Royal Caribbean Cruise Lines 2014 Annual Report Download - page 100

Royal Caribbean Cruises Ltd. 99
In connection with this initiative, we incurred approx-
imately $7.4 million of other costs during 2014 that
primarily consisted of call center transition costs and
accelerated depreciation on lease hold improvements
and were classified within Marketing, selling and
administrative expenses and Depreciation and amor-
tization expenses, respectively, in our consolidated
statements of comprehensive income (loss). We have
completed the restructuring activities related to this
initiative and we do not expect to incur any further
restructuring exit or other additional costs.
Pullmantur Restructuring
Restructuring Exit Costs
In the fourth quarter of 2013, we moved forward with
an initiative related to Pullmantur’s focus on its cruise
business and its expansion in Latin America. Activities
related to this initiative include the sale of Pullmantur’s
non-core businesses. This resulted in the elimination
of approximately 100 Pullmantur shore-side positions
and recognition of a liability for one-time termination
benefits during the fourth quarter of 2013. In the sec-
ond quarter of 2014, we elected not to execute the
dismissal of approximately 30 of the positions which
resulted in a partial reversal of the liability. Additionally,
we incurred contract termination costs and other
related costs consisting of legal and consulting fees
to implement this initiative.
As a result of these actions, we incurred restructuring
exit costs of $3.2 million and $5.3 million for the year
ended December 31, 2014 and December 31, 2013,
respectively, which are reported in Restructuring and
related impairment charges in our consolidated state-
ments of comprehensive income (loss).
The following table summarizes our restructuring exit costs related to the above initiative (in thousands):
Beginning
Balance
January
 Accruals Payments
Beginning
Balance
January
 Accruals Payments
Ending
Balance
December

Cumulative
Charges
Incurred
Expected
Additional
Expensesto
beIncurred()
Termination
benefits —  —      —
Contract termina-
tion costs —  —  () —   —
Other related
costs —  —    —  —
Total —  —      —
In connection with this initiative, we incurred approxi-
mately $8.9 million of other costs during 2014, associ-
ated with placing operating management closer to
the Latin American market that was classified within
Marketing, selling and administrative expenses in our
consolidated statements of comprehensive income
(loss). We have completed the restructuring activities
related to this initiative and we do not expect to incur
any further restructuring exit or other additional costs.
Sale of Pullmantur Non-core Businesses
As part of our Pullmantur related initiatives, on March
31, 2014, Pullmantur sold the majority of its interest in
its non-core businesses. These non-core businesses
included Pullmantur’s land-based tour operations,
travel agency and 49% interest in its air business. In
connection with the sale agreement, we retained a
19% interest in each of the non-core businesses as
well as 100% ownership of the aircraft which are
being dry leased to Pullmantur Air. Consistent with
our Pullmantur two-month lag reporting period, we
reported the impact of the sale in the second quarter
of 2014. See Note 1. General for information on the
basis on which we prepare our consolidated financial
statements and Note 6. Other Assets for the account-
ing of our 19% retained interest.
The sale resulted in a gain of $0.6 million recognized
during the year ended December 31, 2014, inclusive
of the release of cumulative translation adjustment
losses, which is classified within Other operating
expenses in our consolidated statements of compre-
hensive income (loss). As part of the sale, we agreed
to maintain commercial and bank guarantees on behalf
of the buyer for a maximum period of twelve months
and extended a term loan facility to Nautalia due June
30, 2016. We recorded the fair value of the guaran-
tees and a loss reserve for the loan amount drawn,
offsetting the gain recognized by $5.5 million. See
Note 13. Changes in Accumulated Other Comprehen-
sive Income (Loss) for further information on the
release of the foreign currency translation losses.
The non-core businesses met the accounting criteria
to be classified as held for sale during the fourth
quarter of 2013 which resulted in restructuring related
impairment charges of $20.0 million in 2013 to adjust
the carrying value of assets held for sale to their fair
value, less cost to sell. As of December 31, 2013, assets
and liabilities held for sale were not material to our
consolidated balance sheet and no longer exist as of
December 31, 2014. The businesses did not meet the
criteria for discontinued operations reporting as a
result of our significant continuing involvement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS