash flow, market share, performance relative to a comparison group designated by the Committee, or strategic business criteria consisting of one or more objectives based on meeting specified revenue goals, market penetration goals, customer growth, customer satisfaction, geographic business expansion, acquisition or investment goals, cost targets or goals relating to investments, acquisitions or divestitures. The performance goals may relate to one or more business units or the performance of the Company as a whole, or any combination of the foregoing. Performance goals need not be uniform as among Participants. Such goals may be determined on an absolute or relative basis or as compared to specific competitor(s), peers or indices. The Committee may exclude the impact of any event or occurrence which the Committee determines should appropriately be excluded, including without limitations (a) restructurings, discontinued operations, extraordinary items and other unusual or non-recurring changes (b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management or (c) a change in applicable accounting standards.

(iv)    Timing of Establishment of Goals.   The Committee shall establish the performance goals in writing either before the beginning of the performance period or during a period ending no later than the earlier of (i) 90 days after the beginning of the performance period or (ii) the date on which 25% of the performance period has been completed, or such other date as may be required or permitted under applicable regulations under section 162(m) of the Code.

(v)    Certification of Results.   Prior to any payment of an Award intended to qualify as performance-based compensation, the Committee shall certify the performance results for the performance period specified in the Award after the performance period ends. The Committee shall determine the amount, if any, to be paid pursuant to each Award based on the achievement of the performance goals and the satisfaction of all other terms of the Award.

(vi)    Maximum Awards Payable. Notwithstanding any provision contained in this Plan to the contrary, the maximum amount of “qualified performance-based compensation” payable to any one Participant under the Plan for a given performance period

- 11 –

is 500,000 shares, or in the event such performance-based compensation is paid in cash, the equivalent cash value thereof on the last day of the performance period to which such Award relates.

Section 6. Exercises of Stock Options

(A)An Option may be exercised in whole or in part at any time during the term of such Option as provided in the Agreement; provided, however, that (i) unless otherwise provided by Section 7, an Option may be exercised only while the Optionee is an Employee or Director, and (ii) each partial exercise shall be for whole Shares only. Unless otherwise provided by Section 7 or in the Agreement, that portion of an Option that has not become Vested as of the date the Optionee ceases to be an Employee or Director shall lapse and be null and void.

(B)Each Option, or any exercisable portion thereof, may only be exercised by delivery to the Secretary or his/her office, in accordance with such procedures for the exercise of Options as the Company may establish from time to time, of (i) notice in writing signed by the Optionee (or other person then entitled to exercise such Option) that such Option, or a specified portion thereof, is being exercised; (ii) payment in full for the purchased Shares or adequate provision therefor; (iii) such representations and documents as are necessary or advisable to effect compliance with all applicable provisions of Federal or state securities laws or regulations; (iv) in the event that the Option or portion thereof shall be exercised by any individual other than the Optionee, appropriate proof of the right of such individual to exercise the Option or portion thereof; and (v) full payment to the Company of all amounts which, under federal, state or other law, it is required to withhold upon exercise of the Option or adequate provision therefor.

(C)Except as noted in this paragraph, upon receiving notice of exercise and payment, the Company will cause to be delivered to the Optionee, as soon as practicable, a certificate in the Optionee’s name for the Shares purchased, and shall evidence such transfer on the books and records of the Company. The Shares issuable and deliverable upon the exercise of an Option shall be fully paid and nonassessable. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(D)The method or methods of payment of the purchase price for the Shares to be purchased upon exercise of an Option and of any amounts required for tax withholding purposes shall be determined by the Company and may consist of (i) cash, (ii) check, (iii) the tendering, by either actual delivery or by attestation, of whole shares of Stock, valued at Fair Market Value as of the day of exercise, (iv) through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions to (a) a brokerage firm acceptable to the Company to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and other employment taxes required to be withheld by the Company by reason of such exercise, and (b) the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale. The permitted method or methods of payment of the amounts payable upon exercise of an Option may be transacted by the Optionee or by a broker designated by him/her (other

- 12 –

than a payment described in clause (iv) above), and, if other than in cash, shall be set forth in the applicable agreement or (v) such other means as may be approved by the Committee from time to time, including without limitation, by the withholding from the number of Shares otherwise issuable upon exercise of the Option that number of shares having an aggregate Fair Market Value on the date of exercise equal to the Exercise Price.

(E)Each Agreement shall require that an Optionee pay to the Company, at the time of exercise of a Nonqualified Option, such amount as the Company deems necessary to satisfy the Company’s obligation to withhold federal or state income or other applicable taxes incurred by reason of the exercise or the transfer of Shares thereupon. To the extent permitted by the Agreement, an Optionee may satisfy such withholding requirements by having the Company withhold from the number of Shares otherwise issuable upon exercise of the Option that number of shares having an aggregate Fair Market Value on the date of exercise equal to the amount required by law to be withheld.

Section 7. Events Affecting Plan Reserve or Plan Awards

(A)If the Company subdivides its outstanding shares of Stock into a greater number of shares of Stock (including, without limitation, by stock dividend or stock split) or combines its outstanding shares of Stock into a smaller number of shares (by reverse stock split, reclassification or otherwise), or any stock dividend, extraordinary cash dividend, reclassification, recapitalization, reorganization, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase Stock, or other similar corporate event (including mergers or consolidations) affects the Stock such that an adjustment is required in order to preserve the benefits or potential benefits intended to be made available under this Plan, then the Committee shall, in such manner as it may deem equitable and appropriate, make such adjustments to any or all of (i) the number of shares of Stock reserved for the Plan, (ii) the number of shares subject to outstanding Options and other Awards, (iii) the Exercise Price with respect to outstanding Options, and any other adjustment that the Committee determines to be equitable; provided, however, that the number of shares subject to any Option shall always be a whole number. The Committee may provide for a cash payment to any Participant of an Award in connection with any adjustment made pursuant to this Section 7.

(B)Any such adjustment to an Option shall comply with Section 409(A) and any other applicable provisions of the Code and shall be made without a change to the total Exercise Price applicable to the unexercised portion of the Option (except for any change in the aggregate price resulting from rounding-off of share quantities or prices), and shall be final and binding upon all Participants, the Company, their representatives, and all other interested persons.

(C)In the event of a transaction involving (i) a merger or consolidation in which the Company is not the surviving company or (ii) the sale or disposition of all or substantially all of the Company’s assets, provision shall be made in connection with such transaction for the assumption of Awards theretofore granted under the Plan, or the substitution for such Awards of new options of the successor corporation, with appropriate adjustment as to the number and kind of Shares and the purchase price for Shares thereunder. Alternatively, in the discretion of the Committee, the Plan and the Awards issued hereunder shall terminate on the effective date of such transaction if appropriate provision is made for payment to the Participant of an amount in cash equal to the value of the number of Shares subject to the Awards (to the extent such Awards have not been exercised) taking into account the transaction less the aggregate exercise price for such Awards (to the extent

- 13 –

such Awards have not been exercised) taking into account the transaction. Further, any obligations under the Plan to deliver Shares of Stock in the future shall be similarly adjusted.

(D)If a Participant has a Termination of Service by reason of his/her death or Disability, then notwithstanding any contrary waiting period, installment period or vesting schedule in any Agreement or in the Plan, unless the applicable Agreement provides otherwise, each outstanding Award granted to such Participant shall immediately become Vested and, if an Option, exercisable in full in respect of the aggregate number of shares covered thereby and, if a Restricted Stock Unit, Stock Appreciation Right or Performance Share Award, promptly settled.

(E)If an Optionee has a Termination of Service for any reason other than his/her death or Disability prior to the expiration date of his/her Option, and all or some portion of such Option is Vested and exercisable pursuant to the terms of this Plan and of the Option Agreement, such Vested portion of the Option may be exercised by the Optionee at any time prior to the earlier of (i) twelve months following the date of the Optionee’s Termination, or (ii) the expiration date of such Option.

(F)The Company may determine whether any given leave of absence constitutes a Termination of Service and, if it does not, whether the time spent on the leave will or will not be counted as vesting credit; provided, however, that for purposes of the Plan (i) a leave of absence, duly authorized in writing by the Company, if the period of such leave does not exceed 90 days, and (ii) a leave of absence in excess of 90 days, duly authorized in writing by the Company, provided (a) the Employee’s right to reemployment is guaranteed either by statute or contract, or (b) for the purpose of military service, shall not be deemed a Termination of Service.

(G)Following a Change of Control, if a Participant has a Termination of Service within eighteen (18) months of such Change of Control, other than by reason of (i) death, (ii) Disability, (iii) termination for Cause, or (iv) termination by the Participant for other than Good Reason, then notwithstanding any contrary waiting period, installment period or vesting schedule in any Agreement or in the Plan, each outstanding Award granted to such Participant shall immediately become Vested, and, if an Option, exercisable in full in respect of the aggregate number of shares covered thereby.

(H)“Change of Control” shall mean (i) the acquisition by any individual, entity or group (other than the Company, Cruise Associates and/or A. Wilhelmsen AS or an affiliate of any of them) of beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the then outstanding voting securities of the Company entitled to vote generally in the election of Directors (the ”Voting Securities”); (ii) during any period of 24consecutive months, a majority of the Board shall no longer be composed of individuals (a) who were members of the Board on the first day of such period, or (b) whose election or nomination to the Board were approved by a vote of at least two-thirds of the members of the Board who were members of the Board on the first day of such period, or (c) whose election or nomination to the Board was approved by a vote of at least two-thirds of the members of the Board referred to in the foregoing subclauses (a) and (b); (iii) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”) unless, following such Business Combination (a) the beneficial owners of the Voting Securities of the Company immediately prior to the Business Combination beneficially own more than 50% of the combined voting power of the voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination, and (b) at least a majority of the board of directors of the corporation resulting from such Business Combination

- 14 –

were members of the Company’s Board at the time of the action of the Company’s Board providing for such Business Combination; (iv) consummation of a reorganization, merger or consolidation with another corporation or business entity not already under common control with the Company, or the acquisition of stock or assets of such other corporation or business entity, if the market capitalization of the other corporation or entity, or the stock or assets acquired, is equal to or greater than the Company’s market capitalization immediately prior to the closing of such transaction; or (v) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(I)“Cause” shall mean (i) if such term is defined in an employment agreement between the Participant and the Company or Affiliate, as such term is defined therein or (ii) (a) an act of material dishonesty, including, without limitation, fraud, misappropriation, embezzlement, financial misrepresentation or other similar behavior, (b) conviction of, or the entry of a plea of guilty or nolo contendere to, the commission of a felony; (c) an action or failure to act that demonstrates a conflict of interest in which the person acts for his or her own benefit to the detriment of the Company; (d) an action or failure to act that constitutes a material breach of the person’s duties to the Company; or (e) the failure to follow the lawful directives of the Company provided that those directives are consistent with the person’s duties to the Company.

(J)“Good Reason” shall mean (i) if such term is defined in an employment agreement between the Participant and the Company or Affiliate, as such term is defined therein or (ii) (a) the assignment to the person without the person’s consent of any duties materially inconsistent with the person’s position (including status, offices and titles), authority, duties or responsibilities as they existed prior to the Change of Control; (b) any action by the Company which results in a material diminution in the person’s position, authority, duties, responsibilities, compensation or benefits as they existed prior to the Change of Control without the person’s consent; or (c) the Company requiring that the person relocate his or her principal business office more than 100 miles from the location existing prior to the Change of Control without the person’s consent.

(K)In addition to any action required or authorized by the terms of an Award, the Committee may take any other action it deems appropriate to ensure the equitable treatment of Participants in the event of or anticipation of a Change of Control, including but not limited to any one or more of the following with respect to any or all Awards: (i) the acceleration or extension of time periods for purposes of exercising, vesting in, or realizing gains from, the Awards, (ii) the waiver of conditions on the Awards that were imposed for the benefit of the Company, (iii) provision for the cash settlement of the Awards for their equivalent cash value, as determined by the Committee, as of the date of the Change of Control; or (iv) such other modifications or adjustments to the Awards as the Committee deems appropriate to maintain and protect the rights and interests of Participants upon or following the Change of Control.

Section 8. Administration

(A)The Plan shall be administered by the Compensation Committee of the Board unless a different committee is appointed by the Board.

(B)The Committee’s administration of the Plan shall be subject to the following:

(i)    Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the Eligible Individuals those persons who shall receive

- 15 –

Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and, subject to the restrictions of Section 11, to cancel or suspend Awards.

(ii)    To the extent that the Committee determines that the restrictions imposed by the Plan preclude the achievement of the material purposes of the Awards in jurisdictions outside the United States, the Committee will have the authority and discretion to modify those restrictions as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of those jurisdictions.

(C)The Committee may delegate to one or more Directors or officers of the Company, or a committee of such Directors or officers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify, waive rights with respect to, alter, discontinue, suspend or terminate Awards held by, Employees who are not officers or Directors of the Company for purposes of Section 16 of the Exchange Act provided, however, that any such delegation shall conform with applicable law and the requirements of any exchange on which the Company’s securities are listed.

(D)The Company and its Affiliates shall furnish the Committee with such data and information as it determines may be required for it to discharge its duties. The records of the Company and its Affiliates as to an Employee’s or Participant’s employment (or other provision of services), Termination of Service, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the Plan must furnish to the Company such evidence, data, or information, as the Committee or the Company considers desirable to carry out the terms of the Plan.

(E)The Committee is authorized, subject to the provisions of the Plan, to establish, amend and rescind such rules and regulations, as it deems necessary or advisable for the proper administration of the Plan and to take such other action in connection with or in relation to the Plan, as it deems necessary or advisable. Each action and determination made or taken pursuant to the Plan by the Committee, including any interpretation or construction of the Plan, shall be final and conclusive for all purposes and upon all persons.

(F)No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made by him/her or the Committee or the Board in good faith with respect to the Plan or any Award granted pursuant thereto.

(G)The Committee, the Company, and its officers and Directors, shall be entitled to rely upon the advice, opinions or valuations of any attorneys, consultants, accountants or other persons employed to assist them in connection with the administration of the Plan.

Section 9. Government Regulations and Registration of Shares

(A)The Plan, and the grant and exercise of Awards hereunder, and the Company’s obligation to sell and deliver stock under Options, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required.

- 16 –

(B)The obligation of the Company with respect to Awards shall be subject to all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of any registration statement required under the Securities Act of 1933, and the rules and regulations of any securities exchange or association on which the Stock may be listed or quoted.

(C)With respect to persons subject to Section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that Incentive comply with the applicable provisions of Section 422 of the Code, that grants of “qualified performance-based compensation” comply with the applicable provisions of Section 162 (m) of the Code and that, to the extent applicable, all Awards comply with the requirements of Section 409A of the Code. To the extent that any legal requirement of Section 16 of the Exchange Act or Section 422, 162 (m) or 409A of the Code as set forth in the Plan ceases to be required under such section, the Committee, in its sole discretion, may decide that the applicable Plan provision shall cease to apply. The Committee may revoke any Award if it is contrary to law, or may modify an Award to bring it into compliance with any valid and mandatory government regulation.

