What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-08-05 · 227 added, 217 removed, 970 unchanged (31% of the section changed)

3 unchanged sentences

in thousands, except per share data)

Quarter Ended June 30,

Quarter Ended September 30,

Passenger ticket revenues $ 280,153 $ 3,204

34 unchanged sentences

Change in defined benefit plans ( 3,627 ) ( 3,086 )

Gain on cash flow derivative hedges 51,476 124,331

Total other comprehensive income 44,899 144,390

(Loss) gain on cash flow derivative hedges ( 13,264 ) 66,135

Total other comprehensive (loss) income ( 11,869 ) 82,120

Comprehensive Loss ( 1,436,423 ) ( 1,257,192 )

6 unchanged sentences

in thousands, except per share data)

Six Months Ended June 30,

Nine Months Ended September 30,

Passenger ticket revenues $ 323,782 $ 1,487,077

44 unchanged sentences

(in thousands, except share data)

June 30, December 31,

September 30, December 31,

Current assets

Cash and cash equivalents $ 3,289,326 $ 3,684,474

Trade and other receivables, net of allowances of $ 4,459 and $ 3,867 at June 30, 2021 and December 31, 2020, respectively

Trade and other receivables, net of allowances of $ 12,369 and $ 3,867 at September 30, 2021 and December 31, 2020, respectively

397,232 284,149

6 unchanged sentences

Goodwill 809,373 809,480

Other assets, net of allowances of $ 85,369 and $ 81,580 at June 30, 2021 and December 31, 2020, respectively

Other assets, net of allowances of $ 85,089 and $ 81,580 at September 30, 2021 and December 31, 2020, respectively

1,428,876 1,497,380

20 unchanged sentences

Common stock ($ 0.01 par value;

500,000,000 shares authorized, 282,575,446 and 265,198,371 shares issued, June 30, 2021 and December 31, 2020, respectively)

500,000,000 shares authorized, 282,672,234 and 265,198,371 shares issued, September 30, 2021 and December 31, 2020, respectively)

Paid-in capital 7,547,210 5,998,574

1 unchanged sentence

Accumulated other comprehensive loss ( 675,824 ) ( 739,341 )

Treasury stock ( 27,882,987 and 27,799,775 common shares at cost, June 30, 2021 and December 31, 2020, respectively)

Treasury stock ( 27,882,987 and 27,799,775 common shares at cost, September 30, 2021 and December 31, 2020, respectively)

( 2,065,959 ) ( 2,063,991 )

5 unchanged sentences

(unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Activities

8 unchanged sentences

Amortization of debt discounts and premiums 93,517 36,330

(Gain) loss on extinguishment of debt ( 3,156 ) 40,335

Loss on extinguishment of debt 138,759 41,109

Currency translation adjustment losses — 69,044

4 unchanged sentences

(Increase) decrease in prepaid expenses and other assets ( 123,935 ) 271,315

Increase in accounts payable 38,073 118,398

Increase in accrued interest 17,675 52,114

Increase (decrease) in accounts payable 107,215 ( 90,306 )

(Decrease) increase in accrued interest ( 3,685 ) 164,284

Decrease in accrued expenses and other liabilities ( 5,911 ) ( 87,936 )

16 unchanged sentences

Repayments of debt ( 2,212,510 ) ( 3,430,245 )

Premium on repayment of debt ( 135,372 ) —

Proceeds from issuance of commercial paper notes — 6,765,816

2 unchanged sentences

Proceeds from common stock issuances 1,621,860 —

Other, net ( 36,125 ) ( 28,284 )

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

2 unchanged sentences

(unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Other, net ( 5,779 ) ( 25,824 )

Net cash provided by financing activities 2,838,559 7,469,762

Effect of exchange rate changes on cash ( 704 ) ( 1,764 )

Net increase in cash and cash equivalents 565,895 3,902,953

Net (decrease) increase in cash and cash equivalents ( 395,148 ) 2,773,050

Cash and cash equivalents at beginning of period 3,684,474 243,738

6 unchanged sentences

Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities $ 22,925 $ 13,603

Non-cash Financing Activities

Purchase of Silversea Cruises non-controlling interest $ — $ 592,313

Termination of Silversea Cruises contingent consideration obligation $ — $ 17,274

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

3 unchanged sentences

Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

Balance at April 1, 2021 $ 2,824 $ 7,513,318 $ 4,431,053 $ ( 708,854 ) $ ( 2,065,959 ) $ 9,172,382

Balance at July 1, 2021 $ 2,826 $ 7,527,305 $ 3,083,798 $ ( 663,955 ) $ ( 2,065,959 ) $ 7,884,015

Activity related to employee stock plans 1 20,045 — — — 20,046

5 unchanged sentences

— — ( 1,424,554 ) — — ( 1,424,554 )

Balance at June 30, 2021 $ 2,826 $ 7,527,305 $ 3,083,798 $ ( 663,955 ) $ ( 2,065,959 ) $ 7,884,015

Balance at September 30, 2021 $ 2,827 $ 7,547,210 $ 1,659,244 $ ( 675,824 ) $ ( 2,065,959 ) $ 6,467,498

Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

8 unchanged sentences

— — ( 3,903,531 ) — — ( 3,903,531 )

Balance at June 30, 2021 $ 2,826 $ 7,527,305 $ 3,083,798 $ ( 663,955 ) $ ( 2,065,959 ) $ 7,884,015

Balance at September 30, 2021 $ 2,827 $ 7,547,210 $ 1,659,244 $ ( 675,824 ) $ ( 2,065,959 ) $ 6,467,498

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

3 unchanged sentences

Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

Balance at April 1, 2020 $ 2,372 $ 3,473,253 $ 9,915,758 $ ( 1,095,617 ) $ ( 2,063,991 ) $ 10,231,775

Balance at July 1, 2020 $ 2,372 $ 3,700,288 $ 8,276,463 $ ( 951,227 ) $ ( 2,063,991 ) $ 8,963,905

Activity related to employee stock plans 1 20,445 — — — 20,446

Equity component of convertible notes, net of issuance costs — 208,988 — — — 208,988

Silversea acquisition 52 608,824 608,876

Changes related to cash flow derivative hedges — — — 66,135 — 66,135

3 unchanged sentences

— — ( 1,346,756 ) — — ( 1,346,756 )

Balance at June 30, 2020 $ 2,372 $ 3,700,288 $ 8,276,463 $ ( 951,227 ) $ ( 2,063,991 ) $ 8,963,905

Balance at September 30, 2020 $ 2,425 $ 4,329,557 $ 6,929,710 $ ( 869,107 ) $ ( 2,063,991 ) $ 8,328,594

Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

2 unchanged sentences

Equity component of convertible notes, net of issuance costs — 208,988 — — — 208,988

Silversea acquisition 52 608,824 — — — 608,876

Common stock dividends, $ 0.78 per share

6 unchanged sentences

— — ( 4,430,527 ) — — ( 4,430,527 )

Balance at June 30, 2020 $ 2,372 $ 3,700,288 $ 8,276,463 $ ( 951,227 ) $ ( 2,063,991 ) $ 8,963,905

Balance at September 30, 2020 $ 2,425 $ 4,329,557 $ 6,929,710 $ ( 869,107 ) $ ( 2,063,991 ) $ 8,328,594

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

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We account for our investment in TUIC under the equity method of accounting.

Together, our Global Brands and our Partner Brands operate a combined 60 ships as of June 30, 2021.

Together, our Global Brands and our Partner Brands operate a combined 60 ships as of September 30, 2021.

Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents.

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We have restarted our global cruise operations in a phased manner, following the requirements and recommendations of regulatory agencies, with reduced guest occupancy, modified itineraries and enhanced health, safety and vaccination protocols.

Our Global Brands have returned to service from U.S.

ports, and 12 of our ships have sailed or are expected to sail from U.S.

ports by August 31, 2021.

More broadly, a total of 36 of our 60 Global and Partner Brand ships have resumed sailing or have announced their intention to resume sailing by August 31, 2021.

By the end of September 2021, we operated 38 of our Global and Partner Brand ships, representing 63 % of our fleet, and sailed over 500,000 passengers since we resumed operations.

We expect to operate approximately 80 % of our fleet by December 31, 2021.

Uncertainties remain as to the specifics, timing and costs of administering and implementing our health and safety measures, some of which may be significant.

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Additionally, we expect to continue to pursue refinancing opportunities to reduce interest expense and extend maturities.

As of June 30, 2021, we had liquidity of $ 5.0 billion, consisting of cash and cash equivalents of $ 4.3 billion and a $ 0.7 billion 364-day term loan facility commitment available to draw through August 12, 2022.

Our revolving credit facilities were mostly utilized through a combination of amounts drawn and letters of credit issued under the facilities as of June 30, 2021.

