Norwegian Cruise Line Holdings Ltd. Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements and Derivatives (Tables)

12 Months Ended

Dec. 31, 2021

The derivatives measured at fair value and the respective location in the consolidated balance sheets includes the following (in thousands):


		Assets				Liabilities
		December 31,		December 31,		December 31,		December 31,
	Balance Sheet Location	2021		2020		2021		2020
Derivative Contracts Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	29,349	$	—	$	—	$	—
	Other long-term assets		19,554		—		—		—
	Accrued expenses and other liabilities		—		—		—		35,973
	Other long-term liabilities		—		—		—		28,947
Foreign currency contracts
	Prepaid expenses and other assets		4,898		5,779		—		—
	Other long-term assets		—		43,250		—		—
	Accrued expenses and other liabilities		—		—		98,592		14,778
	Other long-term liabilities		—		6,821		73,496		44,938
Interest rate contracts
	Accrued expenses and other liabilities		—		—		469		6,776
	Other long-term liabilities		—		—		—		452
Total derivatives designated as hedging instruments		$	53,801	$	55,850	$	172,557	$	131,864

Derivative Contracts Not Designated as Hedging Instruments

Fuel contracts	Prepaid expenses and other assets	$	10,836	$	—	$	—	$	—
	Other long-term assets		3,476		—		—		—
	Accrued expenses and other liabilities		—		546		—		6,732
	Other long-term liabilities		—		—		—		3,534

Total derivatives not designated as hedging instruments		$	14,312	$	546	$	—	$	10,266
Total derivatives		$	68,113	$	56,396	$	172,557	$	142,130

The gross and net amounts recognized within assets and liabilities include the following (in thousands):

The effects of cash flow hedge accounting on accumulated other comprehensive income (loss) include the following (in thousands):


							Location of Gain
							(Loss) Reclassified
							from Accumulated	Amount of Gain (Loss) Reclassified
	Amount of Gain (Loss)						Other Comprehensive	from Accumulated Other
	Recognized in Other						Income (Loss) into	Comprehensive
Derivatives	Comprehensive Income						Income	Income (Loss) into Income
	Year Ended December 31,							Year Ended December 31,
	2021		2020		2019			2021		2020		2019
Fuel contracts	$	74,434	$	(157,669)	$	46,154	Fuel	$	(41,080)	$	(45,488)	$	14,093
Fuel contracts		—		—		—	Other income (expense), net		(12,002)		(49,653)		—
Foreign currency contracts		(185,067)		116,496		(163,197)	Depreciation and amortization		(5,067)		(4,929)		(3,062)
Interest rate contracts		254		(10,469)		(5,972)	Interest expense, net		(6,868)		(6,600)		(2,133)
Total gain (loss) recognized in other comprehensive income	$	(110,379)	$	(51,642)	$	(123,015)		$	(65,017)	$	(106,670)	$	8,898

The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands):


	Year Ended December 31, 2021
			Depreciation
			and		Interest		Other Income
	Fuel		Amortization		Expense, net		(Expense), net
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	301,852	$	700,845	$	2,072,925	$	123,953

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income
Fuel contracts		(41,080)		—		—		—
Foreign currency contracts		—		(5,067)		—		—
Interest rate contracts		—		—		(6,868)		—

Amount of loss reclassified from accumulated other comprehensive income (loss) into income as a result that a forecasted transaction is no longer probable of occurring
Fuel contracts		—		—		—		(12,002)

The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands):


	Year Ended December 31, 2020
			Depreciation
			and		Interest		Other Income
	Fuel		Amortization		Expense, net		(Expense), net
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	264,712	$	717,840	$	482,313	$	(33,599)

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income
Fuel contracts		(45,488)		—		—		—
Foreign currency contracts		—		(4,929)		—		—
Interest rate contracts		—		—		(6,600)		—

Amount of loss reclassified from accumulated other comprehensive income (loss) into income as a result that a forecasted transaction is no longer probable of occurring
Fuel contracts		—		—		—		(49,653)

Amount of gain recognized in income as a result of failing effectiveness tests
Fuel contracts		—		—		—		5,507

The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands):


	Year Ended December 31, 2019
			Depreciation
			and		Interest
	Fuel		Amortization		Expense, net
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	409,602	$	646,188	$	272,867

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income
Fuel contracts		14,093		—		—
Foreign currency contracts		—		(3,062)		—
Interest rate contracts		—		—		(2,133)

The effects of derivatives not designated as hedging instruments on the consolidated statements of operations include the following (in thousands):


		Amount of Gain (Loss) Recognized in Income
		Year Ended December 31,
	Location of Gain (Loss)	2021		2020		2019
Derivatives not designated as hedging instruments
Fuel contracts	Other income (expense), net	$	65,507	$	20,932	$	—