Commitments and Contingencies

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Ship Purchase Obligations

Our future capital commitments consist primarily of new ship orders. As of March 31, 2017, we had two Quantum-class ships and two Oasis-class ships on order for our Royal Caribbean International brand with an aggregate capacity of approximately 19,200 berths. Additionally, as of March 31, 2017, we have four "Project Edge" ships on order for our Celebrity Cruises brand with an aggregate capacity of approximately 11,600 berths.

In April 2017, we signed conditional agreements with Meyer Turku to build two ships of a new generation of ships for Royal Caribbean International, known as “Project Icon”. These ships, which have an aggregate capacity of approximately 11,300 berths, are expected to be delivered in the second quarters of 2022 and 2024. Our agreements with Meyer Turku are contingent upon completion of conditions precedent, including financing.

As of March 31, 2017, the aggregate cost of our ships on order, not including the TUI Cruises' ships on order and the Project Icon ships, was approximately $8.5 billion, of which we had deposited $316.3 million as of such date. Approximately 60.5% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at March 31, 2017. Refer to Note 9. Fair Value Measurements and Derivative Instruments for further information.

Litigation

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2016, we settled in February 2017 all claims by the Alaska Department of Environmental Conservation for alleged violations of the Alaska Marine Visible Emissions Standards. Pursuant to this settlement, we agreed to pay an amount and perform certain remedial actions which, individually and in the aggregate, are immaterial to our financial condition or results of operations and cash flows.

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

If any person acquires ownership of more than 50% of our common stock or, 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 our credit facilities, which we may be unable to replace on similar terms. Our public debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.