As of September 30, 2021, we had liquidity of $ 4.1 billion, including $ 0.1 billion of undrawn revolving credit facility capacity, $ 3.3 billion in cash and cash equivalents, and a $ 0.7 billion commitment for a 364-day term loan facility available to draw at any time prior to August 12, 2022.

Our revolving credit facilities were mostly utilized through a combination of amounts drawn and letters of credit issued under the facilities as of September 30, 2021.

During the three months ended March 31, 2021, we extended our $ 1.0 billion unsecured loan due April 2022 and our $ 1.6 billion unsecured revolving credit facility due October 2022 to October 2023 and April 2024, respectively.

As of June 30, 2021, we were in compliance with our financial covenants.

As of September 30, 2021, we were in compliance with our financial covenants.

Refer to Note 7 .

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We consolidate the operating results of Silversea Cruises on a three-month reporting lag to allow for more timely preparation of our consolidated financial statements.

No material events or other transactions involving Silversea Cruises have occurred from March 31, 2021 through June 30, 2021, with the exception of the full repayment of the Silversea Cruises 7.25 % senior secured notes, in the amount of $ 619.8 million, in addition to payment of the related call premiums, accrued interest and fees in June of 2021, which are reported in our consolidated financial statements as of and for the quarter ended June 30, 2021.

No material events or other transactions involving Silversea Cruises have occurred from June 30, 2021 through September 30, 2021, that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended September 30, 2021.

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.

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We recognized an immaterial gain on the sale during the quarter ended March 31, 2021 and have agreed to provide certain transition services to Azamara for a period of time for a fee.

On July 9, 2020, we acquired the 33.3 % interest in Silversea Cruises that we did not already own from Heritage Cruise Holding Ltd.

Redeemable Noncontrolling Interest in our Annual Report on Form 10-K for the year ended December 31, 2020 for further information regarding our acquisition of Silversea Cruises' noncontrolling interest.

Summary of Significant Accounting Policies

6 unchanged sentences

We are currently evaluating the impact of the new guidance on our consolidated financial statements.

The impact, if any, will be dependent on the terms of any future contract modifications related to a change in reference rate.

In August 2020, the FASB issued ASU No.

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The ASU is effective for annual reporting periods beginning after December 15, 2021, including interim reporting periods within those annual periods, with early adoption permitted no earlier than the fiscal year beginning after December 15, 2020.

The guidance is expected to have an impact on our consolidated financial statements given the recent issuance of convertible notes, however, we are still evaluating the magnitude of the new guidance on our consolidated financial statements.

The guidance is expected to have an impact on our consolidated financial statements given the recent issuance of convertible notes;

however, we are still evaluating the magnitude of the new guidance on our consolidated financial statements.

Reclassifications

For the six months ended June 30, 2021, we separately presented Amortization of debt discounts and premiums , which includes amortization of commercial paper notes discount, in our consolidated statements of cash flows within Operating Activities .

For the nine months ended September 30, 2021, we separately presented Amortization of debt discounts and premiums , which includes amortization of commercial paper notes discount, in our consolidated statements of cash flows within Operating Activities .

As a result, the prior year amortization amounts were reclassified from Other, net within Operating Activities to conform to the current year presentation.

Also, for the six months ended June 30, 2021, we no longer separately present Proceeds from exercise of common stock options in our consolidated statements of cash flows.

Also, for the nine months ended September 30, 2021, we no longer separately present Proceeds from exercise of common stock options in our consolidated statements of cash flows.

As a result, the prior year amounts were reclassified to Other, net within Financing Activities to conform to the current year presentation.

Impairments and Credit Losses

Starting in early 2020, the challenges related to COVID-19 have significantly impacted our expected investments, operating plans and projected cash flows.

The challenges related to COVID-19 have significantly impacted our expected investments, operating plans and projected cash flows.

Refer to Note 1 .

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As a result of these events, we performed interim impairment evaluations during 2020 on certain assets.

During the quarter and six months ended June 30, 2020, we recognized combined impairment and credit losses of $ 156.5 million and $ 1.3 billion, respectively, which are reported within Impairment and credit losses within our consolidated statements of comprehensive loss.

For the quarter ended June 30, 2020, we recognized impairment losses of $ 64.9 million primarily related to our property and equipment, net and right-of-use assets.

We recognized impairment losses of $ 1.1 billion during the six months ended June 30, 2020 primarily related to goodwill, trademarks and trade names, property and equipment, net and right-of-use assets.

The credit losses of $ 91.6 million and $ 129.7 million recognized during the quarter and six months ended June 30, 2020, respectively, related to our notes receivable.

In addition, an impairment charge of $ 39.7 million related to our equity investments was recognized in earnings during the quarter ended March 31, 2020 and is reported within Equity investment loss within our consolidated statements of comprehensive loss for the six months ended June 30, 2020.

For the quarter ended March 31, 2021, we had no indication of impairment or credit losses.

During the quarter and nine months ended September 30, 2020, we recognized combined impairment and credit losses of $ 89.9 million and $ 1.4 billion, respectively, which are reported within Impairment and credit losses within our consolidated statements of comprehensive loss.

For the quarter ended September 30, 2020, we recognized impairment losses of $ 83.9 million primarily related to our property and equipment, net.

We recognized impairment losses of $ 1.2 billion during the nine months ended September 30, 2020 primarily related to goodwill, trademarks and trade names, property and equipment, net and right-of-use assets.

The credit losses of $ 6.0 million and $ 135.7 million recognized during the quarter and nine months ended September 30, 2020, respectively, related to our notes receivable.

For the quarters ended March 31, 2021 and September 30, 2021, we had no indication of impairment.

During the quarter ended June 30, 2021, we determined that certain construction in progress projects would be reduced in scope or would no longer be completed due to the impact COVID-19 has had on our operations.

This led to an impairment of $ 40.6 million of construction in progress assets previously reported in Property and equipment, net.

This impairment charge was reported within Impairment and Credit Losses in our consolidated statements of comprehensive loss for the three and six months ended June 30, 2021.

This impairment charge is reported within

Impairment and Credit Losses in our consolidated statements of comprehensive loss for nine months ended September 30, 2021.

For information regarding our credit losses, refer to Note 6 .

Other Assets.

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, which may result in additional impairments to these assets in the future.

1 unchanged sentence

Revenues are measured based on consideration specified in our contracts with customers and are recognized as the related performance obligations are satisfied.

Historically, the majority of our revenues when we are operating are derived from passenger cruise contracts which are reported within Passenger ticket revenues in our consolidated statements of comprehensive loss.

Historically, the majority of our revenues when we are operating are derived from passenger cruise contracts that are reported within Passenger ticket revenues in our consolidated statements of comprehensive loss.

Our performance obligation under these contracts is to provide a cruise vacation in exchange for the ticket price.

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These type of port costs, along with port costs that do not vary by passenger head counts, are included in our cruise operating expenses.

The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $ 3.2 million for the quarter ended June 30, 2021 compared to no port costs charged for the quarter ended June 30, 2020.

Port costs charged to our guest and included within Passenger ticket revenues were $ 4.7 million and $ 124.5 million for the six months ended June 30, 2021 and 2020, respectively.

The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $ 29.3 million for the quarter September 30, 2021 compared to no port costs charged for the quarter ended September 30, 2020.

Port costs charged to our guest and included within Passenger ticket revenues were $ 33.9 million and $ 124.5 million for the nine months ended September 30, 2021 and 2020, respectively.

Our total revenues also include O nboard and other revenues , which historically have consisted primarily of revenues from the sale of goods and services onboard our ships that are not included in passenger ticket prices.

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The following table disaggregates our total revenues by geographic regions where we provide cruise itineraries (in thousands):

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2021 2020(6) 2021 2020(6)

12 unchanged sentences

(5) Includes revenues primarily related to cancellation fees, vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities.

Amounts also include revenues related to our bareboat charter, which was terminated when Pullmantur Holdings filed for reorganization in Spain in 2020, and procurement and management related services we perform on behalf of our unconsolidated affiliates and third parties.

Amounts also include revenues related to our bareboat charter, which was terminated when Pullmantur

Holdings filed for reorganization in Spain in 2020, and procurement and management related services we perform on behalf of our unconsolidated affiliates and third parties.

Refer to Note 6 .

Other Assets for more information on our unconsolidated affiliates.

(6) Onboard and other revenues for the quarter and nine months ended September 30, 2020 includes a charge of $ 67.9 million to correct cancellation revenue, for certain immaterial bookings, which was incorrectly recognized during the six months ended June 30, 2020.

The charge is considered immaterial to our financial statements.

Passenger ticket revenues are attributed to geographic areas based on where the reservation originates.