Section 10. Miscellaneous Provisions

(A)    Rights of Company. Nothing contained in the Plan or in any Agreement, and no action of the Company or the Committee with respect thereto, shall interfere in any way with the right of the Company or an Affiliate to terminate the employment of the Participant at any time, with or without cause. The grant of Awards pursuant to the Plan shall not affect in any way the right or power of the Company to make reclassifications, reorganizations or other changes of or to its capital or business structure or to merge, consolidate, liquidate, sell or otherwise dispose of all or any part of its business or assets.

(B)    Designation of Beneficiaries. Each Participant who shall be granted a Plan Award may designate a beneficiary or beneficiaries and may change such designation from time to time by filing a written designation of beneficiary or beneficiaries with the Company on a form to be prescribed by it, provided that no such designation shall be effective unless so filed prior to the death of such person.

(C)    Payroll Tax Withholding. The Company’s obligation to deliver shares of Stock or make payments under the Plan shall be subject to applicable federal, state and other tax withholding requirements. Federal, state, and other tax due upon the exercise of any Award may, in the discretion of the Company, be paid in shares of Stock already owned by the Optionee or through the withholding of shares otherwise issuable to such Optionee, upon such terms and conditions (including, without limitation, the conditions referenced in Section 6) as the Company shall determine which shares shall have an aggregate Fair Market Value equal to the required minimum withholding payment. If the Optionee shall fail to pay, or make arrangements satisfactory to the Committee for the payment to the Company of all such federal, state and other taxes required to be withheld by the Company, then the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to such Optionee an amount equal to federal, state or other taxes of any kind required to be withheld by the Company.

(D)    Employees Subject to Taxation Outside the United States. With respect to Participants who are subject to taxation in countries other than the United States, the Committee

- 17 –

may grant Awards on such terms and conditions as the Committee deems appropriate to comply with the laws of the applicable countries, and the Committee may create such procedures, addenda and sub-plans and make such modifications as may be necessary or advisable to comply with such laws.

(E)    Exclusion from Benefit Computation. By accepting an Award, unless otherwise provided in the applicable Agreement, each Participant shall be deemed to have agreed that such Award is special incentive compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the amount of any payment under any health and welfare, pension, retirement or other employee benefit plan, program or policy of the Company or any Subsidiary. In addition, each Beneficiary of a deceased Participant shall be deemed to have agreed that such Award will not affect the amount of any life insurance coverage, if any, provided by the Company on the life of the Participant which is payable to such Beneficiary under any life insurance plan covering employees of the Company or any Subsidiary.

(F)    Use of Proceeds. Proceeds from the sale of Shares pursuant to Options granted under this Plan shall constitute general funds of the Company.

(G)    Form and Time of Elections. Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification, or revocation thereof, shall be in writing filed with the Company at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Company shall require.

(H)    Unfunded Status. Neither a Participant nor any other person shall, by reason or participation in the Plan, acquire any right in or title to any assets, funds or property of the Company or any Affiliate whatsoever, including, without limitation, any specific funds, assets, or other property which the Company or any Affiliate, in its sole discretion may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the Stock or amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Affiliate shall be sufficient to pay any benefits to any person.

Section 11. Amendment and Termination of this Plan

The Committee may at any time terminate, suspend or discontinue this Plan. The Committee may amend this Plan at any time, provided that no such amendment shall be made without the approval of the Company’s stockholders (a) to the extent that such approval is required by applicable law or by the listing standards of any applicable exchange(s) on or after the adoption of this Plan, (b) to the extent that such amendment would materially increase the number of securities which may be issued under the Plan, (c) to the extent that such amendment would materially modify the requirements for participation in the Plan, (d) to the extent that such amendment would accelerate the vesting of any Restricted Stock or Restricted Stock Units under the Plan except as otherwise provided in the Plan or (e) to the extent that such amendment would permit or would result in the purchase of any or all outstanding Options with an Exercise Price greater than the Fair Market Value of a Share of Stock.

The Committee may at any time alter or amend any or all Award Agreements under this Plan to include provisions, or to effect a result, that would be authorized for a new Award under this Plan, so long as such an amendment would not require approval of the Company’s shareholders if such amendment were made to the Plan. Notwithstanding the foregoing, except as may be provided in

- 18 –

Section 7(C), no such action by the Board or the Committee shall, in any manner adverse to a Participant, affect any Award then outstanding without the consent in writing of the affected Participant.

- 19 –

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Richard D. Fain, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 23, 2014
	/s/	RICHARD D. FAIN
		Richard D. Fain
		Chairman and
		Chief Executive Officer
		(Principal Executive Officer)

1

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jason T. Liberty, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 23, 2014
	/s/	JASON T. LIBERTY
		Jason T. Liberty
		Senior Vice President,
		Chief Financial Officer
		(Principal Financial Officer)

1

EX-32.1

Exhibit 32.1

In connection with the quarterly report on Form 10-Q for the quarterly period ended September 30, 2014 as filed by Royal Caribbean Cruises Ltd. with the Securities and Exchange Commission on the date hereof (the “Report”), Richard D. Fain, Chairman and Chief Executive Officer, and Jason T. Liberty, Senior Vice President, Chief Financial Officer, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Royal Caribbean Cruises Ltd.

Date: October 23, 2014
	By:	/s/	RICHARD D. FAIN
			Richard D. Fain
			Chairman and
			Chief Executive Officer
			(Principal Executive Officer)
	By:	/s/	JASON T. LIBERTY
			Jason T. Liberty
			Senior Vice President,
			Chief Financial Officer
			(Principal Financial Officer)

1

XML

Fair Value Measurements and Derivative Instruments - Derivative Instruments (Details)					3 Months Ended		9 Months Ended						9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Interest rate swaps USD ($)	Dec. 31, 2013 Interest rate swaps USD ($)	Sep. 30, 2014 Forward Contracts USD ($)	Sep. 30, 2013 Forward Contracts USD ($)	Sep. 30, 2014 Forward Contracts USD ($)	Sep. 30, 2013 Forward Contracts USD ($)	Sep. 30, 2014 Forward Contracts Not Designated USD ($)	Jan. 31, 2014 Forward Contracts Designated as Hedging Instrument EUR (€)	Sep. 30, 2014 Foreign exchange contracts USD ($)	Dec. 31, 2013 Foreign exchange contracts USD ($)	Sep. 30, 2014 Cruise ships on order USD ($)
Gains and losses from derivatives involved in hedging relationships
Aggregate cost of ships on order, including the conditional agreement for a third Quantum - class ship													$ 6,000,000,000
Amount deposited for cost of ships on order, including the conditional agreement for a third Quantum - class ship													571,400,000
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate	29.30%	36.30%
Notional amount			2,900,000,000	3,000,000,000					556,700,000	415,600,000	3,500,000,000	2,500,000,000
Change in fair value of foreign currency forward contracts recognized in earnings					$ (35,100,000)	$ 16,900,000	$ (24,200,000)	$ (8,600,000)

XML

Restructuring and Related Charges (Details) (USD $)	3 Months Ended			9 Months Ended			12 Months Ended		12 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended				3 Months Ended		9 Months Ended		3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2013 shore_side_position	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014 Pullmantur Air	Dec. 31, 2013 Consolidation of Structure shore_side_position	Sep. 30, 2014 Consolidation of Structure	Dec. 31, 2013 Pullmantur shore_side_position	Sep. 30, 2014 Pullmantur	Sep. 30, 2014 Marketing, Selling and Administrative and Depreciation and Amortization Expenses Consolidation of Structure	Sep. 30, 2014 Marketing, Selling and Administrative and Depreciation and Amortization Expenses Consolidation of Structure	Sep. 30, 2014 Marketing, Selling and Administrative and Depreciation and Amortization Expenses Pullmantur	Sep. 30, 2014 Marketing, Selling and Administrative and Depreciation and Amortization Expenses Pullmantur	Sep. 30, 2014 Restructuring and Related Impairment Charges Pullmantur	Sep. 30, 2014 Restructuring and Related Impairment Charges Pullmantur	Sep. 30, 2014 Pullmantur Air	Mar. 31, 2014 Pullmantur Air	Sep. 30, 2014 Pullmantur	Dec. 31, 2013 Pullmantur Restructuring and Related Impairment Charges	Sep. 30, 2014 Other Operating Expenses Pullmantur Air	Sep. 30, 2014 Termination benefits Consolidation of Structure	Sep. 30, 2014 Termination benefits Pullmantur	Sep. 30, 2014 Commercial and Bank Guarantees Other Operating Expenses Pullmantur Air
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 308,000	$ 12,244,000		$ 1,958,000	$ 13,922,000						$ 1,200,000	$ 805,000			$ (900,000)	$ 1,154,000						$ 647,000	$ 1,036,000
Number of shore-side positions eliminated							500		100
Restructuring and Related Cost, Number of Positions not Executed			30
Expected additional expenses to be incurred								500,000		1,080,000												0	0
Additional incremental costs												7,400,000	1,300,000	7,800,000
Non controlling interest percentage						49.00%											19.00%	49.00%
Percentage of Ownership on Aircraft																	100.00%		100.00%
Gain (loss) on sale of non-core businesses																					800,000			2,900,000
Restructuring related impairments																				$ 20,000,000

XML

Fair Value Measurements and Derivative Instruments - Derivatives Not Designated as Hedging Instruments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Derivative Instruments
Amount of Gain (Loss) Recognized in Income on Derivatives			$ (24,234)	$ (8,634)
Other income (expense)
Derivative Instruments
Amount of Gain (Loss) Recognized in Income on Derivatives	(35,395)	16,971	(25,562)	(10,224)
Foreign exchange contracts | Other income (expense)
Derivative Instruments
Amount of Gain (Loss) Recognized in Income on Derivatives	(35,175)	16,789	(24,405)	(10,491)
Fuel swaps | Fuel swaps | Other income (expense)
Derivative Instruments
Amount of Gain (Loss) Recognized in Income on Derivatives	(220)	220	(1,157)	268
Fuel swaps | Options | Other income (expense)
Derivative Instruments
Amount of Gain (Loss) Recognized in Income on Derivatives	$ 0	$ (38)	$ 0	$ (1)

XML

Changes in Accumulated Other Comprehensive (Loss) Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			$ 5,671	$ (134,516)
Other comprehensive income before reclassifications			(356,774)	118,297
Amounts reclassified from accumulated other comprehensive loss			10,214	(50,697)
Total other comprehensive (loss) income	(269,559)	73,160	(346,560)	67,600
Ending balance	(340,889)	(66,916)	(340,889)	(66,916)
Changes related to cash flow derivative hedges
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			43,324	(84,505)
Other comprehensive income before reclassifications			(330,103)	109,154
Amounts reclassified from accumulated other comprehensive loss			6,924	(52,639)
Total other comprehensive (loss) income			(323,179)	56,515
Ending balance	(279,855)	(27,990)	(279,855)	(27,990)
Changes in defined benefit plans
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			(23,994)	(34,823)
Other comprehensive income before reclassifications			(6,829)	8,774
Amounts reclassified from accumulated other comprehensive loss			1,293	1,942
Total other comprehensive (loss) income			(5,536)	10,716
Ending balance	(29,530)	(24,107)	(29,530)	(24,107)
Foreign currency translation adjustments
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			(13,659)	(15,188)
Other comprehensive income before reclassifications			(19,842)	369
Amounts reclassified from accumulated other comprehensive loss			1,997	0
Total other comprehensive (loss) income			(17,845)	369
Ending balance	$ (31,504)	$ (14,819)	$ (31,504)	$ (14,819)

XML

Earnings Per Share - Antidilutive (Details) (Options and performance shares) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Options and performance shares
Antidilutive securities excluded from computation of earnings per share
Shares not included in diluted earnings per share	0	2,200	0	2,200

XML

Fair Value Measurements and Derivative Instruments - Balance Sheet Hedging Instruments (Details) (Foreign currency debt, Pullmantur and TUI Cruises)	9 Months Ended		12 Months Ended
	Sep. 30, 2014 USD ($)	Sep. 30, 2014 EUR (€)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 EUR (€)	Sep. 30, 2014 Current portion of long-term debt USD ($)	Dec. 31, 2013 Current portion of long-term debt USD ($)	Sep. 30, 2014 Long-term debt USD ($)	Dec. 31, 2013 Long-term debt USD ($)
Net investment hedge
Carrying Value of Non-derivative instrument Designated as hedging instrument	$ 169,819,000		$ 750,796,000		$ 0	$ 477,442,000	$ 169,819,000	$ 273,354,000
Notional Amount of Nonderivative Instruments	$ 169,800,000	€ 134,400,000	$ 750,800,000	€ 544,900,000

XML

Fair Value Measurement and Derivative Instruments - Offsetting of Derivative Instruments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Offsetting of Financial Assets under Master Netting Agreements [Abstract]
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet	$ 57,937	$ 188,576
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities	(57,937)	(91,627)
Net Amount of Derivative Assets	0	96,949
Offsetting of Financial Liabilities under Master Netting Agreements [Abstract]
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet	(275,036)	(100,260)
Gross Amount of Eligible Offsetting Recognized Derivative Assets	57,937	91,627
Net Amount of Derivative Liabilities	$ (217,099)	$ (8,633)

XML

Fair Value Measurements and Derivative Instruments - Credit Features (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended													9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Moody's, Baa3 Rating	Sep. 30, 2014 Moody's, Ba1 Rating	Sep. 30, 2014 Standard & Poor's, BBB- Rating Minimum	Sep. 30, 2014 Standard & Poor's, BB Rating	Sep. 30, 2014 Interest rate contracts hedge	Sep. 30, 2014 Designated as Hedging Instrument		Dec. 31, 2013 Designated as Hedging Instrument		Sep. 30, 2014 Other long-term Liabilities Designated as Hedging Instrument Interest rate swaps		Dec. 31, 2013 Other long-term Liabilities Designated as Hedging Instrument Interest rate swaps		Sep. 30, 2014 Derivative Maturity More than Five Years Minimum
Derivative Instruments
Credit ratings for senior debt			Baa3	Ba1	BBB-	BB
Maturity of interest rate instrument																5 years
Liability Derivatives	$ 275,036	$ 100,260						$ 252,678	[1]	$ 77,629	[1]	$ 50,688	[1]	$ 66,920	[1]
Number of derivative instruments							5

[1] Accounting Standard Codification 815-20 “Derivatives and Hedging.”

