Intangible Assets

12 Months Ended

Dec. 31, 2021

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Note 5. Intangible Assets

Intangible assets consist of finite and indefinite life assets and are reported within Other assets in our consolidated balance sheets.

The impact of COVID-19 on our operating plans and projected cash flows resulted in the completion of an interim impairment assessment for the Silversea Cruises trade name as of March 31, 2020, in addition to our annual indefinite-lived intangible asset impairment assessments performed as of November 30, 2020 and November 30, 2021. Refer to Note 1. General for further information regarding COVID-19 and its impact to the Company.

As a result of our evaluation, we determined the carrying value of the Silversea Cruises trade name exceeded its fair value as of March 31, 2020. Accordingly, we recognized an impairment charge of $30.8 million for the quarter ended March 31, 2020. We did not perform interim impairment evaluations of Silversea Cruises' trade name during the quarters ended June 30, 2020 and September 30, 2020, as no triggering events were identified. As of November 30, 2020, we performed our annual trade name impairment review and determined the fair value of the Silversea Cruise trade name exceeded its carrying value by approximately 3%. We did not perform interim impairment evaluations of Silversea Cruises' trade name during the quarters ended March 31, 2021, June 30, 2021, and September 30, 2021 as no triggering events were identified.

As of November 30, 2021, we performed our annual trade name impairment review and determined no incremental impairment losses existed at the date of this annual assessment. We determined the fair value of the Silversea Cruises trade name exceeded its carrying value by approximately 19% at the date of this annual assessment. The adverse impact COVID-19 will continue to have on our business, operating results, cash flows and overall financial condition is uncertain and may result in changes to the assumptions used in the impairment tests discussed above. In addition, delays in achieving occupancy levels at historical levels or changes to our planned ship deliveries could adversely impact our expected occupancy rates and may result in additional impairment charges of the Silversea Cruises trade name in the future.

The gradual resumption of cruise operations, as further discussed in Note 1. General, and possibility of further delays or suspensions create uncertainty in forecasting operating cash flows. The determination of our trade name fair values using a discounted cash flow model and various valuation methods depending on the nature of the intangible asset, such as the relief-from-royalty method, require the use of assumptions that are subject to risk and uncertainties. The principal assumptions used in the discounted cash flow analyses that support the Silversea Cruises trade name impairment assessments consisted of:

•Forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, and terminal growth rate;

•Royalty rate; and

•Weighted average cost of capital (i.e., discount rate).

The following is a summary of our intangible assets as of December 31, 2021 (in thousands, except weighted average amortization period), with Silversea Cruises' trade name representing approximately $318.7 million of the indefinite-lived intangible asset balance:


	As of December 31, 2021
	Remaining Weighted Average Amortization Period (Years)	Gross Carrying Value		Accumulated Amortization		Accumulated Impairment Losses		Net Carrying Value
Finite-life intangible assets:
Customer relationships	11.6	$	97,400	$	22,186	$	—	$	75,214
Galapagos operating license	22.6	47,669		9,802		—		37,867
Other finite-life intangible assets	0	11,560		11,560		—		—
Total finite-life intangible assets		156,629		43,548		—		113,081
Indefinite-life intangible assets (1)		352,275		—		30,800		321,475
Total intangible assets, net		$	508,904	$	43,548	$	30,800	$	434,556

(1) Primarily relates to the Silversea Cruises trade name.

The following is a summary of our intangible assets as of December 31, 2020 (in thousands, except weighted average amortization period):


	As of December 31, 2020
	Remaining Weighted Average Amortization Period (Years)	Gross Carrying Value		Accumulated Amortization		Accumulated Impairment Losses		Net Carrying Value
Finite-life intangible assets:
Customer relationships	12.8	$	97,400	$	14,069	$	—	$	83,331
Galapagos operating license	23.8	47,669		7,621		—		40,048
Other finite-life intangible assets	0	11,560		11,560		—		—
Total finite-life intangible assets		156,629		33,250		—		123,379
Indefinite-life intangible assets (1)		352,275		—		30,800		321,475
Total intangible assets, net		$	508,904	$	33,250	$	30,800	$	444,854

(1) Primarily relates to the Silversea Cruises trade name.

The estimated future amortization for finite-life intangible assets for each of the next five years is as follows (in thousands):


Year
2022	$	8,179
2023	$	8,179
2024	$	8,179
2025	$	8,179
2026	$	8,179