For the quarters ended June 30, 2021 and 2020, our guests were sourced from the following areas:

Quarter Ended June 30,

For the quarters and nine months ended September 30, 2021 and 2020, our guests were sourced from the following areas:

Quarter Ended September 30,

Passenger ticket revenues:

Singapore 54 % — %

United States 74 % 66 %

United Kingdom 14 % 14 %

China — % 11 %

All other countries (1) 12 % 20 %

Six Months Ended June 30,

Nine Months Ended September 30,

Passenger ticket revenues:

Singapore 61 % — %

China 15 % 3 %

United States 67 % 67 %

United Kingdom 13 % 7 %

Singapore 13 % — %

All other countries (1) 7 % 26 %

(1) No other individual country's revenue exceeded 10% for the quarters and six months ended June 30, 2021 and 2020.

(1) No other individual country's revenue exceeded 10% for the quarters and nine months ended September 30, 2021 and 2020.

Customer Deposits and Contract Liabilities

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The current reduction in demand for cruising due to COVID-19 resulted in an unprecedented low level of advance bookings and the associated customer deposits received.

At the same time, we have experienced significant cancellations as a result of the COVID-19 pandemic operations, which has led to issuance of refunds to customers, while the remainder have been rebooked on future cruises or received credits in lieu of cash refunds.

As of June 30, 2021, refunds due to customers mostly as a result of booking cancellations were $ 107.9 million compared to $ 95.8 million as of December 31, 2020.

Due to the uncertainty around the return of demand for cruising, we are unable to estimate the amount of the June 30, 2021 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel through the end of 2021.

Customer deposits presented in our consolidated balance sheets include contract liabilities of $ 283.7 million and $ 124.8 million as of June 30, 2021 and December 31, 2020, respectively.

At the same time, we have experienced significant cancellations as a result of the COVID-19 pandemic, which has led to issuance of refunds to customers, while the remainder have been rebooked on future cruises or received credits in lieu of cash refunds.

As of September 30, 2021, refunds due to customers mostly as a result of booking cancellations were $ 44.6 million compared to $ 95.8 million as of December 31, 2020.

Due to the uncertainty around the return of demand for cruising, we are unable to estimate the amount of the September 30, 2021 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel through the end of 2021.

Customer deposits presented in our consolidated balance sheets include contract liabilities of $ 538.6 million and $ 124.8 million as of September 30, 2021 and December 31, 2020, respectively.

We have provided flexibility to guests with bookings on sailings cancelled due to COVID-19 by allowing guests to receive enhanced future cruise credits (“FCC”) or elect to receive refunds in cash.

As of September 30, 2021, our customer deposit balance includes approximately $ 650.0 million of unredeemed FCCs.

In January 2021, we extended the expiration date of the FCCs until April 2022 for sailings departing on or before December 2022.

Given the uncertainty of travel demand caused by COVID-19 and lack of comparable historical experience of FCC redemptions, we are unable to estimate the number of FCCs that may expire unused in future periods and get recognized as breakage.

We will update our breakage analysis as future information is received.

Contract Receivables and Contract Assets

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We have contract assets that are conditional rights to consideration for satisfying the construction services performance obligations under a service concession arrangement.

As of June 30, 2021 and December 31, 2020, our contract assets were

$ 53.7 million and were included within Other assets in our consolidated balance sheets.

As of September 30, 2021 and December 31, 2020, our contract assets were $ 53.7 million and were included within Other assets in our consolidated balance sheets.

Given the short duration of our cruises and our collection terms, we do not have any other significant contract assets.

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Prepaid travel agent commissions are an incremental cost of obtaining contracts with customers that we recognize as an asset and include within Prepaid expenses and other assets in our consolidated balance sheets.

Prepaid travel agent commissions were $ 31.7 million as of June 30, 2021 and $ 1.1 million as of December 31, 2020.

Substantially all of our prepaid travel agent commissions at December 31, 2020 were expensed and reported primarily within Commissions, transportation and other in our consolidated statements of comprehensive loss for the quarter ended June 30, 2021.

Prepaid travel agent commissions were $ 51.4 million as of September 30, 2021 and $ 1.1 million as of December 31, 2020.

(Loss) Per Share

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

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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Diluted (loss) per share $ ( 5.59 ) $ ( 6.29 ) $ ( 15.56 ) $ ( 21.01 )

There were approximately 445,000 and 449,000 antidilutive shares for the quarter and six months ended June 30, 2021, respectively, compared to 421,000 and 662,000 for the quarter and six months ended June 30, 2020, respectively.

There were approximately 339,835 and 433,705 antidilutive shares for the quarter and nine months ended September 30, 2021, respectively, compared to 192,981 and 265,606 for the quarter and nine months ended September 30, 2020, respectively.

Since the Company expects to settle in cash the principal outstanding on the convertible notes that mature in 2023, we currently use the treasury stock method when calculating their potential dilutive effect, if any.

While the criteria for conversion of the convertible notes has not been met, the shares that would be issued upon conversion of the notes would be anti-dilutive for the quarter and six months ended June 30, 2021.

While the criteria for conversion of the convertible notes has not been met, the shares that would be issued upon conversion of the notes would be antidilutive for the quarter and nine months ended September 30, 2021.

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:

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Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

As of June 30, 2021, the net book value of our investment in TUIC was $ 488.9 million, primarily consisting of $ 347.1 million in equity and a loan of € 111.0 million, or approximately $ 131.6 million based on the exchange rate at June 30, 2021.

As of September 30, 2021, the net book value of our investment in TUIC was $ 449.2 million, primarily consisting of $ 316.6 million in equity and a loan of € 107.0 million, or approximately $ 124.0 million based on the exchange rate at September 30, 2021.

As of December 31, 2020, the net book value of our investment in TUIC was $ 538.4 million, primarily consisting of $ 387.5 million in equity and a loan of € 118.9 million, or approximately $ 145.5 million based on the exchange rate at December 31, 2020.

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The majority of these amounts were included within Other assets in our consolidated balance sheets.

During the quarter ended March 31, 2021, we and TUI AG each contributed € 59.5 million, or approximately $ 69.9 million based on the exchange rate at March 31, 2021, of additional equity through a combination of cash

contributions and conversion of existing receivables.

In June 2021, Hapag-Lloyd Cruises received delivery of the Hanseatic Spirit , a 230 berth luxury expedition cruise vessel.

TUIC has various ship construction and financing agreements which include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.55 % through May 2033.

TUIC has various ship construction and financing agreements that include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.55 % through May 2033.

Our investment amount and outstanding term loan are subs tantially our maximum exposure to loss in connection with our investment in TUIC.

TUI Cruises and Hapag-Lloyd Cruises, our Partner Brands, have been adversely affected by COVID-19, resulting in the suspension of the majority of the brands' cruise operations.

TUI Cruises has resumed limited cruises and announced resumption of additional cruise operations in Europe.

Hapag-Lloyd announced their resumption of cruise operation for the third quarter of 2021.

TUI Cruises and Hapag-Lloyd Cruises have resumed cruises and announced resumption of additional cruise operations in Europe.

The brands' suspension of operations during the COVID-19 pandemic has resulted in a material negative impact to the brands' results of operations and liquidity.

The brands have executed cost containment actions and liquidity measures, including the issuance of new financing, such as the April 2021 issuance of € 300.0 million senior unsecured bonds due in 2026, and the deferral of existing financing, to mitigate the impact of COVID-19 until normal operations resume.

The brands have executed cost containment actions and liquidity measures, including the issuance of new financing, such as the April 2021 and October 2021 issuances of € 300.0 million senior unsecured bonds due in 2026 and € 223.5 million senior unsecured bonds due in 2026, respectively, and the deferral of existing financing, to mitigate the impact of COVID-19 until normal operations resume.

We have determined that Pullmantur Holdings, in which we have a 49 % noncontrolling interest and Springwater Capital LLC has a 51 % interest, is a VIE for which we are not the primary beneficiary, as we do not have the power to direct the activities that most significantly impact the entity's economic performance.

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We are currently recognizing our share of net accumulated equity method losses against the carrying value of our loans receivable from Grand Bahama.

As of June 30, 2021, we had exposure to credit loss in Grand Bahama consisting of a $ 12.7 million loan.

As of September 30, 2021, we had exposure to credit loss in Grand Bahama consisting of a $ 12.3 million loan.

Our loan to Grand Bahama matures March 2026 and bears interest at LIBOR plus 3.5 % to 3.75 %, capped at 5.75 %.

Interest payable on the loan is due on a semi-annual basis.

During the three months ended March 31, 2021, we received principal and interest payments of $ 8.9 million related to a term loan that had fully matured.

We did not receive principal and interest payments during the first half of 2020.

