Royal Caribbean Cruise Lines 2013 Annual Report Download - page 102
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes our restructuring exit costs related to the above initiative (in thousands):
Beginning
Balance
January
Accruals Payments
Ending
Balance
December
Cumulative
Charges
Incurred
Expected
Additional
Expensesto
BeIncurred()
Termination benefits —
Contract termination costs — —
Other related costs —
Total —
() These amounts relate to restructuring exit costs associated with our Global Sales, Marketing and General and Administrative restructuring and
consolidation efforts. It does not include charges related to other initiatives.
In connection with this initiative, we also expect to
incur approximately $5.2 million of other costs through
the end of 2014 which will primarily consist of call
center transition costs and accelerated depreciation
on leasehold improvements and will be classified
within Marketing, selling and administrative expenses
and Depreciation and amortization expenses, respec-
tively, in our consolidated statements of comprehen-
sive income (loss).
Pullmantur Restructuring
Restructuring Exit Costs
A second initiative relates to Pullmantur’s focus on
the cruise business and expansion in Latin America.
During the fourth quarter of 2013, we moved forward
with activities related to this initiative. The activities
include the opening of a Pullmantur regional head
office in Panama to place operating management
closer to the Latin American market. 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 quar-
ter of 2013. Additionally, we incurred contract termi-
nation 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 $5.3 million for the year ended December
31, 2013, which are reported in Restructuring and
related impairment charges in our consolidated
statements of comprehensive income (loss). We
expect to incur additional restructuring exit costs of
approximately $9.2 million, through the end of 2014,
to complete this initiative.
The following table summarizes our restructuring exit costs related to the above initiative (in thousands):
Beginning
Balance
January
Accruals Payments
Ending
Balance
December
Cumulative
Charges
Incurred
Expected
Additional
Expensesto
BeIncurred()
Termination benefits — —
Contract termination costs — — —
Other related costs — —
Total — —
() These amounts relate to restructuring exit costs associated with our Pullmantur restructuring. It does not include any charges related to other
initiatives.
In connection with this initiative, we also expect to
incur approximately $7.5 million of other costs through
the end of 2014 primarily related to the sale of the
Pullmantur non-core businesses, which we anticipate
will be classified in Other (expense) income in our con-
solidated statements of comprehensive income (loss).
Sale of Pullmantur Non-core Businesses
As part of our Pullmantur Restructuring, in December
2013, Pullmantur reached an agreement to sell the
majority of its interest in its non-core businesses, the
closing of which is subject to customary closing condi-
tions. These non-core businesses include Pullmantur’s
land-based tour operations, travel agency and its
49.0% interest in its air business. In connection with
the agreement, we will retain a 19.0% interest in the
non-core businesses and will retain the aircraft which
will be dry leased to Pullmantur Air. The non-core
businesses met the accounting criteria to be classified
as held for sale during the fourth quarter of 2013
which led to restructuring related impairment charges
of $20.0 million to adjust the carrying value of assets
held for sale to their fair value, less cost to sell. The
impairment charge is reported in Restructuring and
related impairment charges in our consolidated state-
ments of comprehensive income (loss). Assets and
liabilities held for sale are not material to our consoli-
dated balance sheets.