XML

Property and Equipment

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

In September 2014, we sold Celebrity Century to an unrelated third party for $220.0 million in cash. As part of the sale arrangement, we agreed to charter the Celebrity Century from the buyer until April 2015 to fulfill existing passenger commitments. The sale resulted in a loss of $17.4 million that was recognized within Other operating expenses in our consolidated statements of comprehensive income (loss) for the quarter and nine months ended September 30, 2014.

XML

Fair Value Measurements and Derivative Instruments - Income Statement Hedging Instruments (Details) (Fair Value Hedging, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Income on Derivative	$ 53	$ 3,980	$ 33,630	$ (51,987)
Amount of Gain (Loss) Recognized in Income on Hedged Item	7,902	8,883	(5,687)	83,655
Interest rate swaps | Interest expense, net of interest capitalized
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Income on Derivative	3,063	3,022	9,199	6,299
Amount of Gain (Loss) Recognized in Income on Hedged Item	3,968	9,503	13,435	28,102
Interest rate swaps | Other income (expense)
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Income on Derivative	(3,010)	958	24,431	(58,286)
Amount of Gain (Loss) Recognized in Income on Hedged Item	$ 3,934	$ (620)	$ (19,122)	$ 55,553

XML

Commitments and Contingencies (Details)			9 Months Ended		1 Months Ended							1 Months Ended
	Sep. 30, 2014 ship	Dec. 31, 2013	Sep. 30, 2014 Cruise ships on order USD ($)	Aug. 31, 2014 Cruise ships on order berth	Apr. 30, 2014 Unsecured term loan maturing 12 years after ship delivery Oasis Class Ship Third [Member] EUR (€)	Aug. 31, 2014 Oasis Class Ship Term Loans [Member]	Apr. 30, 2014 Oasis Class Ship Term Loans [Member]	Apr. 30, 2014 LIBOR Unsecured term loan maturing 12 years after ship delivery Oasis Class Ship Third [Member]	Aug. 31, 2014 Royal Caribbean International Cruise Ships [Member] Oasis class ship	Apr. 30, 2014 Royal Caribbean International Cruise Ships [Member] Oasis class ship EUR (€)	Dec. 31, 2013 Royal Caribbean International Cruise Ships [Member] Oasis class ship EUR (€)	Oct. 23, 2014 Class Action Complaint [Member] crew_member
Commitments and Contingencies
Number of Ships on Order	5
Aggregate cost of ships expected to enter service			$ 6,000,000,000
Deposit for the purchase of ships expected to enter service			571,400,000
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate	29.30%	36.30%
Long term debt, principal amount					178,400,000
Long term debt, term					12 years
Long term debt, interest rate					2.53%
Margin on floating rate base (as a percent)								1.20%
Anticipated loan balance										€ 713,800,000	€ 892,200,000
Guarantee Percent						100.00%	100.00%
Approximate Berths				5,450
Percentage of Bank Committed Financing									80.00%
Number of crew members submitting demands for arbitration (in excess)												450

XML

Goodwill and Other Assets (Details)	9 Months Ended					9 Months Ended				9 Months Ended
	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Dec. 31, 2013 USD ($)	Sep. 30, 2014 Nautalia	Mar. 31, 2014 Pullmantur Air	Sep. 30, 2014 Grand Bahamas Shipyard Ltd. USD ($)	Sep. 30, 2014 Grand Bahamas Shipyard Ltd. Not Primary Beneficiary USD ($)	Dec. 31, 2013 Grand Bahamas Shipyard Ltd. Not Primary Beneficiary USD ($)	Sep. 30, 2014 Pullmantur aircraft	Sep. 30, 2014 TUI Cruises GmbH joint venture USD ($)	Sep. 30, 2014 TUI Cruises GmbH joint venture EUR (€)	Jan. 31, 2014 TUI Cruises GmbH joint venture EUR (€)	Dec. 31, 2013 TUI Cruises GmbH joint venture USD ($)	Dec. 31, 2011 TUI Cruises GmbH joint venture EUR (€)	Sep. 30, 2014 Pullmantur Air	Mar. 31, 2014 Pullmantur Air	Sep. 30, 2014 Equity Grand Bahamas Shipyard Ltd. Not Primary Beneficiary USD ($)	Dec. 31, 2013 Equity Grand Bahamas Shipyard Ltd. Not Primary Beneficiary USD ($)	Sep. 30, 2014 Loans Grand Bahamas Shipyard Ltd. Not Primary Beneficiary USD ($)	Dec. 31, 2013 Loans Grand Bahamas Shipyard Ltd. Not Primary Beneficiary USD ($)	Sep. 30, 2014 Pullmantur USD ($)	Sep. 30, 2014 Tradenames and Trademarks Pullmantur USD ($)
Goodwill and Other Assets
Goodwill	$ 426,538,000		$ 439,231,000																		$ 139,500,000
Indefinite-Lived Intangible Assets (Excluding Goodwill)																						196,300,000
Percentage of ownership interest						40.00%				50.00%	50.00%
Investments in entity							54,300,000	56,100,000		350,800,000			354,300,000
Underlying equity in net assets																	8,200,000	6,400,000
Advances to Affiliate																			46,100,000	49,700,000
Principal and interest payments received	76,167,000	23,372,000				3,600,000
Non controlling interest percentage				19.00%	49.00%										19.00%	49.00%
Number of aircraft									4
Percentage of Ownership on Aircraft									100.00%						100.00%
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount	10,400,000
Debt, guaranteed percentage										50.00%	50.00%
Unsecured term loan											180,000,000.0
Amount outstanding on bank loan										153,500,000	121,500,000
Line of credit provided to TUI Cruises												125,000,000.0		90,000,000.0
Interest rate on line of credit provided to TUI Cruises (as a percent)												5.00%
Additional borrowing on line of credit provided to TUI Cruises										$ 57,700,000	€ 45,700,000
Bank financing commitment percentage										80.00%	80.00%
Reduction of current ownership interest (as a percent)										37.50%	37.50%

XML

Fair Value Measurements and Derivative Instruments - Designated Cash Flow Hedges (Details) (Cash flow hedge, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion)	$ (252,310)	$ 91,108	$ (330,103)	$ 109,154
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	(2,684)	29,535	(6,924)	52,639
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	(8,037)	(945)	(7,697)	(4,897)
Cross currency swaps | Interest expense, net of interest capitalized
Effect of derivative instruments involved in hedging on the consolidated financial statements
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	0	(890)	(261)	(2,641)
Interest rate swaps | Other income (expense)
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion)	4,437	(5,816)	(62,309)	87,672
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	17	(7)	(78)	420
Foreign currency forward contracts | Other income (expense)
Effect of derivative instruments involved in hedging on the consolidated financial statements
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	(238)	19,089	(4,052)	18,612
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	15	15	(12)	5
Foreign currency forward contracts | Depreciation and amortization expenses
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion)	(163,387)	47,338	(172,629)	38,343
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	(450)	(449)	(1,348)	(1,348)
Foreign currency forward contracts | Interest expense, net of interest capitalized
Effect of derivative instruments involved in hedging on the consolidated financial statements
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	0	(217)	(57)	(222)
Foreign currency collar options | Depreciation and amortization expenses
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion)	(21,904)	16,801	(30,638)	5,554
Fuel swaps | Swaps | Other income (expense)
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	(8,069)	(953)	(7,607)	(5,322)
Fuel swaps | Swaps | Fuel cost
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion)	(71,456)	32,785	(64,527)	(22,415)
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	$ (1,996)	$ 12,002	$ (1,206)	$ 38,238

XML

Commitments and Contingencies - Leases (Details) (Brilliance of the Seas) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended				9 Months Ended
	Jul. 31, 2002	Sep. 30, 2014 USD ($)	Sep. 30, 2014 GBP (£)	Sep. 30, 2013 USD ($)	Sep. 30, 2013 GBP (£)	Sep. 30, 2014 USD ($)	Sep. 30, 2014 GBP (£)	Sep. 30, 2013 USD ($)	Sep. 30, 2013 GBP (£)
Commitments and Contingencies
Operating lease		$ 5.1	£ 3.1	$ 4.8	£ 3.1	$ 15.4	£ 9.3	$ 14.1	£ 9.2
Initial lease expiration period	25 years
Optional lease cancellation period	18 years
Minimum period of prior notice to cancel lease	1 year
Future payment if lease terminated		$ 101.5	£ 62.6

XML

Commitments and Contingencies - Debt (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Commitments and Contingencies Disclosure
Stated or notional amounts included in the indemnification clauses	$ 0
Change of control provisions in debt covenants
Number of months considered to determine requirement of prepayment of debts	24 months
Line of Credit | Minimum
Change of control provisions in debt covenants
Debt instrument covenant, minimum percentage of ownership by a person	33.00%
Debt Securities | Minimum
Change of control provisions in debt covenants
Debt instrument covenant, minimum percentage of ownership by a person	50.00%

XML

Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Net income for basic and diluted earnings per share	$	490,248	$	365,701	$	654,378	$	466,674
Weighted-average common shares outstanding	222,523		219,744		222,007		219,450
Dilutive effect of stock options, performance share awards and restricted stock awards	1,336		1,260		1,344		1,294
Diluted weighted-average shares outstanding	223,859		221,004		223,351		220,744
Basic earnings per share	$	2.20	$	1.66	$	2.95	$	2.13
Diluted earnings per share	$	2.19	$	1.65	$	2.93	$	2.11

Diluted earnings per share does not reflect options to purchase an aggregate of 2.2 million shares for each of the quarter and nine months ended September 30, 2013, respectively, because the effect of including them would have been antidilutive. There were no antidilutive shares for thequarter and nine months ended September 30, 2014.

XML

Shareholders' Equity (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014 Subsequent Event [Member]
Subsequent Event [Line Items]
Dividend declared (in dollars per share)	$ 0.30	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.12	$ 0.12
Dividend paid in the same quarter declared (in dollars per share)		$ 0.25	$ 0.25			$ 0.12	$ 0.12
Prior quarter dividend paid (in dollars per share)			$ 0.25	$ 0.25				$ 0.30

XML

Fair Value Measurements and Derivative Instruments - Fuel Price Risk (Details) (Fuel Price Risk, USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Derivative Instruments
Estimated unrealized net gains associated with cash flow hedges pertaining to fuel swap agreements expected to be reclassified to earnings from accumulated other comprehensive income loss	$ (33.7)	$ 9.5
Swaps 2014
Derivative Instruments
Fuel Swap Agreements (metric tons)	731,000	762,000
Percentage of projected requirements	54.00%	57.00%
Swaps 2015
Derivative Instruments
Fuel Swap Agreements (metric tons)	778,000	665,000
Percentage of projected requirements	56.00%	45.00%
Swaps 2016
Derivative Instruments
Fuel Swap Agreements (metric tons)	600,000	372,000
Percentage of projected requirements	41.00%	25.00%
Swaps 2017
Derivative Instruments
Fuel Swap Agreements (metric tons)	306,000	74,000
Percentage of projected requirements	20.00%	5.00%

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
Passenger ticket revenues	$ 1,786,746	$ 1,672,051	$ 4,590,048	$ 4,432,542
Onboard and other revenues	602,016	639,698	1,665,981	1,673,194
Total revenues	2,388,762	2,311,749	6,256,029	6,105,736
Cruise operating expenses:
Commissions, transportation and other	396,916	378,291	1,068,961	1,017,734
Onboard and other	182,658	178,269	456,296	440,466
Payroll and related	214,260	213,860	634,232	632,758
Food	120,908	119,104	358,172	351,117
Fuel	230,818	215,686	718,081	689,809
Other operating	281,322	311,591	825,794	890,726
Total cruise operating expenses	1,426,882	1,416,801	4,061,536	4,022,610
Marketing, selling and administrative expenses	239,662	249,954	790,957	781,936
Depreciation and amortization expenses	192,448	188,541	579,063	564,089
Restructuring charges	308	12,244	1,958	13,922
Operating Income	529,462	444,209	822,515	723,179
Other income (expense):
Interest income	2,117	3,299	8,023	10,451
Interest expense, net of interest capitalized	(60,100)	(79,654)	(193,931)	(256,713)
Extinguishment of unsecured senior notes	0	(4,206)	0	(4,206)
Other income	18,769	2,053	17,771	(6,037)
Total other income (expense)	(39,214)	(78,508)	(168,137)	(256,505)
Net Income	490,248	365,701	654,378	466,674
Earnings per Share:
Basic (in dollars per share)	$ 2.20	$ 1.66	$ 2.95	$ 2.13
Diluted (in dollars per share)	$ 2.19	$ 1.65	$ 2.93	$ 2.11
Weighted-Average Shares Outstanding:
Basic (in shares)	222,523	219,744	222,007	219,450
Diluted (in shares)	223,859	221,004	223,351	220,744
Comprehensive Income
Net Income	490,248	365,701	654,378	466,674
Other comprehensive (loss) income:
Foreign currency translation adjustments	(18,482)	6,164	(17,845)	369
Change in defined benefit plans	(1,451)	5,423	(5,536)	10,716
(Loss) gain on cash flow derivative hedges	(249,626)	61,573	(323,179)	56,515
Total other comprehensive (loss) income	(269,559)	73,160	(346,560)	67,600
Comprehensive Income	$ 220,689	$ 438,861	$ 307,818	$ 534,274

XML

Fair Value Measurements and Derivative Instruments - Non-Derivative Net Investment (Details) (Foreign currency debt, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net investment hedge
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	$ 13,408	$ (26,347)	$ 18,038	$ (21,593)
Amount of Ineffectiveness on Net Investment Hedges	0	0	0	0
Other income (expense)
Net investment hedge
Amount of Gain (Loss) Recognized in OCI (Effective Portion)	13,408	(26,347)	18,038	(21,593)
Amount of Ineffectiveness on Net Investment Hedges	$ 0	$ 0	$ 0	$ 0

XML

General

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

Description of Business

We are a global cruise company.  We own Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisières de France and a 50% joint venture interest in TUI Cruises.

Basis for Preparation of Consolidated Financial Statements

The unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates. See Note 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of our significant accounting policies.

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. See Note 6. Goodwill and Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method. We consolidate the operating results of Pullmantur and CDF Croisières de France on a two-month lag to allow for more timely preparation of our consolidated financial statements. On March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale during the second quarter of 2014. See Note 11. Restructuring Charges for further discussion on the Pullmantur sales transaction. No material events or other transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of August and September 2014 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended September 30, 2014.

We believe the accompanying unaudited consolidated financial statements contain all normal recurring accruals necessary for a fair presentation. Our revenues are seasonal and results for interim periods are not necessarily indicative of results for the entire year.

