Royal Caribbean Cruise Lines 2009 Annual Report Download - page 94

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ROYAL CARIBBEAN CRUISES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents information about the Company’s long-lived assets held for sale recorded at fair value on a
nonrecurring basis (in thousands):
Long-lived assets held for sale with a carrying amount of $56.6 million, were written down to their fair value of $52.3 million,
less cost to sell of $2.7 million (or $49.6 million), resulting in a loss of $7.0 million which was recognized in our consolidated
statements of operations. Long-lived assets held for sale are reported within prepaid expenses and other assets in our consolidated
balance sheet.
The following table presents a reconciliation of the Company’s fuel call options’ beginning and ending balances as follows (in
thousands):
F-21
Fair Value Measurements
at December 31, 2009 Usin
g
Descri
p
tion Total Level 1 Level 2 Level 3
Total Gains
(Losses)
Long-lived assets held for sale
$52,252
—
$52,252
—
$(6,972)
1. Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.
Valuation of these items does not entail a significant amount of judgment.
2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into
account the contract terms such as maturity, as well as other inputs such as exchange rates, fuel types, fuel curves, interest rate
yield curves, creditworthiness of the counterparty and the Company.
3. Fair value for fuel call options is derived using standard option pricing models with inputs based on the options’ contract terms,
such as exercise price and maturity, and data either readily available or derived from public market information, such as fuel
curves, volatility levels and discount rates. Categorized as Level 3 because certain inputs (principally volatility) are
unobservable.
4. Consists of foreign currency forward contracts, interest rate, cross currency, fuel swaps and fuel call options.
5. Consists of exchange-traded equity securities and mutual funds.
6. Consists of fuel swaps and foreign currency forward contracts.
7. Inputs based on a quoted price in an active market adjusted for the condition of the asset.
8. Consists of the fair value of the Atlantic Star and the loss recognized during the period to reduce the carrying value to its fair
value less cost to sell.
Fair Value
Measurements Using
Significant
Unobservable Inputs
(Level 3)
Fuel O
p
tions
Balance at January 1, 2009
$
—
Total gains or losses (realized / unrealized)
Included in other (expense) income
(2,538)
Included in comprehensive income
—
Purchases, issuances, and settlements
12,536
Transfers in and/or out of Level 3
—
Balance at December 31, 2009
$9,998
The amount of total gains or losses for the period included
in other (expense) income attributable to the change in
unrealized gains or losses relating to assets still held at
the reporting date
$(2,538)
173
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