Norwegian Cruise Line Holdings Ltd. Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements and Derivatives (Tables)

9 Months Ended

Sep. 30, 2022

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


		Assets				Liabilities
		September 30,		December 31,		September 30,		December 31,
	Balance Sheet Location	2022		2021		2022		2021
Derivative Contracts Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	62,387	$	29,349	$	2,713	$	—
	Other long-term assets		14,908		19,554		1,924		—
	Accrued expenses and other liabilities		2,363		—		3,028		—
	Other long-term liabilities		549		—		1,236		—
Foreign currency contracts
	Prepaid expenses and other assets		—		4,898		—		—
	Accrued expenses and other liabilities		—		—		240,918		98,592
	Other long-term liabilities		—		—		68,878		73,496
Interest rate contracts
	Accrued expenses and other liabilities		—		—		—		469
Total derivatives designated as hedging instruments		$	80,207	$	53,801	$	318,697	$	172,557

Derivative Contracts Not Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	9	$	10,836	$	184	$	—
	Other long-term assets		—		3,476		522		—
	Accrued expenses and other liabilities		—		—		138		—
	Other long-term liabilities		—		—		200		—
Total derivatives not designated as hedging instruments		$	9	$	14,312	$	1,044	$	—
Total derivatives		$	80,216	$	68,113	$	319,741	$	172,557

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

The effects of cash flow hedge accounting on accumulated other comprehensive income (loss) were as follows (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 Income
Derivatives	Comprehensive Loss				Income (Expense)	(Loss) into Income (Expense)
	Three Months		Three Months			Three Months		Three Months
	Ended		Ended			Ended		Ended
	September 30, 2022		September 30, 2021			September 30, 2022		September 30, 2021
Fuel contracts	$	(48,593)	$	19,202	Fuel	$	33,886	$	(10,278)
Fuel contracts		—		—	Other income (expense), net		(293)		(65)
Foreign currency contracts		(146,950)		(64,306)	Depreciation and amortization		(1,831)		(1,267)
Interest rate contracts		—		(30)	Interest expense, net		—		(1,338)
Total gain (loss) recognized in other comprehensive loss	$	(195,543)	$	(45,134)		$	31,762	$	(12,948)


					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 Income
Derivatives	Comprehensive Loss				Income (Expense)	(Loss) into Income (Expense)
	Nine Months		Nine Months			Nine Months		Nine Months
	Ended		Ended			Ended		Ended
	September 30, 2022		September 30, 2021			September 30, 2022		September 30, 2021
Fuel contracts	$	96,139	$	68,708	Fuel	$	80,037	$	(27,101)
Fuel contracts		—		—	Other income (expense), net		(293)		(11,793)
Foreign currency contracts		(342,881)		(142,466)	Depreciation and amortization		(4,365)		(3,800)
Interest rate contracts		—		261	Interest expense, net		(40)		(5,634)
Total gain (loss) recognized in other comprehensive loss	$	(246,742)	$	(73,497)		$	75,339	$	(48,328)

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


	Three Months Ended September 30, 2022								Three Months Ended September 30, 2021
			Depreciation								Depreciation
			and		Interest		Other Income				and		Interest		Other Income
	Fuel		Amortization		Expense, net		(Expense), net		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	$	186,984	$	186,551	$	152,330	$	31,461	$	79,238	$	173,289	$	161,205	$	4,720

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense)
Fuel contracts		33,886		—		—		—		(10,278)		—		—		—
Foreign currency contracts		—		(1,831)		—		—		—		(1,267)		—		—
Interest rate contracts		—		—		—		—		—		—		(1,338)		—

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense) as a result that a forecasted transaction is no longer probable of occurring
Fuel contracts		—		—		—		(293)		—		—		—		(65)


	Nine Months Ended September 30, 2022								Nine Months Ended September 30, 2021
			Depreciation								Depreciation
			and		Interest		Other Income				and		Interest		Other Income
	Fuel		Amortization		Expense, net		(Expense), net		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	$	503,682	$	547,214	$	624,392	$	100,572	$	175,931	$	517,867	$	1,122,905	$	57,464

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense)
Fuel contracts		80,037		—		—		—		(27,101)		—		—		—
Foreign currency contracts		—		(4,365)		—		—		—		(3,800)		—		—
Interest rate contracts		—		—		(40)		—		—		—		(5,634)		—

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense) as a result that a forecasted transaction is no longer probable of occurring
Fuel contracts		—		—		—		(293)		—		—		—		(11,793)

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
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	Location of Gain (Loss)	2022		2021		2022		2021
Derivatives not designated as hedging instruments
Fuel contracts	Other income (expense), net	$	(733)	$	7,398	$	33,345	$	57,505
Foreign currency contracts	Other income (expense), net		(1,905)		(4)		(13,761)		(61)