During the nine months ended September 30, 2021, we received principal and interest payments of $ 8.9 million related to a term loan that had fully matured.

We did not receive principal and interest payments during the quarter and nine months ended September 30, 2020.

The outstanding loan balance is included within Trade and other receivables, net and Other assets in our consolidated balance sheets.

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Effective April 1, 2020, we placed the loans in non-accrual status based on our review of Grand Bahama's projected cash flows, which have been adversely affected by impacts to their operations caused by the 2019 crane accident related to Oasis of the Seas , Hurricane Dorian and most recently, COVID-19.

During the quarter and six months ended June 30, 2021, no credit losses were recorded related to these loans.

During the quarter and nine months ended September 30, 2021, no credit losses were recorded related to these loans.

For further information on the measurements used to estimate the fair value of our equity investments, refer to Note 12 .

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The following tables set forth information regarding our investments accounted for under the equity method of accounting, including the entities discussed above (in thousands):

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

1 unchanged sentence

Dividends received (1) $ — $ — $ — $ 2,215

There were no dividends received from TUI Cruises for the quarters and six months ended June 30, 2021 and June 30, 2020 .

As of June 30, 2021 As of December 31, 2020

(1) There were no dividends received from TUI Cruises for the quarters and nine months ended September 30, 2021 and September 30, 2020 .

As of September 30, 2021 As of December 31, 2020

Total notes receivable due from equity investments $ 136,255 $ 164,596

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These bareboat charters were terminated when Pullmantur Holdings filed for reorganization in Spain.

We recorded the following as it relates to these services in our operating results within our consolidated statements of comprehensive income (loss) (in thousands):

Quarter Ended June 30, Six Months Ended June 30,

We recorded the following as it relates to these services in our operating results within our consolidated statements of comprehensive loss (in thousands):

Quarter Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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Credit Loss Allowance

We reviewed our notes receivable for credit losses in connection with the preparation of our financial statements as of June 30, 2021.

We reviewed our notes receivable for credit losses in connection with the preparation of our financial statements as of September 30, 2021.

In evaluating the allowance for loan losses, management considered factors such as historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions.

The following table summarizes our credit loss allowance related to receivables for the six months ended June 30, 2021 (in thousands):

The following table summarizes our credit loss allowance related to receivables for the nine months ended September 30, 2021 (in thousands):

Credit Loss Allowance

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Write-offs ( 4,723 )

Ending balance June 30, 2021 $ 89,828

Our credit loss allowance balance as of June 30, 2021, primarily relate to a $ 81.6 million loss provision recognized during 2020 on notes receivable related to a previous sale of property and equipment.

Ending balance September 30, 2021 $ 97,458

Our credit loss allowance balance as of September 30, 2021, primarily relate to a $ 81.6 million loss provision recognized during 2020 on notes receivable related to a previous sale of property and equipment.

Debt consist of the following (in thousands):

Interest Rate (1)

Maturities Through Quarter Ended June 30, 2021 Year Ended December 31, 2020

Maturities Through Quarter Ended September 30, 2021 Year Ended December 31, 2020

Fixed rate debt:

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Long-term portion $ 19,882,760 $ 17,957,956

(1) Interest rates based on outstanding loan balance as of June 30, 2021 and, for variable rate debt, include either LIBOR or EURIBOR plus the applicable margin.

(1) Interest rates based on outstanding loan balance as of September 30, 2021 and, for variable rate debt, include either LIBOR or EURIBOR plus the applicable margin.

(2) Includes $ 1.9 billion facility and $ 1.3 billion facility, the vast majority of which is due in 2024.

Our $ 1.9 billion facility accrues interest at LIBOR plus a maximum interest rate margin of 1.30 %, which interest was 1.45 % as of June 30, 2021 and is subject to a facility fee of a maximum of 0.20 %.

Our $ 1.3 billion facility accrues interest at LIBOR plus a maximum interest rate margin of 1.70 %, which interest was 1.85 % as of June 30, 2021 and is subject to a facility fee of a maximum of 0.30 %.

(3) At June 30, 2021 and December 31, 2020, the weighted average interest rate for total debt was 5.98 % and 6.02 %, respectively.

Our $ 1.9 billion facility accrues interest at LIBOR plus a maximum interest rate margin of 1.30 %, which interest was 1.43 % as of September 30, 2021 and is subject to a facility fee of a maximum of 0.20 %.

Our $ 1.3 billion facility accrues interest at LIBOR plus a maximum interest rate margin of 1.70 %, which interest was 1.83 % as of September 30, 2021 and is subject to a facility fee of a maximum of 0.30 %.

(3) At September 30, 2021 and December 31, 2020, the weighted average interest rate for total debt was 5.65 % and 6.02 %, respectively.

In March 2021, we amended our $ 1.55 billion unsecured revolving credit facility due October 2022 and our $ 1.0 billion unsecured loan due April 2022.

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Following these amendments, the aggregate revolving capacity of the revolving credit facility is approximately $ 1.3 billion, with approximately $ 0.2 billion terminating in October 2022 and approximately $ 1.1 billion terminating in April 2024 and the aggregate principal balance of the term loan is approximately $ 0.9 billion, with approximately $ 0.3 billion maturing in April 2022 and approximately $ 0.6 billion maturing in October 2023.

As of June 30, 2021, our aggregate revolving borrowing capacity was $ 3.2 billion and was mostly utilized through a combination of amounts drawn and letters of credit issued under the facilities.

Certain of our surety agreements with third party providers for the benefit of certain agencies and associations that provide travel related bonds, allow the sureties to request

As of September 30, 2021, our aggregate revolving borrowing capacity was $ 3.2 billion and was mostly utilized through a combination of amounts drawn and letters of credit issued under the facilities.

Certain of our surety agreements with third party providers for the benefit of certain agencies and associations that provide travel related bonds, allow the sureties to request collateral.

We also have agreements with our credit card processors relating to customer deposits received by us for future voyages.

These agreements allow the credit card processors to require us, under certain circumstances, to maintain a reserve that can be satisfied by posting collateral.

As of June 30, 2021, we have posted letters of credit as collateral with our sureties and credit card processors under our revolving credit facilities in the amount of $ 164.2 million.

Executed amendments are in place for the majority of our credit card processors, waiving reserve requirements tied to breach of our financial covenants through at least September 30, 2022, and as such, we do not anticipate any incremental collateral requirements for the processors covered by these waivers in the next 12 months.

We have a reserve with a processor where the agreement was amended in the first quarter of 2021, such that proceeds are withheld in reserve until the sailing takes place or the funds are refunded to the customer.

The maximum projected cash exposure with the processor, including amounts currently withheld and reported in Trade and other receivables , is approximately $ 210.6 million.

The amount and timing are dependent on future factors that are uncertain, such as the dates when our various ships return to operations, volume and value of future deposits and whether we transfer our business to other processors.

These agreements allow the credit card processors to require us, under certain circumstances, to maintain a reserve

that can be satisfied by posting collateral.

As of September 30, 2021, we have posted letters of credit as collateral with our sureties and credit card processors under our revolving credit facilities in the amount of $ 162.3 million.

Executed amendments are in place for the majority of our credit card processors, waiving reserve requirements tied to breach of our financial covenants through at least September 30, 2022, with modified covenants thereafter, and as such, we do not anticipate any incremental collateral requirements for the processors covered by these waivers in the next 12 months.

We have a reserve with a processor where the agreement was amended in the first quarter of 2021, such that proceeds are held in reserve until the sailing takes place or the funds are refunded to the customer.

The maximum projected cash exposure with the processor, including amounts currently held and reported in Trade and other receivables , is approximately $ 237.7 million.

The amount and timing are dependent on future factors that are uncertain, such as the pace of resumption of cruise operations, volume of future deposits and whether we transfer our business to other processors.

If we require additional waivers on the credit card processing agreements and are not able to obtain them, this could lead to the termination of these agreements or the trigger of reserve requirements.

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We repaid in full £ 300.0 million of Sterling-denominated notes issued under the Joint HM Treasury and Bank of England’s COVID Corporate Financing Facility and a $ 130 million term loan during the first and second quarters of 2021, respectively.

In June 2021, we issued $ 650.0 million of senior unsecured notes due in 2026 (the "Unsecured Notes") for net proceeds of approximately $ 640.6 million.

Interest accrues on the Unsecured Notes at a fixed rate of 4.25 % and is payable semi-annually.

We fully repaid the Silversea Cruises 7.25 % Senior Secured Notes due in 2025 (the "Silversea Notes"), in the amount of $ 619.8 million, with a portion of the proceeds from the Unsecured Notes.

We also funded call premiums, fees and expenses in connection with the redemption of the Silversea Notes with proceeds from the Unsecured Notes.

