2016 Annual Report for Norwegian Cruiseline Holdings - F-11

Revenues by destination were as follows (in thousands):
2016

North America
Europe
Asia-Pacific
Other
Total Revenues

Year Ended December 31,
2015

3,132,208
1,148,403
196,978
396,751
4,874,340

2,743,007
1,120,705
198,131
283,205
4,345,048

2014

2,388,457
629,457
41,261
66,706
3,125,881

Substantially all of our long-lived assets are located outside of the U.S. and consist primarily of our ships. We have 16 ships with Bahamas
registry with a carrying value of $7.1 billion and $7.2 billion as of December 31, 2016 and 2015, respectively. We have seven ships with Marshall
Island registry with a carrying value of $1.9 billion as of December 31, 2016 and six ships with Marshall Island registry with a carrying value of
$1.4 billion as of December 31, 2015. We also have one ship with U.S. registry with a carrying value of $0.3 billion as of December 31, 2016 and
2015.
Recently Issued Accounting Policies
In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-04 which
simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss
by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. The guidance is effective for annual
or any interim goodwill impairment tests in years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill
impairment tests performed on testing dates after January 1, 2017. We do not expect to early adopt this guidance.
In August 2016, the FASB issued ASU No. 2016-15 which amends Topic 230 (Statement of Cash Flows) to eliminate discrepancies in reporting
certain items in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods
within those annual periods with early adoption permitted. The transition should be made using a retrospective approach. We do not believe that
the adoption of this guidance will be material to our consolidated statements of cash flows.
In May 2016, the FASB issued ASU No. 2016-12 which addresses improvements to the guidance on revenue from contracts from customers
regarding collectability, noncash consideration, and completed contracts at transition. Additionally, it provides a practical expedient for contract
modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from
customers. The effective date of this guidance is upon adoption of ASU No. 2014-09 which is presented below. We are currently evaluating the
impact of the adoption of this guidance to our consolidated financial statements.
In May 2016, the FASB issued ASU No. 2016-11 which is a rescission of Securities and Exchange Commission guidance related to the issuance
of ASU No. 2014-09 which is presented below. The effective date of this guidance is upon adoption of ASU No. 2014-09. We are currently
evaluating the impact of the adoption of this guidance to our consolidated financial statements.
In April 2016, the FASB issued ASU No. 2016-10 which does not change the core principle of the guidance in ASU No. 2014-09 but clarifies
two aspects: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.
The effective date of this guidance is upon adoption of ASU No. 2014-09. We are currently evaluating the impact of the adoption of this guidance
to our consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-09 to improve multiple aspects of the accounting for share-based payment transactions,
including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The
guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods with early adoption
permitted. We do not believe that the adoption of this guidance will be material to our consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02 which sets out the principles for the recognition, measurement, presentation and disclosure
of leases for both parties to a contract (i.e. lessees and lessors). The ASU requires lessees to recognize assets and liabilities on the balance sheet
for the rights and obligations created by all leases with terms of more than 12 months. The ASU further modifies lessors' classification criteria for
leases and the accounting for sales-type and direct financing leases. The ASU will also require qualitative and quantitative disclosures designed to
give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from leases. The ASU is
effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption
permitted. The ASU is to be applied using a modified retrospective approach. We are currently reviewing our existing leases to evaluate the
impact of the adoption of this guidance to our consolidated financial statements.
In July 2015, the FASB issued ASU No. 2015-11 to simplify the measurement of inventory for all entities. This applies to all inventory that is
measured using either the first-in, first-out or average cost method. The guidance requires an entity to measure inventory at the lower of cost and
net realizable value. The guidance must be applied prospectively and will be effective for our interim and annual reporting periods beginning after
December 15, 2016. Early adoption is permitted as of the beginning of an interim or annual reporting period. We have evaluated the impact of the
adoption of this guidance to our consolidated financial statements and there will not be a material impact to our consolidated financial statements.
F-11

Table of Contents for the Digital Edition of 2016 Annual Report for Norwegian Cruiseline Holdings