Royal Caribbean Cruise Lines 2010 Annual Report Download - page 84

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ROYAL CARIBBEAN CRUISES LTD. 81
Additionally, as of December 31, 2010 and 2009, we
have entered into fuel call options on a total of 6.6
million barrels which mature between 2011 and 2013,
and 2.8 million barrels, which mature between 2011
and 2012, respectively, in order to provide protection
in the event fuel prices exceed the options’ exercise
prices. As of December 31, 2010, the fuel call options
represent 41% of our projected 2011 fuel requirements,
25% of our projected 2012 fuel requirements and
11% of our projected 2013 fuel requirements. As of
December 31, 2009, the fuel call options represented
20% of our projected 2011 fuel requirements and 10%
of our projected 2012 fuel requirements.
Our fuel swap agreements are accounted for as cash
flow hedges and our fuel call options are not desig-
nated as hedging instruments and thus, changes in
the fair value of our fuel call options are recognized in
earnings immediately and reported in other income
(expense) in our consolidated statements of operations.
At December 31, 2010 and 2009, $83.6 million and
$56.9 million, respectively, of estimated unrealized net
gains associated with our cash flow hedges pertaining
to fuel swap agreements were expected to be reclas-
sified to earnings from other accumulated compre-
hensive income (loss) within the next twelve months,
including $37.2 million related to fuel swap agreements
terminated in 2010. Reclassification is expected to
occur as the result of fuel consumption associated
with our hedged forecasted fuel purchases.
The fair value and line item caption of derivative
instruments recorded were as follows:
Fair Value of Derivative Instruments
Asset Derivatives Liability Derivatives
As of As of As of As of
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
Balance Balance
Sheet Sheet
In thousands Location Fair Value Fair Value Location Fair Value Fair Value
Derivatives designated as hedging instruments under FASB ASC 815-201
Interest rate swaps Other Assets  
Other long-
term liabilities  —  —
Cross currency swaps Other Assets  
Other long-
term liabilities — —
Foreign currency forward contracts
Derivative
Financial
Instruments — 
Accrued
expenses and
other liabilities  
Foreign currency forward contracts Other Assets  
Other long-
term liabilities  
Fuel swaps
Derivative
Financial
Instruments  
Accrued
expenses and
other liabilities — 
Fuel swaps Other Assets  
Other long-
term liabilities  
Total derivatives designated as
hedging instruments under
Subtopic 815-20      
Derivatives not designated as hedging instruments under FASB ASC 815-20
Foreign currency forward contracts
Derivative
Financial
Instruments — 
Accrued
expenses and
other liabilities  —  
Fuel call options
Derivative
Financial
Instruments  —
Accrued
expenses and
other liabilities — —
Fuel call options Other Assets  
Other long-
term liabilities — —
Total derivatives not designated
as hedging instruments under
Subtopic 815-20
   —  
Total derivatives      
1 Accounting Standard Codification 815-20 “Derivatives and Hedging.”