XML

Fair Value Measurements and Derivative Instruments (Details) (Fair Value, Measurements, Nonrecurring, USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Total
Assets:
Cash and cash equivalents	$ 183,181	[1]	$ 204,687	[1]
Total Assets	183,181		204,687
Liabilities:
Long-term debt (including current portion of long-term debt)	7,241,824	[2]	8,431,220	[2]
Total Liabilities	7,241,824		8,431,220
Level 1
Assets:
Cash and cash equivalents	183,181	[1],[3]	204,687	[1],[3]
Total Assets	183,181	[3]	204,687	[3]
Liabilities:
Long-term debt (including current portion of long-term debt)	1,844,607	[2],[3]	2,888,255	[2],[3]
Total Liabilities	1,844,607	[3]	2,888,255	[3]
Level 2
Assets:
Cash and cash equivalents	0	[1]	0	[1]
Total Assets	0		0
Liabilities:
Long-term debt (including current portion of long-term debt)	5,397,217	[2]	5,542,965	[2]
Total Liabilities	5,397,217		5,542,965
Level 3
Assets:
Cash and cash equivalents	0	[1]	0	[1]
Total Assets	0		0
Liabilities:
Long-term debt (including current portion of long-term debt)	0	[2]	0	[2]
Total Liabilities	0		0
Reported Value Measurement
Assets:
Cash and cash equivalents	183,181	[1]	204,687	[1]
Total Assets	183,181		204,687
Liabilities:
Long-term debt (including current portion of long-term debt)	6,931,171	[2]	8,020,061	[2]
Total Liabilities	$ 6,931,171		$ 8,020,061

[1] Consists of cash and marketable securities with original maturities of less than 90 days.

[2] Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations.

[3] Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

XML

General (Details)				9 Months Ended
	Sep. 30, 2014 Minimum	Sep. 30, 2014 Maximum	Sep. 30, 2014 TUI Cruises	Sep. 30, 2014 Pullmantur and CDF Croisieres de France	Sep. 30, 2014 Pullmantur Air	Mar. 31, 2014 Pullmantur Air
General
Investment in a joint venture, percentage of interest	20.00%	50.00%	50.00%
Time lag in consolidation				2 months
Non controlling interest percentage					19.00%	49.00%

XML

Fair Value Measurements and Derivative Instruments - Recurring (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Assets:
Derivative financial instruments	$ 0		$ 96,949
Liabilities:
Derivative financial instruments	217,099		8,633
Fair Value, Measurements, Recurring | Total
Assets:
Derivative financial instruments	57,937	[1]	188,576	[1]
Investments	5,678	[2]	6,044	[2]
Total Assets	63,615		194,620
Liabilities:
Derivative financial instruments	275,036	[3]	100,260	[3]
Total Liabilities	275,036		100,260
Fair Value, Measurements, Recurring | Level 1
Assets:
Investments	5,678	[2],[4]	6,044	[2],[4]
Total Assets	5,678	[4]	6,044	[4]
Fair Value, Measurements, Recurring | Level 2
Assets:
Derivative financial instruments	57,937	[1],[5]	188,576	[1],[5]
Total Assets	57,937	[5]	188,576	[5]
Liabilities:
Derivative financial instruments	275,036	[3],[5]	100,260	[3],[5]
Total Liabilities	$ 275,036	[5]	$ 100,260	[5]

[1] Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

[2] Consists of exchange-traded equity securities and mutual funds.

[3] Consists of interest rate swaps, fuel swaps, foreign currency forward contracts and foreign currency collar options. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

[4] Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

[5] Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

XML

Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Net income for basic and diluted earnings per share (in dollars)	$ 490,248	$ 365,701	$ 654,378	$ 466,674
Weighted-average common shares outstanding	222,523	219,744	222,007	219,450
Dilutive effect of stock options, performance share awards and restricted stock awards (in shares)	1,336	1,260	1,344	1,294
Diluted weighted-average shares outstanding	223,859	221,004	223,351	220,744
Basic earnings per share (in dollars per share)	$ 2.20	$ 1.66	$ 2.95	$ 2.13
Diluted earnings per share (in dollars per share)	$ 2.19	$ 1.65	$ 2.93	$ 2.11

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Revenues and Expenses

Historically, we recognized revenues and cruise operating costs for our shorter voyages (voyages of ten days or less) upon voyage completion while we recognized revenues and cruise operating costs for voyages in excess of ten days on a pro-rata basis. We followed this completed voyage recognition approach on our shorter voyages because the difference between prorating revenue from such voyages and recognizing such revenue at the completion of the voyage was immaterial to our consolidated financial statements. As of September 30, 2014, we have changed our methodology and recognized passenger ticket revenues, revenues from onboard and other goods and services and all associated cruise operating costs for all of our uncompleted voyages on a pro-rata basis. We believe that recognizing revenues and cruise operating costs on a pro-rata basis for all voyages is preferable as revenues and expenses are recorded in the period in which the revenue generating activities are performed.

The effect of this change was an increase to net income of $16.3 million for each of the quarter and nine months ended September 30, 2014 and was immaterial to these periods. In addition, the change has not been retrospectively applied to prior periods, as the impact of prorating all voyages was immaterial to the respective periods presented.

Recent Accounting Pronouncements

In January 2014, amended guidance was issued regarding the accounting for service concession arrangements. The new guidance defines a service concession as an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates and maintains the grantor’s infrastructure for a specified period of time and in return receives payments from the grantor and or third party user for use of the infrastructure. The guidance prohibits the operating entity from accounting for a service concession arrangement as a lease and from recording the infrastructure used in the arrangement within property plant and equipment. This guidance must be applied using a modified retrospective approach and will be effective for our interim and annual reporting periods beginning after December 15, 2014. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have a material impact to our consolidated financial statements.

In April 2014, amended guidance was issued changing the requirements for reporting discontinued operations and enhancing the disclosures in this area. The new guidance requires a disposal of a component of an entity or a group of components of an entity to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The guidance will be effective prospectively for our interim and annual reporting periods beginning after December 15, 2014. The guidance will impact the reporting and disclosures of future disposals, if any.

In May 2014, amended guidance was issued to clarify the principles used to recognize revenue for all entities. The guidance is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in the prior accounting guidance. This guidance must be applied using one of two retrospective application methods and will be effective for our interim and annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. We are currently evaluating the impact of the adoption of this newly issued guidance to our consolidated financial statements.

In August 2014, guidance was issued requiring management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. This guidance will be effective for our annual reporting period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements.

Other

Revenues and expenses include port costs that vary with guest head counts. The amounts of such port costs included in passenger ticket revenues on a gross basis were $232.7 million and $135.8 million for the third quarters of 2014 and 2013, respectively, and $494.5 million and $368.5 million for the nine months ended September 30, 2014 and 2013, respectively.

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 183,181	$ 204,687
Trade and other receivables, net	252,918	259,746
Inventories	136,162	151,244
Prepaid expenses and other assets	273,112	252,852
Derivative financial instruments	14,853	87,845
Total current assets	860,226	956,374
Property and equipment, net	17,211,775	17,517,752
Goodwill	426,538	439,231
Other assets	1,101,371	1,159,590
Total assets	19,599,910	20,072,947
Current liabilities
Current portion of long-term debt	772,245	1,563,378
Accounts payable	340,702	372,226
Accrued interest	66,332	103,025
Accrued expenses and other liabilities	719,349	563,702
Customer deposits	1,839,112	1,664,679
Total current liabilities	3,737,740	4,267,010
Long-term debt	6,213,829	6,511,426
Other long-term liabilities	627,313	486,246
Commitments and contingencies (Note 7)
Shareholders’ equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)	0	0
Common stock ($0.01 par value; 500,000,000 shares authorized; 232,967,271 and 230,782,315 shares issued, September 30, 2014 and December 31, 2013, respectively)	2,329	2,308
Paid-in capital	3,241,723	3,159,038
Retained earnings	6,531,569	6,054,952
Accumulated other comprehensive (loss) income	(340,889)	5,671
Treasury stock (10,308,683 common shares at cost, September 30, 2014 and December 31, 2013)	(413,704)	(413,704)
Total shareholders’ equity	9,021,028	8,808,265
Total liabilities and shareholders' equity	$ 19,599,910	$ 20,072,947

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Basis of Accounting

Basis for Preparation of Consolidated Financial Statements

The unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates. See Note 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of our significant accounting policies.

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. See Note 6. Goodwill and Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method. We consolidate the operating results of Pullmantur and CDF Croisières de France on a two-month lag to allow for more timely preparation of our consolidated financial statements. On March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale during the second quarter of 2014. See Note 11. Restructuring Charges for further discussion on the Pullmantur sales transaction. No material events or other transactions affecting Pullmantur or CDF Croisières de France have occurred during the two-month lag period of August and September 2014 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended September 30, 2014.

We believe the accompanying unaudited consolidated financial statements contain all normal recurring accruals necessary for a fair presentation. Our revenues are seasonal and results for interim periods are not necessarily indicative of results for the entire year.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2014, amended guidance was issued regarding the accounting for service concession arrangements. The new guidance defines a service concession as an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates and maintains the grantor’s infrastructure for a specified period of time and in return receives payments from the grantor and or third party user for use of the infrastructure. The guidance prohibits the operating entity from accounting for a service concession arrangement as a lease and from recording the infrastructure used in the arrangement within property plant and equipment. This guidance must be applied using a modified retrospective approach and will be effective for our interim and annual reporting periods beginning after December 15, 2014. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have a material impact to our consolidated financial statements.

In April 2014, amended guidance was issued changing the requirements for reporting discontinued operations and enhancing the disclosures in this area. The new guidance requires a disposal of a component of an entity or a group of components of an entity to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The guidance will be effective prospectively for our interim and annual reporting periods beginning after December 15, 2014. The guidance will impact the reporting and disclosures of future disposals, if any.

In May 2014, amended guidance was issued to clarify the principles used to recognize revenue for all entities. The guidance is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in the prior accounting guidance. This guidance must be applied using one of two retrospective application methods and will be effective for our interim and annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. We are currently evaluating the impact of the adoption of this newly issued guidance to our consolidated financial statements.

In August 2014, guidance was issued requiring management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. This guidance will be effective for our annual reporting period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this newly issued guidance is not expected to have an impact to our consolidated financial statements.

Other

Other

Revenues and expenses include port costs that vary with guest head counts. The amounts of such port costs included in passenger ticket revenues on a gross basis were $232.7 million and $135.8 million for the third quarters of 2014 and 2013, respectively, and $494.5 million and $368.5 million for the nine months ended September 30, 2014 and 2013, respectively.

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 16, 2014
Document and Entity Information
Entity Registrant Name	ROYAL CARIBBEAN CRUISES LTD
Entity Central Index Key	0000884887
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		222,673,323
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

XML

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Reconciliation Between Basic and Diluted Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Net income for basic and diluted earnings per share	$	490,248	$	365,701	$	654,378	$	466,674
Weighted-average common shares outstanding	222,523		219,744		222,007		219,450
Dilutive effect of stock options, performance share awards and restricted stock awards	1,336		1,260		1,344		1,294
Diluted weighted-average shares outstanding	223,859		221,004		223,351		220,744
Basic earnings per share	$	2.20	$	1.66	$	2.95	$	2.13
Diluted earnings per share	$	2.19	$	1.65	$	2.93	$	2.11

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	232,967,271	230,782,315
Treasury stock, common shares	10,308,683	10,308,683

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As of September 30, 2014, the aggregate cost of our five ships on order (excluding TUI Cruises' ships on order) was approximately $6.0 billion, of which we had deposited $571.4 million as of such date. Approximately 29.3% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at September 30, 2014. (See Note 10. Fair Value Measurements and Derivative Instruments).

In April 2014, we entered into a credit agreement for the US dollar financing of a portion of the third Oasis-class ship. The credit agreement makes available to us an unsecured term loan in an amount up to the US dollar equivalent of €178.4 million. The loan amortizes semi-annually and will mature 12 years following delivery of the ship. At our election, prior to the ship delivery, interest on the loan will accrue either (1) at a fixed rate of 2.53% (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 1.20%. In connection with this credit agreement, we amended the €892.2 million credit agreement, originally entered into in 2013 to finance the ship, reducing the maximum facility amount to approximately €713.8 million. Both the existing Euro-denominated facility and the new US dollar-denominated facility are 100% guaranteed by Compagnie Française d’Assurance pour le Commerce Extérieur (“COFACE”), the export credit agency of France.

In August 2014, our conditional agreement with STX France to build the fourth Oasis-class ship for Royal Caribbean International became effective. We received commitments for the unsecured financing of the ship for up to 80% of the ship’s contract price through a facility to be guaranteed 100% by COFACE. The ship will have a capacity of approximately 5,450 berths and is expected to enter service in the second quarter of 2018.

Litigation

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2013, a class action complaint was filed in June 2011 against Royal Caribbean Cruises Ltd. in the United States District Court for the Southern District of Florida on behalf of a purported class of stateroom attendants employed onboard Royal Caribbean International cruise vessels. The complaint alleged that the stateroom attendants were required to pay other crew members to help with their duties and that certain stateroom attendants were required to work back of house assignments without the ability to earn gratuities, in each case in violation of the U.S. Seaman’s Wage Act. In May 2012, the district court granted our motion to dismiss the complaint on the basis that the applicable collective bargaining agreement requires any such claims to be arbitrated. The United States Court of Appeals, 11th Circuit, affirmed the district court’s dismissal and denied the plaintiffs’ petition for re-hearing and re-hearing en banc. In October 2014, the United States Supreme Court denied the plaintiffs’ request to review the order compelling arbitration. Shortly thereafter, in excess of 450 crew members submitted demands for arbitration. The demands make substantially the same allegations as in the federal court complaint and are similarly seeking damages, wage penalties and interest in an indeterminate amount. Unlike the federal court complaint, the demands for arbitration are being brought individually by each of the crew members and not on behalf of a purported class of stateroom attendants. At this time, we are unable to estimate the possible impact of this matter on us. However, we believe the underlying claims made against us are without merit, and we intend to vigorously defend ourselves against them.

We are routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

Other

In July 2002, we entered into an operating lease denominated in British pound sterling for the Brilliance of the Seas. The lease payments vary based on sterling LIBOR and are included in Other operating income (expenses) in our consolidated statements of comprehensive income (loss). Brilliance of the Seas lease expense amounts were approximately £3.1 million and £3.1 million, or approximately $5.1 million and $4.8 million, for the quarters ended September 30, 2014 and September 30, 2013, respectively, and were approximately £9.3 million and £9.2 million, or approximately $15.4 million and $14.1 million for the nine months ended September 30, 2014 and September 30, 2013, respectively. The lease has a contractual life of 25 years; however, both the lessor and we have certain rights to cancel the lease at year 18 (i.e. 2020) upon advance notice given approximately one year prior to cancellation. In the event of early termination at year 18, we have the option to cause the sale of the vessel at its fair value and to use the proceeds towards the applicable termination payment. Alternatively, we could opt at such time to make a termination payment of approximately £62.6 million, or approximately $101.5 million based on the exchange rate at September 30, 2014, and relinquish our right to cause the sale of the vessel. Although we do not believe that exercise of this early termination provision is probable, we evaluate, from time to time, our alternatives under the lease, including the potential purchase of the vessel.

Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates, capital allowance deductions and certain unfavorable determinations which may be made by the United Kingdom tax authorities. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in our lease payments due to the various circumstances, timing or a combination of events that could trigger such indemnifications. The United Kingdom tax authorities are disputing the lessor’s accounting treatment of the lease and the lessor and tax authorities are in discussions on the matter. If the characterization of the lease by the lessor is ultimately determined to be incorrect, we could be required to indemnify the lessor under certain circumstances. The lessor has advised us that they believe their characterization of the lease is correct. Based on the foregoing and our review of available information, we do not believe an indemnification payment is probable. However, if the lessor loses its dispute and we are required to indemnify the lessor, we cannot at this time predict the impact that such an occurrence would have on our financial condition and results of operations.

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable.

If (i) any person other than A. Wilhelmsen AS. and Cruise Associates and their respective affiliates (the “Applicable Group”) acquires ownership of more than 33% of our common stock and the Applicable Group owns less of our common stock than such person, or (ii) subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. Certain of our outstanding debt securities also contain change of control provisions that would be triggered by the acquisition of greater than 50% of our common stock by a person other than a member of the Applicable Group coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

XML

Goodwill and Other Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Other Assets

Goodwill and Other Assets

Goodwill and Other Assets

As of September 30, 2014, the carrying amounts of goodwill and trademarks and trade names attributable to our Pullmantur reporting unit were $139.5 million and $196.3 million, respectively. Pullmantur is a brand targeted primarily at the Spanish, Portuguese and Latin American markets, with an increasing focus on Latin America. The persistent economic instability in these markets has created significant uncertainties in forecasting operating results and future cash flows used in our impairment analyses. We continue to monitor economic events in these markets for their potential impact on Pullmantur’s business and valuation. However, based on our most recent projections, we do not believe an interim impairment evaluation of Pullmantur’s goodwill or trademarks and trade names is warranted as of September 30, 2014.

If there are relatively modest changes to the projected future cash flows used in the impairment analyses, especially in Net Yields, or if anticipated transfers of vessels from our other cruise brands to the Pullmantur fleet do not take place, it is reasonably possible that an impairment charge of Pullmantur's reporting unit’s goodwill and trademarks and trade names may be required. Of these factors, the planned transfers of vessels to the Pullmantur fleet is most significant to the projected future cash flows. If the transfers do not occur, we will likely fail step one of the impairment test. We will evaluate these intangible assets for potential impairment during our annual impairment test scheduled for the fourth quarter of 2014.

Variable Interest Entities

A Variable Interest Entity (“VIE”) is an entity in which the equity investors have not provided enough equity to finance the entity’s activities or the equity investors (1) cannot directly or indirectly make decisions about the entity’s activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity’s activities involve or are conducted on behalf of an investor with a disproportionately small voting interest.

We have determined that Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair and maintenance facility in which we have a 40% noncontrolling interest, is a VIE. The facility serves cruise and cargo ships, oil and gas tankers, and offshore units.  We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. We have determined that we are not the primary beneficiary of this facility as we do not have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of September 30, 2014, the net book value of our investment in Grand Bahama, was approximately $54.3 million, consisting of $8.2 million in equity and $46.1 million in loans. As of December 31, 2013, the net book value of our investment in Grand Bahama was approximately $56.1 million, consisting of $6.4 million in equity and $49.7 million in loans. These amounts represent our maximum exposure to loss as we are not contractually required to provide any financial or other support to the facility. The majority of our loans to Grand Bahama are in non-accrual status and the majority of this amount is included within Other assets in our consolidated balance sheets. During the first nine months of 2014, we received approximately $3.6 million in principal and interest payments related to loans that are in accrual status from Grand Bahama and recorded income associated with our investment in Grand Bahama. We monitor credit risk associated with these loans through our participation on Grand Bahama’s board of directors along with our review of Grand Bahama’s financial statements and projected cash flows. Based on this review, we believe the risk of loss associated with these loans was not probable as of September 30, 2014.

On March 31, 2014, as part of Pullmantur's sale of its non-core businesses, Pullmantur sold the majority of its 49% interest in Pullmantur Air S.A. ("Pullmantur Air"), a small aircraft business that operates four aircraft in support of Pullmantur's operations. Post-sale, we retained a 19% interest in Pullmantur Air as well as 100% ownership of the aircraft, which are now being dry leased to Pullmantur Air. We will continue to utilize the services provided by Pullmantur Air. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale in the second quarter of 2014. As of the date of the sale, we determined that Pullmantur Air was no longer a VIE and have accounted for our 19% investment in Pullmantur Air under the cost method of accounting.

Prior to the sale, we determined that Pullmantur Air was a VIE for which we were the primary beneficiary and we consolidated the assets and liabilities of Pullmantur Air in our consolidated balance sheets as of December 31, 2013. We did not separately disclose the assets and liabilities of Pullmantur Air as they were immaterial to our December 31, 2013 consolidated financial statements. See Note 11. Restructuring Charges for further discussion on the sales transaction.

Additionally, in connection with the sale of Pullmantur's non-core businesses, Pullmantur sold the majority of its land-based tour operations and travel agency, retaining a 19% noncontrolling interest in both Nautalia Viajes, S.L. ("Nautalia"), a small travel agency network, and Global Tour Operación, S.L. ("Global Tour"), a small tour operations business. We will continue to utilize the services provided by these businesses, in addition to services from other travel agency and tour operations businesses. Consistent with our two-month lag Pullmantur reporting period, we reported the impact of this sale in our consolidated financial statements in the second quarter of 2014. As of the date of the sale, we determined that Nautalia and Global Tour were VIEs for which we were not the primary beneficiaries as we do not have the power to direct the activities that most significantly impact the economic performance of these entities. In accordance with authoritative guidance for nonconsolidated VIEs, we have accounted for our 19% investment in these companies under the equity method of accounting.

We also extended a term loan facility to Nautalia due June 30, 2016 and maintained commercial and bank guarantees on behalf of Nautalia, Pullmantur Air and Global Tour for a maximum period of twelve months from the date of sale. As of September 30, 2014, our maximum exposure to loss related to these transactions was $10.4 million. Except for the aforementioned, we are not contractually required to provide any financial or other support to these businesses.

We have determined that TUI Cruises GmbH, our 50%-owned joint venture, which operates the brand TUI Cruises, is a VIE. As of September 30, 2014 and December 31, 2013, our investment in TUI Cruises, including equity and loans, was approximately $350.8 million and $354.3 million, respectively. The majority of this amount was included within Other assets in our consolidated balance sheets. In addition, we and TUI AG, our joint venture partner, have each guaranteed the repayment of 50% of a €180.0 million bank loan provided to TUI Cruises due in 2016. Our investment amount and the potential obligations under this guarantee are substantially our maximum exposure to loss. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting. As of September 30, 2014, TUI Cruises’ bank loan that is guaranteed by the shareholders had a remaining balance of €121.5 million, or approximately $153.5 million based on the exchange rate at September 30, 2014. This bank loan amortizes quarterly and is secured by first mortgages on both Mein Schiff 1 and Mein Schiff 2. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable.

In connection with our sale of Celebrity Mercury to TUI Cruises in 2011, we provided a debt facility to TUI Cruises in the amount of up to €90.0 million and maturing in June 2018. During 2014, we made several amendments to the facility, including increasing the maximum amount of the facility to €125.0 million and providing TUI Cruises with the ability to draw upon the available capacity through December 31, 2015 to fund installment payments for its newbuild ships. Any amounts drawn under the facility to fund newbuild installments mature in March 2016. Interest under the loan accrues at the rate of 5.0% per annum. This facility is 50% guaranteed by TUI AG and is secured by second and third mortgages on Mein Schiff 1 and Mein Schiff 2. The outstanding principal amount of the facility as of September 30, 2014 was €45.7 million, or $57.7 million based on the exchange rate at September 30, 2014.

TUI Cruises currently has three newbuild ships on order with STX Finland: Mein Schiff 4, scheduled for delivery in the second quarter of 2015, Mein Schiff 5, scheduled for delivery in the second quarter of 2016 and Mein Schiff 6, scheduled for delivery in the second quarter of 2017. TUI Cruises has in place commitments for the financing of up to 80% of the contract price of each ship on order. The remaining portion of the contract price of the ships will be funded through TUI Cruises’ cash flows from operations and/or shareholder loans (via the debt facility described above or otherwise) and/or equity contributions from us and TUI AG. The various ship construction and credit agreements include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.5% through 2019.

XML

Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accounting Policies [Abstract]
Impact of voyage proration change	$ 16,300,000		$ 16,300,000
Gross amount of port costs included in passenger ticket revenues	$ 232,700,000	$ 135,800,000	$ 494,500,000	$ 368,500,000

XML

Changes in Accumulated Other Comprehensive (Loss) Income (Tables)

9 Months Ended

Sep. 30, 2014

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of changes in accumulated other comprehensive income (loss) by component

The following table presents the changes in accumulated other comprehensive (loss) income by component for the nine months ended September 30, 2014 and 2013 (in thousands):

	Accumulated Other Comprehensive loss for the Nine Months Ended September 30, 2014												Accumulated Other Comprehensive loss for the Nine Months Ended September 30, 2013
	Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss			Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss
Accumulated comprehensive income (loss) at beginning of the year	$	43,324		$	(23,994	)	$	(13,659	)	$	5,671		$	(84,505	)	$	(34,823	)	$	(15,188	)	$	(134,516	)
Other comprehensive (loss) income before reclassifications	(330,103		)	(6,829		)	(19,842		)	(356,774		)	109,154			8,774			369			118,297
Amounts reclassified from accumulated other comprehensive income (loss)	6,924			1,293			1,997			10,214			(52,639		)	1,942			—			(50,697		)
Net current-period other comprehensive (loss) income	(323,179		)	(5,536		)	(17,845		)	(346,560		)	56,515			10,716			369			67,600
Ending balance	$	(279,855	)	$	(29,530	)	$	(31,504	)	$	(340,889	)	$	(27,990	)	$	(24,107	)	$	(14,819	)	$	(66,916	)

Schedule of reclassifications out of accumulated other comprehensive income (loss)

The following table presents reclassifications out of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2014 and 2013 (in thousands):

	Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive (Loss) Income into Income
Details About Accumulated Other Comprehensive (Loss) Income Components	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013			Affected Line Item in Statements of Comprehensive (Loss) Income
(Loss) gain on cash flow derivative hedges:
Cross currency swaps	$	—		$	(890	)	$	(261	)	$	(2,641	)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(450		)	(449		)	(1,348		)	(1,348		)	Depreciation and amortization expenses
Foreign currency forward contracts	(238		)	19,089			(4,052		)	18,612			Other income (expense)
Foreign currency forward contracts	—			(217		)	(57		)	(222		)	Interest expense, net of interest capitalized
Fuel swaps	(1,996		)	12,002			(1,206		)	38,238			Fuel
	(2,684		)	29,535			(6,924		)	52,639
Amortization of defined benefit plans:
Actuarial loss	(222		)	(438		)	(666		)	(1,315		)	Payroll and related
Prior service costs	(209		)	(209		)	(627		)	(627		)	Payroll and related
	(431		)	(647		)	(1,293		)	(1,942		)
Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses:
Foreign cumulative translation	—			—			(1,997		)	—			Other operating
Total reclassifications for the period	$	(3,115	)	$	28,888		$	(10,214	)	$	50,697

XML

Fair Value Measurements and Derivative Instruments

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements and Derivative Instruments

Fair Value Measurements and Derivative Instruments

Fair Value Measurements

The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows (in thousands):

	Fair Value Measurements at September 30, 2014 Using										Fair Value Measurements at December 31, 2013 Using
Description	Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)		Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Cash and cash equivalents(4)	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Total Assets	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Liabilities:
Long-term debt (including current portion of long-term debt)(5)	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—
Total Liabilities	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2014 and December 31, 2013.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations.

Other Financial Instruments

The carrying amounts of accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at September 30, 2014 and December 31, 2013.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at September 30, 2014 Using								Fair Value Measurements at December 31, 2013 Using
Description	Total		Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Derivative financial instruments(4)	$	57,937	$	—	$	57,937	$	—	$	188,576	$	—	$	188,576	$	—
Investments(5)	$	5,678	5,678		—		—		$	6,044	6,044		—		—
Total Assets	$	63,615	$	5,678	$	57,937	$	—	$	194,620	$	6,044	$	188,576	$	—
Liabilities:
Derivative financial instruments(6)	$	275,036	$	—	$	275,036	$	—	$	100,260	$	—	$	100,260	$	—
Total Liabilities	$	275,036	$	—	$	275,036	$	—	$	100,260	$	—	$	100,260	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2014 and December 31, 2013.

(4) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(5) Consists of exchange-traded equity securities and mutual funds.

(6) Consists of interest rate swaps, fuel swaps, foreign currency forward contracts and foreign currency collar options. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of September 30, 2014 or December 31, 2013, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our consolidated balance sheets.

As of September 30, 2014 and December 31, 2013, no cash collateral was received or pledged under our ISDA agreements. See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments.

The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties:

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 30, 2014									As of December 31, 2013
	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities			Cash Collateral Received		Net Amount of Derivative Assets		Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets			Cash Collateral Received		Net Amount of Derivative Assets
In thousands of dollars
Derivatives subject to master netting agreements	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949
Total	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949

The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties:

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 30, 2014										As of December 31, 2013
	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities			Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Pledged		Net Amount of Derivative Liabilities
In thousands of dollars
Derivatives subject to master netting agreements	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)
Total	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. As of September 30, 2014 we did not have any exposure under our derivative instruments. As of December 31, 2013 we had exposure under our derivative instruments of approximately $92.5 million, which was limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, all of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

Derivative Instruments

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We manage these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, we do not hold or issue derivative financial instruments for trading or other speculative purposes. We monitor our derivative positions using techniques including market valuations and sensitivity analyses.

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments.

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive (loss) income until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive (loss) income along with the associated foreign currency translation adjustment of the foreign operation.

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e. interest rate, foreign currency and fuel). We perform regression analyses over an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. The determination of ineffectiveness is based on the amount of dollar offset between the change in fair value of the derivative instrument and the change in fair value of the hedged item at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is immediately recognized in earnings and reported in Other income (expense) in our consolidated statements of comprehensive income (loss).