In June 2021, we issued $ 650.0 million of senior unsecured notes due in 2026 (the "June Unsecured Notes") for net proceeds of approximately $ 640.6 million.

Interest accrues on the June Unsecured Notes at a fixed rate of 4.25 % per annum and is payable semi-annually in arrears.

We fully repaid the Silversea Cruises 7.25 % senior secured notes due in 2025 (the "Silversea Notes"), in the amount of $ 619.8 million, with a portion of the proceeds from the June Unsecured Notes.

We also funded call premiums, fees and expenses in connection with the redemption of the Silversea Notes with proceeds from the June Unsecured Notes.

In August 2021, we issued $ 1.0 billion of senior notes due in 2026 (the "August Unsecured Notes") for net proceeds of approximately $ 986.0 million.

Interest accrues on the August Unsecured Notes at a fixed rate of 5.50 % per annum and is payable semi-annually in arrears.

We used the proceeds of the August Unsecured Notes to replenish our capital as a result of the redemption of a portion of the 11.50 % senior secured notes due 2025, in the amount of $ 928.0 million plus accrued interest and call premiums.

The repayment of the 11.50 % senior secured notes due 2025 resulted in a total loss on the extinguishment of debt of $ 141.9 million, which was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive loss for the quarter and nine months ended September 30, 2021.

During the first quarter of 2021, we amended $ 4.9 billion of our non-export credit facilities and certain of our credit card processing agreements to extend the waiver of the financial covenants through and including the third quarter of 2022 or, if earlier, the date falling after January 1, 2022 on which we elect to comply with the modified covenants.

Pursuant to the amendments, we have modified the manner in which such covenants are calculated (temporarily in certain cases and permanently in others) as well as the levels at which our net debt to capitalization covenant will be tested during the period commencing immediately following the end of the waiver period and continuing through the end of 2023.

As of June 30, 2021, the monthly-tested minimum liquidity covenant was $ 350 million for the duration of the waiver period.

As of September 30, 2021, the monthly-tested minimum liquidity covenant was $ 350 million for the duration of the waiver period.

As of the date of these financial statements, we were in compliance with the applicable minimum liquidity covenant.

Pursuant to these amendments, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022.

Pursuant to these

amendments, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022.

During the first quarter of 2021, we also amended $ 6.3 billion of our export credit facilities to extend the waiver of the financial covenants through and including at least the end of the third quarter of 2022, and subsequently in the third quarter of 2021, we entered into a letter agreement to extend the waiver period to the end of the fourth quarter of 2022.

These amendments defer $ 1.15 billion of principal payments due between April 2021 and April 2022.

The deferred amounts will be repayable semi-annually over a five-

year period starting in April 2022.

The deferred amounts will be repayable semi-annually over a five-year period starting in April 2022.

Pursuant to these amendments, we have agreed to implement the same liquidity covenant that applies in our non-export credit facilities.

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Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating.

On February 25, 2021, S&P Global downgraded our senior unsecured rating from B+ to B, which had no financial impact, and downgraded our $ 3.32 billion Senior Secured Notes and our Silversea Notes (which were fully repaid in June 2021 with proceeds from the $ 650 million Unsecured Notes) from BB to BB-.

On February 25, 2021, S&P Global downgraded our senior unsecured rating from B+ to B, which had no financial impact, and downgraded our $ 3.32 billion 10.875 % senior secured notes due 2023 and our 11.50 % senior secured notes due 2025 (collectively, "the "Secured Notes") and our Silversea Notes which were fully repaid in June 2021 with proceeds from the $ 650 million June Unsecured Notes, from BB to BB-.

This downgrade had no impact on the terms of the notes.

Except for the term loans we incurred to acquire Celebrity Flora and Silver Moon, all of our unsecured ship financing term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed.

For the majority of the loans as of June 30, 2021, we pay to the applicable export credit agency, depending on the financing agreement, an upfront fee of 2.35 % to 5.48 % of the maximum loan amount in consideration for these guarantees.

For the majority of the loans as of September 30, 2021, we pay to the applicable export credit agency, depending on the financing agreement, an upfront fee of 2.35 % to 5.48 % of the maximum loan amount in consideration for these guarantees.

For one of our loans, we pay to the applicable export credit agency a fee of 2.97 % per annum, based on the outstanding loan balance.

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Once the loan is drawn, such fees are classified as a discount to the related loan, or contra-liability account, within Current portion of long-term debt or long-term debt .

The following is a schedule of annual maturities on our total debt net of debt issuance costs, and including finance leases, as of June 30, 2021 for each of the next five years (in thousands):

The following is a schedule of annual maturities on our total debt net of debt issuance costs, and including finance leases, as of September 30, 2021 for each of the next five years (in thousands):

Remainder of 2021 $ 12,932

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Operating leases

Our operating leases primarily relate to preferred berthing arrangements, real estate and shipboard equipment and are included within Operating lease right-of-use assets , and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of June 30, 2021 and December 31, 2020.

Leases with an initial term of 12 months or less are not recorded on our consolidated balance sheet.

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For some of our real estate leases and berthing agreements, we have the option to extend our current lease term.

For those lease agreements with renewal options, the renewal periods for real estate leases range from one to 10 years and the renewal

periods for berthing agreements range from one to 20 years.

For those lease agreements with renewal options, the renewal periods for real estate leases range from one to 10 years and the renewal periods for berthing agreements range from one to 20 years.

Generally, we do not include renewal options as a component of our present value calculation for berthing agreements.

However, for certain real estate leases, we include them.

In June of 2021, we issued a notice to SMBC Leasing and Finance, Inc (the "Lessor"), exercising our existing option under our operating lease with the Lessor to purchase Terminal A at PortMiami in July 2021 for the pre-agreed purchase price of $ 220.0 million.

We reassessed the classification of the terminal lease as a result of our exercise to purchase the terminal and determined the lease to be a finance lease as of June 30, 2021.

Accordingly, as of June 30, 2021, we remeasured the lease liability and adjusted the related right-of-use asset, based on the pre-agreed purchase price and reported the finance lease liability in Current portion of long-term debt in our Consolidated Balance Sheet.

In June of 2021, we exercised our option under our operating lease with SMBC Leasing and Finance, Inc (the "Lessor") to purchase Terminal A at PortMiami in July 2021 for the pre-agreed purchase price of $ 220.0 million.

Upon purchase of the terminal lease in July 2021, the underlying asset was recorded as a leasehold improvement within Property and equipment, net.

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Additionally, we remeasured the ground lease related to the Terminal A lease based on a reassessed lease term resulting from our purchase option exercise.

As of June 30, 2021, we determined that the ground lease should remain as an operating lease with adjustments to the operating lease liability and the related right-of-use asset in our Consolidated Balance Sheet.

We determined that the ground lease should remain as an operating lease with adjustments to the operating lease liability and the related right-of-use asset in our Consolidated Balance Sheet.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments.

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In May 2021, the finance lease for the Silver Whisper expiring in 2022 was amended to extend its expiration by 12 months and will now expire in 2023, subject to an option to purchase the ship.

Additionally, certain scheduled payments have been deferred and are reflected in Long-term debt in our Consolidated Balance Sheet as of June 30, 2021.

The total aggregate amount of the finance lease liabilities recorded for this ship was $ 31.5 million at June 30, 2021 and December 31, 2020.

Additionally, certain scheduled payments have been deferred and are reflected in Long-term debt in our Consolidated Balance Sheet as of September 30, 2021.

The total aggregate amount of the finance lease liabilities recorded for this ship was $ 31.5 million at September 30, 2021 and December 31, 2020.

The lease payments on the Silver Whisper are subject to adjustments based on the LIBOR rate.

The components of lease expense were as follows (in thousands):

Consolidated Statement of Comprehensive Loss Classification Quarter Ended June 30, 2021 Six Months Ended June 30, 2021

Consolidated Statement of Comprehensive Loss Classification Quarter Ended September 30, 2021 Nine Months Ended September 30, 2021

Operating lease costs Commission, transportation and other $ 1,626 $ 1,626

Operating lease costs Other operating expenses 5,424 15,365

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Total lease costs $ 17,892 $ 44,745

Consolidated Statement of Comprehensive Loss Classification Quarter Ended June 30, 2020 Six Months Ended June 30, 2020

Consolidated Statement of Comprehensive Loss Classification Quarter Ended September 30, 2020 Nine Months Ended September 30, 2020

Operating lease costs Commission, transportation and other $ 17,648 $ 50,268

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In addition, certain of our berthing agreements include variable lease costs based on the number of passengers berthed.

During the quarter ended June 30, 2021, we had no variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive loss.

During the quarter and nine months ended September 30, 2021, we had no variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive loss.