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities and derivative instrument cash flows from hedges of foreign currency risk on debt payments as financing activities.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments. At September 30, 2014, approximately 24.4% of our long-term debt was effectively fixed as compared to 34.6% as of December 31, 2013. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

Market risk associated with our long-term fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At September 30, 2014 and December 31, 2013, we maintained interest rate swap agreements on the $420.0 million fixed rate portion of our Oasis of the Seas unsecured amortizing term loan and on the $650.0 million unsecured senior notes due 2022. The interest rate swap agreements on Oasis of the Seas debt effectively changed the interest rate on the balance of the unsecured term loan, which was $262.5 million as of September 30, 2014, from a fixed rate of 5.41% to a LIBOR-based floating rate equal to LIBOR plus 3.87%, currently approximately 4.20%. The interest rate swap agreements on the $650.0 million unsecured senior notes effectively changed the interest rate of the unsecured senior notes from a fixed rate of 5.25% to a LIBOR-based floating rate equal to LIBOR plus 3.63%, currently approximately 3.86%. These interest rate swap agreements are accounted for as fair value hedges.

Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. At September 30, 2014 and December 31, 2013, we maintained forward-starting interest rate swap agreements that hedge the anticipated unsecured amortizing term loans that will finance our purchase of Quantum of the Seas and Anthem of the Seas. Forward-starting interest rate swaps hedging the Quantum of the Seas loan will effectively convert the interest rate for $735.0 million of the anticipated loan balance from LIBOR plus 1.30% to a fixed rate of 3.74% (inclusive of margin) beginning in October 2014. Forward-starting interest rate swaps hedging the Anthem of the Seas loan will effectively convert the interest rate for $725.0 million of the anticipated loan balance from LIBOR plus 1.30% to a fixed rate of 3.86% (inclusive of margin) beginning in April 2015. These interest rate swap agreements are accounted for as cash flow hedges.

In addition, at September 30, 2014 and December 31, 2013, we maintained interest rate swap agreements that effectively converted the interest rate on a portion of the Celebrity Reflection unsecured amortizing term loan balance of approximately $572.7 million from LIBOR plus 0.40% to a fixed rate (including applicable margin) of 2.85% through the term of the loan. These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of interest rate swap agreements related to outstanding debt and on our current unfunded financing arrangements as of September 30, 2014 and December 31, 2013 was $2.9 billion and $3.0 billion, respectively.

Foreign Currency Exchange Rate Risk

Derivative Instruments

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts, collar options and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates. As of September 30, 2014, the aggregate cost of our ships on order was approximately $6.0 billion, of which we had deposited $571.4 million as of such date. Approximately 29.3% and 36.3% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at September 30, 2014 and December 31, 2013, respectively. The majority of our foreign currency forward contracts, collar options and cross currency swap agreements are accounted for as cash flow, fair value or net investment hedges depending on the designation of the related hedge.

On a regular basis, we enter into foreign currency forward contracts to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During the third quarter of 2014, we maintained an average of approximately $556.7 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts resulted in a (loss) gain, of approximately $(35.1) million and $16.9 million, respectively, during the quarter ended September 30, 2014 and September 30, 2013, respectively, and approximately $(24.2) million and $(8.6) million, during the nine months ended September 30, 2014 and September 30, 2013, respectively, that were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive income (loss).

We consider our investments in our foreign operations to be denominated in relatively stable currencies and of a long-term nature. In January 2014, we entered into €415.6 million foreign currency forward contracts and designated them as hedges of a portion of our net investments in Pullmantur and TUI Cruises as of September 30, 2014. These forward currency contracts mature in April 2016.

The notional amount of outstanding foreign exchange contracts including our forward contracts and collar options as of September 30, 2014 and December 31, 2013 was $3.5 billion and $2.5 billion, respectively.

Non-Derivative Instruments

We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments in Pullmantur and TUI Cruises of approximately €134.4 million and €544.9 million, or approximately $169.8 million and $750.8 million, as of September 30, 2014 and December 31, 2013, respectively.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements and fuel call options to mitigate the financial impact of fluctuations in fuel prices.

Our fuel swap agreements are accounted for as cash flow hedges. At September 30, 2014, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2017. As of September 30, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements:

	Fuel Swap Agreements
	September 30, 2014	December 31, 2013
	(metric tons)
2014	731,000	762,000
2015	778,000	665,000
2016	600,000	372,000
2017	306,000	74,000

	Fuel Swap Agreements
	As of September 30, 2014		As of December 31, 2013
	(% hedged)
Projected fuel purchases for year:
2014	54	%	57	%
2015	56	%	45	%
2016	41	%	25	%
2017	20	%	5	%

At September 30, 2014 and December 31, 2013, $(33.7) million and $9.5 million, respectively, of estimated unrealized net (loss) gain associated with our cash flow hedges pertaining to fuel swap agreements were expected to be reclassified to earnings from Accumulated other comprehensive (loss) income within the next twelve months. Reclassification is expected to occur as a result of fuel consumption associated with our hedged forecasted fuel purchases.

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows:

	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of September 30, 2014		As of December 31, 2013		Balance Sheet Location	As of September 30, 2014		As of December 31, 2013
		Fair Value		Fair Value			Fair Value		Fair Value
In thousands
Derivatives designated as hedging instruments under ASC 815-20(1)
Interest rate swaps	Other assets	$	2,384	$	56,571	Other long-term liabilities	$	50,688	$	66,920
Foreign currency forward contracts	Derivative financial instruments	2,882		61,596		Accrued expenses and other liabilities	29,304		—
Foreign currency forward contracts	Other assets	40,682		13,783		Other long-term liabilities	99,437		—
Foreign currency collar options	Derivative financial instruments	—		—		Accrued expenses and other liabilities	8,465		—
Foreign currency collar options	Other assets	—		22,172		Accrued expenses and other liabilities	—		—
Fuel swaps	Derivative financial instruments	—		10,902		Accrued expenses and other liabilities	37,768		1,657
Fuel swaps	Other assets	18		8,205		Other long-term liabilities	27,016		9,052
Total derivatives designated as hedging instruments under ASC 815-20		$	45,966	$	173,229		$	252,678	$	77,629
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	11,971	$	15,347	Accrued expenses and other liabilities	$	22,358	$	22,631
Total derivatives not designated as hedging instruments under ASC 815-20		11,971		15,347			22,358		22,631
Total derivatives		$	57,937	$	188,576		$	275,036	$	100,260

(1)Accounting Standard Codification 815-20 “Derivatives and Hedging.”

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows:

		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of September 30, 2014		As of December 31, 2013
In thousands
Foreign currency debt	Current portion of long-term debt	$	—	$	477,442
Foreign currency debt	Long-term debt	169,819		273,354
		$	169,819	$	750,796

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows:

Derivatives and related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative										Amount of Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended September 30, 2014			Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013			Quarter Ended September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	3,063		$	3,022	$	9,199	$	6,299		$	3,968	$	9,503		$	13,435		$	28,102
Interest rate swaps	Other income (expense)	(3,010		)	958		24,431		(58,286		)	3,934		(620		)	(19,122		)	55,553
		$	53		$	3,980	$	33,630	$	(51,987	)	$	7,902	$	8,883		$	(5,687	)	$	83,655

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows:

Derivatives under ASC  815-20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive (Loss) Income on Derivative (Effective Portion)												Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive (Loss) Gain into Income (Effective Portion)	Amount of (Loss) Gain reclassified from Accumulated Other Comprehensive (Loss) Income into Income (Effective Portion)
	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Cross currency swaps	$	—		$	—		$	—		$	—		Interest expense, net of interest capitalized	$	—		$	(890	)	$	(261	)	$	(2,641	)
Interest rate swaps	4,437			(5,816		)	(62,309		)	87,672			Other income (expense)	—			—			—			—
Foreign currency forward contracts	(163,387		)	47,338			(172,629		)	38,343			Depreciation and amortization expenses	(450		)	(449		)	(1,348		)	(1,348		)
Foreign currency forward contracts	—			—			—			—			Other income (expense)	(238		)	19,089			(4,052		)	18,612
Foreign currency forward contracts	—			—			—			—			Interest expense, net of interest capitalized	—			(217		)	(57		)	(222		)
Foreign currency collar options	(21,904		)	16,801			(30,638		)	5,554			Depreciation and amortization expenses	—			—			—			—
Fuel swaps	(71,456		)	32,785			(64,527		)	(22,415		)	Fuel	(1,996		)	12,002			(1,206		)	38,238
	$	(252,310	)	$	91,108		$	(330,103	)	$	109,154			$	(2,684	)	$	29,535		$	(6,924	)	$	52,639

	Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivatives under ASC 815- 20 Cash Flow Hedging Relationships		Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Other income (expense)	$	17		$	(7	)	$	(78	)	$	420
Foreign currency forward contracts	Other income (expense)	15			15			(12		)	5
Fuel swaps	Other income (expense)	(8,069		)	(953		)	(7,607		)	(5,322		)
		$	(8,037	)	$	(945	)	$	(7,697	)	$	(4,897	)

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows:

Non-derivative  instruments under ASC 815- 20 Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income (Effective Portion)										Location of Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Quarter Ended September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014		Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013
In thousands
Foreign Currency Debt	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)	Other income (expense)	$	—	$	—	$	—	$	—
	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)		$	—	$	—	$	—	$	—

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows:

		Amount of (Loss) Gain Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of (Loss) Gain Recognized in Income on Derivatives	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Foreign currency forward contracts	Other income (expense)	$	(35,175	)	$	16,789		$	(24,405	)	$	(10,491	)
Fuel swaps	Other income (expense)	(220		)	220			(1,157		)	268
Fuel call options	Other income (expense)	—			(38		)	—			(1		)
		$	(35,395	)	$	16,971		$	(25,562	)	$	(10,224	)

Credit Related Contingent Features

Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings remain below specified levels. Specifically, if on the fifth anniversary of entering into a derivative transaction or on any succeeding fifth-year anniversary our credit ratings for our senior unsecured debt were to be below BBB- by Standard & Poor’s and Baa3 by Moody’s, then each counterparty to such derivative transaction with whom we are in a net liability position that exceeds the applicable minimum call amount may demand that we post collateral in an amount equal to the net liability position. The amount of collateral required to be posted following such event will change each time our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to, or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. Currently, our senior unsecured debt credit rating is BB with a positive outlook by Standard & Poor’s and Ba1 with a stable outlook by Moody’s. We currently have five interest rate derivative hedges that have a term of at least five years.  The aggregate fair values of all derivative instruments with such credit-related contingent features in net liability positions as of September 30, 2014 and December 31, 2013 were $50.7 million and $66.9 million, respectively, which do not include the impact of any such derivatives in net asset positions. The earliest that any of the five interest rate derivative hedges will reach their fifth anniversary is November 2016. Therefore, as of September 30, 2014, we were not required to post collateral for any of our derivative transactions.

XML

Shareholders' Equity

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

In September 2014, we declared a cash dividend on our common stock of $0.30 per share which was paid in the fourth quarter of 2014. During the first and second quarters of 2014, we declared and paid a cash dividend on our common stock of $0.25 per share. During the first quarter of 2014, we also paid a cash dividend on our common stock of $0.25 per share which was declared during the fourth quarter of 2013.

During the third quarter of 2013, we declared a cash dividend on our common stock of $0.25 per share which was paid in the fourth quarter of 2013. We declared and paid a cash dividend on our common stock of $0.12 per share during the first and second quarters of 2013.

XML

Changes in Accumulated Other Comprehensive (Loss) Income

9 Months Ended

Sep. 30, 2014

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Changes in Accumulated Other Comprehensive (Loss) Income

Changes in Accumulated Other Comprehensive (Loss) Income

The following table presents the changes in accumulated other comprehensive (loss) income by component for the nine months ended September 30, 2014 and 2013 (in thousands):

	Accumulated Other Comprehensive loss for the Nine Months Ended September 30, 2014												Accumulated Other Comprehensive loss for the Nine Months Ended September 30, 2013
	Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss			Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss
Accumulated comprehensive income (loss) at beginning of the year	$	43,324		$	(23,994	)	$	(13,659	)	$	5,671		$	(84,505	)	$	(34,823	)	$	(15,188	)	$	(134,516	)
Other comprehensive (loss) income before reclassifications	(330,103		)	(6,829		)	(19,842		)	(356,774		)	109,154			8,774			369			118,297
Amounts reclassified from accumulated other comprehensive income (loss)	6,924			1,293			1,997			10,214			(52,639		)	1,942			—			(50,697		)
Net current-period other comprehensive (loss) income	(323,179		)	(5,536		)	(17,845		)	(346,560		)	56,515			10,716			369			67,600
Ending balance	$	(279,855	)	$	(29,530	)	$	(31,504	)	$	(340,889	)	$	(27,990	)	$	(24,107	)	$	(14,819	)	$	(66,916	)

The following table presents reclassifications out of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2014 and 2013 (in thousands):

	Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive (Loss) Income into Income
Details About Accumulated Other Comprehensive (Loss) Income Components	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013			Affected Line Item in Statements of Comprehensive (Loss) Income
(Loss) gain on cash flow derivative hedges:
Cross currency swaps	$	—		$	(890	)	$	(261	)	$	(2,641	)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(450		)	(449		)	(1,348		)	(1,348		)	Depreciation and amortization expenses
Foreign currency forward contracts	(238		)	19,089			(4,052		)	18,612			Other income (expense)
Foreign currency forward contracts	—			(217		)	(57		)	(222		)	Interest expense, net of interest capitalized
Fuel swaps	(1,996		)	12,002			(1,206		)	38,238			Fuel
	(2,684		)	29,535			(6,924		)	52,639
Amortization of defined benefit plans:
Actuarial loss	(222		)	(438		)	(666		)	(1,315		)	Payroll and related
Prior service costs	(209		)	(209		)	(627		)	(627		)	Payroll and related
	(431		)	(647		)	(1,293		)	(1,942		)
Release of foreign cumulative translation due to sale of Pullmantur's non-core businesses:
Foreign cumulative translation	—			—			(1,997		)	—			Other operating
Total reclassifications for the period	$	(3,115	)	$	28,888		$	(10,214	)	$	50,697

XML

Restructuring and Related Charges

9 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

Restructuring and Related Charges

Restructuring Charges

For the quarter ended September 30, 2014 and September 30, 2013, we incurred $0.3 million and $12.2 million, respectively, and for the nine months ended September 30, 2014 and September 30, 2013, we incurred $2.0 million and $13.9 million, respectively, of restructuring charges in connection with our broad profitability improvement program. The following are the profitability initiatives.

Consolidation of Global Sales, Marketing, General and Administrative Structure

One of our profitability initiatives relates to restructuring and consolidation of our global sales, marketing and general and administrative structure. Activities related to this initiative include the consolidation of most of our call centers located outside of the United States and the establishment of brand dedicated sales, marketing and revenue management teams in key priority markets. This resulted in the elimination of approximately 500 shore-side positions in 2013, primarily from our international markets, resulting in recognition of a liability for one-time termination benefits during the year ended December 31, 2013. Additionally, we incurred contract termination costs and other related costs consisting of legal and consulting fees to implement this initiative.

For the quarter and nine months ended September 30, 2014, we incurred $1.2 million and $0.8 million, respectively, in restructuring exit costs associated with this initiative, which are reported within Restructuring charges in our consolidated statements of comprehensive income (loss). The costs incurred in the third quarter of 2014 related to discretionary bonus payments paid to persons whose positions were eliminated as part of our restructuring activities. For the quarter and nine months ended September 30, 2013, we incurred $12.2 million and $13.9 million, respectively, of restructuring exit costs associated with this initiative.

The following table summarizes our restructuring exit costs related to the above initiative (in thousands):

	Beginning Balance January 1, 2014		Accruals		Payments		Ending Balance September 30, 2014		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	8,315	$	647	$	6,991	$	1,971	$	10,285	$	—
Contract termination costs	$	126	8		59		$	75	4,150		—
Other related costs	$	1,397	150		244		$	1,303	4,529		500
Total	$	9,838	$	805	$	7,294	$	3,349	$	18,964	$	500

In connection with this initiative, we incurred approximately $7.4 million of other costs during the nine months ended September 30, 2014 that primarily consisted of call center transition costs and accelerated depreciation on leasehold improvements and were classified within Marketing, selling and administrative expenses and Depreciation and amortization expenses in our consolidated statements of comprehensive income (loss). For the quarter ended September 30, 2014, we did not incur any additional other costs associated with this initiative. We do not expect to incur any further material restructuring exit or other additional costs related to this initiative.

Pullmantur Restructuring

Restructuring Exit Costs

In the fourth quarter of 2013, we moved forward with an initiative related to Pullmantur’s focus on its cruise business and its expansion in Latin America. Activities related to this initiative include the sale of Pullmantur's non-core businesses and placing operating management closer to the Latin American market. This resulted in the elimination of approximately 100 Pullmantur shore-side positions and recognition of a liability for one-time termination benefits during the year ended December 31, 2013. In the second quarter of 2014, we elected not to execute the dismissal of approximately 30 of the positions which resulted in a partial reversal of the liability. Additionally, we incurred contract termination costs and other related costs consisting of legal and consulting fees to implement this initiative.

As a result of these actions, we reversed $0.9 million and incurred $1.2 million of restructuring exit costs for the quarter and nine months ended September 30, 2014, respectively, which are reported within Restructuring charges in our consolidated statements of comprehensive income (loss). For the quarter ended September 30, 2014, we reversed contract termination costs and termination benefits to adjust for actual costs incurred.

The following table summarizes our restructuring exit costs related to the above initiative (in thousands):

	Beginning Balance January 1, 2014		Accruals			Payments		Ending Balance September 30, 2014		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	3,910	$	1,036		$	3,488	$	1,458	$	4,946	$	—
Contract termination costs	$	847	(607		)	—		$	240	240		—
Other related costs	$	516	725			855		$	386	1,241		1,080
Total	$	5,273	$	1,154		$	4,343	$	2,084	$	6,427	$	1,080

In connection with this initiative, we incurred approximately $1.3 million and $7.8 million of other costs during the quarter and nine months ended September 30, 2014, respectively, associated with placing operating management closer to the Latin American market that was classified within Marketing, selling and administrative expenses in our consolidated statements of comprehensive income (loss). We do not expect to incur any further material restructuring exit or other additional costs related to this initiative.

Sale of Pullmantur Non-core Businesses

As part of our Pullmantur related initiatives, on March 31, 2014, Pullmantur sold the majority of its interest in its non-core businesses. These non-core businesses included Pullmantur’s land-based tour operations, travel agency and 49% interest in its air business. In connection with the sale agreement, we retained a 19% interest in each of the non-core businesses as well as 100% ownership of the aircraft which are being dry leased to Pullmantur Air. Consistent with our Pullmantur two-month lag reporting period, we reported the impact of the sale in the second quarter of 2014. See Note 1. General for information on the basis on which we prepare our consolidated financial statements and Note 6. Goodwill and Other Assets for the accounting of our 19% retained interest.

The sale resulted in a$0.8 million gain reported in the second quarter of 2014, inclusive of the release of cumulative translation adjustment losses, which is classified within Other operating expenses in our consolidated statements of comprehensive income (loss). As part of the sale, we agreed to maintain commercial and bank guarantees on behalf of the buyer for a maximum period of twelve months and extended a term loan facility to Nautalia due June 30, 2016. During the second quarter of 2014, we recorded the fair value of the guarantees and a loss reserve for the loan amount drawn, offsetting the gain recognized by $2.9 million. See Note 9. Changes in Accumulated Other Comprehensive Income (Loss) for further information on the release of the foreign currency translation losses.

The non-core businesses met the accounting criteria to be classified as held for sale during the fourth quarter of 2013 which resulted in restructuring related impairment charges of $20.0 million in 2013 to adjust the carrying value of assets held for sale to their fair value, less cost to sell. As of December 31, 2013, assets and liabilities held for sale were not material to our consolidated balance sheet and no longer exist as of September 30, 2014. The businesses did not meet the criteria for discontinued operations reporting as a result of our significant continuing involvement.

XML

Changes in Accumulated Other Comprehensive (Loss) Income - Reclassifications (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Reclassifications out of accumulated other comprehensive loss
Interest expense, net of interest capitalized	$ (60,100)	$ (79,654)	$ (193,931)	$ (256,713)
Depreciation and amortization expenses	(192,448)	(188,541)	(579,063)	(564,089)
Other income (expense)	(39,214)	(78,508)	(168,137)	(256,505)
Fuel	(230,818)	(215,686)	(718,081)	(689,809)
Net income	490,248	365,701	654,378	466,674
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Reclassifications out of accumulated other comprehensive loss
Net income	(3,115)	28,888	(10,214)	50,697
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Reclassifications out of accumulated other comprehensive loss
Net income	(2,684)	29,535	(6,924)	52,639
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Cross currency swaps
Reclassifications out of accumulated other comprehensive loss
Interest expense, net of interest capitalized	0	(890)	(261)	(2,641)
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Foreign currency forward contracts
Reclassifications out of accumulated other comprehensive loss
Interest expense, net of interest capitalized	0	(217)	(57)	(222)
Depreciation and amortization expenses	(450)	(449)	(1,348)	(1,348)
Other income (expense)	(238)	19,089	(4,052)	18,612
(Loss) gain on cash flow derivative hedges: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Fuel swaps
Reclassifications out of accumulated other comprehensive loss
Fuel	(1,996)	12,002	(1,206)	38,238
Amortization of defined benefit plans: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Reclassifications out of accumulated other comprehensive loss
Actuarial loss	(222)	(438)	(666)	(1,315)
Prior service costs	(209)	(209)	(627)	(627)
Net income	(431)	(647)	(1,293)	(1,942)
Release of foreign cumulative translation due to sale of business: | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Reclassifications out of accumulated other comprehensive loss
Other income (expense)	$ 0	$ 0	$ (1,997)	$ 0

XML

Restructuring and Related Charges (Tables)

9 Months Ended

Sep. 30, 2014

Consolidation of Structure

Restructuring Cost and Reserve [Line Items]

Summary of restructuring and related charges

The following table summarizes our restructuring exit costs related to the above initiative (in thousands):

	Beginning Balance January 1, 2014		Accruals		Payments		Ending Balance September 30, 2014		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	8,315	$	647	$	6,991	$	1,971	$	10,285	$	—
Contract termination costs	$	126	8		59		$	75	4,150		—
Other related costs	$	1,397	150		244		$	1,303	4,529		500
Total	$	9,838	$	805	$	7,294	$	3,349	$	18,964	$	500

Pullmantur

Restructuring Cost and Reserve [Line Items]

Summary of restructuring and related charges

The following table summarizes our restructuring exit costs related to the above initiative (in thousands):

	Beginning Balance January 1, 2014		Accruals			Payments		Ending Balance September 30, 2014		Cumulative Charges Incurred		Expected Additional Expenses to be Incurred
Termination benefits	$	3,910	$	1,036		$	3,488	$	1,458	$	4,946	$	—
Contract termination costs	$	847	(607		)	—		$	240	240		—
Other related costs	$	516	725			855		$	386	1,241		1,080
Total	$	5,273	$	1,154		$	4,343	$	2,084	$	6,427	$	1,080

XML

Property and Equipment (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Sep. 30, 2013
Celebrity Century
Proceeds from sale of Celebrity Century	$ 220,000	$ 220,000	$ 0
Loss on sale of ship		17,401	0
Other Operating Expenses
Celebrity Century
Loss on sale of ship	$ 17,401

XML

Restructuring and Related Charges Rollforward (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Restructuring Reserve [Roll Forward]
Accruals	$ 308	$ 12,244	$ 1,958	$ 13,922
Consolidation of Structure
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			9,838
Payments			7,294
Balance at the end of the period	3,349		3,349
Cumulative Charges Incurred	18,964		18,964
Expected Additional Expenses to be Incurred	500		500
Pullmantur
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			5,273
Payments			4,343
Balance at the end of the period	2,084		2,084
Cumulative Charges Incurred	6,427		6,427
Expected Additional Expenses to be Incurred	1,080		1,080
Termination benefits | Consolidation of Structure
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			8,315
Accruals			647
Payments			6,991
Balance at the end of the period	1,971		1,971
Cumulative Charges Incurred	10,285		10,285
Expected Additional Expenses to be Incurred	0		0
Termination benefits | Pullmantur
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			3,910
Accruals			1,036
Payments			3,488
Balance at the end of the period	1,458		1,458
Cumulative Charges Incurred	4,946		4,946
Expected Additional Expenses to be Incurred	0		0
Contract termination costs | Consolidation of Structure
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			126
Accruals			8
Payments			59
Balance at the end of the period	75		75
Cumulative Charges Incurred	4,150		4,150
Expected Additional Expenses to be Incurred	0		0
Contract termination costs | Pullmantur
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			847
Accruals			(607)
Payments			0
Balance at the end of the period	240		240
Cumulative Charges Incurred	240		240
Expected Additional Expenses to be Incurred	0		0
Other related costs | Consolidation of Structure
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			1,397
Accruals			150
Payments			244
Balance at the end of the period	1,303		1,303
Cumulative Charges Incurred	4,529		4,529
Expected Additional Expenses to be Incurred	500		500
Other related costs | Pullmantur
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period			516
Accruals			725
Payments			855
Balance at the end of the period	386		386
Cumulative Charges Incurred	1,241		1,241
Expected Additional Expenses to be Incurred	1,080		1,080
Restructuring and Related Impairment Charges | Pullmantur
Restructuring Reserve [Roll Forward]
Accruals	(900)		1,154
Marketing, Selling and Administrative and Depreciation and Amortization Expenses [Member] | Consolidation of Structure
Restructuring Reserve [Roll Forward]
Accruals	$ 1,200		$ 805

XML

Fair Value Measurements and Derivative Instruments - Balance Sheet (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Asset Derivatives
Asset Derivatives	$ 57,937		$ 188,576
Liability Derivatives
Liability Derivatives	275,036		100,260
Designated as Hedging Instrument
Asset Derivatives
Asset Derivatives	45,966	[1]	173,229	[1]
Liability Derivatives
Liability Derivatives	252,678	[1]	77,629	[1]
Designated as Hedging Instrument | Foreign currency collar options | Other assets
Asset Derivatives
Asset Derivatives	0	[1]	22,172	[1]
Designated as Hedging Instrument | Foreign currency collar options | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	0	[1]	0	[1]
Not Designated as Hedging Instrument
Asset Derivatives
Asset Derivatives	11,971		15,347
Liability Derivatives
Liability Derivatives	22,358		22,631
Interest rate swaps | Designated as Hedging Instrument | Other assets
Asset Derivatives
Asset Derivatives	2,384	[1]	56,571	[1]
Interest rate swaps | Designated as Hedging Instrument | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	50,688	[1]	66,920	[1]
Foreign currency forward contracts | Designated as Hedging Instrument | Other assets
Asset Derivatives
Asset Derivatives	40,682	[1]	13,783	[1]
Foreign currency forward contracts | Designated as Hedging Instrument | Derivative financial instruments
Asset Derivatives
Asset Derivatives	2,882	[1]	61,596	[1]
Foreign currency forward contracts | Designated as Hedging Instrument | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	99,437	[1]	0	[1]
Foreign currency forward contracts | Designated as Hedging Instrument | Accrued expenses and other liabilities
Liability Derivatives
Liability Derivatives	29,304	[1]	0	[1]
Foreign currency forward contracts | Not Designated as Hedging Instrument | Derivative financial instruments
Asset Derivatives
Asset Derivatives	11,971		15,347
Foreign currency forward contracts | Not Designated as Hedging Instrument | Accrued expenses and other liabilities
Liability Derivatives
Liability Derivatives	22,358		22,631
Foreign currency collar options | Designated as Hedging Instrument | Derivative financial instruments
Asset Derivatives
Asset Derivatives	0	[1]	0	[1]
Foreign currency collar options | Designated as Hedging Instrument | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	8,465	[1]	0	[1]
Fuel swaps | Designated as Hedging Instrument | Swaps | Other assets
Asset Derivatives
Asset Derivatives	18	[1]	8,205	[1]
Fuel swaps | Designated as Hedging Instrument | Swaps | Derivative financial instruments
Asset Derivatives
Asset Derivatives	0	[1]	10,902	[1]
Fuel swaps | Designated as Hedging Instrument | Swaps | Other long-term Liabilities
Liability Derivatives
Liability Derivatives	27,016	[1]	9,052	[1]
Fuel swaps | Designated as Hedging Instrument | Swaps | Accrued expenses and other liabilities
Liability Derivatives
Liability Derivatives	$ 37,768	[1]	$ 1,657	[1]

[1] Accounting Standard Codification 815-20 “Derivatives and Hedging.”