Weighted average of the remaining lease terms and weighted average discount rates are as follows:

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Weighted average of the remaining lease term

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Supplemental cash flow information related to leases is as follows (in thousands):

Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Cash paid for amounts included in the measurement of lease liabilities:

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Financing cash flows from finance leases $ 15,058 $ 13,291

As of June 30, 2021, maturities related to lease liabilities were as follows (in thousands):

As of September 30, 2021, maturities related to lease liabilities were as follows (in thousands):

Year Operating Leases Finance Leases

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Our future capital commitments consist primarily of new ship orders.

As of June 30, 2021, two Oasis-class ships and three ships of a new generation, known as our Icon-class, are on order for our Royal Caribbean International brand with an aggregate capacity of approximately 28,200 berths.

As of June 30, 2021, we had two Edge-class ships on order for our Celebrity Cruises brand with an aggregate capacity of approximately 6,500 berths.

Additionally, as of June 30, 2021, we have three ships on order for our Silversea Cruises brand with an aggregate capacity of approximately 2,000 berths.

COVID-19 has impacted shipyard operations which have and may continue to result in delays of our previously contracted ship deliveries.

As of June 30, 2021, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

As of September 30, 2021, two Oasis-class ships and three ships of a new generation, known as our Icon-class, are on order for our Royal Caribbean International brand with an aggregate capacity of approximately 28,200 berths.

As of September 30, 2021, we had two Edge-class ships on order for our Celebrity Cruises brand with an aggregate capacity of approximately 6,500 berths.

Additionally, as of September 30, 2021, we have three ships on order for our Silversea Cruises brand with an aggregate capacity of approximately 2,060 berths.

COVID-19 has impacted shipyard operations which has and may continue to result in delays of our previously contracted ship deliveries.

As of September 30, 2021, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

Ship Shipyard Expected Delivery Dates Approximate

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Mein Schiff 7 Meyer Turku Oy 2nd Quarter 2024 2,900

Unnamed Fincantieri 3rd Quarter 2024 4,100

Unnamed Fincantieri 1st Quarter 2026 4,100

Unnamed Fincantieri 4th Quarter 2024 4,100

Unnamed Fincantieri 2nd Quarter 2026 4,100

Total Berths 47,860

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General for further information.

In addition, as of June 30, 2021, we have an agreement in place with Chantiers de l'Atlantique to build an additional Edge-class ship for delivery in 2025, which is contingent upon completion of conditions precedent and financing.

As of June 30, 2021, the aggregate cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was approximately $ 12.9 billion, of which we had deposited $ 739.5 million as of such date.

Approximately 70.1 % of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2021.

In addition, as of September 30, 2021, we have an agreement in place with Chantiers de l'Atlantique to build an additional Edge-class ship for delivery in 2025, which is contingent upon completion of conditions precedent and financing.

In September 2021, we amended the credit agreements for the first and second Evolution-class ships to increase their maximum loan amounts by € 175.6 million on an aggregate basis, or approximately $ 203.5 million based on the exchange rate at September 30, 2021.

The increase in the loan amounts will finance ship design modifications that incorporate innovative sustainability features and additional premium cabins, increasing the capacity for each ship to 730 berths.

At our election, interest on incremental portion of each loan will accrue either (1) at a fixed rate of 4.34 % and 4.38 %, respectively (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 0.99 % and 1.03 %, respectively.

As of September 30, 2021, the aggregate cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was approximately $ 12.8 billion, of which we had deposited $ 784.8 million as of such date.

Approximately 62.5 % of the aggregate cost was exposed to fluctuations in the Euro exchange rate at September 30, 2021.

Refer to Note 12 .

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The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs.

The trial for the Havana Docks Action has been scheduled for October 25, 2021.

The Court dismissed the Port of Santiago Action with prejudice on the basis that the plaintiffs lacked standing;

however, the plaintiffs have appealed the dismissal.

In the Havana Docks Action, we and the plaintiff have filed motions for summary judgment, which remain pending, and the trial has been scheduled for February 28, 2022.

The Court dismissed the Port of Santiago Action with prejudice on the basis that the plaintiff lacked standing, and the plaintiff’s appeal of the dismissal is awaiting a decision by the appellate court.

We believe we have meritorious defenses to the claims alleged in both the Havana Docks Action and the Port of Santiago Action, and we intend to vigorously defend ourselves against them.

We believe it is unlikely the outcome of either action will have a material adverse impact to our financial condition, results of operations or cash flows.

However, the outcome

of litigation is inherently unpredictable and subject to significant uncertainties, and there can be no assurances that the final outcome of either case will not be material.

As previously disclosed, on October 7, 2020, a shareholder filed a putative class action complaint against us, and three officers, Richard Fain, Jason Liberty and Michael Bayley, in the United States District Court for the Southern District of Florida, alleging misrepresentations relating to COVID-19 in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, seeking unspecified damages on behalf of a purported class consisting of all persons and entities (subject to specified exceptions) that purchased or otherwise acquired our securities from February 4, 2020 through March 17, 2020.

In addition, on October 27, 2020, a second complaint was filed by another shareholder against us and these same officers in the District Court alleging the same misrepresentations relating to COVID-19.

As is the case with the first action, the second action seeks unspecified damages on behalf of a purported class consisting of all persons and entities (subject to specified exceptions) that purchased or otherwise acquired our securities from February 4, 2020 through March 17, 2020.

On December 23, 2020, these cases were consolidated with a new lead plaintiff, Indiana Public Retirement System.

On February 25, 2021, the lead plaintiff filed with the District Court a voluntary dismissal of the action without prejudice.

On February 26, 2021, the District Court dismissed the entire action without prejudice based on the request for voluntary dismissal.

However, the outcome of litigation is inherently unpredictable and subject to significant uncertainties, and there can be no assurances that the final outcome of either case will not be material.

We are also routinely involved in claims typical within the cruise vacation industry.

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In addition, in the event we declare a dividend or engage in share repurchases, we will need to repay the amounts deferred under our export credit facilities.

Accordingly, we did not declare a dividend during the second quarter of 2021.

Accordingly, we did not declare a dividend during the third quarter of 2021.

Pursuant to amendments made to these agreements during the first quarter of 2021, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022.

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Changes in Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss by component for the six months ended June 30, 2021 and 2020 (in thousands):

Accumulated Other Comprehensive Loss for the Six Months Ended June 30, 2021 Accumulated Other Comprehensive Loss for the Six Months Ended June 30, 2020

The following table presents the changes in accumulated other comprehensive loss by component for the nine months ended September 30, 2021 and 2020 (in thousands):

Accumulated Other Comprehensive Loss for the Nine Months Ended September 30, 2021 Accumulated Other Comprehensive Loss for the Nine Months Ended September 30, 2020

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

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Ending balance $ ( 602,005 ) $ ( 61,794 ) $ ( 12,025 ) $ ( 675,824 ) $ ( 798,668 ) $ ( 62,511 ) $ ( 7,928 ) $ ( 869,107 )

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters and six months ended June 30, 2021 and 2020 (in thousands):

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters and nine months ended September 30, 2021 and 2020 (in thousands):

Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income

Details About Accumulated Other Comprehensive Loss Components Quarter Ended June 30, 2021 Quarter Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Affected Line Item in Statements of

Details About Accumulated Other Comprehensive Loss Components Quarter Ended September 30, 2021 Quarter Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Affected Line Item in Statements of

Comprehensive Loss

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Total reclassifications for the period $ ( 6,375 ) $ ( 52,101 ) $ ( 28,197 ) $ ( 132,778 )

During the quarter and six months ended June 30, 2020, a $ 69.0 million loss was recorded within Other expense in our consolidated statements of comprehensive (loss) income, consisting of a $ 92.6 million loss resulting from the recognition of a currency translation adjustment, partially offset by the recognition of a deferred $ 23.6 million foreign exchange gain related to the Pullmantur net investment hedge.

During the nine months ended September 30, 2020, a $ 69.0 million loss was recorded within Other expense in our consolidated statements of comprehensive (loss) income, consisting of a $ 92.6 million loss resulting from the recognition of a currency translation adjustment, partially offset by the recognition of a deferred $ 23.6 million foreign exchange gain related to the Pullmantur net investment hedge.

In connection with the Pullmantur reorganization in 2020, we no longer have significant involvement in the Pullmantur operations and these amounts previously deferred in Accumulated other comprehensive loss were recognized in earnings.

Of the $ 69.0 million loss, $ 34.3 million was released from Accumulated other comprehensive loss as of June 30, 2020.

Of the $ 69.0 million loss, $ 34.3 million and $ 34.7 million was released from Accumulated other comprehensive los s during the quarters ended June 30, 2020 and September 30, 2020, respectively.