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating Activities
Net income	$ 654,378	$ 466,674
Adjustments:
Depreciation and amortization	579,063	564,089
Loss on derivative instruments not designated as hedges	24,234	8,634
Loss on extinguishment of unsecured senior notes	0	(4,206)
Loss on sale of ship	17,401	0
Changes in operating assets and liabilities:
Decrease in trade and other receivables, net	69,833	14,278
Decrease (increase) in inventories	13,900	(13,541)
Increase in prepaid expenses and other assets	(3,596)	(28,363)
(Decrease) increase in accounts payable	(33,668)	43,415
(Decrease) increase in accrued interest	(36,693)	14,219
Increase in accrued expenses and other liabilities	48,600	29,496
Increase in customer deposits	104,211	131,237
Other, net	21,901	(4,240)
Net cash provided by operating activities	1,459,564	1,230,104
Investing Activities
Purchases of property and equipment	(559,018)	(534,046)
Cash paid on settlement of derivative financial instruments	(14,808)	(8,451)
Investments in unconsolidated affiliates	(69,748)	(60,426)
Cash received on loan to unconsolidated affiliate	76,167	23,372
Proceeds from sale of ship	220,000	0
Other, net	2,592	1,147
Net cash used in investing activities	(344,815)	(578,404)
Financing Activities
Debt proceeds	1,917,550	1,519,464
Debt issuance costs	(49,641)	(51,720)
Repayments of debt	(2,958,427)	(2,065,965)
Dividends paid	(131,857)	(54,159)
Proceeds from exercise of common stock options	65,885	13,626
Cash received on settlement of derivative financial instruments	22,835	0
Other, net	1,422	1,140
Net cash used in financing activities	(1,132,233)	(637,614)
Effect of exchange rate changes on cash	(4,022)	626
Net (decrease) increase in cash and cash equivalents	(21,506)	14,712
Cash and cash equivalents at beginning of period	204,687	194,855
Cash and cash equivalents at end of period	183,181	209,567
Cash paid during the period for:
Interest, net of amount capitalized	208,311	232,769
Non cash Investing Activities
Purchase of property and equipment through asset trade-in	$ 0	$ 46,375

XML

Long-Term Debt

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

In January 2014, we borrowed $380.0 million under a previously committed unsecured term loan facility. The loan is due and payable at maturity in August 2018. Interest on the loan accrues at a floating rate based on LIBOR plus the applicable margin. The applicable margin varies with our debt rating and was 2.12% as of September 30, 2014. The proceeds of this loan were used to repay our €745.0 million5.625% unsecured senior notes due January 2014.

In January 2014, we amended and restated our €365.0 million unsecured term loan due July 2017. Interest on the amended facility accrues at a floating rate based on EURIBOR plus a margin which varies with our credit rating. The amendment reduced the margin, which at our current credit rating resulted in a decrease from 3.00% to 2.30%. The amendment did not result in the extinguishment of debt.

In March 2014, we amended our unsecured term loans for Oasis of the Seas and Allure of the Seas primarily to reduce the margins on those facilities and eliminate the lenders option to exit those facilities in 2015 and 2017, respectively. The interest rate on the $420.0 million floating rate tranche of the Oasis of the Seas term loan was reduced from LIBOR plus 2.10% to LIBOR plus 1.85%. The interest rate on the entire $1.1 billionAllure of the Seas term loan was reduced from LIBOR plus 2.10% to LIBOR plus 1.85%. These amendments did not result in the extinguishment of debt.

XML

Long-Term Debt (Details)		9 Months Ended		1 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended
	Jan. 31, 2014 Unsecured Term Loan Due in August 2018 USD ($)	Sep. 30, 2014 Unsecured Term Loan Due in August 2018 LIBOR	Jan. 31, 2014 Unsecured term loan due July 2017 EUR (€)	Jan. 31, 2014 Unsecured term loan due July 2017 EURIBOR	Dec. 31, 2013 Unsecured term loan due July 2017 EURIBOR	Mar. 31, 2014 Oasis of the Seas term loan USD ($)	Mar. 31, 2014 Oasis of the Seas term loan LIBOR	Dec. 31, 2013 Oasis of the Seas term loan LIBOR	Mar. 31, 2014 Allure of the Seas term loan USD ($)	Mar. 31, 2014 Allure of the Seas term loan LIBOR	Dec. 31, 2013 Allure of the Seas term loan LIBOR	Jan. 31, 2014 Senior Notes Unsecured 5.625% Senior Notes Due 2014 EUR (€)
Long-Term Debt
Long term debt, principal amount	$ 380,000,000.0		€ 365,000,000.0			$ 420,000,000.0			$ 1,100,000,000.0			€ 745,000,000.0
Margin on floating rate base (as a percent)		2.12%		2.30%	3.00%		1.85%	2.10%		1.85%	2.10%
Long term debt, interest rate												5.625%

XML

Fair Value Measurements and Derivative Instruments - Non-Derivative Instruments (Details)	9 Months Ended								9 Months Ended		9 Months Ended		9 Months Ended	12 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013 USD ($)	Sep. 30, 2014 Interest rate swaps USD ($)	Dec. 31, 2013 Interest rate swaps USD ($)	Sep. 30, 2014 Interest rate swaps Fair Value Hedging 5.41% Fixed rate debt USD ($)	Dec. 31, 2013 Interest rate swaps Fair Value Hedging 5.41% Fixed rate debt USD ($)	Sep. 30, 2014 Interest rate swaps Fair Value Hedging 5.25% Fixed rate debt USD ($)	Dec. 31, 2013 Interest rate swaps Fair Value Hedging 5.25% Fixed rate debt USD ($)	Sep. 30, 2014 Interest rate swaps Cash flow hedge Quantum of the Seas facility USD ($)	Oct. 01, 2014 Interest rate swaps Cash flow hedge Quantum of the Seas facility Forecast	Sep. 30, 2014 Interest rate swaps Cash flow hedge Anthem of the Seas facility USD ($)	Apr. 01, 2015 Interest rate swaps Cash flow hedge Anthem of the Seas facility Forecast	Sep. 30, 2014 Interest rate swaps Cash flow hedge Celebrity Reflection floating rate debt USD ($)	Dec. 31, 2013 Interest rate swaps Cash flow hedge Celebrity Reflection floating rate debt USD ($)	Sep. 30, 2014 Foreign exchange contracts USD ($)	Dec. 31, 2013 Foreign exchange contracts USD ($)	Sep. 30, 2014 Pullmantur and TUI Cruises Net Investment Hedging USD ($)	Sep. 30, 2014 Pullmantur and TUI Cruises Net Investment Hedging EUR (€)	Dec. 31, 2013 Pullmantur and TUI Cruises Net Investment Hedging USD ($)	Dec. 31, 2013 Pullmantur and TUI Cruises Net Investment Hedging EUR (€)	Sep. 30, 2014 LIBOR Interest rate swaps Fair Value Hedging 5.41% Fixed rate debt	Sep. 30, 2014 LIBOR Interest rate swaps Fair Value Hedging 5.25% Fixed rate debt
Derivative Instruments
Exposure under foreign currency forward contracts, foreign currency collar options, fuel call options, interest rate and fuel swap agreements		$ 92,500,000
Derivative instrument, observation period	3 years
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate	24.40%	34.60%
Unsecured term loan					420,000,000.0	420,000,000	650,000,000.0	650,000,000
Debt amount					262,500,000												169,819,000		750,796,000
Interest rate on hedged debt (as a percent)					5.41%		5.25%
Additional interest above LIBOR rate (as a percent)																					3.87%	3.63%
Derivative, Variable rate of interest (as a percent)																					4.20%	3.86%
Anticipated loan balance									735,000,000.0		725,000,000.0		572,700,000	600,000,000
Additional interest above LIBOR rate (as a percent)									1.30%		1.30%		0.40%	0.40%
Notional amount			2,900,000,000	3,000,000,000											3,500,000,000	2,500,000,000
Fixed rate on converted debt (as a percent)										3.74%		3.86%	2.85%	2.85%
Carrying value of non-derivative instrument designated as hedging instrument																	$ 169,800,000	€ 134,400,000	$ 750,800,000	€ 544,900,000

XML

Fair Value Measurements and Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Estimated Fair Value of Financial Instruments that are not Measured at Fair Value on Recurring Basis

Fair Value Measurements

The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows (in thousands):

	Fair Value Measurements at September 30, 2014 Using										Fair Value Measurements at December 31, 2013 Using
Description	Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)		Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Cash and cash equivalents(4)	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Total Assets	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Liabilities:
Long-term debt (including current portion of long-term debt)(5)	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—
Total Liabilities	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2014 and December 31, 2013.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations.

Company's Financial Instruments Recorded at Fair Value on Recurring Basis

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at September 30, 2014 Using								Fair Value Measurements at December 31, 2013 Using
Description	Total		Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Derivative financial instruments(4)	$	57,937	$	—	$	57,937	$	—	$	188,576	$	—	$	188,576	$	—
Investments(5)	$	5,678	5,678		—		—		$	6,044	6,044		—		—
Total Assets	$	63,615	$	5,678	$	57,937	$	—	$	194,620	$	6,044	$	188,576	$	—
Liabilities:
Derivative financial instruments(6)	$	275,036	$	—	$	275,036	$	—	$	100,260	$	—	$	100,260	$	—
Total Liabilities	$	275,036	$	—	$	275,036	$	—	$	100,260	$	—	$	100,260	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2014 and December 31, 2013.

(4) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(5) Consists of exchange-traded equity securities and mutual funds.

(6) Consists of interest rate swaps, fuel swaps, foreign currency forward contracts and foreign currency collar options. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

Outstanding Fuel Swap Agreements

As of September 30, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements:

	Fuel Swap Agreements
	September 30, 2014	December 31, 2013
	(metric tons)
2014	731,000	762,000
2015	778,000	665,000
2016	600,000	372,000
2017	306,000	74,000

	Fuel Swap Agreements
	As of September 30, 2014		As of December 31, 2013
	(% hedged)
Projected fuel purchases for year:
2014	54	%	57	%
2015	56	%	45	%
2016	41	%	25	%
2017	20	%	5	%

Fair Value And Line item Caption of Derivative Instruments

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows:

	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of September 30, 2014		As of December 31, 2013		Balance Sheet Location	As of September 30, 2014		As of December 31, 2013
		Fair Value		Fair Value			Fair Value		Fair Value
In thousands
Derivatives designated as hedging instruments under ASC 815-20(1)
Interest rate swaps	Other assets	$	2,384	$	56,571	Other long-term liabilities	$	50,688	$	66,920
Foreign currency forward contracts	Derivative financial instruments	2,882		61,596		Accrued expenses and other liabilities	29,304		—
Foreign currency forward contracts	Other assets	40,682		13,783		Other long-term liabilities	99,437		—
Foreign currency collar options	Derivative financial instruments	—		—		Accrued expenses and other liabilities	8,465		—
Foreign currency collar options	Other assets	—		22,172		Accrued expenses and other liabilities	—		—
Fuel swaps	Derivative financial instruments	—		10,902		Accrued expenses and other liabilities	37,768		1,657
Fuel swaps	Other assets	18		8,205		Other long-term liabilities	27,016		9,052
Total derivatives designated as hedging instruments under ASC 815-20		$	45,966	$	173,229		$	252,678	$	77,629
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	11,971	$	15,347	Accrued expenses and other liabilities	$	22,358	$	22,631
Total derivatives not designated as hedging instruments under ASC 815-20		11,971		15,347			22,358		22,631
Total derivatives		$	57,937	$	188,576		$	275,036	$	100,260

(1)Accounting Standard Codification 815-20 “Derivatives and Hedging.”

Carrying Value and Line Item Caption of Non-derivative Instruments designated as hedging instruments

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows:

		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of September 30, 2014		As of December 31, 2013
In thousands
Foreign currency debt	Current portion of long-term debt	$	—	$	477,442
Foreign currency debt	Long-term debt	169,819		273,354
		$	169,819	$	750,796

Effect of Non-derivative Instruments Qualifying and Designated as net investment Hedging Instruments on Consolidated Financial Statements

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows:

Non-derivative  instruments under ASC 815- 20 Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income (Effective Portion)										Location of Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Quarter Ended September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014		Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013
In thousands
Foreign Currency Debt	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)	Other income (expense)	$	—	$	—	$	—	$	—
	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)		$	—	$	—	$	—	$	—

Derivative Instruments

Offsetting Liabilities

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 30, 2014										As of December 31, 2013
	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities			Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Pledged		Net Amount of Derivative Liabilities
In thousands of dollars
Derivatives subject to master netting agreements	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)
Total	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)

Offsetting Assets

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 30, 2014									As of December 31, 2013
	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities			Cash Collateral Received		Net Amount of Derivative Assets		Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets			Cash Collateral Received		Net Amount of Derivative Assets
In thousands of dollars
Derivatives subject to master netting agreements	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949
Total	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949

Not Designated as Hedging Instrument

Derivative Instruments

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows:

		Amount of (Loss) Gain Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of (Loss) Gain Recognized in Income on Derivatives	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Foreign currency forward contracts	Other income (expense)	$	(35,175	)	$	16,789		$	(24,405	)	$	(10,491	)
Fuel swaps	Other income (expense)	(220		)	220			(1,157		)	268
Fuel call options	Other income (expense)	—			(38		)	—			(1		)
		$	(35,395	)	$	16,971		$	(25,562	)	$	(10,224	)

Fair Value Hedging

Derivative Instruments

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows:

Derivatives and related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative										Amount of Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended September 30, 2014			Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013			Quarter Ended September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	3,063		$	3,022	$	9,199	$	6,299		$	3,968	$	9,503		$	13,435		$	28,102
Interest rate swaps	Other income (expense)	(3,010		)	958		24,431		(58,286		)	3,934		(620		)	(19,122		)	55,553
		$	53		$	3,980	$	33,630	$	(51,987	)	$	7,902	$	8,883		$	(5,687	)	$	83,655

Cash flow hedge

Derivative Instruments

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

Derivatives under ASC  815-20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive (Loss) Income on Derivative (Effective Portion)												Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive (Loss) Gain into Income (Effective Portion)	Amount of (Loss) Gain reclassified from Accumulated Other Comprehensive (Loss) Income into Income (Effective Portion)
	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Cross currency swaps	$	—		$	—		$	—		$	—		Interest expense, net of interest capitalized	$	—		$	(890	)	$	(261	)	$	(2,641	)
Interest rate swaps	4,437			(5,816		)	(62,309		)	87,672			Other income (expense)	—			—			—			—
Foreign currency forward contracts	(163,387		)	47,338			(172,629		)	38,343			Depreciation and amortization expenses	(450		)	(449		)	(1,348		)	(1,348		)
Foreign currency forward contracts	—			—			—			—			Other income (expense)	(238		)	19,089			(4,052		)	18,612
Foreign currency forward contracts	—			—			—			—			Interest expense, net of interest capitalized	—			(217		)	(57		)	(222		)
Foreign currency collar options	(21,904		)	16,801			(30,638		)	5,554			Depreciation and amortization expenses	—			—			—			—
Fuel swaps	(71,456		)	32,785			(64,527		)	(22,415		)	Fuel	(1,996		)	12,002			(1,206		)	38,238
	$	(252,310	)	$	91,108		$	(330,103	)	$	109,154			$	(2,684	)	$	29,535		$	(6,924	)	$	52,639

	Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivatives under ASC 815- 20 Cash Flow Hedging Relationships		Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Other income (expense)	$	17		$	(7	)	$	(78	)	$	420
Foreign currency forward contracts	Other income (expense)	15			15			(12		)	5
Fuel swaps	Other income (expense)	(8,069		)	(953		)	(7,607		)	(5,322		)
		$	(8,037	)	$	(945	)	$	(7,697	)	$	(4,897	)