Fair Value Measurements and Derivative Instruments

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

Fair Value Measurements at June 30, 2021 Using Fair Value Measurements at December 31, 2020 Using

Fair Value Measurements at September 30, 2021 Using Fair Value Measurements at December 31, 2020 Using

Description Total Carrying Amount Total Fair Value Level 1 (1)

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(3) Inputs that are unobservable.

The Company did not use any Level 3 inputs as of June 30, 2021 and December 31, 2020.

The Company did not use any Level 3 inputs as of September 30, 2021 and December 31, 2020.

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

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Other Financial Instruments

The carrying amounts of accounts receivable, accounts payable, accrued interest, accrued expenses and commercial paper approximate fair value at June 30, 2021 and December 31, 2020.

The carrying amounts of accounts receivable, accounts payable, accrued interest, accrued expenses and commercial paper approximate fair value at September 30, 2021 and December 31, 2020.

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 June 30, 2021 Using Fair Value Measurements at December 31, 2020 Using

Fair Value Measurements at September 30, 2021 Using Fair Value Measurements at December 31, 2020 Using

Description Total Level 1 (1)

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(3) Inputs that are unobservable.

No Level 3 inputs were used in fair value measurements of Other financial instruments as of June 30, 2021 and December 31, 2020.

No Level 3 inputs were used in fair value measurements of Other financial instruments as of September 30, 2021 and December 31, 2020.

(4) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps.

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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 June 30, 2021 or December 31, 2020, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of September 30, 2021 or December 31, 2020, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

Nonfinancial Instruments Recorded at Fair Value on a Nonrecurring Basis

The following tables present information about the Company’s nonfinancial instruments recorded at fair value on a nonrecurring basis (in thousands):

Fair Value Measurements at June 30, 2021 Using

Description Total Carrying Amount Total Fair Value Level 3 Total Impairment for the six months ended June 30, 2021

Fair Value Measurements at September 30, 2021 Using

Description Total Carrying Amount Total Fair Value Level 3 Total Impairment for the nine months ended September 30, 2021

Long-lived assets(1) — — — $ 40,643

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The discounted cash flow model used our 2020 projected operating results as a base.

To that base we added future years’ cash flows through 2030 assuming multiple revenue and expense scenarios that reflect the impact of different global economic environments for this period on the Silversea Cruises' reporting unit.

To that base we added future years’ cash flows through 2030 assuming multiple revenue and expense scenarios that reflect the impact of different global economic

environments for this period on the Silversea Cruises' reporting unit.

We assigned a probability to each revenue and expense scenario.

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Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting

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Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting

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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 June 30, 2021, we had counterparty credit risk exposure under our derivative instruments of $ 20.5 million, which were limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks.

As of September 30, 2021, we had counterparty credit risk exposure under our derivative instruments of $ 17.8 million, which were limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks.

We do not anticipate nonperformance by any of our significant counterparties.

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For all other hedging programs, we use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship.

The methodology for assessing hedge effectiveness is applied on a consistent basis for each one of our hedging programs (i.e., interest rate, foreign currency ship construction, foreign currency net investment and fuel).

The methodology for assessing hedge effectiveness is applied on a consistent basis for each one of our hedging programs (i.e., interest

rate, foreign currency ship construction, foreign currency net investment and fuel).

For our regression analyses, we use 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.

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.

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.

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Our exposure to market risk for changes in interest rates primarily relates to our debt obligations including future interest payments.

At June 30, 2021 and December 31, 2020, approximately 67.8 % and 64.5 %, respectively, of our debt was effectively fixed.

At September 30, 2021 and December 31, 2020, approximately 67.5 % and 64.5 %, respectively, of our debt was effectively fixed.

We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

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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 June 30, 2021 and December 31, 2020, we maintained interest rate swap agreements on the following fixed-rate debt instruments:

Debt Instrument Swap Notional as of June 30, 2021 (in thousands) Maturity Debt Fixed Rate Swap Floating Rate:

LIBOR plus All-in Swap Floating Rate as of June 30, 2021

At September 30, 2021 and December 31, 2020, we maintained interest rate swap agreements on the following fixed-rate debt instruments:

Debt Instrument Swap Notional as of September 30, 2021 (in thousands) Maturity Debt Fixed Rate Swap Floating Rate:

LIBOR plus All-in Swap Floating Rate as of September 30, 2021

Oasis of the Seas term loan

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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 June 30, 2021 and December 31, 2020, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument Swap Notional as of June 30, 2021 (in thousands) Maturity Debt Floating Rate All-in Swap Fixed Rate

At September 30, 2021 and December 31, 2020, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument Swap Notional as of September 30, 2021 (in thousands) Maturity Debt Floating Rate All-in Swap Fixed Rate

Celebrity Reflection term loan

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(1) Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floor matching the hedged debt EURIBOR zero-floor.

Amount presented is based on the exchange rate as of June 30, 2021.

Amount presented is based on the exchange rate as of September 30, 2021.

(2) Interest rate swap agreements hedging the term loan of Odyssey of the Seas include LIBOR zero-floors matching the debt LIBOR zero-floor.

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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 our current unfunded financing arrangements as of June 30, 2021 and December 31, 2020 was $ 3.2 billion and $ 3.4 billion, respectively.

The notional amount of interest rate swap agreements related to outstanding debt and our current unfunded financing arrangements as of September 30, 2021 and December 31, 2020 was $ 3.1 billion and $ 3.4 billion, respectively.

Foreign Currency Exchange Rate Risk

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We enter into foreign currency forward contracts to manage portions of the exposure to movements in foreign currency exchange rates.

As of June 30, 2021, the aggregate cost of our ships on order was $ 12.9 billion, of which we had deposited $ 739.5 million as of such date.

As of September 30, 2021, the aggregate cost of our ships on order was $ 12.8 billion, of which we had deposited $ 784.8 million as of such date.

These amounts do not include any ships placed on order that are contingent upon completion of conditions precedent and/or financing, any ships on order by our Partner Brands and any ships on order placed by Silversea Cruises during the reporting lag period.

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Commitments and Contingencies , for further information on our ships on order.

At June 30, 2021 and December 31, 2020, approximately 70.1 % and 66.3 %, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate.

At September 30, 2021 and December 31, 2020, approximately 62.5 % and 66.3 %, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate.

Our foreign currency forward contract agreements are accounted for as cash flow or net investment hedges depending on the designation of the related hedge.

On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements and collar options 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 second quarter of 2021, we maintained an average of approximately $ 407.3 million of these foreign currency forward contracts.

During the third quarter of 2021, we maintained an average of approximately $ 508.8 million of these foreign currency forward contracts.

These instruments are not designated as hedging instruments.

For the quarters ended June 30, 2021 and 2020, changes in the fair value of the foreign currency forward contracts resulted in a gain of $ 0.5 million and $ 12.5 million, respectively.

For the six months ended June 30, 2021 and 2020, changes in the fair value of the foreign currency forward contracts resulted in a loss of $ 13.0 million and $ 40.1 million, respectively.

For the quarters ended September 30, 2021 and 2020, changes in the fair value of the foreign currency forward contracts resulted in a loss and a gain of $ 12.9 million and $ 4.9 million, respectively.

For the nine months ended September 30, 2021 and 2020, changes in the fair value of the foreign currency forward contracts resulted in a loss of $ 25.9 million and $ 35.3 million, respectively.

These amounts were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive loss.

We consider our investments in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature.

As of June 30, 2021, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investments in TUI Cruises of € 245.0 million, or approximately $ 290.5 million based on the exchange rate at June 30, 2021.

As of September 30, 2021, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investments in TUI Cruises of € 245.0 million, or approximately $ 283.9 million based on the exchange rate at September 30, 2021.

These forward currency contracts mature in October 2021.

The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of both June 30, 2021 and December 31, 2020 was $ 2.2 billion and $ 3.1 billion, respectively.

The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of both September 30, 2021 and December 31, 2020 was $ 3.0 billion and $ 3.1 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 primarily in TUI Cruises of € 148.0 million, or approximately $ 175.5 million, as of June 30, 2021.

We had designated debt as a hedge of our net investments primarily in TUI Cruises of € 93.0 million, or approximately $ 107.8 million, as of September 30, 2021.

As of December 31, 2020, we had designated debt as a hedge of our net investments in TUI Cruises of € 215.0 million, or approximately $ 263.0 million.

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For hedged forecasted fuel consumption that remains possible of occurring, hedge accounting will be discontinued and the related accumulated other comprehensive gain or loss will remain in accumulated other comprehensive gain or loss until the underlying hedged transactions are recognized in earnings or the related hedged forecasted fuel consumption is deemed probable of not occurring.

The prior suspension of our cruise operations due to the COVID-19 pandemic and our recent gradual resumption of cruise operations has resulted in reductions to our forecasted fuel purchases.

During the quarter and six months ended June 30, 2020, we discontinued cash flow hedge accounting on 0.1 million and 0.3 million metric tons of our fuel swap agreements maturing in 2020 and 2021, respectively, which resulted in the reclassification of net losses of $ 13.7 million and $ 68.6 million in 2020 and 2021, respectively, from Accumulated other comprehensive loss to Other income (expense) .

During the six months ended June 30, 2021, we discontinued cash flow hedge accounting on 48 thousand metric tons of fuel swap agreements maturing in 2021, which resulted in the reclassification of a net $ 4.4 million loss from Accumulated other comprehensive loss to Other income (expense) .

The prior suspension of our cruise operations due to the COVID-19 pandemic and our gradual resumption of cruise operations has resulted in reductions to our forecasted fuel purchases.

During the quarter and nine months ended September 30, 2021, we discontinued cash flow hedge accounting on 48.1 thousand and 95.8 thousand metric tons of fuel swap agreements, respectively, maturing in 2021 and 2022, which resulted in the reclassification of a net $ 2.4 million gain and $ 1.9 million loss from Accumulated other comprehensive loss to Other income (expense) , respectively.

During the quarter and nine months ended September 30, 2020, we discontinued cash flow hedge accounting on 0.2 million and 0.5 million metric tons of our fuel swap agreements maturing in 2020 and 2021, respectively, which resulted in the reclassification of net losses of $ 7.9 million and $ 76.3 million in 2020 and 2021, respectively, from Accumulated other

comprehensive loss to Other income (expense) .

Changes in the fair value of fuel swaps for which cash flow hedge accounting was discontinued are currently recognized in Other income (expense) each reporting period through the maturity dates of the fuel swaps.

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for further discussion on risks related to COVID-19.

At June 30, 2021, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2024.

As of June 30, 2021 and December 31, 2020, we had the following outstanding fuel swap agreements:

At September 30, 2021, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2023.

As of September 30, 2021 and December 31, 2020, we had the following outstanding fuel swap agreements:

Fuel Swap Agreements

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Designated as hedges:

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Fuel Swap Agreements

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Designated hedges as a % of projected fuel purchases:

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Fuel Swap Agreements

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Not designated as hedges:

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2022 62,750 14,650

As of June 30, 2021, $ 34.5 million of estimated unrealized gain associated with our cash flow hedges pertaining to fuel swap agreements is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months.

As of September 30, 2021, $ 42.9 million of estimated unrealized gain associated with our cash flow hedges pertaining to fuel swap agreements is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months.

Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.

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Asset Derivatives Liability Derivatives

Balance Sheet Location As of June 30, 2021 As of December 31, 2020 Balance Sheet Location As of June 30, 2021 As of December 31, 2020

Balance Sheet Location As of September 30, 2021 As of December 31, 2020 Balance Sheet Location As of September 30, 2021 As of December 31, 2020

Fair Value Fair Value Fair Value Fair Value

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The location and amount of gain or (loss) recognized in income on fair value and cash flow hedging relationships were as follows (in thousands):

Quarter Ended June 30, 2021 Quarter Ended June 30, 2020

Quarter Ended September 30, 2021 Quarter Ended September 30, 2020

Fuel Expense Depreciation and Amortization Expenses Interest Income (Expense) Other Income (Expense) Fuel Expense Depreciation and Amortization Expenses Interest Income (Expense) Other Income (Expense)

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Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income n/a $( 3,905 ) n/a $( 505 ) n/a $( 3,782 ) n/a $( 1,511 )

Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

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Non-derivative instrument designated as

hedging instrument under ASC 815-20 Balance Sheet Location As of June 30, 2021 As of December 31, 2020

hedging instrument under ASC 815-20 Balance Sheet Location As of September 30, 2021 As of December 31, 2020

Foreign currency debt Current portion of debt $ 39,207 $ 43,696

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Income on Hedged Item

Quarter Ended June 30, 2021 Quarter Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Quarter Ended June 30, 2021 Quarter Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Quarter Ended September 30, 2021 Quarter Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Quarter Ended September 30, 2021 Quarter Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Interest rate swaps Interest expense, net of interest capitalized $ 383 $ 39 $ 148 $ 23,338 $ 2,100 $ 2,379 $ 7,098 $ ( 20,855 )

$ 317 $ 2,870 $ ( 234 ) $ 23,299 $ 2,068 $ ( 1,904 ) $ 4,998 $ ( 23,234 )

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets for the cumulative basis adjustment for fair value hedges were as follows (in thousands):

e fair value and line item caption of derivative instruments recorded within our consolidated balance sheets for the cumulative basis adjustment for fair value hedges were as follows (in thousands):

Line Item in the Statement of Financial Position Where the Hedged Item is Included Carrying Amount of the Hedged Liabilities Cumulative amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities

As of June 30, 2021 As of December 31, 2020 As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020 As of September 30, 2021 As of December 31, 2020

Current portion of debt and Long-term debt $ 659,209 $ 700,331 $ 10,413 $ 17,512

$ 661,031 $ 700,331 $ 12,514 $ 17,512

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

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Accumulated Other Comprehensive Loss into Income

Interest rate swaps $ 1,534 $ ( 42,488 ) $ 29,228 $ ( 90,677 ) Interest expense, net of interest capitalized $ ( 11,418 ) $ ( 6,532 ) $ ( 32,376 ) $ ( 15,939 )

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The table below represents amounts excluded from the assessment of effectiveness for our net investment hedging instruments for which the difference between changes in fair value and periodic amortization is recorded in accumulated other comprehensive loss (in thousands):

Gain (Loss) Recognized in Income (Net Investment Excluded Components) Six Months Ended June 30, 2021

Gain (Loss) Recognized in Income (Net Investment Excluded Components) Nine Months Ended September 30, 2021

Net inception fair value at January 1, 2021 $ ( 1,915 )

Amount of gain recognized in income on derivatives for the six month period ended June 30, 2021 3,293

Amount of gain (loss) remaining to be amortized in accumulated other comprehensive loss, as of June 30, 2021 ( 2,034 )

Fair value at June 30, 2021 $ ( 656 )

Amount of gain recognized in income on derivatives for the nine month period ended September 30, 2021 4,966

Amount of gain (loss) remaining to be amortized in accumulated other comprehensive loss, as of September 30, 2021 ( 3,141 )

Fair value at September 30, 2021 $ ( 90 )

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

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Non-derivative instruments under ASC 815-20 Net

Investment Hedging Relationships Quarter Ended June 30, 2021 Quarter Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Investment Hedging Relationships Quarter Ended September 30, 2021 Quarter Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Foreign Currency Debt $ 2,585 $ ( 16,732 ) $ 5,593 $ ( 16,784 )

$ ( 2,813 ) $ ( 7,541 ) $ 3,009 $ ( 52 )

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

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Gain (Loss) Recognized in

Income on Derivatives Quarter Ended June 30, 2021 Quarter Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Income on Derivatives Quarter Ended September 30, 2021 Quarter Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Foreign currency forward contracts Other income (expense) $ ( 12,880 ) $ 4,907 $ ( 25,854 ) $ ( 35,265 )

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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, generally, at the next fifth-year anniversary.

As of June 30, 2021, our senior unsecured debt credit rating was B by Standard & Poor's and B2 by Moody's.

As of June 30, 2021, seven of our interest rate derivative hedges had a term of at least five years requiring us to post collateral of $ 60.9 million to satisfy our obligations under our interest rate derivative agreements, taking into account any collateral waivers issued by banks.

We believe the maximum additional collateral we may need to provide under these agreements in the next twelve months is approximately $ 11.4 million.

As of September 30, 2021, our senior unsecured debt credit rating was B by Standard & Poor's and B2 by Moody's.

As of September 30, 2021, seven of our interest rate derivative hedges had a term of at least five years requiring us to post collateral of $ 65.6 million to satisfy our obligations under our interest rate derivative agreements, taking into account any collateral waivers issued by banks.

We expect that we will not need to provide additional collateral under these agreements in the next twelve months .

Restructuring Charges

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We incurred severance costs of $ 28.0 million during the year ended December 31, 2020.

The following table summarizes our restructuring costs during the six months ended June 30, 2021 as it relates to the April 2020 reduction in our workforce (in thousands):

Beginning balance January 1, 2021 Accruals Payments Ending balance June 30, 2021 Cumulative

The following table summarizes our restructuring costs during the nine months ended September 30, 2021 as it relates to the April 2020 reduction in our workforce (in thousands):

Beginning balance January 1, 2021 Accruals Payments Ending balance September 30, 2021 Cumulative

Incurred Expected

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements